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Wednesday, 27 June 2001
Page: 28714


Mr SWAN (3:50 PM) —What the minister confirmed in question time today is that there is a family debt time bomb out there that is going to soak the cash out of Australian families. The Howard government can spend $20 million a month on blatant political advertising, but they will not spend one cent on information for Australian families so that they can innocently avoid incurring a substantial family debt. What we know, and what was confirmed by the minister in the House today, is that there are 500,000 Australian families out there who may incur up to $1,000 debt through their family payment system. The government can spend $20 million advertising the private health insurance industry—blatant political advertising—but they cannot spend a cent of that money to inform Australian families how they should not incur that debt.

This is a political time bomb that they did not want to surface before the Aston by-election, and it is one that they wanted to occur in secret. What they wanted to happen was for these debts to be silently thieved from the tax returns of Australian families, silently thieved by the Treasurer of Australia through the tax return process. What we have seen here today is an indication of how out of touch and how mean the Howard government is. This political time bomb is going to impact, as confirmed by the minister, on 500,000 families with family tax benefit debts and 200,000 families with child-care benefit debts.

How do we know that the Howard government decided it was not going to engage in some genuine information advertising? We know that because their impact assessment papers from the department say it. This is what the department says:

It is now unlikely there will be a media campaign dealing with the estimate reconciliation issues.

That is, this department put forward a comprehensive public information campaign so that the families of Australia could be alerted as to how to not incur a substantial family debt, and the government quashed it because they want to hide the problem. They want to hide the problem in the tax system. They want to confine it to tax returns.

They are not going to send letters out to those families that are going to incur this debt. It is going to be silently taken from their tax return. They are not going to tell the accountants of Australia what the potential debt is for those 500,000 families, so when they prepare their tax returns by themselves or with their accountant they will have no idea. They will be expecting in some cases to receive a substantial refund, and when it comes back there is a rude shock. There is either no refund or there is a substantial debt, because this government have set out deliberately to hide the debt in the taxation system. For those Australian families that do not lodge tax returns, the government have decided to send them their bills on 16 July— two days after the Aston by-election. What the minister did not say in this House during question time is that those debt notices could be posted to those people at any time from 1 July. So, Minister, perhaps you would like to tell the House during your response why that is not the case. Why aren't those debt notices being sent out to the people who do not lodge tax returns? That is the whole point.

Here we have a government that is determined to hide the nature and the extent of the problem. It is determined to do it, because it is soaking out the cash of Australian families, clawing back its mean and inadequate GST compensation for Australian families. The memo from the department, dated 16 July, says this:

Bulk reconciliation of customers not required to lodge tax returns. This will include a high proportion of single parents.

Minister, that includes single parents in Aston. These details could have been sent to these families well before 16 July, and that is the whole point.

This is all pretty familiar, isn't it? The day after the Ryan by-election we had that note from John Howard's best political friend, Shane Stone. He wrote it all down—remember that dear John letter that appeared in the Bulletin? He said:

This government is mean and tricky.

The events of family payment debt prove that this government is still mean and is still very tricky. Shane Stone was right when he said that this government always has to be dragged, kicking and screaming, to fix its mistakes. The Aston by-election will be the opportunity for local families to tell John Howard that they have not passed through the GST phase with flying colours but that they have passed through the GST phase to incur huge family payment debts. Up to 500,000 Australians will have debts up to $1,000. That is not flying colours; that is an enormous amount of misery and financial grief for too many Australian families. And for the 13,000 Australian families in Aston receiving family payments, up to half of those could incur a debt of up to $1,000.

Of course, the pensioners of Aston know a lot about this, because on 20 March they had pension clawback, where their four per cent pension increase was clawed back to two per cent. From 16 July onward, the people in Aston are going to get John Howard's family payments—


Mr DEPUTY SPEAKER (Mr Nehl)— You will refer to the Prime Minister correctly.


Mr SWAN —They are going to get the Prime Minister's family payments clawback after 16 July. They are all very familiar with it, because the whole process was outlined by Shane Stone. But it is not as if the government did not have any warning about this. In fact, we warned the government about this on 4 April last year. I will quote what we said in this House:

Under the new payments, the 10 per cent tolerance of variation in income is to be replaced by a zero tolerance. This should, I think, send shudders down the spines of many members of this parliament. This zero tolerance for families reflects this government's real attitude to the needs of low and middle income Australian families—zero tolerance. As I have said on many occasions, this is a government which is very weak in taxing the strong and very strong in taxing the weak. Nothing demonstrates this more in this bill than the zero tolerance shown to estimates that families are supposed to provide.

There are two new aspects of this family payment system, which the minister says is so good, that are so punitive to Australian families. The first one is zero tolerance. There used to be a 10 per cent buffer. If your underestimate was less than 10 per cent, that was not a problem—you would not get a debt—but for every dollar of underestimate you now get a debt. So zero tolerance for Australian families—not very family-friendly, Minister. Secondly, you expect families in this country to provide an estimate of their income one year in advance. No other form of payment that we have in this system of government expects anyone to provide an estimate of income one year in advance. So these two elements are what have produced this family tax time bomb, this debt time bomb that is now going to be faced by so many Australian families.

