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Thursday, 24 March 1994
Page: 2177


Senator PATTERSON (12.04 p.m.) —The committee is currently considering a message received from the House of Representatives in relation to the Social Security (Home Child Care and Partner Allowance) Legislation Amendment Bill 1994 which informs the Senate that the House of Representatives has not made the amendments requested by this house.

  We requested the House of Representatives to make amendments to the bill to ensure that families who until now had been eligible for the with-child dependent spouse rebate are not prevented from receiving the home child-care allowance. A Senate inquiry has found, and the government has admitted during the Senate committee hearing on this bill, that certain families will be ineligible for the home child-care allowance due to differences in eligibility requirements and definitions under the relevant taxation and social security laws.

  Families in at least four different types of circumstances will be ineligible for HCCA under the government's current bill. These four circumstances are: families in which the dependent parent or child is out of Australia for longer than 13 weeks; families in which the youngest dependent child is a full-time student aged between 18 and 25 years who earns less than $1,785 a year; families in which the dependent child is a prescribed student; and families who are disadvantaged by the more onerous income definitions in the Social Security Act.

  These families will be significantly worse off than families who receive the home child-care allowance. Not only will they be ineligible for the HCCA but, in addition, the imminent abolition of those parts of the Income Tax Assessment Act that relate to the with-child dependent spouse rebate will mean that they will be ineligible for that rebate as well. They will only be able to claim a childless dependent spouse rebate, even though they will have dependent children. These families will be up to $372 a year worse off than families who will be receiving the HCCA.

  To put it bluntly but, I would argue, very accurately, if the government does not accede to the request we put forward, it is refusing to acknowledge or recognise the fact that these families even have children. Apparently the government's only argument in support of the exclusion of such families is that they are being sacrificed for the common good. This is an arrogant argument, if ever I have heard one. We heard some bizarre comments about this yesterday in question time.

  The government claims that this bill will result in the vast majority of families being better off than they were under the old dependent spouse rebate. But this is no comfort to those families who will be up to $372 a year comparatively worse off under the new system. What have these families done wrong? When Mr Keating made his election promise, before the last election, these families believed that, as they were getting the dependent spouse rebate, they would be eligible for this HCCA that the Prime Minister was referring to. What sin have these families committed that warrants their being sacrificed for the common good? I suppose the answer must be that they are unlucky enough to be in the circumstances that subject them to different treatment under the social security system from that under the tax system.

  Anyone with any degree of compassion would want to know exactly how many families are in these circumstances. The coalition has on numerous occasions attempted to ascertain the number of disadvantaged families. Each time we do, the government claims that it is not possible to provide an estimate of the number of families. The government is able to give us estimates of just about everything else—not that the figures are always right—but it cannot give us an estimate of how many families are affected.

  Senator Crowley told us that it is `only a handful'. This is still an important issue for that handful of families. How does Senator Crowley know that it is only a handful? If she knows that, she should be able to give us an estimate of how many families are affected. However, it seems that there are no figures. I do not know whether Senator Crowley has asked for them. If the government does have an estimation, it is not prepared to tell the chamber how many families are affected.

  I believe a significant number of families will be disadvantaged by this bill in its current form. One has only to look at the number of families who will be excluded as a result of the more onerous age restrictions that this government would apply to the HCCA. Previously, the with-child dependent spouse rebate was paid to families with dependent children in full-time education, aged 18 to 25, with separate net annual incomes of under $1,785 a year.

  Under the government's bill, the HCCA will cut out when a child turns 16 or when he or she finishes secondary school, whichever is the sooner. A significant proportion of the hundreds of thousands of young Australians aged up to 25 in tertiary education do not have personal incomes of over $1,785 a year. In relation to this issue, it has been pointed out to me that young people in rural areas cannot access part-time work in their holidays as easily as young people in the city can. Many of them are supported by families in which only one parent is working. Previously, the fact that such students were dependent on their families was recognised in the with-child dependent spouse rebate.

