Senate debates

Thursday, 23 June 2011


Family Assistance and Other Legislation Amendment Bill 2011; Second Reading

4:12 pm

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Hansard source

I rise to speak on the Family Assistance and Other Legislation Amendment Bill 2011. This bill encompasses 2011-12 budget measures including provisions to freeze the indexation of family assistance income thresholds and family tax benefit part A and B supplements. The bill also makes changes to the way people are assessed for the disability support pension, creating a two-speed, two-track process for DSP applicants. It also brings forward the implementation date for some measures from 1 January 2012 to 3 September 2011. The bill also lowers the maximum age of eligibility for family tax benefit part A, extends the Cape York welfare reform trial and makes technical amendments to the Aboriginal Land Rights (Northern Territory) Act 1976. Schedule 1 of the bill amends the A New Tax System (Family Assistance) Act 1999 to lower the maximum age of eligibility for family tax benefit part A from 24 to 21 on 1 January 2012. This will bring it into alignment with the age a person becomes independent for youth allowance purposes.

The bill will also freeze indexation until 1 July 2013 for the higher income free area—that is, the adjusted taxable income someone may have before their rate of family tax benefit is affected by the income test for FTB part A. This freeze includes both the basic amount of family income of $94,316 and the additional amount for each FTB child after the first $3,796. What this means is that families in which both partners work and earn average incomes of $50,000 to $60,000 each will be affected by the government's measures. Many of the families that will be affected by the FTB freeze in this bill are struggling to make ends meet on a mere $45,000 a year. The rate of indexation for the family tax benefit part B income limit, the baby bonus income limit and the FTB A and B supplements will also be frozen for three years from 1 July 2011.

One disturbing detail about the substance of this bill was uncovered by Samantha Maiden in the News Limited Sunday papers. She disclosed that confidential government emails showed that the Labor government had been planning to freeze indexation well before the last election. Not only had the government been planning to slug Australian families with a carbon tax despite vowing not to; they had been planning to slug ordinary Australian families through this freeze since before the last election.

At the most recent Senate estimates I pursued the issues raised by Ms Maiden. What I discovered was that Minister Macklin's office had sought and received advice on freezing the family benefits in this bill as early as January 2010 and had updated advice as late as one minute before the caretaker provisions commenced. The email that was sent to Minister Macklin's office advised that the department had completed 'a new version of the spreadsheet with updated numbers for the pause supplements option'. As I mentioned, this email advice was received one minute prior to the caretaker period coming into effect.

What this means is that the Australian Labor Party had been planning this hit on Australian families from the first official day of the election campaign, from the first formal day of the caretaker period. The government did not give the Australian people the opportunity to cast a ballot, to give their verdict, on the merits of the particular proposal. This again represents the government being less than straightforward with the Australian public, as was the case with the carbon tax.

We also discovered during Senate estimates that the department is in the process of costing policies from the Greens. I cannot help but wonder whether Senator-elect Rhiannon, before she takes her seat in this place, will, for example, submit her boycott, divestment and sanctions policy for costing and consideration—or, for that matter, whether the Greens policies currently being costed by the government include their policy on reintroducing death duties. I guess time will tell.

Many of the families that will be affected by this freeze are struggling to make ends meet. They will be hit by these changes. Unfortunately, the government is seeking to give the impression that these families are rich families when many, many, many of them are anything but rich. Indeed, over 2.1 million families will lose some support as a result of the real value of the FTB supplement being cut. That is the 'pause supplements option' that appeared in the email that the government received a minute before the caretaker period started before the last election.

Even without the government's proposed carbon tax, electricity prices are already rising. They have risen by an average of 51 per cent across Australia since December 2007. The overall cost of food has increased by 13 per cent and education costs such as school fees have increased by an average of 24 per cent across Australia.

The FTB, parts A and B, the baby bonus, paid parental leave and other measures such as these are designed to support families. Labor should not be using these sorts of measures to search for savings to accommodate what has been an incredibly reckless period of fiscal management by this government.

