Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I was speaking on this legislation before I was so rudely interrupted by question time—a sign of the mistaken priorities of the government! I was indicating the concern Labor has for the lack of compliance with regard to the current child support arrangements and said that we were offering the government support in looking to improve compliance and in supporting a range of compliance measures. It is a key to ensuring fairness and ongoing community support for the child support arrangements. People have to believe that the system works and that they get justice from the system. Compliance is a very important aspect of improving the system. I am hopeful that the increased payment of liabilities will diminish some of the negative effects of the new formula for low-income resident parents.

I note that this year’s budget measures allocate $146.6 million to improve service standards and carry out organisational change in the Child Support Agency. Concerns in the community about the administration of the Child Support Scheme by the CSA are just as profound as those about the payments formula and compliance. To recognise this is not to attack the CSA staff; they work in a very difficult environment. All senators and members would recognise the hard work of agency staff and the pressures they are under. Nonetheless concerns exist, and I hope that the budget allocation and related action results in some more positive outcomes for both clients and staff. I think that some of the measures to do with case management, et cetera will improve outcomes for clients but also allow the CSA staff a better working environment.

I was concerned to hear recently that an internal CSA audit found that there have been 405 privacy breaches in the last nine months—of which 69 saw sensitive information being given to ex-spouses—and that at least two families have had to be relocated for their own safety as a result of such breaches. Labor notes, from the report in the Australian newspaper, that the Minister for Human Services is satisfied that the agency was taking action in this regard. We encourage the government to ensure that its reforms within the agency do as much as they can to prevent a repeat of these breaches.

The ministerial task force has examined the scheme, using sound principles, and its report was generally well received. Labor believes that it does provide a strong and constructive basis for reform. As I have indicated, our principal concern is in regard to the effect that the new assessment formula will have on low-income resident parents with children aged 12 years and under. They are the losers in this change. The government has supported the report and has picked up most of its recommendations, which it now seeks to implement.

Labor has taken a constructive approach to the reforms. We do not believe that any side of politics should seek to politicise this issue. Our aim has been to support positive reform of the scheme. In this we have endeavoured to work with the government, and there has been constructive engagement between my office and Minister Brough’s office. The changes that the government is seeking to implement cut across a range of areas, and the government plans to introduce them in three stages between July this year and July 2008.

We recognise that the package as a whole is carefully crafted by an expert committee, which has endeavoured to provide a balance based on the results of its research. In designing a new payments formula, the task force has based its calculations on research into the actual costs of raising children. It recognises the fact that the costs of care for older children are greater than those for younger children. It notes also that regular contact between children and non-resident parents increases the costs of care considerably, due to the duplication of infrastructure in two households, and that the costs of children change in accord with the parents’ income level.

At the heart of the formula is the attempt to divide these costs fairly between both parents in a way which recognises the level of care each provides. The current formula, by contrast, is not based on research into the actual costs of raising children and therefore lacks some of the intellectual rigour and underlying fairness of the new formula. The resulting package presents a trade-off in costs between resident and non-resident parents. This is in effect a zero-sum game. The new arrangements, as the Parkinson report noted, do not alter the amount of resources available for the children’s upbringing, but they do alter their allocation between households.

The task force argues that the new formula is grounded in evidence about the costs of raising children and the most defensible principles for allocating those costs. It notes the presence of anomalies in the current system and that the correction of these means that obligations must go up or down. It states:

... its recommendations can best be assessed by reference not to a comparison between the outcomes of the current and proposed formula, but by reference to the principles and evidence upon which these recommendations are based.

The package developed by the task force is a result of expert examination and analysis and seeks to balance competing factors in a sound manner. This is reflected in a balanced package of measures: a new payments formula balanced by increased compliance measures and attempts to make it harder for parties to hide their income in order to reduce their liabilities. The House of Representatives standing committee noted that ‘the CSS has a number of complex and interrelated components’ and that changing one aspect impacts on other aspects of the scheme. I believe that the same applies for the reform package. Therefore, attempting to unpick the package by amending certain measures would undermine its integrity as a whole and could create further inequities. After some consideration, the government has picked up the package largely in its entirety and Labor is prepared to support the government’s legislation as a whole.

However, Labor have indicated that our support for the package as a whole is contingent upon there being a satisfactory outcome and government action to put in place sufficient protection against income reductions for low-income resident families. We have very serious concerns about the impact of certain parts of the package of reforms. Our principal concern regards the impact the new formula will have on low-income single parents of children up to the age of 12. These households are generally headed by women. The House of Representatives report Every picture tells a story noted that 91 per cent of child support payees were female and nine per cent were male. Many single-parent families are among Australia’s poorest and most likely to fall into poverty.

