Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Hansard source

The Family Assistance and Other Legislation Amendment Bill 2013 is a bill from a Labor government which has not only lost its way but has lost what were once bipartisan values of supporting families and helping parents. The honourable member for Blair, who preceded me in this debate, made constant reference to the education bonus as if it were something completely new. What the government did was replace an old tax rebate with the education bonus. Most people who are in receipt of that bonus would have been in receipt of the rebate under the former system.

The coalition does not support this government's continuing attack on families through this bill. The coalition will always stand up for Australian families. What this bill seeks to do is to bury a change to the baby bonus in a range of other measures. I will concentrate on the most significant part of this proposed legislation, namely the changes to the baby bonus. This bill seeks to implement Labor's change to the baby bonus, a change announced in the 2012-13 Mid-year Economic and Fiscal Outlook. The amount of the baby bonus for second and subsequent children who come into a family from 1 July this year will be reduced under this bill to $3,000. This change will apply generally, regardless of whether the child is born into the family, adopted by the family or entrusted to the family's care within 26 weeks of birth—under, for example, a foster care arrangement. The baby bonus will continue to be paid at the rate of $5,000 for the family's first child and for each child who comes into the family in a multiple birth, adoption or entrustment-to-care situation.

Let us put this into context. The baby bonus was introduced by the coalition in 2002 for the purpose of raising Australia's declining fertility rate. This policy was a direct result of the intergenerational reports instigated by Peter Costello when he was Treasurer. What those Intergenerational reports pointed out was that, for the continuing economic growth of this nation, we had to concentrate on three things—population, participation and productivity.

Labor has repeatedly slashed the baby bonus in an attempt to find savings. In the 2009-10 budget, Labor paused the indexation of the upper income limit for the baby bonus, fixing the income threshold at $75,000. In the 2011-12 Mid-year Financial and Economic Update, Labor paused the indexation of the baby bonus payment until 2014-15 and reduced the rate of payment from $5,437 to $5,000 per child. Even the language the government uses about the baby bonus is interesting. The bonus was, as I said, introduced as a measure to ensure that we stay somewhere close to a replacement fertility rate in Australia. Why is that important? It is because Australia, like many other countries around the world, has been suffering a gradually declining fertility rate. If you do not have people, you do not have people to do the jobs which this country is currently crying out to have done. If you do not have people, you negatively affect the economic growth rate of the nation. Indeed, a whole series of historical studies have shown that at least a quarter of national economic growth—not just in Australia but elsewhere around the world—comes from population growth. So, if your fertility rate is declining—if your population growth through natural means is declining—that is going to have an impact at some stage on economic development, on economic prosperity, on the economic growth of the nation. The baby bonus was a measure introduced to deal with that specific issue of fertility. But now, when we hear the Labor Party discuss it, they talk about it in welfare terms and they treat it like welfare—not only treating it like welfare but making cuts to it.

Following the cuts made by the government which I mentioned previously, we warned that changes would further limit choice for mothers, particularly those who wish to stay at home—either for a short or temporary period of time or for a period of time while the kids are growing up and going to school—and raise their children. The reality is that Labor is ideologically opposed to stay-at-home mums. For some reason they have decided that mums should not have a choice but should just go back to work or enter the workforce after having their baby. That flies in the face of the practical experience of many families in Australia. The common income in Australia is 1¼ to 1½ jobs, where one partner—maybe the male, maybe the female—is working full time and the other is working on a part-time or casual basis, and families make arrangements over their life course appropriate to their work and family situation.

Let us be clear about why the government wants to slash this payment. The baby bonus slash and burn exercise is expected to provide savings of $505.9 million over the four years from 2012-13 to 2015-16—$505.9 million is therefore going to be taken from the pockets of Australian families, particularly those families having children under this measure. That is half a billion dollars being ripped away from Australian families. This is nothing more than a cynical and cruel attack on families simply to help the Treasurer, Mr Swan, reduce Labor's burgeoning black hole. This is a desperate measure, ripping half a billion dollars from Australian families in order to provide a surplus—a surplus which of course will never be delivered by this government.

It is often claimed that generous provisions that enable women to enter or remain in the paid workforce contribute to higher fertility levels, hence the Australian demographer Hugo argues:

… the international ranking of countries according to their fertility levels matches their ranking on the extent to which they facilitate the employment of mothers in the paid workforce and the extent to which a degree of gender equity applies within the family itself.

