Transcript by The Hon Jenny Macklin MP

Budget – Family Tax Benefit, families on $150,000, new participation measures, Paid Paternity Leave, income management trials

Program: ABC Radio National Breakfast

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FRAN KELLY: So the policy is to encourage welfare recipients to either enter the workforce or work longer hours. The targeted groups include the long term unemployed, young single mothers, and some people with disability. Some measures such as the wage subsidies and the chance to work more part time hours will now be penalised and they’re welcomed, but others including stripping part benefits from some recipients has been criticised as too tough. The package was put together by Families Minister Jenny Macklin who joins us in our Parliament House studio. Minister, good morning.

JENNY MACKLIN: Good morning Fran.

FRAN KELLY: Because the limits you’re putting on family payments are aimed at the upper end of the income scales, what we’ve been discussing with Michelle, Tony Abbott says you’re waiting for the class warfare against households of combined incomes of $150,000. What do you say to that? Are you slugging the rich?

JENNY MACKLIN: Of course not, and Tony Abbott should remember a couple of things. One is that this family payments system for Family Tax Benefit Part A was actually designed by Mr Howard and the income limits are those set by Mr Howard at around $120,000. So they’re no different.

The second fact that Mr Abbott should remember is that when he was the Opposition spokesperson for Families, he actually supported the pause that we put in place to the top thresholds. We put this in place once before. The Opposition supported it and in fact Mr Abbott had said at the time that he thought these savings were a bit ‘soft’.

So he had one view a couple of years ago when he wasn’t the Leader, now he has a view which is that he just wants to oppose everything.

They also supported the introduction of the means test on Family Tax Benefit Part B at $150,000 when we introduced it in 2008. So I think if you look at their record they actually supported all of these changes when we put them in place over the last three years.

FRAN KELLY: Do you think households with combined income of over $150,000 are rich?

JENNY MACKLIN: No I don’t. But one of the things that the Australian Family Tax Benefit system has had in place for a long time is a targeted approach. It is targeted to low and middle income earners and it’s always been the case that we give the most support to the lowest income earners and then we slowly decrease it as people’s incomes rise. And of course that’s the critical thing here. As people’s incomes rise, their families are better off and they don’t need Family Tax Benefit as much.

FRAN KELLY: Well that’s all in the definition isn’t it? I mean Treasurer Wayne Swan says the money would be better targeted at families with modest income. A family living in Sydney for instance (inaudible) for instance living on $150,000 probably feels like they are doing it tough.

JENNY MACKLIN: That’s true and that’s why of course we’re introducing a range of other supports. We’ve just for the first time in Australia introduced a Paid Parental Leave scheme – never been done before.
We’ve also introduced in this Budget the money for additional support for teenagers. If we left things the way they were under Mr Abbott, families would face a reduction in their Family Tax Benefit when their child turned 15. We’re changing that, we’re fixing it, recognising that teenagers actually cost more, and so families will receive up to $4,200 extra a year to help with the cost of raising teenagers who are still at school.

FRAN KELLY: Let’s talk about the welfare to work moves, honourable intention, moving people off welfare and into a job and into meaningful work as we’ve heard the Prime Minister talk about. But can you guarantee that vulnerable people won’t be hurt by this because that’s the concern of welfare groups? They don’t trust it.

JENNY MACKLIN: That’s why we’ve really done an enormous amount of work to get the supports alongside the obligations. We do want to make sure that whoever you are and wherever you live you get the chance to get a job in this economy. We can see unemployment coming down but we do know that there are some areas in Australia where unemployment is too high, and also where we’ve had too many people on unemployment benefits for too long. So we are targeting our efforts to the very long term unemployed, to jobless families, to single parents, teenage parents, because we want to help them get into work. If you actually have a look at the Budget figures you’ll see that we’re spending more than we’re saving because we’re putting so much extra into training places, wage subsidies, support for families in the subsidised child care, those sorts of initiatives.

FRAN KELLY: Welfare groups are worried about the ones that fall through the cracks. They like the idea of training and support to help people into work. But what about a seventeen year old single mum who can’t cope with going back to school and doing Year 12 or can’t cope with managing a job and a baby and might not have family support. I mean you’d know yourself a seventeen year old with family support doing school would be stressed enough.

JENNY MACKLIN: That is very true. But I also know that if that seventeen year old doesn’t finish her education, doesn’t get the chance to get a decent level of skills she’ll face a life of poverty. And so what we want is for her to work with Centrelink to get her skills up. In the first instance it might just be help with managing her baby because she doesn’t have the family support that you talk about. So that’s why we’re going to require the single parent, the teenage parent to come into Centrelink and work with Centrelink on the issues that that young parent needs. We want to get it very specific for the individual parent.

FRAN KELLY: As we trawl through the Budget papers one of the savings measures that cropped up is the deferral of the Paid Paternity Leave. This is the two weeks leave for mainly fathers after the birth of the baby, that’s supposed to start in July next year. You’re pushing back another six months for a saving of just $33 million. Well fathers are going to be disappointed with that?

JENNY MACKLIN: Well of course one of the good things about our Paid Parental Leave scheme is that it can be shared between mums and dads. So if (interrupted)

FRAN KELLY: Well a lot of mothers might be disappointed too, I’m sure.

JENNY MACKLIN: Well we’ve never had Paid Parental Leave in Australia before and I can tell you the parents I speak to are absolutely thrilled that they’re getting it. We’ve got around 50,000 parents registered for Paid Parental Leave in Australia, never been done before. So, yes we’ve delayed this a little bit to give us a bit more time to consult with employers and so on, but Paid Parental Leave is there, it’s happening, parents are benefiting, and both mums and dads and their babies certainly think it’s been a great initiative.

FRAN KELLY: Another element in the Budget is spending around $120million extending income management that’s already been on trial, as in the case of the Northern Territory since the Federal intervention into Aboriginal communities. In the trial this year in the five communities, these are general communities not Indigenous communities. Will this be voluntary or compulsory this trial?

JENNY MACKLIN: A mixture of both and it really mirrors what we’ve been doing in some parts of Western Australia for the last couple of years. So this approach now operates across Perth in a non-discriminatory way and also in the Kimberley. The way it will work is that if the child protection authorities in these states recommend that a parent will benefit and their children would benefit from the income management, up to 70 per cent of their welfare payments can be quarantined for the essentials of life. Or people can volunteer or Centrelink can identify that a person is vulnerable, maybe not paying their rent for example, and they too could have 50 per cent of their welfare income managed.

FRAN KELLY: Just very briefly because we’re almost out of time. But what proof is there that it works because we were told yesterday that there hasn’t been an evaluation yet?

JENNY MACKLIN: That’s right in the Northern Territory we’re undertaking a major evaluation but we have done some evaluation in Perth and certainly the evidence from Western Australia is that it’s been very beneficial to help families get control of their money.

FRAN KELLY: Jenny Macklin thank you very much for joining us.