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

This proposed legislation seeks to amend the A New Tax System (Family Assistance) Act 1999 to lower the maximum age of eligibility for Family Tax Benefit Part A, or FTBA, from 24 to 21 on 1 January 2012; pause indexation until 1 July 2014 for the higher income-free area for FTBA, for the Family Tax Benefit Part B, or FTTB, income limit and for the baby bonus income limit; and pause indexation of FTBA and FTBB supplements for three years from 1 July 2011. Secondly, it seeks to amend the Paid Parental Leave Act 2010 to extend the commencement date for indexation of the Paid Parental Leave scheme income limit. Thirdly, it seeks to amend the Social Security Act 1991 to require people to test their future work capacity by participating in training or work related activities in order to qualify for the disability support pension. Fourthly, it seeks to amend the Social Security (Administration) Act 1999 to enable a proposed 12-month extension of the welfare reform trial in the Cape York area. Fifthly and finally, it seeks to amend the Aboriginal Land Rights (Northern Territory) Act 1976 to clarify that the Public Works Committee Act 1969 does not apply to Aboriginal land trusts.

This bill spearheads the Labor-Greens alliance antifamily agenda. I will first cover the issue of the eligibility age for children under the family tax benefit. The bill seeks to lower the maximum age for the eligibility of a child for FTBA from 24 to 21 on 1 January 2012 to align with the age at which a person becomes independent for the purposes of youth allowance from 1 January 2012. This is to ensure consistency between the FTB and youth allowance. The measure also includes transitional arrangements so that families with a young person who is already enrolled in a course which started before 1 January 2012 will continue to receive FTBA until that course finishes.

I turn to the issue of indexation. Amend­ments to indexation arrangements for family assistance and paid parental leave are also proposed. Indexation will be paused until 1 July 2014 for the higher income-free area of FTBA—both the basic amount and the additional amount for each FTB child after the first—the FTBB income limit and the baby bonus income limit. As paid parental leave is a new entitlement, indexation of the PPL income limit will not commence until 1 July 2014. This schedule also pauses indexation of FTBA and FTBB supplements for three years. These changes will commence on 30 June 2011. The indexation arrangements for the amounts that comprise the FTBA and FTBB supplements will be amended so that these amounts are not indexed on 1 July 2011, 1 July 2012 or 1 July 2013. As a consequence, indexation will not recommence for the supplements until 1 July 2014. This will mean more pressure on families and that household budgets will again suffer at the hands of this government. Whilst the cost of living rises, family assistance will not stay in line. Instead it will be frozen. The message is clear for all to see—Labor has lost its way and has now adopted a Greens-like antifamily agenda.

Next I will cover the issue of the Paid Parental Leave scheme income threshold. The Paid Parental Leave Act 2010 provides that a person can be eligible for parental leave pay only if they meet the requirements in section 31, which include satisfying the income test. The PPL income limit before 1 July 2012 is $150,000 and is then subject to indexation. Under the Paid Parental Leave Act, indexation for the PPL income limit should occur on 1 July each year, starting on 1 July 2012. This measure will extend the commencement date for indexation of the PPL income limit to 1 July 2014. This will assist in maintaining consistency with the pausing of indexation for the baby bonus income limit under the Family Assistance Act.

I turn to the issue of assessing qualification for the disability support pension. This schedule introduces a requirement, commencing from 3 September 2011, for people to provide evidence that they have tested their future work capacity, by participating in training or work related activities, in order to qualify for the disability support pension. This new requirement will not apply to claimants for DSP who have a severe impairment, such as those who are clearly unable to work. Presently a person has a continuing inability to work because of an impairment if the secretary is satisfied that the impairment is of itself sufficient to prevent the person from doing any work independently of a program of support within the next two years, and either: (i) the impairment is of itself sufficient to prevent the person from undertaking a training activity during the next two years; or (ii) if the impairment does not prevent the person from undertaking a training activity, such activity is unlikely, because of the impairment, to enable the person to do any work independently of a program of support within the next two years.

