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Wednesday, 11 November 1998
Page: 207

Mr SWAN (4:34 PM) —Some of the important amendments the government seeks to introduce through the Child Support Legislation Amendment Bill 1998 were due to commence on 1 July 1998. This bill was first introduced into the parliament on 12 March and has been on the books since then. Its passage through the Senate was interrupted by the government's decision to call an early election. This is yet another example of how this government puts its political agenda ahead of the needs of families. The government had 2½ years to fix some of the problems with the child support scheme, yet this bill, like so much of this government's agenda, was subsumed by its political agenda. The government's delay in dealing with this bill is a sad reflection on the level of its commitment to bringing about important reform in this area.

Like many members of parliament my office has been inundated by calls from both custodial and non-custodial parents, raising issues as emotive as they are difficult. Labor understands that there are no easy fixes, but a responsible government must tackle these issues. After talking to many individuals affected by these problems, I will always consider well thought out and fair proposed changes in this area. The delays in dealing with this bill have perpetuated the problems for many people.

The correct balance between the needs of custodial and non-custodial parents is very difficult to achieve. This bill represents the government's substantive response to the recommendations of the inquiry of the Joint Select Committee on Certain Family Law Issues into the child support scheme, and goes part of the way toward achieving such a balance, but the Labor Party believes that more needs to be done.

The opposition will be moving the same amendments that we moved last May, with the exception of our amendment dealing with non-agency payments, the substance of which has now been incorporated. However, as someone who has spent the last 2½ years having a spell in the paddock, and doing a lot of listening, I have an open mind on what further improvements could be made in this area in the years ahead.

This bill proposes a number of changes. Firstly, the bill introduces a minimum child support liability for all payer parents of $260 per annum, and, secondly, includes net rental property losses—that is, negative gearing types of losses and exempt foreign income—in the taxable income for child support purposes. The bill proposes to introduce case management to assist parents at risk of family violence, to end the collection of child support or, indeed, to recommence the collection of child support as appropriate.

However, I offer a note of caution, which I hope the Minister for Family and Community Services, and her representative in this place, will heed. As Centrelink is now the first point of contact for clients of the child support system, it will be the staff of Centrelink who will be placed in the unenviable position of explaining the changes which the government is proposing. These are the same staff who have been told they must endure savage cuts of 5,000 jobs over the years ahead. At the same time, they have been asked to deal with new and complex policy issues.

While the government may choose to ignore the crisis in Centrelink, the Australian people know the truth about the constant engaged signals, overworked and despondent staff, and a worrying number of mistakes and delays in payments. Centrelink staff are now being asked to somehow find the time to help people sort out what the government changes will mean for them. I suspect very few child support clients will be satisfied discussing their personal affairs with a kiosk in a shopping centre.

Of course, those clients who would be prepared to interact with a machine, rather than with a trained staff member, will have to hang around for five years waiting for the government to install the technology. The simple fact is that the current services are in crisis. There are more job cuts on the way and the new technology is years away from being ready. Child support system clients have every right to be suspicious of this government's commitment to assist them or to help them resolve difficult problems which they face.

If this government fails to provide Centrelink with the resources it needs to assist clients of the child support system, it will be held accountable by the Australian people. Be assured: the Labor Party will not allow this government to shirk its responsibilities or to pretend that this problem does not exist.

The government also proposes increasing the exempt income of the child support payers by 10 per cent. For 1997-98, the exempt amount would be $9,907 for single taxpayers and $16,525, plus additional amounts for each child, for payers with natural or adopted children in their care. It also proposes to lower what is referred to as the `payee's disregarded income' from $37,424 to $29,598 by using a figure known as the `all employees average total weekly earnings', rather than full-time adult weekly earnings.

It needs to be pointed out that this reduction will be offset, at least in part, by the halving of the rate at which child support is reduced from the present dollar for dollar reduction in child support once you are over that income limit to 50c in the dollar. Payees may seek reassessment if they incur high child-care costs exceeding five per cent of their income.

The bill also seeks to revise the child support scheme objectives to recognise that both parents are responsible for the support of their children. It seeks to allow parents, by agreement, to undertake private collection of child support at any time, and it talks about using the most current taxable income information available in the child support assessment. However, I would want to suggest that simply using the previous tax year, rather than the one before, does not really resolve the problems faced by many clients of the child support system. People are required to make estimates of their income or face being subjected to the indexation factors. If they do estimate their income, and if it turns out that their income is less than they have estimated, but the difference is less than 15 per cent, they cannot recover the amounts they pay in child support. This problem is a source of great frustration to many people. In talking to clients of the child support system, I have heard, time and time again, heartbreaking stories about the effect of this rule. Labor will be considering how this and other problems, not addressed by the government's amendments, can be addressed in the future.

