Wednesday, 29 March 2017
Social Services Legislation Amendment Bill 2017; Second Reading
The original question was that this bill be now read a second time. To this the honourable member for Jagajaga has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form 'that the amendment be agreed to'. The question now is that the amendment be agreed to.
As I was saying before the break, I do support the amendment, and Labor will vote against this bill, because it will increase poverty in Australia. By freezing family tax benefits you are making the most vulnerable in our community worse off.
Schedule 1 of this bill freezes for three years the income-free areas for working-age and student payments, Newstart, youth allowance, the parenting payment and the carer payment. This means that for these people their payments will not keep pace with the cost of living. This will impact 204,000 Australians on the lowest incomes. These people have no wiggle room in their household incomes. When their car breaks down, they struggle to find money to fix it. They do not holiday, and a night out at a restaurant or a movie is really a luxury for people in these circumstances. The threshold after which the parenting payment is reduced is $188 per fortnight. For Newstart it is $102 per fortnight. There is no rationale for this three-year freeze. In my community not one week goes by where people do not talk to me about housing affordability and whether or not their kids are going to be able to afford to live in the community that they grew up in. House prices are going through the roof, and rents are doing the same, so the cost of living for people in our community is increasing at a dramatic rate, yet the approach of this government through this bill is to freeze the incomes of the weakest, most vulnerable and poorest in our community. This bill will make life difficult for many more of those.
Schedule 3 extends the waiting periods for those people accessing the parenting payment and youth allowance by one week while amending the current severe financial hardship provisions to a 'personal financial crisis' exemption. This is a truly harsh and heartless change with no discernible policy rationale at all. Schedule 4 of the bill freezes the indexation rate for family tax benefits part A and part B for two years from 1 July 2017. The impact will be significant on those families that rely on family tax benefits to get by. A family on $60,000 with two primary-school-age children will be around $440 worse off in 2018-19. A single parent on $50,000 with two high-school children will be around $540 worse off in 2018-19. A single-income couple on $60,000 with three children under the age of 12 will be $600 worse off in 2018-19. It affects about 1.5 million families in Australia that will be worse off, and 600,000 of these families are on the maximum rate of FTB-A, which means their household income is less than $52,000 a year.
But, as I said earlier, at the same time, the government is proposing a five per cent tax cut over the course of the decade for the largest multinational businesses in Australia, with turnovers of over $1 billion, and they include the big four banks. It completely represents just how out of touch this government are and the fact that they have their priorities all wrong when it comes to this budget and this legislation. Even when indexation resumes, this cut will mean that, into the future, families will be receiving less each year than they would have been. This reform puts them behind the eight ball, and they can never catch up, particularly as, as the Reserve Bank of Australia and the government's own Treasury have been forecasting, inflation is set to increase in Australia over the course of this year. It is astonishing to note that this bill is actually a 2014 budget measure. This is something that was chewed up and spat out by the Australian public the first time, and yet the government keeps bringing it back. They keep bringing these dodgy 2014 budget measures back, and this is further proof that Malcolm Turnbull is just Tony Abbott in a more expensive suit.
The Prime Minister is just the member for Warringah in a more expensive suit—thank you, Deputy Speaker.
Schedule 2 of the bill relates to the automation of income stream review processes. This is a measure that we welcome, and one that will improve the accuracy and efficiency of the social security system and reduce the regulatory burden on income stream providers and recipients of social security payments. From 1 January 2018 a six-monthly electronic data collection process will be introduced for income stream information from financial service providers. Recently we have seen just how disastrous things can be when the social security system is not running at its best. Many in my community that I represent—as I am sure is the case for many other MPs in this place—got in touch with me to express their worry, concern and dismay at the letters that they had received from Centrelink which claimed that they owed money, but the debts that were owed were actually inaccurate and grossly overestimated. This proved deeply upsetting for many, and it is something that this government should do all it can to ensure never happens again. A more regular and accurate reporting system is a good place to start. The bulk of the measures in this bill, unfortunately, will leave many hundreds of thousands of Australians worse off, particularly through the family tax benefit freezes.
It is hard to believe that the government would resurrect measures from their disastrous first budget, which really, in retrospect, led to the member for Warringah being deposed by the current Prime Minister on the basis of poor economic management. But here we are, with these unfair cuts coming up again and again. This government's priorities are enshrined in this bill. They are the wrong priorities. They attack the weak, the vulnerable and the poorest in our community, yet at the same time the government offers tax cuts to the wealthiest individuals in Australia and the largest businesses, with turnovers of more than a billion dollars. That tells you everything about this government's twisted budget priorities, and that is why I and my Labor colleagues are opposed to this reform.
I rise to speak on the Social Services Legislation Amendment Bill 2017, which, quite frankly, is a rotten piece of legislation that attacks Australian families and those already struggling to get by, especially in my electorate of Lindsay. I note that it was only last week that I spoke in this place about the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill, which has been reworked into the bill presented without notice, all thanks to and courtesy of a dirty deal with the crossbenchers in the Senate, namely the Nick Xenophon Team, One Nation and Derryn Hinch—apparently the people who were elected to this place to stand up against the major parties like us for everyday Australians. Well, I am not sure how they define sticking up for people, but this certainly is not it. And I must say honourable mention goes to Jacqui Lambie for her personal account of what it is like to live in the real world and rely on support. As someone who, as a parliamentarian, has given a personal account of life in reality, I commend her on her brave contribution.
What this bill proves yet again is that this unfair Liberal government is incapable of standing up for ordinary Australians. In this bill, we see $1.4 billion being ripped away from Australian families who are already doing it tough—leaving 1.5 million families worse off.
It freezes the rates of family tax benefit A and B for two years—and, when you consider the rising cost of living around this country, the fact is this measure will hurt families who can least afford it. It is not right and it should not be happening, and those responsible for it should absolutely hang their heads in shame.
