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Tuesday, 4 April 2000
Page: 15187

Mr PRICE (9:42 PM) —I am pleased to speak in this debate on the Child Support Legislation Amendment Bill 2000. This legislation is a step in the right direction in that it seeks to ensure that the system applies fairly and equally to all those living outside Australia, whether they are a payer or a recipient of child support. It amends domestic laws and enables Australia to fulfil international child and spousal maintenance obligations. The amendments provide for regulations or delegated legislation to be made which prescribe for matters relevant to the recognition and enforcement of child support and spousal maintenance liabilities—for example: the enforcement of administrative assessments; the allowing of the Child Support Agency to make an administrative assessment even though the payer is not resident in Australia and does not have an Australian taxable income; in the case of New Zealand providing that the creation and variation of liabilities will only be able to be undertaken in the country where the payee is resident; obliging each country to assist in locating payers, serving notices and providing advice so that maintenance liabilities can be enforced; allowing the Child Support Agency to collect overseas maintenance liabilities which have not first been registered in an Australian court under the Family Law Act 1975; and requiring reciprocity in legislative presumptions of parentage. I can say that these measures followed a recommendation arising out of the report of the inquiry into the Child Support Scheme tabled in November 1994.

The point I make is that this is part of closing a loophole. I have heard members of this parliament wax about how good the child support scheme is, but the thing I have been totally offended by is that it is in fact not a universal scheme. It is not a universal scheme, and this closes one of the loopholes—that is, the overseas escape hatch to certain countries. That is not totally closed for all countries. I must express some disappointment that the House has no figures on the dollar value that we can now anticipate being recovered as a result of these measures, nor on the number of parties, primarily women, who will benefit from these measures. I know that there will not be a great number, but I would have thought that in introducing the legislation the minister and the department would have some idea—and we are entitled to know—how many people will be affected by this measure.

But the great loopholes in the scheme are not closed. This is the second measure this government has taken to close off a loophole—the first being to introduce fringe benefits and negative gearing into the assessment of child support. I support that, but what I do not support is the fact that the committee, in 1994 I might add, proposed a whole raft of recommendations—a whole chapter entitled `Repairing the child support income base'; it could have been entitled `Making the system universal'—but these have been ignored. There are some draconian measures in this chapter proposed for the parliament's consideration; draconian because the most frequent cases of avoiders of their responsibility to their children are the professionals and self-employed who are legally able to minimise their income. To give you an example of these draconian recommendations, the committee recommended that we actually go back seven years when we find a situation of someone trying to avoid their responsibilities in terms of assessable income. Going back seven years is clearly a message to accountants, to solicitors and to advisers that you are much better off paying up than avoiding the scheme.

I want to emphasise that in Australia there is a whole raft of women, some of whom I have met, who are not getting one dollar out of child support. I cannot accept the proposition that constituents in your electorate, Madam Deputy Speaker, or my electorate or the electorate of the honourable member for Throsby should be caught up in the child support scheme but that there is a whole raft of people who are legally, under the current scheme, able to avoid and evade their responsibilities. It is an absolute outrage, and nothing has been done for these women. I am sorry, there are two things that have been done that have had minimal impact: negative gearing and fringe benefits. And, now, there is closing off the international loophole that exists with some countries. There are still going to be a vast number of women in the main—residential parents—who will not receive a dollar out of this scheme.

I would like to refresh us on what the objectives of the scheme are. Parents share in the cost of supporting their children according to their capacity to pay. I agree with that first objective, but I must say that my mathematics must be of a very limited nature. Let me say why. It is because there is a myth around that somehow the lifestyle and the living standards of children who are now in a separated family can be maintained at the same rate as those in an intact family. I just do not understand the mathematics of that proposition. I think that the children are going to be worse off and will have less money to support them when the parents are separated. But this scheme is built around the premise that, in fact, we can maintain the same lifestyle. It says `according to their capacity to pay'. I know I do not have to go through the impact of the formula, but primarily it is based on gross income. I do not object to that measure. It is based on gross income. I do not resile from that.

But if you want to look at people's capacity to pay you actually have to look at disposable income. That is what is left after the essentials have been paid for. I accept about all the clients of the agency and all the people caught up and all the children caught up in separated families that we cannot be so intrusive as to examine for each and every case what their disposable income is. But no-one has done it. In all the debate we have had about child support, no-one on this side or that side of the House has brought any decent statistics to us on disposable income.

What I say is this: we need to take a thermometer reading out there in voter land about different demographic types of residential and non-residential parents. We really need to have a good feel for what their disposable income is—because it is only on that basis that we can be confident that the changes we make to the formula are accurate and will not impair those parents or those children.

The second objective—why wouldn't we laud it?—is that adequate support is available for all children not living with both parents. The third one is that Commonwealth involvement and expenditure is limited to the minimum necessary for ensuring children's needs are met. This is perhaps the most dishonest of all the objectives because from day one of the operation of the scheme—and let me just make this point which I have made plenty of times before: the existing system prior to child support was absolutely abominable and disgraceful, and we needed to bring in a scheme like this—the highest priority of this scheme has been to claw back Commonwealth expenditure.

To give some figures, if you look at the way the Child Support Agency publicise their success they say that the net savings to the department have been $419 million. It costs $190 million to collect it, and there are some 2,663 staff—and the number of staff has increased exponentially. But the primary purpose of this scheme was to claw back financial expenditure by the Commonwealth. I think there ought not be a debate about the children most in need of assistance—the children in separated families. Rather than having a priority of clawing back expenditure, surely the Commonwealth should have a priority of investing in these children, of supporting these children. They should not be the Commonwealth's second-class children, and that is what they are at the moment.

