Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 1 April 1987
Page: 1891

Mr MILTON(4.32) —Before I talk about the main points I want to raise in this debate, I must deal with several points raised by the honourable member for Dawson (Mr Braithwaite). First of all, on the question of our overseas debt, I point out that two-thirds of that debt is caused by private sources, not by the Government. It is totally incorrect to blame, as the honourable member did, the Federal Government for the various enterprises which private industry is engaged in, thereby increasing our overseas debt. I should point out that takeover bids do not create any income at all. All they do is cause the cost of goods produced by the workers in future to go up, and eventually Australians as a whole have to pay. The honourable member also made some reference to Argentina. Argentina is a country that economically, culturally and politically is completely different from Australia, and it is quite ridiculous to make comparisons with it.

I speak in support of Appropriation Bill (No. 3), Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2). I want to concentrate on the social costs of life on a low income. I think it is important to bring this information before the House and before the Government. I refer to the plight of families who do not have enough money to make ends meet at a time when the Government is considering cost cutting measures to be included in the May statement, which I suppose in some respects we can call a mini-Budget. A number of articles and reports have been published on the income and expenditure of low income families. I found the report entitled `When the Pressure is Really On' by Jenny Trethewey of the Brotherhood of St Laurence-I have a copy with me now-to be particularly interesting. The report was published in August 1986, so its findings are completely up to date. It is based on a study undertaken because of the call by the Prime Minister (Mr Hawke) to all Australians to accept a lower standard of living as a result of the 8 per cent decline in our national income, arising mainly from lower prices for our minerals and agricultural product exports.

The report is only interim, but it shows that, based on the 50 families included in the research study, people on low incomes just cannot reduce their standard of living any further. The report underlines six basic facts, in which it is supported by the many other publications I have read on the problems of low income families. First, people living on social security benefits are now on incomes which barely cover their basic living costs. They are forced to cut back on basic necessities such as food, clothing and footwear; fuel and power; and medical treatment. Running a private car or holiday activities are out of the question. Secondly, one-fifth of Australian children are living in families reliant on social security or in receipt of low wages. Many of the 116 children involved in the study did not have enough to eat or to wear, did not receive essential medical treatment and were not able fully to participate in school activities.

Thirdly, families on low incomes spend the highest proportion of their income on basic living costs. They cannot, for example, afford to bear the burden of a deferment of their expected indexed increases. They just do not have the flexibility in their budgets to forgo cost of living adjustments, as their incomes are totally committed to providing the basic needs of life. Fourthly, the incomes of many pensioner households will drop in the coming year, even without welfare cuts. This is because, although the base rate pension is indexed, other income receipts such as grants and allowances are not indexed. Fifthly, the high cost of private rental housing is a matter of great concern in the report.

Finally, there is the problem of the poverty trap, which I have mentioned before in debates in this House. The report details cases of social security recipients who obtain work finding that their social security benefits are cut so that their work turns out to have a net worth of only $5 to $6 a day. Inevitably, they give up the unequal struggle and fall back on total social security support.

The report gives details of the 50 families involved, but I want to inform honourable members of the case of one of my former constituents who, because of the electoral redistribution, is no longer in my seat of La Trobe but is in the seat of my friend and colleague the honourable member for Streeton (Mr Lamb). Mrs Olive Richards has kept detailed records of all items of expenditure on herself and her 17-year-old daughter since 1976. I want to make it clear that this is not a condemnation of the present Federal Australian Labor Party Government; it is a condemnation, if you like, of all governments which have been unable to address the problems of low income people. I will explain later how our Government has attempted to do that, but that more has to be done.

Mrs Richards receives an English widow's and child's pension as well as the Australian pension but, as the records show, she is left with very little discretionary income. The main point made by Mrs Richards is that pension increases over the years have had little impact on her spending power and the living standards of herself and her daughter. Mrs Richards sent her records early last year to the Institute of Family Studies, which forwarded them on to Dr Bettina Cass as a case to be included in the social security review. The Director of the Institute, Dr Edgar, had little hope that politicians would take note of the plight of Mrs Richards but at least, by noting some of Mrs Richards's comments and details in this debate, I can back up the conclusions of the Brotherhood of St Laurence report and draw the attention of the Government to the desperate situation of people like her.