Labor has time and time again stood up for Australian families against the Liberal government's attacks, ever since the shocking 2014 budget. The government prove day after day that they have an ideological obsession with taking money from people who are struggling so that they can hand huge sums of money to their big business mates. The family tax benefit measures contained within the bill are actually from the 2014 budget. It is unbelievable to think that this government is still trying to pass elements of that unpopular and unfair failure of a budget—a budget that was so unjust that it led to the downfall of a Prime Minister and his Treasurer. And, with the credit ratings agencies circling, the pressure for this government to be responsible could not be more urgent.
Mr Khalil interjecting—
Mr Pasin interjecting—
I might remind the member for Barker that no government members are speaking on this, and he had ample opportunity, if he had something to say, to add himself to the speakers list.
But here we are again—and every single Liberal and National Party member is about to vote to cut $1.4 billion from 1.5 million families. This is not fiscal responsibility; this is lazy policy from an incompetent mob who would rather see people go without than solve the real problems. There are 600,000 families who are currently receiving the maximum rate of family tax benefit part A, which means their entire household income is less than $52,000 each year. These are real people struggling to get by as it is, and this unfair Liberal government is reaching into their pocket and making them worse off. They are pitting vulnerable people against other vulnerable people. It is unconscionable and unAustralian. And it goes to show that those opposite do not understand how hard it can be for low-income families.
As the shadow minister for families and social services mentioned earlier, this measure was originally opposed by Labor following the 2014 budget, so the Liberals withdrew the legislation and took it out of their next budget. Now, without notice, and following the dirty deal I mentioned earlier with the Senate crossbench, here we are again, fighting to protect low-income families from this unfair government, fighting to stop unfair cuts that will make life harder for families that are already doing it tough. And, looking at the speakers list today, it is absolutely unsurprising to see that not a single government member is willing to get up and defend these changes—not one single one.
They are happy to vote for the changes, but not one of them is prepared to defend them, because they know they are simply unfair. Well, I think that if you are happy to vote to rip away $1.4 billion from low-income families, have the guts to stand up and say why. And, if you cannot defend it, do not support it. Stand up for the families in your own electorates and vote no.
The member for Barker raises a good point. I heard that. The member for Wills is very lucky that he has not been asked to leave, because he is out of his place. I request that he remain silent and, if he does not, he will be leaving under 94(a). I call the member for Lindsay.
If you cannot defend it—and we just had a pathetic showing from the member for Barker—do not support it. Stand up for families in your own electorate and vote no. Recognise and understand that these families deserve more support, not less. You do not fix the problems that stem from poverty by taking more money away from people who actually need it. It is not rocket science.
Mr Pasin interjecting—
But we know already that the Prime Minister and those Liberals on the opposite side of the chamber will not stand up for low-income families, because their track record is one of cruel cuts and shameful decisions. But, in this particular case, I think it is pretty telling that there are no government MPs here to defend these cuts—only to sit opposite and throw slurs.
Another element of this bill is a three-year freeze on the income-free area for all working age and student payments by the Commonwealth government. This means that, for three years, the income tests applying to payments for single parents, jobseekers and students will not keep pace with the rising costs of living. We already know that many of these payments are incredibly difficult to survive on now. And we know the current thresholds are very low, too low. But these changes will make it even more difficult for the 204,000 Australians affected, because it means their income thresholds will effectively reduce over time, leading to an effective cut in their purchasing power if they are earning a small amount of income. It does not make sense to hurt these people. This measure will do nothing to lift people up and it will do nothing to encourage and support the poorest people to build a better life for themselves. Labor will not be supporting this measure.
Similarly, we will not be supporting the measure that introduces a one-week waiting period before people can access parenting payments or youth allowance. Again, this measure simply does not make sense. It is just bad, lazy policy from a bad, lazy government. The only reason the government is introducing this waiting period is to save money and—instead of getting tax-dodging multinationals to do the heavy lifting, instead of hitting up the big banks that continue to rort their customers, instead of scaling back their unfair big business tax cut—they decide to save money by taking a week's pay from the poorest of the poor in Australia. It is absolutely astonishing.
Senator Jacqui Lambie, as I mentioned earlier, spoke passionately last week about the realities of living on welfare. And that speech hit home, to more people than you can know—to many, many people, because they know that that is the reality and it is clear for all to see that this government has no idea how tough some people are doing it. They do not know and they do not want to, because ignorance is bliss. For someone who has also relied on welfare, the stigma and relentless shaming of this government of those people is cruel and unnecessary, and we see it time and time again from this government.
The lifters and leaners, poor people who do not own a car or the simplistic comments of a simple Prime Minister who says: 'Get rich parents;' whether it's the 700,000 low-paid workers having their penalty rates ripped away or the 330,000 pensioners who are worse off after this government changed the pension asset test, or the various other cuts this government spruiks day after day—they are always targeting those who can least afford it. This measure is just one more example of Prime Minister Malcolm Turnbull's clear disregard for those struggling to make ends meet.
As the member for Jagajaga noted in her contribution, these unfair cuts come at a time when inequality is at a 75-year high in Australia. Company profits are at record levels; wages growth is at record lows. The widening gap between the rich and poor is getting bigger and bigger in Australia, and the rich just keep on getting richer, and those in the middle and towards the bottom are missing out on the growing wealth of our nation.
We need a government that will address this problem and ensure there is a little fairness in the system. Instead, we have got a government that actively punishes those at the bottom, while gloating about a $50 billion big business tax cut that will hand $7 billion straight to the big four banks. Not to mention that this will add $4 billion to the interest and the budget bottom line. For people so obsessed with the debt and deficit, obviously, they cannot get their accounting department right. And, in hurting 1.5million families, they cannot even front up to the chamber to defend their decisions. It is weak and it is poor leadership—and the people out there are getting tired of this unfair, arrogant government.
