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Tuesday, 7 October 2003
Page: 20653


Mr SWAN (4:38 PM) —I would like to commence my discussion of the Family and Community Services and Veterans' Affairs Legislation Amendment (2003 Budget and Other Measures) Bill 2003 by talking for a few moments about the ministerial reshuffle that was announced last week, which saw the appointment of a new Minister for Family and Community Services who was sworn in today. Two years ago the Prime Minister gave a speech setting out his third term priorities. He said he did not aspire to an Australia where our growing wealth was built at the expense of families and communities. He said welfare reform was a central platform for this third term. Just a month before the 2001 election, the Prime Minister told those attending an ACOSS conference:

I know the welfare sector is particularly anxious about the effect of welfare reform on the most vulnerable in our community. In response to that very natural concern, I want to re-state the assurances I have previously given...nobody's benefit will be cut as a result of changes to the social security system.

Another ironclad guarantee. Today it is plain to see that the Prime Minister has failed to deliver on this promise.

His former Minister for Family and Community Services, Senator Vanstone, failed to reform the government's flawed family payments rules which have seen almost one million families hit with more than $1 billion of debt over just two years—an enormous clawback from that compensation package that the government produced when it put forward the new taxation system, which it brags about in this House. That is about half of the $2 billion the government claimed as an increase in family payments. The government has failed to deliver on paid maternity leave for Australian families—something it promised before the election and something which it talked about constantly after the election. The Prime Minister says the issue of work and families is a `barbeque stopper'. We get talk, talk and talk and no action.

The Prime Minister and the former Minister for Family and Community Services failed to address the punishing effective marginal tax rates that are hitting families who work overtime and those trying to move from welfare to work. We have seen the Prime Minister's department confirm the figures that the opposition has been putting forward in this House for the past 12 months; that is, that there are nearly one million families, many of them earning between $30,000 and $60,000 a year, that are paying effective marginal tax rates of 60c in every additional dollar they earn when they work overtime or when they work intermittently. And that is before you come to the punishing effective marginal tax rates that are flogging people trying to move from welfare to work, where people are losing as much as 80c and 90c in every additional dollar that they earn from working casually—working an extra hour or so.

How is it that the government can construct a system such as this which punishes those who work hard? I thought the objective of everyone in this House was to ensure that people who work hard get fairly rewarded for that work. The government has created a debt trap in the family payments system and a punishing tax trap in the interaction of the welfare system and the income tax system. The government has not lived up to its promise before the election. It has failed to protect the social safety net.

We have seen additional measures come in which have become more readily apparent in the last six months, where the government has cut huge holes in the social security system. Perhaps the nastiest of these is the removal of the carer's payment from 30,000 families caring for disabled children or children who have chronic illnesses. The minister tried to create the impression that the government had backtracked after there was public outrage at this, but the truth is that the plans to remove that payment from the 30,000 families are proceeding and those families out there are suffering. So we have seen those attempts to cut holes in the social safety net as well as the problems in the family payments system and the tax system. What we have had is an attack on the living standards and the adequacy of payments of many people in the system, and we have seen the mess that is the family payments system.

The person the Prime Minister today swore in, supposedly to fix the system, is the person who has just plundered the Medicare system. This is the person who has presided over dramatic drops in the rates of bulk-billing, which have put the same families I was talking about before under tremendous financial pressure. Senator Patterson, who was regarded by many in the community, including groups like the Private Hospitals Association, as being inept and whose policy failures were exposed in this House today in the previous debate, has been elevated to a portfolio which is responsible for the expenditure of one-third of the national budget—$60 billion—for stuffing up the health portfolio. What could be more perverse than that?

How are we supposed to have any confidence that someone whose principal task has been to put the wrecking ball through Medicare is going to come into the Family and Community Services portfolio and do something about a family payments system that delivers debt to one in three families in the country? How is anyone supposed to have any faith in that? The notion that this is some form of promotion only exposes the outrageous arrogance of this government—the arrogance of this government to think that it could spin Senator Patterson's appointment to Family and Community Services as some sideways move or promotion. So now we have Senator Patterson let loose on the Family and Community Services portfolio.

