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Tuesday, 11 May 2004
Page: 28196


Mr ANTHONY (Minister for Children and Youth Affairs) (8:19 PM) —I move:

That this bill be now read a second time.

The measures contained in this bill and another bill introduced tonight represent the largest package of assistance for families ever. The measures will provide very substantial increases in the level of financial support to families with dependent children as well as giving better rewards from paid work. They will help families balance their work and family responsibilities.

The bills underpin the government's More Help for Families package announced by the Treasurer tonight. The 2004-05 budget measures build on the government's family tax initiative in 1996 and the increased assistance which formed part of a new tax system in 2000.

However, the measures contained in these bills go further. They provide major increases in assistance to help families raise their children. They give better rewards from paid work and will help families balance their work and family responsibilities.

Compared to the situation in 1996, total assistance to families from this government will increase by over $6 billion a year with passage of this legislation.

This bill contains a number of important measures to improve the rewards from paid work and to help families balance their work and family responsibilities.

The changes to family tax benefit part A and family tax benefit part B provide extra cash for families and improve rewards from work, especially for families on low or middle incomes and for mothers returning to work after having children. When the government came to office, families on average earnings faced effective marginal tax rates in excess of 80 per cent. The introduction of a new tax system saw these effective marginal tax rates reduced significantly. The measures in this bill will reduce them further.

The specific measures contained in the bill are:

An ongoing increase in the maximum and base rates of family tax benefit part A of $600 per child, payable as a lump sum when families lodge their tax returns for the 2003-04 income year and later years.

As well as providing extra assistance to families, this lump sum will be available, if required, to offset any family assistance overpayment that may have occurred during a previous income year.

A reduction in the rate at which family tax benefit part A is withdrawn from the maximum rate to the base rate, from 30c in the dollar to 20c in the dollar.

The lower taper rate will apply from 1 July 2004.

An increase in the amount of income a secondary earner in a partnered relationship can earn before entitlement to family tax benefit Part B is affected, from $1,825 to $4,000. This measure will apply from 1 July 2004.

A reduction in the rate at which family tax benefit Part B is withdrawn, from 30c in the dollar to 20c in the dollar, from 1 July 2004.

The two proposed changes to family tax benefit part B mean that secondary earners in families with a child under five will be able to earn $18,600 before losing entitlement to family tax benefit part B. Families with a child over five will be able to earn $14,184 before losing entitlement to family tax benefit part B.

The financial cost of the family tax benefit changes is around $14 billion.

The bill also provides further help for those balancing work and family responsibilities by the introduction of a new maternity payment. The new payment of $3,000 will be payable as a lump sum to all mothers, regardless of income, from 1 July 2004. The maternity payment will increase to $4,000 in July 2006 and $5,000 in July 2008.

The new maternity payment will replace the current (means tested) maternity allowance and the baby bonus. The baby bonus scheme will be closed to new claims after 30 June 2004 but existing claimants' entitlements will be maintained for up to five years.

As the new maternity payment will be non-means tested, provisions are included in the bill to ensure that maternity immunisation allowance is not means tested and is payable for all children who meet current immunisation requirements.

The financial cost of introducing the new maternity payment is $2.5 billion over four years.

The measures contained in this bill will provide significant additional assistance to families. The government has taken significant steps to improve rewards for working families since coming to office. The measures contained in this bill add to this in a major way. Since 1996, the amount of assistance through family tax benefit part A and its predecessors will have increased by over 100 per cent in real terms with the inclusion of the additional $600 per child per year provided for in this bill. The measures are also a concrete expression of this government's commitment to assisting families with their work and family responsibilities. They provide greater choice for families in balancing their work and family responsibilities, through the new universal maternity payment, which will provide extra support for families with a new baby. In addition, the substantial increase in the level of tax-free assistance for families with dependent children in receipt of family tax benefit part A and the changes to the income threshold and withdrawal rates for family tax benefit part B will mean that couple families can increase their level of paid work without losing entitlement to benefits. I present the explanatory memorandum to the bill.

Debate (on motion by Ms Gillard) adjourned.

House adjourned at 8.25 p.m.