The government's bill also seeks to allow the non-custodial parent to pay up to 25 per cent of their child support liability in kind without the consent of the custodial parent, subject to discretion on the part of the registrar. It also seeks to introduce an internal review mechanism for objection to decisions made by the Child Support Agency. It proposes to deem a stepchild to be a dependent child where the court has made a relevant order under the Family Law Act. It also proposes to continue child support liability until the end of the school year where the child is undergoing full-time secondary education and turns 18 during that school year.

It has to be said that the child support legislation has been controversial and was the subject of an extensive inquiry by a committee of the parliament, the Joint Select Committee on Certain Family Law Issues. That committee received 6,197 submissions which, I understand, is the largest number ever received by any parliamentary committee. So there is a very substantial degree of community interest and community concern in relation to this issue. This is borne out by the fact that the 1997-98 Commonwealth Ombudsman's report notes that the Child Support Agency accounted for some 12 per cent of all complaints to the Ombudsman's office.

I understand that the Child Support Agency receives in excess of 4,000 letters a day and that, from 1 July 1997 to 30 November 1997, it received 17,516 applications for departure from the standard formula. So there is no doubt that the Child Support Agency has generated a lot of community comment and, indeed, community concern. When the child support review was conducted by the joint select committee, it concluded that the development of the child support scheme was a qualified success. It pointed out that it had been successful in sheeting home to parents responsibility for looking after their children, and making it clear that it was not acceptable to have children and then to walk away from that responsibility of looking after them until they attain the age of majority.

It ought to be said that there are many people who have been highly critical of the child support scheme. Indeed, I think it is fair to say that it is used in some places as a campaigning weapon against the Labor Party. But, if we look at the legislation before us, the government has essentially acknowledged the strengths of the child support scheme by making no essential changes to the basic model. We now have a situation where the government appears to support the scheme, leaving those in its own ranks who have been critical of it in an interesting position. I would be interested to hear what other participants in this debate from the government side have to say about this bill.

When this bill was first debated in the House in May, the government used its numbers to gag debate on opposition amendments. That was a clumsy and outrageous decision, and smacks of genuine contempt not only of the parliamentary process but also of the interests of the thousands of parents who are interested in the debate on the child support scheme. It was cut off thanks to what was essentially a mean-spirited act by the government. One has to ask: why did this happen; why was it gagged? It seems clear that the government was deeply concerned that some within its own ranks were seriously considering supporting some of Labor's amendments.

For example, we had the unprecedented event of the former member for Dickson, Tony Smith, moving amendments to the government's bill. Let me repeat: a government backbencher at that time moved amendments to a government bill. And it is important to remember that at that time he was still a fully paid-up member of the Liberal Party and the coalition. Of course, he cited the government's failure to reform the Child Support Agency as a major reason for his resignation from the government.

For our part, good policy is always an unfinished business. Just because the child support scheme has noble objectives does not mean that it is by any means perfect and it does not mean that it will not require adjustment into the future. On the contrary, it is all the more probable that important and complex legislation which affects the lives of countless families will always require adjustment into the future. The simple fact is that an astounding number of ordinary Australians, from both sides of the debate, felt strongly enough about this issue to make submissions to the joint select committee inquiry. Labor understands the depth of that feeling and the frustration among ordinary Australians, and so we will be monitoring the effect of the government's amendments.

The opposition has put forward a number of amendments which we believe pick up issues arising out of the report of the joint select committee. We will be doing that at the end of this debate. A particularly important amendment we are looking at is to try and ensure that changes in income are properly reflected in child support liabilities. At present, the payers who suffer a reduction in their income cannot recover any payments that they make unless that reduction exceeds 15 per cent. Recommendations 125 to 127 of the joint select committee's report provide for a much more up-to-date assessment of income and thereby largely address this problem. The government has made some changes, both in this legislation and previously, which are intended to help address this problem, but as far as we can tell it still remains a serious issue for people making estimates of their income.