The schedule introduces the new requirement that a person who does not have a severe impairment must satisfy the secretary that they have actively participated in a program of support. The requirement for a person to have actively participated in a program of support will not of itself answer the question of whether the person has a continuing inability to work. In addition, the person will also be required to satisfy the secretary that, as a result of the person's impairment, the person is prevented from undertaking any work and/or a training activity within the next two years. A person will have a severe impairment if the person's impairment has been assessed under the impairment tables and has been assigned an impairment rating of 20 points or more, of which 20 points or more have been assigned under a single impairment table. A person with a severe impairment will not be required to have actively participated in a program of support. However, the person will have to satisfy the secretary that, as a result of the person's impairment, the person is prevented from undertaking any work and/or a training activity within the next two years. This schedule commences on 3 September 2011. This commencement date aligns with Centrelink system requirements.

Schedule 4, 'Extending Cape York welfare reform trial', amends section 123UF of the Social Security (Administration) Act 1999 to enable a proposed 12-month extension of the welfare reform trial in the Cape York area. The Cape York welfare reform trial is a partnership between the communities of Aurukun, Coen, Hope Vale and Mossman Gorge, the Australian government, the Queensland government and the Cape York Institute for Policy and Leadership. It aims to restore positive social norms, re-establish local Indigenous authority and support community and individual engagement in the real economy. A key plank of the trial is the Family Responsibilities Commission, established under Queensland government legislation. Local Family Responsibility Commissioners hold conferences with community members, refer people to support services and, when necessary, arrange income management. Currently, a person can only be subject to income management under the trial after a decision by the Family Responsibilities Commission, made before 1 January 2012. This schedule amends the Social Security (Administration) Act 1999 to extend this date to 1 January 2013 to enable income management to continue in Cape York for a further 12 months.

Schedule 5, 'Aboriginal land trusts', amends the Aboriginal Land Rights (Northern Territory) Act 1976 to clarify that the Public Works Committee Act 1969 does not apply to Aboriginal land trusts. The land rights act provides for the establishment of Aboriginal land trusts to hold title to land in the Northern Territory for the benefit of Aboriginal people entitled by Aboriginal tradition to the use or occupation of the land concerned. Land vested in an Aboriginal land trust under the land rights act is held as an estate in fee simple. Since the concept of authorities of the Commonwealth was first introduced into the Public Works Committee Act by way of amendment in 1981, Aboriginal land trusts have not in practice been considered to be Commonwealth authorities to which the Public Works Committee Act applies. The amendment made by this schedule clarifies that Aboriginal land trusts are not authorities of the Commonwealth for the purposes of the Public Works Committee Act.

When the Prime Minister said that the government had lost its way she was right. The government lost its way and now we know that it has lost its way permanently. This bill will see a quarter of a million families worse off; I repeat: one quarter of a million families worse off. Even families struggling to make ends meet on incomes of $45,000 per year will be hit as a consequence of this legislation. Labor has turned its back on families, who will have their payments eroded. Every single family receiving a family tax benefit will be hit by this change; that is some 2.1 million families throughout Australia. At a time when Australian families are struggling with a rising cost of living, cutting $2 billion from family benefits will put many under even more pressure. On top of that, many families with parents earning average wages will lose hundreds of dollars a year through the freezing of the threshold at which families start losing base rate family tax benefit A. Losing this support will hurt families, who have already seen many of their bills increase dramatically in recent years. Since December 2007, electricity prices across Australia have increased by an average of 51 per cent; the overall cost of food has increased in this country by 13 per cent; and education costs such as school fees have increased by an average of 24 per cent across Australia. Measures such as the FTBA and the FTBB, as well as the baby bonus and paid parental leave, are important measures designed to support families. They should not be used to generate savings to sort out the financial recklessness that we have become so used to seeing from this weak government.

I am sure Labor's backbench is excited that their official alliance partner, the Greens, will soon be boosted by new senators. And one of them is anti-Israel senator-elect Lee Rhiannon. She is nothing less than an extremist and she, together with her Green colleagues, will continue to pull the Labor Party away from what was once bipartisan ground; that is, supporting ordinary Australian families. Senator Brown has been so obsessed with his pet issues that he has forgotten about the 2.1 million families that will be hit by the antifamily agenda that he and Labor are pursuing with this bill and other measures. The reality is that Labor stopped listening to Australians a long time ago. If they would only listen they would hear a resounding chorus of condemnation. Labor's economic manage­ment leaves much to be desired: debt and deficit, waste and mismanagement, incomp­etence and ineptness. And it is getting much worse. This pressure on families will increase. Costs of living will increase. But, in stark contrast to these facts, family support will be frozen. If their approach to family relationship and support services is anything to go by, cuts will follow in the future.

