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Tuesday, 7 May 1985
Page: 1796

Mrs SULLIVAN(10.15) —When last we debated Appropriation Bill (No. 3) 1984-85 and Appropriation Bill (No. 4) 1984-85 I was in the course of making a speech on the subject of proposals to limit the payment of family allowances in Australia. These proposals have been made in speculation and in the context of the proceedings of the Expenditure Review Committee. At that time I outlined that there were five diverse proposals: Firstly, that the family allowance be taxed; secondly, that it be means tested; thirdly, that it be paid at a flat rate-that is, the same rate for every child in the family, regardless of the number of children; fourthly, that it be removed for dependent student children over the age of 16; and, fifthly, that the first child not qualify for the family allowance. At that time I made a statement that the family allowance, when introduced by the Fraser Government in 1976, was not intended as a social welfare payment. I also said that that was agreed to by members of the present Government. To justify that statement, I turn to the words of the present Minister for Community Services in the Hawke Government, the former Minister for Social Security, Senator Grimes. At the time he made his speech in the Senate in 1978, he was the shadow Minister for Social Security. He said:

It has never been suggested, since child endowment was introduced or since the family allowance scheme was introduced, that these payments should be considered a pension in any sense of the word and available only to those who pass a certain means test.

He went on in his speech:

I have pointed out, and others undoubtedly will point out, that this payment is not and never was a pension.

. . . .

. . . the introduction of family allowances was welcome and was not opposed by the Opposition.

That is, by the present Government. The present Government welcomed the introduction of the family allowance and, through those who had responsibility for speaking on it, pointed out that it was not a social security measure. I pointed that out in my speech in this place on 22 April this year, when I commenced criticism of the suggestion that the family allowance would be reduced, taxed or means tested by the Government as a way to cut expenditure.

Comments by the members of the Government in recent times have really concentrated on the issue of means testing the family allowance, as though it is something that should be paid only to lower income families. Something that is totally overlooked by members of the Government, whether acknowledged or anonymously, is that there is available for families a payment on the basis of need-that is, the family income supplement which was introduced by the Fraser Government. To those families on single incomes or low incomes who are shown to be in need, there is a welfare payment. The welfare payment is the family income supplement. The welfare payment is not the family allowance. The family allowance was and is a recognition of the value to this country of the parenting of children. In my last speech I referred to it as the mothering of children, because in most cases the mother has primary responsibility for the care of young children on a day to day basis. I do not see any conflict between those terms, and I will use them interchangeably. There are in fact some very serious welfare implications if one treats the family allowance as a welfare payment. If one moves to reduce it in any way, there are some quite profound welfare indications.

Again I refer to the speech of Senator Grimes in the Senate in 1978, when he referred to the proposal to limit the payment of the family allowance on the basis of other sources of family income. He said:

. . . this proposal would well force back into dependency single working parents who, without the family allowance, are better off receiving a pension. We in this community are supposed to encourage people to get away from dependency on the Government and people on both sides of the Parliament would agree with that view.

Any thoroughgoing assessment of those who receive the family allowance who are in need or close to being in need will show that attempts to limit the payment of the family allowance to mothers because of income available to other members of the family has, in fact, a very severe welfare implication. It could be the factor that puts families back into the welfare category versus earning income through a job plus receiving income through the family allowance.

One thing that deeply troubles me in any suggestion I have heard that family allowances should be taxed is whose income will be taxed. I have already mentioned in debate on this subject that it is possible in a large family for a woman who is receiving only the family allowance as income can by virtue solely of that family allowance receive an annual income sufficient to take her across the tax threshold. That is, in large families where a woman receives only the family allowance-and those are the families who are usually very strongly in need of the extra assistance that the family allowance gives-that alone can take her over the tax threshold if it is her only income. So taxation is a very dangerous course to follow in any event.

