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Monday, 20 September 1999
Page: 8390

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Senator IAN CAMPBELL (3:59 PM) —I table a revised explanatory memorandum relating to the social security package of bills and an additional explanatory memorandum relating to the A New Tax System (Pay As You Go) Bill 1999. I» «move» :

That these bills «be» «now» «read» «a» «second» «time .

I seek leave to have the second reading speeches incorporated in Hansard .

Leave granted.

The speeches read as follows


The initiatives foreshadowed for the Veterans' Affairs portfolio in this year's budget build on our commitment to provide generous compensation and assistance recognising the special standing of the veteran community.

The Veterans' Affairs portfolio is responsible for providing income support and health care to one in four Australians over the age of 75 years. This Government has given priority to programmes designed to help ageing veterans live independently in their own homes, if this is their wish. This year the Government has also focused the National Healthy Ageing Strategy on the International Year of Older Persons.

The Department of Veterans' Affairs' main initiative during the International Year of Older Persons is HomeFront—an initiative designed to reduce falls and accidents in and around veterans' homes.

This initiative provides eligible veterans and war widows a free home assessment and up to $150 in financial assistance towards recommended aids and minor home modifications per year.

HomeFront also provides a range of information and helps link veterans and war widows to other support programs and services for which they may be eligible.

HomeFront is currently available to all Gold Health Care Card holders. This bill will allow HomeFront to be available to all White Health Care Card holders as well—bringing the total eligible to approximately 340,000 members of the veteran community.

Complementing this extension, the bill will allow the Government to introduce the Home Support Loan Scheme, which was foreshadowed in the Budget. It will provide low interest loans of up to $10,000 for home modifications and essential maintenance.

Loans under the Scheme will be available to certain persons eligible under the Defence Service Homes Act who have an outstanding loan of less than $10 000. Eligibility for the Loan Scheme will be extended beyond those eligible for a Defence Service Home advance. This new Loan will be available to Australian veterans, members of the Defence Force, and members of a Peacekeeping Force covered by the Veterans' Entitlements Act, and to their widows or widowers.

The student children of older veterans who receive an extreme disablement adjustment will also benefit under this bill.

Currently only children of deceased, extreme disablement adjustment veterans, are entitled to assistance under the Veterans' Children Education Scheme. This bill will ensure that the children of living extreme disablement adjustment veterans become eligible for such assistance as well, providing these student children with full access to all of the benefits available under the Scheme—including financial assistance, educational guidance and counselling.

Further, this bill provides a mechanism for setting out the specific circumstances and criteria for determining whether a person is permanently incapacitated for work, for the purposes of an invalidity service pension and income support supplement on grounds of invalidity.

Currently the criterion for permanent incapacity for work purposes, does not specify the assessment methodology to be used in determining the degree of incapacity.

The current test lacks reference to objective criteria and is susceptible to subjectivity in its application.

From 1 January 2000, there will be three measures of permanent incapacity for service pension purposes:

. Blindness;

. The receipt of the special rate disability pension, for total and permanent incapacity; and

. An objective assessment of the person's impairment, combined with the person's capacity to work.

The impairment assessment will be made by reference to the Guide to the Assessment of Rates of Veterans' Pensions, so bringing consistency with an existing test that is widely known and accepted within the veteran community.

I assure the House that veterans found not to be permanently incapacitated as measured by these new criteria, will continue to have access to Australia's extensive income support safety net, including disability support pension, sickness allowance and Newstart allowance.

A further provision of this bill will allow the Minister for Veterans' Affairs to declare, by gazettal, the deployment of non-Australian Defence Force personnel as a Peacekeeping Force for the purposes of the Veterans' Entitlements Act 1986.

I commend the bill to the Senate.


Since forming Government in 1996, this Government has sought to implement its commitment to a simpler and more coherent social security system that more effectively meets its objectives of adequacy, equity, incentives for self-provision, customer service and administrative and financial sustainability.

That commitment can be met in part by seeking to ensure that social security legislation is routinely reviewed to improve its readability and to ensure that it is easier to amend so as not to impede the implementation of new policies.

The aims of enhanced readability and adaptability to implement change are not new to social security legislation. Indeed, the Government recognises the efforts of the former Government in rewriting the social security law in 1991, culminating in the Social Security Act 1991.

But just as the 1991 exercise recognised the need to make social security legislation more comprehendible and adaptable, subsequent experience with the Social Security Act indicates that these aims could be better achieved by consolidating the technical rules provisions of that act.

A technical rules simplification project has been conducted in my Department, in conjunction with Centrelink, with the aim of simplifying the technical rules provisions.

The objectives of the project have been to implement simpler policies for the Social Security Act through legislation that:

. is consistent across payment types;

. facilitates movements between payment types;

. is easy to administer;

. reflects current and desired best practice in administration and customer service;

. is easy to amend;

. facilitates the introduction of emerging technologies;

. is in clear English and has a logical structure and flow; and

. is as short as possible because it avoids unnecessary repetition.

This bill is the result of that project, simplifying the technical rules by standardising them and locating them and other administrative provisions separately from the other provisions of the Social Security Act.

The bill deals with technical rules relating to:

. claims;

. start days (this concept replaces the somewhat misleading concept of "provisional commencement day");

. payment into bank accounts;

. payment by instalments;

. protection of social security payments;

. information gathering;

. comparable foreign payments;

. provision of tax file numbers;

. rate increase, reduction, cancellation or suspension determinations;

. changes to payments by computers;

. date of effect determinations;

. review of decisions;

. offences; and

. use of emerging technologies.

The bill covers social security payments and concession cards. However, the bill does not contain any provisions relating to qualification, payability, rates, overpayments, debt recovery, portability or international social security agreements.

