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Tuesday, 26 May 1987
Page: 3346

Mr PORTER(8.31) —The Social Security and Veterans' Entitlements Amendment Bill implements decisions announced in the mini-Budget. That mini-Budget came about as a result of this Government's gross economic mismanagement. The mini-Budget is evidence that the chickens are starting to come home to roost. The Government has implemented a massive spending program. As a result of its economically incompetent management, inflation has increased greatly; interest rates, the deficit and taxes are up, and there has been a general economic slow-down. The international community has passed its judgment on this Government's economic management. It has downgraded our credit rating from AAA to AA. When this Government came to office, the dollar was worth $US1 or thereabouts. It is now worth 70-odd cents. Now, after all that we have said to the Government-that it cannot undertake this massive spending program without its having an inflationary impact, without its increasing taxes and the deficit-at long last the message has got through. The Government has now said that it realises it was wrong and after years of extravagance it introduced a mini-Budget to cut spending.

What does the Government target to cut? It targets families with children, the young unemployed, the sick, invalids, sole parents, widows and other welfare beneficiaries. The Government says that they are the ones who should suffer because of its previous incompetent economic management. Did the Government cut funds from the Commission for the Future, the Human Rights and Equal Opportunity Commission and the Constitutional Commission? No. The Government is much more interested in taking money away from families with children, the young unemployed, invalids, widows and sole parents. This Government has been cutting incomes of families and widows instead of the Commission for the Future. Where is the social justice in that? The Australian Labor Party pretends to stand for social justice. It pretends to stand for social justice and equity. It is quite clear from the mini-Budget brought down a week or so ago that there is no social justice emanating from this Government. It has cut benefits to those in most need. The result of the Government's policies is a very inequitable situation where the poorest members of our society, those least able to look after themselves, now have the worst health service they have ever had. One hundred thousand people are queuing for public hospital beds. More than 160,000 people are waiting in queues for public housing. Those people, more than ever before, are seeking public housing accommodation as a result of this Government's policies.

The Bill introduces, for the first time, a means test on the family allowance. The Government said that, initially, the means test will apply only to families with incomes over $50,000. What is in store? What does the future hold for the family allowance? Real Commonwealth Government cuts in the recent mini-Budget were around $1 billion. The Government talks about a $4 billion saving, but many of the cuts will occur in other areas, such as cutting funds to the States, selling assets and delaying next year's expenditure to the following year. The real cut in Commonwealth spending is about $1 billion. It is quite clear that more cuts are needed. The Government has started by means testing the family allowance for families earning over $50,000. Inevitably, in the Budget-if the Government is still in office at the time of the Budget-it will have to make further cuts. There is no doubt that the means testing of the family allowance is the thin end of the wedge. When the Government needs more money, and indeed it will if it maintains its stupid spending programs on things such as the Commission for the Future, it will have to find it. It is odds on that the family allowance will be in for more cuts. The measure clearly indicates this Government's social objectives.

From 1 July the Government is to bring in tax cuts. After the massive increases in taxes, the Government says that it had better give a bit back, so from 1 July it will introduce some tax cuts. It is interesting to consider the impact of those tax cuts on families when the cut in the family allowance is also taken into account. After the tax cuts on 1 July, a married couple without children earning $28,000 each will receive a tax cut of $10 a week. A two-income family on the same income, $28,000 each, with two children will receive the same tax cut-that is, $10 a week. However, that couple will lose $13 a week as a result of the means testing of the family allowance. In other words, after the tax cuts on 1 July and as a result of the recent mini-Budget, families with children will be $3 a week worse off, whereas married couples without children will be $10 a week better off.

I ask Government members: Where is the social justice in that? Why has the Government decided to discriminate against families with children? Why are they having to carry the burden for the Government's economic mismanagement? I remind the House that the family allowance is not a welfare payment. It was introduced by the Fraser Government in recognition of the cost of raising children. It is paid to the caring spouse-more often than not the mother. The fault with the Labor Government's policies-its tax, economic and welfare policies-is that they look at total income; they fail to take account of capacity to pay. This first go at means testing the family allowance-it is the thin end of the wedge-is a classic example of that. As a result, two-income couples without children will be better off, whereas two-income parents with children will be worse off. The Government has failed to recognise that bringing up children costs money. It just does not care about families with children.

