House of Reps proceedings 16 February 1988 Part 1

House of Reps proceedings 16 February 1988

Title: CHILD SUPPORT BILL 1987
Date: 16 February 1988

Debate resumed from 9 December 1987, on motion by Mr Howe:
That the Bill be now read a second time.

Title: CHILD SUPPORT BILL 1987
Date: 16 February 1988
Speaker: Connolly Mr D.M. (BRADFIELD, LP)
Interjector: Mr DEPUTY SPEAKER
Source: House

Mr CONNOLLY (Bradfield)(4.11) --It is particularly appropriate that we should be debating a very significant piece of social legislation on the opening day of this new session of parliament, coming so soon after the Government's very notable defeat in the by-election in Adelaide. That defeat demonstrated very clearly that the Australian people, by and large, are no longer prepared to believe the rhetoric of this Government on the one hand as distinct from its actions on the other and they are particularly concerned about the impact of its social and economic policies on the development of the Australian community as a whole.

The Child Support Bill has been described in the second reading speech by the Minister for Social Security (Mr Howe) as a `centrepiece of the Government's child support scheme'. In fairness to the Government and to the Minister, a very serious attempt has been made over the last year or so to try to overcome some of the problems which have been manifestly obvious for the last five years of the Hawke Government and which, regrettably, have been ignored for far too long. It is precisely for that reason that the Opposition supports in principle the Child Support Bill and the establishment of a child support agency. In so doing, however, we are concerned about the impact it can have on that not inconsiderable number-probably about 30 per cent of non-custodial parents-who are currently the subject of mutually agreed arrangements between the ex-husband and wife in relation to the protection and financial support of their children. Therefore, for that particular reason, on behalf of the Opposition, I move the following amendment:

That all words after `That' be omitted with a view to substituting the following words:

`whilst not declining to give the Bill a second reading, the House wishes to ensure the protection of the rights of non-custodial parents who have entered into maintenance arrangements to share in the cost of supporting their children at no extra cost to the Commonwealth, by not requiring these agreements to be registered with the Child Support Agency, except in the event that maintenance arrangements are not honoured'.

The significance of this legislation cannot be overestimated. For far too long in Australia we have seen an inexorable rise in the divorce rate, with the result that year after year some 55,000 more children are subject to the economic and social dislocation caused by the break-up of their families. In fact, the majority, some 85 per cent of sole parents, are divorced or separated. Only 4 per cent of all supporting parents are, in fact, teenagers. The average current duration for the receipt of benefits is 2.2 years for men and 2.8 years for women. This is significant because it demonstrates that, while the level of divorce in Australia is extremely high, equally, the proportion of people who then enter into new relationships of either a de factor or de jure nature is also substantial.

Nevertheless, in Australia we are aware that there are some 800,000 children living in poverty. It is not by any means a subject outside the responsibility of this Parliament to note that, according to investigations into this matter by the Australian Institute of Family Studies, half of those children-some 400,000-are in the care of sole parents following separation of the parents. Consequently, the whole issue of maintenance and the way in which it is administered is of profound importance to us today.

Over the years the Commonwealth has seen its responsibilities in this area grow. According to the Minister, it is anticipated that the scheme will in fact save, in social security terms, an estimated $200m in 1988-89. I hope to see this, but I must say that I am not sanguine about it because, as the Minister no doubt would appreciate, the actual implementation of these proposals will be very difficult because of the number of people who, for one reason or another, may not wish to co-operate. That is in no sense an excuse for not attempting to solve what has become a very major social problem in Australia today.

I will now comment on the substance of the Bill. It should be noted that its purpose is to draw a distinction between arrangements relating to parents-ex-nuptial parents or others in de facto or de jure relationships who have entered into agreements prior to the passage of this legislation-and arrangements that will follow after the introduction of this law. It appears, from what the Minister said previously and in documentation on this subject, it is not proposed that the legislation be all-embracing. The reason given is essentially one of cost and also the related very major problem that we do not have in the Australian court system, at present, the capability to carry a significant increase in the number of appeals which, no doubt, could flow from this legislation.

For that reason it was determined that mutually agreed arrangements which involved no payment of Commonwealth social security benefits to the custodial parent could remain in place, subject only to the proviso that when they were later reviewed or amended they would then become subject to the child support agency. It also follows that persons who are recipients of benefits, whether they are on the basis of shared maintenance and benefits on the one hand or no maintenance and all benefits on the other hand, will automatically come within the purview of the legislation, even though those arrangements are in place today.