It must be made clear that the plan to launch this attack on family budgets was planned in great detail before the election and as early as January 2010. Labor knew it needed to find money after wasting billions and its anti-family agenda led it to hit family assistance payments, freezing payments and eroding them over time when this was the last thing that Australian families needed. This was a deception on the Australian people. There was not a word about hitting family assistance during the campaign and certainly not before it, yet we know from answers provided in the Senate estimates that this was planned as early as January 2010.

The Prime Minister that lied about a carbon tax deceived Australians by not being upfront and honest about her hit on family benefits. The reality is that this government no longer has any moral authority. It does not care about families. In fact, thanks to the extremists in their own ranks and in the ranks of their Green allies, they are perpetuating an agenda that will hurt families and hit family budgets hard. For this the government stands condemned. It stands condemned for deceiving Australians and it stands condemned for hitting family budgets. Therefore, I move:

That all words after "That" be omitted with a view to substituting the following words: "whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) that over 2.1 million Australian families will lose some support as a result of the real value of the Family Tax Benefit supplement being cut in this legislation;

(b) that the Government had worked up a policy to freeze indexation on Family Tax Benefits prior to the last election and kept this a secret from the Australian people during that election campaign;

(c) that these cuts to family assistance payments come at a time when Australian families are struggling with increased cost of living pressures and will put further pressure on family budgets; and

(d) that Family Tax Benefit Part A and Family Tax Benefit Part B, the Baby Bonus and Paid Parental Leave are important measures designed to support families which should not be used to generate savings to sort out the Government's financial waste and mismanagement; and

(2) calls on the Government to immediately acknowledge the serious impact that this bill will have on Australian families who will have their assistance payments eroded or cancelled".

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Teresa Gambaro (Brisbane, Liberal Party, Shadow Parliamentary Secretary for Citizenship and Settlement) Share this | Link to this | Hansard source

I second the amendment.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to follow the member for Menzies in this debate on the Family Assistance and Other Legislation Amendment Bill 2011. The pleasure I have in following the member for Menzies is that it enables me to take a little time to mention the things that he left out. One of the things that he left out—and I know that a lot of people on that side of the chamber do—was the global financial crisis. We do not need to contain ourselves to the history books as to when it occurred and its effect. As a matter of fact, Australia had one of the few developed economies in the world that grew over that period of time. It also reflects well in our employment records. But, leaving all that aside, there are plenty who can go out there and extol the virtues of Labor's management of the economy.

I want to talk about what the opposition did when they had a chance to participate in doing something constructive for the economy at that stage. When it came to things such as guaranteeing bank deposits to ensure that small business did not go under, did they support that? No. They wanted to impose some form of limit of $100,000. That would have been very good for very, very small businesses, but for businesses that generate employment, no, they did not want to participate. Did they support the one-off payments in all areas of the stimulus package? Again, no, they did not. You have to ask yourself why. The same position on the stimulus package was put forward by every leading economist in the country. The only ones that did not embrace the package were all those opposite. Probably the reason they did not embrace it is that there is not an economic brain between them.

This bill delivers on five measures announced in the 2011-12 budget as well as some non-budget measures. Families are the core of our society. With this in mind, we must provide as much support as possible for the family unit. My electorate is in outer metropolitan Sydney. I know full well that the family unit is very much the core of the being of my electorate of Fowler. The number of families and the fact that they come from a low socioeconomic area means that they do require support. When we support those families those children go on to do wonderful things throughout other aspects of our economy. I will come back to that a little later.