Now there is one element of this bill that we have said we will support, and it wasn't tied to the unfair cuts contained throughout this amendment. It is a straightforward measure that will automate the process of collecting income stream information for social security recipients, improving the accuracy and efficiency of the social security system and reducing the regulatory burden on income stream providers. This measure would potentially help avoid another robo-debt disaster by providing a more regular and accurate reporting system. Labor has made it clear to the government that this measure would enjoy our support, if it was separated from the unfair elements of this bill. This shows that Labor has its priorities right and that this government is proving, yet again, that they have their priorities wrong.
Now all of these unfair cuts are being rammed through this parliament at a rapid rate so the government can pay for their childcare changes. Well, we believe in child care and we believe in supporting working men and women, but we do not believe that increased support for child care should cost the poorest Australians through the nose by pitting people who need our help against other people who are vulnerable. Sadly, that is this government's default position. This bill is plainly unfair, and we will not be supporting it.
I rise in the House today to say that I will not be supporting the Social Services Legislation Amendment Bill 2017 and to outline my reasons why. In doing so, just to put on the record, I do get the budget emergency argument but I do not get cruelty, I do not get inefficiency and I do not think we are being our best selves with this particular bit of legislation.
There are clear reasons for me deciding not to support this legislation that go to the heart of balancing social justice with the need for the government to make savings. We pride ourselves on providing support for those in need. We, as a nation, must ensure that the safety net is maintained for the most vulnerable, even when the government takes action to seek the savings necessary to balance its budget.
I believe the cuts proposed by government have the potential to impact significantly negatively on benefit recipients within my electorate, including the 20,231 aged pensioners and 32,024 pensioners with a concession card. These measures rely on increasing incomes to make the savings. They potentially increase red tape, in allowing more regular updating of pay rates. They set a waiting period for additional payments and they set a waiting period for all pauses in indexation for two years, reducing the cost over the forwards of the compounding indexation.
In my electorate, there are more than 10,000 families who receive tax benefit A; 8,000 families who receive tax benefit B; nearly 500 who receive the partnered parenting payment; nearly 1,800 who receive single parenting payment; more than 9,000 who have a health care card; 2,700 have a low-income card; 4,500 are on a Newstart allowance; more than 20,000 receive the aged pension; and over 32,000 have a pensioner concession card. Without good argument—and I will be referring to the budget argument later on—I will not support legislation that leaves those in my community worse off. I will not support legislation that makes life more difficult for those who are already disadvantaged.
The changes proposed by the government are tinkering around the edges at an issue that requires a holistic approach. Good policy should not result in further inefficiencies for either the government or the recipients. Social services are often looked at as a series of welfare payments. But social services should not just be a time and place mechanism; they should act as a safety net with compassion at its core. I am worried we have lost the compassion in the development of our social policy. Compassion is frequently referenced as a reason for policy, but it is frequently left out of the equation when it comes to implementation. I believe these measures increase red tape. They will set a waiting period for additional payments, and the setting of a waiting period for all pauses in indexation for two years does not show compassion.
In 2015 the government released the final report of the McClure review of Australia's welfare system—A new system for better employment and social outcomes. And, while some might call it semantics, the title of the report gives us a clear indication of where the government's focus lies: better employment. I believe the focus of social welfare, before anything else, should be about better social outcomes. Better employment will come as a result of better social outcomes. A person's employment status or unemployment status cannot be looked at in isolation.
Employment security is one of our greatest challenges, but, sadly, having a job for life no longer exists. The workforce has been undergoing a massive transformation over the past three decades, and currently the average Australian stays with one employer for just three years and four months. If this plays out in the lifetime of a school leaver today, it means that they will have 17 separate employers in their lifetime. People are used to moving on, but the big shift we are seeing now is that there is no longer just one job for life; there is not even a career or an industry for life. People will be changing employers, professions and industries and retraining as they go. Nowhere is the challenge of employment security felt more than in regional Australia, and no group feels it more than the young people.
I believe the government should not be looking at welfare payments as a short-term cost but rather as a long-term investment, particularly when directed towards investment in our young people. Young Australians living outside the capital cities and other major urban population centres encounter a number of challenges that are not normally part of the everyday experience of young people living in metropolitan areas. These challenges include obtaining access to suitable and appropriate health and welfare services, education and training, paid employment, economic stability and recreational opportunities. In rural areas there are fewer employment opportunities, with far fewer career options, and household incomes are lower on average than those for people living in our cities. Regional employment and training opportunities can be scarce, and last week's release of the youth unemployment rate of 13.3 per cent for my electorate has shown that there has been little change in this number over the past 30 years.
We have a severe problem with unemployment. When people are working between jobs we absolutely need the social safety net to catch them, look after them and propel them forward to the next step. Making it a punishment, making them feel ashamed, making them feel embarrassed does not do what we want it to do. Our safety net system should have an adequate payment system based on need that encourages people to prepare for and seek work where it is reasonable to do so. It should support people who are unable to work. It should feature fair returns from work, individualised requirements for participation in the workforce and support services that build individual and family capacity. It should give people a sense of security so that they are able to fully participate in the community. But that is not what is happening. Our approach to social services results in people falling through the cracks, having to compete against one another and compete against the system.
Let me tell you a story about one of my constituents. Let me call her RB. I know RB well. In my previous life as a teacher, she was one of my students. I have watched her growth and development and I can assure the House that she is a woman of great integrity and great responsibility. In her middle age she suffers from chronic illnesses; however, she was unable to obtain her disability pension card for some time because she was earning just above the threshold. Having the card made all the difference, even while pension payments were minimal because of her partner's income. But following a small increase in her partner's income RB lost her pension card. In her words:
… losing the card meant my health costs went up substantially, and that's not allowing for dental and optical as well. But perhaps more significantly it means my sense of independence and my self-esteem has suffered immensely and the burden on our relationship was also increased substantially.
Sadly, she is not alone, and her experience is not particular to those receiving the disability pension.
