House debates

Tuesday, 9 February 2016


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

1:04 pm

Photo of Sharman StoneSharman Stone (Murray, Liberal Party) Share this | | Hansard source

I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. This bill introduces reforms to the family tax benefit part A and the family tax benefit part B. It also looks at the at-home under-18-year-old fortnightly rate. Under the current rules, there are different rates for family tax benefit eligible children. From 1 July 2016 this bill will make changes to the rate structure and rules for family tax benefit part B and reduce some of the confusion regarding rates for various ages.

From 1 July 2018 youth allowance and disability support pension recipients aged under 18 and living at home will receive the same fortnightly rate as family tax benefit part A paid for eligible children aged up to the age of 19 years. This will mean that from 1 July 2018 the maximum basic rate of youth allowance will be paid for a person who is: not independent, lives home and is not yet 18; an accommodated independent person not yet 18 years of age; independent and in supported state care and is not yet 18 years of age. The aim is to ensure that there is no financial incentive for a child to leave full-time secondary study to claim youth allowance. That would be a very sorry outcome. Too often in the past it has led to long-term unemployment and intergenerational poverty when a child under financial stress, perhaps under pressure from some of their relations, understands that if they leave school they will have some welfare support. In general this bill makes changes that increase some rates of payment and maintain others.

We have just seen the results of the 2015 Progress in Australian Regions report. This is an ABS-ABARES document. It indicates why it is important for Australia to have a strong safety net for those who, for whatever reason, need additional support to live decently in Australia. The outcomes of this report for the electorate of Murray show that we have many low-income and unemployment challenges to overcome to improve the incomes and independence of people living in northern Victoria.

In the 2015 report, Shepparton had the lowest median weekly household income increases for the whole of Australia between 2001 and 2011. Incomes only increased by $11 over that 10-year period. The average increase across Australia for the same period was $190. You might wonder why we have such low income or low median weekly household income increases in what has often been called the food bowl of Australia. We are a rural electorate dependent on our hard-working farmers, whether they are in dairy, beef, fruit growing or cropping, or have piggeries. We are an area which has long been dependent on water security provided through the Murray-Darling system and, in particular, the Goulburn Murray Irrigation District. Communities, however, had to survive the millennium drought—a 10-year drought at the turn of the century when, for the first time in history, the irrigation system failed. This left many farmers with high levels of debt—many, in fact, doubled their debt. This caused enormous stress to families as well as to small and larger communities.

There are over 60 towns with less than 5,000 people in my electorate of Murray. Some of my towns only have 100 to 400 people in them. The town where I was born, Pyramid Hill, had only 400 people when I was born, and it continues to have a population of 400 people. The majority of our farm families—as well as many of our small businesses—were only able to put food on the table and pay their household bills through having the drought Exceptional Circumstances Relief Payment coming in to their households. This was the equivalent of Newstart allowance. That Exceptional Circumstances drought support has been replaced by a different welfare support payment, the Farm Family Support benefit. But it was, in the case of my electorate, an essential safety net which meant we were able to have farm families stay—many of them recovered—because they at least had enough income on a weekly basis to pay for the basics of keeping their families together.

In 2008, when the Labor government was in power, the Minister for Climate Change and Water at the time, Penny Wong, was in the early stages of gathering together water out of the Murray-Darling Basin production systems, to be moved into the Commonwealth Environmental Water Holder's bucket. Unfortunately, she offered what turned out to be over $2,500 a megalitre to farmers if they sold their water to the Commonwealth. The sellers, of course, were not willing; too often the pressure was coming from their financial advisers and from the banks, to whom they owed double the debt they owed in the time before the drought. They were told that if they did not retire their debt their properties would be sold—their land as well as the water. They were also informed that the temporary water market, which at that time was selling a megalitre of water for some $30 to $40, would be a more-than-adequate alternative to owning a permanent water entitlement holding into the future. Tragically, there has now been a huge increase in the price of temporary water. It is today, as we speak, up around $300 a megalitre, putting it beyond the reach of dairy farmers, fruit growers and certainly rice growers. Only a very small proportion of primary producers can pay that price, but it makes it a wonderful playground for speculators, who joyously talk about the 20 to 30 per cent profits that they make in trading their water. Those traders include Melbourne Water, who has 75 gigalitres of the Goulburn Murray Irrigation District entitlement, which it can no longer obtain via a closed down pipeline. They speculate with that water each year, at the same time making cash for the state of Victoria but putting the price of that water above farmers' capacity to pay to grow food and fibre.

This is a very difficult circumstance leading to many more families in my area—once dependent upon Exceptional Circumstances relief through the drought—to now reach for farm household support. I have some 70 farmers who are able to access food parcels supplied by the Victorian Foodbank weekly. Think of the irony of that situation: these are food producers depending on the Foodbank of Victoria in order to put food on their own tables. This is a very tragic circumstance.

I was particularly concerned when consultant Mr Rob Rendell—unfortunately, the architect of the now discredited and failed Goulburn-Murray Water Connections Project Stage 2—gave evidence at the Senate inquiry into the Murray-Darling Basin Plan just last Friday. He said quite happily that:

… dairy farmers actually can turn it off—

That is, their water—

as they did in the drought for an odd year but it costs.