This amendment introduced by the Minister for Families, Housing, Community Services and Indigenous Affairs is a very proactive step to ensuring that the government directs its resources in the most effective manner to those Australian families who, quite frankly, need it most. That is what we do in a caring society. We do not want to go down the path of the former Howard government, which was buying votes from people and which was governed by middle-income welfare. This is a matter of realigning and doing what we should do as a caring society to ensure that our emphasis goes to helping families in need and helping people to participate in all sectors of the economy. (Quorum formed)

As I was saying, three provisions were put in practice in respect of the reform for family payments through the 2011-12 budget package. Commencing on 1 January 2012, the maximum age for eligibility for family tax benefit A will be lowered from 24 to 21. Importantly, this will bring that provision into line with the eligibility provision for youth allowance. This change recognises the fact that people aged 22 and over are considered independent—although I, like you, Mr Deputy Speaker Scott, have children over 24 and I do not think that as parents we ever get relieved of that level of dependence. But for the purposes of this legislation this provision aligns family tax benefit A with the age provisions for the youth allowance. If these young adults are enrolled in full-time study they will have access to the youth allowance, independent of their family's income, subject obviously to the means-testing and academic progress rules.

By saving $29.2 million over four years, we can redirect those resources within the family payment system, with a greater focus on families with dependent children in study or who are currently undertaking training, vocational or otherwise. Again, this gets back to the central theme of what I said initially, that this is about directing resources towards those in our community who need assistance.

From 1 July this year Australian families will benefit from the indexation pause for another two years. The pause will be applicable to higher income limits for family payments and that will, over a four-year period, save an estimated $1.2 billion. This is yet another measure that demonstrates the government is committed to helping families with the rising costs of raising kids, especially in low- to middle-income households. That is precisely where these changes are directed in my electorate of Fowler and those are precisely the people who will benefit from the redirection of those resources.

To meet the increased costs of living, the government has ensured that the fortnightly payment rate for the family tax benefit and the baby bonus continue to be indexed annually. The provision in respect of parental leave payments was raised earlier but, given the link between the national minimum wage and the parental leave payment, that will not now be affected.

Under these changes it is expected that less than two per cent of families will no longer be eligible for family payments. This, however, is a necessary change as it is in line with the government's effort to ensure a sustainable family payments system not only now but into the future.

In addition to these measures, the amending legislation provides for more efficient and accurate assessments for the disability support pension and also enables the proposed 12-month extension of the Cape York welfare reform trial to 1 January 2013. Under the current system, people can apply for the disability support pension without ever having sought rehabilitation and without having demonstrated that they have undertaken various training regimes or participated in a program of support to help facilitate employment options. By requiring applicants to now provide sufficient evidence that they are unable to work independently, we are ensuring that the disability support arrangements are directed at individuals who actually need it most. It also promotes a greater focus on encouraging individuals to re-enter and participate in the workforce.

Only last week I spoke in the House about Hoxton Industries as well as the Australian Foundation for Disability, AFFORD. Both of these organisations are employers of people with disability. Hoxton Industries currently employ around 150 people with a disability. They do a fabulous job in my community. I have often suggested, particularly when I address chambers of commerce and other businesses, that, where possible, without jeopardising a return on investment, a return to shareholders or compromising a business, local businesses should use the services of organisations such as Hoxton Industries or AFFORD—people who go out and specialise in the employment of people with disabilities. They make an enormous contribution to our community. I have nothing other than praise for the way those organisations conduct themselves and provide opportunity for people with disabilities, some of them with profound disabilities, to participate in the workforce.

One thing I have learnt from my many years of working with people with disabilities is that they certainly do not want our sympathy and they do not seek handouts. People with disability expect inclusion in all aspects of our community, including employment. They are no different from anybody else—they want to feel a sense of worth through their participation in gainful employment. Encouraging and helping to facilitate that is a very good thing. By concentrating on people's abilities rather than limitations, this legislation delivers an extra saving of $49.7 million while empowering individuals to help support themselves.

Finally, these budget measures also extend the Cape York welfare reform. To demonstrate support for this trial in the communities of Aurukun, Coen, Hope Vale and Mossman Gorge, in a partnership with the Queensland government, we have committed an extra $16.1 million over two years.

These budgetary measures are econo­mically responsible and they certainly strive to bring the budget back into surplus. More importantly, these changes achieve a redirection of resources to communities that need them. They certainly seek to redirect support to families in most need. As a government, we have a commitment to do all we can to assist families. I therefore commend this bill to the House.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Family Assistance and Other Legislation Amendment Bill 2011. From the title you would think there was a whole lot in this for families—more family assistance at a time when costs of living continue to rise, at a time when retail in our suburban shopping centres such as Kingsway, Newpark and Wanneroo Central is suffering. Yet the government brings in all these changes that will take away support for families—the forgotten families.

