Labor Senator's Dissenting Report
The Labor Senators on the Community Affairs References Committee
(committee) reject the recommendation contained in the majority report that the Social Services Legislation
Amendment (Family Payments Structural Reform and Participation Measures) Bill
(No. 2) 2015 (bill)
should be supported.
This bill contains the latest round of harsh cuts to Australian
If passed, millions of families – and their children – will be
Of course, low income and vulnerable families will be hurt the most.
In the course of this inquiry, the cuts contained in this bill have been
overwhelmingly opposed by stakeholders.
As such, Labor Senators believe that the bill should be rejected.
Description of Cuts
As outlined in the majority report, this bill is comprised of three
schedules and seeks to amend the A New Tax System (Family Assistance) Act
1999, A New Tax System (Family Assistance) (Administration) Act 1999,
Social Security Act 1991 and the Social Security (Administration) Act
1991 in order to:
Reform family tax benefit (FTB) Part A and at-home, under-18
fortnightly rates for youth allowance and disability support pension by:
increasing FTB Part A fortnightly rates by $10.08 for each FTB
child in the family aged up to 19; and
increasing youth allowance and disability support pension by
around $10.44 per fortnight for recipients aged under 18 and living at home.
Reform FTB Part B by changing rates calculated by the youngest
child in the family:
for children under one, increasing the standard rate by $1 000.10
for children between one and five, maintaining the current
for children between five and 13, maintaining the current
for children aged 13 to 16, introducing a reduced standard rate
of $1 000.10 per year for individuals who are not single parents aged 60
or more or grandparents or great-grandparents; and
for children aged 13 to 18, maintain the current standard rate
for single parents who are at least 60 years of age, grandparents or
Phase out FTB Part A and Part B supplements by:
reducing FTB Part A supplement to $602.25 a year from 1 July
2016, and to $302.95 a year from 1 July 2017 and ceasing on 1 July 2018; and
reducing FTB Part B supplement to $302.95 a year from 1 July
2016, and to $153.30 a year from 1 July 2017, and ceasing on 1 July 2018.
The Liberal Government's record
Since coming to government in 2013, the current Liberal Government has
sought to make deep and harsh cuts to support for low and middle income
Their first attempt came in the 2014 budget, where the Government sought
freeze FTB rates;
freeze certain FTB thresholds;
reset FTB supplements, and
cease FTB Part B for families when their youngest child turns
Evidence presented in Senate Estimates revealed that had these measures
been passed, they would have resulted in cuts of around $8 billion from
These cuts were roundly rejected by the Australian people. Labor are
pleased to have been able to prevent these cuts from going through the
It is disappointing, however, that the Government has determined to
pursue a new round of cuts to families.
Impact of the Current Cuts
Whilst the Government has touted these cuts as a compromise on its
original family payments cuts from 2014, data presented to Senate Estimates
shows the impact of these cuts will be widespread, and remains very harsh.
Labor Senators do not accept that these measures amount to a
Because of the abolition of FTB Part A supplements, 1.5 million
families will lose $726 per child every year.
Of these, more than 600 000 are single parents. 600 000 are on combined
family incomes of less than $40 000 a year.
Because of cuts to FTB Part B Supplements, 1.3 million families will
lose $354 per family per year. These families are all on a single income.
130 000 single parent families will lose FTB Part B when their youngest
child is 13. Of these, around 80 000 are on incomes of less than $40 000 a year.
In total, the Government's own figures show that more than 3 million
children will be adversely affected by these cuts.
Labor Senators are pleased that the Government has removed proposed
changes to support for grandparent carers from this bill.
However, it is clear that these cuts will hurt a very large number of
families, many of whom are on low incomes.
As outlined in the majority report, submissions received by the committee
from stakeholders have almost universally opposed the passage of these cuts.
Overwhelmingly, submissions reflected serious concerns about the impact
that these cuts would have on low income families.
As the Australian Council of Trade Unions submitted:
These measures are extremely harsh on low income families and
likely to have significant negative consequences on the capacity of those
families to meet the everyday costs associated with raising children.