Let us say that a person is employed as a part-time cleaner, that they have a part-time cleaning contract. If that contract comes up for renewal and they miss out on the contract, their income is therefore reduced but their child support is paid on that earlier basis and they are not entitled to recover the overpayments. This strikes us as a problem that could be better addressed. Therefore, we are proposing that recommendations 125 to 127 of the joint select committee report be put forward to address this.

We think there ought to be a financial penalty on anyone who deliberately or recklessly provides false or misleading information. We do not want to encourage dishonesty in this area. This is something that the joint select committee also recommended in recommendations 128 and 129. The opposition's amendment has also been designed to work in reverse—that is, if a payee's income rises unexpectedly, then they will be required to declare that increase and meet any increased child support liability.

We propose to put forward some amendments which will attack child support avoidance, which continues to be a problem. The joint select committee recommendation 142 is designed to help repair the child support income base by identifying parents who receive business or investment income and the extent to which those parents minimise their child support liabilities in that way. The joint select committee recommendations 143 and 144 propose that fringe benefits should be added to the existing child support income base for both parents and that we should require both parents to provide full details of all fringe benefits received from an employer.

Our amendments also provide for the establishment of an inquiry into certain aspects of the modelling of the scheme, including the impact on the relative disposable income of payee and payer parents of the value of fringe benefits provided by all levels of government to parents who are social security recipients. This is in accordance with the joint select committee recommendation 162. We also propose that that assessment be conducted by a body independent of the Department of Family and Community Services.

We will be putting forward an amendment concerning the issue of subsequent family repartnering following the joint select committee proposal 139 that a payer parent's subsequent family formula self-support component be increased so that the relativity between the single and married rate of pension is reflected in the basic and subsequent self-support component. I believe that this amendment would go some way towards addressing what is an increasing concern—that the children of subsequent relationships are being treated as less valuable than the children of the first relationship.

The amendments we propose to move cover matters that need obvious attention. There are some matters that may need further consideration, and it is possible we will be moving amendments in the Senate in respect of those matters. In particular, I am concerned that some custodial parents at the lower end of the income scale might receive less child support as a result of the bill and that this loss will be only partially picked up by an increase in their family allowance entitlement. We will therefore be moving amendments in the Senate to address this problem through the social security system.

What the government has failed to acknowledge is the effect of some of these changes upon the poorest sole parent families as well as upon the poorest non-custodial families. Labor will be moving to remedy this problem by moving further amendments in the Senate.

Child support, as we in the parliament all know, does arouse very strong passions, and it is seen as evidence that there is some sort of gender war taking place in our society. Members who spoke on this issue in a previous debate in this place were absolutely right when they indicated we should stop looking at this issue just through the prism of gender. Most importantly, I think we have to continue to look at it through the prism of need.

In over 90 per cent of cases of separation or divorce it is the woman who ends up with the children and becomes the payee parent, and therefore in over 90 per cent of cases it is the man who is the payer parent and liable to pay child support.

The joint select committee process confirms what many of us have known for some time: that the levels of disquiet, frustration and dismay on both sides are staggering. I might take this moment to quote a section from the committee's report:

The Joint Committee considered the wider social impact of the interaction of social security, child support, family law and taxation legislation on the behaviour of custodial and non custodial parents both within and outside the Scheme. In particular, the Joint Committee is concerned that the interaction of this broad range of legislation may be creating serious work disincentives for both custodial and non custodial parents, putting intolerable pressure on existing relationships and discouraging the formation of new relationships generally.

These are complex and emotive issues which must be tackled with the interests of both the custodial and non-custodial parents in mind but with the absolutely paramount imperative of ensuring that the children are adequately provided for. The government has yet to demonstrate its commitment to this goal. The Labor Party understands there is a way to go before the child support system will be widely accepted as delivering the best outcome for our nation's children while being at the same time as fair as possible to both parties.

I hope that in the future we are able to move forward to a situation where there is less hardship and misery all around. There is no question in my mind that the breakdown of a marriage, or of any relationship involving children, is a terrible thing: it leaves emotional scars on parents and on children. We try, as a parliament, to do justice to each and every one of these situations, but from my own experience as a member of parliament that sometimes that does not occur—and perhaps all too frequently that does not occur. But whether, as legislators, we can find an adequate remedy for each and every one of those cases I am not sure.

I hope that the government's bill represents a further step in the development of a fair and just social policy. As I indicated at the outset, we support it but we will move amendments both here and in the Senate which we hope will improve it further, and may move additional amendments to that end in the Senate particularly.