Monday, 27 February 2017
Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017; Second Reading
I rise today to speak on the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill and not in favour of the amendment. This bill is fair, reasonable and responsible and provides better targeted support to Australian families. This bill will improve the sustainability of government payments and will trigger the right levers to get more people participating in employment or onto better pathways.
This bill reintroduces the Jobs for Families Child Care Package and a range of new and previously introduced social services measures. Total savings delivered by the measures included in this bill amount to almost $5.5 billion in net savings. These savings are critical to ensure we can provide support where it is needed most and, more importantly, to ensure we do not place our children and grandchildren into even more debt.
Close to my heart, and a topic of much debate, is paid parental leave. It is likely that many of those in this House fortunate enough to be parents, like me, were not afforded paid parental leave at the time. Many Australians with older children possibly spent less time with their newborns and did their very best to provide a stable future. Parents are now fortunate to live in a time where the government will support them during this important postnatal period and beyond. The coalition government considers that all working parents should receive paid leave to spend time bonding with their newborn or newly adopted child in those early months, and the coalition's policy and this bill will provide an important safety net for families who do not have access to employer schemes or only have access to a few weeks.
This government proposes to increase paid parental leave to 20 weeks. Our changes mean that all mothers have the opportunity to spend equal time—that is, 20 weeks—with their newborn or newly adopted child. This change means that 53 per cent of eligible mothers who do not have access to employer provided parental leave will now be able to spend an extra two weeks with their new child. We need to ensure fairness in this system so that taxpayer funded paid parental leave is sustainable and available to eligible families. Our package is aimed at providing support to those who need it most. For this reason, mothers who are entitled to employer funded parental leave will be able to access a maximum 20 weeks combined parental leave from their employers and the government. Only a very small percentage of mothers—two per cent, or 4,000 people—will not receive parental leave pay from the government because of their generous employer provided leave. That means they receive more than 20 weeks from their employers at above the national minimum wage.
I have spoken before about the unfairness in previous iterations of the parental leave scheme that results in some mothers, particularly those mothers who work in dangerous occupations or who work casually, not able to access any parental leave. This is significant. In 2011, there were 1.23 million women in casual employment. There were 109,705 women working in construction and 30,798 women in mining. I am pleased to say that this bill will ensure those mothers have better access to parental leave by reducing the work test requirements. The current work test requires mothers to work 10 of the 13 months before the birth of their child, with a maximum break of eight weeks between work days during this time. Under the changes, eligible mothers will be able to have a 12-week break between work days in the 13 months before birth or adoption. Mothers in dangerous jobs will be able to use the hours from before they had to stop working to meet the work test.
In the past, I have received complaints from constituents about the difficulties in submitting their parental leave forms on time. The amendments in this bill relax the backdating provisions so that parents have more time to make their claim. And, importantly, we are reducing red tape for businesses. The Department of Human Services will now administer the parental leave pay and this is expected to reduce compliance costs on businesses by around $44 million per year.
There are many young, hardworking families in my electorate of Ryan who contact my office with their concerns about the cost of child care. They are concerned because the nature of the current childcare rebate scheme prohibits them from placing their son or daughter into child care while they work or study. The childcare reforms we are introducing are the most significant reforms to the early education and care system in four decades and respond to recommendations of the Productivity Commission inquiry into child care and early childhood learning, an inquiry instigated by the coalition. The reforms are also the product of in-depth and ongoing consultation with the sector. The Jobs for Families Child Care Package demonstrates the coalition's commitment to supporting new families and new parents. Approximately one million Australian families will be better off from the coalition's reforms to make child care more affordable, more flexible and more accessible. The childcare measures create a better environment for Australian parents who want to work or who want to work more to provide a stable future for their young families. We are committed to helping families who want to get ahead by providing accessible and affordable child care so parents can go to work.
Families, particularly those on lower incomes, will feel relief from out-of-pocket childcare cost pressures. We are introducing a new childcare subsidy, which is better targeted than the current childcare benefit and childcare rebate. The subsidy will provide low-income families with 85 per cent of their childcare fees up to an hourly cap, which decreases down to 20 per cent for families with very high incomes. This subsidy is subject to a three-step activity test, which aligns the hours of subsidised care more closely with the hours of work, training or study the parents may do. The more hours parents work, train or study, the more hours of subsidised child care they will be able to access. However, we recognise that children from disadvantaged backgrounds benefit most from quality early childhood education and care. So families with an income of less than $65,000 who do not make the activity test will still be eligible for the highest rate of subsidy. The childcare reforms will ensure the most vulnerable children get the best start in life. No child in Australia should be disadvantaged due to their family's financial situation. There will be an hourly rate cap to place downward pressure on fees and to set a benchmark, making child care more affordable for families.
