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Monday, 23 February 1987
Page: 427

Senator ZAKHAROV(3.30) —We are debating today a matter of public importance concerning the alleged failure of the Labor Government to take the necessary action to stop the decline in living standards of Australian families. Unlike Senator Peter Baume, I will concentrate mainly on family policies rather than the waffle of broader issues such as the overseas trade balance, which may be indirectly concerned with this matter but which certainly has much more bearing on matters such as borrowings for company takeovers.

Senator Walters —You haven't even got a Minister here.

Senator ZAKHAROV —In order perhaps to quieten Senator Walters I should say that I was asked to speak on this matter because it is an area in which I have some expertise and some experience. The relevant Minister is new to his portfolio and I was asked to speak in this debate as a member of the welfare committee of Caucus and as somebody who is--

Senator Walters —That is how much they think of it; they don't even have a Minister in the House.

The DEPUTY PRESIDENT —Order! Senator Walters is interjecting too much.

Senator ZAKHAROV —I am trying to answer the interjection Senator Walters made. My work before I entered Parliament was concerned with family welfare. My many years experience as a sole parent has been in that area and since I entered Parliament I have taken it as a particular area of study. That is why I am speaking on the matter today.

I would like to begin with a little bit of history. The Parliamentary Library last year produced a basic paper on Commonwealth social security cash benefits since Federation. It is interesting that the document shows that nearly all those benefits were introduced by Labor governments and most improvements in their level or cover have also come from Labor governments. For example, it was the Fisher Government in 1912 which introduced the maternity allowance, the first recognition by any Australian government that children needed particular support. It was the Curtin Government in the forties which introduced unemployment, sickness and special benefits. Those of my generation who can remember the extreme poverty and loss of dignity suffered by the unemployed in the 1930s realise just how important that decision was. The supporting parent's benefit was introduced by the Whitlam Government. Most recently, the family income supplement was introduced by the present Hawke Labor Government. I believe that was the first real attempt to give help specifically to low income families in the work force. Obviously, cash benefits do not present the whole picture. I will say something later about the components of the social wage, but I think it is significant that as a Labor movement we have had the interests of families paramount in our policies for over 60 years.

There are two parts to this matter of public importance-the allegation of a decline in living standards of Australian families and the necessary action to stop that alleged decline. I will deal with the facts about living standards and, along the way, refer to actions we are taking and have taken to improve those standards. Firstly, what are Australian families? The common element in all families is that they have children-in this context, dependent children. The stereotype of the family, what most people traditionally think of as a family, would be two parents and, in contemporary terms, probably two to three children. But there are large numbers of Australian families that do not fit that stereotype, and it is important that we remember that a significant proportion of families do not fit that stereotype. In 1981-these are the latest census figures-there were 252,000 families comprising one parent and one or two dependent children. In addition, the census family type comprising parent, children and other adults accounted for another 65,000 families. Many of these are also sole parent families, the `other adults' being the older children in the family. In that same census the two parent, two child family comprised only 56.7 per cent of the whole. Yet that is the stereotype and that is what Opposition parties seem usually to be talking about.

I have said that the common element in families is children, and what this Government has as its main family concern is children. Families with children have the Government's top priority. The authors of the Government's social security issues review paper on income support for families with children found that 20 per cent of children live in families below the poverty line, and they need our priority help. Without ignoring the needs of families above the poverty line-they are also being addressed-clearly the needs of that 20 per cent of children are paramount. Those senators who spoke last week with groups from the Low Income Network and the Campaign for Economic Justice will have some idea of what that sort of poverty means in terms of meeting children's basic needs. I doubt that any honourable senator in the chamber would argue about the priority of meeting the needs of those children. Incidentally, I did not see any member of the Opposition at that luncheon with low income families, although Opposition members were invited. The social security review is concerned with identifying such needs, consulting widely with the community about possible ways of meeting them and advising government on the best action to take. No previous government conducted anything like a similar review. I will be referring to other aspects of it later.

Senator Walters —What have you done?

Senator ZAKHAROV —The review is not complete. What then of the allegations that there has been a decline in the living standards of Australian families in recent years? Under the Liberals, the percentage of Australian children dependent on social security payments tripled, from about 7 per cent to over 20 per cent, while benefits paid for children slumped. The additional pension for children and the mothers/guardians allowance paid to single parents on social security under the Fraser Government both fell by over one-third. The Labor Government has worked to restore the real levels of assistance to families. Under this Government, additional pension for children has risen by 70 per cent from $10 to $17, while the mothers/guardians allowance has doubled, from $6 to $12.

As I have said, the social security review is conducting an examination of assistance for families and the Government has established a ministerial committee to assess expenditure options in that area. Last year's Budget included measures to reduce the effects of poverty traps. These traps occur because a pensioner who earns anything over the income test free limit not only is taxed on that income but also loses a part of the pension. This is a very powerful disincentive to re-entering the work force and it works to keep low income families in poverty.

