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Wednesday, 2 April 1941

Senator LECKIE(Victoria - Assistant

Minister) [9.56]. - I move -

That the bill be now read a second time.

It would be idle for me to deny thatI value the privilege of being the sponsor of a measure of such outstanding importance as this is in the social life of the people of Australia. It will not be necessary for me to persuade . honorable senators to believe that a bill such as this is necessary. Every one seems to be in agreement that some system of family endowment is necessary for the future well-being of the nation, and the only opposition I have heard is not to an endowment scheme, but to the manner of financing it. The passing of this measure is an example of how democracy works. It may work slowly, but it works safely, surely and in the end, justly. It sometimes requires a jolt to draw attention to the fact that a reform, that every one in his heart realizes is due, should be immediately crystalized into legislative action. Such a jolt was administered by the Arbitration Court when it said plainly that a family unit of more than three, on the basic wage, suffers hardship, The Government took immediate action and it is apparent, I think, that honorable senators and the people whom they represent are in accord in wishing success to the measure. Great national results may not be apparent at first, but, I believe that the immediate results of this measure will be an improvement in the comfort and well-being of the children of Australia, with its inevitable consequence of improving the health and increasing the stamina of our people. It is not advisable then for me to dwell on the desirableness of this measure. I have therefore only to explain briefly the details of the bill which has been carefully considered and carefully drafted. in the most recent judgment of the Commonwealth Arbitration Court, when it deferred for six months a decision on the application before it, the view was expressed by the chief judge that, considered on the basis of needs only, the present basic wage was adequate for a family unit of three, but offered only a meagre existence for a family unit of four. When the unit got beyond four, hardship was often experienced. The chief judge added that during a portion of the term of a low-wage employee, a married man frequently had a family of more than two dependent children. He claimed that a more logical system would be to grade the basic wage according to family responsibilities. A re-apportion- men t of the national income sufficient to the wages of men and women with more than one dependent child would, he believed, be of advantage to the Commonwealth. The State courts have differed in their decisions as to the family units for which they prescribe a wage. Queensland and South Australia have adopted a family unit of five, and Western Australia a family unit of four ; New South Wales dealt with a family unit of three until October, 1937, when it followed the Commonwealth court's basic wage. It can be inferred quite reasonably from the judgments of the Commonwealth court during the last decade that the " needs " conception of the basic wage has something of the quality of a " will-o'-the-wisp ". Common sense supports that contention. Even if we could choose an average family unit, it would not reflect the actual situation of the employee during the whole of his working life. It would be too large at the beginning and at the end of his working life, when his domestic responsibilities would be comparatively light, and too small, when his domestic responsibilities would reach their peak.

I now turn to a consideration of the salient features of the bill itself. The essential provision is that endowment at the rate of 5s. a week shall be paid for all children under the age of sixteen years, in excess of one child in each family. The Government has given a great deal of consideration to the provision of endowment in respect of the first child. Whilst it approached the question sympathetically, it has decided that payment in respect of the first child is- not warranted. On the Commonwealth Court's own recent finding, the present basic wage is adequate for a man, wife and one child. Since most married people have at least one dependent child - at the census of 1933 this applied to 60 per cent, of married males - the presence of one child in the household does not put it at a serious disadvantage compared with the living standards of its neighbours. Studies of malnutrition and ill health among children, both in Australia and abroad, show that these appear seriously only in large families and that first, children are clearly in a superior position. The inclusion of first children in the benefit would raise the cost of the endowment in Australia by more than '80 per cent. That is, it would increase the amount of payment at present proposed, namely, £13,000,000 by another £11,000,000. Current expenditure of this type should obviously not be made from loan sources, and the raising of a further £11,000,000 from taxation, on top of that made inevitable by war requirements, would augment difficulties already being experienced. It must be evident to all honorable senators that this is a breadandbutter provision. We do not borrow in order to buy the ordinary breadandbutter things of life. We borrow only for such things as building materials. I cannot conceive of any one saying that endowment should be paid out of borrowed money or an extension of credit.

Existing schemes elsewhere exclude the first child and sometimes more children from benefit. The New South Wales scheme pays 5s. a week to dependent children in excess of one in certain lowwage families. The New Zealand social security legislation gives a family benefit of 4s. per week to all dependent children in excess of two. That, I understand, was also the extent of the legislation recommended in the minority report of the Royal Commission on Child Endowment in 1928. The 1940 report of the Victorian select committee proposed that the payment should begin at 4s. a week for the fourth child. The many European schemes existing before the present war either did not endow the first child or else paid for it at a lower rate. This bill provides for payment of all dependent children in excess of one, irrespective of the income or occupation of their parents. It has been suggested in some quarters that endowment should be given only to children of wage and salary earners, but there are many other people with low incomes, such as small farmers and independent tradesmen, whose exclusion would be unjust and invidious. An income limitation also involves a regular means test which, in addition to being embarrassing and irritating, is expensive to administer. The saving which would be effected by imposing an income limit is not nearly so considerable as most honorable members would imagine, and as it is proposed, in view of the universal grant of endowment, to abolish the prevailing income tax deductions in respect of each child after the first, those taxpayers on the larger incomes will be called upon to make a direct contribution to the financing of the schemes. Under a system based on limitation of income, the payment of endowment for the current year must necessarily be based on the parents' income of the previous year, and this frequently involves anomalies that defeat the object of the endowment. There are now about 1,830,000 children under sixteen in Australia, and it is estimated that 1,000,000 are dependent children in excess of one child in each family, and therefore eligible for endowment. Payment on account of each of these at the rate of 5s. a week, or £13 a year, would amount to £13,000,000.