While Labor accept that the new formula is based on a fair estimation and division of costs, we do not believe that the parliament can be blind to the practical consequences for the families affected. The aim of the reforms is to share the costs fairly between parents recognising the level of care they provide. The redistribution of those costs imposes minimal financial burden on the Commonwealth. While that reallocation of costs between parents is based on fair principle, Labor argue that there is a broader responsibility on the part of the Commonwealth and the parliament to ensure protection against loss of income for low-income resident parents. We do not want to see these families with less money to raise their kids.

The reforms attempt to encourage contact between children and non-resident parents by reducing that parent’s support liability in line with their level of care. At present, the non-resident parent’s liability is the same whether they have no contact or care for 29 per cent of nights each year. The task force recommends that, where the non-resident parent has care of the child for between 14 and 34 per cent of nights per year, their liability should be reduced by 24 per cent. I know this attempts to recognise the cost of providing domestic infrastructure such as a second bedroom but, clearly, the cost of renting a two-bedroom unit rather than a one-bedroom unit does not change depending on how many nights the parent has care of the child.

Recognition of the ongoing costs for non-resident parents and the encouragement this can provide for ongoing contact is a sound principle and should be supported. However, we must recognise the fact that the fixed infrastructure costs faced by the resident parent such as rent do not decrease at a rate commensurate with the other parent’s level of care. Yet, under the proposed changes, she or he faces a 24 per cent cut in their child support payments. Fairness has to work both ways. Just as we must be fair to the non-resident parent and recognise the fixed costs they face, we must also apply that same fairness to the resident parent. This is the area in which real concern exists. This is the measure which most starkly challenges the fairness of the package.

We should also acknowledge the reality that many of the people who face cuts in their child support payments will also be hit by the government’s Welfare to Work changes. I am not seeking to politicise this debate on child support. Labor’s vehement opposition to the welfare changes is well known, particularly those aspects which result in reduction of support for single parents. However, we have to acknowledge the fact that some of the poorest families in the country face the prospect of increased work obligations, reduced welfare payments, more punitive taper rates and, now, a reduction in child support payments. If we are to observe the principle of putting the interests of children first and respect the original intent of the Child Support Scheme to reduce child poverty, then we cannot ignore the impacts that these changes will have on these families.

While Labor are signalling broad support for the package, I am also indicating that we are seriously concerned about the impact on low-income families. We argue there is a clear responsibility for government to ameliorate the negative effects the changes may have on children in these families. We urge the government to look closely at this issue and examine ways of ensuring that carer families are not unfairly penalised and whether greater protection can be offered to them. It is a small issue in many ways compared to the totality of the package, but it is a very big issue for those families—it is a very big issue for those single-parent families who are potentially getting whacked by three or four separate measures.

These legislative reforms in this first tranche include the following principal measures: changing the capacity-to-earn provisions, increasing the minimum payment and its indexation to the CPI, increasing the amount of the child support payment that the non-resident parent can direct to specific purposes, dealing with a constitutional issue regarding application of the Child Support Scheme to ex-nuptial children in Western Australia and reducing the cap on the income of non-resident parents which is assessable for child support purposes from just under $140,000 to just under $105,000. This final measure means a reduction in payments by non-resident parents on incomes over $104,702 of up to $180 a week and a commensurate loss of income for the resident parents. This is another measure which causes me some concern. While I understand the logic behind it, the effect is that some families—some carer parents—will lose up to $180 per week from 1 July. Bang! No phase-in. Some of them I think may even still be unaware of the impact.

I think the new cap is defensible. I have certainly had a lot of encouragement to think that by some people whom I know personally. But I do think that there is an issue here in terms of phase-in. It does not matter how much income one has coming in—and if they are anything like me they are spending five per cent more than what is coming in—to say to a family, ‘As of 1 July, you suddenly have a reduction of $180 per week,’ when people have committed to school fees, mortgages, car payments et cetera, I think is harsh. While I accept the overall argument, I think the government should look again at that issue as to whether they cannot ameliorate the sudden impact of that provision on single parents caring for children. I do not pretend that the impact here is nearly as serious as it is on low-income parents who have a lot less to assist them in raising those children, but it has a very serious effect on some families. I got a very eloquent letter from a particular parent about that and I think there is an argument for them to say that there should be some sort of phase-in.

