Thursday, 12 November 2015
Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015; Second Reading
I rise to make a contribution on the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015. The bill contains measures that, from 1 January next year, remove the family assets test and the family actual means test from the youth allowance parental means test arrangements; from the same date next year, align parental income test exemptions for youth allowance with existing arrangements for family tax benefit part A; from the same time next year, remove maintenance income from the youth allowance parental income test assessment; and, from 1 January the following year, apply a separate maintenance income test for the treatment of child support like that currently applying to family tax benefit part A. Furthermore, from July next year, where a family has a dependent child who receives an individual youth payment that is parentally income tested and younger siblings who qualify for FTB, the family pool for the youth parental income test will include all the FTB children.
There should be systems in this country that support our students and young people. The Australian Greens support measures that encourage rural and remote young people to access higher education. We also support measures to simplify the system where there are changes that are fair and reasonable. We will be supporting this bill through the Senate, but we do have a few concerns, which I will articulate here and are why I will be moving a second reading amendment.
The key concern raised during the inquiry was that removing the family and personal assets test for youth allowance for dependent young people could enable wealthier families to manage their wealth so as to access a payment intended for lower income families. This is not just an unsubstantiated fear; in the past we have, in fact, seen this happen. The Australian Greens propose a review of these measures in two years, to ensure that there are not adverse outcomes as a result of removing the family and parental assets test. The Australian Greens also share submitters' concerns that the removal of the family and personal assets test is not the best approach to address the issues raised by farm assets in assessing income support payments, and that this issue should be looked at across the whole of the social security system. As ACOSS put it in their submission:
If there are anomalies in the assets test treatment of farms, these should be resolved across the social security system rather than by exempting one payment.
The Greens recommend that a review of the effect of these measures be carried out in two years to see if, in fact, they are working and having the desired outcomes. The Greens second reading amendment is that at the end of the motion we would add:
… but the Senate recommends the government establish an independent review of the effect of the measures implemented under this legislation and it be undertaken no later than two years after the commencement of this legislation.
The bigger issue is that this bill fails to address the inadequacy of our youth payments and our approach to young people in this country. The bill does not address this huge issue of the inadequacy of the youth allowance payment—an issue that I have brought countless times to this chamber. This was noted by the Australian Council of Social Service and the National Welfare Rights Network in their submissions to the inquiry. The National Welfare Rights Network noted:
In our opinion, inadequacy of the youth allowance rate itself, and the extremely narrow criteria for independent status are the main social security issues affecting access to education. If spending of youth allowance is to increase, it should be to increase rates of payment, make the criteria for independent status more flexible and increase access to the payment for lower income families rather than high income and asset families.
Increasing the payment amount should be an urgent priority for the government—along with other income support payments such as Newstart.
I also suggest that, if the government were interested in helping young people, it would not have a bill in parliament that does not allow young people to go onto Newstart for what is, basically, five weeks—extending the one-week wait period by four weeks to make it a five-week wait period. These young people are expected to live on thin air, it seems, for five weeks before being able to access some form of income support. The government really needs to display some consistency here when it is addressing issues like support for young people—whether it is access to university, access to TAFE and vocational education, or access to income support while they are trying to find work. We really do need a much more consistent approach. This government has repeatedly tried to push this type of nasty measure of kicking young people off income support for weeks at a time. We saw the previous attempt, where it was for six months; it was going to be rolling six months on, six months off for anybody under 30. Thank goodness that never saw the light of day in this chamber. Although it was introduced, the government knew very well it could not get that particular measure up. So the repeated attempts to get that legislation up were not successful and the government changed its tack, but it is still attacking young people—reducing the age from 30 to 25 and still trying to keep people off income support.
Whether it is six months or five weeks, the community overwhelmingly does not accept that keeping young people off income support will help them gain employment. The Senate confirmed this sentiment when it rejected the previous attempt to keep them off for five weeks. The Senate also supported a motion by the Greens that condemned that particular approach. The government really should be taking a new approach under its new leadership and use the new leadership of Prime Minister Turnbull to change tack on supporting young unemployed people, rather than pursuing punitive measures that would entrench poverty. The jobs simply are not there for young people at the present time. Our training system is not up to the job yet to support people. There are viable alternatives instead of keeping young people off income support and making their life more difficult.