You would expect a government like this to come up with a system which is so unreal and so out of touch with the everyday lives of Australian families. The Prime Minister and ministers like those opposite all live in the 1950s, when people worked nine to five, when they had steady incomes and when nothing changed from week to week—we see that. But, Minister, we are in the new century and families' incomes change. We have a casualised work force and people work overtime irregularly. All of these things mean that this government is completely out of touch, and now it has plunged to new lows to hide the deception. That is where we get this sneaky attempt to simply take these debts out of the tax returns. Like a thief in the night, silently without any warning, this government is going to take these debts from the tax returns of unsuspecting taxpayers. When families or accountants calculate the likely tax return, they will not know the amount of likely family payment clawback— they will not have a clue.

With other benefits, the department normally sends a note out saying what the likely problem is going to be. That is not going to occur here. That is why there were intense discussions in this minister's department over a period of months about the need for there to be a significant public information campaign to alert people to the problem, but the discussions were quashed. As always, this government are always mean and they are always tricky. It was simply hoped that they could skate through, that many families would not notice that significant amounts of money had been taken from their tax returns. That is why we have the department gearing up significantly with all those measures mentioned in question time. They are going to have flying squads, Saturday openings dedicated to reconciliation, and so on. There are all these emergency measures, because if you had actually communicated effectively with the people affected months and months ago, you would not have the scope or the problem that you have before you. That is the problem.

What has been the government's solution to this in the interim? Its solution has been extremely dishonest. This government has instructed Centrelink officers to tell families that they should change their income estimate, to falsely overestimate their income so they can try and make a dent in their debt at tax time. This government is actually instructing very good Centrelink officers to tell people not to tell the truth about the nature of their income. Why is that the case? It is because of the administrative processes that you have set up, Minister. Even if you instantaneously ring Centrelink and advise them of a change in your income, you can still receive a debt at the end of the year— even if you move instantaneously. That is why this system is so unfair. You have not put in place processes within the department to take that into account to ensure that even those people who instantaneously advise Centrelink of a change in income do not receive a debt.

Minister Anthony is frequently in the media talking about how tough this government is on fraud. There was an example of this in the newspapers this morning. We saw in the Herald Sun: `Where the cheats are'. What Minister Anthony does not tell the journalists who write these articles is that the moneys recovered are not just the moneys recovered from a small proportion of people who are cheating the system: they are the moneys recovered from people who have been innocently overpaid in their family payments. So you go out and blackguard the hardworking families of Australia trying to do the right thing by their children and the right thing by their government and you include the money you recover from them in articles like `Where the cheats are', and you issue press releases like `Public dobs in dole cheats'. You lump the families of Australia into that slander.

The interesting thing about the figures that the minister provides is that the areas of Knox in Melbourne, Box Hill and Ringwood had some of the highest rates of recovery of the money that the minister says publicly is money that is recovered from dole cheats. But it is not. It is actually money recovered from families who have been innocently hit by unexpected debts because of the failures in the administrative processes of this minister. In the Aston by-election, all of those families who have been hit with debts and all of those families who are going to get debts need to know that this minister thinks they are dole cheats. That is the only way he can explain the fact that so much of what he is currently working on is so out of whack with the needs of Australian families.

What does Minister Vanstone say about all of this? She simply puts out completely misleading propaganda. She claimed recently, in April, that only families rorting the system would receive debts. That is what Minister Vanstone said: only families who receive debts are rorting the system; no-one is caught up innocently in this system. If you get a debt, you are rorting the system. She claimed that a family would have to underestimate their income by $18,000 to receive a $1,000 debt. That is wrong. A yearly income estimate, as we demonstrated in question time—and the minister did not dispute it—could be as little as $1,500 out to incur a $1,000 debt for just one child. I repeat: it could be as little as $1,500 out to incur a $1,000 debt for one child. For a family earning $30,000, this amounts to an error of just five per cent but, of course, for this government, being 95 per cent or 96 per cent correct is just not good enough. What they really want to do is call you a dole cheat and imply that you are rorting their fatally flawed system. Minister, these are the sorts of tactics we are getting. The problem is that this system is a time bomb. It is a debt time bomb for too many Australian families, and too many of them are going to suffer.

We also had to suffer from the minister this absurd claim about what a dramatic increase there had been in family payments under this government. What he did not tell the people of Australia was that he suspended their indexation and that about half of the increase that all families have received was actually their automatic indexation. Minister, that is why families cannot stretch the amount of money they earn in the work force and through family payments around the price rises that are coming from the GST—like the 11 and 12 per cent for electricity, the increases in telephone charges, the increases in insurance of 35 and 38 per cent and so on. That is why so many Australian families are finding it so hard to make ends meet. The fact is that Australian families do not have crystal balls to predict their future income and most do not have the accounting software to deal with the government's complicated zero tolerance family payments policy. John Howard is not supporting battling Australian families; he is creating them. (Time expired)