Those on the other side used to be the supporters of working families, but that was just a catchcry that served a purpose back in 2007. It created an image but now, when things are getting a bit tough, they pull back from that assistance. Thousands of Australian families will be worse off. They will lose various amounts of family tax benefit A or family tax benefit B at a time when electricity prices are rising, when the cost of food is rising, when transport costs are rising and when school fees are rising. This is the government's response.

Those opposite talk about savings, and the member for Fowler talked about the need to bring the budget back into surplus. There is no doubt about that. Spending restraint by this government is very important to keep pressure off interest rates. We know there is a lot of pressure on interest rates in this country. But, when you look across the range of government programs, it is very easy to find savings. We look back on some wonderful programs such as the pink batts scheme and some of those green programs that have been shown to be fundamental, colossal failures. There is the border protection failure which has seen costs blow out to the extent of billions of dollars. The member for Fowler talked about the redirection of resources but, when you look through what is actually being redirected and what is being saved from the cuts, the cuts far and away exceed what is being redirected.

Australian families are the ones that will be suffering at a time when the shops and retail outlets in my electorate of Cowan, across Perth and across this country are doing it tough. Not everyone has the fly-in fly-out miners. Not everyone has those guys on $150,000 or $200,000 walking into their shops. Most people are not on that sort of money, and it is wrong of the government to take away money from families that are not doing it easy. It seems that $150,000 is the magic mark for this government—families on more than 150 grand are just the filthy rich and they should have everything taken away from them. But there are a lot of families sailing close to that mark on a couple of modest salaries and they have to look after their kids, pay the bills and keep up with the costs of living. It is a sad day when this government attacks the forgotten families of this country with these sorts of measures. It is very hard to find something in this bill that you can honestly say you would support—there are indexation freezes and there is the tax on family tax benefit supplements. There are a lot of problems in this bill, and that is why I support the second reading amendment of the member for Menzies.

Some aspects of this bill relate to the disability support pension. It is appropriate that all those with the capacity to seek employment be asked to reach their capacity and be asked to contribute to society. I do not think anyone on this side would object to that. There have been some cases where the families of those with severe impairment or permanent incapacity have been unfairly required by Centrelink to continually prove disability. That is a tragic thing and certainly Centrelink needs to work something out. If someone has a permanent severe disability the family should not be put under the pressure of having to get medical certificates every couple of years to justify the requirement for the disability support pension.

In any discussion of the disability support pension it is also worthwhile talking about the National Disability Insurance Scheme. Recently the Productivity Commission's draft report was put out; we on this side certainly supported the referral to the Productivity Commission. In regard to disabilities we know that there is a wide range of support. In many state jurisdictions there is the workers compensation aspect. If someone is injured in a car accident, for instance, the level of support is quite significant in some jurisdictions. But in other areas, such as where someone is born with a disability, it is very difficult because there is a requirement for the families to reach out to a number of different agencies to try to cobble together the support they need for their disabled family member. So we have a real mish-mash of a scheme, a system that really needs to be worked on.

We need a workable scheme in this country and it is right that we look at the National Disability Insurance Scheme or in fact a scheme that would see a resolution of the longstanding problem in this country of providing true support to those who are disabled and for their families. On this side we look forward to the Productivity Commission's final report with regard to the scheme and to disability services in this country. The coalition will give generous consideration to the final report.

Across this bill there are some aspects that I am happy with, but what is being done against families in this country is not something we should be supporting. As I said before, the cost of living continues to rise. The support levels under this bill continue to fall or are planned to fall. When we look at the election campaign just 12 months ago, it is very difficult to recall where this was all forecast. It is a bit like the carbon tax that was never going to exist; it was ruled out by the Prime Minister and by the Treasurer—hysterically at one point by the Treasurer I recall. This government wants to take away family payments and create problems for Australian families. It has forgotten families. At the same time it wants to bring in this carbon tax, a tax that will do nothing for the environment and for the lowering of global temperatures. There are a number of attacks being made by this government. Conveniently, they were not forecast as part of the election campaign. In any case, these are the challenges that this government wants to impose on the forgotten families of this country.