That is the main area of concern we have with the first tranche of reforms. In an effort to try and build bipartisan support and positive support for the changes, I am not looking to move amendments. Labor will not be moving amendments, but I make those two points to the government. I urge them to take them on as serious issues that ought to be addressed. I know the first stage is fairly minimal in terms of the broader package, but we urge the government before they proceed with the later stages of the package to take very seriously our concerns about low-income parents and the impact this will have on them.

There is a set of losers that even the Parkinson report identified who will be substantially hurt by these measures. Many of them will be women raising kids who will also be affected by the government’s welfare reforms or so-called welfare reforms, which also seek to cut their income. So they get a cut in income from the movement onto Newstart and they get a cut in income when the child support reforms come in. I do not think in all conscience that this parliament should be seeking to impose these two burdens, these two whacks, on them and their capacity to provide for their children.

Labor will be supporting the bill. We will be supporting the whole package in broad terms and we will be seeking to build community support for the child support system and the reforms contained herein. But there are issues on which we want the government to respond, in particular the issue about the impact on low-income sole parents. There is time before the second tranche for the government to address those concerns. At a time of large budget surpluses and the ability for the government to throw quite large amounts of money at those who perhaps do not need it as much, we could do better in how we treat low-income parents. Labor will be supporting the bill and not be seeking to move amendments to this particular piece of the legislative package.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

In talking to this piece of legislation this evening, I think it is important that all of us in this place and those in the community understand that the people whom we are discussing are those in deep personal crisis. The history of this legislation is that in 1988, when the first round of reforms was announced and the Child Support Scheme was introduced, there was massive community involvement and outrage because it was a new system. It was a system that was being introduced to deal with families at a time of great disruption and pain. We acknowledged this at that time—and I was working in the Public Service—and there was extensive discussion amongst those of us working in the public sector about the impact of this legislation on the wider Australian community.

There were allegations at the time of social intervention and experimentation. At this time of breakdown and dealing with the handling of such difficult arrangements, it was important that through this process the government would offer support, personal support, and give a degree of understanding while working with families to ensure that the No. 1 priority would be the rights, welfare and security of the children. That principle has never changed. In terms of the way the scheme has operated, there has been significant debate about whether any piece of legislation can effectively fulfil that outcome. There are arguments that no single piece of legislation can effectively work through these difficult processes. But, whilst balancing the impact of this legislation, we need to understand that families are working through so many other elements of change.

As Senator Evans outlined, when we are looking at the introduction of this round of amendments to child support, there is no way that you can consider this in isolation. The families who are working through how they will be affected by the document called the Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006 are also working through the complexities of the family tax system. They are often working through various elements of the family law system and they are seeking to survive at a time when other elements of welfare change are being imposed on the community.

For many of the families affected by this piece of legislation and seeking to know where their family income will be coming from, the Welfare to Work changes will be imposed at the same time. Whilst we are not here to debate those changes, once again it reinforces that we cannot in this place talk about bills in isolation because the families cannot be absolutely clear about where one piece of legislation begins and ends and where the other one takes up when we are talking about their very survival and their livelihood. I think this is something all of us should consider. The complexity of the whole legislative framework is one with which we are struggling and I can assure you it is one with which families are struggling on a daily basis.

I am aware of that struggle through my experience working in the public sector in the then Department of Social Security and, subsequently, having the privilege of working in this place and being involved in Senate committee hearings such as the poverty inquiry. Many of the people who came to give evidence and share their personal stories about family struggles during that inquiry were trying to survive on single incomes. They are the people that a government must keep in mind whenever we are looking at change and, most particularly, when we are looking at equity of change.

This particular initial measures bill is but the start of the current round of reforms to the Child Support Scheme. The legislation was introduced in 1988. People’s personal experience, the operations of departments and changes in government were worked through until early in the 1990s when the first round of legislative changes were made. This legislation continues to impact on people and must continue to be reviewed constantly. Also, nothing can be put aside and left alone.

This bill is possibly the first major, significant change to the child support legislation since it was introduced, and it has not come upon us suddenly. We had the very, very valuable House of Representatives committee report, Every picture tells a story, which I hope all senators have had the chance to consider. Through that process, the families of Australia, as well as so many of the agencies that work with them, the legal profession and the support groups chose to come forward and work with their political representatives, to give their stories, to talk about the proposed changes that they think would best impact on their own circumstances and to share with their political representatives what the impact of the current legislation has been on them and their lives. We had significant response to the public meetings across the country. I urge people to read that report if they have the opportunity, because it effectively reflects so much of the personal experience—and also the pain.

