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Wednesday, 9 March 2005
Page: 109

Senator PATTERSON (Minister for Family and Community Services and Minister Assisting the Prime Minister for Women’s Issues) (5:04 PM) —I thank honourable senators for their contributions. Older Australians and families with children will gain from the two major measures contained in this bill. The measures are the last in a series of legislation based commitments made by the government to Family and Community Services and Veterans’ Affairs customers before the 2004 election.

The first of these commitments is to introduce a new family tax benefit part B supplement. The new supplement will be paid as a lump sum on income reconciliation after the end of the income financial year, additional to the standard rate of the FTB part B—a benefit that was going be eliminated by Labor had they got into government. The lump sum payment is similar to the approach used for the FTB part A supplement that the government implemented last year. The new FTB part B supplement will commence on 1 January 2005 and, unlike Labor’s claim, will be six months earlier than originally announced. The claim has been made by members on the other side, both in the chamber here and publicly. In the election, we announced that this measure would start on 1 July 2005—in other words, for the 2005-06 financial year. Families receiving FTB would receive an extra $300.

The claim that this government is ripping families off is ludicrous and typical of Labor’s tactics of misinformation and mendacity. It never ceases to amaze me how they can twist the truth. We are bringing forward this payment to 1 January 2005. Families receiving FTB B will be entitled to up to $150 more than they would have been under the original commitment. Whatever Labor says—whatever twists and turns and dives with double pikes they do—the facts are that, in respect of this financial year, families will get $150 more than the commitment in the election. They will get $150 in respect of this financial year in family tax benefit and, as promised, $300 in respect of next financial year.

But Labor cannot get its mind around the issue of a financial year. It cannot get its mind around the fact that these payments are made in respect of a financial year. If Labor wants to continue to claim that this $150 is not real, let them go ahead—like they claimed the $600 per child payment was not real. We know what families thought of their claims about that. When they got that money in their pockets when they put their tax returns in, families knew how real that was. They will know how real this $150 is. That is in respect of this financial year—six months earlier than the original commitment of it being for next financial year at the rate of $300.

For 2004-05, which is now the first income year of the new supplement, the annual amount will be $302.95. The first supplement payments will be made in the second half of the 2004-05 income year, representing the period 1 January to 30 June 2005. That is a maximum of $150.23. That difference is the indexation factor. Subsequent supplement payments will payable in the full income year of eligibility. The FTB part B supplement will be indexed annually on 1 July based on annual movements in the consumer price index. However, the first indexation on 1 July 2005 will be a one-off six-month indexation arrangement because of the supplement’s 1 January 2005 commencement, which I will reiterate is six months earlier than the commitment made in the election.

In an additional amendment relating to FTB, the bill will repeal the existing formula set down for the FTB child income cut-out amount. A child whose income equals or exceeds the cut-out amount cannot attract the payment of FTB. The formula is being replaced with a specified amount of $11,233, which represents annual indexation of the existing amount for 2004-05 of $10,948. The new cut-out amount, which will apply from 1 July 2005, will be consumer price indexed on each following 1 July. The new cut-out amount is higher than the amount of $11,218 that would have applied from 1 July 2005 under the existing formula.

The last of our election commitments is to exempt aged care accommodation bonds from the social security and veterans’ entitlements means test. This important measure is being introduced by the government to give older Australians making the transition to aged care greater reassurance and options for managing that transition. Under the current means test rules, the refundable balance of any accommodation bond paid by a customer to an aged care facility is held as an asset of the customer. This could have the effect of lowering the customer’s payment or making the payment not payable at all. Now, because of these amendments, many older people approaching aged care will be paid more or receive a payment that they would not have been paid before.

As a complement to this, customers who pay their accommodation bonds by periodic payments will now be able to rent out their former home without the rental payments affecting their rate of payment. These customers will also keep the asset test exemption for their former home while they are renting it out. This policy approach is consistent with the current concessions available to residents in high-level aged care who pay accommodation charges. Customers who will now be eligible for either a social security or veterans’ entitlements payment because of these changes will have their payments backdated to 1 July 2005 as long as they claim payment from Centrelink or the Department of Veterans’ Affairs before 30 September 2005 or, if they have special circumstances, 30 June 2006.

There have been a number of comments about the utilities payment to pensioners and the concessions payment to assist self-funded retirees with their concessions. We have indicated that self-funded retirees who have provided for themselves throughout their lives and are now in a position where they provide for themselves in their retirement ought to receive some of the benefits that they would otherwise have got had they been on the pension. One of those is concessions. An offer went out to the states for some considerable period of time. It was not responded to. One or two states were nibbling at the bait on the end of the line but had not got hooked onto the line at all in real terms. We saw Victoria rip over $250 million out of the pockets of pensioners by taking away their concession for car registration and not coming to the table to look at some ability to assist self-funded retirees. In order to overcome that, we have given assistance to self-funded retirees in the form of a payment to assist them in paying some of their utility bills.

There are some variations across the states. I cannot remember exactly but concessions for pensioners vary from about $450 in some states to, I think, over $900 in one other jurisdiction. There is quite considerable variation between jurisdictions in their assistance to pensioners by way of concessions. We believe that we should give self-funded retirees some assistance. The states did not come on board, and that is why that commitment was made. When people make a comparison between the assistance to pensioners and the assistance to self-funded retirees, we indicate that pensioners were already receiving concessions—as I said, ranging quite broadly across the jurisdictions. No such concessions were given to self-funded retirees. That is why we believed it was important to do that. The benefits of self-funded retirees do not exceed in any state or jurisdiction the benefits that pensioners receive before you even take into account the concession assistance that the Commonwealth is giving to pensioners.

I note the comment that Senator Bishop made about the Department of Finance and Administration costings. The Department of Finance and Administration costings, the Charter of Budget Honesty and the revision of the published estimates in the portfolio additional estimates clearly show that the half-year bring-forward of this measure is real. We are talking about the $150 for FTB part B for this financial year. As I said, you might not believe it is real. As you argued, the $600 per child FTB part A supplement was not real. I indicated before that the Labor Party will know where that argument got them. Australian families receiving FTB part A know that the $600 for each child was real and they will know the $150 is real, too. The Labor Party can go on ad infinitum about the $150 not being real. It is, and they need to have a look at the Charter of Budget Honesty and the portfolio additional estimates. If you do that comparison, you will know it is real.

The other thing that Senator Bishop raised was the issue of widows of veterans. That has not been brought to my attention personally. There may be a letter from the veterans’ widows association but I have not had that brought to my attention. If what Senator Bishop has said is correct—and I do not always go by what somebody says here in the chamber, because it is not always right—and it is a case of an administrative situation and not something else, I will have a look at that because it would be inappropriate for people to be having to fill out extra forms.

With regard to the health care cards and the ramshackle system that existed for self-funded retirees under Labor, where it was very complicated and people did not apply, Labor might want to go back and look in the mirror at their own policies and their own record. I appreciate Senator Bishop bringing it to my attention. It would have been more collegiate had he done that earlier and by way of a letter to me. We might have been able to respond faster. Now it has been brought to my attention, I will have a look at it. I commend the bill to the chamber.

Question agreed to.

Bill read a second time.