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Wednesday, 24 June 2009
Page: 4117


Senator SIEWERT (11:50 AM) —The Greens of course welcome the move to increase the base rate of the age pension and a range of other pensions by $32.49 per week for singles and $10.14 for couples. The Greens have campaigned for many years on the issue of the inadequacy of these pension payments by comparison to community standards and in the face of rising living costs. We welcome the increase in the pension rate as a very important step in helping people address their standard of living and providing quality of life for those on the age pension. This increase in the base pension rate includes most but not all people receiving disability support pensions, as well as the carer payment, veterans pension, widow pension and wife pension recipients. However, it does not include the sole parent pension or those living on parenting payment single and it also excludes disability support pensioners who are under the age of 21 and do not have dependent children.

Why these groups are excluded from an increase in the base rate pension designed to deal with and address the rising cost of living makes absolutely no sense, as those groups face exactly the same cost-of-living pressures, if not greater ones when they are trying to raise children. In fact, in the case of single parents, they may have many mouths to feed. The increase does not extend to those on unemployment benefits or on Newstart, which includes those single parent families with school age children who are now forced onto Newstart allowance under Welfare to Work. The Greens remain extremely concerned that some groups have been excluded from the pension rise for no valid reason and that the disparity in the different types of income support payments continues to grow.

This bill represents, we believe, one of the most significant changes to Australia’s social security safety net since the Whitlam era. For the first time in our history, we have a Labor government deliberately making a distinction between different groups and types of pensioners. On the one hand we have a group, including those on the age pension, who are finally to receive a significant increase, which of course we support, as I said. But on the other hand we have those who are on the parenting payment single and the younger disability support pensioners. They will not receive the increase. There is absolutely no credible rationale for the distinction between these groups. In fact, it seems to us that the government has made a political decision about the deserving and the undeserving poor.

There is no evidence that can be presented to show that the impacts of the cost-of-living pressures for one group are greater than for the other. There is absolutely none. The weak justification put forward by the government—that single parents receive other payments—is absolute nonsense. Not only that, and I will discuss that in a minute, but they have also effectively frozen the maximum rate of family tax benefit—the family tax benefit which they used to justify the fact that they are not raising the income support for single parents. They are using the FTB to justify it and then freezing the FTB—another go at single parents.

If the current pension rates cannot adequately sustain a single age pensioner—and of course we have demonstrated very clearly that they cannot—it is not at all clear to us, and again no rationale was presented, how they expect sole parents, those on unemployment support and their families to survive. Why doesn’t the same rationale apply? We know the cost of living has increased for those on age pensions, but that does not apply to sole parents? Pull the other one.

These significant structural changes have been introduced without proper opportunity for public consultation and debate. We had a very rushed one-day Senate inquiry. I think it was referred on the Tuesday and we had the inquiry on the Friday, so there was not extensive community consultation and debate. The government argues that there was an opportunity for consultation through the Harmer pension review and the Henry review of retirement incomes. However, both of these reviews are very narrow in their terms of reference. They do not consider the social security system as a whole. They do not look at the impact of the cost-of-living pressures on other groups of people on income support, including single parents, the unemployed and other low-income families.

We are now seeing a significant change to our social security system and yet another layer of complexity added to entitlements, apparently with no consideration given to others who have been excluded. There is no adequate opportunity to consider the implications and impacts of these changes before they will be made law. This policy, which excludes sole parents from any income support increases, is in fact without evidence base or rationale. We should not be making these major changes on the run without a full look at the impact that not raising the base rate for those on sole parent pensions and Newstart is going to have.

The Australian Greens share the view of all the community service organisations who presented to the very hastily convened Senate Community Affairs Legislation Committee inquiry, including the Australian Council of Social Service, Catholic Social Services, Family Relationship Services Australia, Uniting Care Australia, the St Vincent de Paul Society, the National Council for Single Mothers and Their Children, solo mums Australia, the Sole Parents Union and the ACTU. We believe that single parent pensioners and their families and young people on disability support pensions should not have been legislatively excluded from the increase in the base pension rate. The Greens are extremely concerned by the plight of the 600,000 or more children in 360,000 single-parent families who rely on the parenting payment single. There are at least 20,000 other single-parent families who have been moved onto the Newstart allowance under Welfare to Work. I do not think anybody in this chamber can be under any illusion about what the Greens think of Welfare to Work.

