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Tuesday, 16 September 2003
Page: 20200

Mr FARMER (7:32 PM) —I rise to speak on the Family Assistance Legislation Amendment (Extension of Time Limits) Bill 2003. The family tax benefit system is the centrepiece of this government's commitment to families in Australia. The system provides financial assistance to around two million Australian families, and this money is used to help around 3.5 million children. Those families receive around $2 billion a year in family tax benefits, an average of $5,700 a year tax free. Import-antly, those most in need—those on low incomes—are well supported. In fact, 260,000 families currently receive the equivalent of more than $10,000 a year tax free in fortnightly family payments. While we do not make rules about what this money is spent on, it is often used to provide the essentials that our children need. It is spent on things like books, school uniforms and even sports fees and shoes.

In my own electorate, the family tax benefit helps thousands of families. The last census showed that over 18,500 families were dependent on the family tax benefit system. Depending on their family income, these families could be eligible for the family tax benefit. I talk to many parents in my electorate about the family tax benefit, and it is something that is being very well received. This government is listening to families and taking on board their suggestions. This government has a strong record of listening and, more importantly, responding to the concerns of the Australian community. That is why it introduced some changes to the family tax benefit system earlier this year. These were changes that gave families the flexibility to take the family tax benefit as a combination of fortnightly payments in a lump sum to reduce the chance of overpayment.

We also addressed the issue of change in family income. Before these changes to the act, families who changed their income estimates only had payment changes to reflect their new income from that day on. This usually meant an overpayment was dealt with at the end of the year and as part of a reconciliation. Under the new measures families have the additional option of asking to be paid for the remainder of the year at a rate that will significantly reduce or wipe out any potential overpayment. This type of flexibility has been well received in my electorate and will give many families the certainty of knowing they will not have an FTB debt at the end of the financial year.

Today we are debating further legislation that will finetune the FTB system. The family assistance legislation amendment bill will give families a further 12 months to claim any top-up to FTB that they are owed. This means that families will be given an extra 12 months in which to receive a top-up to their family payments or to claim a lump sum payment of their family tax benefit. The 12-month extension of time will apply to families who are seeking top-ups or payments for the year 2001-02 onwards. It does not change the legal requirement for families to lodge a return within 12 months; it simply means that, even if they do not lodge a return within that 12 months, they will be eligible for a top-up if they lodge it in the next 12 months after that.

You may ask: why should the government do this? The government are doing this because, I am pleased to say, we have been listening. This government listen to the people of Australia. We listen to the people who say that it is not always possible to lodge a tax return within 12 months of the end of the financial year. We listen to families who live in regional areas and find their tax accountant is so busy that they cannot see them in time. We listen to families who have lost everything in fires, floods or other natural disasters and cannot lodge a return within 12 months. We listen to owners of small businesses who are having difficulties finalising their annual income in time to lodge a tax return within that 12 months. We listen and we respond.

Here, we have responded by increasing to two years the time allowed for families to claim a top-up. This amendment makes the system more flexible and more practical for families. This change will mean a top-up will be available for an extra 35,000 Australian families. Most importantly, it is something that families could not access at all when the Labor Party was in power. That is because the top-up simply did not exist under the old system. If you overestimated your income and were owed money, quite simply it was just tough luck. You missed out on money if you estimated your income on the high side.

This created a system where families were forced to underestimate their incomes and take a higher rate of payment each fortnight. They were forced to take too much each week so that they did not miss out. The overpayment was then ripped back off them when they lodged their tax return. The problem was that often they did not have the money to pay it back; it was already spent during the year on essentials for their children. I do not blame them, to be quite honest with you—that is just human nature. You learn to live on what you have. You use money that is put into your account each fortnight to provide for your children. That is simply human nature.

The only way for families to make sure that they got what they were entitled to was to be overpaid then give back the difference at tax time. That is why this government introduced top-ups. It is like a system of forced savings. It is a system that benefited 680,000 families in the 2001-02 financial year. This was not available under the old system.

I have spoken with many mums and dads in my office who receive family tax benefits, and they think ours is a great system. It has been really well received by families that rely on shiftwork and overtime, which can change a family's income by hundreds of dollars from week to week.

The DEPUTY SPEAKER (Mr Barresi)—Order! The member for Riverina should acquaint herself with the standing orders in relation to walking between the speaker and the chair.

Mr FARMER —Rather than getting their income estimate wrong because of overtime and getting paid too much family tax benefit, the top-up system lets families take a fortnightly payment but still get access to any money that they are owed at the end of the financial year. It means that they can spend the family tax benefit that gets put into the bank each fortnight by the government without worrying that they will have to pay it back at a later date. It gives them a fortnightly payment then a lump sum at the end of the financial year that can be spent on their children. This amendment today makes it possible for those families to have an extra 12 months to claim a lump sum owed from the financial year 2001-02. It is a sensible and practical amendment, and it is an amendment that I welcome on behalf of the people of Macarthur.