This particular area of legislation is one where I cannot separate the issues of personal pain from those of legislative change. Through the Every picture tells a story process, we heard the genuine, painful experiences of families who had worked through interpersonal breakdowns but who were then working through how they were able to maintain contact with their children, how they could retain the financial security that was being sought and, most importantly, how they could effectively develop family relationships after an initial parenting relationship had broken down. These are the people who will be affected by the raft of changes that are coming through now in three parts from the government. These are the people who most know the experience, because it is their lives.

Indeed, as a result of the Every picture tells a story report there was further community consultation. I know that through my own party and, I would anticipate, through other parties represented in this place there was great debate about the best process to take on from the community consultations that occurred. The government decision to institute a formal review of the process through introducing the Parkinson task force was extremely positive and one which I think was welcomed by all of us here and, I think, more importantly, by those people who had been part of the Every picture tells a story experience because they could see that their experience was being considered and that the government was then going to take professional advice on the issues that were raised.

I do not think there was anyone in the community who felt that any range of legislation was going to solve all the problems, but I think that there was genuine acceptance that the government process was at least considering a way forward. Now, two years down the track, we are in the position of looking at the initial round of what is now going to be a three-part implementation of change. Certainly I have some concerns about the time period over which these changes are going to be implemented and also about the time period for some of the most important changes—in particular, the formula change. Anyone who works in this area knows that the formula on which the financial arrangement is based is the key component to working out what you are going to receive in your budget on a regular basis, and that is the living money of people who are raising children in single relationships, often without very much extra money around. So the fact that the formula change is further down the track—the actual way that people can see their own circumstances and make the calculations is further down the track—makes the immediate impact of the legislation less powerful. In terms of expecting the change to happen, in the community in which I was working there was an expectation that these changes were going to happen in 2006 as a result of the previous processes. But when you examine the way in which the legislation is being brought in, the full complete changes—whatever they turn out to be in terms of the government debate and what happens—will not be in place in family relationships until 2008. That is a long way down the track.

In terms of the concerns we have had about the impact on any family in this process, of course we welcome the fact that the Parkinson report did some very valuable modelling of the financial impact and the expenses of raising children. That was something that was long overdue. Anecdotally, people talked about their own experiences and we had heard of the various expenses involved in child rearing, but until, through the Parkinson process, we were able to have a look at the data sets and see the background on which the decisions were made, there was still a degree of uncertainty about what the basis of the legislation was. I think that having that research was a very effective way of engaging people and showing that, whilst all of us have individual circumstances, at least there was a genuine attempt in developing the legislation to look at objective data—as objective as any discussion on families can be. There is no such thing as a model family. All of us need to work within the constraints of the community. We all look at different expenses and demands. It is very difficult, when you are talking about the impact of raising families, to be able to see yourself in the data. That is one of the things that I have been doing with some of the groups with which I have been working—taking the standard environment and the background and then working with people to see how they best fit within the mix.

Indeed, in terms of the process of finding out how people best fit, one of the things that I think is most valuable in the changes that the government is introducing is, I believe for the first time, a significant influx of funding into the Child Support Agency and some genuine dedication of resources into upskilling the people who work in that area, providing alternative service delivery mechanisms and putting outlets closer to the community so that people who are working through this system are able to deal with people who best know the system. All of us in this place would have regular contact with families who are not happy with the service that they receive from the Child Support Agency—in some cases a feeling that it is distant, that the staff in the Child Support Agency are not taking a personal interest in their circumstances and are somehow so far away, so uncaring and so unmoved by the individual pain of those with whom they are dealing that there is no genuine understanding of what it is like to be balancing a family expense account as well as working through all the other demands of raising children alone.

I think that the acknowledgement by the department that there is a need for some immediate work on behalf of the people who are working in the field—to look at specialised training programs and to ensure that people working in the Child Support Agency have effective support mechanisms as they work through quite difficult circumstances—is a major advance. That alone will ensure that the people who are working in this field feel better about themselves and feel more confident that they understand not just the technical aspects of the legislation but also the difficult personal circumstances of the people who are their clients.

I also believe that the introduction of better telephone services and hotlines will help, as will people knowing that Child Support Agency staff are well trained, they will understand their situation and they are accessible at any time. That is because some of the key issues for people who come to us concerned about decisions that have been made about their circumstances are that there is a delay in getting service from the public sector workers; there is a lack of sympathy, a lack of compassion; and there is no understanding that every single case has its own dynamic. The acknowledgment of this need for training and development is a major part of my hope that at least this first step of the process will be more effectively communicated to the public and that there will be a move towards making the process of implementing the legislation more accessible to the wider community.

