Marie Coleman. The FTB cuts have been softened, but they’re still a con

Oct 27, 2015

The Turnbull Government might be trying to scale back the size of its planned Family Tax Benefit cuts, but the fact is they still hit the poor hardest and ask them to foot the budget repair bill, writes Marie Coleman.

After a year of the Senate blocking its radical changes to parental benefits, the Government has tried another tack this week.

On Tuesday the Turnbull Government introduced revised welfare legislation to Parliament that scales back some of the tougher Family Tax Benefit cuts first flagged in the 2014 budget.

Under the new plan, the Family Tax Benefit (FTB) Part B payments to families would end when their youngest child turned 13 (rather than the original plan of six), and there will be a boost for those receiving FTB Part A payments.

But the proposal still includes a number of cuts to payments that are expected to save the Government $4.8 billion over the forward estimates and leave thousands of families worse off.

The welfare changes have always been tied (hypothecated) to overall budget savings and to funding new approaches to expand child care, and despite this new approach it is still something we need to reject.

It still relies on punishing low income and sole parent families. It asks the poor to fund the need to bring outlays under control. And it doesn’t approach the expenditures outside the Social Security portfolio where the major inequitable expenditures exist.

More than 130,000 single parents stand to lose family benefits under the Turnbull Government’s new family payments plan.

Department of Social Services officials this week told a Senate committee that 136,000 single parents would see a reduction in FTB part B once their youngest child turned 13. Furthermore, single parents of teenagers would have their payments reduced from more than $3,000 a year to $1,000 and grandparent carers would also have their payments cut when their grandchild reached 13.

According to the Australian Bureau of Statistics, in June 2012, there were 961,000 one-parent families, making up 15 per cent of all families. About two-thirds of these one-parent families (67 per cent) had dependants living with them.

There were 780,000 single-mother families in June 2012, making up the vast majority of one-parent families (81 per cent).

Single-parent families come into being for many reasons – death of a partner, divorce, separation, and births to unwed mothers. Many women leaving domestic violence become the heads of single-parent families.

Not all these families live in poverty. But those reliant on our tightly targeted Australian social security system are indeed close to the poverty line. Australia has fewer children living in poverty than many comparable economies because of our system of providing benefits to all families to assist with the costs of child rearing, although there are some worrying trends.

Many, but not all, single-parent families are reliant on financial support from the taxpayer to some degree. Some, not all, receive Sole Parent Payments. Many receive further support through the system of Family Tax Benefits (FTB).

FTB has two key elements.

First, the FTBB is available to all families, both two-parent and single-parent. Second, the FTBA is means tested, and available to the very poorest of families – some two-parent, some single-parent.

The Senate estimates session heard 3,900 grandparents who are carers would be affected by the measure and that a further 76,000 couple families would lose their FTBB completely when their youngest child turned 13.

The Government argues that the new approach will mean that parents will be encouraged to enter the workforce, and that the proposed new child care arrangements will mean that those who do will in fact be better off.

This assumes that there is work for these adults – notwithstanding continuing strong trends in unemployment in many regions. It also assumes that the as yet announced child care details will indeed lead to beneficial outcomes. But child care policy experts Professor Deborah Brennan and Dr Elizabeth Adamson found that the draft proposal will “reduce access and increase complexity“. Many organisations commenting on the Regulation Impact Statement supported the Brennan-Adamson findings.

Then there are the regional and national employment data from the Australian Bureau of Statistics.

Unemployment and underemployment remain an issue. There are strong regional issues. Where are the retraining programs? Social Services Minister Christian Porter has no real answers. He suggests grandparents need to get a job. Really?

Get real. Where are the jobs for these grandparent and sole parents and low income families?

Senators need to look at the facts in their own areas – can sole parents or grandparents find work? This is a disgraceful con.

Marie Coleman is the chair of the National Foundation for Australian Women Social Policy Committee. This article was first published in The Drum on 23 October 2015.

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