House debates

Monday, 8 February 2016


Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015; Second Reading

7:29 pm

Photo of Jenny MacklinJenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | | Hansard source

Tonight I speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. It is another year and another bill that seeks to rip thousands of dollars from the pockets of Australian families. It is clear that it is not just the Liberal Party; it is also the National Party. The National Party represent some of the lowest income electorates in this country and yet they are prepared to take thousands of dollars out of the pockets of those on the lowest incomes. It is going to come out of the pockets of poor families. That is where it is going to come from. It is going to come out of the pockets of poor families if the National Party get their way. That is exactly where it is going to come from.

It is like an annual tradition for the Liberal Party and the National Party. Every single year they come around and put forward legislation to cut family payments to millions of Australian families. The characters might change from year to year, a conversation about an increase to the GST might come or go, but the same cuts to families remain. It all began in the 2014 budget when the former Prime Minister, the member for Warringah, proposed to cut $8.5 billion out of the pockets of families. These cuts of $8.5 billion would have made it so much harder for families to receive the support that they needed to help with the cost of raising children. These cuts would have left a single-income family on $65,000 a year around $6,000 each year worse off. That would have applied right through all of the National Party seats as well as Liberal Party seats. $6,000 each year is how much worse off Australian families would have been if this Liberal-National Party government had been successful in getting its first round of cuts to family payments through the parliament. I am very pleased to say that Labor fought those cuts and won.

Then last year in what the Liberals and the Nationals called a compromise they again tried to cut support to families. This time they were cuts of $4.8 billion. Again, Labor fought for families. Labor fought for families that faced cuts of around $5,000 a year. We fought against the cuts to the family tax benefit supplement and cuts to family tax benefit part B. We are doing so again tonight, because this bill contains the same cuts to family tax benefit supplements, both A and B, and the same cuts to family tax benefit part B for single parents. Today Labor is saying to this Prime Minister: enough is enough. These cuts to family payments completely fail the fairness test. They fail the fairness test that the Prime Minister himself set for changes to family payments. Last year the new Prime Minister, Mr Turnbull, said in reference to these changes:

Fairer is what it is all about. Fairness has got to be the key priority.

Well, Prime Minister, these changes to family payments will make families up to $5,000 a year worse off. How could that be fair?

The Prime Minister cannot just talk about fairness. He cannot just say one thing and then do the exact opposite. Yet that is exactly what is happening here. It is also happening on climate change, marriage equality and the republic. This Prime Minister says one thing and then does another. He says he believes in fairness but then he makes massive cuts to low- and middle-income families.

I will just give the parliament an example. A single-parent family with two teenage children stands to lose around $4,700 a year or $97 a week when the impact of these cuts to family payments and the abolition of the schoolkids bonus are combined. So a single parent with two teenagers will those $1,806 in family tax benefit A and B end-of-year supplements, $1,712 as a result of the abolition of the schoolkids bonus and $1,785 in family tax benefit part B, as the base payment is set to be reduced to $1,000 a year. These cuts will apply each and every year to the poorest families in this country. These families would only gain around $525 from a fortnightly increase to family tax benefit part A. But when you add it altogether it would mean that a family like this—a single parent with two teenagers—would end up a total of $4,700 a year worse off. How on earth could that be fair?

Just last week we saw new projections from the Parliamentary Budget Office that showed that Mr Turnbull's cuts to family payments will cost families $16 billion over the next 10 years. That is how much each and every member of the Liberal and National parties are going to take out of the pockets of the poorest families in this country when they vote for this legislation in a few hours time. $16 billion will come out of the pockets of low- and middle-income families when each of these Liberal and National Party members vote for it. That is how much this Turnbull government wants to rip from the pockets of Australian families—$16 billion over the next decade.

What this proves is that it does not really matter who leads the Liberal Party or the National Party. It does not matter who the Treasurer is. It does not matter who the social services minister is. All this government want to do is dip into the pockets of Australian families and take money out of them. They are not actually interested in how these families manage; they just want to take these huge amounts of money off them.

