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Monday, 11 November 1985
Page: 1908


Senator HARRADINE(5.23) —I have given a good deal of consideration to what I propose to say because during the life of this Government I have attempted to give credit where credit is due, and I do not wish to sound alarmist. But since the Budget was brought down in August this year I have been giving it, together with the tax package, considerable thought. I have analysed that Budget and with the assistance of some expert help, not least of which came from the Legislative Research Service of the Parliamentary Library, I am in a position to make a statement which I do not think the Government will like. I am loath to make that statement because as an official of one of the largest, in fact the largest, union affiliated with the Australian Council of Trade Unions, I am concerned that the prices and incomes accord should be kept in place. What I say is that the Government does not need a Governor-General to oust it from office. All the Government needs to do is to continue the trend of the attacks of successive governments on the one-income family. The standard of living of most Australian families will be eroded because of the failure of the 1985 Budget-we are now debating the appropriation Bills-to redress the unfair economic burden that they carry. Unless the Government reverses this injustice it will face a critical electoral backlash whilst the accord will be strained to breaking point.

I intend to show by stating facts and figures that this Budget and the tax package to come will further exacerbate the problems faced by one income families in Australia today. Since 1976 the one income family on average weekly earnings has had imposed upon it a massive 435.7 per cent increase in taxation at the same time as average weekly earnings have risen by only 135.4 per cent. I seek leave to have a document prepared by the Legislative Research Service of the Commonwealth Parliamentary Library incorporated in Hansard.

Leave granted.

The document read as follows-

DEPARTMENT OF THE PARLIAMENTARY LIBRARY STATISTICS GROUP

Comparison of Tax paid by Taxpayer on Average Weekly Earnings with Dependent Spouse and Four Dependent Children

1976-77

1985-86

Percentage

increase

$p.a.

$p.a.

%

Income-AWE (a)...

9,364

22,039

135.4

Gross Tax...

2,667

5,244

. .

Less General Rebate...

610

. .

. .

Less Spouse Rebate...

500

1,030

. .

Net Tax...

1,557

4,214

. .

Family Allowance...

1,069

1,600

. .

Effective Net Tax Paid (b)...

488

2,614

435.7

(a) AWE for 1985-86 assumed to be AWE for 1984-85 plus 8%. (b) Net Tax less Family Allowance.

Compiled at request by the statistics group of the Legislative Research Service.


Senator HARRADINE —The worker whose family is existing on one income and who is receiving the weighted average weekly award rate has had imposed upon him an even greater percentage increase. Whereas in 1976 he was paying no notional increase, today he is faced with an amount of some $226.

The Government's taxation package will further exacerbate the problems of the one income family compared with the two income family. On present tax scales the one income family on average weekly earnings is paying $785 more in direct taxation than the two income family on an equivalent income. After September 1986-after the much heralded tax package is inserted into legislation-the one income family will be paying not $785 but $809 more than the two income family. Let me turn to the one income family on weighted average weekly award rates. At the moment that family is paying $272 more in direct tax than the two income family on an equivalent income. After the tax package is in place in September 1986 the one income family will be paying $342 more than the two income family on an equivalent income. That is a scandal and it needs to be exposed so that the Government can rectify the position. In addition, the failure of the 1985 Budget to restore the value of family allowances means that a mother with four children is now $55.35 a month worse off in real terms than she was in 1976 when tax rebates for children were abolished in favour of the new family allowance system.

The value of family allowances has been eroded by almost 50 per cent since 1976. There is an attack not only on the one income family but also, in effect, on the mothers of children, whether they be of one income families or dual income families. It is a failure of this Government and successive governments to recognise the economic value of the input of the mother into the home. That applies not only to the mother who is a full time homemaker but also to many families which, because of economic pressures, have to rely on two incomes to make ends meet. Typically, a spouse goes out to work part time and has to come home and face her economic contribution to society in the home. Of course all of this is of great concern, but what of the full time homemaker? If she has four children not only is she now $55.35 a month worse off in real terms but also she is worse off because the spouse rebate has not been adequately attended to over the years. In 1983 the Prime Minister, Mr Hawke, promised to increase the spouse rebate but he did not do so. The Government's failure to recognise the economic worth of the homemaker will force even more families to take on two jobs either to make ends meet or to maintain living standards.

Families are faced with a large number of costs, not only income tax costs. If we look at related costs and the pressures that families are under now we can see that to impose an economic burden of the magnitude of 436 per cent over that period exacerbates the problem enormously. Families are now faced with ever increasing mortgage interest payments and that is a real fear among families struggling to keep up the monthly payments on their homes.


Senator Puplick —Not only families.


Senator HARRADINE —It applies not only to families; but I am talking about the actual rate of increase that has been applied to them. There have been increases in local government rates, power charges, fares and sales taxes. I noted with interest an article in the Canberra Times of 7 November in which Alan Thornhill stated that the average family is paying $39 a week in protection money, that is, in indirect tax to support Australian industries. I do not believe that families object to that, but they are having that impost on top of the others, which is leading to economic breakdown and other breakdowns in family life.