But even putting that group of women aside for the moment, we must realise that the basic implication in proposals to tax the family allowance or to means test it that I have seen and know of suggest that the family allowance income of the mother should be assessed or limited according to the income going to some other member of the family. The common statement made is that in a family where the father earns a high income the mother should not receive the family allowance. I am aware that many women react with some hostility to this proposal for a number of reasons. One of them is that they feel the family allowance is a recognition to them of the economic contribution that they make to their family and to society. In this context it should be borne in mind that the major family allowance increase in 1976 was brought about through the abolition of the dependants' rebate, so it was a transfer of income essentially from husband to wife. Something that previously went to the father through a tax rebate was redirected to the woman in the form of a payment of a family allowance. I urge the House to consider seriously that the income of one member of the family does not necessarily measure the economic well-being of all other members of the family. To put it very bluntly, there is no guarantee that the wife of a Toorak millionaire sees one cent of her husband's income as disposable income for herself. Indeed, there are cases that I know of where that is so, not necessarily in Toorak. It is very dangerous indeed to assess a payment of this sort according to someone else's income. There is only one such government payment that comes into this category at present and that is tertiary education assistance scheme allowances, where we accept to some degree that allowances paid to students in tertiary education can be modified according to the income of their parents. But that is the only such allowance paid from the public purse which is modified according to the income of someone other than the recipient.

The whole issue of whether the husband's income should be taken into account opens a Pandora's box for all manner of government payments. It re-opens the issue on which Senator Grimes was speaking in 1978-the speech from which I have quoted already-the so called 'newsboy tax' which was roundly criticised by the present Government when it was in opposition.

Mr Goodluck —They will criticise anything.

Mrs SULLIVAN —I criticised it too, and I also criticised some then Government members. I refer again to the statements of members of the then Opposition whose spokesman on this subject mentioned the principle of reducing the mother's income according to the income in this case of the child, another family member. He said:

In some families, particularly those on benefits or on minimum wages, the children earn their own pocket money . . . by doing various jobs in the community. It is frequently the only way they can raise money for further study, for musical instruments, for field trips at school, for extra clothes, and for the extra things other children have . . .

Payment of the family allowances is made to the mother. To deprive a family of the allowance on the basis of what the children earn in an effort to assist that family's income is quite wrong and may well put it back into a situation of dependency on the Government which it does not want and in which it need not be.

The proposal will also affect some women in the community who sometimes find that the only income or personal money that they receive is the family allowance payment.

Senator Grimes at least concurred at that time with the sentiment I expressed a few minutes ago. He went on:

If these women or poor families are to be deprived of these payments in part or whole by this proposal, it is an unjust measure.

The Government should bear those words in mind because there is a lot of sound common sense in the words that Senator Grimes uttered on that issue in 1978.

As far as means testing is concerned, the same principles apply as for tax; in fact, taxing the family allowance would be a crude form of means test. Added to that, there would be additional expenses because there are administrative complications in any proposal to tax or means test the family allowance. One of the beauties of the family allowance is that it is comparatively an extremely simple program to administer and implement. It does not require the payment of large sums of money to the bureaucracy. In his speech in 1978 Senator Grimes said-on the basis of an estimate that the then Minister, Senator Dame Margaret Guilfoyle, had given-that it had been estimated that 400 additional staff would have been necessary in the Department in order to implement the 'newsboy tax' proposal. He went on to say:

Some two million people in this community will have to be contacted on behalf of some 4 1/4 million children and they will have to answer questionnaires on how much those children earn from all sorts of sources.

Those are the facts that were available to the Opposition in 1978 and which are available to the Government now in 1985. Those are the facts that must be taken into account. If the Government continues with this proposal it will rightly be branded as a government which considers child rearing work non-essential and valueless in economic terms. This is reinforced by the attitude expressed by the Minister for Education (Senator Ryan) in a paper presented to the Centre Left faction at a tax reform seminar in Canberra in which she opposed child care as a tax deduction. The availability of child care expenses as a tax deduction follows in a straight line in logic from the payment of family allowances. Far from moving to make things more difficult for families and particularly more difficult for mothers by limiting the payment of family allowances, I urge the Government to consider alternative means such as child care as a tax deduction in its future economic considerations.