  However, this is not the case with the home child-care allowance, regardless of parental income. This is but one of at least four circumstances in which families will be excluded from the HCCA. Not only do these exclusions appear niggardly; they also do not gel with the government's supposed policies in relation to providing income support for young people who live at home with their parents.

  In 1987 the government abolished unemployment benefits for 17- and 18-year-olds living at home, claiming they were still dependent on their parents. The Austudy parental income test and the Austudy scale of payments both recognise that tertiary students who live at home with their parents remain financially dependent on them. In fact, our previous Prime Minister, Mr Hawke, actually instructed young people to stay in education as long as possible due to their poor employment prospects.

  The government's refusal to recognise the fact that families provide for children who are aged over 16 years does not gel with the realities of contemporary Australian society. Young people are staying at home longer; they are staying at secondary school and in tertiary education longer; and their job prospects under this government and the recession we had to have have diminished significantly. All of these significant trends in our society mean that young people are remaining financially dependent on their parents for longer periods. However, in this bill, the government is giving the exact opposite message. It would appear to me to be hypocritical, coming from a government that, prior to the last election, chastised the coalition for its sole parent pension policy.

  It must be pointed out that the Minister for Social Security (Mr Baldwin) recently had the gall to write to the shadow minister, Mr Ruddock, making totally outlandish claims about the unforeseen circumstances of the Senate's request for amendments. The coalition has bent over backwards urging the government to take action to rid this legislation of these needless anomalies. We have stated time and again that we will not jeopardise any of the benefits for families contained in this bill, despite the minister's ridiculous press releases saying that we are jeopardising the receipt of the HCCA by 840,000 families and despite the ridiculous comments that Senator Crowley made in question time yesterday indicating that Senator Minchin was telling people they would not get their HCCA.

  The press releases the minister has put out have been blatantly wrong. The Hansard record will show that the coalition has always recognised that the drafting of the necessary amendments is a complex matter. We have asked the government on three occasions to use its expertise to draft amendments that will ensure that families receiving the dependent spouse rebate are not prevented from accessing the home child-care allowance. When the coalition has offered such invitations, it is absolutely outrageous for the minister then to write to Mr Ruddock claiming that Senator Harradine's genuine attempt to rectify this unacceptable situation will have unforeseen circumstances. It must be pointed out that, in his letter, the minister made absolutely no attempt to suggest any possible changes to Senator Harradine's amendments that may have assisted in overcoming the unforeseen consequences he alleged.

  It is important to expose the government's desperate tactics, which I alluded to earlier, in attempting to refute criticisms of its own behaviour in excluding these families from the home child-care allowance. I do not understand its behaviour in excluding these people. The government is resorting to the old gun-at-the head tactic, which is typical of the right wing of the Labor Party of New South Wales. Here is how it works. Firstly, government members make an outlandish claim that the opposition amendments will have the most deplorable unforeseen circumstances. Secondly, they tell the opposition that, if the amendments are supported, they will have no choice but to withdraw the legislation. Thirdly, they threaten to use their vast resources of public and taxpayers' money to tell everyone who otherwise may have benefited from the legislation that their benefits have been taken away by the opposition for the sake of assisting an undeserving minority.

  I am sure the Democrats have been exposed to this tactic. In parliamentary parlance, I think it is quite rightly referred to as political blackmail: `If we do not get our way, we will tell everyone how terrible you are'. We have constantly said that we will not do anything to jeopardise the HCCA going ahead, but we will do everything within our power to ensure that those people who were eligible for the with-child dependent spouse rebate would be eligible for the HCCA.

  All the indications are that the government will resort to such underhanded tactics if the Senate seeks to ensure that such families are eligible for the home child-care allowance. The minister has said that we are jeopardising it. The only way it can be jeopardised is if this government takes the bill off and does not bring it back on. It cannot be jeopardised by the amendments.

