BILLS;Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015;Second Reading – 12 Nov 2015

Once again I am a little confused about this government’s priorities. I am, of course, pleased to support the bill currently before the chamber. While I will outline the precise measures contained in this bill, in summary it removes certain means-testing provisions for Youth Allowance. Basically, the bill improves support for young people living in families with higher levels of assets either by increasing their income support payments, or allowing them to receive payments where they were previously ineligible. It makes a refreshing change when this Liberal government decide they actually want to provide more support to young Australians, especially given their record. But it begs the question: where are this government heading when it comes to providing a social safety net? What is their real stance on supporting those who are doing it tough?

You have to wonder what was going through the minds of those opposite when they put this bill forward, as it flies directly in the face of their legacy on income support. I would like to take a moment to reflect on that legacy, and remind those listening, or reading the Hansard, that the current Prime Minister was in the cabinet when all the cruel cuts of the last two budgets were agreed upon. We should also remember that Prime Minister Mr Turnbull said publicly that he supported the cuts in the 2014 budget. Remember, in June 2014, Mr Turnbull said:

I support unreservedly and wholeheartedly every element in the Budget.

We need to remember those words of ‘unreservedly and wholeheartedly’. There is no room for equivocation there, and Mr Turnbull made it distinctly clear that he supported every element.

Let us have a look at exactly what Mr Turnbull supported, particularly when it comes to income support payments. He supported cuts to the indexation of pensions which, had they been successful, would have left pensioners worse off by up to $80 a week. Having been unsuccessful with this move, the government instead put legislation through the parliament—in a dirty deal with the Greens—which cut pensions by up to $8,000 for single pensioners and $14,000 for couples. This legislation will see 330,000 pensioners worse off in 2017. Mr Turnbull supported cuts to family payments which would have left families worse off by up to $6,000 a year.

In the same interview, where Mr Turnbull professed his unreserved and wholehearted support for the measures in the 2014 budget, he specifically backed the then Abbott government’s policy for university deregulation and $100,000 degrees. I have noticed, from previous contributions both here and in the other place, that they have emphasised the benefit these measures will have in supporting families from regional areas. But, at the same time, those opposite supported legislation which would have killed the prospects of a quality university education for many regional students. How can you say you believe in greater support for young people in remote and regional areas while, at the same time, kill their chances to advance their education?

It is interesting to note that many of the cuts to income support put forward by this government will have the greatest impact—guess where?—in regional areas. I turn to the Nationals, as I have done in this place many, many times before, and ask them, once again: how can you claim to represent regional Australia when you continue to roll over to your coalition partners on policies that hurt regional Australia? Perhaps this bill is intended as some kind of gesture by the Nationals to their constituents. It is a weak gesture, mainly, and is probably to maintain the pretence that they still support regional Australia.

Mr Turnbull also supported legislation that would have left young job seekers with nothing to live on but fresh air for six months. Senator Siewert mentioned this. I have spoken many times in this place on that issue and about how hard it would be for young people to live—in fact for anybody to live—with no income for six months. While the government have scaled back this proposal, there is still legislation on the books to force young job seekers to wait up to one month without a payment. Once again, I think that anybody trying to live and survive for one month without any income is just atrocious.

When I spoke on the legislation in September, I mentioned some of the evidence that had been submitted to a Senate inquiry about the effects that a one-month payment would have on young people and their families. Various welfare agencies have said that the measure would lead to dire consequences, including family breakdown, increased isolation, deterioration in physical and mental wellbeing, homelessness and housing insecurity. I also referred in a previous contribution to comments in the media from a young person who had experienced homelessness and had managed to get her life back on track with the help of our income support system and other social services. This young person said that she was certain young job seekers would turn to crime to support themselves if they were subject to a one-month waiting period and had no other means of support. She said that they would turn to crime because they would not have an alternative, and unfortunately I do believe that that is a real possibility for some young people.

Remember that, while young people are subject to this waiting period, they would still be required to participate in activities such as applying for 20 jobs a month. How on earth anyone could be expected, while struggling to survive without an income, to travel to appointments and make themselves presentable for job interviews? They would be lucky to be able to eat let alone do other things. If you cannot even afford essentials such as food, rent and electricity, how can you even contemplate buying clothes or something like a bus ticket?

As I said in my speech on that particular bill, that proposal is downright cruel. Mr Turnbull and those on the other side supported this harsh, punitive measure.

The same legislation included a cut of $46 a week to income support for young people between the ages of 22 and 24. So when the Turnbull government introduces a bill like this to the Senate, it really does serve to highlight the hypocrisy at the heart of this government’s agenda. If this government is serious about helping young people, as this bill seems to indicate, then they should dump their cruel, punitive cuts to income support payments for young people, particularly the one-month waiting period. Until they do, many young people will question what the government’s intentions actually are.

There are some very confused priorities when you have measures on the one hand which provide more generous income support to young people—and we applaud that—but on the other hand you have measures that punish young people and drive them into poverty and hardship.