Having said that, we are pleased that the government is, in some areas, helping young people, as this measure does. I have articulated the Greens concerns about some elements of these measures. Having said that the Greens will be supporting this particular bill but with a second reading amendment. I move:
At the end of the motion, add:
", but the Senate recommends the Government establish an independent review of the effect of the measures implemented under this legislation be undertaken no later than 2 years after the commencement of this legislation.".
Once again I am a little confused about this government's priorities. I am, of course, pleased to support the bill currently before the chamber. While I will outline the precise measures contained in this bill, in summary it removes certain means-testing provisions for Youth Allowance. Basically, the bill improves support for young people living in families with higher levels of assets either by increasing their income support payments, or allowing them to receive payments where they were previously ineligible. It makes a refreshing change when this Liberal government decide they actually want to provide more support to young Australians, especially given their record. But it begs the question: where are this government heading when it comes to providing a social safety net? What is their real stance on supporting those who are doing it tough?
You have to wonder what was going through the minds of those opposite when they put this bill forward, as it flies directly in the face of their legacy on income support. I would like to take a moment to reflect on that legacy, and remind those listening, or reading the Hansard, that the current Prime Minister was in the cabinet when all the cruel cuts of the last two budgets were agreed upon. We should also remember that Prime Minister Mr Turnbull said publicly that he supported the cuts in the 2014 budget. Remember, in June 2014, Mr Turnbull said:
I support unreservedly and wholeheartedly every element in the Budget.
We need to remember those words of 'unreservedly and wholeheartedly'. There is no room for equivocation there, and Mr Turnbull made it distinctly clear that he supported every element.
Let us have a look at exactly what Mr Turnbull supported, particularly when it comes to income support payments. He supported cuts to the indexation of pensions which, had they been successful, would have left pensioners worse off by up to $80 a week. Having been unsuccessful with this move, the government instead put legislation through the parliament—in a dirty deal with the Greens—which cut pensions by up to $8,000 for single pensioners and $14,000 for couples. This legislation will see 330,000 pensioners worse off in 2017. Mr Turnbull supported cuts to family payments which would have left families worse off by up to $6,000 a year.
In the same interview, where Mr Turnbull professed his unreserved and wholehearted support for the measures in the 2014 budget, he specifically backed the then Abbott government's policy for university deregulation and $100,000 degrees. I have noticed, from previous contributions both here and in the other place, that they have emphasised the benefit these measures will have in supporting families from regional areas. But, at the same time, those opposite supported legislation which would have killed the prospects of a quality university education for many regional students. How can you say you believe in greater support for young people in remote and regional areas while, at the same time, kill their chances to advance their education?
It is interesting to note that many of the cuts to income support put forward by this government will have the greatest impact—guess where?—in regional areas. I turn to the Nationals, as I have done in this place many, many times before, and ask them, once again: how can you claim to represent regional Australia when you continue to roll over to your coalition partners on policies that hurt regional Australia? Perhaps this bill is intended as some kind of gesture by the Nationals to their constituents. It is a weak gesture, mainly, and is probably to maintain the pretence that they still support regional Australia.
Mr Turnbull also supported legislation that would have left young job seekers with nothing to live on but fresh air for six months. Senator Siewert mentioned this. I have spoken many times in this place on that issue and about how hard it would be for young people to live—in fact for anybody to live—with no income for six months. While the government have scaled back this proposal, there is still legislation on the books to force young job seekers to wait up to one month without a payment. Once again, I think that anybody trying to live and survive for one month without any income is just atrocious.
When I spoke on the legislation in September, I mentioned some of the evidence that had been submitted to a Senate inquiry about the effects that a one-month payment would have on young people and their families. Various welfare agencies have said that the measure would lead to dire consequences, including family breakdown, increased isolation, deterioration in physical and mental wellbeing, homelessness and housing insecurity. I also referred in a previous contribution to comments in the media from a young person who had experienced homelessness and had managed to get her life back on track with the help of our income support system and other social services. This young person said that she was certain young job seekers would turn to crime to support themselves if they were subject to a one-month waiting period and had no other means of support. She said that they would turn to crime because they would not have an alternative, and unfortunately I do believe that that is a real possibility for some young people.