Schedule 2 of the bill amends the Paid Parental Leave Act 2010 such that a person can only be eligible for parental leave pay if they meet the requirements of section 31, which include satisfying the income test. The PPL income limit before I July 2012 is $150,000 and it is then subject to indexation. This measure will extend the commencement date for indexation of the paid parental leave income limit to 1 July 2014. As I understand it, the aim of this schedule is to maintain some consistency with the pause in indexation for the baby bonus income limit under the Family Assistance Act.

Of particular interest to many in the chamber is schedule 3, which makes some quite significant changes to the way disability support pension applicants are assessed. I should point out firstly that the elements found in this schedule first appeared in the 2010-11 budget under the heading 'Job capacity assessment: more efficient and accurate assessments for disability support pension and employment services.' Under that measure, DSP claimants without sufficient evidence of future work capacity of less than 15 hours per week could be referred to an alternative income support payment. Others may be offered employment assistance through Job Services Australia or Disability Employment Services. That measure was due to come into effect from 1 January 2012.

At the time, the government pointed out that this measure was going to be in alignment with the introduction of the revised impairment tables. They were to come into effect on the same day. Presum­ably, the government believed that there was a legitimate need for alignment between these two reform measures. I doubt that the alignment between the two measures was part of a government commitment to a policy-making aesthetic; I am sure that there was a reason for having them in alignment. The 2011-12 budget measure Building Australia's Future Workforce, the imple­mentation of more efficient and accurate assessments for disability support pension, brings forward the implementation of the 2010-11 measure from 1 January 2012 to 3 September 2011. This measure was originally in alignment with the new impair­ment tables, and I would be interested to hear the government's rationale now for the decoupling of those measures.

Schedule 3 introduces a new requirement that if someone has not been assessed as having an impairment of 20 or more points on a single impairment table they must satisfy the secretary that they have actively participated in a program of support. What this will do, as I touched on briefly before, is create a two-track, two-speed assessment process which will have some similarities to reforms in the United Kingdom. One group will go through a more thorough testing of their capacity to work, as a result of these changes, and if they still satisfy the relevant criteria they will go on to the DSP; if not, they will be offered an alternative income support payment like Newstart.

Schedule 4 amends the Social Security (Administration) Act 1999 to enable a proposed 12-month extension of the welfare reform trial in the Cape York area. The Cape York Welfare Reform trial is a partnership between a number of communities on Cape York, the Australian and Queensland governments and the Cape York Institute for Policy and Leadership, which has done so much good work in this area. The intention is to restore local Indigenous authority, to support the local community, to increase individual engagement in the real economy and to reinforce and restore positive social norms.

A key element of the Cape York trial is the Family Responsibilities Commission, established under Queensland government legislation, and the role of local family responsibility commissioners. These com­missioners will hold conferences with com­munity members, refer people to support services and, when necessary, arrange income management for people who need it. They will help provide a better social fabric for these communities in need. At present, a person can only be subject to income management under the trial after a decision by the Family Responsibilities Commission made before 1 January 2012. This schedule pushes the date out to 1 January 2013, to enable income management to continue in Cape York for a further 12 months.

Schedule 5 amends the Aboriginal Land Rights (Northern Territory) Act 1976 in order to clarify that the Public Works Committee Act 1969 does not apply to Aboriginal land trusts. Schedule 5 makes some changes that clarify that Aboriginal land trusts are not authorities of the Commonwealth for the purposes of the PWC Act.

I have raised a number of issues relating to this bill, with particular reference to changes to the family tax benefit. This is a matter that the government was clearly examining, anticipating and intending to introduce before the last federal election. Key changes to public policy, such as the freeze and such as the intention to introduce a carbon tax despite telling the Australian people the opposite, go to the democratic deficit in the current government. This government is really starting to put serious pressure on the compact of trust that there should be between an elected government and the voting public. This is yet another deeply disappointing example of that growing trend in this government to say one thing and do another—or to say nothing to hide an intention and then to reveal it after an election.

There are also some significant changes to the disability support pension. I know that I and a number of colleagues on this side, including Senator Boyce, will be very carefully monitoring how these play out in the lives of the Australians who rely on these benefits and who need to go through these processes. Obviously, we all want to do whatever we can to encourage people and support them in moving from payments back into the workforce. The government has spoken of that as well—there has been plenty of rhetoric around that—but we will have to wait and see and examine what the real effect of these particular measures are. I indicate that the coalition will not be opposing this bill.


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