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Wednesday, 9 October 1991
Page: 1623

Mr PETER FISHER(11.13 p.m.) --Mr Deputy Chairman, you would know that this Budget allows for a significant increase in outlays in the social security portfolio. You would probably also know that there can be no satisfaction in an increasing social welfare Budget. It is a clear indication of failure and a clear indication that more people are being driven into poverty and forced into the welfare net.

Actual expenditure on social security in the last Budget was some $24.67 billion as against $23.7 billion in 1990-91. The 1991-92 forecast is for total outlays to rise to $28.9 billion--a rise of 14.4 per cent over the coming year. Spending on administration is up to 13 per cent higher to $866m and average staffing levels within the Department have increased by 1,745 to 19,070.

Social security now represents some 27.7 per cent of total Commonwealth outlays--almost three times the size of defence--and is the largest spending portfolio, including the Treasury portfolio, which includes payments of billions of dollars to the States. The Budget forecasts an average unemployment rate for 1991-92 of 10.5 per cent. We know that this represents about 880,000 unemployed Australians through the coming year. We know at present that the figure is estimated to be one million and possibly higher through the hidden unemployed. Of course, precisely how this translates to average numbers on the unemployment benefit lists throughout 1991-92 is unclear, although expenditure on unemployment payments is forecast to be $6.8 billion, up from $4.56 billion last year.

I also remind the House that the previous Budget contained a proposal to impose an assets test on the family allowance of $300,000. As a result of protests throughout the Australian electorate, this figure was subsequently raised by the Government to $500,000, but to no avail as this initiative was defeated by the Opposition in the Senate. But the ideologues have finally got their way. This Budget tells us that from 1 January 1992 there will be a net assets test of $600,000, beyond which point the family allowance entitlement cuts out altogether. Excluded from the definition of assets are the family home, curtilage and any debts.

Hardship provisions have also been introduced for two years for families excluded as a result of the assets test. I acknowledge that this again is a significant change from the last Budget. However, two conditions are attached to the entitlement for family allowance under the hardship provisions: firstly, the current year's estimated taxable income must be below the annual married pension rate of $13,078, plus $624 per annum for each dependent child; and, secondly, the family has less than $6,000 for a single person or $10,000 for a couple in available funds. The family allowance hardship provisions, which will also apply for two years, will be introduced to the existing family allowance supplement assets test which currently stands at $347,500 in net assets. Further, families with net assets below $600,000, but above the family allowance supplement threshold, will become eligible for a family allowance supplement if they meet the above hardship conditions.

The hardship provisions for both allowances will mean that many of those who are income poor but asset rich, particularly when those assets are not presently realisable at their current valuation, will not be deprived of the family allowance or the family allowance supplement. However, an assets test would still require current valuations which in the case of farm assets are almost impossible to determine accurately, given present market conditions. It is therefore not clear that this latest assets test proposal will be workable until asset prices, particularly rural assets, can be adequately valued.

The family income supplement threshold is to be raised from $18,000 to $19,300, at a cost of $90.2m in its first year. I also acknowledge that this measure will allow many low income working families to receive extra income support to reduce the likelihood that they would be better off relying solely on government income support rather than being in paid employment.

In this very short debate tonight on social security, I wish to mention the special benefits that are being made available to 16- to 20-year-olds from low income families who are experiencing hardship during the education leavers deferment period. Claimants for either Job Search or sickness allowance who are single, have no dependants and are under 21 years of age must currently wait 13 weeks before becoming eligible for either of those two payments. From 1 October 1991, 16- to 20-year-olds experiencing hardship and who are from low income families have become eligible to apply for special benefits during the 13-week period.

While I have acknowledged and, where appropriate, supported some of the Budget changes, I wish to make a number of brief comments about how the system affects many of my constituents in Mallee. Any application of the asset test at this time of economic depression is a farce. Farms and many businesses cannot be sold, there are no cash flows, and many families are even having difficulty putting food on the table. The continuing inequalities and welfare gaps make a mockery of social justice policies and the social justice claims of this Government.

Earlier this evening in my previous contribution to this primary industry debate, I spoke of the huge debts of many farming families who are being assisted at present by rural counsellors. The average debt of those who have made inquiries to and are being assisted by these counsellors is $267,370. These hardship provisions must at this time be allowed to override any asset test guidelines. The only realistic test that can be made at this point surely is an income test. The welfare gap must be addressed to ensure that asset test and work test applications do not exclude self-employed people in serious financial and social conditions the opportunity to participate either in the unemployment benefits system or Job Search program.

Mr Deputy Chairman, I know that you will allow me to breach procedures somewhat here to briefly mention one change in Austudy that concerns me and that is linked very much to the asset test as it is applied through the social security system. I refer to Austudy changes that were announced in the Budget which I believe will have a devastating effect on some country families, particularly those with more than one child in full time study. I have made some calculations which indicate that there are some students over 18 years of age living away from home attending tertiary institutions who will lose, as a result of these Budget changes to Austudy, some $40 per week and for many others, depending on family income, up to $16 to $17 per week.

It is obvious that these radical changes have been made because the Federal Government is strapped for cash and has directed its priorities away from so-called middle income families to the increasing number of low income people. This change may be justified because of the increasing unemployment and the drop in living standards. However, it should be recognised that in rural communities young people have no local access to tertiary education and must live away from home at a huge cost. There are still many major anomalies in both the social security and education policies and they should be addressed in the interests of fairness.