Matters of Interest

Family Tax Benefits

The Hon. T.T. NGO (15:32): The 2015-16 federal budget relies on unfair changes to family tax benefits (FTB), which were in the last budget. Following the unveiling of last year's federal budget a number of measures in it have fallen by the wayside. These include the GP co-payment and changes to Newstart Allowance to make those under 25 wait six months, which I discussed last year. I am glad that, after the community expressed its outrage, the federal government came to its senses and gave up on those changes.

However, the federal government continues to pursue changes to FTB that will unfairly impact low income families. These changes include ceasing FTB part B for families when their youngest turns six, down from 16. I believe that reducing the cut-off to six years old is mean and low. It suggests that somehow at the age of six children become independent and can look after themselves. It also does not take into consideration that whilst children are in primary school they still require a lot of looking after.

My question is: what if they get sick and cannot go to school, or the school sends them home? An employer will not want to employ someone who says they can only work between 9am and 2.30pm each day and will regularly have to take time off work to care for their sick children. Many honourable members have experienced parenthood and know how tough it can be to raise young children with two parents, let alone with a single parent. If honourable members have young children, try for the next few weeks to look after them by yourself and give your partner a break. I am sure that after a while many honourable members will love to have their partner back to give them a hand to raise their beautiful children.

Currently, a single parent who earns less than $50,000 per year receives $3,091.55 from Family Tax Benefit Part B. Modelling by the National Centre for Social and Economic Modelling of the impact that changes to family tax benefits and the new Jobs for Families will have on families shows that low income families will be worse off and that high income families will be better off if the changes are successful. It suggests that nine out of 10 low income families will lose out while nine out of 10 high income families will benefit. Around 80 per cent of families with children will have lower disposable incomes each year to 2018-19.

Worryingly, it also suggests that low income families earning up to $47,000 will lose up to 7.1 per cent of their disposable income by 2018-19, whereas those with an income of more than $120,000 per year should see a 0.2 per cent increase in disposable income, meaning that those earning in the bottom fifth will be worse off and that those in the top fifth will be better off under these changes.

On 10 May, the Prime Minister said, 'So, while we are very committed to this improved Jobs for Families childcare package, there will need to be savings in the family tax benefit area to fund it.' This statement suggests that the federal government would link the funding of the family's package to the changes to FTB. Some would say they were trying to blackmail the Senate or force it to choose between childcare reform and pushing low income families with children further into poverty.

I hope that the federal government comes to its senses and does not make these cuts to family tax benefits—to the most vulnerable families in our society. I suggest that the government considers continuing FTB until a child reaches at least high-school age, when they are more independent. If savings are required, the federal government should look at other ways of achieving this will not unfairly affect low income families.