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Monday, 3 March 2003
Page: 8848

Senator JACINTA COLLINS (3:24 PM) —Perhaps I should correct some of the errors in this debate in which Senator Knowles has just contributed. Senator Vanstone was quite accurate in describing the Ombudsman's report as an executive summary of some of the transitions that have occurred in the system. However, what Senator Vanstone overlooked, and what I suspect Senator Knowles has not even read, is that further on in the report—where the Ombudsman tries to suggest what further changes might be necessary to this system to introduce some equity, particularly for low-income families—it mentions that families did not have a good understanding of the nature of the new family assistance system and the implications of income testing based on annual total income. The report notes:

This is not surprising given that the new system is very different in its effects than other government payments.

What we now have is a system which averages people's needs over a 12-month period, and it just does not work. The question I asked Senator Vanstone today highlighted that in one particular case. You cannot expect families to anticipate that their 15-year-old children will go out and work at the end of the school year halfway through the year prior. As the Ombudsman points out, under the new arrangements families can now—so, yes, Senator Knowles, who has also left the chamber, families do have some more choices under these arrangements—make a more informed choice about how to receive their entitlement. Senator Vanstone now calls this an `advance'. However, to quote the report:

... many lower income families will still be unable to afford to choose to defer receiving their payments.

This government is asking families, if they have a 15-year-old child who, at the end of the school year, might choose to take up an apprenticeship, to say, `I had better defer receiving any family support payments just in case my child does make that choice. So I do not have the income I need to provide support for the child.' The government needs to seriously look at the objective of these payments. These payments were introduced to help support families to provide for children, and you cannot defer those needs for six months just to fit in with the tax cycle. It just simply does not work that way.

What today's question time highlighted was perhaps another issue: the inconsistency that this government has in many areas. It is quite happy to let corporate excess continue, to let larger and larger corporations in Australia make their own rules and make huge payouts to their senior executives, but when it comes to low-income families the government rips its money back through the tax system—in quite unanticipated ways, according to the Ombudsman's report. Senator Vanstone implied in question time that this really is not a matter that affects low-income families. That is where she differs with the Ombudsman's report, and I encourage her to read that report. In estimates and now again in question time she has implied that this is not such a big issue and that we are talking about higher income families here. That is definitely not the case. The Ombudsman's report highlighted again the issue that I have raised with Senator Vanstone through estimates and other forums.

The questions remain. Senator Vanstone says that families can choose to put their 15- or 16-year-olds onto youth allowance. Let these children become financially independent at the age of 15 or 16 because they may later get work. This is the same government that says that students up until the age of 26 should be regarded as dependants. With respect, you cannot have it both ways. When you are talking about youth allowance the minister must answer the following question: are families told to make a decision between family tax or youth allowance so that they will avoid debts? I doubt it very much. I doubt that Centrelink has been issuing those warnings to families once their children get to that relevant age. I think you will find that there are many families in this debt system who, had they chosen to put their children on youth allowance, would not have had a debt. But they were not forewarned, and this is just some off-the-cuff answer by the minister. She is not ensuring that the system deals with the real problems that the Ombudsman has raised in relation to the current system— not just the one prior to the tinkering that the minister did at the end of last year. The minister has to confront those outstanding problems and do something to fix the system. (Time expired)

Question agreed to.