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Thursday, 27 June 2013
Page: 4257


Senator BOYCE (Queensland) (12:57): This legislation is, yet again, one of those efforts this government have made to desperately try to come up with a surplus, which they had promised over and over and never delivered. They finally had to admit, under former Treasurer Swan, in November last year, that they were incapable of doing that.

I think we only need to look at the reports that were produced by the Senate Standing Committees on Community Affairs when this bill was given to them to assess, to understand how poorly this government has gone about its job. We have a report from the government and a dissenting report from the coalition on this subject. The government report says that NATSEM researcher 'Bob Phillips' had been reported as considering that the baby bonus was significantly higher than the up-front costs of having a baby and was therefore not well targeted.

For a start, I would point out to the government and Greens members of that committee that the NATSEM researcher involved was not Bob Phillips but Ben Phillips. His research, which is not quoted directly but was quoted second-hand from a story in the Australian newspaper in February this year, demonstrates again how little time the secretariats, the government, the opposition—anybody here—has to assess this government's legislation and performance. But the main problem with this government's attempt to reduce the baby bonus for second and subsequent children from $5,000 to $3,000 is that the government does not understand the purpose of the baby bonus.

A baby bonus assists families in paying for the costs of a child. But it was instigated by Treasurer Peter Costello in the Howard government to boost population, to boost replacement levels in Australia of young people. We still face the situation that Treasurer Costello was the first to identify of a massive number of baby boomers and an ever-decreasing number of taxpayers to support those baby boomers. The superannuation system will assist here but it will not fix it. We need to continue to develop taxpayers. While we can and do import taxpayers, we need also to grow taxpayers. The baby bonus was very successful initially at encouraging the birth rate to rise. But, given that the government has fiddled with this again and again, we anticipate that that is not going to happen any longer.

To suggest that somehow because a second or subsequent child might—and I emphasise the word 'might'—be cheaper than the first child is irrelevant. It is interesting to look at some of the material provided by Family Voice, who made the point that you might have to buy a second cot because, unless the space between your children is fairly large, the oldest will not be ready to move into a bed before the second child is born. And I do not really think that it is up to the government to start social engineering in terms of when you provide the money and when you do not.

But the point is that it is not really about paying for the cost of a baby. I cannot believe any suggestions from literature that the upfront costs of having a baby are not more than $5,000. They are more than $5,000. The only people who would not have to fork out more than $5,000 for their first child and close to $5,000 for their second and third children would be people who are lucky enough to have family to pay for some of the products that you need to buy when you have a child. When you look at the list of things that you need for a child, it does not take long to reach $5,000. But this is not the reason that this is happening.

If you look at the material from Mr Ben Phillips, he makes the point that the cost of having a child overall is massive. He points out that for a lower income family with two children the overall cost of raising those children is $474,000. For middle income families it is $812,000. For higher income families, it is $1,097,000. Here we have the ridiculous situation of this government thinking that whether a child is the first or second or subsequent child is somehow relevant to the cost of raising them. It is not. There is absolutely nothing there to suggest that.

The coalition members of the community affairs committee were very concerned about the potential economic impact of Labor's ongoing cuts to the baby bonus. In their submission to the committee, Family Voice Australia highlighted data from the ABS identifying the percentage of women who were having three or more children as a key driver for our below-replacement-level total fertility rate. The fertility rate in Australia has declined from 54 per cent in 1976 to 32.6 per cent in 2006. We are currently having 1.8 babies per woman, which is well below the replacement fertility rate that we need of 2.1. As I said, migration can assist with building our population. But it cannot do it by itself. If you go back to the first Intergenerational report commissioned by Treasurer Peter Costello in 2000, you will see that we would have to have a migration rate in the millions to build the sort of population that we really need to support elderly Australians as that boom develops. This needs to happen through a balance between migration and local Australian-born children.

The removal of this incentive to have two or more children will have a very detrimental impact on our economic development. The whole point of the baby bonus was to boost fertility rates. Yes, it assisted people with the cost of children. But it was about boosting fertility rates; that is what it was there for. And that is what it succeeded in doing. Labor has tried to rationalise these cuts by arguing that the costs associated with second and subsequent children are less than for firstborn children. This goes against the practical experience, as I said, of many Australian families. By seeking to argue that the costs of second and subsequent children are reduced because items of clothing and equipment can be handed down, Labor demonstrates a fundamental misunderstanding of the financial pressures faced by parents and of the practical realities of raising children. As I said, many families will end up with two cots, not just one. One thing in the report that the coalition did agree with was that most people would like to have more children than they end up raising and that one of the most important considerations when people are planning children is being able to afford to raise the child. Whilst a $2,000 cut in the baby bonus for a child might be something this government can get away with in political terms, it is yet another example of its very poor ability to manage Australia's policies, to manage Australia's future and to understand our future.

I want to continue to make that point about the fertility rate. In the late 1970s the decline in our fertility rate started to slow down, until it reached 1.73 babies per woman in 2001. From 2002, when Treasurer Costello introduced the baby bonus, the total fertility rate increased, reaching 1.96 babies per woman in 2008—the highest recorded since 1977. It has since decreased from 1.96 to 1.89 babies per woman in 2010. I would suggest that much of that is around the fiddling that this government has done in all areas of assisting families. The fiddling with the family assistance material has been appalling. Firstly, in 2008-09 Labor introduced a means test so that families who earned more than $75,000 in the six months after the birth or adoption did not receive the funds. And of course, in typical form, this was introduced less than nine months after it was announced, so people who had actually planned on using the baby bonus were unable to, because it cut out when they got to six months. The government went on to index it, paused the indexation and then cut the rate again for younger children. It is part of an appalling record in terms of supporting those who need it most in Australia, and I think we need to consider this carefully.

The ACTING DEPUTY PRESIDENT ( Senator Pratt ): The time for consideration of this bill has expired. The question is that this bill now be read a second time.

Question agreed to.

Bill read a second time.