Remember that, while young people are subject to this waiting period, they would still be required to participate in activities such as applying for 20 jobs a month. How on earth anyone could be expected, while struggling to survive without an income, to travel to appointments and make themselves presentable for job interviews? They would be lucky to be able to eat let alone do other things. If you cannot even afford essentials such as food, rent and electricity, how can you even contemplate buying clothes or something like a bus ticket?
As I said in my speech on that particular bill, that proposal is downright cruel. Mr Turnbull and those on the other side supported this harsh, punitive measure.
The same legislation included a cut of $46 a week to income support for young people between the ages of 22 and 24. So when the Turnbull government introduces a bill like this to the Senate, it really does serve to highlight the hypocrisy at the heart of this government's agenda. If this government is serious about helping young people, as this bill seems to indicate, then they should dump their cruel, punitive cuts to income support payments for young people, particularly the one-month waiting period. Until they do, many young people will question what the government's intentions actually are.
There are some very confused priorities when you have measures on the one hand which provide more generous income support to young people—and we applaud that—but on the other hand you have measures that punish young people and drive them into poverty and hardship.
I will outline briefly what the bill currently before the Senate does. There are four main components to the bill. Commencing from 1 January next year, the bill will remove the family assets test and the family actual means test from the youth allowance parental means test arrangements. This measure will see around 4,100 additional dependent youth allowance claimants qualify for the first time, accessing average annual payments of $7,000 a year. Removing the family actual means test will see around 1,200 more people receiving youth allowance for the first time, as well as increasing payments for around 4,800 existing students by approximately $2,000 a year. As I mentioned earlier, this measure is particularly important for families in regional areas. It will benefit a number of farming families who may be on low incomes but still have difficulty getting access to youth allowance because farm assets are included in the means test.
The bill also aligns the parental income test exemptions for youth allowance with existing arrangements for family tax benefit part A. It removes the maintenance income from the youth allowance parental income test assessment and applies a separate maintenance income test for the treatment of child support, like the test that currently applies to family tax benefit part A. Where a family has a dependent child who receives an individual youth payment that is parentally income-tested and younger siblings who qualify for family tax benefit, the family pool for the youth parental income test will include all FTB children. This measure will allow around 13,700 families with dependent children in both the family tax benefit A and youth streams, to become eligible for an average increase in their payment of around $1,100 a year.
Around 5,800 families who currently miss out on payments due to the combined higher taper rates will also become eligible for an average payment of around $1,300 per year. These changes will reduce the regulatory burden on around 30,000 families subject to the family actual means test and around 200,000 families subject to the family assets test. The measures contained in this bill require a financial commitment of $262.7 million over the forward estimates.
This bill was referred to a Senate inquiry, and I will now take some time to comment on a couple of submissions to that inquiry. Of the nine submissions received, five came from the Isolated Children's Parents' Association of Australia and their state and territory branches. ICPA Australia pointed out the challenges facing young people from remote and regional areas, particularly the higher up-front expenses associated with relocation including travel, accommodation and the other costs of living away from home. They noted that many family-owned rural businesses have a high asset base, which excludes students from these families qualifying for dependent youth allowance, despite these businesses having a low net income.
We know that rural students are underrepresented in higher education. ICPA Australia cited in their submission research they had conducted which showed that financial costs, combined with the difficulty of accessing government support schemes, were key factors in limiting rural students' access to higher education. The research involved surveying ICPA members about their children's' access to tertiary education. Let me quote some of the data from ICPA Australia's research, which was conducted in 2013. Seventy-four per cent of respondents indicated they required government financial support to meet the expense of relocation and ongoing living and university expenses; 34 per cent of students deferred, with 74 percent citing financial reasons for deferral, and 47 per cent were ineligible for dependent youth allowance due to assets.
A submission to the inquiry by the Youth Affairs Council of Western Australia noted that in order to satisfy the family actual means test, a young person is required to provide the department with details of the spending and savings of every member of their family. So a young person is required to provide the department with details of the spending and savings of every member of their family. The onerous nature of this requirement led to delays in receiving payment and also acted as a disincentive for young people to apply for payments. I am not surprised.