Her figures show that in the year ending 31 December 1985 her total income was $5,606.31. Her house bills generally were $1,231.81. Thus, she and her daughter were left with $4,374.50 for food, clothing and other ancillary expenses such as medical and school costs. This amounts to $42.06 each per week for herself and her teenage daughter. In 1984 the net amount was $38.38; in 1983 it was $31.56 and it fell proportionately each year to $21 each in 1976. A similar pattern emerged in 1986. Mrs Richards has one dubious luxury-she smokes. Whilst I do not have time to cover all the matters raised by Mrs Richards, I will include the following quote from her submission:

Since January of 1982 things quickly worsened, at the end of March (for the second time) I could not meet my house mortgage repayments $188.46 insurance included due 31st March. Principal balance after payment $271.79! I had to go and see Workers Compensation Board to pay off the house using my previous bit of life saving money. They paid $337.00 but all told with the State Savings Bank insurance, their solicitor etc it cost $500.38. A bitter blow to me. Because of my mental depression and stressful position (not known at the time) I rang and asked ``Why haven't I received the second half of the school allowance of $104.00''. This was in Dec-Dec 2nd. After a short while I was told I had not received the first half or even filled the form in. I could not believe it, but to cut the story short, I never got any money from them for 1983.

Mrs Richards then explains that after visiting her doctor she found that she was suffering from stress and severe depression. That is not surprising, is it? The treatment for her depression took about six months to take effect. To use her own words:

I have not had depression since. It is a most horrible thing to have and I never want it again.

Mrs Richards went on to explain that in 1986 she received the secondary school allowance of $1,825 in three payments of $608.33 to help keep her daughter at school. The first payment was used to rebed and repoint the roof of her house, replace her worn out gas heater, replace garden fencing and provide front and back security doors and window deadlocks as her neighbourhood is liable to burglary. I have not quoted all the comments made by Olive Richards because some of them are very bitter. However, I think I have included sufficient details of her submission to show how desperate are the circumstances of people like herself and her daughter and the 50 families studied in the Brotherhood of St Laurence report.

Only recently the National Institute of Economic and Industry Research Pty Ltd reported that the proportion of households living in poverty has risen from 11.5 per cent in 1981-82 to 12.4 per cent in 1985-86. The conclusions of the Brotherhood of St Laurence report are important because in conversations that I have had with Olive Richards the conclusions tie in correctly with her circumstances. The report states that there is a loss of self-esteem involved in seeking emergency relief and that there is an inability to attend leisure activities. Many of the families lead restrictive homebound lives and the lack of suitable clothing leads to children being ostracised at school and adults refusing social invitations.

Leisure activities and social involvement are important ingredients in the upbringing of children. The restrictions suffered by children of low income families cause social problems in later life. Few of the families in the study could afford to allow their children to attend school excursions or camps. The children often suffered depression as a result. All the families suffered stress which caused the marriages to be at breaking point, particularly those families with preschool children or adolescents. The findings of the Brotherhood of St Laurence interim study is worth quoting because they are so important:

Fundamentally, the families in the study did not have enough money to meet their needs. From this the following findings flowed:

That families were often forced to cut back or go without basic necessities in order to afford the living costs to which they gave priority-rent and energy bills.

Seasonal events which increased household costs, such as Christmas or school holidays, placed great strains on the families' budgets.

The families' income level did not allow for regular saving. This left them with no capacity to cope with unexpected or large costs.

The budgeting skills of the families did not compensate for an inadequate income. To manage, the families had to rely on assistance from relatives and emergency relief agencies, or enter into debt.

The negative costs to children's development and family relationships of living on a low income.

The Federal ALP Government is, of course, aware of the needs of low income families. I know that various initiatives have been taken by the Government such as increases in the mother's-guardian's allowance, increases in additional pensions for children, increases in rent assistance, indexation of income limits for fringe benefits eligibility and the introduction of a carer's pension. These initiatives and others are all contained in an answer provided by the Minister for Social Security (Mr Howe) on 26 March 1987 to a question on notice. The problem is that whilst these initiatives have helped specific groups in need, there is an overall lack of support as a result of the operation of poverty traps. I know that the Minister for Social Security is aware of the problems and has said, for example, that a different approach to unemployment assistance is necessary. The Government is developing a whole range of policies as part of the review of employment and welfare policies.

My main reason for speaking in this debate is to underline the problems of low income families. I believe that it is vital that the May statement does nothing to worsen the plight of low income families and that the August budget should substantially increase the financial assistance for those families. In conclusion, it is important to point out that there is no doubt that low income families would not get any support from the Liberal Party. Its leaked policy documents make it clear that it plans to scrap the indexation of pensions and benefits, cut unemployment and supporting parents benefit and cut the Medicare rebate. These are just some of the Opposition's policies which will cut the incomes of social security beneficiaries in order to restore benefits, such as fringe benefits, for the wealthy and business people.