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Monday, 18 June 2001
Page: 27775


Mr ALBANESE (9:54 PM) —At the outset of this debate I would like to indicate that the opposition will be supporting the Family and Community Services Legislation (Simplification and Other Measures) Bill 2001. It is not very often that we come into this chamber offering support for a bill moved by this mean-spirited government, because we are accustomed to government proposals, particularly in the area of family and community services, which strip entitlements from older Australians, the unemployed and families. When the government does actually spend money, it is not usually on assisting people. We saw in today's question time a debate about where the government's priorities are with regard to spending. Of course, today confirmed that once again the government's priority is in multimillion dollar advertising spending sprees.

We need only to have switched on the television last night to have witnessed the wads of taxpayer cash being shoved into the pockets of advertising executives. As the Manager of Opposition Business said today, it was more a case of there being programs in between the government ads, which were non-stop last night. Some half a million dollars was spent in one night on advertising. We heard today what that could have done in terms of providing real assistance for labour market programs, for operations for people in the health system and, perhaps, for extending the $300 payment to carers above the age of 55 who had missed out. But what we saw instead was advertisement after advertisement, which should have been authorised by Lynton Crosby as the Federal Secretary of the Liberal Party but instead were paid for by the Australian taxpayer.

It is indeed a sad development, but it is a sad development which is consistent with a government that is just so out of touch. We get to see not only the lengths that the coalition goes to in an attempt to improve its fortunes in the electorate but also, in very stark terms, the government's priorities. The government has only one priority for employment and that is for the members of the government to keep their jobs. The government has only one priority when it comes to families, and that is to keep the family of the Liberal Party on the government benches. With regard to community services, the government regards people out there as being essentially an impediment to its re-election. But in fact the only impediment to its election is the election day, because the coalition will not be able to avoid it. No matter how much money this government wastes, all it will do is reinforce just how out of touch this government is.

The legislation before us tonight is essentially a housekeeping bill. It seeks to simplify a number of provisions in social security law. Key changes in this legislation include an update of the rules regarding recovery of certain social security payments where recipients receive or are entitled to a lump sum or periodic compensation payments, a tightening of the rules regarding income and assets tests treatment of income streams, more workable deeming exemptions for assets that have been determined as unrealisable under the assets test hardship provisions, streamlined debt recovery allowing compensation arrears debts that are treated as income to be recovered directly from compensation payers or insurers, and changes to the taper rate for the income cut-out formula used to set the compensation preclusion period for recipients of lump sum compensation payments.

In addition to these measures, other, minor technical amendments are made. From examining these measures, it would appear that the government has made a number of changes that appear on the surface to be beneficial. They do, however, merely partially reverse some of the cuts that the coalition has already perpetrated. A common theme of the parliament this year has been legislation designed to at least ameliorate either some of the strictly callous decisions which have had adverse economic and social impacts on the community or administrative ramifications which have been negative for community members. As usual, we need to revisit the record of the Howard government to see these measures in an unbiased light, to see why this legislation is necessary and to have a look at the changes to the compensation provisions.

I wish to now refer to the compensation issue. The changes claim to simplify administration, but they make a number of substantive changes. The bill contains an amendment that changes the taper rate for the income cut-out formula that is used in working out the preclusion period for recipients of lump sum compensation. The government claims that this is beneficial to recipients as it will shorten their compensation preclusion periods. While I intend to discuss the history of this measure shortly, I think it is worth while canvassing why the government has made this change. It could be argued that this is yet another example of the government dabbling in GST roll-back. When the new tax system was being introduced, we heard a lot about how they had got it right, about how the system was being simplified and about how this was a revolutionary change which would put in place a tax system that would serve us for generations. What we have seen is the opposite. Almost 2,000 amendments have now been made to the GST legislation. Barely a day passes in the House of Representatives when there is not an amendment being moved to the government's own legislation with regard to the administration, the operation or the impact of the goods and services tax.

There has been such a widespread backlash from individuals who have served compensation preclusion periods with the introduction of the GST. Those people affected point out sensibly that they have not been adequately compensated for the GST. Of course, they are not alone. Earlier this year, we saw the clawback of the two per cent compensation which had been given for the GST. We heard the government justify it on the basis that somewhere in a footnote in very small print on page 400 of some document it was said that half of the compensation, which was trumpeted so much as a social equity measure, would indeed be clawed back. It is no wonder that pensioners were angry. The GST compensation has not been adequate, and tonight this legislation is necessary because, yet again, the government is acknowledging that there is another section of the community who were not properly compensated for the regressive impact of the goods and services tax. These preclusion periods have not reflected the increased cost of living that has come about with the introduction of the GST. Those affected have argued that their compensation preclusion periods should be shortened to reflect the fact that their compensation does not stretch as far with the higher prices—a reasonable point of view.

This legislation comes in spite of the rhetoric of this government with regard to the inflationary impact of the GST and in spite of the remarkable situation where a Treasurer of this nation walked into this parliament and said how well the economy was going post GST. The fact is that we had negative growth in the December quarter, unlike the economic growth which this government inherited: four per cent, after four per cent, after four per cent. That is, consistent growth under Labor, negative growth under the coalition—one reason: GST. That is why people want to be adequately compensated for its introduction.

