PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P. J. KEATING MP
JOINT PRESS CONFERENCE WITH THE HON PETER BALDWIN MP
PARLIAMENT HOUSE, CANBERRA, THURSDAY, 4 AUGUST 1994
E & OE PROOF COPY
PMV: Well, thank you very much for coming. This is a, quite a proud
moment for the Government in honouring yet another election
commitment. I'm pleased and proud today, with my colleague Peter
Baldwin, to officiate at the start of what's going to be a large change to
income support in this country. And that is, with-the Home Child Care
Allowance, which is a substantial reform and one which will now
funnel, I think, transfer a $ 1000m from the budget and from what was
formerly the Dependent Spouse Rebate, to the daily carer of the
children usually the mother. So, that's to say, there's about $ 1 b
transfer from the wallet to the purse, and it's important to appreciate
that this is not all. All of this new payment includes $ 230m which the
Government has added additionally to the old Dependent Spouse
Rebate to make the Home Child Care Allowance a more progressive,
responsive payment. It means we will, for the first time, have built a
system of payments, in the main to mothers, directly to their bank
accounts upon which other changes can be built. And, as you know,
the Government is also contemplating has announced, in fact the
parenting allowance which will be built on the same administrative
system. Now, there's also an improvement in the way the allowance worked,
compared to the DSR and my colleague Peter Baldwin will go into
that in a moment but it will mean that up to 120,000 more families will
be assisted by the new measure. And there is, I think, 55,000 families
who will be eligible for the Home Child Care Allowance who were
ineligible for the Dependent Spouse Rebate. So, 55,000 families who
were ineligible for the Dependent Spouse Rebate will get the Home
Child Care Allowance, and up to 120,000 more families will be assisted
because of the new income test.
The general point in all this is, of course, is that the Government has
delivered mightily in income support to Australian families. In the
period when the coalition was in office, the real value of family
payments for low income families in particular, fell by more than 2%.
Under this Government, we've given large real increases over 30%
in payments for low income families and let me give an example: a low
income family with two children now receive $ 153 per week. We've of
course indexed all family payments for the first time and we deliver
payments directly into the hands of carers. And this means that under
this Government nearly $ 6b has been transferred to carers, usually of
course, mothers.
And of course, we're committed to doing more, and in the context of
the recent Accord negotiations, I announced the new maternity
allowance for women who are not entitled to paid maternity leave. So,
there's an important social change here. A set of payments directly
a week directly paid to the carer at home, usually the mother,
and this will be apart from the value of the income support it will be
a step forward in developing a new payment system and a new
relationship between the Commonwealth and carers, usually mothers,
in this country. Now, I'd like you to see the advertisement which is a
simple one. We're now going to run it for you, I think probably one or
two times, and then I'll invite Peter Baldwin to say a few words, too.
Thank you.
( advertisement shown)
PM: Well, I invite Peter Baldwin now to add to my remarks.
PB: Thank you, and this, the Home Child Care Allowance is yet another
major structural reform to the system of assistance provided by
government to families with children. If you look at what's happened
over the past few years, there has been a major effort in this area by
the Government. We've seen the introduction of additional family
payment and it's very substantial real increase over a period of years,
and if you look at that part of the assistance to families there is a huge
improvement. This payment takes that a step further by replacing the
old with child rate of Dependent Spouse Rebate. It increases the
amount of assistance available and there will be about 840,000
families that will benefit from that somewhat increased level of
assistance for each.
But more significantly, I think, the payment is made directly to the
carer, as the PM said. And furthermore, there are about 55,000 low
income families that don't have a sufficient taxable income to benefit
fully from a tax rebate who will be on average, some $ 20 a week better
off as a result of this payment. It's also the case that it's a much more
flexible arrangement whereby a partner who might come in and out of
the workforce, say that the child is sick for a number of months and a
person needs to leave the workforce, they can go right straight back
onto this payment rather than having to wait for the end of the financial
year and reconciliation through the tax process.