Labor is concerned that, for the people who will immediately lose funding under the changes to the legislation, there will not be effective support or any ability to readjust their financial circumstances before the impost is placed on them. No matter how well you think you are operating your budget and no matter how effectively you believe you are planning your future, if there is a significant loss of regular income from your budget, which is going to impact on your lifestyle as well as that of your children, that will cause more stress and sometimes quite serious disruption to the operation of the family unit.

We acknowledge that the funding experiment has been done and that we understand that there are models in place to work out some changes to the way non-residential parents are working with the residential parents and how there can be variations to the expected amount of money that is paid on a regular basis. There are specific aspects of the legislation, such as lowering the cap and the changes to the way that people’s money can be assessed in terms of their ability to work, that are welcome. However, when that translates to a fortnightly decrease in the money on which you are expected to live, that can create great pain. As Senator Evans pointed out in his contribution to this debate, these are the people who need particular support from all of us as we look at the long-term impact of the changes.

In the whole process of the Child Support Agency working with the community, there must be an understanding that this particular change will have varying impacts on the families that are currently clients of the Child Support Agency and that, once again, there is no way that one size can fit all Australian families. We would expect there to be personal service given to each of the families who are working through the changes—a personal approach to each family so that they fully understand the impact of the changes on them. During the Senate estimates process, we talked to officials from the department about what process will be in place to implement the changes when they have been approved by the different levels of government. There was an acknowledgment that there would have to be an implementation process on a personal level, rather than just a general notice—or even a general letter like the letters that come from many government departments. Whilst some of us believe that such correspondence fulfils our legal responsibilities to ensure that a change is known and understood, those of us who have worked in the public sector understand that in reality it does not. The responses of individual clients to getting a letter from a government agency vary enormously, and there have been some research papers done on this issue.

I urge the government, in working out the implementation process for whatever changes come through, to do so through a very personalised information-sharing process with the families who will be impacted. Unless these changes are fully understood, there will be even further pain for the people who can least balance such changes. It is very simple for us in this place to talk about balancing the various costs and imposts of raising children, and understanding the various streams of income that come through from the government, including the range of family tax benefit changes we have discussed at length in this place. But, all too often, things that seem quite straightforward to the people who are developing the legislation and those working with it every day are not that straightforward or clear to those who are relying on the payment.

We already have a complex child support system, and that is one of the biggest complaints we have heard. So, in putting forward this major review of the way the system is going to operate, along with the fact that the government is going to do it in three stages, it is very important that we bring the people along with us so that every step of the way is clear to them.

There is absolutely no guarantee that a personalised process would be accepted by every client or something that they would welcome, but the least that the people of Australia who are clients of the child support system should be able to expect is that such a service is offered to them so that the changes are explained. If that is done, I think it will at least show that we have listened to some of the experiences to come out of the House of Reps committee inquiry—because the people who gave evidence to that review were clear that sometimes they felt that their interests were not best protected by the people who created the legislation. They also felt that the very title of the House of Reps committee report, Every picture tells a story, reflected the need for this personalised explanation of any changes that are going to be implemented.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I rise to speak on behalf of the Australian Democrats to the Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006. As other speakers have indicated, this bill is the first of three stages of a very significant overhaul of the Child Support Scheme. I do not think there would be a politician in this place, in the Senate or the House of Reps, who has not had significant representation from a wide range of perspectives expressing concern about how the Child Support Scheme operates, which I think is an indication of how fraught and difficult this area is.

This first stage of the legislation contains a number of key measures: increasing the minimum payment for child support; strengthening the Child Support Agency’s capacity to ensure parents pay their payments in full and on time, which I think is particularly important; recognising non-resident parents on Newstart and related payments who have contact with their children; and reducing the maximum amount of child support payable by high-income earners to ensure those payments are better aligned with the actual costs of children, an area which is perhaps one of the more contentious parts of this first part of the legislation. There are also arrangements for assessing the capacity of parents to earn income, enabling non-resident parents to spend a greater proportion of the payments directly on their children and helping separating parents agree on arrangements for their children. There are more changes coming down the track in the second part of the year. A particularly important one is the allowance of an independent review of all Child Support Agency decisions by the Social Security Appeals Tribunal, which I think will address one area that has been the source of very significant frustration. And there are further changes coming in from July 2008.

