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Second Reading Speech: Social Services and Other Legislation Amendment (Promoting Sustainable Welfare) Bill 2018
I am pleased to sum up the second reading debate on the Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018.
The government is committed to making the sensible and responsible decisions required to return the budget to surplus and to keep welfare spending sustainable for future generations. This bill will contribute to this by encouraging those who are in a position to support themselves to do so and by better targeting assistance to those in need.
The bill contains amendments that will strengthen waiting periods for newly arrived migrants to access a range of welfare payments. It is reasonable to expect that people choosing to come to Australia on a skilled or family visa should be self-reliant during their initial settlement period. These migrants are well placed to support themselves and their families through work or support from family members already in Australia, and should not expect full and immediate entitlement to our generous welfare payments.
This bill will extend the existing two-year waiting period for certain working-age payments and concession cards, and will introduce a new waiting period to other payment types for the first time. These changes will reinforce expectations that new migrants should make plans to support both themselves and their families during their initial settlement period.
The current bill specifies that the extended and new waiting periods will be three years, as was announced in the 2017-18 Mid-Year Economic and Fiscal Outlook.
The government has circulated amendments that will increase the waiting period for working-age payments and concession cards to four years, in line with the subsequent announcement in the 2018-19 budget. This increase reflects the nature of these payments and capacity of skilled and family migrants. Those who come to Australia specifically to work or to be with family should not need to rely on working-age payments such as the Newstart allowance and parenting payment. The government has circulated amendments to retain the existing waiting period for the carer payment and reduce the length of the new waiting period for carer allowance, family tax benefit, parental leave pay, and dad and partner pay. These changes respond to concerns raised during the Senate committee inquiry process into the bill and reflect that these payments support particular needs and costs for eligible individuals and families. The new arrangements provide a more proportionate increase for payments which will have a waiting period introduced for the first time.
Importantly, under the government amendments, family tax benefit part B will not be subject to a waiting period. This means that single-parent migrant families, or those who have one main income earner, will continue to be supported to balance work and caring responsibilities, particularly when their children are younger. The government has circulated amendments that will exclude 'orphan relative' and 'remaining relative' visa holders from the changes to waiting periods. This recognises that these are often vulnerable young people who may be disproportionately disadvantaged if subject to increased waiting periods.
There will continue to be a comprehensive range of exemptions—and I emphasise that point in view some of the comments that have been made during the debate—including for humanitarian entrants and their families, New Zealand citizens on a special category visa and people who experience a substantial change of circumstances and can no longer support themselves as planned. Migrants who experience a substantial change of circumstances will continue to be exempt from the waiting period for special benefit. The bill as introduced was intended to clarify and refine when a substantial change of circumstances could count for the exemption. To address concerns raised through the Senate committee inquiry process, the government will not proceed with those particular amendments. There will be no change to the exemption for substantial changes in circumstances. The existing exemption will remain in place and will continue to provide protection for those in Australia, including, for example, where a person who has applied for a temporary partner visa experiences a substantial change in circumstances, through access to special benefit. This provides certainty that there are no detrimental changes included in the legislation to the exemption for substantial changes in circumstances for special benefit.
The government has also circulated amendments to clarify the operation of the exemptions for family payments. These amendments will enable humanitarian entrants and other migrants who fall within an exemption category from day one to be exempt for the whole waiting period. For migrants who become exempt after the start of their waiting period, the exemption will apply from that point onwards. Inclusive of the government amendments, this bill strikes a balance between encouraging self-sufficiency for new migrants and maintaining a safety net through appropriate exemptions and exclusions.
The proposed amendments also incorporate new measures into this bill. Some of the measures were previously introduced to the parliament in other bills. These amendments include creating a simpler and fairer family assistance system by creating a consistent income test taper rate for family tax benefit part A for families with income above the higher income-free area. Instead of two different taper rates applying to different families with the same income, as currently occurs, a single 30c taper rate will apply. There will also be a one-off increase to the family tax benefit part A higher income-free area, bringing this amount to $98,988 from 1 July 2019.
Finally, the amendments will extend the existing indexation pauses first implemented under the previous government on higher income limits for family and parental leave payments for one further year until 30 June 2021. This will apply to the increased family tax benefit part A higher income-free area as well as the family tax benefit part B primary earner income limit and the paid parental leave pay and dad and partner pay income limits. Maintaining these higher income limits at their current levels will target government assistance to families that need it most. The changes reflected in the government amendments will create a family assistance system that is simpler and better targeted.
The government amendments circulated today will rename this bill the Social Services and Other Legislation Amendment (Promoting Sustainable Welfare) Bill 2018. This new title reflects the broader range of measures that will now be contained in the bill. These measures deliver on the government's ongoing commitment to a welfare payment system that promotes self-reliance, is targeted to those most in need and is fiscally sustainable into the future. I commend the bill to the House.