The experience of loss of independence and self-esteem is an experience that is felt by so many people relying on the government to support them when they are most in need. It should not be a punishment. I want to remind the government that this is what happens when the design of a policy to help those most in need, those most disadvantaged and those on the margins is driven by economics and not by compassion or fairness. We can and we should have both. We need compassion, we need fairness and we need economic outcomes. I believe as a nation we are capable of combining all of these together. When we try to make it either/or we are less than our best selves.
The need to balance the budget is not lost on me. I am a farmer and a businesswoman. I run my own household and I have degree with a major in economics. I understand macro- and microeconomics and I would like to work with the government to identify budget savings. There is no shortage of this discussion in our office. I understand the need for fiscal responsibility—but not at any cost and definitely not at the cost of those most in need.
We have heard from Senator Jacqui Lambie the very personal stories of what it is like to be reliant on government support, of the personal toll when complex requirements means having to move between different providers and the very direct impact this has not only on individuals but their families and how this invariably leads people to fall through the cracks, often taking their family with them—and I have to say, if there was one question I heard repeated over and over again last weekend, it was: 'Cathy, did you hear Senator Lambie?' 'Cathy, did you hear Senator Lambie?' 'Cathy, what are you going to do about what she said? She's right you know. She's got it.'
I would like today to take a step back and take a moment to talk about how my electorate sees how government can take a leading role in providing support. I would like to include in the budget some thoughts from the kitchen table conversations that we held in the Indi electorate in 2015. Kitchen table conversations was a process that involved over 600 people coming together, talking in small groups about their vision for their community, about the role for an elected representative and the issues they were facing.
It was then followed by the Indi summit, which was a community-led initiative that engaged people in shaping their future by encouraging them to share and develop their ideas. It was an opportunity that allowed members to create a vision, to show leadership, to raise issues that were important to them and then for them to talk about the solutions. The idea was: government is not like some knight on a white charger that is going to come over the hill and resolve our problems—we know that that is not possible—so what do we need to do in our communities to resolve our own problems, and, given that I am the elected representative, what was the message that I could take from the Indi summit to Canberra?
I was told: early intervention to reduce disadvantage, including targeted programs to address and manage issues such as violence, poverty and homelessness; support for programs that focus on early intervention to reduce disadvantage—programs that break the cycle of disadvantage by reducing homelessness and domestic violence; policies that change the mindsets and relationships between government agencies, local government, community groups, volunteers and citizens from 'doing to' to 'doing with'. The people in my community—just as Jacqui Lambie outlined so well—want to be part of the solution. They are very keen to move themselves to another and better place and to get a job to earn enough money to have the status and recognition that brings. They want to be part of the solution. They do not want to be done to. They do not want to be seen as numbers in the system or playthings for the government and the budget to balance one against the other by taking from Peter to give to Paul. In talking to the government about this, there is an enormous willingness in my electorate to work together. There is no shortage of discussion about how we could do this better, how we could make savings, how we could make the social security system work better and be more efficient and how we could target it better. In our rural communities, people understand that it needs to be targeted. You cannot have one size fits all; otherwise, you get a blanket approach and people get benefits who clearly should not be getting them. Rural communities see that and they understand it, so there is no shortage of opportunity to say to the government, 'We could work with you on this.' But, really, really importantly, we need to have early intervention that reduces disadvantage so that we are not paying huge costs at the other end, and we must do something about local poverty and homelessness.
In bringing my comments to a close, I call on the government to provide leadership in social investment; investment encased in welfare support that builds confident, strong, vibrant and resilient communities. It is resilient communities that have the confidence and the skill to build local frameworks that provide local support in the face of adversity and times of need. My final comment is about a conversation I had in my office as I was getting ready for this speech. We were talking about a systems approach to disadvantage rather than a reductionist approach. A systems approach would recognise that schools, hospitals, GPs, churches, local members of parliament, service groups and a whole-of-community approach have a role to provide the infrastructure to support and encourage people and lift them on their way. To the government, the minister and the relevant people: come and talk to us in rural communities. We have no shortage of ideas. We definitely want to be part of the solution both in balancing the budget, so that more money can come back to our communities for infrastructure, and for providing people with pride, confidence and the courage they need to live the lives they want in the places they want to live them.
I rise to speak on the Social Services Legislation Amendment Bill 2017. I want to put on the record concerns from people in my electorate who this bill will have an impact on. People in regional communities will be hit very hard by measures in this bill. Zombie cuts are back. They are again a tax on those in our community who are the most vulnerable. In my electorate, over the last five years, we have talked a lot about hidden poverty, about the people who are slowly going under because their household income is stuck or falling yet the cost of living is increasing. On a daily basis, we hear from welfare organisations about a 40 per cent increase in people seeking help—organisations like the Salvation Army, Uniting Care in Kangaroo Flat and Forest Street Bendigo and St Vincent de Paul in Bendigo, whether supporting people with food relief, rent assistance or getting the car fixed—who are struggling to survive. This bill and the cuts before us will only make it worse.
I would like to take a moment to acknowledge the member for Indi's comments. I hope members of the government and other regional MPs were listening to some of the recommendations that she put forward and also listening to some of the stories she put forward about the experiences of people in her electorate. These are real people who are really struggling in our regional towns. These are towns where it is not just one person; in some cases, it is entire neighbourhoods that need support right now. The member for Indi talked about the social welfare net and the importance of having a strong social welfare net so that people do not collapse into dire poverty that then affects their lives going forward. These are the experiences of people in my own electorate.
