Turner Judy: Social Security (Working for Families) Amendment Bill Taxation (Working for Families) Bill — Third Readings 
Turner Judy: Social Security (Working for Families) Amendment Bill Taxation (Working for Families) Bill — Third Readings 
[Volume:617;Page:13531] 
JUDY TURNER (United Future) 
: 
 For all the talk about individuals and beneficiaries we seem to forget that this package is about assisting families and that is why United Future is supporting this bill. Families are worthy of support. The decision to start a family involves a degree of financial sacrifice and some would say that would-be parents have to take responsibility for the decision to start a family. 
United Future believes that families are the cornerstone of our communities and our nation and they need to be recognised and supported. If one parent decides to stay at home and look after children then there is a potential loss of income. If both parents go out to work then there are childcare costs. In clinical economic terms with children comes the arrival of non-productive yet highly consumptive members of the household. That is why the key mechanisms of this package put the focus fairly and squarely on children. Both family support and the in-work payment weigh joint income against the number of dependent children. 
That said we have expressed reservations about the fact that the key delivery mechanisms for this package come in a form that would appear to families to be for all intents and purposes like a benefit. In general we would prefer that working families did not have to receive assistance in the form of a weekly payment alongside their wages but rather indirectly as more money in their pay packets or as a lump sum at the close of a tax year that could be used to offset large expenses. 
 But we recognise that it would be more difficult although not impossible to use generalised tax cuts in such a way that recognises the different needs of different families as they all come in different shapes and sizes. A cut to the 19.5 percent rate would be welcomed by all families and individuals alike but it does not take into account the additional financial constraints faced by families. United Future’s own suggestion of income splitting would assist those families where one parent chooses to stay at home or work only part-time and would be the perfect complement to this legislation today. 
Although not fully comprehensive the use of family support and the in-work payment as key delivery mechanisms in this legislation do at least recognise the needs of families so when many elements of the taxation system assess an individual’s income these are measures that are based on family income. At the end of the day it is worth remembering that they are tax credits not benefits and they have been in place in some form for some time. 
The increase in eligibility and in the rates for the childcare subsidy also recognise the costs faced by families as well as the goal of ensuring that all-important pre-school education is accessible to all families. My only regret in that respect is that such measures effectively favour families whose parents both choose to work. This is not to pass a value judgment on this decision but merely notes that the option of either parent spending some of their working life at home with their children is not supported in a similar way. In the end such financial implications mean that the choice to do so has become less of a choice and possibly even a luxury or as the Minister has said an ambition. 
The other element of this package that United Future finds favour with is the extension of its reach into what might normally be considered middle incomes. The Government’s first instinct in developing this package was to lift the living standards of those families on low incomes whether or not they were in work. As the fiscal situation has appeared more favourable we have been very pleased to see that the Government has recognised the increasing hardship of those families that would not consider themselves poor but are finding it a challenge to get by. 
Previously families earning over $30000 would have received the message that they were considered too wealthy to get help. Family support for a family with one child extinguished at a combined income of over $30000 child tax credits disappeared at $33000-plus the family tax credit applied only if a family earned less than $18368 and the parental tax credit starts abating at $33000. The Government did not provide childcare subsidies to those with an income over $32240. Yet families that earn over these amounts face impediments that others do not. They may face higher marginal rates of tax at $38000. They are more likely to have student loans to service which is just like another tax and takes even more money out of their pay packets. Someone who is earning $50000 will be $3000 or $4000 worse off a year thanks to a student loan repayment. These aspirational families are also more likely to want to buy a home and that is no mean feat in today’s buoyant housing market. United Future is not afraid to say that it backs these families and we are pleased to see that they will come within the ambit of this bill. 
I want to touch on one final point. This package is also about ensuring that work pays for those moving off benefits creating a gap between work and welfare. However the way it does that is not immediately apparent since a simple reading of the bill would lead to the conclusion that both benefit-led and working families get a lift. But if we examine the way the different provisions interact we find that the size of this increase will be different for families depending on the source of income. The enactment of this legislation will mean that financial assistance towards the cost of children will be primarily paid through one payment—family support. This means that the basic benefit rates do not include a child component since it is loaded into family support which is then readily transferred when a family moves from benefit income to paid work. 
We think that a key requirement for the success of this provision in encouraging beneficiaries into work—and this is very important—will be to ensure that they can see the difference between what they receive in benefits and what they receive in family support so that they will know what they will retain by starting work. It may take some work to get the balance right but this bill at least provides the model through which such incentives can be created. For that reason United Future is very happy to support the Labour-led Government’s legislation.