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Tuesday, 22 June 1999
Page: 7031

Mr ANDREWS (6:19 PM) —The Social Security (Family Allowance and Related Matters) Legislation Amendment Bill 1999 is a practical embodiment of the Howard government's commitment to Australian families. It provides no less than $42 million in the 1999-2000 financial year to improve the living standards of Australian families, and it shows the government's particular concern for low income families, the battlers who came to us in droves after years of disillusionment with the elitist policies of Labor under Mr Hawke and Mr Keating.

The government understands that it is still tough for very many families. There are many who have never recovered from the Keating induced `recession we had to have'. In August 1997, 700,000 children under the age of 15 were living in families where neither parent had a job. Just over 200,000 of these children were living in families in which neither parent had a job and at least one parent was actively seeking a job. This was after 13 years of Labor government. Over that period, the number of children increased by seven per cent and the number of children living in unemployed families increased at double this rate, to just under 16 per cent. This increase occurred, too, despite the fact that overall unemployment at the beginning and the end of this period was about the same. This highlights the difficulties, indeed the increasing difficulties, faced by many Australian families. To be fair, not all of this can be sheeted home to the Labor government in exile, which now sits on the opposition benches, wondering, like Alice in Wonderland, where oh where might they now turn.

The increase in children living in unemployed families is the result of the rise in the number of single parent families between 1984 and 1997, from 270,000 to 437,000. The same families in the same period became increasingly likely to be unemployed, with the unemployment rate of single parent families rising from 14.7 per cent to 16.9 per cent. This resulted in a staggering 148 per cent rise in the number of children living in single parent families. By comparison, the unemployment rate for couple families rose only slightly, from 4.7 per cent to just over that amount.

The effect of the Labor government's economic ineptitude under Messrs Hawke and Keating was such that, increasingly, Australian families have found it virtually impossible to survive without two wages. This means that between 1984 and 1997 the composition of the Australian family changed dramatically. In 1984 the two-income family accounted for only 33 per cent of all families, but by 1997 it represented 40 per cent of all families. A sea change in family type had occurred due to economic exigencies.

The Howard government recognises that raising children is fundamental to the future of Australia in the next century and beyond. It is quite simply our future. But raising children comes with many economic costs for families. Even on the lowest measurement, the basket-of-goods Lovering approach, which includes food, clothing, fuel, household provisions, costs of schooling—apart from fees—gifts and pocket money, but does not include housing, transport, school fees and uniforms, child care, and medical and dental expenses, parents are worse off by up to $4,134 for low income families and up to $6,878 for middle income families. If I can say this against my own sex, I think that many of us are too apt to underestimate exactly how much children cost, because it is women who mostly do the buying and budgeting.

This bill recognises too that increasingly young people are remaining at home and being supported by their families. Unlike my own generation, the present generation of young people are staying put for a variety of reasons, which has had a major effect in adding to the existing financial and emotional burden on many families. Overall, an additional 12 per cent of young people were being supported by their families or were having to survive on less than subsistence income in 1995-96 compared with 14 years previously. This was the conclusion of a recent study by the Social Policy Research Centre at the University of New South Wales.

That study, by Judy Schneider, found that much of the change in financial dependence was driven by increased participation in education and lower incomes for the full-time employed. These, in their turn, were the result of government funding for education, incentives associated with different forms of income support, changes in the labour market leading to less demand for young people's labour, and changes to wage arbitration. So in 1982, 79 per cent of 15- to 17-year-olds were dependent, but in 1995-96, 96 per cent of the same group were dependent. Those aged 15 to 17 simply have lost virtually all hope of being able to earn a living above the poverty line as the labour market's educational and training demands have risen. This has meant school retention is much greater.

I should note that the report states that the cause of the lack of opportunities in the workplace is the increase in the school retention rate, but this seems like putting the cart before the horse. People would not have been staying at school in such unprecedented numbers except that there were few opportunities in the workplace. The Keating-engineered `soft landing' that drove many thousands of businesses to the wall was the catalyst for school retention and the much touted `clever country' slickery only an attempt to dress up necessity as opportunity.

The report does go on to say school retention is thought to have been driven partly by the market, through the collapse of teenage employment, and partly by government, through greater provision of income support to low income families of post-compulsory school students. The introduction of the youth allowance by the Howard government last year, making school participation a necessary condition for receipt of any income support for young people under 18 years of age, is expected to lead to further increases in school retention.

The upside of this is that more of our young people are receiving higher levels of education and training in line with the requirements of a post-industrial state on the cusp of a new millennium, and it is hoped that this will lead to greater productivity and employment in the long run as we produce more people with the high skills required to manage an increasingly complex and unhomogenous society and a technologically sophisticated economy.

The Howard government introduced the youth allowance in July last year as part of a major rationalisation of a plethora of confusing income support arrangements for young job seekers and students. Five different payments with 13 different payment regimes were amalgamated for the sake of simplification and efficiency. The government also sought to provide greater incentives for young people to choose continued training and education over unemployment. Under Labor we had the ludicrous situation, often pointed out by distressed students and their families, that they would be better off being unemployed than continuing to study with all the associated costs. So under the Howard government, the youth allowance for a 16- or 17-year-old can be received only if they are in full-time education; gave 18 months full-time work in the previous 24 months; or meet the youth training allowance independent criteria, which means that they are not and cannot be expected to obtain or seek support from parents and guardians for reasons of domestic violence, parents unable to exercise care and so on.

The bill, as the minister has explained, will assist Australian families by extending the qualification for family allowance so that it covers both job seekers and students who have turned 16 and continues until age 21 for job seekers and until age 25 for full-time students. It also increases the fortnightly rate of family allowance to $50, payable in respect of a young person who is aged 18 to under 21, or who is undertaking full-time study and is aged 21 to under 25. It also ensures that young persons are not inadvertently deprived of a health care card by force of these amendments.

Finally, I would like to commend the work of the minister in seeking to improve the living standards of all Australian families, particularly low income families, and in building on previous measures to help families, as outlined in the family tax package. Recent research by the National Centre for Social and Economic Modelling—NATSEM—shows that the Howard government policy is beginning to reap benefits. After the 13 years of government in which the gap between the haves and the have-nots became much greater despite all the rhetoric about social justice, the living standards of children are more equal now than they were in the mid-1980s. The NATSEM report states:

The decline in income inequality among Australian children was driven largely by an improvement in the living standards of those at the very bottom. While there is some evidence of growing inequality at the top of the income spectrum, this has not nearly been sufficient to swamp the much greater movement at the bottom of the income distribution.

By 1995-1996, almost 45 per cent of Australian children lived in families where both parents were in paid work. Just under one-third lived in couple families where only one parent worked—a dramatic drop since 1982.

The results indicate that the extension of government assistance to low income working families, allied with improvements in social security, has had an enormous impact on the living standards of Australian children.

This bill, in addressing family allowances, is part of a comprehensive range of measures which have been introduced by the current government, not only in this current term of parliament but also in the previous term of parliament, beginning with the family tax initiative and continuing with this package of bills that we are debating at present, and also the measures in the reform of the taxation system package which is before the parliament. In combination, these measures mark an improvement in the public policy outlook for families in Australia, a serious consideration of families and children within families, so that we can provide for their wellbeing into the future. I commend the bill to the House.

Sitting suspended from 6.29 p.m. to 8.00 p.m.