It is proposed that the cost of child endowment be financed as follows: - A tax on all pay-rolls at the rate of 2£ per cent, on amounts in excess of £20 a week, or an annual amount of £1,040. It is expected that £9,000,000 per annum will be raised in this way. Something more than £2,000,000 will come from the abolition of the income tax deductions for each child after the first, and it is proposed that the balance will be financed from Consolidated Revenue. The question of finance will be dealt with fully in a separate measure, and I do not propose to discuss it in detail at this stage. The New South Wales Government is at present spending £1,300,000 a year on its own scheme, and has announced that this will be withdrawn when the Commonwealth Government scheme comes into operation. We have adopted the principle that endowment is to be paid to each dependent child after the first. The effect of this will be to add endowment in respect of certain children who might strictly be said to be already covered by some form of endowment. For example, allowances are paid in respect of children of war pensioners and of present members of the fighting forces. As an illustration, a private in the Australian Imperial Force with four children receives a weekly allowance of 10s. 6d. for each child. The Government has taken the view that the country would not desire the children of war pensioners or of members of the fighting forces to be excluded from the operation of an additional general benefit of this kind. Consequently, it proposes that such children shall be eligible for the additional endowment.

Endowment will be paid also in respect of children residing in private charitable institutions and children boarded out by the States. Recognizing that the State governments themselves have certain social responsibilities, the Government does not propose to pay endowment to children in institutions which are substantially supported by the States. The general scheme of endowment will relieve the States of some expenditure on persons who would otherwise require relief. There is less need, therefore, to subsidize the work that their child welfare departments have long undertaken. Payment will be made for all children maintained by private charitable institutions. In such instances there will be no exemption of the first child. British subjects coming from overseas will be able to claim endowment after they have been in Australia for twelve months, this period being generally taken as the statistical distinguishing mark of a non-tourist. Endowment will be payable to children born in Australia of alien fathers, because such children are British subjects. Endowment will also be payable for the same reason to children not born in Australia from the time that their father becomes naturalized. It is proposed to pay endowment to the children of aborigines and half-castes, where it is shown that they are living under conditions .comparable with white Australians.

The Commonwealth Public Service scheme, which has been in operation since 1920, is financed by a theoretical fund provided by deduction from the basic wage of all adult officers. Endowment under the new scheme will, therefore, be payable to public servants, and also to those receiving endowment under private schemes. It will be a matter for the Public Service unions and those participating in private schemes to determine for themselves' the future of their present arrangements.

Another liberal feature of the Government's proposals is the provision for endowment to continue until the age of sixteen years. The New South Wales scheme, like most schemes established some time ago, provides for endowment only until the fourteenth birthday. It will be generally agreed that under our present educational systems, many children are entering upon the period of greatest expense to their parents at about that age. All State governments have been considering raising the schoolleaving age from fourteen to- fifteen years, and we can assume that this is a likely post-war development. The census records and the experience of the Taxation Commissioner reveal that relatively few children under sixteen years . of age earn as much as 10s. a week. Moreover, if children are forced to begin earning early, it is generally because of poverty in the family, ana a continuance of endowment to the age of sixteen will be of particular value in these cases. The number of children to be provided for by the present bill would be reduced by 7 per cent, if payment ceased at fifteen and by 14 per cent, if payment ceased at fourteen.

The proposals provide that the claim of a parent or guardian for endowment should -be based on actual responsibility for maintenance and not on natural relationship. Thus adopted and illegitimate children, would be claimed for, if otherwise eligible, by those maintaining them. Natural relationship would not give the right to claim, if it did not involve maintenance. This policy is in accordance with the principle that endowment is being introduced for the benefit of the child. Except in special cases, endowment will be paid to the woman in direct charge of the children, who will usually be the mother.

We are not attempting to cover in the bill the multitude of varying circumstances -which may arise - for example, the case of n family of five in which two of the children are living with the father, the mother is living in another State and perhaps one or two children are living with a grandparent. It is impossible to provide in the bill for cases of that sort, lt is proposed to deal with cases such as that by regulations which will be prepared and submitted for the consideration of the Parliament before the scheme comes into operation. The Commissioner will have discretion to pay endowment to the father or guardian or any other selected person. This "will help to distinguish the endowment from normal income and it will place it directly in the hands of the one accustomed to laying out money for the children. The Government's policy in this connexion contains no reflection on the Australian father, hut experience of administration with other endowment schemes, notably in New South Wales and New Zealand, aud on the continent of Europe, shows that the best return is obtained from endowment when it is expended by the mother.

Endowment will not be regarded as income for taxation purposes, and it is expected that the States will follow the Commonwealth's practice in this regard. This Parliament nas already accepted on behalf of the people of Australia the country's obligations to the aged and infirm and it has generously intercepted our responsibility to those members of its fighting forces who have suffered in the country's service. The Parliament is now invited to inaugurate another major reform which itself, by making specific provision for the health and well-being of Australia of the future, will stand as a landmark along the road of social progress.

We are desirous that the benefits promised under this scheme shall be given promptly. We are proceeding with the necessary administrative preparations with a view to having the scheme in operation as from the 1st July of this year. We can achieve that result if honorable senators assist the passage of the necessary legislation. This is the most important bill I have ever had the privilege to present. It will have far-reaching consequences, and the people of Australia, after experiencing its benefits, will say that this Parliament has done well by passing it. I ask the Senate to give it a speedy passage.

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