Senator MOORE (Queensland) (13:06): The Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014 amount to a serious attack on the Australian welfare state. In his budget reply, our opposition leader, Mr Shorten, said about the budget that was brought down that it was an attack on the freedom of integrity, on the freedom of respect, on the freedom that gives every person dignity and the right to be treated equally and on the freedom of compassion and respect that gives individuals the opportunity to fulfil their potential. This is the freedom we believe in, and this budget undermines that freedom. It weakens it. This budget tears at the fabric of our country. Indeed, these bills are the heart of that budget. They attack the most vulnerable in our community. I believe that the government is trying to destroy our system of a 'fair go' specifically through these bills.
We know that through the proposals that we have before us millions of pensioners, families, people with disability, carers and young people will be worse off; cuts will throw Australia's most vulnerable citizens into poverty. Is this what the Prime Minister meant when he said that he was going to protect the vulnerable? As has been said many times, there are a series of broken promises in this legislation: broken promises to pensioners, broken promises to Australian families, broken promises to people with disability, broken promises to carers and broken promises to young people who do not have work.
Before the election, this Prime Minister promised Australian pensioners that there would be no cuts or changes to the pension, yet within these bills we see cuts to pension indexation which will undeniably diminish the living standards of age pensioners, disability pensioners, veterans and carers. Despite what the government says-despite the rhetorical discussion about whether these are cuts or reductions-these are cuts. People will have less money; to me, that is a cut.
Before the election, Australian families were promised by this Prime Minister that they would be better off under an Abbott government. They are now counting the cost of the cruel cuts to family payments contained in these bills. There is a fear which was raised by Bill Shorten in his budget reply that this budget-and, I believe, in particular these bills-will make Australia a colder, meaner and narrower place. This is a failure of this government-a government that promised govern for all of us-in its mutual obligation to young job seekers as they look for work.
I know that many senators in this debate will talk about particular elements in this bill, and there are so many about which to talk. I want to raise a few. The bills will tear up our system of social contracts-social contracts that have been built by successive governments of all particular flavours over the last century. They are based on the pillars of the Australian welfare state: access to universal health care and education, a fair and secure pension system, support for people who cannot work due to disability or caring responsibilities and support that helps get people into work. It took more than a century to develop the system that we have today; these bills will take that system out.
We have a social welfare system of which Australians can be proud. No-one claims that it is perfect. We accept that, and we need to consistently work together in our communities to see how we can make it better. Importantly, I say 'work together'. When the Senate Standing Committee on Community Affairs looked at this legislation, every one of the witnesses that came to see us said that they wanted to engage with government to look at the system. They were not just rejecting and saying no-though they were rejecting the changes in these bills, there is no doubt about that-they were prepared to work with the government to find alternative ways to make our system stronger. The statements from government that only they care about our budget and our society and that only they are aware of the need for change are just not true. We need to have security in our system. It is that very security that these bills seek to destroy.
The Abbott government is making a false and misleading argument to support these cuts. We heard on budget night one element which continues to infuriate me and many people in the community: a claim that we are a nation of leaners and lifters and that the leaners need to do more heavy lifting. Apart from the fact that that claim is offensive, what does it mean? Does it mean that anyone who has any need of reliance on welfare is automatically not worthy? Is that what the government is saying? Once again, people are not being treated with respect through this process.
We agree with the comments made by the Council on the Ageing:
If the argument is that pensions need to go down in terms of Commonwealth expenditures because of a fiscal crisis, we do not think that is a sufficient argument …
In fact, there is compelling evidence that the proportion of Australians who are welfare-dependent is decreasing. Despite the cries of the government and its compliant media, who run regular media statements about people who are taking down the system, the statistics in the June analysis of the Melbourne Institute using the Household, Income and Labour Dynamics in Australia Survey showed that Australians have reduced their dependence on welfare. In 2001, 23 per cent of working-age people in Australia received a welfare payment each week. In 2011, that had dropped to 18.5 per cent, and it continues to drop despite the rhetoric and despite the claims that our system is falling over and is unsustainable.
We know that across the OECD Australia spends less on welfare than any other country except Iceland. Earlier this year, Minister Andrews claimed that Australia is a risk of becoming a welfare state like nations in Europe, but welfare spending in Australia is well below the countries in the OECD.
