Jodie Campbell (Bass, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. Is the minister aware of concerns amongst public benevolent institutions and other charities about changes to income definitions? What are their origins?

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

I thank the member for Bass for her question and for her particular concern for the charities operating in her electorate, who are doing such an outstanding job for some of the most disadvantaged people in this country. I have been made aware of concerns among many public benevolent institutions and other charities about the impact of the former government’s changes to income definitions. These are changes that were introduced by the previous government as part of wide-ranging child support reforms. The changes were detailed two years ago in the Howard government’s 2006-07 budget. I will refer to the specific measure in the budget papers from 2006-07. It says that the government—and this, of course, is referring to the previous government:

... will align the income definitions used to calculate Child Support and Family Tax Benefit.

It goes on to say:

The FTB income definition will be broadened to include the gross value of reportable fringe benefits rather than the net value used at present.

That is what was said back in 2006-07, when we had a number of people opposite sitting around the cabinet table who would have taken this decision, including the Leader of the Opposition, who, of course, knew all about it. I want to make it absolutely clear that these changes were part of major changes that the previous government wanted to make to child support.

What we know is that very little of the impact of this was made clear by the previous minister. I will read from the former minister’s fleeting mention of this measure in his second reading speech back in September 2006. He said:

The gross value of reportable fringe benefits, rather than the net value, will apply for family tax benefit, as it already does for child support. The changes to income for family tax benefit will also apply for childcare benefit.

That is all that was said about this in the second reading speech. Not a word was said about the impact of this measure and how it could hurt people working in public benevolent institutions or in other charities. Now it is the case that the full impact of this measure is becoming clear.

I want to reassure those people who are doing such an outstanding job working in public benevolent institutions, in charities or in other parts of the non-government sector that we on this side of the parliament—the new government—certainly value the work that they do. They are working with some of the most disadvantaged people in our community.

We are also aware that salary-packaging arrangements are a very significant measure for attracting and retaining staff in the not-for-profit sector. That is why this government intends to take action to address these concerns as a matter of urgency. We are now looking at all of the options that may be available to us to assist the not-for-profit sector to make sure that they are not hurt by these changes. It is our intention to finalise our policy position by the end of this financial year. The changes are due to come into effect on 1 July, so it is imperative that employees in the not-for-profit sector get some reassurance before then.

I do want to say, though, to people working in the not-for-profit sector that the payment system through Centrelink is, of course, extremely complex and technical. Centrelink payments are organised months in advance, so I would ask people who are listening today—and whom we are also in touch with—to bear with us as we find the best way through this issue. We are committed to making sure that people working in these public benevolent institutions are not hurt by the former government’s changes. We do need to find a solution to this problem and I want to give a reassurance to those working in these organisations that we are committed to urgent action on this issue.

The previous government left these important workers in the lurch. They did not explain publicly what they were doing and how it would impact on the not-for-profit sector. This government, by contrast, is very different. We intend to clean up the former government’s mess and we will work with the not-for-profit sector, not undermine it.

Tony Abbott (Warringah, Liberal Party, Shadow Minister for Families, Community Services, Indigenous Affairs and the Voluntary Sector) Share this | Link to this | Hansard source

Mr Speaker, I seek leave to table the explanatory memorandum of the 2008 budget bill in the minister’s portfolio showing that her legislation is implementing this rip-off of working families.

Leave not granted.