(323k)Transcript
8 July 2009
Interview with Samantha Maiden, 666 ABC Canberra
E&OE PROOF ONLY
SUBJECTS: Minimum wage decision, overdue child support payments, economy.
SAMANTHA MAIDEN: There is a sting in the tale of the Government’s $900 ‘cash splash’ stimulus payments with revelations that parents who have filed years of tax returns to claim the handout have ended up with bills of unpaid child support payments. Of course across Australia, parents owe $795 million in unpaid child support payments, but the Government is closing the net on at least some of these payments. The man who is chasing these Mums and Dads, Human Services Minister, Chris Bowen, who we spoke to a short time ago.
Good morning Chris, now before we get to this question of Dads and Mums who aren’t paying their child support, there was this decision by the Fair Pay Commission yesterday to freeze the minimum wage, for the first time since the 1980s. Now what’s your view on that decision?
CHRIS BOWEN: Look, I don’t think the Fair Pay Commission got the balance right. There is always a balance to be struck between minimising the wage cost for employers and maximising the wages of very low income employees. There was a case, we thought, for a considered wage rise, but the Fair Pay Commission has come down on the side of no wage rise. We think that’s disappointing; we don’t think they have got the balance right, but under the system that we inherited it is a matter for them.
MAIDEN: It is easy though for the Government to sit back and blame the Fair Pay Commission and then reap the benefits of employers being happy that they don’t have to pay more – and potentially protect jobs. If you are really worried about the low paid you could have immediately offered tax cuts or further stimulus payments couldn’t you? Why not do that?
BOWEN: Well we have put in very substantial stimulus payments, of course, which have been targeted at low income, wage earners. So we have been doing that and the reason we are doing that is to stimulate the economy where necessary, and that’s what we have done. Wages are a separate matter. We thought there was a case for a considered wage rise – which you would think would be modest – but the Fair Pay Commission has come down on a different side of that equation.
MAIDEN: And that’s one of the reasons the Fair Pay Commission didn’t raise the minimum wage, was these stimulus packages. When you were sitting around the Cabinet table was there ever any discussion that by offering these cash handouts that it might hit the poor, in terms of getting a minimum wage increase – that we were getting to get something with one hand while the Fair Pay Commission in a sense took from the other?
BOWEN: Well certainly the stimulus payments to low income earners were substantial; more substantial than a pay increase, however, we still thought there was a case for a pay rise, but at the end of the day, it is a matter for the Fair Pay Commission.
MAIDEN: Okay, well let’s look at this issue of child support payments and the hundreds of Mums and Dads who have been caught out by one of these cash splash, stimulus packages. They filed a tax return and as a result you have been able to track them down and hit them for money they have been owing as a result of the child support payment scheme. What’s the worst case that you are aware of that has been uncovered as a result of this process Chris?
BOWEN: Well one of the cases that I am aware of is an individual who hadn’t lodged a tax return in 20 years and the CSP was able to recoup for the former partner, $18,000 in outstanding payments.
MAIDEN: And is that a man I take it, a Dad that hadn’t paid?
BOWEN: In that instance I believe it is, but there are a variety of circumstances where it is between mothers and fathers. It’s the custodial parent that receives the money and the non-custodial parent that makes the payment of course…
MAIDEN: …and that Mum will receive a lump sum or a cheque as payment? How does the Government work that out?
BOWEN: Well there are different circumstances; in that case I believe it is a lump sum. And what we do is – look in the vast majority of cases parents do the right thing. Most parents don’t come through the Child Support Program; they come to private arrangements with their former partner. For those who do go through the Child Support Program, the vast majority pay on time and the full amount. There are some who: dodge the system; don’t lodge tax returns; move around; and are very hard to find. A lot of the resources of the Child Support Program go to trying to find those parents and recoup the loss on behalf of the custodial parent.
Now in this instance we had a big increase in the number of people lodging tax returns, to gain the stimulus payment and the Child Support Program, under its normal, clinical method used that to track down some of these people who disappear from the system. So this year we have what we call 27,000 Tax Return Intercepts, so the $900 stimulus payment went through to the individual, but other payments we have intercepted on behalf of the custodial parent, and we have recovered over $32 million in debt this year, which is about double what we recovered for the same period last year.
MAIDEN: Is it always expected that these cash handouts would be a compliance measure? Is that something that you understood when you were going out there?
BOWEN: It wasn’t part of the design of the measure. It’s always important that people lodge their tax returns, for pretty obvious reasons, to provide the payment back to those who have paid some tax. But this is if you like a by-product – not a design feature – but it is something that we don’t apologise for using, because there is a substantial debt owed by non-custodial parents to custodial parents, and it’s part of our responsibility to do what we can tog et it back.
MAIDEN: So, presumably, not for purpose, but you knew what was going to happen when you went about it? You didn’t warn people that if they pop in a tax return they might get a bill for something else?
