Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Financial Assistance Legislation Amendment Bill 2009

This is a Bill to amend the Federal Financial Relations Act 2009 and the Local Government (Financial Assistance) Act 1995.

The global economic recession is the great challenge of our time and the Rudd Government has made dealing with its impact a priority.

Tonight I introduce a bill that will assist Australia deal more quickly and therefore more effectively than it otherwise could. The Financial Assistance Legislation Amendment Bill 2009 will provide the Government with greater flexibility to assist local government in Australia.

We know that the global economic recession is placing new pressures on local government across Australia. We have seen reports from the Australian Local Government Association that councils are facing increased defaults on council rates payments. And while record low interest rates are assisting families with mortgages, many councils are seeing a reduction in their level of investment income.

The Government’s financial assistance grants provided through the Local Government (FinancialAssistance) Act is an important mechanism to provide ballast in the balance sheets of local government. On average these grants contribute around 7 per cent to council revenue.

Earlier this year the Government was able to bring forward the fourth quarter’s grant payments to Victoria and Queensland to assist disaster-affected councils. That decision helped affected councils manage cash flow at a critical time.

More broadly in Australia, however, we face the challenge of the global economic recession. Until now the Act that provides Commonwealth funding to local government lacked the means to bring forward some payments from a future year to the current year.

The Bill I introduce tonight remedies that problem.

The proposed amendments for the Local Government (Financial Assistance) Act 1995 will increase the Commonwealth’s flexibility to provide additional funding in a particular year. including by, in effect, bringing forward funding from a future year. when economic or other special circumstances warrant such measures.

The other element of the Financial Assistance Legislation Amendment Bill relates to the Federal Financial Relations Act.

Other government decisions taken in the 2009-10 Budget will require an increase in the general drawing rights limit for the 2008-09 financial year for the purposes of section 9 of the Federal Financial Relations Act 2009 so that the necessary payments can be made. To do this, the Bill will increase the general drawing rights authorising debits from the COAG Reform Fund for the purposes of making grants of general revenue assistance to the States in the financial year starting 1 July 2008.

Social Security and Family Assistance Legislation Amendment (2009 Budget Measures) Bill 2009

In this Budget, the Treasurer has announced the most significant reforms to Australia’s pension system since it was introduced 100 years ago.

The Government’s Secure and Sustainable Pension Reform delivers a simpler, fairer and sustainable pension system to prepare Australia for the consequences of our ageing population.

These long overdue reforms will improve the adequacy of the pension system, make its operation simpler, and secure its sustainability into the future.

Central to this reform is providing security and certainty for Australia’s carers. Carers make great sacrifices caring for the most vulnerable in our community. We recognise the selfless contribution made by carers every day of their lives. And the great financial pressure many of them are under.

As part of the Government’s Secure and Sustainable Pension Reform, 500,000 carers will now have greater financial certainty and the peace of mind that it brings.

Carer Payment recipients will receive pension increases of $32.49 a week for singles on the full rate and $10.14 per week combined for pensioner couples. A Carer Payment recipient partnered to a non-pensioner will receive an increase of $5.07 per week.

And to give carers the financial security they deserve and the capacity to manage their financial circumstances, the Government is replacing ad-hoc bonuses with a legislated annual supplement.

For too long, carers have been burdened by the uncertainty of not knowing whether they will receive one-off bonuses, making it difficult for them to plan ahead and manage their financial circumstances.

This bill introduces a new payment, called Carer Supplement, into the social security law. The first Carer Supplement payments will be made before 30 June this year.

Carer Supplement, which is a payment of $600, will be available to a wide range of carers, including those who are caring for children or adults with disability, as well as people who are caring for veterans with particular care needs. The existing $1,000 Child Disability Assistance Payment will continue to apply for recipients of Carer Allowance paid in respect of a child.

Carer Supplement will be an ongoing payment, guaranteed by this legislation, and will be available each year to eligible carers.

It is intended that the first payments of Carer Supplement will be made by 30 June 2009, for people who were qualified for Carer Supplement (as described below) on 12 May 2009.

On an ongoing basis, from July 2010, a person will receive Carer Supplement if the person was qualified for, and received, one of the qualifying payments for the payment period, normally a fortnight, that includes 1 July.

Qualification for Carer Supplement will be linked to receipt of a range of payments made to carers, including Carer Allowance, Carer Payment, and Department of Veterans’ Affairs Carer Service Pension. People who receive Wife Pension or Department of Veterans’ Affairs Partner Service Pension as well as Carer Allowance will also be eligible.

A carer who receives both Carer Payment and Carer Allowance will receive an amount of Carer Supplement for each, in addition to increases to their pension.

For example, a single carer who receives both full rate Carer Payment and Carer Allowance will get two Carer Supplement amounts totalling $1,200, plus an annual pension increase of $1,689, bringing additional permanent increases in this Budget to $2,889 a year.

A couple comprising a full rate Carer Payment recipient partnered to a disability support pensioner, for whom the Carer Payment recipient also receives Carer Allowance, will receive pension increases of $527 a year and two Carer Supplement amounts. This couple will benefit from permanent increases of $1,727 a year.

The increases to payment rates for Carer Payment will be introduced by legislation in the coming weeks.

This bill is part of the Government’s response to the needs of carers and highlights the Government’s commitment to improving much needed assistance. Expenditure on the new Carer Supplement will total $1.8 billion over the Budget period.

This bill also contains some of the measures announced in the Budget to reform family payments to make them more sustainable for the long-term.

This bill pauses indexation of higher income thresholds for certain family assistance payments for three years.

The Family Tax Benefit Part A higher income free areas, Family Tax Benefit Part B primary earner income limit, and Baby Bonus family income limit will remain at their 2008-09 levels and indexation will not be applied to these thresholds from 1 July 2009 to 30 June 2012.

Indexation of the thresholds will recommence on 1 July 2012. The indexation of rates for these payments will not be affected by this bill.

The Family Tax Benefit Part A higher income free area is the threshold at which the base rate of Part A begins to reduce. Families above this threshold receive a reduced rate of payment until the effect of the withdrawal rate reduces their payment completely. Each family’s Family Tax Benefit Part A income cut-out depends on the age and number of children. For example, this change means the income limit for Part A for a family with two children under 18 will remain around $112,000 until 2012.

The Family Tax Benefit Part B and Baby Bonus income limits were introduced by the Government in the 2008 Budget.

The income limit for Family Tax Benefit Part B was set at a generous $150,000 per annum while the Baby Bonus income limit was set at a comparable $75,000 in the six months following birth (or following commencement of care by an adoptive parent or a long-term carer). Individuals or families with incomes above these limits are not eligible for the respective payment.

These measures will limit the growth of family payments to families at the higher end of the income scale and save $1.4 billion over the forward estimates.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.