Ms JACKSON (4:17 PM) —Over the past two years the government's family tax benefits system has driven families in my electorate of Hasluck into a cycle of debt which many are still struggling to come to terms with. After the first year of its operation, 5,052 families in Hasluck received notification of a family tax benefit debt and 971 families received notification of a child-care benefit debt. After the second year of operation, another 2,550 families received notification of an FTB debt and 559 families received notification of a child-care benefit debt. Based on the national average of these debts provided by the minister, the government is taking—conservatively—$6,743,869 out of the pockets of Hasluck families. I have surveyed approximately eight per cent of the families within Hasluck who have received notices of debts through the family tax benefits system. I believe that their feedback is indicative of the difficulties many families receiving this benefit are now facing. Results from the survey of 200 local families clearly demonstrate the fact that a system that is supposed to assist families with the costs of raising their children has actually resulted in blowing apart their family budgets. I have spoken to many families who have received a debt notice and they have repeatedly told me about the obvious flaws in the system, but I was deeply shocked to realise the longer term impact these debts were having on those families.

By far the most disturbing figure that emerged from my survey was the fact that 70 per cent of families who received a debt notice for the 2000-01 financial year also received one for the 2001-02 financial year. Worse still, as the government well knows, the issuing of debt notices for the 2000-01 financial year was cynically delayed until early 2002, a few short months after the November 2001 election. One may well question the government's handling and motivation for that decision, as it resulted in 70 per cent of Hasluck families surveyed being hit with two large debts within months of each other. I know that a combined debt of $1,627 may not mean much to members of parliament who are on salaries in excess of $100,000, but for families in some areas of Hasluck this figure could well be close to 10 per cent of their annual income. As one single mother put to me:

This government should be ashamed of its decision to delay notifying families of the first round of debts. It has put an additional financial burden on many low-income families, and for many families a debt trap has already closed.

The results of my survey indicate that families receiving the family tax benefit have been offered different pieces of advice from Centrelink officers on how to avoid further debts. One piece of advice that was regularly offered was the need to advise Centrelink immediately of any changes in income. We even had an electronic media advertising campaign to that effect. The Prime Minister himself stated on 18 September 2002, in response to a question without notice:

Mr Deputy Speaker Jenkins, you might wonder what the result was following this advice from Centrelink and repeated by the Prime Minister. It was that 54.4 per cent of families who received a debt during 2000-01 and/or the following year notified Centrelink of changes to their income within one week; and 33.3 per cent of those surveyed notified Centrelink of changes to their income within one month. One constituent who received a debt for the first financial year stated:

Another constituent who received a debt in excess of $1,200 told me that Centrelink had said to her, `Let us know if your circumstances change,' which, she said:

Yet another constituent who followed this advice said that Centrelink was slow to make changes to her payments. She said:

Clearly, advising Centrelink immediately of any changes to income did not work. Though families received reduced payments at some point after notification, Centrelink did not take into account the so-called overpayment component which would have accumulated prior to the notification of change. I note that the government publication from the Family Assistance Office entitled `More Choices for Families' now gives more detailed information. The fact sheet includes the following:

This statement is included in a densely-written four-page fact sheet which I understand was distributed to families who receive the family tax benefit. I must say that I am not confident that this fact sheet will be of much use to the many families who are already deeply confused by this complex system. From this statement, it is still not clear whether or not families who ring Centrelink to advise of changes to their income will have their payments adjusted to reflect the overpayment, which would have occurred prior to notification. According to the statement, individuals would have to not only ring Centrelink to advise of changes in their income but also specifically request Centrelink to further reduce their payments to take into account debts already accumulated.

The second piece of advice to avoid a debt, given to 43 per cent of survey respondents, was for families to overestimate their income for the family tax benefit. Of those constituents who did overestimate their income, 68 per cent said the advice did not work. In addition, 42 per cent said that they lost benefits, such as their health care card or their child-care benefit, which they would otherwise have been entitled to. One of my constituents who followed this advice had her FTB payments halved while she was still struggling to pay off her FTB debt from the year before. Another constituent who overestimated her income lost $150 per fortnight. She conveyed to me that she was unable to continue overestimating her income because, she said, `We rely on the extra payment to survive!' Yet another constituent echoed this sentiment, stating, `We need the money on a weekly basis to feed the family.' Other constituents provided feedback on the impact of overestimating their income on additional benefits. One constituent stated that overestimating her income resulted in `lowering the child-care percentage rate, meaning I pay more for child care'. Another stated, `We couldn't afford to lose so much benefit and child care.'

For families in my electorate of Hasluck, the government is clearly out of touch with reality. It believes that most families are in a position to either overestimate their income and receive reduced benefits or opt to receive their benefits in a lump sum at the end of the year. Families who have been advised by Centrelink to do this have said, for example, `I cannot afford the cut in payments' or `I was told to claim no benefit in the year and I would be paid a lump sum at the end of the year. Obviously we should starve until that time.'

The government still does not seem able to comprehend the basic principle of a family assistance payment; that is, it is meant to assist families. The government's deliberate decision to hold off notifying families that they had incurred a debt at the end of the 2000-01 financial year ensured that the majority of families were doomed to receive an FTB debt two years in a row. This ensured that families who were supposed to be receiving family assistance were instead plunged into a cycle of debt from which many have still to recover. Whilst families were still paying off the debts that they had no idea they were accumulating, the government advised them to further reduce their income by receiving reduced benefits or no benefits throughout the year.

As the survey respondents have clearly said, this is just not possible for many families. What are they expected to live on during the year, when they need that additional assistance through the family tax benefit system? The Howard government's family tax benefit system is an unmitigated disaster. For many families, it has not assisted but rather plunged them into debt at a time when Australian households are confronting the highest debt levels in history. It has forced those in Centrelink to divert scarce resources in order to administer this overly complex system and to deal with debt collection instead of doing their job. Families in Hasluck are struggling. I call on the Howard government to waive the debts owed by Hasluck families and to fix the system now.