Like the 1991 exercise, this bill does not involve any major policy initiatives and it does not have any significant financial impact.

The policy initiatives implemented by the bill relate to:

. streamlining the claims process and providing enhanced flexibility in how claims may be made;

. making it easier for a person to be transferred between income support payments;

. making it easier for a person to be placed onto the correct payment where the person has applied for the incorrect social security payment;

. introducing generic provisions applicable to all payment types wherever possible—for example, commencement provisions being events based rather than being payment type based (and so varying from payment type to payment type); and

. reducing the number of instalment rounding provisions.

The bill also gives effect to some recommendations of the Guilfoyle Report, including:

. giving the Social Security Appeals Tribunal the ability to consider matters without having to convene an oral hearing if it considers that a review may be conducted adequately without an oral hearing; and

. establishing a 12 month time limit in which a customer may lodge an application to a Centrelink authorised review officer to appeal a reviewable decision (although there will be scope to extend the time limit in special circumstances).

A significant outcome of the bill will that there will be much less social security legislation—about 500 pages less—and it will be more consistent. This should be of benefit to Centrelink in administering the social security law.

This bill is not, nor is intended to be, an all singing, all dancing exercise. Just as the Government's commitment to a simpler and more coherent social security system is ongoing, so is the need to constantly review the legislative basis underlying that social security system. The Government trusts that this bill will receive the same bipartisan support afforded to the 1991 rewrite of the social security legislation.

I commend the bill to the Senate.


This bill accompanies the Social Security (Administration) Bill 1999 and the Social Security (Administration and International Agreements) (Consequential Amendments) Bill 1999.

The bill:

. provides for the consolidation of existing social security international agreements into a separate act;

. provides for new social security international agreements to be added to the Social Security (International Agreements) Act (once enacted) by way of regulation; and

. provides for existing social security international agreements to be varied by way of regulation.

I commend the bill to the Senate.


This bill accompanies the Social Security (Administration) Bill 1999 and the Social Security (International Agreements) Bill 1999. Together, they form part of the measures being undertaken by the Government to give effect to the Government's commitment to implement a simpler and more coherent social security system that more effectively meets it objectives of adequacy, equity, incentives for self provision, customer service and administrative and financial sustainability.

The bill:

. amends and repeals provisions of the Social Security Act 1991 consequential upon the enactment of the Social Security (Administration) Act 1999 and the Social Security (International Agreements) Act 1999;

. provides for the repeal of Part 9 of the Social Security (Administration) Act 1999 (when enacted) as a consequence of the commencement of provision of that act which contains a single rounding provision that applies to all social security payments; and

. amends the A New Tax System (Family Assistance) (Administration) Act 1999 to insert a new section that provides for a time limit for applications for review of decisions by the Social Security Appeals Tribunal, consistent with the approach taken in the Social Security (Administration) Bill 1999.

I commend the bill to the Senate.


This bill will replace the outdated income tax collection systems with one comprehensive modern collection system called pay as you go, or PAYG.

The bill, together with another I will introduce in Spring, will also implement a number of administrative reforms announced by the government before the last election. One important reform is the introduction of a single activity statement reducing the number of interactions businesses have with the Australian Taxation Office. For many this will mean only four statements and payments each year.

The new PAYG will replace provisional tax, company instalments, pay as you earn, prescribed payments and reportable payments. It also draws together into one system all of the other withholding arrangements, like non-resident withholding, tax file number (TFN) withholding and withholding from mining and natural resource payments.

Under PAYG, payment dates will be aligned. Businesses in GST will pay their income tax instalments at the same time, quarterly, after their income is earned.

Currently most taxpayers pay a percentage of last year's tax and individuals also pay an uplift factor. PAYG instalments will be based on actual income. This will mean that the payments will fluctuate with trading conditions. Taxpayers will pay less when they earn less and more when their income increases. Taxpayers will be able to vary the amount of their instalments, for example, in the event of an unforeseen downturn in trading conditions. In certain circumstances this could lead to a refund.

Individuals not in the GST system will be in the PAYG system for investment income. Where they are large payers, they will pay quarterly. There will be an option to pay quarterly notional amounts if they prefer not to make quarterly instalment calculations.

PAYG takes advantage of the opportunities provided by the GST and the single activity statement. Businesses in GST will calculate their quarterly income tax instalment based on the GST sales they report.

The new integrated PAYG withholding system will reduce compliance costs by removing uncertainty and reducing the amount of paperwork and the number of payment dates. In line with the government's earlier announcement, withholding will be required from payments to employees and other office holders, payments to workers by labour hire firms, payments under voluntary agreements and payments where the payee's Australian business number, or ABN, is not quoted. The new withholding arrangements do not try to make contractors employees. PAYG does not fall back on generic descriptions and deeming provisions. It describes the payments that are subject to withholding.

The new arrangements will provide more flexibility. It will be possible to add additional categories of withholding if it is desirable to do so. This will ensure that the withholding rules are able to evolve and stay relevant over time. Withholding rules should not be an obstacle to more efficient ways of doing business.

It will also be possible for businesses and their contractors to choose to enter into a voluntary agreement. Under these agreements, the business will withhold and, in most cases, the contractor will not have to charge GST. Finally, the new `no-ABN' withholding will impact on the cash economy by making it harder for unscrupulous operators to evade their fair share of tax.

Full details of the measures in the bill are contained in the explanatory memorandum.

I commend the bill.

Debate (on motion by Senator O'Brien) adjourned.

Ordered that the Veterans' Affairs Legislation Amendment Bill (No. 1) 1999 and the A New Tax System (Pay As You Go) Bill 1999 be listed on the Notice Paper as separate orders of the day.