A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999

A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999

A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (NO. 1) 1999

MAY 1999

© Parliament of the Commonwealth of Australia 1999

ISSN 1440-2572

View the report as separate downloadable parts:

MEMBERSHIP OF THE COMMITTEE
 

THE INQUIRY

 

THE BILL

 
ISSUES

 

RECOMMENDATION
 

MINORITY REPORT – AUSTRALIAN LABOR PARTY

 

APPENDIX 1 - Submissions received by the Committee

 

APPENDIX 2 - Public hearing

 

For further information, contact:

Committee Secretary
Senate Standing Committees on Community Affairs
PO Box 6100
Parliament House
Canberra ACT 2600
Australia

Phone: +61 2 6277 3515
Fax: +61 2 6277 5829
Email: community.affairs.sen@aph.gov.au

 

Membership of the Committee

Members

Senator Sue Knowles, Chairman LP, Western Australia
Senator Andrew Bartlett, Deputy Chair AD, Queensland
Senator Kay Denman ALP, Tasmania
Senator Alan Eggleston LP, Western Australia
Senator Chris Evans ALP, Western Australia
Senator David MacGibbon LP, Queensland

Substitute Member

Senator the Hon Eric Abetz for Senator Knowles for the period 24 to 28 May 1999. Senator Abetz was elected as Committee Chair for this period. LP, Tasmania

Participating Members

Senator the Hon Eric Abetz LP, Tasmania
Senator Bob Brown Greens, Tasmania
Senator Mal Colston Ind, Queensland
Senator the Hon Rosemary Crowley ALP, South Australia
Senator the Hon John Faulkner ALP, New South Wales
Senator Michael Forshaw ALP, New South Wales
Senator Brenda Gibbs ALP, Queensland
Senator Brian Harradine Ind, Tasmania
Senator Meg Lees AD, South Australia
Senator Dee Margetts GWA, Western Australia
Senator the Hon Chris Schacht ALP, South Australia
Senator John Woodley AD, Queensland

 

REPORT

A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999

A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (NO. 1) 1999

 

THE INQUIRY

1.1 The A New Tax System (Family Assistance) Bill 1999 and related Bill were introduced into the House of Representatives on 31 March 1999. On 29 April 1999, the Senate referred the provisions of the Bills to the Committee for report by 25 May 1999. The Bills passed the House of Representatives on 13 May with the A New Tax System (Family Assistance) Bill 1999 being amended by the Government.

1.2 Due to the Committee’s workload with inquiries on other Bills and a forthcoming round of supplementary estimates hearings, it was decided to hold a public hearing on 5 May. However, as most organisations were not opposed to the legislation and therefore reluctant to appear, this hearing was cancelled.

1.3 The Committee undertook to receive written comments on the Bills, and received four submissions which are listed in Appendix 1.

1.4 A public hearing was subsequently held on 13 May 1999 with representatives of the Department of Family and Community Services. Details of the public hearing are referred to in Appendix 2. The Department responded to questions and provided information on a range of matters including: the youth allowance changes contained in the amendments moved in the House; the payment of family tax benefit subject to a tapered income test; the establishment and operation of the new Family Assistance Office; and payment of and eligibility for Child Care Benefit. The Department also advised that the associated Bills foreshadowed in the Minister’s second reading speech are being drafted and are expected to be introduced in time for the Senate debate on the legislation.

 

2. THE BILLS

2.1 The A New Tax System (Family Assistance) Bill 1999 and A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 simplify the structure and administration of family assistance, as part of the Government’s plan for a new tax system. Twelve types of assistance for families, currently available through the tax and social security systems, will be reduced to three. The new payment types will be Family Tax Benefit Part A – to provide assistance to families with dependent children, Family Tax Benefit Part B – to provide assistance to single income families, and Child Care Benefit – to provide assistance for the cost of child care outside the home. The eligibility and rate provisions relevant to these new payment types are set out in the legislation.

2.2 The new system of family assistance will be delivered by a new Family Assistance Office, which will utilise existing service delivery networks of Centrelink, the Australian Taxation Office and the Health Insurance Commission.

2.3 The Bills also ensure, as part of the Government’s reforms of the Fringe Benefits Tax provisions, that for the purposes of the income tests for family assistance, the non-grossed up value of a person’s fringe benefits will be used in determining the amount of family assistance available.

 

3. RECOMMENDATION

3.1 The Committee reports to the Senate that it has considered the A New Tax System (Family Assistance) Bill 1999 and A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 and recommends that the Bills proceed.

Senator the Hon Eric Abetz
Chairman
May 1999

 

MINORITY REPORT - AUSTRALIAN LABOR PARTY

A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999

A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (NO. 1) 1999

The Government has made these Bills contingent on the enactment of the entire Goods and Services Tax (A New Tax system) package of legislation.

It is the Opposition's view, however, that it is possible - and preferable - to rationalise family payments without introducing a GST.

While remaining completely opposed to a GST, we support this Bill's attempt to rationalise family payments.

The Opposition supports the child care measures on the understanding that the Bill will retain the current system of payments in advance to services, and payment for hours booked as opposed to hours used. We note, however, that the main payment mechanism will be determined by the A New Tax System (Family Assistance) (Administration) Bill 1999, which at the time of this report has not been tabled before Parliament. The Opposition is disappointed that the Government has not honoured its commitment to table this legislation in the House of Representatives prior to the scheduled Senate debate of the two other Family Assistance Bills, so that the legislation can be considered as a total package.

 

RECOMMENDATION

That the legislation be passed without amendment.

Senator Chris Evans
(ALP, Western Austalia)

 

APPENDIX 1 - submissions received by the committee

1 Australian Council of Social Service (ACOSS)
2 Welfare Rights Centre
3 Brotherhood of St Laurence
4 Uniting Community Services Australia

 

APPENDIX 2

public hearing

A public hearing was held on the Bill on 13 May 1999 in Senate Committee Room 2S1.

Committee Members in attendance

Senator Sue Knowles (Chairman)

Senator Andrew Bartlett (Deputy Chairman)

Senator Alan Eggleston

Senator Chris Evans

Witnesses

Department of Family and Community Services

Mr David Tune, Executive Director

Mr Alexander Dolan, Executive Director

Ms Judy Raymond, Assistant Secretary, Child Care Benefits Branch

Mr Jeff Popple, Unit Head, Tax Reform Unit