I hope that the Prime Minister's claim that Senator Patterson will have greater sensitivity in the families job is true—I really do. These matters that I have spoken about do need to be fixed. It is certainly true that it would not be hard to have greater sensitivity than Senator Vanstone. Senator Vanstone is someone who went on A Current Affair and said she was prepared to sell the homes of pensioners who had been overpaid through no fault of their own over a period of time when the reason they were overpaid was that Senator Vanstone had not been checking the accuracy of their payments. This is a person who went on television and said she would be prepared to sell their homes. It will not be hard for Senator Patterson to show more compassion than Senator Vanstone. But what is needed is some lateral thought. What is needed is a root and branch reform of many aspects of Family and Community Services.

I am sure that we all have grave fears that Senator Patterson will not be up to this task, particularly when you look at one of the last decisions that she took when she was in the health portfolio. Her last decision was to introduce the user-pays principle to child immunisation. Families with young kids will now have to fork out $500 to immunise their children against chicken pox. That is on top of the massive decline in bulk-billing, which is slugging families every time their kids are sick. In my view, putting Senator Patterson into families is a bit like putting a doctor who has just lost a patient through negligence in charge of the grieving family. Nevertheless, we will be keeping her accountable and we will be continuing to push for vital reform.

This bill, like most others put forward by this government, has few beneficial or sensible changes. But as always there is something nasty. In this instance, it is in the form of a proposal to halve the portability provisions in the Social Security Act which enable pensioners to undertake short overseas trips to visit sick or dying relatives. And there are also plenty of missed opportunities in this bill. I first of all want to talk about one of those real missed opportunities, which is the subject of our second reading amendment. I will go through that amendment before I continue. It reads:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House condemns:

(1) the Government's attempt to reduce the generosity of portability rules that assist people on social security benefits to attend to family commitments overseas; and

(2) the Government's failure to strengthen debt recovery rules to prevent Centrelink pressur-ing the aged and disabled to mortgage or sell their homes or use credit cards to recover debts that have arisen because of adminis-trative errors rather than a deliberate attempt to defraud the Commonwealth.

I want to deal with the second one of those, because it is in this area of debt recovery that Senator Patterson really does need to act.

In the debt recovery measures contained in this bill today there is nothing to address the government's increasingly unscrupulous and aggressive debt collection practices at the expense of aged and disabled Australians. The existing legislation does not afford pensioners who have incurred a debt as a result of a genuine mistake or bureaucratic bungling sufficient protection against aggressive debt collection by government agencies. This was not more obvious than when just one month ago aged and disabled pensioners began phoning and writing to parliamentarians because they were receiving bills ranging from a few hundred dollars to $50,000 from Centrelink. Many of these pensioners have told stories of bullying and threats from government debt collector teams. The debts have come about because of a new government budget program to review the past financial records of 43,000 pensioners each year to search for discrepancies. The government hopes to collect $100 million from aged and infirm Australians.

This is part of a larger program that will see around 344,000 aged and disabled pensioners and students targeted with debts for inaccurate payments made during the last seven years which have never been crosschecked by the government. They have arisen because the government has not had checks in place. And because the government has not had checks in place most of these people were unaware that the debt was accumulating. In the case of pensioners, there have been no checks in place. This is stunning when it is measured against the rhetoric of the government about how tough it is on compliance. It has not been tough on compliance and because it has not been tough on compliance overpayments have been occurring. Now the government is seeking to recover much of this money in a brutal way.

What we now have is a trifecta. Not only have the government been out there getting stuck into parents of disabled and chronically ill children, they have been out there getting stuck into pensioners. And the latest area in which they have been moving is in the area of youth allowance, where they are going back four years because they have not been checking. We have a hit list trifecta of students, parents and pensioners out there at the moment. That is certainly going to require some attention from the new minister.