I want to go through the detail of what is in this legislation and exactly how exactly how families will be worse off as a result of these proposed cuts. There will be a reduction in family tax benefit part B for single parent families when their youngest child turns 13. There will be around 136,000 single parents with children aged over 13 who will have their family tax benefit part B reduced to $1,000 in 2016—a cut of around $1,700 a year. Single parents with children over the age of 16 will have their family tax benefit cut entirely, and that means they will lose $3,100. I have to say that my great fear with that measure is that if it gets through the parliament—and I sincerely hope that it will not—it will be a very big disincentive for young people to stay in school. It will make life that much harder for the families of young people who do decide that they will try to stay in school.

There will also be a rapid phase-out of family tax benefit A and B end-of-year supplements over two years. The family tax benefit A supplement will be reduced to $602.25 from 1 July 2016, then to $302.95 from 1 July 2017 and abolished entirely from 1 July 2018. Everyone should know that this will apply to 1.5 million Australian families—that is, 1½ million families who will entirely lose their family tax benefit part A supplement. That is a cut of $725 a year for every single child in those families. Around 500,000 of those families are on family incomes of less than $50,000 a year. There families are on very low incomes, and this government is going to take hundreds and hundreds of dollars out of their pockets.

The impact of these cuts, of course, will be compounded by cuts to family tax benefit part B. There are 1.3 million families who will lose their family tax benefit part B supplement—that is a cut of $354 a year per family. Single-parent families will lose both of the supplements—both family tax benefit A and B. In total, more than 1.6 million families will be left worse off because of these cuts. That is what the Liberal members and the National Party members are going to be voting for tonight. There will be thousands of these families in the electorate of each and every member who will vote in favour of these cuts tonight. Shame on each and every one of you. Three million children are set to lose the support that their parents rely on. The family tax benefit part B supplement will be reduced to $302.95 from 1 July 2016. It will go to $153.30 from 1 July 2017, and it will be abolished entirely from 1 July 2018. So these cuts are very, very harsh indeed. They are very harsh cuts that will have a very real impact on the living standards of families across Australia. In fact, I believe that these cuts are actually harsher than those contained in the 2014 budget.

Also contained in this bill is a very small increase of $10 a fortnight in the standard child rate of family tax benefit part A. However—and only this government could figure this out—around 300,000 families will not even receive this increase but will still be affected by the Prime Minister's cuts. The bill also sees the return of the Baby Bonus in the form of a new rate of family tax benefit part B that will be introduced for families with children aged under one. This particular measure is quite remarkable for a number of reasons. First of all, it completely flies in the face of the government's rhetoric about budget repair. Second, it is contrary to the government's rhetoric about simplifying the welfare system. We have just heard the Minister for Social Services go on and on about how important it is to simplify the welfare system, and here they are creating a new payment in this bill! Of course, it is just another piece of rhetoric by them gone wrong. It does make you wonder why the measure exists at all. The reason, of course, was that it was part of the deal that the current Prime Minister did with the Nationals after he rolled the previous Prime Minister.

This Prime Minister yesterday talked about good policymaking taking precedence over political decisions. If the Prime Minister were true to his word, then he would take this measure out of this bill immediately. I cannot recall a measure that is so blatantly about the Prime Minister shoring up support in the coalition party room. This really takes the cake!

I am pleased to say that Labor have been able to get some concessions out of the government. We were able to get some exemptions for around 4,000 grandparent carers from the cuts to family tax benefit part B that would apply when their youngest child turns 13. But we should not forget the appalling way in which this Liberal National Party government was prepared to treat grandparent carers, and, of course, all the Liberal and National Party members over there voted for it. The Minister for Social Services stood up in this place in question time and told grandparent carers to go out and get a job. It was so offensive and so out of touch. Then, of course, we saw him give a train wreck interview. He was asked whether a grandparent carer with a 15-year-old in their care would be $2,500 a year worse off, and he said:

Errr, well, that depends on their capacity to access childcare and re-enter the workforce.

A grandparent carer with a 15-year-old child and the minister says that whether or not they are going to be worse off depends on their capacity to access child care and re-enter the workforce. Honestly, I don't know if the minister was doing an impersonation of the previous Minister for Social Services, the member for Menzies, or he really is that out of touch—it is hard to tell—because anyone who has actually met a grandparent carer would know how hard it is and how much that responsibility weighs on their shoulders.