BOWEN: Well we aren’t in the habit of saying to people, of advising people how to avoid their child support responsibilities to their former partners and their kids, but look, as I say, the vast majority of people do pay, but there is a comprehensive program there to track down those who don’t. It can be difficult if someone is intent on disappearing from the system; it can be very hard to track them down, but we continue to do what we can to find them and make them pay for their kids.
MAIDEN: You’re listening to the 666 morning program, our guest this morning is the Human Services Minister Chris Bowen.
Now you said that the majority of mums and dads do the right thing with child support payments which is good news, but I remember a few years back, there was an extraordinary statistic that the vast majority of custodial parents paid $5 a week or less in child support, what’s that figure today?
BOWEN: I don’t have that figure in front of me but we have changed the child support system since those figures and changed the formula for calculating, we now take into account the income of both parents and this is a very significant change but I don’t have that figure at my disposal at this moment.
MAIDEN: I’m assuming that that figure would still be below $10 a week is that enough to raise a child?
BOWEN: Clearly, everybody does it tough when a family breaks down, the custodial parent does it tough, the non custodial parent does it tough and you do need to strike that balance. I’ve not come across anybody who’s become better off as a result of a family breakdown and they’re very difficult circumstances; there is often a lot of emotion involved and it’s a very difficult job for the Child Support Program to be involved in but it’s a very important one. So we do have to strike that balance; the new child support system has been in place for 12 months now and the signs are that it is making a difference.
MAIDEN: Why don’t mums and dads pay? We hear a lot about ‘dead beat dads’ which is obviously a nasty term. Presumably if you don’t get along with your former partner you still care about your children. Is access an issue in some cases, do mums and dads not want to pay because they don’t think they’re getting equal access?
BOWEN: Look Sam, every family breakdown is an emotionally draining and distressing thing. In some instances the breakdown is so acrimonious that the kids get caught up in it and the non-custodial parent says frankly ‘I’m having this big fight with my former partner and I’m not going to pay and I don’t get the access I think I’m entitled to and therefore why should I pay’ and unfortunately it’s the kids that suffer not the custodial parent, which is why the child support program was set up.
So there are a range of circumstances, some people frankly just don’t want to do the right thing don’t care about their kids, that’s a very, very small minority. Others have other crosses to bear and other things which are worrying them and that affects their decisions, others are in dire financial situations themselves but the formula is designed to take all of those financial circumstances into account.
MAIDEN: Speaking of debts, you’re also involved in a battle of debt trucks. This morning Malcolm Turnbull’s rolling out another debt truck to highlight the Rudd deficit and you’re rolling out the jobs truck to defend the stimulus payments. Obviously this is being paid for by the Labor Party not taxpayers your debt truck?
BOWEN: Yes that’s correct.
MAIDEN: What’s your message with the debt truck?
BOWEN: Mr Turnbull launched his debt truck yesterday he is entitled to do that. When he launched it he said in his response to a question, debt to pay for infrastructure is ok. Our truck points out that 70 per cent of the stimulus package goes on infrastructure; it also points out that we have the lowest debt of any of the comparable countries that we compare ourselves with; and that our debt is very sustainable and prudent for this point of the economic cycle. Mr Turnbull, if he is going to launch a debt truck has to say how he will get no debt, what would he cut what taxes would he increase. Of course what he has engaged in is a misleading campaign. He’s entitled to have his debt truck and we’re entitled to respond and correct the record.
MAIDEN: Interestingly the PM in Berlin over night is calling for a change of tack, what happens next is world Governments looking at getting out of the economy and stopping their spending is that the view of the Rudd Government?
BOWEN: The PM was making the point in relation to primarily other nations who have much higher debt then us, much bigger budget deficits, much greater government debt that needs to be brought under control in the medium and long term.
There are nations around the world who would do anything to be in our position, we’ve managed to keep our budget deficit at just under 5 per cent of GDP, the average of the developed world this year is 9 per cent, our debt levels will be way, way below the average around the world over the coming ten years. So the PM was making the sensible point that we need an exit strategy as a world economy from the very substantial debts and deficits racked up around the world, in most cases appropriately, so to stimulate the economy but there is an issue around the world.
We have one of the most sustainable debt levels and we’re in a good position to be a part of that debate.
MAIDEN: Good luck with your debt truck, I don’t know if you need a truckies license to drive that thing.
BOWEN: Well I’m not personally driving it I’m happy to report…
MAIDEN: You’ve got other things to do now you’re in Cabinet.
BOWEN: (Laughs) If I was still a non-Cabinet Minister they may have got me to drive it.
MAIDEN: Well I’m sure you would look great behind the wheel. Thanks for your time; you’ve been very generous with us this morning thanks.
BOWEN: Always a pleasure.
Ends
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