In fact, dairy farmers cannot turn their water off, even for one year, because they have to keep their herds supplied with stock water, their dairies have to be washed, and they have to grow pastures or they have to have sufficient means to buy in feed. To be viable, dairy farmers mostly rely on the capacity to grow their own fodder. We have a serious need in our area to have well-thought-through welfare support arrangements when through no fault of their own my agricultural producers find themselves in a condition or a state where—while doing their hardest work and having the strongest of intentions, great expertise and generations of knowledge—they still cannot make a living. That is because of failed policy, in this case the Murray Darling Basin Plan, and because of the Victorian government when it chose to pipe water across the divide to Melbourne in the middle of the worst drought on record. At the end of the day, that is a legacy of taking 225 gigalitres out of the system, and that was achieved by shutting down half of the irrigation infrastructure. That is why we have a very strong welfare connection now when it comes to keeping a lot of my farm families alive. It is a very sad state.

The regional report data I referred to a few moments ago, which looked at data for Shepparton and the north-west region, reflected on the critical state of the communities that have now lost so many of their rural enterprises or have again been forced into spiralling debt because state and federal government policies have forcibly removed their access to the irrigation supply systems that once conveyed their water. We have very high youth unemployment—around 26 to 27 per cent. The regional report stated that there has been a decline in young people aged from 15 to 24 who are earning or learning; however, some 70 per cent of young people in my electorate of Murray are earning or learning.

We have also seen our skill levels increasing with people attaining certificate III or above or being employed in skilled occupations. This rose to 52 per cent, but the national average for people in such categories is 59.8 per cent—nearly 60 per cent. At the same time, vocational or higher education qualifications for people in my area increased to 53.5 per cent, but the national average is 63.9 per cent. So you can see that in my region there has been a most significant slowing of the capacity of people to gain skill levels—at least a certificate III or above—or to have vocational or higher educational qualifications. We are at least 10 percentage points below the national average.

Ever since the drought, we have had a decline in the number of young people taking up higher educational opportunities away from home to go to university. They are often forced to consider only the local TAFE or the local campus at La Trobe University. Unfortunately, these campuses do not offer the range of courses that you would expect in a metropolitan area. Too often courses, particularly those offered by universities, are only offered online. This situation has arisen because the cost of a student living away from home is some $20,000. If a family has more than one student who needs to live away from home to be educated, you can imagine that in the circumstances which I have just described it would be an impossible ask for these farm and small business families. So we are losing the next generation of educated, upskilled individuals, who are the backbone of any community and, in particular, of a small rural community. We should not have young people being disadvantaged because of their geographic location in our great country, but that is becoming even more the case than it was generations ago.

The loss of water from my area through deliberate government policy both state and federal—federally, of course, under Labor policy instigation—has resulted in losses of agricultural enterprise. If we consider the dairy industry, dairy enterprises have been reduced by some 50 per cent since the middle of the worst drought on record. The multiplier effect of this enterprise loss means, as I mentioned before, some 27 per cent youth unemployment. The report showed that there has been a two per cent decrease in participation rates in the workforce in this region, down to 57.5 per cent. This is way below the average across Australia, which in terms of the decrease in participation rates is 61.4 per cent. I have to say that this circumstance in my electorate makes me look very carefully at any welfare legislation—in this case, the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. I want to make sure that our welfare, our safety net programs, in Australia offer genuine support, without perverse incentives, and also that it is very much geared to the circumstances in different parts of the country.

I am most concerned that our welfare takes on board that a lot of the children in my electorate are being raised by grandparents, usually the grandmother, and that when it comes to my youth, my young people, the 27 per cent unemployed, it often means that the girls have teenage pregnancies. They become single mothers. They live a life of poverty, rarely able to be skilled beyond their early school leaving age and often unemployed for all of their adult life. I commend this bill to the House. I see it as a most important piece of the legislation.

1:19 pm

Photo of Lisa ChestersLisa Chesters (Bendigo, Australian Labor Party) Share this | | Hansard source

It is a bit disappointing that the member for Murray, the previous speaker in this debate, did not mention once the 20,000 or so families that will have their family tax benefit A or B cut or reduced as a result of the bill before the House. I agree water policy is important, and that is the debate which is next on the speaking list; but this particular debate on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015 is focused on this government's cuts and attacks on families.

Yet again, this policy has rebounded. It has boomeranged back onto the floor of this parliament. We are again debating cuts to family tax benefit part A and part B that will hurt thousands upon thousands of rural and regional families. There are 20,000 or so such families in the member for Murray's electorate; 20,000 or so in the member for Mallee's electorate; over 20,000 in the member for Wannon's electorate; and just under 20,000 in my electorate. The impact that these cuts will have on regional families cannot be underestimated, yet all we have seen from those on the government's side is either a blatant disregard for what is in this bill and they talk about other issues—important issues but not related to this bill—or they claim that the government needs to get tough and crack down on spending.

