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Wednesday, 4 March 1998
Page: 396


Senator HARRADINE (5:48 PM) —I have them, but I asked you because I wanted you to say it to the committee.


Senator Newman —I will get it run off, if you like.


Senator HARRADINE —Thank you, very much. That would be useful. I wanted to go to the question that you raised when you said that you have given us the effect of the parental income test. You see, the parental income-free area for a one-child family is $23,400 and, at the present moment, that amount of money is paid to the young adult.


Senator Newman —Are you talking about those over 18?


Senator HARRADINE —That is right. What you are saying is that the parents of the child, if their income is over a certain limit, will be responsible because the amount will be reduced by $1 in $4 over the particular parental income-free area. That young person's allowance will actually be reduced by $1 in every $4 that their parents' income is over the level of $23,400.


Senator Newman —If there's one child.


Senator HARRADINE —Yes. Minister, you launched out into a barrage where you appeared to be saying that this is only going to attack the rich. I have heard all that before. That has always been the tactic used by some people who do not want to see justice done. If you say that a family with an income of $23,400 is rich, then you are not living in the world that I am living in.


Senator Newman —But I did not say that.


Senator HARRADINE —You are saying it. You are saying that there will, in effect, be no problem if the rate is $23,400.


Senator Newman —I didn't say that, so I would be grateful if you would not put words in my mouth.


Senator HARRADINE —I have it here. You gave me this document.


Senator Newman —I didn't say there would be no problem.


Senator HARRADINE —You said the at-home rate for youth allowance where the parental income is $23,400 will be $174.80 a fortnight, which, to my calculation, is the same as it is now.


Senator Newman —Yes.


Senator HARRADINE —That is what I said. Then for every $4 that the parent or parents earn above $23,400, the youth allowance is reduced by $1.


Senator Newman —That's right.


Senator HARRADINE —How can you say that that is not a saving to the budget? The impression gained—and I suggest that this might be borne out by colleagues around the chamber—is that, `No, there's no savings to the budget. It's all give, give, give.' In fact, it is not. That is the point that I am making, Minister: you are not acknowledging that income transfer from parent to adult—we are talking about adult siblings—in the tax system in any shape or form. I feel that this is something that will influence substantially my attitude to this matter.

I understand what you say about the question of government policy on tax. I had hoped that the government—any government—would recognise that its most important function is to assist families in the exercise of their functions, because the fundamental group unit of society is the family. If, therefore, society's governors—that is, elected parliaments and elected governments—do not see that their responsibility is to assist those families to exercise their functions, then that government is going down the wrong path.

I did not think that was the situation, but again, I believe that we must have a good look at what is happening. I believe that the government should indicate to the chamber and to the parliament before these provisions are adopted that they are prepared to accept the consistent principle, as I explained a moment ago, that where expenditure is incurred by the families, particularly in areas which were previously directly paid out of the Social Security budget, that transfer of income from the parents to the adult child should be recognised in the taxation system.