Late last year, just before Christmas, I had the opportunity to meet with some grandparent carers at the Mirabel Foundation in the electorate of the member for Melbourne Ports. I know that the member for Melbourne Ports is a big supporter of everyone at Mirabel. The member for Melbourne Ports was instrumental in having Mirabel's funding restored after it was cut in the 2014 budget by this Liberal-National Party government. Mirabel does amazing work, and I want to thank Jane Rowe and Elizabeth McCrea and the whole team for the work they do. It was a very, very emotional visit. Some of the stories that this group of grandparent carers shared with me were very sad—stories of terrible tragedy. But I also heard stories of extraordinary love and dedication—love and dedication to their grandchildren. Grandparent carers do an amazing job.

One grandparent carer I met at Mirabel was Lorri, and I want to spend some time talking about Lorri's story. She has been caring for her 13-year-old granddaughter since 2002. Her granddaughter was only two months old when Lorri was asked to care for her. Lorri's own daughter had a history of mental health illness and chronic drug use, and she died in 2007. The money that Lorri had previously saved and invested to ensure she would be independent in her retirement had to be used to buy a car and to cover the ongoing costs of caring for her granddaughter. She now rents a small two-bedroom private rental unit for herself and her granddaughter. Her granddaughter's school fees for 2016 will be $1,100 which will need to be gradually paid off through the year. Up until now the schoolkids bonus has helped with the ever-increasing cost of school. But, of course, this government has decided to scrap the schoolkids bonus from the middle of this year—and that too will affect Lorri and her granddaughter greatly. If the government's cuts to family payments had gone through the parliament, Lorri told me that she would have 'gone under'. That is how serious these cuts are. This is a real person. She is not a number in the budget papers. Lorri is a real person.

The grandparent carers that I met at Mirabel really do not expect that much from any government; most just want a little bit of help that might make their special responsibility in life that much easier. Instead, what this Liberal-National government is trying to do is make their life so much harder. It was Labor that had to shame this government into dropping their cuts to grandparent carers. They did not do it out of the goodness of their heart. We had to shame them into it. I want to say to all those grandparent carers out there that Labor will continue to fight for you in the face of this Liberal-National Party government's cuts. As a result of the legislation that is before us tonight, grandparent carers will still lose all of their family tax benefit end-of-year supplements. That is what this legislation will do to grandparent carers. So I would say to everybody who is going to vote on this legislation: think about these extraordinary people before you vote tonight.

As I said earlier, we should not forget that Mr Turnbull said in an interview just last October that his approach to family payment changes would be all about fairness. Well, Mr Turnbull, in this legislation, single-parent families will be around $5,000 a year worse off. This is Prime Minister Turnbull's version of fairness: single parents will be around $5,000 a year worse off. This is a Prime Minister who continually says one thing and does another. He may say that he is not convinced about an increase to the GST right now, but how could you trust him? How could you trust this Prime Minister or this Liberal-National government to keep their word about anything, after the record we have seen in the last two and a half years? How could you trust this Prime Minister when he talks about fairness and he wants to take $5,000 out of the budgets of low- and middle-income families? So Labor will again oppose these cuts. We will oppose this bill today. We will oppose it because we do believe in fairness, and we are not just saying it like the Prime Minister does. We will put people first. We will put families first. And that is why we are opposing this bill with every ounce of our passion today.

7:50 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

The member for Jagajaga has just spoken for close to 20 minutes in this debate on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. In those 20 minutes this nation has had to borrow another $1.4 million. And we will borrow another $1.4 million in the next 20 minutes, and so on and so on, every hour of the day, every day of the week, every week of the year for the next two years as we try to bring this budget under control. What this means is that we are continuing to add to the debt burden which we will hand on to our children and our grandchildren.

It is all very well for the member for Jagajaga to come in here, whinge and complain about the difficult job that we in the coalition have to do in trying to repair this budget, but, mind you, Madam Deputy Speaker, it was a problem that was created by the member for Jagajaga when she sat on the Treasury benches—when she was sitting in that Labor cabinet which ticked off all that reckless and wasteful expenditure, which turned the $20 billion of budget surplus they inherited into record deficit. It put this nation into so much red ink, for which we now have to find $13 billion every year—not to pay for family tax benefits or to give to kids with disabilities or to health care or to public transport or to education. That $13 billion, which could otherwise have gone to those very needy causes, simply has to go to pay the interest on the debt that they created. They are the ones who come in here after causing all the mess and causing the reasons this budget repair is needed to whinge and complain about fairness.