The problem we faced, however, was in deciding whether there was adequate protection given in the Bill to that not insignificant number-as I said earlier, probably as high as 30 per cent-of non-custodial parents who have voluntarily entered into agreements through the courts or otherwise and whose children are not beneficiaries of social security payments. As the Bill currently stands, there is a considerable degree of freedom given to those people to opt out of the system, provided they advise the agency within 14 days of the passage through the court of the maintenance arrangements of their desire not to be part of the system. That is fair enough. The problem, however, arises when these people still have their agreements registered with the agency even though effectively they will not be subject to it.

I think this question needs to be asked: should those people who have entered into voluntary agreements and who have voluntary agreements in place, for which they are meeting their commitments, be treated the same as people who may not have met their commitments? The Parties which I represent decided that was a distinction which ought to be made. The Liberal Party of Australia and the National Party of Australia are firmly of the view that the basis for the Australian legal system has always been that one is innocent until proven guilty. While the Minister may think that I am drawing a long bow in this particular case-his laughter would suggest that he does-this question can quite legitimately be asked: why, if one is a non-custodial parent and has had a satisfactory arrangement with one's ex-wife following the break-up of the marriage and one's ex-wife is not a recipient of social security benefits, should one be identified along with others who may well have not either met the determinations of the court or, by one means or another, totally ignored their filial responsibilities?

We believe, and no doubt the Minister believes, that the purpose of this legislation is to ensure that parents accept their fundamental responsibilities. When I use the word `parents' I use it in the widest sense of the term, whether they be in de jure relationships, in de facto relationships or in ex-nuptial relationships. One of the significant elements of this legislation is that for the first time in Commonwealth law, as a result of changes made in the last session to the Family Law Act, ex nuptial relationships relating to people living in those States which have agreed to the introduction of this new agency are going to be given equal status.

The important point, is this: The essential ingredient of this legislation is that we are attempting to assist children. Regrettably, I find that many people make value judgments as to who is responsible for what result in relation to the breakdown of a marriage. We all know that time and time again it is the children who ultimately have to carry both the economic and social dislocation and costs resulting from the marriage breakup. The whole purpose of this Bill, therefore, is to say to people who have brought children into this world, mothers and fathers alike, that as far as the state is concerned they have no right to pass on their financial responsibilities to the community. This legislation will insert a mechanism which establishes once and for all not only that fundamental responsibility but also the means by which people who are non-custodial parents will be required to make a financial contribution in accordance with their means.

As I said initially, this is a very sensitive and difficult area. It is the first time in Australia's history that legislation of this nature has been on the statute books. No doubt amendments will be required from time to time as the agency comes into operation and we see how the agency works. I am concerned that time and time again I detect, in comments made by the Minister and others, that while he refers to the legislation as being the centrepiece of the Government's child support scheme, there seems to be more than a strong assertion creeping in that the main purpose of the exercise is to save money. I can strengthen that criticism by making the point that, according to the information provided by the Department of Social Security, in conjunction with social security amendments it is anticipated that $192m will be saved in the 1988-89 financial year. With the passage of time that figure is becoming less and less likely because this legislation may not be on the statute books before May, in which case the year will have virtually passed. I would be delighted if the Minister in his closing remarks could explain to us how the Government has determined that there will be a reduction in the numbers of pensioners and beneficiaries. He guesses in this regard. Nevertheless, there is no doubt that there will be a cumulative community saving because funds which would have previously gone to the social security system to one extent or another will be paid by the non-custodial parents. That again, as I said, is something we strongly support.

There are a number of other matters which need to be referred to. For example, there is some concern among employers that the proposal to apply what is in effect an extension of the pay as you earn tax system will involve additional work for them. On the basis of the rather scant information supplied in the Minister's second reading speech and in the explanatory memorandum, I think their fears are justified. The questions that need to be raised are the extent to which they will be involved and the extent to which discussions have taken place. I gather from the major employer organisations that discussions have not taken place between organisations representing employers and the Minister and his Department as to the requirements they will have to meet. For example, clause 47 of the Bill refers to a form which employers must use to make the deductions. The Government has pledged that the system will be introduced with a minimum cost to business. However, as I have said, neither I representing the Opposition nor the business community have sighted the form or been consulted as to what it will involve. Despite the Government's commitment to consultation, I am sceptical that the ultimate form will tend to meet the needs of the Commissioner of Taxation, who, incidentally, in this case will be the Registrar of the agency, rather than the needs and the day to day administrative arrangements of employers.

The Bill makes the point that it does not wish to discriminate between those who will be subject to the agency and those who will not. It makes the point that employers will be in breach of the law if they discriminate between people in both categories in terms of employment opportunities. We support that concept. Nevertheless, it will be a major exercise right across Australia in community support, employer support and, above all, non-custodial parent support to see whether it is possible to put in place a system which is more effective than the shambles we have had for far too long.

