Senator HILL (Environment and Heritage) (10:05 PM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard .

Leave granted.

The speeches read as follows—

A NEW TAX SYSTEM (FAMILY ASSISTANCE) (ADMINISTRATION) BILL 1999

This bill complements the A New Tax System (Family Assistance) Bill 1999 that has already been introduced into the parliament. That bill, which forms part of the fundamental reform of the Australian tax system, introduces reform and improvements to the assistance currently provided by government to families. From 1 July 2000, gone will be the 12 conflicting and overlapping family payments. Instead, there will be three well designed, harmonised and generous benefits that will make a positive impact on the living standards of Australian families, particularly those with low incomes.

The A New Tax System (Family Assistance) (Administration) bill 1999 contains administrative, procedural and technical rules that will apply in relation to the new family assistance payments—family tax benefit part A, family tax benefit part B and child care benefit. The bill will also include machinery type provisions dealing with two other family-related payments, maternity allowance and maternity immunisation allowance.

I consider that it might assist this House if I were to provide an overview of the delivery of the family assistance package.

A new `Family Assistance Office' will be set up to help families

The new Family Assistance Office will deliver family tax benefit (parts A and B), child care benefit, maternity allowance and maternity immunisation allowance. The law does not refer to the Family Assistance Office as it will be a `virtual' organisation using the existing infrastructure of Centrelink, the Australian Taxation Office and the Health Insurance Commission (Medicare Offices). It is expected that all Australian Taxation Offices, all Centrelink offices and all Medicare offices will have a Family Assistance Office as part of their office. The extended network of sites will ensure families have a greater choice about the way in which they access assistance.

In order to give families these choices, the Secretary to the Department of Family and Community Services will have the power to delegate his or her powers to constituent agencies of the new Family Assistance Office. The heads of these agencies and their staff, as delegates of the Secretary, will be able to process claims, make payments and perform other functions under the family assistance law.

Making a claim for Family Tax Benefit

The primary carer will be able to make a claim for family tax benefit in one of the following ways:

lodge a claim with the Family Assistance Office (through Centrelink) for fortnightly payments; or

claim a lump sum payment at the end of the year (through the taxation system), either through the primary carer's tax return or their partner's tax return. Families will have a further option to reduce their (or their partner's) tax instalment deductions during the year in anticipation of their end of year family tax benefit lump sum entitlement.

Making a claim for Child Care Benefit

Families will be able to claim child care benefit for formal care (in approved child care services) in one of the following ways:

as instalment payments paid directly to their nominated child care service to enable the service to reduce the fees that the family will pay (current arrangements under which child care assistance advance payments are made to child care services will be preserved for child care benefit purposes. This will be achieved by regulations); or

as a lump sum after the end of the financial year (from the Family Assistance Office).

Child care benefit for informal care will be claimed as a lump sum for a period of care of up to 12 months and paid via the Family Assistance Office.

Child care benefit will not be delivered through the tax system because of the complexity of the information parents would need to retain to be able to correctly assess their entitlement.

Making a claim for Maternity Allowance and Maternity Immunisation Allowance

Families will be able to claim single, one-off payments of maternity allowance and maternity immunisation allowance from the Family Assistance Office (through Centrelink).

Like child care benefit, maternity allowance and maternity immunisation allowance will not be delivered through the tax system.

Families will receive their correct entitlement to family assistance

Families who choose to receive fortnightly payments will estimate their income for the current financial year. Their estimated income will be compared with their actual income at the end of the year. Families who have overestimated their income during the year and have been underpaid will receive a `top up' payment at the end of the year. On the other hand, families who have underestimated their income and have been overpaid, will be required to pay back the amount they were overpaid during the year. This is much fairer than the current arrangements for family allowance where families who underestimate their income are required to pay back the amount they were overpaid but families who overestimate their income during the year do not receive a top up payment. It is also fairer than the current arrangement for child care assistance where families do not receive a top up payment if they are underpaid, and are not required to pay back overpaid amounts.

Administrative arrangements for Maternity Allowance and Maternity Immunisation Allowance

The administration of these payments will not change significantly under the new family assistance regime.