I held a listening post not that long ago at the front of Coles in Bendigo. A single mum approached me. She said, 'Lisa, I need help. I am struggling with Centrelink. I am caught up in the review system. I do not know how I am going to pay my rent this week. Who should I speak to? I have almost spent my entire family tax benefit payment that I received after the last tax year. How do I pay for food next week? How do I get my son to and from school and to his appointments next week?' She had moved to Bendigo under tragic circumstances, which a lot of people find themselves in. It is a family break-up and she is without any support or any money. She is in that situation where she is most in need. She has skills herself. She has multiple degrees. She is out there trying to look for work but right now needs our support. This government is not there for her. It is very lucky for this particular individual that Max at Uniting Care Bendigo was able to help. The Bendigo community reached out and supported this family in my electorate to make sure that they did not go under, they were not evicted from their home and the children could go to school with lunches.
We have a situation in Bendigo where children are not sent to school because mum or dad cannot afford to buy lunches, because all of their money is going towards rent. We talk about rent stress in this country and it is a real issue, yet the measures in this bill are going to make it even harder for people to survive going forward. We have inequality in this country at a 75-year high. What does that mean?
Households in this country are struggling to survive. More and more people are being evicted, more and more people are being forced to live in their cars and more and more people are just dropping out of our system. They are not productive in our economy, they cannot get the hours that they need at work and, therefore, they are literally going under. This is a hidden poverty problem that has now become a stark reality for so many people.
In my own electorate of Bendigo, about 30 per cent of households are trying to survive on less than $600 a week and many families will be caught up in this government's cruel measures that we are now debating in this House. The two measures that I particularly wish to highlight are indexation and the family tax benefit—first of all, the freezing of the income indexation threshold for people of all working ages and for students. This includes Newstart, youth allowance, parenting payment and carers payment. This will affect about 204,000 Australians on the lowest incomes, including a lot of people who live in regional electorates. These are people living on very low incomes. The threshold has been frozen when it is already incredibly low. As an example, parenting payment will reduce after a person earns $188 a fortnight. For Newstart, it is $102 a fortnight. There is no rationale for freezing these thresholds for three years. It is the income test. I do not understand why a government, when somebody is earning money and wants to work more hours, would not let the income threshold increase. These are people who are trying to survive on low wages and earn a bit extra. If their wages increase, what they can earn before they lose their payment should also go up. All the government is doing is taking away the incentive for people to work and locking them into poverty. I believe we have to go the other way. I believe that we need to start looking at increasing the income threshold to encourage people to work more. It should be celebrated. When somebody is working and we encourage them to work more, yes, they get a bit more of a social welfare net and payment from us, and we should not lock them into poverty by cutting that payment. We should encourage them to earn more. We need to look at increasing the income bank, as we called it in my day, for students so they can build their earning capacity and we can see some of these people lifted up out of poverty.
We have a university in my electorate and this is an issue that comes up a lot when I talk to students at the Bendigo La Trobe campus. Young people leave home to move to university, and we joke about it being a rite of passage—when you are a student you survive on two-minute noodles, not that that is a healthy option, a smart option or a government policy we should ever be endorsing. We now have university students seeking food relief help because all of their Newstart and all of their wages are going on the cost of study, which is increasing, and the cost of rent, which is also increasing. Average rents in Bendigo are now $250 per week. When you are on Newstart or youth allowance, it is very hard to make that payment. This is rent in a regional town, let alone the rents in Melbourne. When you have students who are reaching out for food relief, there is a structural problem in our system, and the indexation measures before us around freezing people's capacity to earn are only going to make that harder.
The changes to family tax benefit are effectively a cut. A family on $60,000 with two primary school aged children will be about $440 worse off in 2018-19. These are the same parents who have lost their schoolkids bonus. These are the same parents who, if they work in hospitality or retail, have just been hit with a penalty rates cut. Sixty thousand dollars is not a lot of money and it is actually higher than the average income of people in my electorate. A single parent on $50,000 with two children in high school will be about $540 a year worse off in 2018-19. High school is the time in young people's lives when costs start to increase for parents. They do not decrease; they actually increase, particularly in regional areas, where we have a youth unemployment problem. We do not have enough jobs for young people to get involved in and there is a spike in people aged 15 to 19 being unable to get work. We just do not have enough jobs in our region because this government has dropped the ball on job creation. Another example is single income couples on $60,000 with three children under the age of 12. They will be $600 a year worse off. Six hundred dollars makes a big difference to families who are trying to survive on $60,000. It does not go far enough. This is from the same government that, in the budget, is going to let the people at the top end of the scale, the millionaires, basically receive a pay rise. The levy that was in place will cease, so millionaires will basically receive a tax cut of $16,000 or $17,000, while people at the lowest end and the people affected by these changes will be grossly worse off. To a single income couple with three children, $600 is a lot.
In the time that I have left, I wish to talk about penalty rates and the impact of the Fair Work Commission decision. We have seen this week from the Australia Institute that there will be a $650 million blow to the budget because of the cut to Sunday and public holiday penalty rates for retail and hospitality workers. That is just the beginning. Right now, employers in the beauty and hairdressing industry want the same cut to the wages of their employees. Also, clubs, pubs and hotels are doing exactly the same. So this problem for the government is going to blow out unless they join Labor and back our legislation to protect penalty rates. It is not only going to hurt those workers and lock them into poverty and needing more from our social welfare system; the starting figure for that budget cost, if we do not take action, will be $650 million. Read what the Australia Institute has put out; read it and understand it between now and when we come back for the budget when this parliament resumes.
This bill is another cruel attack by this government on the most vulnerable in our community. The government are also attacking hardworking families, people on the lowest of incomes. The government do not seem to understand the impact of these decisions, or they do understand and they just do not care. You can tell that because of the volumes of speakers they have to defend these cuts—not one of their members is willing to get up here and defend these cuts. There are no marginal seat holders standing up and telling the truth. They are happy to heckle but will not engage in the debate. They will not listen to the real stories of how these cuts will affect people. We have so many families close to going under in our own electorates—people who are really struggling, people who might be working full-time, who are going to be hit with a cut to the family tax benefit. These are people working in industries like retail, like horticulture, like food processing. If you work in chicken, if you are lucky enough to be directly employed, you might be able to take home $50,000 a year. You are one of the families that are going to be cut. You work hard in food processing, but it is a minimum wage and you are likely to be affected by these changes.