The Family Law Act, which was the subject of major amendments in the closing weeks of the last session, made one very important change of great relevance to this package. It took from the courts the authority to take account of the level of social security benefits which may be payable in addition to the level of maintenance that should be provided. Over the years the judiciary has tended to apply a simple formula of expecting the maximum degree of social security benefits and the minimum degree of maintenance, with the result that the cost to the community has risen enormously. I am pleased to say that that situation is about to change. Clearly, the judicial process from now on will have to make judgments on the merits of the case in relation to the assets of the non-custodial parent and the ability to meet what should be an adequate level of maintenance. In turn, that will determine the extent to which social security benefits will be required, especially in those cases where the level of maintenance will not be adequate to meet the income and assets limitations under the social security legislation.

I should like to make some general comments about poverty in relation to sole parents because it is something that too many people tend to ignore. Some 60 per cent of sole parents on the widow's pension or supporting parent's benefit, are living below the poverty line. The Minister no doubt will make the observation that as a result of the family allowance supplement (FAS) and so forth which was introduced in the last Budget steps are being taken to overcome that problem. I hasten to add that, on the commitment he made to me in this House, we have seen only stage 1 of the FAS and that stage 2 is yet to be seen. I sincerely hope that in the next Budget we will see the reality of stage 2 and that it will be closely linked to the whole question of poverty in relation to single parents and in particular their children.

Some 90 per cent of sole parents are women and they have very limited labour market opportunities. Even those who are employed receive on average some 20 per cent less per annum than married couples where only one parent is employed. This is particularly relevant because a significant percentage of single parents are women of an age at which normally they would expect to be in the work force if their circumstances were more beneficial. The vast majority tend to be left with children, often of a young age, and that quite clearly limits their capacity to enter the work force because of problems of child care and matters such as that, which is a daily problem women face. It is an issue to which again I trust the Government, in its efforts towards overcoming poverty in the community, will give very serious consideration in the future.

Statistics from the Australian Institute of Family Studies in 1986 show that in the average case where the woman was the sole parent and the man was living alone, the man was $175 a week better off than the woman, even after payment of tax and payment of maintenance-in the case of those who did pay maintenance. This significant fall in the sole parentay, in the poverty base between those with access to, it is hoped, an enhanced level of income, together with a threshold which allows an additional sum of money to be gained before loss of pension and the not insignificant group of women and their children who have no access to additional income or benefits, no access to maintenance and, therefore, are totally dependent on the pension. It is an issue which I think is worthy of some consideration by the Government.

The data from the 1981-82 income and housing survey shows that some 56.2 per cent of female sole-parent income units, were in the lowest decile class of income units yet only 3.5 per cent of married couples with children were in the lowest decile class. What that emphasises, if there is any doubt about the issue, is that while there is a considerable degree of poverty among two-parent families in that lower decile, the fact of the matter is that single-parent families are in an even lower and more hopeless situation. It is now claimed that over 2 1/2 million Australians live below the poverty line and, quite clearly, those women and their children must be given very serious consideration in the development of social welfare policy.

The increasing number of single-parent families, their poverty and the growth in government expenditure mean that the public and the private roles in providing support have to be re-examined. That is one of the fundamental reasons why the legislation is before the House. As a proportion of all families in Australia, sole-parent families rose from 9 per cent in the mid-1970s to the current figure of 14 per cent. That increase is due, in part, to a divorce rate which had stretched to 39,417 cases in 1986. The proportion of sole-parent families on social security has also risen and some 85 per cent, or 250,000 people, are now on pensions or benefits.

In the 1987-88 Budget the expenditure estimate for the class A widows pension was $1,011.5m and the supporting parents benefit figure rose to $1,509.8m, totalling $2,521.3m-a very substantial amount of money. The supporting parent's benefit was introduced in 1974 at a cost of $40.6m. It is worth noting the incredible increase that has taken place in what is a relatively short period. At the same time, the number of payments has escalated from 26,000 in 1974 to approximately 180,000 today. Quite clearly, the community has a right to cry out for reform and to say that those who bring children into the world must be required to accept their responsibilities for so doing.

It has been said to me that one of the weaknesses of the legislation is that, apart from the related fact that the courts may take action against people for contempt of court in cases where maintenance agreements are not met, there is no provision whatsoever which sets out what the Commonwealth's capacity will be to face up to the undoubted problem that some people will simply refuse to pay anything. We are facing that very sensitive issue of maintenance on the one hand and access on the other. In the developing of the legislation the Minister has made the point, and I support him, that it is very important that we do not allow those two issues to become too closely intertwined. The question of access is essentially one for the courts to determine. We all know, from our dealings with constituents, the difficulties and complexities of human interrelationships faced in that very sad area. Nevertheless, if we allow ourselves to be put in the position where people say, `I do not have access; therefore, I refuse to pay', we are opening up yet another Pandora's box, the key to which, regrettably, somebody threw away many years ago.