So it is right that we on this side of the House talk about these things and remind the government that families are the most important building block of this country. They are entitled to support, and that support should not be reduced in this frivolous manner. Whilst there is virtue in ensuring that the budget is balanced as soon as possible, the government should look to many of its programs that have not worked, are expensive and have blown out and find the savings within those measures. We have been able to do it. During the election campaign we talked about the billions of dollars that we would cut from some of these many wasteful programs. So it is possible to do it without a tax on the families of Australia.

I encourage the government to re-think this bill. In any case I most certainly take this opportunity to support the member for Menzies in his wise amendment about this bill.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Family Assistance and Other Legislation Amendment Bill 2011. I am very proud to be part of a government that actually supports families. There are a number of measures we have brought in since we came into government in November 2007 that have made a huge difference and will continue to do so over many years. First, I am most proud about the Paid Parental Leave scheme that we brought in and that is now operating in this country. For 11½ years those opposite opposed it. In fact the current Leader of the Opposition said that it would come in over his dead body. Then, later on, in a road-to-Damascus conversion experience, he decided that he was going to bring in a system that would actually tax companies and increase the impost on household budgets. It is an extravagant scheme that plays to the higher income earners but fails to assist middle- and low-income earners.

The second issue that as part of this government I think has made a big impact is the area of childcare rebates. The 73 per cent increase in childcare rebates we have seen in this country—up to $7,500 per child—assists mums and dads who want to participate in the workforce and make an impact in the workplace with their productivity. They also contribute to their family's financial security by working hard day in, day out for the money. It has made a big impact because we have seen more children placed in childcare centres, where they get good-quality child care. This is because of the funding that this government has put in. It is far more than the Howard coalition ever put into child care. One of its first acts in power was to rip $1 billion out of the childcare sector, so we have massively increased the funding there. The increased funding for the childcare rebate has been a huge advantage for Australian families.

The third area is in the education tax refund for people on family tax benefit A, putting real money back into people's pockets so they can spend that money on things like computers and education needs for their kids, and extending this out to uniforms is also a big advantage. We have a proud record of helping Australian families, not just through the tax cuts we provided for three years in a row but also through real measures like the paid parental leave scheme, the childcare rebate increase, areas like helping households and schools, school and education communities, and helping health by massively increasing its funding. In fact, in so many areas since we have been in government we have made changes to remedy the problems of the past.

The bill that we are debating has a number of budget measures. There is the reform of family payments for 2011-12; the aligning of family tax benefit part A eligibility with the youth allowance, which makes sense in terms of the age of dependency; and the pausing of indexation of certain family assistance and paid parental leave income thresholds for a further two years. I do not think that is unreasonable in the circumstances as we get the budget back into surplus and put a focus on good economic management. We are the ones who brought in the paid parental leave scheme. We are the ones who increased assistance to households. Of course, we put in pause indexation on FTB end-of-year supplements for three years. There are a number of changes in this piece of legislation which we believe are important and necessary for the whole budget framework.

Those opposite on so many occasions will criticise us for what we do. They will say that we should not do this; they will say that we are wasting money, but when push comes to shove and when they are given the opportunity to say something about the budget and legislation here they carp and whine and moan. They do not come up with plans; they do not come up with strategies which are geared towards helping families. We are the ones who have been vigilant with respect to pension increases, tax cuts and building Australia's future by helping participation in the workforce.

We are the ones who have also made an impact by making sure disability support pensions do not get left out. Those opposite will criticise us in that regard. They will criticise us for what we are doing about disability support pensions and the implementation of efficient and more accurate assessments for disability support pensions. They will criticise us for all kinds of things we do to make sure that people transition from welfare to work and say we are not doing enough or achieving what we say we are achieving. But we have brought forward reforms. We want people to participate in the workforce, we want to get them off welfare, because we know that if someone works it improves their self esteem, it improves their employment prospects in the future and their family's financial security. So we are making reforms in this bill. We are making changes which we think are necessary in the overall budget strategy.

The bill covers a number of elements, as I have said. We are supporting families with dependent children in study and training—we think that is an important focus for our government. The reforms contained in the legislation are sensible initiatives. They not only support families but also are geared to getting the budget back into surplus. I come from a small business background. I ran a business for 20 years and I know how important it is to get your business in the black. I know how important running your business efficiently and effectively is for your credibility not just in terms of the bank but also for the staff and your customers.