The government needs to start listening to the stories of people in their electorates, particularly those in regional communities. These cuts will hurt families, these cuts will hurt young people and these cuts will hurt our pensioners. This is at a time when the government is also not doing anything to support wages growth and is not doing anything to support increasing employment opportunities. Unemployment in our country is spiking and underemployment in our country is spiking, yet the government are not addressing this. Worse still, through the measures that are before us they are locking people into low household income and locking them into poverty. It is the wrong approach, particularly at this time with the state of the economy and the state of the community and people's living standards. I ask people to vote against this bill. (Time expired)
It is my pleasure today to speak about the Social Services Legislation Amendment Bill, because this bill has significance to me and to my electorate, being an electorate that is predominantly in the outer suburbs. Today in question time the Prime Minister was asked to defend low-income earners. He was asked if he believed that big business deserved a $50 billion tax cut while the lowest income earners will continue to suffer. He was asked if he thought it was fair and responsible to increase the minimum wage. On both counts, he could not assure the Australian people that his government actually cared for them or was willing to fight for them. The Social Services Legislation Amendment Bill testifies to this—it testifies to this government's blatant disregard for Australian families and to their relentless attacks on Australian families.
I want to start with family payments. The measure under schedule 4 of the bill will freeze indexation of family tax benefits parts A and B for two years, leaving 1.5 million families worse off. The bill will cut $1.4 billion from Australian families. It will freeze family tax benefit rates for two years, meaning that the payments families receive will not keep up with the cost of living and 1.5 million families will be left worse off. Almost 600,000 of these families are on a minimum rate FTB A, which means their household income is less than $52,000 a year. That is not a lot, certainly not in this day and age. The cuts will leave a family on $60,000 with two primary school aged children around $440 worse off in 2018. A single parent on $50,000 with two high school children will be around $540 worse off in 2018-19.
I was in one of those families once, and I know what it means to be $540 a year worse off. It does not sound like a lot to me now, at all, but back then, having two boys and trying to raise them on my own and send them to school, I know that that little bit of help that I got with the family tax benefit meant that my children had the books, the uniforms, the shoes and the bags to start the school year every year on time and with the things that they needed to get through that year. And I consider myself one of the lucky ones. I had a roof over my head, I had a means of transport, but, most importantly, I had hope. I had hope of finding a job. Because I was studying and working towards getting a job, I had hope that one day I would be able to provide for my children and that one day I would be able to more easily afford the books, the uniforms, the bags, the pencils and pens and everything that they needed to go to school. I had hope that one day I would be able to pay the mortgage and that one day I would be able to pay for the groceries in full. Sadly in this day and age, with unemployment at a record high in my electorate, many people in my electorate and many people in the outer suburbs do not have that hope.
I would like to move on to schedule 3 of the bill, which introduces a one-week waiting period before people can access parenting payment or youth allowance. This one is particularly significant to me. It makes it harder for people who are already in a difficult financial situation to access the financial hardship exemption by requiring that they are also experiencing a personal financial crisis. At the age of 25, I found myself in a very violent marriage. I had a three year old and a one year old. It was the hardest decision that I had to make to leave my violent husband, but it was a decision that needed to be made for the good of myself and my children. I will never forget the day that I walked into that Centrelink office, that building of grey concrete with its harsh lighting and the carpet that had been stepped on by millions of desperate souls before me. I will never forget being told that I would have to wait for my first parenting payment. I had absolutely nothing. I had not a cent to my name, and I did not know how I was going to feed my children for that next week until the parenting payment came through. I will never forget walking out of the building that day, turning the corner, leaning against the harsh concrete wall and breaking down in tears. I will never forget the face of a man approaching me and himself walking into the Centrelink office and wondering whether he saw on my face the shame, humiliation and desperation of what I had just been through. I will never forget those days.
The government does not seem to understand that people in these situations, many of them mothers fleeing family violence, are not there to scam the government. We are not criminals. We are there because we have no other choice. Many of the people who seek these kinds of payments are not there out of choice. The very principle of a social security system is that it is there for people who need it. The very principle of it is that the measure of our compassion as a society, the measure of our progress as a society, is how well we look after the most vulnerable in our society. It is that we never leave anyone behind. It is that we ensure that nobody is left in a situation where they are so desperate that they go to desperate means. This is what social security is about.
I would like to move on to schedule 1 of the bill, which freezes the income-free areas for all working-age and student payments, meaning that for the three years the income tests applying to payments for parents, job-seekers and students will not keep pace with the cost of living. Again I reiterate the importance of ensuring that payments keep up with the cost of living. While the cost of living increases and wages stay stagnant, there is no chance for economic growth. That is not how you grow an economy. It is not how you grow an economy to give big business $50 billion in tax cuts while you cut the pay of the most vulnerable in our society. It is not how you grow an economy by giving business $50 billion worth of tax cuts while impeding the capacity and ability of people to spend by cutting their wages and freezing their earnings so they do not match the increases in the cost of living. This part of the bill will affect 204,000 Australians on the lowest incomes.
I will talk again about my situation and my experiences. As a single parent raising my two sons, I was also looking for work at the same time. I was struggling to raise my kids on just $400 a fortnight. I would like everyone to think a bit about that. I would like you to think about how hard it is to try to raise a family on less than a third of what a backbencher gets in travel allowance for four days of sittings. That is pretty much what it amounts to. $400 a fortnight amounts to less than a third of what I get as a backbencher in travel allowance for four days of sitting. I have not forgotten what that is like. I have not forgotten what it is like to stand at the shopping centre counter and return half your shopping because you simply cannot afford it that week. I have not forgotten what it is like to delve through my purse and pick up coins just to be able to afford essentials like milk and bread. I will use every last breath that I have each time I walk through these doors to remind this government that there are people out there in my electorate, and in their electorates, for whom this is not something that they can push into the past—it is part of their everyday reality today.