So, in those respects it is a major improvement. It does represent a
net significant addition by the Commonwealth in spending on
assistance for families. It's worth around $ 230 million a year more
than the old Dependent Spouse Rebate and a lot of that expense is
because, as I said, those low income families that couldn't benefit fully
from the Dependent Spouse Rebate will gain significantly from this. If
you look at the totality of assistance to families now, it is very
significant particularly that targeted assistance to low income families
where a low income couple with a couple of dependent children in
aggregate can end up with around about $ 150 a week in extra support
provided by the Commonwealth.
So, it is very significant. It is not the end of our agenda in this whole
area of assistance to families. In the White Paper we announced from
July next year we will be paying the new Parenting Allowance which,
as well as overcoming some significant disincentive effects to people
joining the workforce, we will also provide significant additional income
to low income working households up to $ 130 a week through the
Parenting Allowance. When the Parenting Allowance is introduced the
Home Childcare Allowance will be integrated into it. So, what we are
calling at this point, the Home Childcare Allowance, will in effect be the
base level of the Parenting Allowance that will be free of any income
test on the partners income and it will also be nontaxable.
So, as from July next year, significant further boost through the
Parenting Allowance which will then subsume and integrate the Home
Childcare Allowance. Put all that together and it is a very major
agenda and in addition to that, of course as the Prime Minister has
said, we are intending to look at a maternity allowance type payment
as well.
It is a very major effort in this whole area of assistance to families. We
pay enormous attention to equity in the structure of these things, which
I might say, is a sharp contrast with the Coalition. Every proposal that
has surfaced from them whether it be income splitting, whether it be
lumping together all the child payments and childcare assistance and
splitting it up on a per capita basis means significantly dramatically
lower levels of assistance to low income families and additional
assistance to families with incomes over $ 100,000. In vertical equity
terms there is simply no comparison between our approach to this
issue and that of the Coalition party. So, I think this should be
recognised for the major reform it is. We are exceeding our election
commitments in this area. This is a more costly package than the one
we described during the election campaign and, I think, that is another
important point that needs to be recognised. Thank you very much.
PM: I think we would be happy to take a few questions if you would like.
J: Mr Keating, the Catholic Bishops have accused your Government of
using women as guinea pigs in the tests on the contraceptive drug
RU486 and say they are going to take their fight directly to you. How
do you respond to that?
PM: Well, I am in receipt of no approach by the Catholic Bishops at this
point. They may approach me, but as I understand it the drug trails
will be conducted in accordance with proper procedures and in the
informed consent documentation has been complied with under the
rules of the National Health and Medical Research Council. Anyway,
I'll wait and see what the Bishops have to say.
J: It could be assumed Prime Minister, that the Bishops are targeting you
on this issue because of your Catholic background. Are you entirely
happy with the testing?
PM: I'm not here to be debating that principally, but this.
J: Prime Minister, on another issue, Alexander Downer says that you
haven't visited Aboriginal communities and he has thrown out a
challenge for you to follow his footsteps.
PM: What? Visit them and take their land while I'm at it. Is that the idea? I
should visit while I announce they are going to repeal the Native Title
legislation. We saw Dr Hewson visit them in that sham a year or so
ago when the Aboriginal people of this country opened their hearts
and their hospitality to him and when we brought the Bill into the
House of Representatives to pass it, he said ' it was a day of shame'.
A day of shame. And, can I just say, yesterday when Alexander
Downer was credited with softening his stand on this he said ' 1 have
said that if we have to, we will repeal the legislation and put new
legislation in place, but let's just see how things pan out.' In other
words, he will repeal the Native Title Act and the Liberals will put a
new Native Title Act in place. That's softening his stand. Well, if that
is a softer stand, I mean, the thing he might tell us is what he is going
to tell the Western Australian Liberals next time he visits there.
J: How far are you prepared to go in terms of modifying the legislation to
meet the concerns of Justice French and also of the NFF and the
miners?