I remind the House that the Institute of Family Studies has clearly identified the cost of raising children and the fact that married couples with children need to earn more income to be in the same position as individuals without children. For example, a married couple with one income and two children need to earn $42,900 a year to have a disposable income similar to that of a single person on average weekly earnings of $24,000 a year. A married couple needs substantially more income to take account of the cost of raising children, yet the move in this Bill is the thin edge of the wedge; that is, taxing or removing a benefit which is paid to families with children. The Labor Party has taken no account of the fact that families with children have greater costs to bear. It is interested only in total income; all of its tax policies have been aimed at total income. It is disadvantaging families with children and relatively advantaging families or married couples without children. I ask again: Where is the social justice in that? As a result of four years of Labor there has been an unremitting attack on families. Taxes have gone up; the benefits paid to families have gone down; the costs for families have gone up; the costs of food and clothing, as a result of inflation, have all risen; and interest rates have gone up.

Just let us look briefly at the evidence of the difficulties confronting families trying to make ends meet as a result of four years of Labor Government. In the area of housing the average mortgage repayment for the Australian family has increased by $150 a month. This increase in mortgage repayments has absorbed half the pre-tax increase in the average weekly earnings over the same period. Average weekly rents for those who have been forced out of their homes or for those not able to purchase their own homes have also skyrocketed. Average weekly rents in Melbourne have gone up $42; in Perth, $55; in Canberra, $59; and in Sydney they are up $75 a week as a result of Labor Government policies. These increases are a direct result of those policies. Spiralling interest rates, the introduction of the capital gains tax and the removal of negative gearing have all pushed up rental rates. They have also pushed up housing repayment rates. This Government says: `In this mini-Budget we want everyone to share the burden'. But what does it do? Where does it apply the tax? To families with children. It is no wonder that, as a result of this Government's economic policies, there are more people now waiting for public housing than there have ever been in this country. There are 160,000 families on the public housing waiting list. That is the record of the Labor Government. It has put 160,000 people on the public housing waiting list.

As I have said, other necessities of family life have also been the victims of Australia's spiralling inflation rates. Under the Hawke Government the cost of food has gone up 29 per cent; the cost of clothing has gone up 28 per cent; and the cost of transportation has gone up 30 per cent.

Mr Cohen —It is better food.

Mr John Brown —It is better food though. It is better clothing.

Mr PORTER —Those are typical interjections from the Minister for Sport, Recreation and Tourism (Mr John Brown) and the Minister for Arts, Heritage and Environment (Mr Cohen), who are at the table. They interjected: `Better food'. A lot of Australian families cannot even afford to buy the food, clothing and housing that they need. The Government has put more people under the poverty line than any government since Federation. The Australian people ought to understand the fickle nature of this Government. It is just not interested in the Australian family. `Better food', the Ministers say. People cannot make ends meet and the Ministers are talking about better food. It is all right for the Minister for Sport, Recreation and Tourism and his wife on their big incomes and a champagne and caviare diet. There are a lot of people out there who can hardly afford to live, let alone buy champagne and caviare like he does.

At the same time as the family has been under pressure from the inflationary forces of this Government's economic policies, the Government's tax policies have continued to lock the family into more and more tax increases to try to fund its bureaucratic big spending programs. The tax for a person on average weekly earnings just highlights the impact of this Government on the family. In 1983 a family on average weekly earnings had a marginal tax rate of 30 per cent. In July this year their marginal tax rate will be 40 per cent. Their marginal tax rate has increased from 30 per cent to 40 per cent. The average tax rate for a family on average weekly earnings has increased over the period of this Government from 17.5 per cent to 20.5 per cent-and that is after the supposed tax cuts. In other words, the average tax rate a family is paying now has risen from 17 1/2 per cent to 20 1/2 per cent. Extraordinary! The tax, net of the rebate-for example, the spouse rebate and allowance for a family-in March 1983 was 14.1 per cent of average weekly earnings. It is now 18 per cent. These tax rates have obviously had an effect on a family's disposable income. A family's disposable income on average weekly earnings in March 1983 was $412.60. In December 1986 their disposable income was $381.30. In other words, Australian families are now $31.30 a week worse off as a result of this Labor Government's policies.