Other researchers have reached similar conclusions. Let us look at declining fertility over the past century. Beginning in the 1930s, Sweden introduced policies that enabled women to maintain their position in the paid workforce whilst having children. In the 1980s, the fertility rate climbed to just over two children per woman, leading some commentators to conclude that the reversal was due to the cumulative impact of public day care, child benefits, parental leave, parents' rights to work part time and other measures. These views were reinforced as female labour force participation soared to 81 per cent and the birth rate rose above replacement levels.

But the growth was temporary, falling to the lowest rate ever for the country—1.52—by the end of the century. It would appear that Sweden's birth rate related to the economic cycle and the impact of the so-called 'speed premium' whereby parents were entitled to the same income replacement for a second child born within 30 months of their first, irrespective of the level of income between the two births. The policy would appear to have resulted in births being brought forward, rather than a permanent increase in the number.

It remains important to promote public policy outcomes that boost fertility rates. Prior to the baby bonus being introduced, the fertility rate in Australia had fallen to less than 1.9 children per woman, when our replacement birth rate is 2.1. Policies such as the baby bonus, along with other policies that were introduced by the Howard government, are critical to encouraging fertility. Our public policies should seek to maintain at least a replacement birth rate. People sometimes say that, if you do not have a replacement birth rate, you can make up for it with immigration. The problem with immigration is that the average age of immigrants who come to this country is about the average of the population, and so they age along with the rest of us and it does not help our birth rate. Only, theoretically, if you could somehow attract a larger, much younger cohort of immigrants could you offset some of the effects of a declining fertility rate, but the reality is we are in competition for those young skilled immigrants from all over the world—competition with countries like Canada and the United States—and therefore we cannot attract that larger cohort of younger immigrants.

Singapore provides a classic study of what happens with fertility rates once they go down. Dr Tony Tan, when Deputy Prime Minister of Singapore, announced that their government would fund $50 million over five years to educate the public on family life. The Singapore study illustrates that the birth rate, having been driven down from high levels in the 1950s and 1960s, has got down to about 1.2 or 1.3 and, despite a series of efforts over the last 10 or 15 years, with all sorts of inducements such as health care, accommodation assistance et cetera, it has been very difficult to get the fertility rate back up. Given that Singapore is a small and in some senses closed society, it provides an illustration, a case study if you like, of what happens to a nation when the fertility rate drops below a certain level. It seems to me, from studies that have been carried out around the world, that if your fertility rate gets below about 1.4 or 1.5 it is extremely difficult to raise that fertility rate again, and that has medium- and long-term consequences for that society, for that country—and one of those consequences, as I indicated before, is a decline in what would otherwise have been the economic growth of the country.

Most governments have sought to provide economic support for families. Using the rhetoric of 'family friendly policies', measures range from direct taxation and social security benefits to parental leave and flexible working hours. These policies often have the twin objectives of encouraging fertility and supporting families in the raising of their children. France, for example, has a deliberate third child policy. Whereas Australia, for example, currently pays a bonus on the birth of each child—that will be diminished if this legislation passes—France pays a greater amount for third and subsequent children. This is in addition to parental and maternity leave and childcare and family allowances. The interesting thing about France is that France is one of the few countries that has maintained a birth rate somewhere close to replacement levels. They have done that by saying it is those families who are prepared to have more than two children—those who are prepared to have three or four children—that will bring about the greatest increase in the birth rate of a country. These policies have meant that France's birth rate has stabilised at around 1.9, one of the highest in the Western world.

So public policy motives underpinned the coalition's decision to introduce this measure in the first place and our approach to things like promoting the fertility rate—whereas Labor's policy approach, if you can call it a policy approach, is simply about politics. They are ideologically opposed to stay-at-home mums and they are spending money they just do not have. So, to them, this is a measure that attacks a group they already oppose and helps them scrape some more money to put towards their skyrocketing debt.

The baby bonus payments made to families for subsequent births are important. The third birth particularly helps Australia's fertility rate. And—on our approach to parental support—the coalition have a plan to provide a first-class paid parental leave system. We have announced that and we will deliver that. But recognising that some parents do stay at home with their child is equally important. As I said earlier, families make arrangements not just from week to week or month to month; most families make arrangements over a lifetime in which, if not both partners, at least one partner moves in and out of the workforce, which of course they do to balance their work and family commitments. This government has again sought to attack stay-at-home mums and, therefore, to attack the decisions and arrangements that many families make. The coalition oppose this attack, and therefore we will oppose this bill.

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