PM: Well, the Government has always been, I think, very sensible about
the Native Title Act. I mean, it was a complex piece of property and
cultural law that was written from a clean sheet of paper, developing a
very large body of legislation and we've always said that at some point
in time as we see the Act operate there may be cause for remedial
changes and the person we would take advice from in this, of course,
is the Mr Justice French amongst others.
J: Mr Keating, do you think the Childcare Allowance is part of a wide
stream of family assistance the Government seems to have brought on
tap over the last few years. Can you explain the rationale for the
continuation of large funding into the family groups particularly when
quite a lot of it is unmeans tested
PM: Well, I don't think that much of it is unmeans tested. The very large
payments, I think, something like $ 3.6 billion which is the additional
family payment or the old Family Allowance Supplement has a very
tight means test about it. The whole point of it was to deliver very
strong payments, but within a defined income range. And then, of
course, the basic family payment or the old Family Allowance is
income tested because the DSR was non-income tested, it's being
paid across the board at $ 30 a week, but the basic structure of the
payments has been they are income tested therefore the Government
is capable of delivering much greater amounts to particular categories
of families. And that is, I think, one of its strengths. It's one of the
points that Peter made a moment ago about the equity in the system of
family payments under the Government under the Labor Party has
been to basically to help those who need the help most.
J: So, what do you have to say then to the suggestions from people like
Peter Walsh that the tendency in the growth of welfare payments that
will have implications for the tax base downstream, that the tax base is
simply too narrow to sustain the..
PM: I don't I mean, Peter might want to add some words to this. What
the Government has done over, now, a decade is to dramatically
change the priorities of former governments in their spending and
direct it to where we thought the priorities might best lie. And, quite a
deal of this has gone into targeted social security and family payments.
But, I don't see any demographic trend which is going to change this
other than, of course, with the aged pension which, of course, is
income tested and asset tested and for which we now have
occupational superannuation. So, the notion that we have got a set of
payments that are going to put up some inordinate pressure on the
Budget, I think, is wrong. I don't know whether you want to add to that
Peter.
PB: Well, just by way of addition, there have been a number of studies
done of the impact of the changes that have been made in the social
security system over the past decade and there is not the slightest
doubt that we now have a more efficient and effective instrument for
poverty alleviation than we did at the start. We have around about
per cent in net terms, when you take account of tax clawbacks of social
security payments, now going to people who would otherwise be in
poverty. It is a very carefully targeted scheme and it has become a lot
more targeted over the past decade with the result that we do have the
resources to raise the real level of assistance to those who actually
need it.
J: But, you would have to concede though with this home childcare
allowance there is no benefit to equity or to income redistribution?
PB: What we are doing with the home childcare allowance is replacing the
old Dependent Spouse rebate which was seen as, if you like, a
horizontal equity measure rather than a vertical equity measure. It was
seen as being something there to recognise the additional costs to
families irrespective of their overall income of having children. So, it is
bringing across into the outlays side the Social Security side a
measure that has a strong horizontal rather than a vertical equity
dimension. But, you can't look at that in isolation. You have to look at
the totality of what we're doing and, as the PM said, the great bulk of
our payments are highly targeted with a strong vertical equity aspect to
them. They are focussed on the low income families, but this as the
DSR it replaces is part of the rationale is a horizontal equity one.
J: But, on the revenue side, you've got the customs base coming down..
PM: Look, Tom ( Burton) we are not here to go through the Budget. Surely
you are not saying at a launch like this we ought to have a discussion
about budgetary trends on the revenue and outlay side.
TB: I'm just trying to explore what's the durability of this sort of round,
talking in the general funding..
PM: Well, it's paid as the Dependent Spouse Rebate. It was there anyway,
but for the $ 230 million we've added to it. But, the important point is,
it's paid directly to, in the main, the mothers and that is part of the
reform. There is a transfer here within families and it's going to the
ones who need it most obviously and that's mothers. But, you know, to
beg the question then about I mean, I know you are short of things
for the column, but I mean, to get us here for 20 minutes talking about
the the state of the budget.