Senator O'Sullivan: Compared to Greece, Italy and Ireland?
Senator MOORE: In fact, our welfare expenditure accounted for just 8.6 per cent of GDP in 2013 compared to the OECD average of 13 per cent. Perhaps Senator O'Sullivan can give me the figures which he is mumbling about. The government's claim that Australia is heading for some sort of welfare crisis is complete rubbish.
These bills build up the premise that people are not supporting Australia, but they are. These bills are an unprecedented attack on pensioners and seniors. The Prime Minister said that pensions would not be cut. Well, they will be. The real amount of pension will be cut. The pension indexation changes will impact on what people are able to get from their pension. Treasurer Hockey admitted that the Abbott government's changes to pension indexation will result in massive cuts to the age pension, saying:
… in 2024-25, according to the Parliamentary Budget Office, instead of being $74.8 billion a year it is $67.9 billion a year.
In Senate Estimates, answers from Minister Fifield showed that the changes to the pension indexation have been put in place in an effort to slow the rate of pension increase.
What has occurred is that people have been made afraid. They have been made afraid about the security of their future. They have been made to feel as though they are doing something wrong, when in fact they have not. That is not the intent of our system. It is to engage and support, not to demonise.
The major advocacy organisations that support aged people in our country are saying they want to have a discussion about retirement in Australia. They think it is an important thing to do. They do not like their members-older Australians-being referred to as 'leaners'. They want a discussion about how we can work together to best work as a nation. We need to look across the board at our retirement system and not take a blunt instrument like the indexation tool to rip money out of the fortnightly payments of Australian pensioners.
I remember, as you would, Mr Acting Deputy President Gallacher, that when we had the call several years ago to increase pensions, our government, the Rudd government, actually increased pensions. The people on this side were saying we should do more. So their argument is not consistent. With our superannuation changes, again, we believe that we should be protecting superannuation and not ripping it away.
But it is not just age pensioners and veterans who are being affected by these bills. Self-funded retirees are also being betrayed in the budget. The bills include the abolition of the seniors supplement, an annual payment of $876 to people who receive the Commonwealth seniors health card. Already the government has cut the pensioner concessions that are linked between the Commonwealth and state governments, a process that of course is blamed completely on the states, but that is just not true.
We believe that there is a clear indication in these two bills that people in Australia will now be divided into those who have and those who have not, and this government is ripping more money off the people who have not. We consistently talk about the issues of the cumulative effect of these cuts. You cannot take one issue and look at it in isolation. We had evidence during our inquiry about what the cumulative effect would be of the range of cuts. This needs to be addressed by the community and by the government.
In regard to the age pension and superannuation, I will be moving amendments to the bills today to remove the following cruel cuts from the bills: cuts to pensions, through the indexation changes; increasing the age pension to 70; abolishing the seniors supplement; the resetting of the social security and veterans entitlements test deeming thresholds; cessation of the pensioner education supplement; the removal of the three-month backdating of the disability pension under the Veterans' Entitlement Act 1986; and a pause to indexation of the income-test-free areas for all pensioners. Labor will not support these measures.
When we get to families there is another series of attacks. These bills contain measures that can only be described as a full-scale cost-of-living attack on Australian families. It includes a massive $7.5 billion in cuts to family payments. This legislation will put more pressure on the budgets of millions of families, and low-income families will be hit the hardest. We have figures from independent modelling agency NATSEM saying that the government has no credibility in claiming that this is a fair budget. NATSEM research showed that around 1.2 million families will be, on average, $3,000 a year worse-off by 2017-18. In contrast, the top 20 per cent of households will experience either no impact, a negligible impact, or in fact a positive impact.
The bills seek to freeze the payment rate for family tax benefits. They seek to freeze the low-income-free area for family tax benefits, including the low-income-free area for those who receive the maximum rate of family tax benefit A. According to the Department of Social Services, a freeze to the low-income-free area for FTB-A alone will see more than 370,000 families around $750 a year worse off in 2016-17. Over the life of the children's schooling, eligible families will be around $15,000 worse off as a result of this budget, including the measures in these bills. By 2016, a single-income couple family on $65,000 with two school-age children will be around $6,000 worse off each year. We have the figures. Through Senate estimates we tried to get information about these cuts. We tried to find out exactly who was going to be impacted. We found out slowly through Senate estimates that around 700,000 families will lose family tax benefit B, if the government actually gets these bills through.