The aspect of this legislation that causes me some concern is the reduction in the maximum income for payers under the child support formula. This will mean very high income people—people in the top three or so per cent of income earners in Australia—will pay less. I think there is an arguable case for doing this, although I agree with Senator Evans that doing it basically overnight on 1 July, when it will potentially mean a very significant reduction in someone’s income, is not that desirable. What is put forward here is one of three parts of a comprehensive package that results from a very comprehensive review process which involved a lot of engagement with a wide range of stakeholders on the issue. Of course, it is problematic to pick out just one aspect and to trash that bit without it having flow-on effects to all of the other areas. Obviously there has been some attempted balancing in terms of the different interests and impacts on people. As I indicated at the start, this is an incredibly fraught area and one where it is impossible to satisfy all of the different views and concerns.

The key issue for the Democrats is to look at what will produce the best outcome for the children. I should say that part of that includes ensuring that you do not maximise the antagonism between parents. Obviously having a better relationship and connection with parents is in the best interests of the child as well. I think even the wisdom of Solomon would fall short of satisfying people in many respects, but this is somewhere that we need to continue to make the effort to get the system working as well as possible. I think the change that is coming down the track to enable appeals to be made to CSA assessments is an important one. I also agree with Senator Moore about the improvement in resourcing of the Child Support Agency. It is very important that they have the ability and time to make some of these very difficult assessments.

From my experience and from the perceptions I have got from the many people who have complained to me, the problem is not just the decision they have received from the assessment people; it is the process that has been used. Many people have perceived a dismissive attitude or a brick wall approach from the Child Support Agency. Whilst I do not suggest that a nice smiling face will necessarily satisfy everybody if they do not get a result they like, the process is important. It is an important part of how people perceive what is done and why a decision is reached. It is an important part of people at least having more understanding of why certain outcomes have occurred. If they have an opportunity to work through that with people more able to explain it and more able to ensure that the correct decisions are made the first time around, then it will at least reduce some of the very severe dissatisfaction that some people have with the Child Support Agency. So those certainly are positive measures.

It is also important to review how these measures operate and what the impact of them is. I imagine most people would not like to have another continuing set of reviews of this whole area. The process of reviewing the child support system and formula has already taken a very long period of time. It will take another couple of years yet before the whole lot of it is embedded in legislation, so I am loath to talk immediately about whether there is a need to change it again. But it is important to review how these changes operate—whether they function in a way people have anticipated, whether there are unintended consequences and whether there are more difficulties encountered by various people, particularly by children, than expected. Having said that, it is very difficult to pull one part out without the whole house of cards falling down, given how much this has all been knitted together.

The main thing the Democrats would emphasise is that, whilst that could apply as a general comment, that does not mean we give carte blanche endorsement to every aspect of the package of changes that are being put forward now or will be put forward down the track. It also means that we will continue to do what we can to monitor the impacts. We do believe it is an important issue. It obviously affects many Australian families of all types and, of course, many children, so it is important that we do it as well as possible and do all we can to get it right. Overall, this is certainly a step forward in that regard. I acknowledge that. I do not think it is perfect. From that point of view, I think we will all keep focusing on it, and I am sure we will all keep hearing about aspects that are creating dissatisfaction for people.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Family First supports a fairer system for child support and believes the Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006 is a step in that direction. The bill implements a number of the recommendations of the report of the Parkinson ministerial task force set up in 2004 to examine the Child Support Scheme and how it can be improved. The bill will increase the minimum rate of child support from $5 to $6 per week; increase the proportion of child support that can be directed by the payer to cover the costs of medical care, school fees and child care; and change the test under which parents can be deemed to be reducing their earnings to pay less child support.

Child support is a complex and sensitive issue. Too often it descends into conflict between mums and dads. It can be hard to separate the issue of child support from the broader difficulties and sadness of the relationship break-up. It can also be hard to determine how changes affect children. Professor Patrick Parkinson and his ministerial task force had the difficult task of wading through all these issues and proposing a better and fairer system. I have no doubt that they did not get it 100 per cent right, but they have closely examined a very difficult policy area and come up with detailed recommendations to improve the system.

There are always going to be winners and losers when changes are made to areas like child support that involve carving up a person’s income, so it is vital to get the fundamental principles right. Family First believes the task force’s approach of focusing on the cost of raising children and ensuring the income of both parents is taken into account when determining child support payments will result in a fairer system. Currently, the custodial parent has to earn more than $40,000 a year for their income to be included. The Parkinson report also acknowledges that some non-custodial parents have been paying more than they can cope with. It is important we have a fairer system because parents are more likely to respect it and cooperate. Many non-custodial parents who recognise and accept their responsibility for contributing to the financial cost of raising their kids are still reluctant to pay under the current system because they believe it is unfair or because it places an unfair burden on them.