Of course, all of this means that more and more people will be forced through economic circumstances to go into the paid work force, because very often now families cannot live on one income. A secondary effect of this on the labour market will be to block off job opportunities for young people. Is it not ironical that in this International Youth Year there is so much unemployment amongst the young? Is it not ironical that in this Budget the Government has declared youth priority one and yet, in this very year, employment in the Government's own departments has fallen to an all-time low. Whereas in 1966 young people under 21 constituted 22.6 per cent of the Australian Public Service, they now constitute only 6.3 per cent. Clearly, this tragic state of affairs for youth has been brought about by deliberate policy decisions which still remain in force, denying youth, particularly young girls, their fair share of Public Service jobs. A major cause-indeed, it is an overriding cause-of the decline in full time job opportunities for youth, not only in the Public Service but also in commerce and industry generally, has been the failure of successive governments to develop policies enabling families to live decently on one income. Many families have been forced to take on two jobs, either to make ends meet or to maintain living standards eroded by government budgetary policies and, as I said before, high mortgage interest rates.

Despite the rhetorical tributes paid by politicians and governments of every stamp to the family, their pro-family talk is cheap. No one is prepared to spend seriously on the family. Governments wait until after it has broken down. Then the pensions flow in and the massive tide of counsellors, social workers, lawyers, psychologists and everybody else pours in on the family or the remnants thereof, and they act more in the role of undertakers than of rescuers. Whilst this work is necessary, particularly in our society, it serves in the main to fatten up the middle class bureaucrats and professionals while frequently proving futile for the families themselves. Yet governments continue to provide seemingly limitless funds to deal with the smash-up of the family and family life in our country whilst refusing to recognise the difficulties faced by intact families, especially those on low or medium incomes, and especially those with dependent children who are seeking education. Governments and their agencies do not recognise the value of the family until it is too late. The only piece of legislation that I know of that recognises the value of the work of the mother or the wife in the home is the Family Law Act-but only after the breakdown of marriage and the division of property.

What we must do is develop urgently measures to provide economic justice to the family whilst it is in one place, whilst it is intact. We should provide this economic justice, which will ease the material problems which often aggravate and commonly trigger their collapse. The family, when it functions, is the most productive and efficient provider of social services in our society. It nurtures, socialises, educates and provides recreation for its members. It prepares and fortifies them for their role as future and present citizens. It is the central institution of our society. When it goes wrong, the rest of the society goes wrong. For this reason, the good of families should be the central concern of government policies. But amazingly, governments behave as if families or, at the very least, their problems did not exist.

The tax policy is a case in point. The tax policy does not recognise families for the purposes of taxation. Yet-let me put it in this way-income sharing is part of family life. A marriage and a family really contain an income- sharing contract where transfers are continually taking place from persons with capacities to persons with needs. Is that not, as we have heard it so often from the Government, one of the Government's taxation principles-that taxation should be about the transfer of moneys from persons with capacities to persons with needs? But although the Government's taxation system has that as a guideline-and indeed, other taxation systems over the years, in one way or another, have had that, at whatever priority, as a guideline-it does not recognise or, to put it most mildly, it seriously underestimates the value of this kind of family sharing to society, and thus places an undue burden on the one-income family.

Amazingly, governments behave as if families or, at the very least, their problems, did not exist. More than this, governments drive one to the conclusion that family life must be considered in high places. We have to come to this conclusion. The Government may have some other explanation, but what conclusion can one draw from the failure of the Government to recognise the burden being placed upon the one income family other than that people in high places in government or their advisers consider the one-income family as though it were a vice which the poor, particularly, must be persuaded to abandon in return for a tax reward? What other explanation is there? Why penalise the one-income family as the Government does now? An explanation is called for and I will be waiting to hear from the Government what its explanation is.

In the trade union movement we have a large number of glossy magazines to be distributed to all our members. The magazines say what a good thing the accord is. There are merits in the accord, but the fine print is not all there. Once the workers start feeling the pinch-particularly those workers on one income-and start comparing what they are receiving out of the package with what a dual-income family which receives in excess of $50,000 a year is getting out of it, there will be that backlash of which I spoke in my opening remarks this afternoon. I believe that the Government should heed the warning signs now and do something about rectifying that problem.

If the Government did take that action it would find that the employment situation would improve. I agree that the economic aspects of the problem must be tackled, but in tackling the economic aspects one should not ignore the social aspects of the problem of unemployment. The fact is that there are more people in or seeking paid work than there are jobs available. In that situation would any government in its right mind adopt taxation measures which would force even more people to seek paid work in order to make ends meet? Surely one should recognise that there are socially constructive alternatives. In so recognising that, let me quote to the Government what the Prime Minister, Mr Hawke, said, I think in Perth, in September 1983 in his John Curtin Memorial Lecture:

The plain fact is that no government in Australia will now, or in the foreseeable future, solve the problem of unemployment solely through the available methods of increasing the supply of jobs. At least equal attention must be paid to the question of reducing the demands for jobs by helping to provide socially constructive alternatives.

That was what the Prime Minister of Australia said. But that statement, that very constructive idea, is not reflected in the Budget. After all, what more socially constructive work is there in Australia than the nurturing, care and development of one's own children. So many mothers with dependent children are forced by economic pressures to hold down another job. It is unfair to them, to the young unemployed and to the whole community to have allowed this situation to exist, and it is definitely unfair to exacerbate the problems of one income families as this Budget has done and indeed as the new tax package will do when it comes into place in September 1986.