19 November 2015, opening statement from Brian Lawrence, chairman, Australian Catholic Council for Employment Relations
Senate Community Affairs Committee hearing into the Social Services legislation Amendment (Family Payments Structural reform and participation Measures) Bill 2015
Note: Brian Lawrence appeared before the Senate Community Affairs Legislation Committee at 11.20am, Thursday, 19 November 2015
I would like to thank the Committee for inviting me to appear here today to speak about this important Bill, a Bill which, if enacted, would have a major impact on the living standards of low and middle income families.
The submission filed on behalf of the Australian Catholic Council for Employment Relations is in opposition to the Bill.
The Government’s financial impact statement for this legislation shows that the legislation is intended to save $4.84 billion dollars over the first three years of its operation. These proposed cuts will fall on about two and a half million Australian families. All families with children would suffer substantial cuts in their incomes. All children would be worse off, save for those who are less than 12 months old.
These cuts are planned to commence on 1 July 2016 and be fully implemented two years later, on 1 July 2018. The two year program will inflict an unjust burden on all families, but particularly those families who rely on a single income and have children in secondary schools.
In broad terms, the cuts of $4.8 billion borne by 2.5 million families would amount to an average loss of over $1900 for each family with children in the first three years. And because the cuts would only be fully implemented in the third year, the future losses would be suffered at a greater rate.
I would like to briefly outline the impact of these changes on various family groups.
All families would feel a loss from 1 July 2016. By 1 July 2018 all families would feel the full brunt of these measures. By July 2018 family payments under Family Tax Benefit, Part A would be reduced by $ 9.08 per week, per child. Over the first three years of the new scheme, all two child families would suffer a loss of $2,081.50.
Much more damage would be done to the living standards of single income families through major changes to the eligibility for Family Tax Benefit, Part B and the payments made under it.
Family Tax Benefit Part B is payable to the primary carer of children. In couple parent families it is usually the mother, but sometimes the father, who is entitled to the payment. A sole parent is also entitled to the payment if he or she is the primary carer of the children. Special provisions are made for grandparents who are the primary carers of their grandchildren.
The Bill proposes that from 1 July 2016 single breadwinner couple families would no longer be eligible for Family Tax Benefit, Part B at the end of the year in which their youngest child turns 13. This would amount to a further loss of $60.20 per week and means that the loss would usually occur from the end of the first or second year of secondary school. The loss of this payment would cost the family $13,924 over five years of secondary schooling. This loss is in addition to the loss of $9.08 per child, per week, described earlier.
The Bill proposes that from July 2016 sole parents and grandparents who are the primary carers of their grandchildren will cease to be eligible for Family Tax Benefit, Part B at the end of the year in which their youngest child turns 16 and that they be paid at lower rate for the three years prior that time. The lower rate over the three years is less than a third of the full payment, with the result that they would lose $1,784.70 in each year at the reduced rate and $2,784.80 in each year thereafter.
For those parents who continue to be eligible for Family Tax Benefit Part B, there would be a further loss of $6.79 per week as a result of the abolition of the associated annual supplement. In a single breadwinner two child family who escapes the changes in eligibility for this payment, the weekly loss from 1 July 2018 would be $24.95 per week.
These changes are proposed to take place without any reference to the needs or financial circumstances of the families concerned. They would apply to the many families who are already living in poverty.
It is important to appreciate the personal and family consequences of what is proposed by the Bill and how the lives of many children would be affected. For couple parent and sole parent families, and for grandparents who have the care of a grandchild, the Bill proposes withdrawal of support when their children are in the final and critically important years of their schooling.
The Bill would leave many without an adequate standard of living and without sufficient financial resources for parents to provide a decent living for their children. Many more children will live in poverty if this Bill is passed.
The proposal in the Bill to limit the eligibility of single breadwinner couple families is contrary to long-established provisions in Australian taxation and social security laws which have provided financial support to families where one of the parents stays out of the paid workforce in order to care for their children.
Our submission refers to several speeches concerning the importance of this principle. The submission includes extracts from speeches given by Prime Minister Keating and Prime Minister Howard on the need to recognise the value of work performed by parents who stay out of the workforce to care for their children. Those speeches also stress the importance of providing parents with some financial support so that they are assisted in making the choice between paid employment and in-home care for their children. On this issue the two Prime Ministers and their Governments were united.
Our submission also refers to the report of the Parliamentary Joint Commission on Human Rights of 10 November 2015. This report includes a consideration of whether the terms of the Bill are consistent with several provisions of the International Covenant on Economic, Social and Cultural Rights, in particular, the right to social security, the right to an adequate standard of living and the right to non-discrimination in the provision of social security measures. In our submission, the legislation fails these tests because of, at least, the unjust way in which it impacts on low income families.
Our submission also refers to the Convention on the Rights of the Child and argues that Bill fails to meet the requirements in Articles 2, 26 and 27 of that instrument. It is clear, we submit, that the Bill fails to comply with the standards of protection required by the Convention because of the very deleterious effects it would have on children in low income families across Australia. Legislation that causes large numbers of children to fall into poverty, or deeper into poverty, cannot be consistent with the Convention.
I would be happy to answer any questions you may have.
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