Labor has stood up for Australian families against this government's attacks on families. We will continue to do so. Just bear witness today to the number of people who have stood up to speak about this bill. Our list is endless. On the other side—crickets! Nobody is there to defend their attacks on families. If only just one of them could stand up here today and defend why they think it is okay to consistently attack families, to consistently attack those most vulnerable in our society, to consistently attack those who are so desperate, as I once was, that they have to go into a Centrelink office and take social welfare. We did not want to. We do not want to, but we have to. We rely on our government. It is part of the social cohesion and the trust that everyday Australians have in their government, knowing that their government looks after them, knowing that their government cares for them, knowing that they can trust that when they are in a dire situation, when they are desperate, when they find themselves in a situation that they have absolutely no control over, that their government, the people who they have elected to stand here in this very chamber, will fight for them.
I will not stop fighting for those most vulnerable in our community, because I know what it is like from my own experience. I know what it is like from the people who walk into my electorate office every day and tell me how hard it is for them. I will not give up on them, and I implore this government to not give up on them as well.
I just want to congratulate the member for Cowan on that speech on the Social Services Legislation Amendment Bill 2017. Like her, I know from my own experience what it is like to do it tough. I was prepping for my contribution this afternoon, and as part of that process I was going through my first speech. In my first speech I spoke about the experience of my family—my working class matriarchy, my background: my great-grandmother, in a country house out in the western district of Victoria, bringing up 13 children on her own as a single mother. She was a domestic. She cleaned the properties and washed the clothes of the wealthy in the western district. And she did it very, very tough, bringing up those 13 children on her own as a single mother, cleaning and washing until her hands were red raw. It was a tough life, and there was not much money to go around, particularly with those 13 mouths to feed.
And then, to reflect on my grandmother, who I actually did not meet: my grandmother died when she was 54, when I was just six months old. She died of an undiagnosed heart condition, because, like her mother, she was from a very disadvantaged background and lived from week to week, a life of disadvantage and poverty. My grandmother brought seven children up on her own when my grandfather walked out on her when my mother was just born. She brought up those seven kids on her own in a housing commission house in Preston in Victoria. Again, she did it very, very tough. She was also a domestic. She had three cleaning jobs and basically worked around the clock: one job in a hospital, one in a theatre and one in a factory. Those three cleaning jobs kept food on the table. As I said, this poor woman, who worked so hard to keep food on the table for those seven children, bringing them up on her own, died of an undiagnosed heart condition at 54. So, that is another layer of my history where I do have a keen appreciation of what it is like to do it tough.
And then there is my mum. My mum left school at 15, dragged kicking and screaming. She was desperate to be educated and acknowledged that education is the great transformer, the great way of breaking that cycle of disadvantage. But unfortunately she had to pay her way, so to speak, and she had to contribute to putting food on the table, so she was dragged kicking and screaming from Preston girls' school and had to go to work at 15.
You would have thought that that cycle of disadvantage, that cycle of poverty, that cycle of doing it tough would have ended with my mother and with my sisters and me. But, unfortunately, my father walked out on us when I was 11, and that threw us, too, into a potential cycle of disadvantage and hardship. It was essentially only education that broke that cycle. But I know what it is like to do it tough, because I have done it, and I have a family history of doing it tough, of being born on the wrong side of the tracks, so to speak—of being born to a matriarchy of cleaners. When my father walked out of us when I was 11 he left us with $30 in the bank and my mum on her own with three daughters to bring up: me at age 11, my middle sister at nine and my little sister at six. Through those first few years particularly, life was pretty tough, because Mum was not actually working at that stage. It was very tough given the fact that we did not have money for food, so every second night we would go to friends and families for dinner. Quite often, as so many single mothers do—they do not eat at dinner; the food is reserved for the children—my mother would not eat, so she got very thin in that process.
As I said, I know what it is like to do it tough. I come from a family that has done it tough—three generations of a working class matriarchy who have done it tough. That is why I say that this bill is outrageous and just underscores the Turnbull government's completely unfair treatment of low- and middle-income Australians. Labor is not being obstructionist in any way on this bill. What we want is a bill that is fair but that does not target the lowest income earners in our community, the most vulnerable in our community, and that is what this government has done with this bill and with so much of its agenda. We thought it was going to be over in 2014. We thought those dark days of 2014, when that hideous budget was launched on the Australian community, were over. Yet they continue and they continue and they continue, because essentially it is part of the coalition government's DNA to target low- and middle-income earners while giving a $50 billion tax break to the big end of town, to big banks, to big business.
Labor has made it clear. We are not being obstructionist in any way. We are standing up for what we value. We are standing up for what we believe in. And we are standing up for policies that support our values. We will not in any way support policies that cut across Labor values, that cut into the very fabric of society. Our social fabric includes access to education for all, no matter what your background is, no matter where you grow up, no matter how much your parents earn and no matter what your postcode is—access to education, access to universal health care, access to opportunity, access to disability services. Labor will never, ever support any proposal or policy that cuts into our values and cuts into what it basically is to be Australian, that cuts into our social fabric. We will not support any policies that target low- and middle-income earners and the most vulnerable in our community. That is what we have here—this is 2014 reheated. It is 2014 over again.
This bill hurts the most vulnerable in our community because it freezes the income-free areas for all working age and student payments for three years. These are people who are on Newstart, who are on Youth Allowance, who are on the parenting or carer payment. It will freeze indexation of the rates of family tax benefit parts A and B for two years. It will extend the ordinary seven-day waiting period that currently applies to Newstart or sickness benefits to additional payments to parenting payment and Youth Allowance.
