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Monday, 23 May 2011
Page: 4222


Mr NEUMANN (Blair) (17:22): I speak in support of the Child Support (Registration and Collection) Amendment Bill 2011. At common law, a parent owed no duty to provide financial support for a child that was enforceable by court action. However, statute law has long intervened to create a civil liability for financial support of children by parents that is enforceable by court action. The previous speaker was criticising us about legislation, actions and funding in respect of families. Well, long on the watch of the coalition was child maintenance—what we call child support—almost a voluntary measure. It took the election of a federal Labor government, the Whitlam Labor government, in the mid-seventies to ensure that the Family Law Act 1975 established a duty to maintain a child and created the legal obligation to pay child maintenance. The Family Law Act is now constrained by section 66E of that act, which says effectively that, if a person wishes to apply for child support, they need to apply for an administrative assessment of child support under the Child Support (Assessment) Act 1989.

The 1970s and 1980s were a time of dramatic change in Australia. The economy was internationalised by the Hawke and Keating Labor governments. There were massive changes in the way people worked and in family life generally. There was a dramatic increase in divorce. Divorce increased from 10,000 in the mid-1970s to about 40,000 in the mid-1980s. About 50,000 dependent children were affected by their parents' divorce. There was a dramatic increase in the number of single parents receiving what are now called Centrelink payments. In 1974, the total number was 183,000; in 1985, it was 316,000.

These problems mainly occurred on the watch of the coalition governments, all through the Menzies, Holt and Gorton periods and mainly through the period of Fraser. It took a federal Labor government to bring in the Family Law Act, and it took a federal Labor government to bring in the Child Support (Assessment) Act and the Child Support (Registration and Collection) Act. So it was Labor governments that built the progressive reforms in family law and child support, and the coalition who have always behaved with inertia, inaction and idleness when it comes to family law reform—except when they want to pander to the men's rights groups, when they do things that they think will be electorally popular. The result of the voluntary payment of maintenance, or what we call child support these days, led to a reduction in the standard of living of children in single-parent households. It meant that taxpayers increased their payments for single-parent pensions, a very big impost on the public purse.

This government has been committed to making sure that parents fulfil what the legislation describes as their primary obligation under the Family Law Act and the Child Support (Assessment) Act, which is to pay for the maintenance of their children—that is, to pay for their basic needs, their accommodation, their clothing, their school expenses, their food and other recreational activities which incur impost. As at 31 December 2010, over 77 per cent of all children in domestic active cases received about 100 per cent of their child support. That is a significant improvement on when the Howard coalition government was on the benches. The number of children receiving 100 per cent of their child support has steadily increased every year since Labor came to power in November 2007. The federal Labor government collected $1.19 billion in the last financial year for the children of separated parents. That is money that parents pay to maintain their children in a separated situation. It is money that they, not the taxpayers, pay. So a strong, good regulatory system which compels parents to fulfil their financial obligations is good for government operation and it is good for taxpayers generally, because parents have a primary responsibility to do that.

The legislation that is before the House is really quite technical and minor in many ways, but it is in accordance with the reformist nature of this and previous federal Labor governments. The Child Support Agency was established in 1988 to administer the Australian government's Child Support Scheme, which it does by a number of pieces of legislation. Originally of course the Child Support Agency was part of the Australian Taxation Office but, I think correctly, it was transferred to the Department of Family and Community Services, which is now known as the Department of Families, Housing, Community Services and Indigenous Affairs. FaHCSIA currently has responsibility for the Child Support Agency.

The legislation here today deals with only a couple of changes. The first aspect is the outsourcing of the child support debt collection activities. The new arrangement will enable the registrar of the Child Support Agency to delegate powers to persons outside the Department of Human Services. The registrar could use external providers to engage in debt collection. Governments are not always the best at collecting debts, and sometimes there are private providers who have skills, talents and expertise in certain debt collection activities which could lead to more successful identification and collection of outstanding child support debt. Centrelink has undertaken to collect outstanding liabilities. The Department of Human Services is moving to an integrated model with various agencies and now has responsibility for the child support portfolio. I think that is a credible way to go. It means more efficient collection and, if it means that we can avail ourselves of greater opportunities to outsource and allow Child Support Agency staff who were hitherto engaged in those collection activities to be engaged in other aspects, that is important. I think it would also result potentially in the Child Support Agency reducing its administrative and operational costs. There also needs to be safe security clearances for these external agencies and I am pleased that that is proposed as well.

The second matter that this legislation deals with relates to amendments of criminal provisions in the Child Support (Registration and Collection) Act. In any criminal matter—and I used to practice in family law extensively but have a background, from my early time as a lawyer, practising in criminal law—there has got to be physical elements of an offence. An offence is created by an act or an omission. There is a degree of ambiguity in the legislation. I agree with the office of the Commonwealth Director of Public Prosecutions which has advised the Child Support Agency that it would be reluctant to prosecute under section 46 of the act, which deals with an employer who fails to withhold salary or wages of a paying parent.

That creates some real problems. When an employer gets notified by the Child Support Agency that the agency needs to collect child support by withholding that support from the wages of the potential payer who has a registrable liability under the Child Support (Assessment) Act and the employer does nothing about that, there is no sanction that can be enforced against that employer and the integrity of the scheme comes into doubt. That might sound strange. Are we really punishing the employer? Governments of both persuasions have been involved in supporting this type of legislation.

In very small arrangements where there are often corporate structures involving someone who could be an employee as well as a director and a shareholder of a company, or someone who could be working for a brother, sister, mother or father, or indeed someone who could be working in a small enterprise—and there are about 2.4 million of those in the country—the employee could say to his employer, Joe Bloggs: 'Do not comply. Are you being notified by the Child Support Agency? Do not withhold my wages. Pay it to me. Nothing is going to happen to you. They will not prosecute you.' Joe Bloggs, the employer, says: 'If nothing is going to happen, I want Bill Brown, my valued employee, to be happy. He needs the money himself.' The employer does not see that he has any responsibility, so he says: 'I am not going to pay it. I am not going to hand it over to the Child Support Agency under the registration and collection legislation.'

The consequences of no sanction to that employer means that the whole integrity of the scheme breaks down and the payee—usually a mum, but not always, who may have a couple of kids—does not get paid. The consequences of that are, firstly, we as taxpayers foot the bill for the operation of a scheme that is ineffectual and, secondly, we pay the bill because we end up having to pay more from social security payments to the mum who has got responsibility for the kids.

So the amendments really are a practical way to make the scheme operate better. Making sure that there are elements of an offence here that the Director of Public Prosecutions can identify which needs to be prosecuted if someone fails to comply with the legislation is really important. There are amendments in relation to a number of sections of the legislation and, in those circumstances, they make it clear to an employer that if they fail to comply with a proper notice—it is a legal notice I have seen plenty of times in my years practising as a lawyer and plenty of times clients have come to see me and I have always told the employer to comply with the legislation—to deduct or remit those child support payments they have committed an offence and can be prosecuted. If that is the case, and they realise there are consequences for their actions, they are more likely to comply. It will improve the prospects of a successful prosecution and it will improve the integrity of the whole scheme.

I am pleased to support this legislation. It is another demonstration of a federal Labor government that wants reform in the system that we know as the Child Support Scheme in this country. It yet again builds on the amendments that we have had a long history of committing to: of reform in family law and in child support, about which those opposite have often had a certain ambiguity and inertia.