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Thursday, 27 June 2013
Page: 4255

Senator FIFIELD (VictoriaManager of Opposition Business in the Senate) (12:49): I rise to speak on the Family Assistance and Other Legislation Amendment Bill 2013. This bill seeks to bring in to effect the government's changes to the baby bonus announced in the Mid-Year Economic and Fiscal Outlook 2012-13. The bill also makes a number of other amendments to family assistance and social security payments. I intend to focus my remarks on the baby bonus.

The baby bonus is something that has been under attack by this government for some time. The government has repeatedly slashed the baby bonus in an attempt to find savings. In the 2009-10 federal budget, Labor paused the indexation of the upper income limit of the baby bonus at $75,000. In the Mid-Year Economic and Fiscal Outlook of 2011-12, the government paused the indexation of the baby bonus payment until 2014-15 and reduced the rate of payment from $5,437 to $5,000. In the 2012-13 Mid-Year Economic and Fiscal Outlook, the government announced its intention to reduce the baby bonus from $5,000 to $3,000 effective from 1 July 2013. However, as we all know, since then government has been engulfed by yet another budget emergency of its own making and has decided to abolish the baby bonus to save $1.1 billion over the forward estimates. In its place from 1 March 2014, families who are eligible for family tax benefit part A and who are not accessing parental leave will receive an additional loading on their payment. The extra family tax benefit part A payment will provide $2,000 for a family's first child and for each child in a multiple birth and $1,000 for second and subsequent children.

It is pretty clear that Australian families are losing out because of this government's complete and utter incapacity to manage the budget of the Commonwealth. The government is ripping money away from Australian families, in effect, to attempt to cover part of the cost of this reckless spending. The baby bonus was introduced for very important public policy reasons. That is pretty straightforward. Australia needs to maintain a high fertility rate. That is critical to our long-term prosperity.

The reality was reflected in the Intergenerational report, which was such an important, seminal document when it was first released. That report identified that there were three things that Australia needed to do to ensure its future prosperity. It needed to ensure the population continued to grow, that participation in the Australian economy was there for as many people as possible, and that productivity was increased in Australia. Those were what are often referred to as the three p's: population, participation and productivity. That really was at the heart of the motivation behind the baby bonus. The baby bonus had quite a significant effect in lifting the fertility rate of Australia. That is important, because once a nation's fertility rate declines it is very hard to elevate it again. So the baby bonus was quite successful.

If the coalition were in government we would have a different starting point today, compared to where the current government is, because we would have taken different decisions over the course of that period in government. The abolition of the baby bonus is not a decision that we would have taken if we were in government because, as I said, we would have managed the budget differently and had a different starting point. We recognise that the government has completely and utterly trashed the Commonwealth's budget, and for that reason the coalition—although in government we would not be making this decision—will not be opposing this bill.