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Tuesday, 4 April 2000
Page: 15180


Mrs VALE (9:07 PM) —Any measures that improve services to families deserve the full support of this House. The A New Tax System (Family Assistance and Related Measures) Bill 2000 before us is aimed at streamlining and improving assistance to families in a number of categories of need. The bill complements the package of tax reform legislation that was passed in June last year. That package put in place the legal framework for family assistance. I refer primarily to the A New Tax System (Family Assistance) Act 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999. The legislation last year reduced 12 forms of family assistance that were available through the tax and social security systems to three family assistance payments. These systems covered assistance to families to raise children, additional assistance for single income families with children and assistance with the cost of child care outside the home.

As legislators, we must always remember that the family is the most basic building block upon which all other social forms rest. Families are the most cost-effective deliverers of primary welfare services. In purely economic terms, if this were added to the GDP, it would increase by 30 per cent. Of course, the benefits are not just limited to welfare. There have been significant changes to the structure of families that have characterised the families in Australia over the last 50 years. I quote from the House of Representatives Standing Committee on Legal and Constitutional Affairs report entitled To have and to hold: strategies to strengthen marriage and relationships:

Following the Second World War, marriages and births that had been delayed by the conflict soared—a trend which continued through the fifties and early sixties, while divorce rates fell.

A series of changes during subsequent decades had a major impact on family life: the advent of the contraceptive pill, the entry of married women into the paid workforce, the widening of sole parents benefits, and the introduction of no-fault divorce legislation. By the 1980s, the divorce rate had soared, out-of-wedlock confinements had increased, marriages were delayed, and birthrates fell. The structure of the Australian family had changed remarkably.

As a matter of fact, of 4,775,200 families in 1992, 86 per cent were couple families, 13 per cent were single parent families and one per cent were other families. Of the couple families, 92 per cent were married of which 51 per cent had dependent children. Another eight per cent were de facto relationships of which 36 per cent had dependent children. By 1997, the proportion of single parent families had risen to 14.5 per cent. Of the 620,000 single parent families, 84 per cent were mother-headed and 16 per cent were father-headed.

When families break down, together they cost the Australian economy at least $3 billion each year, and when all the indirect costs are included the figure is possibly doubled. Viewed from this perspective, we can see that families do not depend upon the government but the government depends upon the family. That is why the Howard government has been assiduously rebuilding pro-family legislation right across the portfolios—from funding marriage education to providing substantial additional funds for carer respite to prevent burnout of families and family members who are caring for the disabled.

This reconstruction follows successive ALP governments that delivered what can only be described as `locust plague years' to Australian families. For too long the importance of families was put down and, if they broke down, then that just demonstrated that they were dispensable in some new world order. We can see the effects of downgrading the importance of pro-family legislation and policies in almost every social problem that plagues the Australian community, be it domestic violence, child abuse and neglect, drugs, sexually transmitted diseases, homelessness, family break-up—and the list just goes on. That is why it is important that changes to the new tax system are managed in such a way that their impact on the family not just is minimised but also can have an enhancing effect. A lot of focus has rightly been given to the impact of the new tax system on business—and so it should, because getting that right will bring benefits to business and the overall economy with good flow-ons to families, so many of whom are closely involved with, and even dependent on, family businesses.

This bill does not directly impact on all families in the way that other provisions of the new tax system do. However, this bill is vitally important to some families who are probably the most vulnerable and who are greatly helped by or rely upon the delivery of government welfare services and assistance. The bill consists of a large number of amendments each designed to improve existing legislation. Because the new tax system is being put in place, the laws that supported the old tax system will become redundant from 1 July 2000. It is therefore necessary to redesign the laws to bring up to date the structure and administration that provides the government assistance to families in need of help.

The legislation that was passed last June—that is, the A New Tax System (Family Assistance) Act 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999—put in place the legal framework for delivering family assistance under the new tax system. With that legal framework in place, we can now clothe it with the details necessary for its smooth operation. In doing this, the government has taken the opportunity to simplify the array of assistance, compacting 12 forms of assistance to three. Looking at this legislation in overview, this bill will do five things: as I said before, it will provide the administrative infrastructure to support the payment of child-care benefits; it will clarify the operation of various aspects of the family assistance law; it will replace regulation making powers with substantive provisions; it will insert into legislation relevant savings and transitional provisions; and, finally, it will make miscellaneous technical amendments. This is a very technical bill.

In addition, this bill will make consequential and technical amendments to seven other pieces of legislation. These are the Social Security Act 1991, the Social Security (Administration) Act 1999, the Social Security (International Agreements) Act 1999, the Child Support (Assessment) Act 1989, the Health Insurance Assessment Act 1973, the Income Tax Assessment Act 1936 and the Medicare Levy Act 1986. You can see, therefore, that this is a comprehensive bill. We should not let the complexity of detail confuse us. Government is a very complex business, and the new tax system creates a historic change to the financial administration of government. This bill is up to the task of coping with the enormity of the changes and it will deliver a better system of family assistance.