Family First is in no doubt that other senators have been contacted by many fathers with stories of their despair after losing contact with their children after a marriage breakdown. That affects their employment and ability to pay child support. I have been told stories of fathers who have taken their own lives, partly because of the difficulty of trying to make ends meet and start a new life after they pay the required child support. Obviously, many fathers have been able to start new lives and have perhaps married and had a new family but they also find it difficult to survive under the current formula of paying child support for their children as well as supporting their new family. Clearly they have responsibilities for both families, but what is the fairest way of assessing their financial responsibility and ensuring they honour their obligations? One father described himself to me as an ‘EFT dad’—that is, an electronic funds transfer dad. That is the only contact he had with his children. Family First can understand the frustration of contributing financially to raising your children yet not being able to be part of their lives.

One of the aims of the Parkinson report is to remove disincentives for greater contact between children and both parents, and that can only be a good thing. Family First believes we should be doing all we can to ensure children have as much contact as possible with both parents, except in exceptional circumstances, such as abuse. It is certainly disturbing that 40 per cent of non-custodial fathers, or about 300,000, do not pay more than the minimum payment of $5 per week or $260 per year. That is a huge number, and Family First believes that should not be tolerated. About half of these fathers receive welfare. It may be that many other dads are trying to reduce their taxable income, by taking cash payments for work, for example, so that they pay as little child support as possible. The people who really suffer here are the kids. That is the real tragedy here. Family First strongly believes that both parents should pay their fair share of the costs of raising their kids. I support the Child Support Agency in its efforts to track down child support cheats and ensure they meet their responsibilities. I believe most Australians would also think this is fair and reasonable.

Finally, Family First is concerned at how long it is taking the government to implement the recommendations of the Parkinson report. While it was published a year ago, this is the first piece of legislation we have seen which implements some of its recommendations. Further, I understand that other changes will not be fully implemented for years to come. Clearly these changes are long overdue and I call on the government to implement them a lot more quickly. Family First supports a fairer system for child support and supports this bill. (Quorum formed)

Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006. There have been a number of speakers on this issue this afternoon, and I have a few comments to make in relation to this. Senator Moore referred to the report that the then House of Representatives Standing Committee on Family and Community Affairs released in 2003. As she said, it would be a good idea for all senators to have a look at that report. It is a very important contribution to public debate.

The report I refer to, of course, is Every picture tells a story. It made 29 recommendations that covered the family law process, parenting arrangements and the Child Support Scheme. From that, we have seen some legislation emerge and today we are debating some of that legislation. In February of this year there was a government response given to the report of a task force chaired by Professor Patrick Parkinson, which was released in June of last year. The report made 30 recommendations to overhaul the Child Support Scheme. In its response, the government indicated its intention to adopt most of the ministerial task force recommendations for change and to implement the reforms in a three-stage process commencing in July this year.

Labor welcomes the release of the government’s plans to reform the child support system. As Senator Evans said in his speech a little earlier this afternoon, Labor accepts the need for reform of the child support system. We consider that the report released by Professor Parkinson and his task force provides a strong basis for reform. Labor notes that the government appears to have picked up on most of the recommendations contained in that report. As a consequence, Labor will support much of the government’s package and, as we have today—as we always do!—will approach the debate on all of the changes in a constructive manner. Labor supports encouraging shared parenting and a fair balance in meeting the costs of a child’s care and his or her upbringing. The fact that only half of all non-resident parents meet their child support obligations in full and on time is an issue of grave concern to Labor. On that point, I will conclude my remarks.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I thank senators for their contributions. The Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006 is a very important bill and a great deal of thought has gone into the preparation of it. A number of very interesting points were made by senators and the government will look very closely at what has been said in this chamber. A number of senators remarked on the high degree of cooperation and consultation which has occurred in the preparation of the bill. That is entirely appropriate. The government is a consultative one—it is a government which listens to people—so that does not surprise me.

I will conclude by summing up a number of matters which were raised during the second reading debate speeches. To recap: the bill will introduce a number of significant changes to the Child Support Scheme. It is the crucial initial stage in implementing the government’s overhaul of the Child Support Scheme which was announced in February of this year. More extensive and complex elements included in the new formula will be introduced in the second and third stages. These changes are a response to the ongoing community concern and concern by this government about child support issues.

Presently, the scheme affects 1.4 million parents and 1.1 million children who have experienced family separation. In response to concerns about custody arrangements, the then House of Representatives Standing Committee on Family and Community Affairs released its report Every picture tells a story in late 2003. Following that, a ministerial task force on child support was established to examine more closely the details involved, leading to its report In the best interests of children, which was presented to the government in mid-2005.