Labor has stood up for Australian families again and again since the coalition government was elected in 2013—not this one, the previous one, the Abbott government. We now have a different iteration; the leader may have changed but their policies are exactly the same—exactly the same targeting of low- and middle-income earners. Despite all the rhetoric and despite the fact that this man was going to be different and was going to make a difference, there has been no change at all. As I said, we have the policies of 2014 reheated and we have a leader of our nation who essentially stands for nothing. He is a leader who has backed down on his commitment to a republic, on his commitment to marriage equality, on his commitment to climate change—a leader who has abandoned all the policies he feels strongly about simply to have the job of PM under his signature block. That is essentially it.
People in my community are constantly telling me, 'We had so much hope for this Prime Minister. We thought he was going to make a difference, and yet he has let us down significantly.' He has not delivered on what he fundamentally believes in—marriage equality, climate change and the republic. He has abandoned all those principles and all those views that he once promoted, advocated and clung to for the sake of having the title of Prime Minister on his signature block. Members of my community throw their hands in the air because they cannot believe a man could abandon so much of himself to achieve this title. They say to me: 'We have a Prime Minister who is agenda less, a Prime Minister and the government that is visionless and that has no idea what it wants for the Australian people. There is no vision and so there is no plan for us to get there—just ad hoc ideas that are thrown around. They are floated for 24 hours and spiked the next day, floated for 24 hours and spiked the next day and so on. We have seen that on superannuation, on tax, on GST, on states collecting income tax. Late last year we saw the emissions intensity scheme proposed and spiked the next day. This government is running from one policy to another policy and another policy, because they have no idea, no direction, no vision and no agenda.
One member of my community told me, 'We have a Prime Minister who treats this job like hobby.' It is so true—he does treated like hobby. He has no agenda—
You have no agenda. Don't take it from me—this is actually from a member from my community. I think I am repeating the truth. This is the perception, and I am just sharing with you some views of the people of Canberra. I can share more with you, if you would like, Minister. I have imparted some of those, but the one thing that keeps coming up to me is that the Prime Minister is one big disappointment and the government is another big disappointment. They say to me, 'We had so many expectations.' The big-disappointment government is completely out of touch with what is going on in Australia and completely out of touch with the needs of Australians, are deeply those on low and middle incomes
I am not negative; I am speaking the truth, Minister, and I am speaking the truth that is coming from the people of Canberra. I am passing on the views of Canberrans to the minister and he should appreciate this feedback. I do not know that he would get it from the other side of the chamber—
I am passing on the views of the people of Canberra, Deputy Speaker. They passed on their views on what happened in 2014 to me. In 2014 I went out doorknocking just after the budget. I always like to go out doorknocking after a budget—be it our budget or a coalition government's budget—to get a sense of what the community feels about it. Is it good or bad? What are the good elements, what are the bad elements? You cannot get a purer form of feedback than from knocking on someone's door, cold calling on someone, and asking them what they think about a piece of legislation or a particular budget.
I spoke to one mother who was absolutely petrified about what was happening with the cuts to Newstart and wondering how on earth her child could survive all those weeks with no support. That was a very common theme in 2014—concerns about the outrageous cuts to Newstart. There was one mother, and I will never forget her. When I knocked on her door and asked if she had any feedback on the budget, she said, 'No, I don't have any feedback.' I left and, as I was walking down the street, she came running down the street in tears. She basically said, 'I'm so upset by the budget that I couldn't speak when you knocked on my door. But I want to tell you as a single mother I'm absolutely terrified about the opportunities for my child in getting access to education and also about my future. I'm terrified about what this budget will mean for my family.' I have done it tough, Deputy Speaker, and I do not want any Australian family to do it tough. That is why this government's proposal is absolutely outrageous; it is the 2014 budget reheated. The government should be ashamed of itself.
I thank all members for their contribution to the second reading debate and, by way of summation of that second reading debate, I will note that the Social Services Legislation Amendment Bill 2017 seeks to secure the next instalment of remaining unlegislated savings from previous budgets. This bill secures further savings of $2.4 billion over the 2017-18 forward estimates period, building to $6.8 billion over the medium term. This new bill contains three measures from the original omnibus bill, including, firstly, the maintaining of income free areas and means test thresholds for certain payments and allowances at their current levels for three years; secondly, the automation of the income stream review process, which will lead to improvements in the accuracy of income support payment reporting and reductions in customer debts; and, thirdly, the extending and simplifying of ordinary waiting periods for the parenting payment and for youth allowance for a person who is not undertaking full-time study and is not a new apprentice.
The bill also includes a new schedule to maintain the current family tax benefit payment rates for two years at their current levels from 1 July 2017. That measure will achieve savings of about $2 billion over the 2017-18 forward estimates, which will build to $5.5 billion over the medium term. It is important to note that under this new measure there will be no cuts to family tax benefit payments. Indeed, over the two-year maintenance period many families will still see some increases in their payments as a result of increases to particular income thresholds for family tax benefits.
The government has also reversed a previous decision to increase family tax benefit payment rates to offset, in part, the effect of the phase-out of FTB supplements, which was contained in the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill. Not proceeding with that increase in FTB payment rates will reduce costs by a further $2.3 billion over the current forward estimates period compared to the previous social services omnibus savings bill and will reduce costs over the medium term by about $11 billion.
This bill builds further on the $6.3 billion in budget improvements achieved over the forward estimates through the first omnibus savings bill, which passed the Senate on 15 September 2016 and included a saving of $1.6 billion over the forward estimates and $7.1 billion over the medium term gained from the abolition of the family tax benefit supplement for households with incomes of more than $80,000. It is, of course, the government's intention to secure the passage of both this bill and the child care bill so that one may pay for the other.
I would like to acknowledge the very positive way in which the crossbench has worked with the government to deliver this significant reform package that will make a real and positive difference to nearly one million Australian families through improved childcare services, and I commend the bill to the House.
The original question was that this bill be now read a second time. To this the honourable member for Jagajaga 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.