As from July 1987 the poverty traps will be alleviated in the following ways: The amount pensioners can receive without any loss of pension is being increased from $30 to $40 per week for single pensioners and from $50 to $70 per week-an increase of $20-for married couple pensioners; and allowable income for each child in a pensioner family is to be increased from $6 to $12 per week. In other words, we are addressing that question of the poverty trap. The social security review survey on sole parent pensioners' work force barriers had this to say:

Despite regional variations, the majority in each area indicated a preference for working in the future even though they saw work force barriers inhibiting their chances.

. . .

While the majority wished to improve their work skills, many saw difficulties associated with attempting to do so, in particular the costs and accessibility of both training and child care.

By far the most commonly cited work force barrier was child care, including costs, access, transport to and from work, and hours. The pension income test combined with loss of concessions were also seen as important work force barriers for some.

The child care barrier, of course, has received a great deal of attention. The present Government has increased the accessibility of child care, particularly for low income families, by over 150 per cent. When we look at living standards we are not looking just at cash benefits accruing to families since the Labor Government came to power; we also have to look at the other benefits gained by families which are components of what may be termed the social wage. I refer to such matters as the introduction of Medicare. I would remind Senator Peter Baume, incidentally, that it is not necessary for families to have private medical cover. Many of us do not. There have been improvements to housing and improvements to education at all levels as well as the provision of child care, which I have already referred to. It has been calculated that a family of two adults and two children with a pre-tax income of average weekly earnings is better off under the Labor Government, through the operation of the social wage, by over $7,500 per annum.

I come now to the more recent initiatives to assist families in need, and that is in the area of child support in cases where only one of the two parents contributes to the maintenance of the child. This is an issue which means a great deal to me, as I was in the position of those sole parents in the years of conservative governments. That was not an issue they dealt with, I can assure honourable senators. Late last year a Cabinet sub-committee chaired by the Minister for Social Security, Mr Brian Howe, was set up to examine options for reforming current child maintenance arrangements. This is a problem that covers the entire economic spectrum, from low income earners who may have some financial limitation on what they can pay, to those on middle to high incomes who use the present system to do deals to maximise social security benefits. Incidentally, they often use the tax system to do that; in other words they are tax frauds as well. No matter what the economic circumstances, it is the children of irresponsible, non-custodial parents who suffer, and it is the Australian taxpayers who, through the welfare system, have footed the bill for that neglect. All too many parents who no longer share a home with their children now fail to share their income with those dependants. The disturbing figures are that 70 per cent of people who should support their children do not. Those children are suffering because one parent has turned his or her back on his or her responsibilities. This is an issue which I have discussed with Opposition members at both the State and Federal level, and I believe it will have Opposition support.

In this matter of public importance the Opposition is expressing criticism of the Government's policy in the area of support for families, both direct and indirect. What would be the effect on families of the policies of the competing sections or factions of the Opposition? First, the income splitting proposal, which keeps getting recycled annually at least, looks superficially attractive, just as a flat tax looks superficially attractive. But income splitting would cost something like $3 billion. To allow for this, either the average tax rate would have to rise to about 8 per cent or Budget expenditure would have to be cut by that amount. What would the Opposition cut? Would it cut funding for health, education, housing or community services? There are cheaper and more equitable ways of assisting families in need. Income splitting is a very inefficient vehicle for family assistance because it gives most help to the highest income earners, and that help does not depend on family size. The poorest of the families who have two parents working in order to make ends meet would receive no benefit, and would probably have to pay more tax in order to make up for the revenue lost. Those whose income is below a taxable level would gain nothing and would possibly lose through decreased money available for such programs as public housing and education.

Sections of the Opposition are also keen to have some form of consumption tax, and a level of 8 per cent seems to be popular, combined with a reduction in the top marginal tax rate to 40 per cent. In that case a family with two children on $15,000 a year would be $21 a week worse off. On the other hand, a household on $100,00 a year would be $54 a week better off. Is this what the Opposition means by assistance to families? Does it want assistance only for high income families? In addition, the Opposition has made it clear that it intends to cut the social wage. What would it cut first-health, education or pensions? These policies do not sit easily with the Opposition's statement to which Senator Peter Baume referred. In the second last paragraph of its `Policy Overview: Your family, the Liberal/National Party Approach', it says:

We will not implement policies detrimental to families. In government, we will ensure that the interests of families are protected throughout the policy and decision-making process.

When the Opposition finally gets around to a tax policy we will see how it fits with that statement. I believe this Government can be proud of its record on maintaining family standards and its moves towards greater social equity for families. It will be doing even more in the months and years to come.