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Tuesday, 7 October 2003
Page: 20674


Mr MOSSFIELD (6:13 PM) —I rise to speak on the Family and Community Services and Veterans' Affairs Legislation Amendment (2003 Budget and Other Measures) Bill 2003 and to support the amendment moved by the member for Lilley. This is an omnibus bill that makes a number of technical amendments on issues ranging from Nazi holocaust payments to the child support agencies and data retrieval. As members would be aware, compensation payments to holocaust survivors from Germany and Austria are exempt when determining the social security and veterans entitlements income test. This bill seeks to change that to include all such payments regardless of the country of origin.

The change is largely symbolic because the estimate of the cost of this proposal is only a little over half a million dollars over the next four years. I note that there is a disallowable instrument before the Senate that exempts the pensions of mercy given by the Chilean government to survivors of the murderous regime of Augusto Pinochet from the social security income test, finally treating these payments the same way as the holocaust payments. Both the agreement with Chile and this bill that now covers all holocaust payments are a positive move and are changes that should be supported.

The bill also seeks to make amendments to improve the operation of the assurance of support scheme and simplify arrangements for people who provide assurances of support. An assurance of support is a bond paid by a person here in Australia—usually but not always the sponsor—that covers any social security payments made during the exclusion period for new migrants. Depending on the type of visa, both the assurance of support and the exclusion period can differ. For example, a skilled migrant will face a two-year exclusion period and his or her sponsor will have to put $3,500 into the assurance of support bond. An aged parent is facing a 10-year exclusion period and a $10,000 bond.

Under the new arrangements proposed in this legislation, the Department of Immigration and Multicultural and Indigenous Affairs will continue to determine which new migrants are subject to an assurance of support. However, once this determination is made, the assurance of support will be issued under the social security law and Centrelink will administer the scheme. Centrelink will become the single point of contact and will be able to provide much more comprehensive advice regarding all aspects of the scheme, including both rights and responsibilities. If a new migrant does receive a social security payment during their exclusion period, having the scheme administered by Centrelink will also mean the recovery of their debt will be easier.

This measure will to some extent streamline the scheme, cut down on overlap and make things easier for the government and the assurers and migrants who use the system—that, at least, is the theory, and we will be watching the practical application of the scheme to see how it works in the real world. We will also be watching to see if it does indeed save the $11.2 million over four years that the government anticipates it will.

Another amendment contained in this bill seeks to strengthen the arrangements for ceasing payments to people travelling overseas who do not notify Centrelink of their departure. The measures will allow Centrelink to suspend payment if they become aware that a person has left the country without informing them first. Again, we will watch with interest to see if the projected $14.8 million over the next four years is indeed saved. We will also be watching closely to see how many people have their payments suspended when they have not in fact left the country at all.

When the Child Support Agency was moved from the Australian Taxation Office to the Department of Family and Community Services it lost access to information stored on the AUSTRAC database. This bill seeks to restore that access and allow the Child Support Agency to carry out its functions efficiently and effectively. Quite frankly, the access should never have been denied to the Child Support Agency but, in their maneuverings back in 1998, the government forgot about the need for the CSA to have access to this information. It only took five years for them to work out that they had made a mistake and to seek to rectify it.

The bill before the House today seeks to partially address the problems of Centrelink debt. It seeks to do so by amending the data-matching programs available to Centrelink. If this bill is passed, Centrelink will have limited access to newly available data sources relating to taxation and financial transaction activities, but only for the purpose of the administration of the social security law. In its last two budgets, the government has put in place measures to pursue debts for incorrect payments dating back some seven years. Many of these retrospective debts have arisen because data matching of Centrelink records and tax records has not taken place regularly with the pensioner population, including the aged, parenting, disability support and carer categories of pensioners.

In many cases, these debts have arisen because Centrelink has made administrative errors and it has not been the fault of the client at all. Centrelink debt recovery teams have swung into action and are pursuing these debts to the full force of the penalties and punishments available to them. The previous minister suggested on the Sunday program on Channel 9 that pensioners should put the debt on their credit card at 18 per cent interest or even consider selling their house in order to pay back the debt. Certainly, people's tax returns have been garnisheed and the baby bonus has been stripped from some people. This is totally unacceptable. It is no wonder that the Prime Minister was forced to move the minister to another portfolio.