Again, this government is focused on attacking the poorest in our community—the working poor in our community, the single parents in our community, the grandparent carers in our community, the poor farmers in our community whose farms are not turning a profit—but not those in our community who are doing quite well at the other end of the income spectrum. Just to put a face to who are we talking about when it comes to the working poor, I have just one story of somebody in my electorate who will be impacted by the cuts and changes that are before the House. Helen is a hardworking dedicated mother of nine-year-old James. She and most others would have expected that she would be the last person in the world to end up depending upon charity to survive.

After struggling to find work as a chef with flexible hours to allow her to be a sole parent and raise her son, that is exactly where she found herself—at Bendigo Uniting Care asking for help. It is a hard thing to do for somebody who has worked their whole life and who has supported themselves for their whole life, only to now discover that they are struggling and need help. At one point her son's father was assisting; her son's father's parents and her parents were assisting with child care before and after school. She found that working nights as a chef and raising her son was just too hard. She said:

It just burnt me out, so I started to look for work during the day, but the rates are much lower, making it harder to survive. As work started to dry up during the day, I found that more and more of my shifts were being cut and, before I knew it, I went to Uniting Care to put my hand out for help.

Sometimes I bake muffins to take along to help other families, because it is pretty scary when you have to put your hand up for a food parcel, just to make sure your son has lunches to go to school.

This is a real story. This is the face of the person that this government is going after—this is who this government seeks to attack through these changes that are before us.

She is worried about the future and whether she will be able to get work. Will she be able to up-skill and find new work, knowing that it is very expensive to study because of the changes cuts to TAFE in Victoria by the previous government? Helen worries that this is a cycle that will continue through her son's whole life. She worries about what happens when James gets older—when he wants more and more; when he wants to go out with his friends after school. His basketball will get more expensive. These are the real life stories; these are the people that will be hit hardest by this government's unfair changes and cuts to Family Tax Benefit Part A and Part B.

Uniting Care has done quite a bit to help people in my electorate. They fundraise to help families around Christmas and going back to school. In fact, a recent drive in Bendigo raised enough money to help 100 kids get the resources they need to return to school. This is while these families still have access to Family Tax Benefit Part A and Part B and while they still have access to the Schoolkids Bonus. I note that the Schoolkids Bonus will not help these families after next January. This June/July is the last period that these families will receive the Schoolkids Bonus.

Bendigo Family and Financial Counselling Services also report an increase in families and working people seeking support. People who are renting are quite often being crippled by increasing rents by the increased costs of running a house. Electricity prices are going up. All of them laugh when you ask them, 'Did you get your cheque for $550 that this government promised you when they repealed the carbon tax?' They laugh and say, 'You're joking, right? You're joking.' No cheque for $550; instead this government is repeatedly trying to cut Family Tax Benefit Part A and Part B. Let us take a note of the agencies I have mentioned: Bendigo Family and Financial Counselling Services, Bendigo Uniting Care and the Salvation Army. All of these agencies also had suffered a significant cut by this government in grants to deliver emergency food relief. Not only do these agencies have less funding, but they are helping more families. In fact, the Bendigo Family and Financial Counselling Services' emergency food relief funding was cut by 18 per cent last year, but the number of individuals and families seeking support rose by 30 per cent.

The working poor in our community, and especially the people trying to raise families, are doing it tough—really tough. The single parents, grandparents and parents are already doing it tough, and yet this government seeks to impose more pain on them by cutting the little income they have through the measures it puts forward in this bill. Despite the fact that these bills continue to be rejected by those in the other place, this government is determined to continue to push them through this parliament. It did demonstrates again government members are not listening to the people in their electorates. For all the people on that side who claim to represent regional and rural electorates, I question how often you are out there talking to people and help honest you are about the money you seek to cut from their budgets. A lot has happened in the last few years to put lots of pressure on household budgets—rent increases, higher utility charges, the cost of schooling is greater than it has ever been before, gap fees when it comes to medicine and Medicare or seeking to do the simple things like public transport, the cost of fuel. The daily expenses of living continue to go up, which is why these payments and these cuts at this time will hurt so many.

Another person in my electorate, Sharon, wrote to me on the news that this bill had re-entered parliament and this government was seeking again to cut family tax benefits. She wrote:

Lisa, please do not support these measures. We have met before. I am a single mum, still unemployed and after three years I am still looking for work. There is not a lot of part-time work available in Castlemaine. I currently receive a meagre $340 a week to support my daughter and myself. You can pass the disinformation onto your Liberal counterparts in parliament. It's very hard to survive on $340 a week. If family tax benefit B is removed it would take me down to $290 a week.

Two hundred and 90 dollars is not enough for a single parent family to survive on, yet that is what this government is trying to do in this measure before us. It demonstrates again how out of touch this government is with those who are trying to survive on the smallest of incomes. Sharon also says in her email:

It is already dehumanising to be unable to pay your bills, to seek the assistance of charities in a small community, where everybody knows your struggles. Those sympathetic looks and those looks of pity—I don't want my daughter to continue to experience those. I fill my pantry full of donations. I feel like I'm wearing on an armband 'Loser, bludger'—the shame that is embroidered upon me. I feel like I'm wearing a red letter, a letter that reminds me daily of my shame—

Debate interrupted.