Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Hansard source

I rise to speak on the Family Tax Benefit (Tighter Income Test) Bill 2014. At this time, as Senator Leyonhjelm knows well, people who are not going to support his bill get up and say, 'Thank you very much for bringing your bill to us, and we appreciate your interest in this matter.' That is like a kiss of death to getting the positive votes, Senator Leyonhjelm, and I am going to be consistent. We do think that it is important these issues are discussed in terms of the process, but, as I have said, Labor is not supporting the bill, which comes at a time, as we know, when the Abbott government has already launched a full-scale attack on the cost of living of ordinary Australian families.

This bill is simply an extension of the Prime Minister's attack on low- and middle-income Australian families, and we will not be supporting that. The bill itself proposes to tighten the income test for family tax benefit part A, which people call FTB A, from 1 July 2015. Family tax benefits are modest payments that help low- and middle-income parents with the cost of raising children. Currently around 1.6 million Australian families will receive FTB A payments this financial year. We believe, on the current data, that that will be helping more than three million children. We are not talking about families defined as rich and certainly not families who definitely do not self-define in that way. They are honest, hardworking parents doing the best they can to care for their children and, therefore, are investing in our country's future.

Under the current FTB A income tests, the maximum rate of FTB A is reduced by 20c in every dollar earned above what is known as the income-free area. The current income-free area is $50,151. Payments continue to be reduced until an eligible family's payment reaches the base rate of FTB A, which is currently $2,204.60 per year. The bill before us today proposes to remove the base rate so that FTB A families continue to have their payments reduced by 20c in every dollar until their payment reaches nil.

The Parliamentary Budget Office estimates that 247,600 families will be adversely affected by this bill. That means 89,700 families will no longer receive any FTB payments at all under this proposal. That is almost 100,000 families to have their FTB A completely cut. Under this bill, the Parliamentary Budget Office also estimates that more than 5,000 families will have their FTB A payment rate fall below the base rate. The almost 2,000 Australian families on $60,000 to $65,000 a year will lose on average more than $1,500 a year.

These families cannot afford to take another hit and yet another attack on their cost-of-living pressures, certainly not after the pain that the Prime Minister and the Treasurer handed down in May this year. The budget has caused general concern across every level of the Australian community. All of us in this place know how many emails, visitations and letters we have received from people across the board. In fact, in many ways, it has been a unifying budget because the attacks have been on young people, people on the pension or about to go on the pension, ex-veterans and families. Groups under all those headings have been concerned by what this year's budget has proposed for them, their future and their current payments.

In this environment we are looking at another bill which has an even more significant cut for one sector. I have read out the figures that the Parliamentary Budget Office has helpfully provided. There are a range of statistics. But, as I have said many times, when these figures just roll off the tongue the important thing is then to meet with the families and parents and find out what their concerns and worries are. For them, these discussions are not academic. They are real. That 20c reduction that we are talking about is very real for them and part of their daily budget.

The general budget is one that, as with so many things before the election, we did not know was going to happen. Before the election, the Prime Minister promised that he would 'reduce cost of living pressures and help families with the cost of raising children'. Of course, since the election, all we have seen from the Prime Minister and his government are cuts and broken promise after broken promise, all of which, as we have talked about in this place, make it harder for families to pay bills, pay school fees and see a doctor when they are sick. Then, on top of that, there are the extra costs of any other tests and medications.

Families have even had an increased fuel tax imposed on them by the Prime Minister. We know that we did not have a chance to debate that in this place. I am talking about this range of things because they are important in creating the environment in which this bill has come forward. There have already been so many other attacks. The fuel tax proposal came through. It will not come up for parliamentary discussion until sometime in the future when the 12-month period for the regulation is up.

At the moment, when we have an all-time-low oil price and are talking generally about fuel prices lowering across the board, the true impact of this increased cost may well be hidden because people will probably see, if the oil prices continue where they are at, that fuel is cheaper. So they will not know that this increase in the fuel process will go on whether the fuel prices are lower or they go up again. We have heard the saying that what is most certain in this world is taxes and death; I think another is that fuel prices go up and down and that they will go up again.

