ABC RN Drive with Patricia Karvelas
PATRICIA KARVELAS: The Federal Government has reworked its unpopular cuts to Family Tax Benefits, which were a centrepiece of the 2014 Budget. Christian Porter is the Minister for Social Services and joins us now. Thanks for joining us, Minister.
MINISTER PORTER: Patricia, it’s a pleasure.
PATRICIA KARVELAS: Thirteen is the magic number here, single parent families with the youngest child turning thirteen will have their Part-B payments reduced from $2,737 to just $1,000 a year and couples in that position will lose Part-B payments entirely. Are you essentially saying, when you youngest hits thirteen your need for support it gone or greatly diminished?
MINISTER PORTER: Well, I think you know that’s not what we’re saying, and, of course, that sort of statement presumes that there’s not also this ancillary and parallel assistance that’s given under the Family Tax Benefit A stream. So, these families still receive their payments under Family Tax Benefit A, which is of course, as you know, the payment per child, and that’s part of the $20 billion a year bill that attaches to Family Tax Benefits. So, let’s not pretend that the families that we’re talking about in that cohort, when the child turns thirteen, are left without appropriate assistance because on the other hand, they get their Family Tax Benefit A, which, of course, some of the savings in this measure is being reinvested to actually increase. So, of course we’re not saying that you no longer require assistance, there’s still assistance.
PATRICIA KARVELAS: But there is reduced assistance when your youngest turns thirteen, that is the premise of the change?
MINISTER PORTER: Well, there is, yes – but that wasn’t your question, you said there was no assistance and that’s clearly not that case, and that would be a terrible thing for your listeners to be left with as a view.
PATRICIA KARVELAS: I said greatly diminished as well so I do think I covered myself off there! You’re also phasing out the supplements for both Part-A and Part-B, and withdrawing them completely by 2018. Now, these are currently worth about $726 and $354 a year –
MINISTER PORTER: Exactly right.
PATRICIA KARVELAS: You’ve pointed out that Shannon Noll was topping the charts when those supplements were introduced, which I have to admit I thought was hilarious.
MINISTER PORTER: That he ever topped the charts?
PATRICIA KARVELAS: Musical tastes might have changed, but why has the need for the supplements changed?
MINISTER PORTER: Well, I think the circumstances have changed very considerably. So, in 2004, Peter Costello was delivering his ninth budget, he was predicting a $13 billion plus surplus, and prior to that point in time in 2004, there was a very considerable problem with people ending up with debts at the end of the financial year because they were either underestimating or under-reporting their income. That problem about debts has stabilised, obviously our fiscal situation and what we inherited was continuing deficits and that’s what we’re trying to fix. But the problem, the essential problem, of needing an end-of-year payment to help you with what, at a time prior to 2004 was a very large number of debts, has stabilised over time and in 2018 we’ll be introducing a single touch payroll system, which is going to very substantially eliminate that problem. So, at the moment, the overwhelming majority of people who are receiving these end-of-year supplements are receiving them nominally for the purpose of paying a debt, which they don’t actually have.
PATRICIA KARVELAS: The Greens families spokeswoman, Rachel Siewert says the Government’s changes will hurt single parents the most, they say that it’s an example of you pursuing watered-down measures that still disproportionately target our most vulnerable. It is true, isn’t it, that the single parents are going to be the hardest hit?
MINISTER PORTER: Well, I mean, the assumption that sits behind a lot of what the Greens say, if I might – by way of observation – note, is that we live in this binary world where there is either more welfare or less welfare. But there’s a very important intervening choice here, and of course, much of the savings that is going to manifest – if this measure is successful – gets reinvested into child care, which makes child care less inflationary, which makes child care more accessible. Most families will get $30 extra a week for child care and the point of that is that if you are a mother in a mum and dad family, or indeed in a single parent family, you are not only encouraged, but enabled to return to work. And we think that the age of thirteen is particularly the point at which that enabling and encouragement should occur. So, the fact is, that in that binary world that the Greens live in where there’s just more or less of something, we don’t see the world like that. There is an intervening choice which we are trying to encourage and enable. So, if we can take money from those end-of-year supplements and push it into better subsidies in a more efficient child care system, plus – obviously – offer the incentive to go to work because welfare payments decrease at that point when the child turns thirteen, we think that’s a better outcome for everyone.
PATRICIA KARVELAS: Both you and the Prime Minister have been asked this today, but we haven’t really got a straight answer yet; how many people will be worse off and how many will be better off because of these changes? You must have done the modelling.
MINISTER PORTER: Well, again, that’s an answer – it probably won’t surprise you to hear me say – the answer is: it depends. And it depends on that secondary choice. If people are able to and encouraged to return to the workforce and avail themselves of better subsidised childcare, then there’s no need to be worse off at all. I mean, it’s unequivocally the case, Patricia, that what we are doing here is seeking to make savings with respect to ending these end-of-year supplements and redirect them towards child care and redirect them towards the fortnightly payments in family Tax Benefit A as a workforce participation reform. So, no doubt, it will be much more difficult for us to get out there and explain to people that they’re losing an end-of-year supplement than it was for Peter Costello to explain to people they were getting an end of year supplement and there are 1.5 million FTB-A families, and for them, the supplement will be phased out to a point where it ends, but the money will be reinvested in the same families in a different context providing more choice. So it’s not as simple as saying – well, there must be modelling, who’s better or worse off – it depends on how people respond and the response that we’re trying to encourage is increased workforce participation.