At the same time as Labor's tax policies have substantially cut the incomes of Australian families, the Government's traditional assistance programs for families have also been plundered. Under the Hawke Government, family allowances have not been indexed. As a result, families have lost $513m. The spouse rebates have not been indexed and families have lost $394m. The Government has abolished the concessional expenditure rebates and families have lost $170m, and the Government has now applied restrictions on the family allowance, costing families $79m. In other words, over $1.1 billion has been taken from family support by this greedy Government. The result of this Government's disregard for the financial situation of families with children is that it is now generally recognised that the most consistent indicator of poverty in Australia is the presence of children. Twenty per cent of all Australian dependent children live in families receiving means tested payments. Families with children are being forced towards the bottom of the economic ladder under the Hawke Government. For a nation founded on traditions of the family and family values, this reality is a travesty.

There are no statistical aberrations in the figures that I have been citing, no seasonal adjustments to be made, no externally imposed terms of trade to blame-not even any macroeconomic explanations are necessary. The plain facts are that as a result of four years of the Hawke Government families with children have been seriously discriminated against and are now in a relatively worse off position than for at least 11 years. This has not come about through some drastic or sudden change in the tax law or some massive reduction in a particular benefit program; it has resulted from the underhand, slow, relentless, inexorable erosion of family living standards as a result of this Government's policies.

Labor has forgotten-indeed, abandoned-the foundation on which this nation has been built, that is, the family. One has to look no further than the Department of Social Security's own publication to find evidence of this erosion of the incomes of families with children. Let me point to one of its works. Its review issue paper No. 1, entitled `Income Support for Families with Children', states the issues quite clearly. It says that in 1976-77, as a result of such things as the spouse rebate, et cetera, a single income married couple with two children had 13 per cent more disposable income than a single wage earner with an average weekly income. In other words, there was an acknowledgment that families with children had a reduced capacity to pay tax. In 1985-86, that same family had only 10 per cent more disposable income than the same single income earner. In other words, the relative position of families with children has declined under this Labor Government, according to the Government's own Department of Social Security.

The decrease in the disposable income of the family with children, compared with the income of single wage earners, is a direct result of the Hawke Government's annual Budgets. Since 1985-86, the figure for which I quoted from the Department's own publication, the position has deteriorated even further. The 1986-87 Budget and the 1987 mini-Budget have undertaken further attacks on the financial viability of families with children. Under the Hawke Government, the value of the family allowance has declined by almost 30 per cent because the Government did not index it, and increases in the consumer price index have seriously eroded the family's financial viability. The family cannot make ends meet. However, that was not the result of an oversight; it was the result of deliberate choice. For example, the Government failed to index the family allowance while many other Commonwealth benefits were indexed. It took a decision not to index the family allowance to assist families with children.

In addition, the dependent spouse rebate has not been increased. During the Hawke Government's administration, it has remained constant at $1,030, while the much-touted tax reforms have gone ahead without regard to whether the wage earner is supporting a family. As a result of those three factors, the disposable income of single income families with children has declined more rapidly than that of other income earners. This means that the Hawke Government's tax coffers have been filled more and more by families with children to support. That is an undeniable fact. It is not socially just, it is not a policy direction that we as a nation should espouse and it is certainly not the policy preference of those who put this Government into office.

The Opposition condemns this determined Government policy to undermine the financial viability of the family. We believe that the family is the primary unit of our society for the birth, nurture, growth and support of the individual. The family is a microcosm in the larger society in which the individual must be allowed to grow, to be educated and to take on those social, patriotic, ethical, moral and religious values on which our society depends. No government can ever hope to replace the family, nor can any society ever hope to survive without the individuals that families issue into society. The family is the most important unit in our society, and the Government will rue the day that it condemned families with children to the scrap-heap, as it has done.