The task force’s report suggested that some elements of the present scheme are not aligned with community standards on shared parenting and the increased participation of women in the workforce. It suggested that the scheme is not an accurate reflection of the relationship between income and spending on children in ordinary families, nor is it well integrated with the income support family payments and family law systems. Under the bill, the minimum child support payment will be increased from the current amount, which is equal to $5 per week, to the amount that would have been in place if the old minimum had been indexed since its introduction in 1999. Linking the new minimum payment, currently equal to $6.15 per week, to indexation ensures that the value of the payment will not be eroded. The figure that sets the cap on a liable parent’s adjusted income to child support—

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to move a motion relating to the leave of absence of two senators.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

My understanding is we will deal with the bill first and then take that motion. Sorry, I thought you were intending to move or speak to something in relation to this. I will call the minister, and we will finish dealing with the bill that is currently before us.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

When a Carlton supporter speaks to me and asks for leave to present some information to the Senate I generally take a very conciliatory approach. But I commend your ruling, Madam Acting Deputy President; it was entirely correct.

To recap, just before the dinner break I was indicating that the figure that sets the cap on a liable parent’s adjusted income for child support purposes is also amended by the bill. The cap is designed to limit the possibility of child support being paid by high-income parents at a level that exceeds the actual costs of caring for the child. Consequently, this measure provides that a liable parent’s income will be assessed in a way that is more in line with the actual costs of the children and that is more consistent with the treatment of the payee’s income. This measure replaces the full-time adult average weekly total earnings figure with the all employees average weekly earnings figure. These changes will effectively lower the maximum amount of a child support payment by high-income liable parents because, to use the initials, the EAWE figure is lower than the AWE figure.

The bill also includes a measure that sets out further matters for the child support registrar or a court to consider when making a decision about a parent’s capacity to earn. The capacity to earn decision is one where the parent’s real income is not disputed but the decision maker considers that the parent has a capacity to earn at a greater level than is being exercised. Consequently the decision maker may decide to assess the parent’s child support liability as being at a higher rate.

Capacity to earn decisions have been amongst the most controversial in the Child Support Scheme, as many senators will know. This measure will improve the clarity and accountability of capacity to earn decisions. The new method of assessment is intended to be flexible enough to allow parents whose earning capacity has been assessed for child support purposes to make work and lifestyle choices in the same way as parents in intact families. This might include pursuing a different career or reducing work hours because of caring responsibilities.

However, it is important that parents whose earning capacity has been assessed do not deliberately choose to avoid or reduce their child support liability by changing their working patterns. The Child Support Agency can still decide, if a parent cannot show that he or she had an appropriate reason for his or her decision about work changes, to find a higher capacity to earn.

The bill also increases the maximum percentage of a child’s support liability that may be credited towards prescribed non-agency payments such as child-care costs or school fees. This is designed to give payers of an enforceable maintenance liability greater determination over how child maintenance money is spent. This measure provides that credit may now be given up to a maximum of 30 per cent, instead of 25 per cent, of the ongoing liability in any payment period.

Finally, the bill addresses a constitutional issue with the application of the Child Support Scheme to ex-nuptial children in Western Australia. The Commonwealth government has the power under the Constitution to make laws in relation to the children of marriage; however, in relation to ex-nuptial children, Commonwealth laws only apply if the states have referred their powers to the Commonwealth or adopted Commonwealth laws. Except for Western Australia, all the states have referred to the Commonwealth their power to make laws in relation to ex-nuptial children. Western Australia has chosen instead to adopt the Commonwealth child support legislation from time to time.

However, the Western Australian adoption acts have tended to lag behind the Commonwealth amendments. Consequently in the periods before Western Australia has adopted Commonwealth amendments two parallel child support schemes have operated: a pre-amendment scheme applying to ex-nuptial children in Western Australia and a post-amendment scheme relating to the up-to-date legislation applying to all other children in Australia, including the children of marriage in Western Australia. The bill’s amendments confirm the legal status of this arrangement and provide certainty to the families and children affected.

In conclusion, as I mentioned, this is a very important bill. It is one which has engaged the interest of a considerable number of senators, and we congratulate the senators on their contribution. My understanding is that there will not be any amendments moved in the committee stage, but I think I am able to say that the government will be looking very carefully at the contributions that senators have made in this chamber in their consideration of future policy initiatives in this area, which affects a large number of Australians.

Question agreed to.

Bill read a second time.