PATRICIA KARVELAS: Your opposite number, Jenny Macklin, is concerned about single parents and grandparent carers missing out on up to, you know, between $2,000 and $3,000 a year. She said the Government shouldn’t count on a rubber stamp from Labor. Given that, are you now working that crossbench in the Senate to ensure you can get these passes through?
MINISTER PORTER: These changes are the product of a long period of negotiations that the now Treasurer, Scott Morrison, when he was Social Services Minister, undertook. We listened very carefully to the crossbench in devising this repackaging of the Family Tax Benefits changes. So I’m optimistic. I certainly don’t expect a rubber stamp and I certainly expect that I’ll be sitting there – as I said today – having a cup of tea at some point with Jenny Macklin and talking about these. I appreciate the point that she makes about grandparent carers, they are of course a tiny portion of the whole 1.3 million FTB-B recipient families, but what we particularly say with respect to single parent families, when the child turns thirteen, is that we are taking the savings from the end-of-year supplement being reduced and phased out, and the taking of FTB-B payments when the child turns thirteen and re-investing them in better ways that encourage those parents, in those single parent families, when the child is at high school and the opportunity, practically speaking, more obviously arises, to get back into the workplace, to work more, to engage and what we have seen over decades of studies, is the way to increase family prosperity and family wealth, is get the parent – single or dual parent – engaged in work.
PATRICIA KARVELAS: There is only three weeks left of Parliament, when are we going to see the childcare package? Labor says they still haven’t seen the legislation or the modelling.
MINISTER PORTER: Well, I mean, what we are doing now is negotiating a package that pays for the child care package. I had always understood that Labor was very positively disposed towards to the child care package, it seems to be one of those packages – there’s a great deal of detail out without the legislation – but it seems to be one of those packages that people agree is timely, is needed. It replaces three, you know, very complicated systems of subsidies with one, it eases inflationary pressure that had been built into the system, it leaves most families $30 a week better off, it encourages workforce participation with a fair activity test. I think there’s is a lot of agreement it is a good package, but as we noted in Parliament today, you have to pay for it somehow and the way that we want to pay for it is by re-directing what have become arcane payments, payments that are no longer fit for purpose, in the form of the end-of-year supplements that were meant to pay for debts that are not arising in the same way that they used to, and re-direct it in a more productive way – try and strike that sort of fair balance between the taxpayer who is paying for the Family Tax Benefits and the families that are receiving them.
PATRICIA KARVELAS: Minister, in Question Time, Labor’s Clare O’Neil, put this to the Prime Minister.
[RECORDING OF QUESTION TIME]
CLAIRE O’NEIL: Will the national result of the plebiscite be binding on Coalition Members or will individual Coalition Members, be bound by the results in their individual seats, or will the plebiscite not be binding on the Coalition Members at all?
PRIME MINISTER: That’s a very good question, I thank you. It’s an absolutely reasonable request and the answer is, the answer is, that the consequence of a ‘yes’ vote in the plebiscite will be that same sex marriage will be legal in Australia.
PATRICIA KARVELAS: Minister, how do you interpret that, what does it mean?
MINISTER PORTER: Well, it means what it says.
PATRICIA KARVELAS: Well, I don’t understand it, I need an explanation!
MINISTER PORTER: Well, the consequence of a plebiscite being in favour of same sex marriage means that the process will be undertaken and will end in its legalisation under the Act.
PATRICIA KARVELAS: So, it will be binding? Because a plebiscite is just meant to get the mood? It’s like a giant opinion poll, that’s why I’m confused, how will it possibly be binding? How do you build that into the structure?
MINISTER PORTER: Well, I think what the Prime Minister says is quite clear, that if there’s a plebiscite, which is in favour of changing the Marriage Act, and of course we have yet to see how the plebiscite would be worded, but if it is quite clear in terms of changing the Marriage Act, then that change will see its fruition in Parliament.
PATRICIA KARVELAS: So, it will be binding on MPs?
MINISTER PORTER: Well, again, there is this sort of binary notion that something has to be binding for it to be successful; I don’t think that’s the case.
PATRICIA KARVELAS: Okay, and is your understanding that it would be explicit in so much as, show the wording of the potential Bill that will go to Parliament?
MINISTER PORTER: I think that the wording and how it would work is a matter for further discussion and no doubt that is something we will be drilling down into in Cabinet shortly.
PATRICIA KARVELAS: Now, I know you don’t have much more time, so very quickly, Joe Hockey gave his last speech, he’s leaving Parliament; what are your reflections of Joe Hockey?
MINISTER PORTER: Well, look I personally liked Joe Hockey a great deal, but I guess, Patricia, he’s from a generation of politicians before me, he was in this place for about twenty years, I been in here for kind of less than two I think it is, so I mean I had some dealings with Joe, I found him an extremely intelligent person and he is a guy who has devoted twenty years of his life to doing what he thought was best in terms of serving the public. I liked him a great deal, I thought he was very admirable in the things that he was trying to do to bring us back to surplus. But probably, you know, there are people better placed to give you reflections, because he’s been here for twenty and I’ve been here for two.
PATRICIA KARVELAS: Diplomatic! Thank you so much for joining me.
MINISTER PORTER: Thank you, Cheers.