These people are not welfare fraudsters. They are generally people who have in most cases dutifully provided Centrelink with a constant diet of payslips and other paperwork. They are trying to do the right thing but they have been tripped up in most cases because Centrelink has failed to properly advise them or record their information. It may not have occurred if this government was actually doing what it claimed it was doing in relation to social security compliance.

In every case my office has examined, any of the pensioners who have had additional earnings have lodged those earnings each and every year. But this government has not been running the checks between the tax system on the one hand and the social security system on the other to pick up discrepancies before they get out of hand. And that is what has happened: the discrepancies have got right out of hand. That is why we have ended up in the situation where so many pensioners have been caught in this government's pretty brutal attempt to recoup these moneys. That is when Senator Vanstone really let the public face of this government show—when she said she would be prepared to sell their homes.

If Senator Patterson is genuine about changing the way her debt collectors go about their work she will support amendments in the Senate to ensure the life savings and the homes of pensioners who have played by the rules are not stripped away and that where the overpayment is due to an error by Centrelink and payments were received in good faith the law requires that it be waived—no ifs or buts. Where an overpayment has been made due to an unintended lapse by a pension recipient the government ought to adopt a far fairer approach to recovering the debt.

It is simply irresponsible that aged pensioners should be asked to mortgage their homes or use credit cards, with the interest rates that are attached, to settle their debts. Just another extraordinary thing that the government is up to is advising people who are caught in the family payments debt trap or who are caught in these arrangements that they pay debts off on their credit cards. No responsible financial counsellor in the country would be prepared to advise people to do that, but that is what this government is doing. You can see that advice on Senator Patterson's web site—or maybe it has been deleted in the last six hours; let us hope it has. These people, particularly the pensioners, deserve to live out their retirement years with respect and dignity and to not be regarded as criminals and treated as such and to suffer the brutal, thuggish approach that has been occurring with debt recovery.

I now move to the specific provisions of this bill relating to portability. The measure within this legislation that concerns the opposition is the plan to limit the generosity of the portability provisions relating to work force age social security payments. In particular, this bill seeks to reduce the allowable period of temporary overseas absence for portable social security payments from 26 weeks to 13 weeks. This new portability period will also apply to a range of payments, including the disability support pension and family tax benefit. Labor is particularly concerned about the impact of this measure on some of our larger communities that have a heritage overseas. This includes former UK citizens and also the Greek community.

There are good reasons why the portability provisions should be 26 weeks and not 13. Many families who have parents or siblings living overseas are called upon to go to their aid when they get sick or are dying. In some cases this may involve finalising a person's estate. Often there is a need for a person to spend considerable time overseas. There has never been any evidence presented that shows the current rules have been abused. In fact, the net savings the government is claiming for this provision amount to $4.1 million, and I think they confirm the fact that the government also does not believe that the rules have been abused. These are mean changes that will have a direct impact on people who have loved ones in other countries and they are changes which we will be urging Senator Patterson to join with us in rejecting when this bill reaches the Senate.

There are a range of other measures contained in this bill which by and large are either beneficial or represent improvements to the way the social security system and the child support scheme are administered. The extension of income exclusion rules that currently relate to German and Austrian compensation payments for persecution is particularly welcome. Enabling the Child Support Agency access to AUSTRAC data—a privilege that was removed when the organisation moved out of the Treasury portfolio—is also positive. We also will be supporting the proposed changes to the administration of the assurance of support scheme.

This legislation provides further evidence, if any were needed, that the Howard government has run out of steam. There is some housekeeping and there are savings, and there is some meanness, but most of all there is nothing that indicates that the government has a vision of a better social security system or a better life for people who currently rely on social security payments. Some people have questioned why the Labor Party would want to conduct an inquiry into poverty and financial disadvantage at a time of seemingly unparalleled economic prosperity. This sort of complacency I think has affected the Howard government and its ministers. The fact is that, as a nation, we are on the verge of undoing the sense of a fair go that has underpinned our social security system for nearly 100 years. It is true that we have become a far wealthier community in the last decade. In fact, I think wealth in this community has increased by over 100 per cent in that time. The fact is that we are not sharing it as fairly as we used to and there is a growing gap between those at the top, who are doing very well, those in the middle, who are being squeezed, and the poor, who are falling further behind.