We undertook to go into deficit during the global financial crisis. I am committed to jobs in my area of Blair, in Ipswich and the Somerset region, because it was absolutely necessary to do what we did. The measures contained in this legislation are about getting the budget back into the black. They are about doing what we need to do. We think it is important that we undertake these measures, some of which may be tough. They may be very hard. Some may say they are effective but stern. We think it is important to undertake these measures.

As a business needs to get in the black, as a family's household budget needs to be in the black, we need to get the economy geared towards productivity and productive growth in industries—not just the mining industry but also the retail and construction sectors et cetera. Government needs to be efficient and lean and it also needs to be prudent in its management of the economy and its own finances. The measures contained in this bill relate to the budget. They will have a financial impact—for example, the aligning of the age of FTB is $29.2 million over four years and assessing qualifications for the DSP is $622.7 million over four years.

There are many measures here that have a financial impact on the bottom line. These are prudent budget measures. They are necessary to do. They are part of an overall strategy by this government to get the budget back into surplus. I think we have the runs on the board and the credibility to show that we do support Australian families. We support families across the country and the community in my electorate. I commend the legislation to the House.

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

The Family Assistance and Other Legislation Amendment Bill contains six measures, five from the 2011-12 budget and one minor non-budget measure. Three of the budget measures introduced in this bill involve important changes that will deliver a fairer, sustainable and more targeted family support system that focuses on low- and middle-income families and families with dependent children in study or training. First, the bill will align the maximum child age eligibility for family tax benefit part A with a reduction in their youth allowance age of independence from 1 January 2012. This change recognises that young people aged 22 and over are considered independent and from 1 January 2012 may be able to access youth allowance independent of their parents' income, subject to means testing and academic progress rules.

In addition, the bill makes amendments to some indexation arrangements for family assistance and paid parental leave. The bill provides that indexation will be paused until 1 January 2014 for the higher income-free area for family tax benefit part A, the family tax benefit part B income limit and the baby bonus income limit. This builds upon the reforms announced in the 2009-10 budget that were designed to better target the family payment system to low- and middle-income families.

For paid parental leave, which is a new entitlement, indexation of the paid parental leave income limit will not commence until 1 July 2014. This will maintain consistency with the pausing of indexation for the baby bonus income limit. The bill also pauses indexation of family tax benefit end-of-year supplements until 1 July 2014. No family will lose any family payments as a result of these changes unless their income rises.

This bill also delivers important reforms to assessments for the disability support pension. This was a 2010-11 budget measure that was brought forward as part of the recent 2011-12 budget to start in September 2011 rather than January 2012. The bill reforms assessments for the disability support pension to help Australians with disability into work wherever possible, while continuing to provide an essential safety net for people unable to support themselves. Under the new assessment process, most people who apply for DSP will be required to have tested whether they can find suitable employment with the help available through, for example, employment services, retraining or rehabilitation. This requirement will not apply to a person with a severe disability or illness whose impairment is assessed at 20 points or more on one impairment table. The changes make sure assessments for the disability support pension focus on people's ability, not their disability. They will help people with disability get back to work wherever possible.

The final budget measure in this bill relates to the Cape York Welfare Reform trial, which is currently running in the communities of Aurukun, Coen, Hope Vale and Mossman Gorge. The trial is a partnership between these communities, the Australian government, the Queensland government and the Cape York Institute for Policy and Leadership. In the 2011-12 budget the government committed $16.1 million for a proposed extension of the trial for an additional year. The trial will not be extended without consultation with the Cape York communities. However, while these discussions take place, the government is ensuring that the necessary enabling provisions are put in place to allow income management under the trial to continue for an additional year under any extension to the trial. The bill also includes a minor non-budget measure which clarifies that Aboriginal land trusts established under the Aboriginal Land Rights (Northern Territory) Act 1976 are not Commonwealth authorities to which the Public Works Committee Act 1969 applies.

I thank the contributors to the debate and commend the bill to the House.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Menzies has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The immediate question, is that the amendment be agreed to.

Question put.

The House divided. [10:23]

(The Speaker—Mr Harry Jenkins)

Question negatived.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.