The decision to exclude this group from the pension increase flies in the face of the government’s own social inclusion policy. Now it should be called the social exclusion policy. Let me remind you that the Newstart allowance, which is now going to be $106 less per week than the single age pension, was designed as a short-term payment for unemployed singles, to support and encourage them to transition into the workforce. It was not designed to provide long-term support to families. It is quite obvious that in this financial crisis we need to be doing all that we can—and I have stated this on numerous occasions—to help those on Newstart to manage to survive in good economic circumstances so that they can re-enter the workforce very quickly. As I have also articulated on numerous occasions, studies show that people on Newstart are at risk of falling into poverty, and once you are in poverty it is very hard to get out of poverty. So, from a purely economic perspective, let alone a social perspective, it is much better for a country’s economy to ensure people are able to be work ready as soon as possible.

In addition to being overlooked in the proposed pension increases, single-parent families have also been further disadvantaged in the legislation by changes to the family tax benefits and the way they are to be indexed. The change to indexation from MTAWE, the male total average weekly earnings, to CPI will see payments gradually fall behind the cost of living. CPI does not provide an accurate reflection of the cost of living for single-parent families, and the government has admitted this on many occasions. Many of them spend half their income on rent and the majority of the rest on food and utilities.

The Australian Greens are worried that there have been a number of recent legislative changes that have impacted on single-parent families, all of which have been made without due consideration of the cumulative effects of these changes and their ultimate impact on the children growing up in these families. As Therese Edwards of the National Council for Single Mothers and Their Children pointed out:

… this payment was not part of the scrutiny of the Harmer review. It was excluded. It is documented in the Harmer report that it is excluded. Here we have a significant part of our population and also our future population and we do not know what has happened. I talked about three almost invisible hammers coming over and hitting sole parents, one in the disguise of welfare to work, one in the disguise of family law reforms, one in disguise of the child support and now this one.

The Australian Greens are concerned about this series of far-reaching and interrelated reforms that have been pursued in isolation from each other without consideration of the cumulative impacts and despite the fact that they impact directly on a group who are particularly vulnerable to small changes in income and at extremely high risk of poverty. The linking of family payments to the average weekly earnings of a working male was a key plank of a deliberate strategy by a previous Labor government in 1987. Its aim was described by the Prime Minister at the time, Bob Hawke, as being that ‘by 1990 no Australian child will be living in poverty’. While this audacious goal has not been accomplished, research suggests that over the period from 1982 to 1996 there was a one-third decrease in child poverty—in other words, it was having an effect. The sole parent pension was introduced by another Labor government in 1974 and championed by Bill Hayden, who reportedly remains very proud of it. It appears that these proud, family-friendly, antipoverty policies are no longer a priority of the Rudd Labor government.

As Frank Quinlan, from Catholic Social Services, pointed out in their submission to the Senate inquiry, the exclusion of those on parenting payment (single) from receiving the increase is a retrograde step that severs the 30-year tie between the rate of age pension and that of sole parents. The only rationale for breaking this longstanding nexus between child payments and community standards and dismantling this anti child poverty strategy is given by the Minister for Families, Housing, Community Services and Indigenous Affairs, Minister Macklin, in her second reading speech. She states:

The removal of the link to earnings ensures that Government expenditure on family assistance is more sustainable in the long term.

The minister goes on in fact to say:

In a tight fiscal environment, savings from reduced expenditure on family tax benefit can be directed to funding other priorities, such as the secure and sustainable pension reforms.

It is clear that in this context the term ‘sustainable’ is not used in the sense of being sustainable for families. In fact it is misused to refer narrowly to the economic sustainability of the budget rather than to the health and wellbeing of families, particularly children. The minister is effectively saying that money is being taken away from one group so that it can be given to another group who are considered a higher political priority. The fact that the first group, families receiving family tax benefit, includes those single-parent families that rely solely on income support—who are the greatest users of emergency support and the most likely to be living in poverty—is not addressed anywhere in the minister’s speech.

It is simply not appropriate for the government to trade off the wellbeing of one group in desperate circumstances against that of another group in desperate circumstances. The reason why Australia has relatively high rates of spending on family payments as a proportion of GDP by comparison to other OECD countries is entirely related to the manner in which family payments were extended by the previous government upward to middle-class families with other sources of income. It does not reflect the adequacy of the payments made to single-parent families reliant on either parenting payment (single) or Newstart who are receiving the maximum rate of family tax benefit. We are not opposed to the targeting and tightening of eligibility for family tax benefits but we believe that simply taking money from low-income families to give to other people in equally desperate circumstances is extremely poor policy. As Kate Beaumont, from the National Welfare Rights Network, put it, ‘over the next four years this one initiative will take $1 billion out of the mouths of children in our community’.