In terms of the performance of the agency, they say they collected $571.3 million for the 1998-99 year. That is very good. I am pleased about it. But you have to remember that $450 million is in arrears. So, of the collectable amount of money in that years, they collected 55.9 per cent. Is that a success rate? Of course it is not. You might say there are private collections. I am pleased to see private collections outstrip the money collected by the Child Support Agency: $727.9 million. I am even more pleased when parents can sit down and work out a reasonable amount between themselves. These are the best arrangements. But if one of the parents is a Centrelink client the discretion to work out a reasonable amount goes, and it goes because the Commonwealth has a priority of clawing back its expenditure and not supporting these separated parents and their children. They are second-class children.

One of the other objectives—to ensure that work incentives for both parents to participate in the labour force are not impaired—is an excellent objective. The one thing we want parents to do is to get over the trauma of separation and breakdown, get on with their lives and get back into the work force. But who in this House believes—please stand up—that there are not severe work impediments?

Mr Hollis —There are.

Mr PRICE —I am terribly disappointed when I hear parents say, `I am better off not working.' Of course now there is a minimum payment, and I might say the committee recommended it, but we did not recommend it in isolation; we recommended it as a package of reforms. I am glad the honourable member for Throsby interjected. He knows. I have been to at least one meeting where that very point was made. We are certainly not meeting those objectives.

The last objective, and I certainly support it, is to ensure that the overall arrangements are non-intrusive to personal privacy and are simple, flexible and efficient. There is no doubt in my mind that, when the report was done, the Child Support Agency was perhaps the worst performing instrumentality in the Commonwealth. I think even they would admit it. I am happy to acknowledge here in this House tonight that there have been significant improvements in the performance of the agency. But, make no mistake, this is an intrusive scheme; it is a catch-all scheme. The arrangements are not simple, they are not flexible, and I believe they are inefficient. I do not understand the coalition because, generally speaking, they have the view that we ought to keep governments out of private lives. I support that proposition on this side. I think that we ought to have a scheme that lends weight to parents making sensible arrangements between themselves. If that means more Commonwealth expenditure, so be it. But I think we ought to have a system that encourages them to make these arrangements; not only financial arrangements but parenting and contact arrangements, keeping the state out of their lives. We ought to have an agency that is there as an agency of last resort; an agency that does not reward parents with maximum payments because they cannot come to arrangements but is there to put in an intensive effort when parents either cannot come to sensible arrangements or where one parent seeks to avoid or evade their responsibility.

In some ways there is a great irony that the Child Support Agency is very similar to the Family Court—it has a one size fits all approach to its clients. It spends the same amount of effort for a client who is complying as it does for a client who is defaulting. There is no doubt that we will always need a Child Support Agency. I am not arguing that; I am saying that we ought to be able to get as many parents who are accepting their responsibilities out of the scheme coming to terms with their new-found arrangements and making private arrangements.

I talked about a group of women who have missed out under this scheme. Let me refer now to another group of women who I see as real victims. These are the women—and I am sorry to use `men' and `women' because it can be the other way around—whose new partner has a child support liability. I have the feeling that, when this scheme was envisaged, we thought of people being in a relationship, that relationship breaking down and them maybe being in a second relationship. But now we are finding people who have children by three different partners.

This scheme operates on the basis that there is primacy, there is a special relationship, with the children of the first marriage—that the first produced children are superior children—and they are treated differentially. I think that is wrong. We should value and esteem all children whether they are first, second or third, or whether they are separated or intact. That is the way I feel; we have a responsibility to not differentiate with children but, where we do, to differentiate in assistance in terms of providing more assistance to those in need.

Any member of this House who has been listening to his constituents about the child support scheme knows that in second and later relationships often the parent without the liability is forced to work and earn money to pay child support for their partner's first children. It puts enormous pressure on those relationships and often they go under. More tragically, there are sometimes suicides involved. Child support is not the only issue in those suicides, but it is often a key. I say to members of the House: how many suicides do we have to have before we come up with a better and more decent system? I think we have had enough.

Any member who has been in his constituency knows in his heart that we have got much more work to do on this scheme. I have never understood those who argue for the primacy of a spouse in the first relationship and the second one not counting, or even the proposition that is put—sometimes by the agency, I might say—particularly by those who advocate first marriage and first relationship primacy, that people should go to their accountants and determine whether in their new relationship they can financially afford it. It is probably not a bad idea, but we do not impose it on the first, so why should we impose it on the second and the third? I think it is rank hypocrisy.

In conclusion, I think members of parliament on both sides of this House are sensitive to the representations of their electorate. I think they want a system that is intrinsically fair. It is not possible when there are three players in the financial equation—the government, one parent and the other parent—to develop a perfect system where none is going to be without some financial disadvantage when you make a change. If you make a change for one, you are bound to affect the other two.

I do not have the wit, the intelligence or the brilliance to develop such a perfect system, but I say to the House quite passionately that really the time has come for some decent reform. I accept that the government have introduced some of the changes. The thing I do not understand is why they do not tell us the modelling they used to pick the 10 per cent figure. Why was 10 per cent superior to 20 per cent? Maybe five per cent is the answer—I do not know—maybe 25 per cent, but you have to share the information with us so we can see the impact of your changes. But change we need to have—change in child support, change in family law and change in counselling. We have to invest in counselling in relationships while they are still alive and there is still blood in them.