J: One area of child care that has been identified as being deficient is
long term day care places for babies and younger infants. What is the
Government doing on that one?
PM: Well, we have extended apart from the building of long day care
places we've also extended to the private sector, encouraged the
private sector, to be in the child care business. And, that's where we
are going to see the substantial addition to places. There has been an
absolute explosion in places for child care under this government, and
after school care. And, of course, we have later in this financial year
the generalised child care rebate which you might see in a similar
presentation.
J: Is the aim to increase kids... ( inaudible)?
PM: Well, I think we're now into column space. Is there
J: I think, perhaps, Tom's point is, we've had a tax cut war on both sides
of politics, driven the tax base down, now we seem to have a lot written
about both sides competing for the family...
PM: That's wrong, that's wrong. What has, in recent times, driven the tax
base down, was the decline in economic growth. The notion that
you've got to hang on to fiscal drag to actually lift the tax and if you
give it back, you're in some way driving the tax base down, is for those
who want the biggest possible surpluses and the lowest possible
deficits in any circumstances. A group, I can say, well represented in
this room, today.
J: My attendant question is, is the family going to be a policy
battleground for the next election and are you planning more initiatives
for families?
PM: Well, let me just say this, the Government now, over a decade, has
carefully, studiously put into place enormous, equitable, beneficial
changes for families. The most obvious being the additional family
payment which is running at $ 3.6 billion. And, as well as that, of
course, there has been rent assistance and there are other things
which go to families. There is Medicare, there are a whole lot of things
which affect families other than direct payments. And, of course, there
have been the tax cuts which have gone, the great bulk of them, to low
income earners. When the Government was elected in 1983 the
bottom rate of tax was 30 per cent. It is now 20 per cent. And the tax
free threshold is greater. So, for families, there has been an equitable
shift of income to low and middle income families and the last tax cuts
were directed towards middle incomes. That's knocking the rate down
to $ 20,500.
So, the government has now, over a decade, put in steps, one after the
other, into building blocks, to build a system of payments to families
with particular focus on vertical equity. Now, this is another such
building block reform. This sets up a system of payments directly in a
linkage between the Commonwealth and the carers, mostly mothers.
We're not doing it because the Liberal Party have another idea about
how they could sneak their way back into office. It is being done, and
it has been done over a decade, consistently, with a view to equity.
We're not responding to a set of poll driven things in research as the
Liberal Party does in its tax cut policies of the past and as it may
well be doing, now. The fact is, it should be obvious to everyone,
particularly everyone covering public life in this country who is in this
room today, that this has been on now, for a very long period of time.
We committed ourselves to the family allowance supplement, as it was
then called, in 1987, the 1987 election. And we introduced it in 1988.
J: Mr Keating, what do you think of the States' attempt to reassert
themselves in the federation, the new federation document they put
out on Friday?
PM: This will be a useful discussion at COAG. COAG has become quite a
useful body, I think, for progressing non-financial matters. And, ahead
of each one of these meetings there is a certain, you know, ritual
like the dance of the brolgas, everyone is out there doing their
particular dance and theirs came out last week.
J: What's going to be the biggest test? Is it going to be the rights and
responsibilities, is that going to be the real stumbling block or is it
simply the question of money, how big a bribe you have to pay?
PM: I think the Commonwealth-State relationship is a complex one,
particularly as the Commonwealth is now quite heavily engaged and
involved in micro-economic change and getting the states to the
barrier on micro-economic reform. And, also seeing, as I think we
believe, that the delivery of programs is best accomplished when there
is particularly in the social area when there is a unanimity of view
between the Commonwealth and the states about how that might best
be done. Now, in working through these program reviews, as we have
been in functional areas like health and community services and
housing, we are making, I think, a lot of progress. And, we are getting
better program delivery for the people who are to receive the programs
while, at the same time, overlaying that is a discussion about the
states' authorities and their efficiency, and competition policy. So, it is
a complex set of interrelationships and that is the point of the
discussion and the point of the meeting. Thanks very much.
ends.