The government's budget is nothing short of a full-scale attack on the living standards of Australian families, who, if the Prime Minister gets his way, will have their family benefits and parenting payments slashed at the same time as they are hit with a new GP tax and a new fuel tax. The social services budget bills currently before the parliament, to which the minister referred in his contribution, contain more than $5 billion in cuts to families. Nearly $2 billion is cut from family tax payments as a result of the freeze to the rates of family payments for two years—the same family payments that this bill will also reduce with the changed income test arrangements—a cut to the real value of family payments.

According to the Department of Social Services, a freeze to the low-income free area for FTB A alone—and this is a freeze area that is linked in with Senator Leyonhjelm's bill—will see more than 370,000 families around $750 a year worse off in 2016-17. A further nearly $2 billion will be cut when families are kicked off of FTB B when their youngest child turns six. That alone would leave families around $3,000 worse off each year when they lose their payments. These things are cumulative, and every dollar counts. The Department of Social Services revealed at Senate estimates—after a lot of questions, Mr Deputy President—that around 700,000 families will lose their FTB B if the government gets its way and kicks families off payment when their youngest child turns six. I suspect there is more than a little bit of unease from National Party members and senators as a result of the cuts to families, but there should be more protests, and there should be more questions. Many of the low- and single-income families hit hardest by these cuts, including the proposal in the bill today, live in country and regional Australia. The budget will also see a billion dollars cut from the end-of-year supplements, which will be reduced to their original rates.

The Abbott government's budget will put more pressure on the budgets of millions of families, and low-income families will be hit most of all. Earlier this year, the independent modelling agency NATSEM, once described by the Prime Minister as 'Australia's most respected modelling outfit', put to shame the government's claims that the burden of this budget is shared by everyone. Overwhelmingly, expert analysis has demonstrated that those on the lowest incomes are hit the hardest, while those at the top are spared—and the top is not the group to which this bill relates. The sphere of the attacks already in the budget extends from people on very low incomes to people on the highest incomes; this bill that we have before us today is looking right in the middle, so these people are being hit from both sides.

We believe the Abbott government is arrogant and out of touch. I also think there is a genuine concept that they do not care, that talking about the cuts is a mathematical exercise, an academic exercise, and that no-one looks at or listens to the people who can tell you to a dollar exactly what they do with their weekly and monthly budgets. For these payments that are being frozen or reduced or where in this case, in the proposal put forward to us, there is an extra added taper rate and a reduction, they can tell you what impact that will have on daily living and, particularly in this area of family payments, what activities for their families are offset by the money they receive through their family payments. That goes down to things like school fees and the added things that happen in the school curriculum.

Particularly in this case—through you, Mr Deputy President, to Senator Leyonhjelm—people in the bracket to which he is referring have told me that things like the family payments are used in the family budget to pay for things like school camps, which in many schools now are becoming very expensive. When you are budgeting for mortgages, rents and other ongoing credit costs, things like an added payment give your child a chance to travel and be involved in extra things like science camps and sport. These are the kinds of exercises to which the money in the family payments is often allocated. In the history of family payments, this was indeed the intent: providing money to families for the cost of raising children.

The concept from when these payments were first introduced was to support families in the responsibilities they have to raise children. In the process that we have before us, these things are under attack, and families are being forced into making decisions about support for families that they had not thought they would have to make, because the issues of cuts were not discussed openly in the community before the election.

Labor will stand up for the low- and middle-income families who are so savagely cut by the proposals in the Commonwealth government's budget legislation and indeed in the bill today. I have made the comparison before about the messaging that is in the community around this area. As we have said many times in this place, the Commission of Audit process, which was introduced by the government at about this time last year to look at what could be made as savings across the board, was actually a bit of a taste of what proposals could become real in government policy—not all, of course, and certainly we do accept absolutely that the Commission of Audit was not a decision-making body; it was a body to make suggestions to the government around policy. But, when these suggestions are made, and when they are made in an environment where we have been built up to the need for massive savings and cuts, you have to think that this could be a taste of what will be moving forward.