Given the challenges we face with our shifting population demographics, the Greens cannot understand how any measure that relies on taking money from one group and giving it to another can be considered sustainable. The Rudd government has both failed to address these critical issues of fundamental change to our social security system in a joined-up, holistic manner and failed to consider how these and other changes impact on other areas of government policy. This includes its commitment to social inclusion—which should now be termed ‘exclusion’—early childhood development and child protection. It has also shied away, we believe for reasons of political expediency, from dealing with and addressing the fraught issues of adequacy and equity across the system of social payments as a whole. By failing to tackle head-on middle- and upper-class welfare in both superannuation and family payments it is doing those on Newstart and those on parenting payment (single) a huge disservice.

This exclusion of single-parent families from pension increases could be summed up in one simple statement: ‘By 2020 no child of a single-parent family reliant on income support will not be living in poverty.’ This government is guaranteeing that the 600,000 or more children in single-parent families in this country who are reliant on income support will be living in poverty. There is no doubt about that.

The Australian Greens are also concerned by the decision to raise the pension qualification age from 65 to 67 years of age. This proposed legislative change has been made with little community consultation and little consideration of the varied circumstances of working Australians approaching retirement age. We support the position expressed by the Australian Council of Social Services and others, who argue that these measures are tackling the need to respond to changing population demographics from the wrong end. Efforts to increase the participation of older Australians in the workforce should focus on maintaining the participation of those with the greatest capacity to continue working. They should not come at the expense of the living standards and quality of life of the large proportion of elderly Australians who are unable to find work or to continue working.

The ACOSS submission highlighted the fact that there are a significant proportion of those between the ages of 60 and 65, about 50 per cent, who are already on income support. While we can see why the government is moving this measure, the Greens are concerned that it has not been adequately considered and that there has not been adequate consultation—and this needs to be done because of its ramifications for those currently in the workforce and what it means across-the-board for superannuation. So we will be moving to exclude that particular schedule from the legislation, believing there needs to be further community consultation. I will also be moving a second reading amendment to ensure that the increase that is going to those on the single age pension is also given to those on other forms of income support such as single parents and those who are on Newstart.

The Greens also looked at issues around taper rates and asked extensive questions during both estimates hearings and the community affairs committee inquiry and we were reassured by the department’s answer that nobody would be worse off under the taper rate—that under the changes to the taper rate system people will stay in the old system until they would be better off in the new system. I sought those reassurances during both estimates and the inquiry and I will seek them again during the committee stage—that is, that no-one, as is our understanding, will be worse off under these changes. In other words, you stay in the old system until you would be better off in the new system.

This issue has been of great concern to the community. I note that most of the people who made submissions to the inquiry in fact thought the new taper rate was okay because of the reassurances that they had had from government. The Association of Independent Retirees was a notable exception, but the National Seniors Association supported the taper rate changes because of those assurances. So I will again seek those assurances from government in the committee stage of this debate.

As I said, the Greens support the increase in the single age pension. We have been campaigning for it for years and we think it is good. What is bad is that the government is now dividing our community into the deserving poor and the undeserving poor. There is simply no justification for not providing an increase in the base payment for single parents, who struggle to pay the rent, who struggle to buy clothes for their families and who struggle to adequately feed their families. If you are trying to survive on parenting payment (single) and FTB you are doing it very tough. Those not already living in poverty will be through the lack of an increase in payments to single parents. How can this government look single parents in the eye—those 360,000 families, the 600,000 Australian children who are going to be growing up in poverty—and say, ‘We could not afford to increase your income’? That is not true; it can. Senator Brown, in his budget reply, identified $35 billion in savings the government could make if it had the guts. It needs to have the guts to support children in this country. It needs to increase the base rate payment for single parents and those on Newstart. There is $106 difference between those on an age pension and those living on Newstart. If people cannot afford to live on the pension—and we know that pensioners have found it difficult—how are people on Newstart living? How are they managing to survive? How will they manage to survive when there is this $106 difference? They will not be able to. They will be living in poverty, just as single parents will be living in poverty. It is not good enough. I move:

At the end of the motion, add: but the Senate considers that:

(a)   the pension rate increases in this bill should be extended to the parenting payment single rate and to all recipients of the disability support pension including those who are under age 21 without children, who have been excluded from the rate increase; and

(b)   the rate of Newstart Allowance should be increased to equal the pension rate”.