As I go out into the community, I hear that prices have increased not just by the rate of the GST in some circumstances but by even more. I hear from people who get their electricity bills and have the GST added. Every time they have to pay their membership to an organisation, the GST is added. Every time they have a meal out, the GST is added. It has been tax after tax after tax under this government, so it is not surprising that we have legislation continually coming before this House arising from the need for proper compensation. Hence in this bill the government has altered the formula for preclusion periods, effectively shortening them. It is applied retrospectively to 1 July 2000, which is an important date—the same day that this government inflicted the GST on Australia. It is a stunning coincidence, but it is a coincidence of which we will be reminding the electors of Australia. On 1 July—certainly in my electorate—local pensioner organisations and community sector organisations are organising a meeting to express their concern about the impact the GST has had on them. In spite of the fact that the government said it had covered all the side-effects of the GST, this legislation is an acknowledgment by the government of its failure to properly consider all the consequences of this new, regressive tax.

Even if we put this to one side, the government has only partially backtracked to the situation which existed just a few years ago. In 1997 the government forced people who received compensation payments to wait longer for access to income support—totally consistent, of course, with the mean-spirited attitude of this government. Naturally, compensation payments may include a component that is attributed for future lost earnings. It is reasonable then that this component is taken into account and a preclusion period is served before support from the taxpayer is required. Before 1997 the preclusion period was calculated by reference to average weekly earnings. This allowed people who were injured to have access to income that the rest of the community earns and, in most instances, reflected the income these people earned before their injury.

However, as of 20 March 1997 the government changed the formula of the preclusion period with reference to an amount equivalent to the maximum single pension rate plus the free area. This had the effect of increasing the preclusion period and requiring individuals to survive on incomes well below average weekly earnings. As if being hurt at work or elsewhere was not enough, we had this mean-spirited government consigning these people to lower standards of living—consistent, I must say, with the general mean-spirited attitude of this government towards the less well off in our community. If you are actually injured—whether it be physically, through an accident; whether it be economically, through losing your job; whether it be socially, through discrimination on the basis of race or gender or class or where you live—this government see this as an incentive to give you an extra penalty. They do not believe in lifting people up, they believe in discriminating wherever possible, and to discriminate against these people is yet another example of the mean-spirited nature of this government.

The measure in this legislation is insignificant compared with the near $25 million per year cut by the government's 1997 changes. So already we are up over the $100 million mark in savings as a result of these government changes. With this in mind, you will not be surprised that the opposition is not praising the government about this bill, because this is a bill which is simply about fixing up the problems that the government itself has created. In addition, the bill will remove the existing direct deduction rules for the partners of compensation recipients, allowing for an increase in benefits paid to the partner of a compensation recipient. Excess periodic compensation will now only reduce the partner's entitlements under the ordinary income test rather than dollar for dollar. Again, this measure pales into insignificance when compared with the government's previous cuts. In other changes, the bill will also allow the Commonwealth to recover debts arising from the payment of arrears of periodic compensation payments directly from compensation payers and insurers. This measure will streamline debt recovery and will ensure that compensation recipients can plan effectively without the likelihood of a subsequent debt after an arrears compensation payment is received. It is a sensible move.

I now turn to income streams, which is dealt with in the other part of this broad bill. The bill amends the means test treatment of income streams to ensure the conditions that income streams must meet to gain favourable means test treatment are clear. As a result of the changes, there will be ongoing periodic obligations that must be met by an income stream if it is to remain an assets test exempt income stream for the purposes of the social security law. Among other changes, actuarial certificates will be required periodically to ensure the lifespan of the income stream product does not vary from the original estimate. The measures are reasonable and they provide protection for both the recipients and the Commonwealth and therefore are supported by the opposition.

There are other measures in this bill. Along with the changes I have outlined to compensation and income stream products, the deeming extension provisions are streamlined by providing an automatic exemption for financial investments that are unrealisable for the purpose of the assets test hardship provisions. This change is long overdue, with the prevalence recently of investment scheme collapses, which we in this parliament unfortunately are all too familiar with. One such collapse in Western Australia left investors without adequate income support while the minister of the day—Senator Newman at the time—considered their plight for what seemed an eternity.

I conclude by going back to where I began with this bill. This bill is largely an administrative bill, which therefore the opposition is supporting. However, what we saw last night—and what I am sure we will see in coming days and weeks and months—is the real priority of the government with regard to family and community services. The term `simplification', which is used in this bill, is one which we have heard much used by the government. The new tax system was going to simplify everything. Those small businesses out there struggling with the business activity statement, those families out there struggling to put food on the table and those community organisations and charity organisations struggling with the impact of the GST all know that the new tax system has not brought simplification to their lives.

They also know that this is a government which has replaced the sort of funding which needs to go into areas of family and community services, needs to go into providing support for those less well off, needs to go into health and needs to go into education. It is not going into living standards to improve the lifestyles of families in this nation; it is going into the pockets of advertising executives. We saw it last night to the tune of half a million dollars, and I am sure that people who have had the opportunity to watch television have seen it again tonight. We have seen a government which, regardless of that, has committed a fatal error which cruels all governments of whatever political persuasion—that is, when you are in trouble, do not be so arrogant, as the government was today in question time, and just dismiss the concerns and talk about what happened in the past. What people out there in the community know is that they are hurting, what they know is that they need support and what they know is that this government is not prepared to give it to them.