The bill consists of six schedules, each dealing with different aspects of benefits or the law. Schedule 1 contains amendments relating to the A New Tax System (Family Assistance) Act 1999, and it deals with the family tax benefit and maternity immunisations allowance, amendments relating to child-care benefit and common provisions relating to family assistance. It also deals with residence rules, pattern of care eligibility, arrears of rent assistance, rent assistance for parents paying low rent and sharing the care of a child, and maintenance income test.

I am pleased to see that a current anomaly in the Social Security Act is being remedied. The anomaly occurs when some separated parents paying low rent agree to take on the shared care of a child. This is because income support parents without the care of a child and paying low rent may receive less total assistance than when they agree to share the care of a child. The problem arises because persons with the care of a child face a higher rent threshold for payment of rent assistance than those without children.

Although the maximum rate of rent assistance is higher for people with children, those paying low rent do not benefit from this. The higher rent threshold for families means that a person paying low rent may receive less rent assistance at the `with child' rate as part of the family allowance than at the `without child' rate as part of income support. A person sharing the care of a child receives only a proportion of the standard family allowance, and in some cases the extra family allowance does not compensate for the reduction in rent assistance. To avoid this anomaly, the family assistance act is amended so that an individual who only has shared care of a child or children is assessed for rent assistance at both the `with child' and `without child' rates. Payment of rent assistance would then be made at the higher rate.

Schedule 2 contains amendments to an allied act, the A New Tax System (Family Assistance) (Administration) Act 1999, providing administrative detail dealing with the same family tax benefit and maternity immunisations allowance, amendments relating to child-care benefit and common provisions relating to family assistance. Schedule 2 deals with what can be described as reasonable housekeeping matters, such as arrangements for payments into bank accounts, the requirement to provide a tax file number and various variations of entitlement determinations in regard to social security pension or benefit, adjustable taxable income and maintenance income.

The family assistance administration act provides for the payment of family tax benefits, maternity allowance and maternity immunisation allowance at such times and in such manner as the secretary considers appropriate. This flexible approach is complemented by provisions that allow timing and manner of payments to be more precisely described in regulations. Part 1 of schedule 2 amends the family assistance administration act to repeal the regulation making powers referred to above. Instead, new provisions are inserted that ensure that the principal manner of payment of family tax benefit by instalment is into a bank account nominated by the customer. This is consistent with the approach taken under the social security law. In relation to other payment options, flexible payment arrangements would be retained.

Part 2 of schedule 2 replaces the regulation making provisions with substantive provisions in the family assistance law. They deal with, for example, making claims for payment of child-care benefit, determination of claims, how and to whom payment of child-care benefits should be made, notification of obligations of claimants including offences for failure to comply with the obligations, obligations of approved child-care services and payment of advances to approved child-care services. Part 3 of schedule 2 provides definitions and amendments in the areas of payment of protection, overpayments and debt recovery, review of decisions, information management, approval of child-care services and registered carers, and other matters.

Schedule 3 amends three pieces of legislation: the Social Security Act 1991, the Social Security (Administration) Act 1999 and the Social Security (International Agreements) Act 1999. With the schedule 3 amendments to the social security law, the bill makes a series of technical and consequential amendments to the Social Security Act 1991. Amendments also increase social security payments by four per cent to compensate for the effects of the goods and services tax. Those payments that are affected relate to the participant supplement, the pensioners education supplement and the carer allowance. Schedule 3 also makes numerous consequential amendments to the Social Security (Administration) Act 1999. These changes are necessary because of the repeal of family related payments from the social security law and the repeal of the Child Care Payments Act.

Schedule 4 of this bill provides amendments to five other acts: the A New Tax System (Bonuses for Older Australians) Act 1999, the Child Support (Assessment) Act 1989, the Health Insurance Act 1973, the Income Tax Assessment Act 1936 and the Medicare Levy Act 1986. Schedule 4 makes minor technical changes, which I have mentioned, to the A New Tax System (Bonuses for Older Australians) Act. This takes into account the subsequent enactment of the Social Security (Administration) Act. It also makes minor technical and consequential changes to the Child Support (Assessment) Act 1989.

Schedule 5 of the bill deals with the transition from the existing family assistance arrangement in the Social Security Act to the new family assistance arrangement in the family assistance law. It also contains a savings provision for certain family allowance customers with a child attracting payment of double orphan pension or carer allowance. Item 1 ensures that any organisation that was an approved care organisation under the Social Security Act immediately before 1 July 2000 is taken to be approved under section 20 of the family assistance act. This provision avoids the need to re-approve organisations on 1 July 2000 to enable them to continue to be paid family assistance in respect of children in their care.

Finally, schedule 6 provides for the transition to the new child-care benefit system, particularly from the existing child-care assistance and child-care rebate systems.

This bill follows a succession of family assistance bills that stretch back to the lump sum maternity allowance that was introduced into this House in 1912. The next major development which occurred for family assistance was in 1941 when the first Menzies government introduced financial assistance to families with children; provided primarily through tax concessions for children and dependent spouses. Since then, numerous measures have been introduced in this House from various governments targeted at the needs of specific family groups.

This bill is largely a technical bill, but it is necessary to effect the delivery of family assistance with the commencement of the new tax system that will come into effect on 1 July 2000. I support this bill and commend it to the House.