Many in our community feel in their bones the approaching chill of their country slowly—bit by bit—being turned into a place they do not recognise and certainly not the place they were born in. They do not want to wake up one day and find themselves strangers in their own country with a huge chasm between a few at the top, many struggling in the middle and many more left behind. That is why over the course of the past 12 months and through the hearings that have crisscrossed the country the Labor Party, through Senator Steve Hutchins, and members of the Senate Community Affairs References Committee have been collecting evidence and ideas in an effort to make sure that inequality and prejudice do not overtake opportunity and fairness as core Australian values.

The experience of their inquiries to date is a sobering one. The stories of the new poor in Australia and the working poor, the stories of kids going to school hungry or not at all, the stories of families forgoing visits to the GP for want of money—these are stories that lie behind the bald figures: 2.4 million Australians impoverished and around a million of those with some form of work but not necessarily a fair day's pay. The message on the street is that battling Australians face multiple barriers to opportunity. We need a range of responses that enable them to move forward. That is why it is disappointing to come into this House and find yet another piece of legislation devoid of any longer term social policy solutions.

Early in this term the government claimed they were compassionate conservatives. What we have seen in practice are not compassionate conservatives but cold-hearted conservatives. When you look at the measures that have been taken against parents of disabled or chronically ill children, when you look at the approach to aged pensioners and when you look at what is happening to students on youth allowance you see that fact time and again. This whole practice of trying to paint themselves as putting forward a social coalition of compassionate conservatives has simply been stripped bare by the actions of this government and the Family and Community Services portfolio over the last couple of years. All of that rhetoric is just about putting the `con' back into conservatism. That is what it has been all about and it has been laid bare by the practices of Minister Vanstone, which is why Minister Patterson now has such substantial challenges before her.

Where are the promised welfare reforms which would reward work over welfare? Where are the incentives to help people move from welfare to work? It is just a travesty that through this most recent period of strong economic growth the number of people on long-term benefits has increased in the last seven years. It is a damning figure, as are the figures on the number of children living in jobless households and as indeed are the figures on people living in poverty. As we near the International Day for the Eradication of Poverty there is absolutely no indication that the Howard government views social policy in any terms other than as a vehicle for making savings. It does not see it as essential to the heart of this country, to its soul and to that ethos of a fair go that it claims to believe in.

I believe that probably the most urgent task in our community is to conduct a crusade against growing poverty in our community and to create the conditions for growing opportunity in our community. To do that, we must concentrate on preserving and expanding the core universal institutions in our community that deliver opportunities. What are they? They are access to affordable health care, they are access to educational opportunities, they are access to housing opportunities and they are access to a decent social safety net. So we must fight to preserve the social safety net to serve those who are out of work, sick or disabled. We need to give them a helping hand. We need to recognise the hard work of the great bulk of these people in the community, people who have created that 100 per cent increase in wealth in our community in the last decade, and give them a fairer share.

The bill we are debating today is part of portfolio budget cuts totalling more than $600 million. It gives a little, and it tries to take a lot more. We can support the small improvements while lamenting the absence of real reforms, but we will not support further mutilation of the social safety net. That is why I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House condemns:

(1) the Government's attempt to reduce the generosity of portability rules that assist people on social security benefits to attend to family commitments overseas; and

(2) the Government's failure to strengthen debt recovery rules to prevent Centrelink pressur-ing the aged and disabled to mortgage or sell their homes or use credit cards to recover debts that have arisen because of adminis-trative errors rather than a deliberate attempt to defraud the Commonwealth.


The DEPUTY SPEAKER (Hon. I.R. Causley)—Is the amendment seconded?


Mr Fitzgibbon —I second the amendment.


The DEPUTY SPEAKER —Does the member for Hunter wish to reserve his right to speak?


Mr Fitzgibbon —I am simply seconding the amendment.