The member for Jagajaga talked about the fairness test. There is nothing more unfair than running deficit budget after deficit budget. Even with all the hard work that this coalition government is currently doing and all the unpopular steps we are forced to take to wind that budget deficit back, we will be looking at a decade of budget deficit. If you are looking for something that is unfair, that is unfair. It means that the children we are talking about—the beneficiaries of the family tax benefit—will have to pay higher taxes and they will have fewer government services in the future simply because over the last decade we have been spending too much money.

Ms Hall interjecting

I hear the member for Shortland interjecting. She is a champion at coming in here and complaining about some of the tough measures that we have made. I remember the member for Shortland was there voting every time over the last six years when Labor was on its reckless spending spree, racking up the debt. I hope that, when the member for Shortland goes out doorknocking, she apologises to her electors for creating that debt through all that wasteful expenditure which she never spoke up against. I hope you go and apologise and explain to your constituents that every single year now $13 billion has to be found just to pay the interest on the debt that you are responsible for. I hope you apologise to them.

I also hope that members of the Labor Party would at least listen to their former leader, Paul Keating, for over the last couple of days—and it is not often, I must admit, that I would agree with the words of Paul Keating but this time I am in lockstep with him—he said:

…commodity prices have dropped, budget revenues are falling. When commonwealth revenue has been so affected the penny ought to drop that we should be cutting spending.

He is right: the penny ought to drop but, unfortunately, it has not on the other side of the chamber. They think they can continue to borrow and spend and tax and borrow some more and spend some more. They simply do not understand the damage that they are doing to the future prospects of this country.

None of us likes to make these hard decisions. All of us would like to continue to spend and hand out benefits left, right and centre to all our constituents, but the government does not have any money. The only way we can get that money is to increase taxes and to continue to borrow. That is the worst possible thing we can do.

The other thing we need to make a note of is that the money we are borrowing to finance government spending is mainly coming from overseas. It means those interest payments we make actually have to go out of the country. One concern I hear a great deal about from my constituents is that foreign companies are coming in and buying up parts of Australia. They say, 'We are getting further and further behind. There more and more foreigners owning parts of Australia.' When we continue to borrow money, we are getting ourselves further and further into debt with foreigners, and more and more foreign entities are owning a bigger part of Australia. That is because we are borrowing from them to pay our ongoing expenses.

There should be one word that we have for all pieces of legislation in this place—sustainability. We cannot continue to spend unsustainably. We like to talk and teach about it in the schools we go to. We hear sustainability as one of the buzzwords. I would like them to learn about economic sustainability; that is what we need to focus on. We cannot continue in the way we are going because we should—even after this last decade of deficits—look at what is down the track for us. Look at how our age profile is changing; look at the ratio of people of traditional working age between 16 and 64 to people aged over 65. Go back to 1974-75, when we had 7.3 people of working age to every person over 65; now we are down to 4.5 people. For every person over the age of 65, we have their expenditures and their pensions being sustained by those 4.5 people of working age.

If we take the projections forward to the year 2050, we are looking at having only 2.7 people of working age for every person aged over 65. If we cannot balance the budget on the current demographics that we have, what hope do future generations have when we will have such a ratio of people of working age to people aged over 65? This is the obligation that we have, and we need to fix it now. We cannot continue with this reckless spending.

The member for Jagajaga talked about how this would affect single parents. There is some good news in this for single parents. I will give you the example of a single mother with one child who is three years old. The child attends long day care four days per week while her mother is at work. Assuming the mother's income in 2018-19—that is, three years down the track—is $68,000, under the new childcare subsidy she would be $2,845 better off after the new family tax benefit changes have been taken into account. These horrendous cuts that the member for Jagajaga is trying to frighten constituents with are simply not true.

But we need to make some tough decisions. We as a nation simply cannot continue to spend and tax and borrow in the way that we have been. Some hard decisions need to be made. I would hope that members of the opposition, rather than whingeing and whining and complaining, tell the truth to their constituents, admit the problems that we have and work with the coalition to try and bring our budget back to balance. With that, I commend the bill to the House.

Debate adjourned.