The Australian Council of Social Service, or ACOSS, made some comment about the high combined taper rates for families receiving multiple family and youth payments. They pointed out that the high taper rates result from the 'stacking' of multiple income tests, and that this results in a disincentive for family members to engage in paid work.
Labor supports the measures contained in this bill. Of course we want to see extra support provided to young people on youth allowance. But as I said before, it is such a hypocritical approach for this government to take when some young people get support and others are punished. It just goes to show the twisted priorities of this government. If you have assets, this government will go into bat for you, but others on low incomes will have their income support payments cut and their family payments cut.
The Turnbull government should be helping all Australian families, not just those it thinks are deserving of its support. If those opposite are serious about supporting families, they should drop their plan for the $100,000 degrees that price many families out of higher education. They should drop their cuts to family tax benefit and their cuts to paid parental leave. They should start getting serious about job creation and economic growth, particularly with the ever-increasing levels of youth unemployment across Australia. They should rule out increases to the rate or base of the GST. One of the worst things this government could do to family budgets is put a great big 15 per cent tax on everything you buy. We know from recent research conducted by ACOSS and the National Centre for Social and Economic Modelling that those who would be the hardest hit by such a policy are, once again, the ones who can least afford it.
Labor recognises that the bill we are currently considering is a positive step forward for young people and their families, but it does not make up for the government's cuts to family payments contained in the 2014 budget, and it does not make up for the government's push for $100,000 degrees, pricing many regional students out of higher education. It does not make up for their plans to force young people to live on nothing, whether for six months or for one month. And it certainly will not make up for the government increasing the tax burden on low- and middle-income earners by increasing the GST, whether by increasing the rate or by broadening the base.
I have said it many times: this government has targeted its cuts at the most vulnerable and disadvantaged people in Australia. It means that when it comes to budget savings the people who can least afford it are the ones who have to pay the greatest price. When those opposite say that the end of the age of entitlement is over, the so-called entitlements they are talking about are actually basic needs for people on low incomes. And it makes no difference whether Mr Abbott is Prime Minister or Mr Turnbull is; many of the attacks on disadvantaged Australians, many of the cruel cuts from the 2014 and 2015 budgets, are still on their books.
Granted, the bill we are debating right now does provide some additional support to young people and their families who genuinely need it. But it goes a very small way towards addressing the cruel cuts that low-income Australians have had to endure so far.
I rise to oppose the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015. As is often the case, I suspect I will be the only parliamentarian to do so.
The government has budgeted for a $35 billion deficit this year, and the prospect of debt and deficit extends as far as the eye can see. The government acknowledges that we have a spending problem, with government spending as a share of GDP being as high as at any time since the early 1990s, once you account for spending that this Senate refuses to cut. But this bill allows dependent kids of asset-rich parents to get youth allowance. It is a bald-faced expansion of middle- and upper-class welfare, and it will increase government spending by an estimated $263 million by 2019.
Currently youth allowance is denied to students and unemployed youths whose personal income or personal assets exceed certain thresholds. Youth allowance is also denied to students and unemployed youths who are dependent on their parents, if their parents have income or assets above certain thresholds. This is as it should be. But this bill removes the assets test. As such, students and unemployed youths who have significant personal assets or who are dependent on parents with significant assets will become eligible for youth allowance. The Nationals want the dependent kids of asset-rich parents to get welfare, because some farm families are asset rich. It has even been suggested that this bill should be renamed the 'Senator McKenzie Re-election Bill'. But the existing parental asset test already includes carve-outs that help asset-rich farm families. Only a quarter of the value of farm and business assets are included in the test. The family's principal home is excluded from the test, and the asset test does not apply if the family receives a Farm Household Allowance.
There is no problem with the definition of dependent that would justify the government's attempt to jettison the parental assets test for dependent kids either. You are defined as being dependent, and hence subject to the parental assets test, only if you are able to live at home and you have parents who can exercise their responsibilities; if you are not a full-time student or apprentice over 21 years of age; if you have not worked for 18 of the past 24 months; if you have no limits on your capacity for work or education; if you are not married or in a year-old de facto relationship, and if you do not have a dependent child. This is a very restrictive definition of dependent, such that youth allowance is only ever denied to people who clearly do not need it.