I will outline briefly what the bill currently before the Senate does. There are four main components to the bill. Commencing from 1 January next year, the bill will remove the family assets test and the family actual means test from the youth allowance parental means test arrangements. This measure will see around 4,100 additional dependent youth allowance claimants qualify for the first time, accessing average annual payments of $7,000 a year. Removing the family actual means test will see around 1,200 more people receiving youth allowance for the first time, as well as increasing payments for around 4,800 existing students by approximately $2,000 a year. As I mentioned earlier, this measure is particularly important for families in regional areas. It will benefit a number of farming families who may be on low incomes but still have difficulty getting access to youth allowance because farm assets are included in the means test.

The bill also aligns the parental income test exemptions for youth allowance with existing arrangements for family tax benefit part A. It removes the maintenance income from the youth allowance parental income test assessment and applies a separate maintenance income test for the treatment of child support, like the test that currently applies to family tax benefit part A. Where a family has a dependent child who receives an individual youth payment that is parentally income-tested and younger siblings who qualify for family tax benefit, the family pool for the youth parental income test will include all FTB children. This measure will allow around 13,700 families with dependent children in both the family tax benefit A and youth streams, to become eligible for an average increase in their payment of around $1,100 a year.

Around 5,800 families who currently miss out on payments due to the combined higher taper rates will also become eligible for an average payment of around $1,300 per year. These changes will reduce the regulatory burden on around 30,000 families subject to the family actual means test and around 200,000 families subject to the family assets test. The measures contained in this bill require a financial commitment of $262.7 million over the forward estimates.

This bill was referred to a Senate inquiry, and I will now take some time to comment on a couple of submissions to that inquiry. Of the nine submissions received, five came from the Isolated Children’s Parents’ Association of Australia and their state and territory branches. ICPA Australia pointed out the challenges facing young people from remote and regional areas, particularly the higher up-front expenses associated with relocation including travel, accommodation and the other costs of living away from home. They noted that many family-owned rural businesses have a high asset base, which excludes students from these families qualifying for dependent youth allowance, despite these businesses having a low net income.

We know that rural students are underrepresented in higher education. ICPA Australia cited in their submission research they had conducted which showed that financial costs, combined with the difficulty of accessing government support schemes, were key factors in limiting rural students’ access to higher education. The research involved surveying ICPA members about their children’s’ access to tertiary education. Let me quote some of the data from ICPA Australia’s research, which was conducted in 2013. Seventy-four per cent of respondents indicated they required government financial support to meet the expense of relocation and ongoing living and university expenses; 34 per cent of students deferred, with 74 percent citing financial reasons for deferral, and 47 per cent were ineligible for dependent youth allowance due to assets.

A submission to the inquiry by the Youth Affairs Council of Western Australia noted that in order to satisfy the family actual means test, a young person is required to provide the department with details of the spending and savings of every member of their family. So a young person is required to provide the department with details of the spending and savings of every member of their family. The onerous nature of this requirement led to delays in receiving payment and also acted as a disincentive for young people to apply for payments. I am not surprised.

The Australian Council of Social Service, or ACOSS, made some comment about the high combined taper rates for families receiving multiple family and youth payments. They pointed out that the high taper rates result from the ‘stacking’ of multiple income tests, and that this results in a disincentive for family members to engage in paid work.

Labor supports the measures contained in this bill. Of course we want to see extra support provided to young people on youth allowance. But as I said before, it is such a hypocritical approach for this government to take when some young people get support and others are punished. It just goes to show the twisted priorities of this government. If you have assets, this government will go into bat for you, but others on low incomes will have their income support payments cut and their family payments cut.

The Turnbull government should be helping all Australian families, not just those it thinks are deserving of its support. If those opposite are serious about supporting families, they should drop their plan for the $100,000 degrees that price many families out of higher education. They should drop their cuts to family tax benefit and their cuts to paid parental leave. They should start getting serious about job creation and economic growth, particularly with the ever-increasing levels of youth unemployment across Australia. They should rule out increases to the rate or base of the GST. One of the worst things this government could do to family budgets is put a great big 15 per cent tax on everything you buy. We know from recent research conducted by ACOSS and the National Centre for Social and Economic Modelling that those who would be the hardest hit by such a policy are, once again, the ones who can least afford it.

Labor recognises that the bill we are currently considering is a positive step forward for young people and their families, but it does not make up for the government’s cuts to family payments contained in the 2014 budget, and it does not make up for the government’s push for $100,000 degrees, pricing many regional students out of higher education. It does not make up for their plans to force young people to live on nothing, whether for six months or for one month. And it certainly will not make up for the government increasing the tax burden on low- and middle-income earners by increasing the GST, whether by increasing the rate or by broadening the base.

I have said it many times: this government has targeted its cuts at the most vulnerable and disadvantaged people in Australia. It means that when it comes to budget savings the people who can least afford it are the ones who have to pay the greatest price. When those opposite say that the end of the age of entitlement is over, the so-called entitlements they are talking about are actually basic needs for people on low incomes. And it makes no difference whether Mr Abbott is Prime Minister or Mr Turnbull is; many of the attacks on disadvantaged Australians, many of the cruel cuts from the 2014 and 2015 budgets, are still on their books.

Granted, the bill we are debating right now does provide some additional support to young people and their families who genuinely need it. But it goes a very small way towards addressing the cruel cuts that low-income Australians have had to endure so far.