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Senator REID (Australian Capital Territory) --On behalf of the Joint Select Committee on Certain Family Law Issues, I present the report of the committee entitled Operation and effectiveness of the child support scheme, together with submissions, transcript of evidence, minutes of proceedings and a summary document. I seek leave to move a motion in relation to the report.

Leave granted.

Senator REID --I move: That the Senate take note of the report.

I think this, for those of us who have been serving on this committee, is a very significant day. It is a report that has taken quite a bit of time, and certainly a great deal of application by a lot of people. Before I get into the detail of the report, I think it is important that I mention those who, in fact, have been very involved and committed, other than those of us who were actually the members of the committee. It is often the case that the staff of the secretariat are left to last. In this case I say that they should be mentioned first.

Robina Mills was secretary of the committee for one year. Subsequent to that Jane Vincent became secretary--a difficult job to take over two-thirds of the way through a report and then be responsible for the report itself. Other staff members include Matthew Mason-Cox, David Wallace, Susan Cardell, Lesley Cowan, Debbie Devlin, Laura Gillies, Denise Picker, Kerry Warner and Geraldine Windsor.

In recent weeks, the secretariat members have worked above and beyond the call of duty by any standard. They have worked at nights and on weekends, making it possible for us to present the report today, 5 December. Without such commitment, it would not have been possible to complete a report this size and present it this year. It is not a case of our not wanting to or our arguing about it, but the amount of detail that had to be looked at and attended to was very large. This committee has received submissions in excess of the number received by any other parliamentary committee--6,197.

This inquiry came about from the Family Law Act review and a report entitled Aspects of its operation and interpretation--A report of the Joint Select Committee on Certain Aspects of the Operation and Interpretation of the Family Law Act, which was presented in the parliament in November 1992. There were many very significant recommendations in that report. The government has responded to them and now has before the parliament legislation arising from them.

One of the conclusions of that report, which appeared in chapter 16.29, relates to the committee's concern about submissions we received involving the child support scheme. The scheme was not part of the review of the Family Law Act; it has been set up under separate legislation. We received many submissions relating to the operation of the scheme. People's unhappiness with it and the fact that they were being forced to pay maintenance but were not able to get access to their children was an issue frequently brought to our attention. We said in that report in November 1992:

The Committee's major concern is that in many cases the non-custodial parent is bearing a disproportionate cost of maintaining the children.

The committee was concerned about the intent that was put to us at the time. We also said:

The Committee considers that the Government as a matter of urgency must address the anomalies currently inherent in the Child Support Scheme so that both parents share an equitable burden of the cost of supporting their children after marriage breakdown.

All of us who worked on that committee were very pleased when, after the election in May 1993, when the parliament resumed, the committee was asked to review the child support legislation. The purpose of the child support legislation was to ensure that children are provided for by both parents. It came into the parliament during the 1980s. At the time, a number of us had some misgivings about how it might operate and what its impact would be. I think we said at the time that it should be reviewed--and certainly it should have been--but neither I nor any member of the committee came to the view that the scheme should in any way be abandoned. The concept is sound. It needs to be made to work properly.

The committee looked at the priorities of the scheme, what we felt was important about it and what tests we would use to determine how we would come to conclusions. They were in this order: that there should be adequate support for children; that the non-custodial parent should contribute to the cost of children; and that the Commonwealth's burden for supporting the children of a broken marriage who are living with a sole parent pensioner should be reduced as much as possible, although it was not the first consideration.

When I talk about the Commonwealth's responsibility, I remind the Senate that we are talking about the responsibility of one group of taxpayers for the liability of other people's children. I do not think the committee strayed from those three criteria in determining the 163 recommendations contained in this report. It is not possible or sensible to review 163 recommendations in speaking to the Senate this afternoon. I am sure that you, Madam Acting Deputy President, would not want me to. However, I will speak about some of the things from the report that I think are important.

The message from the child support legislation of the 1980s, reconfirmed in this report being presented now, is that those who have children have the prime responsibility for supporting them. Other taxpayers will help as is required after that first test has been met. No senator in this place or a member in the other place has not had many representations from constituents about this scheme and its impact on both custodial parents and non-custodial parents. They fall into different categories. None of us would not have met constituents with enormous concern and anguish--I am thinking about non-custodial parents in particular at the present time--whose lives have been effectively shattered by the impact of this legislation from several points of view.

The way it has operated has frequently meant that the first people hear about their liability for maintenance is in a letter they receive from the Child Support Agency, a section of the Taxation Office, telling them that they already owe anything from about $1,100 to $1,600. That is one of the principal reasons why it has been almost impossible to get people to understand what the scheme is about and why it was meant to be operating as it was.

To start anything off with a debt of that size is absolutely hopeless. It has made it impossible for a man in that situation to reorganise his life in any way, having already gone through the shattering and traumatic experience of divorce. He has frequently been left with very little money to live on because of the other debts and commitments that he may have which, quite properly, are not really taken into account in assessing the formula. But that is the consequence of it. Most of all, the unhappiness of people who are being forced to pay maintenance without getting access to their children is very significant. That is the thrust of the first report I mentioned. It is still a real problem in this area.

I know people will say that a parent has a responsibility to support children. That is so, but the impact and attitude of a parent thus required to pay maintenance who is not able to get access to the children are perfectly understandable and are a serious difficulty with the whole concept.

There are two parts to the review: a review of the formula under which maintenance is assessed; and the operation of the agency established within the Taxation Office that is administering the scheme. We have suggested that it be reviewed in a few years. My personal view is that the Taxation Office is the appropriate place for this scheme to be administered. But I certainly support the recommendations of the report requiring the agency to do it somewhat differently from the way that it has been done in the past.