Amendments in this bill will target those who work the most and earn the least. Take, for example, a hardworking family with young children living in Keppera, a suburb in my electorate. Just like many other families, they have a mortgage or pay rent, they have a car—all of the usual expenses—and of course they care for children. This family might make $65,000 a year and, as a result of the changes contained in this package, they will now pay approximately $15 per day for child care. This is positive relief where it hits hardest, the back pocket. We estimate that the measures in this bill will increase choice and access to child care that will result in more than 230,000 families increasing their workforce participation. I would also like to take the opportunity to note the red tape reduction for childcare providers. The new system will be much easier for providers to navigate and will give them more time to focus on providing care for our children.
This package will improve the lives of many families, but we need to pay for it. We must find savings in the budget to fund these measures. As a fiscally responsible government, this is what we do—unlike those opposite, who continue to drive this country, our children and our grandchildren further into debt. In recognition of the increasing cost pressures facing families, this government is increasing family tax benefit part A by $20.02 per fortnight for each child in a family up to 19 years of age. This means higher payments for 1.2 million lower income families or for 2.2 million children.
We will also provide an extra $19.37 a fortnight for people under 18 who are on youth allowance and living at home. This aligns the payment to the FTB part A payment for a child aged 13 to 19. This change is designed to encourage high school students to stay at school. It also helps simplify our payment system. As children get older, when they study and start entering the workplace themselves, we need to support parents back to work. We are making changes so that single parent families will continue to receive FTB part A for eligible children; however, they will only receive be able to receive FTB part B until the end of the calendar year their youngest child turns 16. Single parents over 60 years of age will be exempt from this measure.
In recognition of the improvements in service delivery and technology, we are phasing out the FTB part A and FTB part B end-of-year supplements. These supplements were introduced to help families with their end-of-year reconciliation of debts. However, they are no longer needed because we now have the technology to update and verify their incomes in real time. This is another red tape reduction measure.
We are also making changes so that young people are given incentives to stay in education or work. From 1 July 2017, young jobseekers aged 22 to 24 years of age who become unemployed will receive youth allowance until they turn 25 rather than being placed onto Newstart. This means that all people under 25 will be on the same payment arrangement regardless of whether they are unemployed or studying. Youth allowance also provides young people with more flexibility to earn an income. Anyone under the age of 25 and already on Newstart or sickness allowance will be exempt from this change.
This bill also introduces other measures designed to streamline and target our welfare system. We are going to implement a trial of seasonal work incentives for jobseekers. This measure provides a social security income test incentive to increase the number of jobseekers who work in specified seasonal horticultural activities—fruit-picking et cetera. This measure responds to concerns raised by the Australian horticultural industry about attracting the right number of seasonal workers. The incentives will commence as a two-year trial from 1 July this year.
A further measure will mean that pensioners who have worked less than 35 years in Australia and who receive a pension and remain out of the country for more than six weeks will have their pension adjusted. Currently, these recipients can remain outside of Australia for 26 weeks before their pension is adjusted, regardless of whether they have worked for two years or 35 years in Australia. Now the adjustments will be proportional to the years the pensioner has spent working in Australia. Taxpayers should not be asked to pay for pensioners to live overseas indefinitely without consideration of the time the pensioner has spent contributing to the Australian community. We will also be stopping payment of the pension supplement once a person has been overseas for more than six weeks. This payment was designed to help pensioners with their cost of living in Australia.
There are a number of other savings measures contained in this bill that help bring government payments into line with today's expectations and standards. For example, we are closing the energy supplement to new welfare recipients. The energy supplement was introduced to compensate Australians for the economy-wide carbon tax which was abolished three years ago. We are ceasing the pensioner education supplement because we now have other incentives and more appropriate programs and supports available for people who want to train or study.
In total, this bill delivers savings of almost $5.5 billion over the forward estimates. That is what responsibility looks like. We are paying for the reforms we are making, and we are using the savings in other areas. We are not saddling future generations with a growing debt problem. The passage of this bill is critical to providing a solid and sustainable future for all Australians. This bill will provide a foundation for better productivity and participation which will improve our economy for the future.
I am pleased to be part of a strong, coalition government which, unlike those opposite, is supporting hardworking Australian mums and dads, and their families. I commend this bill to the House.