Administrative arrangements for Family Tax Benefit and Child Care Benefit will be simplified

Simpler rules will be administered by one agency

Rather than dealing with potentially 12 forms of assistance with different eligibility rules and payment arrangements through three different agencies, families will now have to deal with only 3 payments with similar eligibility rules and with one agency, the Family Assistance Office.

Same rules for all families

There will be one set of rules for all families regardless of how they choose to receive family assistance. For family tax benefit, this means that regardless of whether families receive fortnightly payments or as an end of year lump sum claimed with their tax returns, they will all be subject to the same eligibility criteria, rate calculators and administrative arrangements under the family assistance law. For child care benefit, regardless of whether families receive ongoing payments or lump sum payments from the Family Assistance Office (through Centrelink), the same eligibility rules and rates will apply.

Under the new arrangements, decisions made by the Secretary regarding entitlement to, or eligibility for, family tax benefit and child care benefit will be reviewable by the Secretary, or an authorised review officer, regardless of delivery option. It is expected that where family tax benefit is paid through the tax system, the Commissioner, as delegate of the Secretary, will carry out the review functions for those customers. There will be further rights of appeal to the Social Security Appeals Tribunal, the Administrative Appeals Tribunal and the Federal Court. Rules explaining the process for review of decisions are set out in Part 5 of this bill and will be kept separate from the Australian Taxation Office appeal and review process. Determinations made by approved child care services regarding child care benefit in special circumstances will not be reviewable. Approved child care services and registered carers will also have the right to appeal to the Administrative Appeals Tribunal about the Secretary's decisions affecting them, except where the decision is the result of a Commonwealth planning strategy affecting the distribution of child care places.

It will be easier for families to repay overpayments

As family tax benefit is partly administered through the tax system, overpayments of family tax benefit will be recovered from a claimant's tax refund where possible. This bill will also allow another person, for example the claimant's partner, to make his or her income tax refund available to offset a claimant's family tax benefit debt. In such cases, where consent is given, the Commissioner will apply the partner's income tax refund to reduce or extinguish the claimant's family tax benefit debt. The new administrative arrangements for recovering overpayments of family tax benefit, will make it much easier for families to repay a family tax benefit debt. Where it is not possible to recover overpayments of family tax benefit from the taxation system, and for overpayments of child care benefit, these will be recovered by the Family Assistance Office under existing Centrelink arrangements.

Since child care benefit will not be delivered through the tax system, tax refunds and debts will not be applied against child care benefit debts and payments. Also other family assistance overpayments will not be recoverable from child care benefit. However, child care benefit overpayments will be recoverable from family tax benefit or from social security payments.

Family Tax Benefit paid through the tax system will be a payment, not a tax rebate or an increase in tax free threshold

Although claimants will be able to lodge claims for family tax benefit and receive lump sum and top up payments through the taxation system, the family tax benefit entitlement will not be in the form of a tax rebate or an increase in a person's tax free threshold.

Traditionally, measures like family tax benefit (such as the family tax assistance) have been provided as tax rebates or as an increase in a person's threshold where the rate of family assistance is calculated by the Australian Taxation Office and offset against tax payable.

A similar approach was not adopted for family tax benefit because the administrative mechanism of delivering family tax benefit through a person's income tax assessment would have been very complicated and families would not have been able to benefit from the simpler structure and administrative arrangements of the proposed system (for example, it would not have been possible to ensure that all families receive their correct entitlement regardless of delivery option) which is the main feature of family assistance reform.

I commend the bill to the Senate.

A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (NO. 2) 1999

This bill accompanies the A New Tax System (Family Assistance) Bill 1999, the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 and the A New Tax System (Family Assistance) (Administration) Bill 1999. Together, they will facilitate the introduction of the new family assistance package from 1 July 2000.

The bill:

amends a number of Commonwealth acts that refer to concepts and terms that are relevant under the existing family assistance structure and repeal or amend the references to reflect the new family assistance regime;

provides for the appropriate calculation of family tax benefit part A for those recipients in receipt of income support (or whose partners receive income support);

allows the use or disclosure of information by or between the three agencies involved in the transition to the new family assistance regime—Centrelink, the Australian Taxation Office and the Health insurance Commission—for the purpose of identifying shared customers (so that customers receive only one letter about the new arrangements instead of, potentially, three); and

makes some other minor technical amendments.

I commend the bill to the Senate.

Debate (on motion by Senator O'Brien) adjourned.