  In his letter to Mr Ruddock, the minister alleged that Senator Harradine's request for amendments `would remove access to HCCA on a current income test basis'. In fact, this was the basis for the majority of the minister's alleged concerns about the Senate's request for amendments. This is not only a complete furphy, but the advice I have indicates that the HCCA income test in the current bill may not actually achieve the government's stated objective. There are a number of other issues but time does not allow me fully to go through them. I move:

At the end of the motion, add: "but the Senate:

1.notes that without amendments the bill will exclude from eligibility from the Home Child Care Allowance:

  (a)families in which the child or (otherwise eligible) parent is overseas for longer than thirteen weeks; and

  (b)families with children who are dependent full-time students aged 18 to 25 when the child's income is under $1,785 a year; and

  (c)families with children who are receiving prescribed student payments; and

  (d)families who are ineligible for the HCCA as a result of the more onerous income definitions under the Social Security Act 1991; and

2.also notes that the combined complexities of the Social Security Act 1991 and the Income Tax Assessment Act 1936, make it extremely difficult for requests for amendments to be prepared that ensure that the bill does not unfairly exclude these families from access to Home Child Care Allowance without having any unforeseen consequences; and

3.recalls that during the debate on the second reading of the bill the Senate considered the legal complexity of the issues involved in amending the bill, but did not, at that time, choose to urge the Government to prepare requests for amendments and instead agreed to requests for amendments moved by Senator Harradine; and

4.notes that on 2 March 1994 these requests for amendments were the subject of a letter from the Minister for Social Security, Mr Peter Baldwin MP, to Mr Philip Ruddock MP, highlighting a range of alleged unforeseen consequences; and

5.notes that in light of this correspondence Senator Patterson arranged for the preparation of a revised amendment in the following form:

"Page 13, clause 3, after proposed Division 5, insert the following Division:

`Division 5A—Preservation of home child care allowance

Preservation of home child care allowance where rebates would be available

`929A.(1) If:

(a)under subsection 159J(1B) of the Income Tax Assessment Act 1936 as in force on 1 January 1994, a person or a person's spouse would be entitled to a rebate in respect of a dependent child in respect of a year of income; and

(b)a home child care allowance would not be payable to the person during a period during the year of income, or would be payable but at a lower rate than the amount of the rebate in respect of that period;

a home child care allowance is payable to the person for the child during that period at the rate equal to the amount of the rebate in respect of that period.

`(2) For the purpose of working out the amount of the rebate in respect of that period, the maximum rate of the rebate is taken to be the amount per annum for the time being applicable under section 928.

`(3) This section only applies to a person who lodges a claim in writing, in accordance with a form approved by the Secretary and with section 917, for this section to apply to the person.'."; and

6.notes that this revised amendment would go some way to addressing the concerns and unintended consequences identified by the Minister; and

7.notes that any remaining concerns or unintended consequences could be readily overcome if the Government ensured that the necessary expertise was made available for the drafting of amendments in such a way as to guarantee the elimination of such concerns and unintended consequences; and

8.further notes that in letters from Mr Philip Ruddock MP, and from Senator Kay Patterson, dated 3 March 1994 and dated 9 March 1994 respectively, the Minister has been asked to redraft the amendments, in order to eliminate the alleged unforseen consequences while ensuring that the proposed Home Child Care Allowance benefits are not denied to those families who would otherwise have been unfairly excluded from them; and

9.expresses its concern that on 10 March 1994 the Minister again refused to have the requests for amendments redrafted by the Government or to make available to the Senate's drafter, departmental officers expert in the intricacies of the relevant social security and income tax law; and

10.reminds the Government that, in virtually identical circumstances, on 2 March 1994, while the Senate was considering proposed amendments to the Training Guarantee (Administration) Amendment Bill 1993, Senator McMullan, the Minister for Trade and Administrative Services undertook to "to give effect in the House of Representatives to the Senate's intention by redrafting the amendments, sending them back to the Senate, and having the same purpose with better drafting", an undertaking given because of the complexity of the issues involved; and, therefore,

11.in the light of these matters, requests the House of Representatives to redraft the Senate's amendments or make experts available who could assist the Senate to redraft the amendments, to ensure that the bill delivers its benefits to the families currently intended to receive them and also to those families, referred to in paragraph (1) above, to whom the Government would otherwise deny them".