This bill shows that the coalition government is prepared to bribe voters in the hope of retaining rural votes. It is sad to say that this government is not serious about reducing government spending and resolving our debt and deficit problem.
I thank colleagues for their contributions to this debate on the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015. As has been well canvassed, this bill will implement the government's 2015 budget measure that will provide more consistent and more generous support for families with dependent young people who qualify for certain youth income support payments. With a financial commitment from the government of $262.7 million over the forward estimates, the bill will bring extra support to families as their children move into young adulthood, particularly rural and regional families whose children continue to study beyond year 12.
From 1 January 2016 this will include removing the family assets test and the family actual means test from the youth allowance parental means test arrangements. This will result in a more consistent level of support for families as young people move from family tax benefit part A to an individual income support payment. The parental income test exemptions for youth allowance will also be aligned with existing arrangements for family tax benefit part A. Removing the family assets test for youth allowance will allow around 4,100 additional dependent youth allowance claimants to qualify for the first time, accessing average annual payments of more than $7,000 per year. Removing the family actual means test will see around 1,200 more people receiving youth allowance for the first time as well as increasing payments for around 4,860 existing students by approximately $2,000 a year. The changes will reduce the significant regulatory burden on around 30,000 families who are subject to the family actual means test and around 200,000 families who are subject to the family assets test. The changes mean that farming families will not have farm assets counted towards the means test for their dependent children claiming youth allowance.
A further component of this budget measure will apply from 1 January 2016 to expand the family pool for the youth parental income test to include a notional maximum rate of family tax benefit part A for all of the children for whom the parents have financial responsibility. This will apply to families that have dependent children receiving individual youth payments that are parentally income tested and also younger dependent siblings, and will result in a lower rate of reduction to the dependent child's youth allowance than is currently the case.
Including all FTB children in the family pool for the youth parental income test will allow around 13,700 families with dependent children in both the family tax benefit part A and youth streams to become eligible for an average increase in payment of around $1,100 a year. Around 5,800 families who currently miss out on payments due to the combined higher taper rates will also become eligible for an average payment of around $1,300 a year. Additionally, in a two-stage process, from 1 January 2016 maintenance income will be removed from the youth allowance parental income test assessment. From 1 January 2017 a separate maintenance income test for the treatment of child support will be applied, like the test that currently applies to family tax benefit part A.
This bill seeks to boost assistance for working families, smoothing the transition to individual payment for young people and better supporting them into study to build their careers, develop economic opportunities and contribute to our economy.
The bill was considered by the Senate Community Affairs Legislation Committee, and I am pleased to say that in its report, tabled on 9 November, the committee recommended that the bill be passed without alteration. In the committee report, the Australian Greens provided additional comments around the adequacy of youth payments and proposed there be a review of the measures in two years to ensure there are no adverse outcomes as a result of removing the family assets test. Removing the family assets test is consistent with arrangements for family tax benefits, where no assets test applies. There is no rationale for applying a family assets test for youth payments that does not apply to family tax benefit. Personal assets testing will continue to apply across the social security system for income support payments.
The government commissioned a review of Australia's welfare system, which resulted in the McClure report, and also instituted a review, through the interdepartmental committee on access to higher education for regional and remote students, of the challenges regional students face in accessing higher education. Both of these initiatives include a focus on the adequacy of income support payments, and the government will consider the issues raised by community organisations and the Australian Greens as part of the process of working through the recommendations of the McClure report and the interdepartmental committee review.
While the government does not propose to agree to a formal review after two years, the government does monitor the effectiveness of its programs on an ongoing basis, and the outcomes of the measures in the bill will be considered as part of that continuous process of policy review.
The committee noted that, by removing complex and unnecessary means tests, the bill facilitates the objective of providing more consistent support for families with dependent young people who qualify for youth payments. The committee also noted that this initiative is consistent with the findings of the recent review by the interdepartmental committee on access to higher education for regional and remote students. With those remarks, I commend the bill to the Senate.