The measure before us from Senator Leyonhjelm is a recommendation made by the Prime Minister and the Treasurer's National Commission of Audit. It too recommended that the base rate of family tax benefit A be abolished. Of course, the Commission of Audit was the first indication of what was to come in the year's budget. Released in March, it proposed a range of cuts to families, including exactly this proposal—that the base rate of family tax benefit A be reduced—and also the abolition of family tax benefit B. It also suggested slashing the indexation of the age pension, and there is a very long list, of which we have kept a record, of the other suggestions by this Commission of Audit. We look with interest to see what will pop up in future budget proposals from the government and also whether Senator Leyonhjelm has taken some more ideas out of that area about how we can be more careful with our budget into the future.

Indeed, this is the place where these suggestions should come. In terms of process, we need to understand what the background is. We need to have the debate and also look at the real impact on the people whose budgets will be affected by government changes. The blueprint of the Commission of Audit continues to be part, I think, of decision-making processes. It is important to link that to other proposals that have come forward from the government and also to the other review that is looking into the whole area of Commonwealth payments in the sphere: the McClure report. The Commission of Audit is positively moderate when compared to the extreme cuts that the government included in the May budget. We had the document that put forward all these proposals, and we thought, 'Oh, some of those are just flying in the wind,' but then, when the budget came up, it was even more extensive in the cuts that it was proposing and the expectation that they would all be able to be overlooked in this place and in the wider community because of fears about the budget situation.

I think it has been extraordinarily telling for all of us to see the way that the wider community has responded to the budget. It is not the Labor Party that is saying that this budget and the proposals that have been in it are cruel and have undue impact on people who have the most vulnerability, looking at their futures. We raise the issues, of course, because that is our job. But the people who are raising the concerns and talking to us, saying, 'We want you to raise these concerns,' are the people who are in the community looking at their weekly budgets, and the organisations that support them. A range of organisations have the best day-to-day knowledge of people's concerns about their financial security. I acknowledge the work they have done to bring forward those concerns and issues to us—and, of course, that continues. We see now that, with the cuts to the ABC and the SBS, those people are raising concerns about the impact on their daily plans. We know that it does not matter how loudly and how often you say that the reductions that are in the budget—and, indeed, the proposed reductions that are in Senator Leyonhjelm's bill—are reductions; people understand that they are cuts, and that is the only way that they can result in the savings to the government. You cannot make savings if you are not cutting an entitlement, and that is what we are seeing today.

We know that Australian families feel as though they are under siege from the Abbott government's savage cuts to family payments. I am not sure whether the wider Australian community, Australian families and those people who are currently receiving family tax benefit A are aware of Senator Leyonhjelm's proposals. I do not think Senator Leyonhjelm had quite the same media exposure and discussion around committee processes for this proposal as, perhaps, for some of the other areas of the budget. But, should they become aware that this particular proposal is shadowing a proposal that was in the Commission of Audit and which talks about reducing the base rate payment and also about ensuring that it is a tighter taper rate for the entitlement for the process—hopefully this process today will help that awareness—they will know that the proposals are talking about losing money with which they have been making their family budgets operate. Family tax benefit A is not an overly generous payment. It is scrutinised. We do follow the process, and we make sure that the processes look at the real situations of families when decisions are made.

So we will not be supporting the proposal that is before us. We think it is very much in line with a range of attacks that have already been put in the government's budget. So, within that whole package, what the Labor Party have done is that we have looked at each proposal that has come forward in the budget. We are looking very carefully at Senator Leyonhjelm's proposal in this private senator's bill. We assess that by how it would operate, what the impact would be and, indeed, whether it is fair. It is the same process that we have used all the way through, and we will continue to do so. We believe that this one does not pass the fairness test. It does not effectively take into account the needs of the families who are receiving family tax benefit A. I have already given the number of families who would be affected by this proposed change and the impact that it would have on their budgets. We believe, as we have said on a number of occasions in this place, that it does not pass the fairness test, and we will not be supporting it.