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Thursday, 17 September 1987
Page: 224


Ms JAKOBSEN —I ask the Minister for Social Security whether he has seen today's Press reports that the Confederation of Australian Industry (CAI) is opposed to the planned child support scheme. Can the Minister inform the House how the scheme will affect employers?


Mr HOWE —I thank the honourable member for her question. The Confederation of Australian Industry has claimed that it is not part of the employer's role to co-operate in the automatic deduction of child maintenance from wages and that it discredits the garnishee orders system. It is true that there have been problems with garnishee orders with employees resigning to escape the orders. Under the current system the custodial parent must go back to get a new order-to garnishee the new wage from the new job-every time the parent who wants to escape his or her legal responsibility makes a move. The child support scheme will overcome that problem. Every time parents paying child support get new jobs, the Australian Taxation Office will be in contact with them.

The new scheme is about making sure that separated parents pay their fair share towards the support of their children. The new scheme will be careful to avoid work disincentive. Child support will be determined on the basis of ability to pay. The collection system will operate in exactly the same way as the pay as your earn (PAYE) deductions. Employers will have the same legal obligation to deduct child support as they have to deduct pay as you earn tax deductions. Deductions will be made each pay day and will be the same amount each pay day. Employers will forward a cheque to the Tax Office each month on the same day that they send off their PAYE cheques. Employers will know only that an employee has a maintenance obligation and the amount of that obligation. They will not have the details of the identity or the number of children, the identity of the former spouse or any other personal information. In terms of employer resentment about involvement in private matters the child support scheme is really very little different from cases where, for example, employers make deductions from wages to cover items of a personal nature, such as loan repayments.

The CAI claims that the scheme will be costly to set up. The scheme will not be costly when compared with the huge cost presently carried by the taxpayer in supporting children in cases where a parent has refused to do so. This, of course, is the whole point. I remember that when the Government first announced the child support scheme large organisations such as the Business Council of Australia and the Confederation of Australian Industry made supportive statements because we were taking action to save taxpayers' money and to cut back on government spending. The Business Council of Australia still supports this scheme. Even though the Confederation of Australian Industry maintains, in principle, that employers should not be responsible in this matter, my information is that it has not identified any significant matter of concern in the planned operation of the new scheme. The Tax Office has been holding meetings with business around the country, including Coles, Myer, Westpac, the State Bank and Qantas, over the last three months and has not reported significant problems.

I conclude by saying that this scheme is being introduced, on the one hand, to ensure that taxpayers do not have to carry the whole burden of support of sole parents in the community and, on the other hand, to attack a problem where 65 per cent or two-thirds of non-custodial parents have not been paying regular and effective maintenance. It will make a contribution to the Government's objective of seeking to eliminate child poverty within this country.