Families will lose their payment when their youngest child turns six. We have been fighting these kinds of reductions for years, looking at the need for effective parenting. Again, removing this payment when the youngest child turns six does not engage effectively with what we know is best practice for families and for parenting. It erodes the sense of security, the sense of harmony, that people should have with their government.
Today I will also move amendments to reflect that Labor will oppose the indexing of parenting payment (single) by CPI only-the government is moving the wages benchmark. Labor will oppose the government's move to freeze the rates of family tax benefits; oppose revising the family tax benefit end-of-year supplements to their original values, and cease indexation; and, oppose limiting family tax benefit part B to families with children under six years of age. The new allowance, which as been put in because the government knew this was going to have an impact, further complicates the system and does not adjust effectively for the loss from the original cut. Labor will also oppose freezes to the income-free-areas for family payments.
The bills also include a measure to tighten the means testing for FTB-B from $150,000 to $100,000. Labor accepts the need for means testing. We in fact have implemented means testing for many payments, such as the age pension and the private health insurance rebate. We originally introduced means testing to family tax benefit part B. You will remember that when we did that, the people who are now in government but were on the opposition side of the chamber at the time and they abused our changes, saying that we were heartless, that we did not understand the need, and that we were not effectively fulfilling our role in government. It is always dangerous when you go back and read past Hansards. But I would encourage people to have a look at what this government said when they were in opposition about changes to our system. Compare the rhetoric and compare the allegations, then you will see-when you hear their statements-that there again is no consistency.
There was considerable debate in our inquiry and also considerable information from people who have written in to many of us through the committee process-through email and phone calls-about their concern about the young job seekers' changes. There were a series of questions that we put to the department at our inquiry about the impact and the research behind the singularly unique and harsh changes that the government has brought in, which will withdraw the safety net for young job seekers. I know many senators will be putting information on the record about how concerned they are about this.
The National Welfare Rights Network stated in our inquiry that the changes in this measure to unemployment eligibility for young people under 30 is:
…a fundamental attack on the basic right to social security and the principle of adequate income support based on need.
The removal of any income support for a group of people not in paid work fundamentally changes the Australian income support safety net.
The St Vincent de Paul Society said:
We find very concerning the idea that the government would intentionally remove any semblance of a social safety net for a particular group of people.
The Parliamentary Joint Committee on Human Rights has also pointed out that amongst all the changes that were brought forward, this particular attack on young, unemployed people does not meet the requirement to fit the human rights expectations of our community. Again, I stress that these bills-as part of a wider budget-actually attack the relationship between our citizens and our social welfare system. These do not respond to the way that we have committed to ensuring that people in need will have support.
Senator O'Sullivan: It will be a lot harsher if we do not get the budget in order.
The ACTING DEPUTY PRESIDENT (Senator Gallacher): Order!
Senator MOORE: There is gross unfairness at the heart of this government's budget. We now know that people will not be benefited by these processes. We will also be moving amendments in this particular section of the bill. We will be removing the following sections to extend the ordinary waiting period for working age payments, we will be rejecting the cessation of the education entry payment and we will be rejecting moving people under 25 from Newstart onto youth allowance, which would be with weekly cuts to their already minimal allowances.
The forcing of young people under 30 to wait six months without any support at all then becomes a rolling punishment. It is not just once; but it is six months on, six months off. Think about what that will do to Australian families. This applies to people under 30. These are independent people who now will be forced back to relying on family or charity. That does not meet any requirement under our acceptance of what should be what our nation does. We are also rejecting the pauses to indexation for the low income-free area for student payments, including the student income bank limits. We are also rejecting pausing indexation of income-free areas for all working age allowances.
There are many other elements of this bill that need consideration. They are enormous piece of legislation, but I think it is important that senators across the board can identify elements that offend them, that cause fear and that we should be addressing. We believe the government has not effectively shared the pain of the budget. They said that there would be pain in the budget, but it has not been shared fairly. The most vulnerable, who are the people who are reliant on support, will bear the greatest punishment. We reject this process and we will actually be ensuring that the through this debate, we will be focusing on what needs to change.