The agency started off with a brand new scheme from a standing start. In most instances, such institutions would have to wait for their clients to come in. Not so in this instance, where it started off with nearly 24,000 clients, which made it extremely difficult. That number has now risen to about 275,000 clients, or perhaps even more by now. So the impact on those in the Taxation Office who were required to set it up and administer it was great indeed. I understand the problems they faced.

I think we can question whether they had adequate resources to do what they were required to do--that is, assess debt, collect money and pay it out--and whether they had received adequate training to do it. But the impression I have certainly formed from the constituents who come to my office is that attitude is perhaps the biggest problem. Often, a perfectly reasonable person who is quite happy to pay maintenance for his children on a proper basis complains of being made to feel like a criminal when dealing with the Child Support Agency. I regard that as being totally unacceptable.

In my view, the Child Support Agency within the Taxation Office is required to regard both custodial and non-custodial parents as clients and to deal with them fairly. I have no doubt, from the number of complaints that I received about the way that people were treated, that it was not people's imagination, that people were made to feel like criminals and made to feel that they were in the wrong when they made inquiries and in many other ways. We have recommended that in the future the office have people responsible for cases so that what has happened in the past stops. If people ring up--anyone listening may have had this experience--they are never able to get on to anyone in the agency who can really understand a question or answer it. There have been instances of explanations being given by one office which were different from those given by another office. There are many things which I will not go into in much more detail. But the operation of the scheme must be carried out differently.

I draw the Senate's attention to the recommendations that we have made in the report. The initial operation of the recommendations will mean that the custodial parent should receive money more regularly and sooner and not have the incredible delays that some people have experienced in getting money that has been paid to the office. Most importantly, our recommendations will mean that a person encountering the scheme for the first time will not be met with such a debt as has occurred in the past. Those non-custodial parents will have a better right of appeal and review than has happened previously.

We also want to encourage voluntary compliance with the act. I believe that many more people would pay and would accept their responsibility to pay and that it is not necessary to divert so much of the agency's resources to collecting funds as is happening at present--withholding from wages and things of that nature. With regard to those who do not pay, we have very strict views on how they should be dealt with. But I think there is a great deal of room to encourage people to do this on a voluntary basis. People should be able to ring up the agency and find out what they have to pay, pay it and effectively have no involvement with the agency.

I believe there has been a change in community attitude so that there is now acceptance that non-custodial parents do become responsible for paying maintenance for their children. I feel quite confident that voluntary compliance will become more prevalent and the agency can then get on with dealing with the difficult cases and with the defaulters.

A particular area of concern is that most of my constituents are PAYE taxpayers who can be fairly easily caught up with under the scheme. But it was clear from a number of points of view that some people are able to avoid paying or are able to keep their income down. We have made recommendations that the Taxation Office should make assessments and deal with non-PAYE non-custodial parents more efficiently than has been the case in the past.

My attention was drawn to that matter during the phone-in that we conducted. It might be recalled that in July 1993 we had a phone-in in which thousands of calls came into the building. We reported to the parliament in a little document called Thanks for listening. A number of the people to whom I spoke were not getting the maintenance that they ought to have been getting because the non-custodial parents were not PAYE taxpayers. There are ways of protecting self-employed people who are very low income earners and those who are not, and we have dealt with that matter.

This package of 163 recommendations is interlinked. When we deal with the formula, a dollar here or a dollar there can make a great deal of difference. We have made recommendations for changes to the formula. We have said that that which has been called, for a non-custodial parent, a self-support component is not in fact a self-support component. It is an amount of income that should be disregarded before the formula operates. It might be thought that that is just playing with words but in fact it is a little more than that. When we look at the formula, we see that the amount of income disregarded is not the only amount left for a person to live on. There is money at the other end as well. However, we have recommended that the amount of disregarded income be increased--not by a huge amount, not by as much as some people would have liked, but by a reasonable amount which will make a difference. But it must be balanced at both ends. The whole package of recommendations must be integrated.

We have made a recommendation with regard to the income of the custodial parent that should be disregarded. We have made a significant recommendation relating to income earned by a custodial parent--that, for every $1 increase above the disregarded income level, the reduction should be only 50c, not $1. We were aelfare payments.We have included fringe benefits to be assessed as part of income when determining the amount which should be paid.

As I have said, I have only touched the surface of the 163 recommendations which are now before the government. I urge the government to consider them quickly and to bring in legislation in accordance with the recommendations in order to make changes which I believe are very necessary for this community, as there are a lot of very unhappy people.

There are many other things that I would like to say but I will conclude so that others can speak. I say to men and boys in particular that if they have a one-night stand and they become the father of a child, they will be paying for it. I can vividly recall one young man who certainly got caught, probably deliberately. I did not doubt his story at all. But there is no way that this scheme can be made to work if we start to make that sort of exception. People need to know that if men father a child, they will be paying for it, not their neighbour, their friends or some other taxpayer.

We had difficulty with the concept of re-partnering--the impact on that family if a man re-partners with a woman, when he is paying maintenance for his child under the scheme, but she has children with her and for some reason is not receiving maintenance. Not every problem--and they are real problems--can be corrected. We have not been able to do so. I have no doubt that some people will be disappointed that we have not gone far enough, done enough or included everybody. But if people read the whole report, or even just the whole of the recommendations and conclusions, they will see the logic behind what we have done in preserving the concept of maintenance being paid, as set down in the legislation. They are recommendations which will make the administration of the scheme much better. There is a formula which, while not going as far as it might, will make a difference.