Almost three-quarters of a million families have been caught in a government designed debt trap called the family tax benefit. Senate estimates figures put the number of families with Centrelink debts at 728,458. Over 230,000 of these families have had their tax returns stripped to pay for the debt, in direct violation of the government's own pre-election commitment. In my electorate of Greenway, it is estimated that as many as 4,000 families have accrued debts at an average of $850 and that around 1,000 have had all or part of their tax cheque stripped as a result. The question of Centrelink debt is really a major issue in the electorate of Greenway, and I am sure that is the case in many other electorates. In many cases, of course, the people are providing what they believe to be the correct information and are acting quite honestly although they are incurring these debts. I am sure that most of us are confronted with raising with the government a number of examples that apply in our own electorates.

I have spoken on this before, in a speech that I made on 5 March in response to a bill called the Family and Community Services Legislation Amendment Bill 2002. I refer to a constituent, Mrs Racquel Sheeyh, who had notified Centrelink of a change in her circumstances immediately it happened and in fact tripled her estimated income in order to overcompensate. Unfortunately, she still incurred a debt. This is the hard part: as she had incurred the debt, Centrelink then took her entire tax return as well as her baby bonus and the low-income rebate in order to recover the debt. Instead of getting what she expected—a return on her taxation, her baby bonus and her low-income rebate—it was taken from her by Centrelink, still leaving her with a small debt.

It went to the tribunal, which accepted that Mrs Sheeyh phoned Centrelink on 4 February 2002 to advise of her return to work and to provide a new estimate, that she was advised that she may have a small debt of a family tax benefit and that she should overestimate her income for the remainder of the year in order to receive only the minimum rate of family tax benefit. As I have said, she did overestimate her income, I believe by some three times, but still finished up with a debt. This is a case where the lady did everything possible. I think that her case also probably falls under the recommendations of the Ombudsman, who says that those sorts of debts should be waivered. In this case I do not believe it was.

What the government should understand is that low-income people—the people we are talking about—spend all their Centrelink payments on the necessary essentials of life. In most cases, they are already living close to the breadline. When they are hit with a debt of $4,000 or, in many cases, a lot higher, it defeats the purpose of the whole legislation. The people concerned would have been better off if they had not received Centrelink payments in the first place. People are being hit with a double whammy. The legislation that is supposed to improve their quality of life is, in effect, having the reverse impact. Worse still, they would be better off if they did not take the part-time, casual or short-term jobs that would have given them the experience and training that could lead them off welfare and back into the work force. These debts create great hardship and, in many cases, a great deal of stress.

This is a flawed system that expects casual workers to estimate their income 12 months in advance. That is simply impossible. Even if families continue to notify Centrelink of their changing circumstances, as I have indicated they will still rack up a debt at an alarming rate. The government's incompetence has also led to thousand of students being overpaid youth allowance because nobody at Centrelink bothered to check the figures for four years.

The amendments in this bill relating to data matching have come too late for these families now facing high debts to the Commonwealth. Household debt is already at the highest point in Australia's history, and the government's flawed scheme that creates unavoidable debt to Centrelink is only adding to the financial burdens of families. The government Ombudsman and the opposition and welfare groups around the country have called for wholesale reform of the system but the government so far has ignored everyone and continues to allow debts to accrue at an alarming rate.

Finally, this bill reduces the portability period for people travelling overseas from 26 weeks to 13 weeks. The new portability period will also apply to disability support pension recipients. Labor has consistently opposed the government's attempts to reduce portability provisions in the social security system. Portability provisions are extremely important to all Australians, but particularly to those who were born overseas. In my electorate, that figure at the last census was some 41,811 people or 31 per cent of the total population in the Greenway electorate. The reason it is particularly important to this group is that many still have family and friends in their country of origin. When a parent or other family member is sick or dying it is only natural that they would wish to travel back and spend time with them. Thirteen weeks is an awfully short period of time to spend with someone in those circumstances.

As I said at the beginning of my contribution to the debate, these are largely technical amendments covering a wide cross-section of issues. Most will be supported by Labor, as they represent some streamlining of administrative functions and redress some earlier mistakes made by this government. It will be interesting to see if the proposed savings really are there in four years time or if the implementation of the changes ends up costing more than the government estimates. With those few words, I support the amendment moved by the member for Lilley.