The reduction in FTB Part B from $2,737.50 to $1,000.10 will
substantially reduce household income for vulnerable families with teenage
children including single parents under the age of 60. The disadvantage already
experienced by families that are unable to obtain employment or are employed in
low-wage jobs will become further entrenched.
The Community and Public Sector Union also raised concerns with the
impact on single parents:
Single parents with teenage children may already face
significant barriers to workforce participation and often find that only insecure,
short-term work is available. Reducing payments to this already vulnerable
group with many having no realistic access to secure work will riot improve
their life outcomes, rather it will further entrench their disadvantage.
The Parenthood shared this view:
What these changes will mean in real terms for Australian
families is that they will no longer be able to buy the new school shoes when
needed or the books and other school essentials; they'll no longer be able to
afford to keep enough petrol in the car to take their kids to and from school
or afford the fresh fruit and vegetables to keep their children healthy and
well fed; and it will mean that after all the essentials are covered they'll
lose what little they had left to buy their children the occasional treat like
a trip to the movies.
The impact of these cuts on various types of vulnerable families was
also made clear, particularly the impacts on single parent families and
families of children with disability. As the Salvation Army submitted in
relation to single parents:
Of particular concern is the impact of reducing the amount of
FTB to single parents with children aged 13 and over, as they are unlikely to
be the beneficiaries of additional childcare. None of the government's cameos
model the likely impact of the changes on families with children over the age
of seven. As such, single parent householders with a youngest child over the
age of 13 face being thousands of dollars worse off each year unless they
successfully substitute lost benefits with wages.
Children with Disability Australia drew attention to the impact of these
cuts on families of children with disability. They submitted:
Families accessing the FTB-B for children with disability
aged over 13 and the supplements will experience a considerable reduction in
payments if the measures contained in the Bill are passed. While there is a
lack of specific data that examines the socio economic status of families of
children with disability, available evidence suggests families of children with
disability are more likely to experience economic hardship. For example, the
poverty rate of families with at least one person with disability (including
parents with disability, children with disability or adults in the family) was
11.1 per cent in 2010 based on incomes, as opposed to 7.6 per cent for families
without a person with disability. This data did not take into account
additional expenses for families with a person with disability.
There is therefore a significant risk that the proposed reduced
rates will negatively impact families of children with disability accessing the
National Welfare Rights reinforced this view:
For example, many parents with children with high care needs
due to disability or learning difficulties do not qualify for higher levels of
support such as through payments for carers, which have strict eligibility
conditions. However, they also face major difficulties transitioning to work,
even as their children get older. Why are those parents treated less beneficially
than grandparent carers? Similarly, parents with a disability or other
significant medical problem also face barriers to transitioning to work, and
yet will get less support once their youngest child turns 13. Others such as
foster carers and kinship carers are not considered in terms of their capacity
to participate in the workforce.
The Government's new Baby Bonus
As detailed above, this bill contains a measure to introduce a new rate
of FTB Part A for families with children less than one year old.
The measure has been likened to the reintroduction of the Howard-era
Baby Bonus, which was abolished by Labor.
This measure was announced as part of a deal done between the Liberals
and the Nationals to secure the leadership of the new Prime Minister, Malcolm
The Labor Senators note the contradiction between the Government's calls
for cuts to be made to family payments, at the same time that they are
increasing some payments as part of backroom deals.
This measure is not proper policy development and it is fiscally
irresponsible. Labor does not support this measure.
Labor Senators do not support the passage of this legislation.
The cuts contained in this legislation are harsh. They will hurt low
income and vulnerable families.
Like the measures originally put forward in the 2014 budget they are
The Government should take them out of the parliament and out of the
Labor Senators recommend that the Senate reject the Social
Services Legislation Amendment (Family Payments Structural Reform and
Participation Measures) Bill (No. 2) 2015.
Carol Brown Senator Katy Gallagher
Senator Claire Moore Senator
Nova Peris OAM
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