Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 6 September 1984
Page: 626

Senator WATSON(10.32) — Quite often good intentions, good initiatives and desirable legislation in one area, designed to help a particular group, are frustrated by the operation of other legislation affecting disadvantaged people, taxpayers or even industries. I think the problems often arise from the enthusiasm of particular Ministers or departments to effect their particular change or to bring about some improvement. They lose sight of the impact of legislation in other areas. I think that there needs to be a better liaison between all departments when amendments or new Bills are introduced into the Parliament. It should be mandatory that such a liaison does take place to overcome a conflict of interest which often can reduce the full effect of a desirable objective. With initiatives or incentives to industry we quite often find that tax legislation can have an impact which does directly affect the original intention. So often the problem arises as a result of the impact of the income tax legislation.

I wish to refer to the problems faced sometimes in social security legislation and the impact that taxation has in reducing a benefit. The particular example that I wish to bring to the attention of the Senate tonight is the family income supplement. This was originally paid to the family breadwinner but fairly recently this was changed; it was paid to the person who is in receipt of the family allowance. In most cases this meant the mother. For income tax purposes we find that this family income supplement is not exempt income or non- assessable income to the mother in the sense that it can affect the rebate that the father would otherwise get the benefit of.

I remind the Senate that this family income supplement is designed to help the very low income families. The family income supplement, therefore, for income tax legislation purposes becomes parts of the wife's separate net income. Although the benefit currently payable is $12-I understand that it is to be increased from November-the greater that amount is, the greater the impact of the problem. Approximately one third is lost as a result of income tax liabilities which attach to the father.

The point I am making is that the very people the Government is trying to help, in this case the low income families who receive the family income supplement, have the amount effectively reduced through effects on the spouse rebate. On the one hand we appear to be generous in giving something to a needy section of the community-the lower income earners-in the form of a family supplement, but because we do not amend the income tax Act at the same time there is a reduced benefit. Once the increase takes place-I think it is from November-the impact will tend to be greater.

I ask the Minister for Veterans' Affairs (Senator Gietzelt), who is in the chamber tonight: Will the Government look into this problem with a view to rectifying this difficulty? Will the Government also ensure that, in future, when legislation is introduced into the Parliament designed to benefit an identifiable group it will look at other impacting legislation to make sure that the full benefit is not lost?

Senator Peter Baume —The Minister might tell us whether this was intentional or accidental?

Senator WATSON —I hope that it was purely accidental and an oversight. I would not think that any government would deliberately do it. We have had such problems before. For example, the definition of 'de facto' for social security legislation was different from the definition for tax legislation. The analogy is not as good in that case. I ask that the Minister look into this matter in order to help the disadvantaged group who receive the family income supplement. I ask the Government also to assess the wide impact that this problem could have in future legislation which is designed to help particular industries, individuals or groups in society.