The fundamental point we must support in this context is that the legislation is directed at maintenance and not access. The question of whether a person has access or not does not in any sense overcome the primary reality that the non-custodial parent is the father or mother of the child. That is a fundamental reality. The whole social system based on the family, to a large degree, has shown evidence of breaking down in recent years, probably because we have been too lax and, in a sense, too soft. It is not adequate for people, as they do in the Bronx area of New York in the United States of America, claiming that they have had five generations without any paternal relationship or responsibility; in other words, for five generations the responsibility for bringing up children has been left entirely to women. Often there has not been a job among them for generations and they have all been on social security benefits in one form or another.

This is a very sensitive and difficult area. We are still a relatively young country. As we debate this very important legislation in our bicentennial year, let us hope that the purpose of the exercise is to try to give those children-the hundreds and thousands of them-who through no fault of their own have found themselves in a very difficult situation at least a reasonable chance of enjoying a standard of living which will enable them to pull themselves out of what will otherwise remain, undoubtedly for many, a social security based existence-that is all it is: it is not living; it is an existence-for many years. The evidence is quite clear: people who start off with bad opportunities in education, health, welfare, housing and so forth tend to be, throughout most of their lives, that part of the community which is ultimately a major cost to social security and consequently a major cost to every taxpayer in Australia. Therefore, all of us have a commitment and an interest, in terms of both the welfare of children and acceptance of responsibilities by parents, to ensure that the community at large knows what to expect in this very difficult area.

May I finalise my observations by referring to the actual size of maintenance. A discussion paper entitled `Child Support', which was prepared and put out by the Government in October 1986, contains some quite worrying information as to the actual level of payments. Page 12 of the paper states that, according to Department of Social Security data, most payments received by sole parents on pensions or benefits are between $10 a week and $30 a week and that two-thirds of payments are less that $31 a week. It is worth noting that the Institute of Family Studies made the point quite recently that the cost of maintaining a child is more like $47 a week. The difficulty we face is that until now maintenance payments have been relatively low, notwithstanding the accessibility of pensions. Therefore, the overall threshold needs to be reviewed from time to time.

The other difficulty which we will face is that of non-custodial parents' attitude towards the very real probability that the size of their maintenance payments will increase. That will cause difficulties. One will have to be very sensitive as to the way in which that area of policy comes into effect. I think the biggest danger will be the case where a non-custodial parent remarries and has a second or, in some cases, third family. Again, there has been some division in the community as to the responsibilities of a non-custodial parent in relation to his first, second, third or subsequent family. If logic means anything in this case in terms of the principle of the legislation, which is the protection of all children, surely it follows that we cannot make a distinction between the number of times a person marries and the resulting progeny of those relationships. In other words, it would not be adequate to say that the children of the first marriage should get priority over children of a subsequent marriage, because that would put the latter in an even worse and more invidious position than the former. There is a need to try to average out the system. Having said that in a somewhat theoretical mode, standing in this Parliament, there is not the slightest doubt that those of us who will in future have to adjudicate on and participate in the complex discussions around this legislation and its implementation have many problems ahead of us.

As I said earlier, the actual management of the agency will be in the hands of the Commissioner of Taxation. The Opposition supports that approach because the Commissioner of Taxation, because of his database and so forth, is clearly in a better position than the Department of Social Security to be the initial point of contact. There has been some concern in the Opposition as to whether it is appropriate that the legal responsibility should be taken from the parents and vested in the Commonwealth. Again, that is a point which the Minister may wish to comment on in his closing remarks. It is an issue, because if one accepts the fundamental requirement of the parents taking responsibility for their children, it can equally be argued that if one is transferring the legal or financial responsibility to a third party-in this case the agency or the Commonwealth-there could be a diminution in the actual emotional relationship between a parent and the non-custodial children. These are subtle but nevertheless very significant issues, which will determine to a large degree the success or otherwise of this legislation.

On behalf of the Opposition, I wish to compliment the Minister and those who drafted this Bill. I am well aware of the years of effort involved. I finalise my remarks by also complimenting my colleague the honourable member for Dundas (Mr Ruddock) who was Chairman of the Parliament's committee back in 1980 that first put forward the proposal that an agency should be put in place. I should also note, if the honourable member does not, but I am sure that he will if he gets the opportunity, that the proposals that committee put up are not in any sense identical to what has finally come through, but that is one of the realities of committee life in this Parliament. One puts forward ideas but one rarely sees them come out exactly as one plans them. Nevertheless, since 1980 we have been working slowly and inexorably-with emphasis on the word `slowly'-towards the ultimate overcoming of this fundamental problem.

Mr DEPUTY SPEAKER(Mr Mountford) --Order! The honourable member's time has expired.

Debate continues.....part 2