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Wednesday, 22 June 2011
Page: 6842

Ms MACKLIN (Jagajaga—Minister for Families, Housing, Community Services and Indigenous Affairs) (10:48): This amendment from the member for Melbourne would remove the measure to pause indexation for three years on the end-of-year family tax benefit supplements. The measure delivers savings to the budget of $803.2 million over five years and is part of the government's reforms to make the family payment system sustainable into the future.

As the member for Melbourne has acknowledged, the family tax benefit end-of-year supplements were introduced in 2004 to address overpayments of family payments that arise from parents incorrectly estimating their income for the year. The proportion of families with a family payment overpayment decreased from 32 per cent in 2002-03 to eight per cent in 2007-08. As a result of this change, the forgone increase in 2011-12—this is the change that we are debating—would be, for family tax benefit A, $18 per child for the year, equivalent to 35c a week, and, for family tax benefit B, $11 per family for the year, equivalent to 21c a week.

It is very important for everybody to remember that the fortnightly family payments that families rely on week to week will continue to be indexed. The member for Melbourne has raised concerns about very low income families and the impact that this will have on them. I just want to make it very clear to the House what the actual figures will be. The impact on a maximum rate single parent with two young children receiving both family tax benefit A and family tax benefit B will be $47 a year for 2011-12. This represents 0.34 per cent of their total family payments for 2011-12.

It is very important to add that these families—who are doing it toughest; it is true—will continue to see their family tax benefit payments rise with normal indexation. For this family that I am talking about, their total family tax benefit, part A and B, will increase by $12.32 a fortnight, or $321.20 a year, from 1 July 2011. This means that this family will still receive at least around $321 more in their family payments next year—and, of course, the actual amounts will vary depending on the ages of their children. If this family has a teenager aged 15 to 19 in school, this government and this parliament have supported—as I am sure the member for Melbourne is aware—a very significant improvement to family payments for teenagers. Those who are eligible may receive up to $4,200 a year in extra family assistance for their 15- to 19-year-olds who are in school. The government very plainly has been a strong supporter of the family payments system. Of course, we have added other measures that have been very important for families, such as the 50 per cent childcare rebate, the new national paid parental leave scheme, the education tax refund and family payments for teenagers, which I have just mentioned. Another issue that the member for Melbourne raises is that faced by families when they have to meet difficult expenditures that require them to find a lump sum of money. To address that the government is improving the advances arrangements in the family payments system. That measure is in the Senate right now and has received the support of the House, which we appreciate. We do understand it is an important measure to help families address what can be lumpy expenditures for them. We also believe in a sustainable and targeted family payments system, so the government will not be supporting this amendment. (Time expired)