The legislation deals with a number of other welfare benefits. Firstly, with regard to unemployment benefits, as the Leader of the Opposition (Mr Howard) said in his response to the mini-Budget, we support the removal of eligibility for unemployment benefit for under 18-year-olds and the removal of the incentive for young people to go on unemployment benefit instead of continuing with their education program. It is interesting to note the turnaround in the Government's views on unemployment benefits for the under-18s. The Prime Minister, in a report to his electorate last week, headed `Bob Hawke reports to the electorate of Wills-May 1987', deals with the supposed achievements of the Labor Government and the supposed dire consequences of a conservative government. The report states:

A future conservative government could even scrap the dole for the under 18-year-olds.

That is what the Prime Minister said last week in a statement to his electorate. Is that not exactly what he has done now? Can this man be believed? What hypocrisy it is.

We are glad that the Government has picked up our policy, but why did it have to be dragged screaming to the barrier? Why did it not act before? Why has it not picked up our proposal, which has been universally acclaimed-namely, our work for the unemployment benefit program? Why has the Government taken so long to act on welfare fraud? This legislation is a classic case of shutting the stable door after the horse has bolted. The Government has now admitted that its slack administration of welfare benefits is costing the taxpayer almost $140m a year. In announcing moves to tighten administration of social security benefits in the mini-Budget, the Treasurer (Mr Keating) has claimed savings of almost $140m. After four years of grossly incompetent administration that has allowed welfare fraud to flourish, the Government has belatedly acknowledged the need to act.

Labor's open door welfare policy has resulted in a massive increase in welfare abuse, including the payment of welfare benefits to people in gaol. It is outrageous. It is time that the Government acted; it is acting too late and with a scatter-gun approach. My colleague the honourable member for Richmond (Mr Blunt), when he moves his second reading amendment, will highlight some of the Government's failures in acting against welfare fraud.

Some other changes in the legislation are rather strange. For example, the Government intends to introduce a waiting period for unmarried education leavers. Those under 21 will be required to wait for 13 weeks before becoming eligible for unemployment benefit. That is an extension of the current six week waiting period. That is interesting because those who voluntarily leave a job will, under the legislation, have to wait for between only four and 12 weeks to obtain unemployment benefit. Under this legislation, someone in a job who voluntarily leaves will have to wait for a shorter period to obtain unemployment benefit than will someone who leaves his education course and cannot find a job. I again ask the Minister for Social Security (Mr Howe): Where is the social justice in that? It is ludicrous. This legislation is full of inconsistencies. A voluntary job leaver is faced with only a two or four week postponement before qualifying for unemployment benefit. The legislation is also inconsistent with the rigorous application of a work test for voluntary job leavers on unemployment benefit-that is, if the Government enforces a work test.

The legislation also alters the entitlement for invalid pensions. That has to be the most hypocritical, two-faced, deceitful exercise that the Government has ever undertaken. In altering the eligibility for invalid pension, the Government is doing what the coalition attempted to do-and in some respects did-in 1980. It is interesting to read what the then Opposition spokesman, Senator Grimes, said about those changes. He said:

This is all part of the Federal Government's harsh and unconscionable review of invalid pensioners, using very tough new criteria.

Is it not interesting how things change? Even the Australian Council of Social Service came out screaming against the changes at that time, but we have not heard from it this time. The Press at that time, day after day, carried headlines stating, for example: `Government continues crackdown against invalid pensioners'. Where are the headlines today? There has been an extraordinary change in attitude. The Government has also changed the entitlement to the class B widows' pension. In fact, class B widows' pensions will be phased out. The class B widows' pension is for women over 50 who have received a class A widows' pension, or a widow who is over 45 years of age but who no longer has a dependent child. Again the Government is acting against the woman who marries young, raises her children and stays at home to care for those children. Once the mother reaches the age of 50 or 55 and has little or no income-her children have grown older and her husband has died-the Government says that she should not receive a pension. She is expected to go back into the work force. Of course, she will have few skills to enable her to go back into the work force and, if she does not, she will have to go on the dole. It is interesting to see the priorities of this Government because, by changing the entitlement to the widows pension, it will save next year, 1987-88, the same amount as it is spending on the Commission for the Future-an outrageous set of priorities.

Mr DEPUTY SPEAKER —Order! The honourable member's time has expired.