Senate debates

Thursday, 30 March 2006

Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006

In Committee

4:42 pm

Photo of Rod KempRod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Hansard source

We are talking about government public policy and how it benefits families: we are talking about a tax system and a welfare system. On the one hand, you say that your proudest boast is that the Keating government was able to cut the top tax marginal rate and then, on the other hand, you complain about these issues in relation to FTB part B, I have to say that, at the very least, you are not being consistent.

There was an error in the remarks you made. I have some briefing notes on that, which I will turn to. The way this government has given enormous emphasis to benefiting families is one that we are very proud of. We are very proud of the way that we manage this economy. What was really obscene was the very high levels of unemployment that existed under the Labor government. What was also obscene was a very low increase in real wages under the Labor government. What was particularly obscene was the way that the Labor government, in 13 years, failed to tackle the massive problems of Indigenous disadvantage. That was obscene. You can use the word ‘obscene’ in relation to those activities, but you cannot use it in relation to the measures that are before this chamber.

The amendments moved by the opposition are seeking to introduce a modified income test for FTB part B from July 2006, if a couple’s combined income exceeds $250,000. We do not support such an amendment. The key purpose of FTB part B is to provide extra assistance to single-income families caring for children. It is therefore not income tested for sole parent families. For couple families, FTB is available where the secondary earner has a low, adjusted income. The government considers that it is important to provide extra help to couples who choose to have one partner remain at home to care for children. A higher rate of FTB part B is paid to families where they are caring for preschool children aged under five. FTB part B has been especially designed to assist families who face both the normal costs of raising young children and the indirect cost of reduced workforce participation.

One purpose of FTB part B is to compensate single-income families for the fact that they have access to only one tax-free threshold. As Senator Evans knows, and I think he did refer to this in his argument, dual income families benefit from access to two tax-free thresholds. They also benefit from the lower rates of taxation applicable to their incomes of the graduated tax scale. The vast majority of FTB part B customers have incomes below the levels at which Senator Evans wants to means test this measure. I would make the point—


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