House of Representatives

Second Reading Speech

Ms Macklin (Minister for Families, Housing, Community Services and Indigenous Affairs)

I move:

That this bill be now read a second time.

Introduction

The Clean Energy (Household Assistance Amendments) Bill 2011 is an essential part of the Australian government's plan to build a clean energy future.

The responsibility of government is to govern for today, with a clear eye to tomorrow.

An eye to the challenges and the opportunities of tomorrow, as well as those we face today.

This is a responsibility that we on this side of the chamber take very seriously.

It's the responsibility we brought to the introduction of superannuation-so that our children would face retirement assured of a regular income.

It's the responsibility we brought to the introduction of paid parental leave-so that today's children would derive an enduring benefit from spending those precious first weeks and months with their parents. And it's the responsibility we bring to building a clean energy future for our country, by putting a price on pollution.

Our responsibility to face the challenges and to embrace the opportunities.

This plan that we bring to the parliament delivers on this responsibility, and it does so with a clear head and a very strong heart.

A clear head, because this plan will transition our economy to a clean energy future, strong and resilient and ready to face the challenges of climate change and to embrace the opportunities for growth. It puts a dollar value on pollution, by making the big polluters pay a price for the pollution they put into our atmosphere-which, until now, they have done for free.

And a strong heart, because we bring to this responsibility sound principles, our own Labor values. It is the big polluters who will pay for their pollution, and not Australian families and pensioners.

Principles for household assistance

This bill makes sure it is the big polluters, and not Australian families and pensioners, who pay for the pollution they put into our atmosphere.

This bill supports Australian families and pensioners to be a part of building a clean energy future for our country and for our children and grandchildren.

It gives effect to these important principles by directing revenue raised from putting a price on carbon to Australian families and pensioners through increases to their payments.

It gives effect to these principles by making sure that increased payments are permanent and indexed, so that payments keep pace with the cost of living now and into the future.

And it gives effect to these principles by making sure these payment increases have no strings attached, so that Australian families who make small changes at home to reduce their energy use keep the full amount of the increase to their payments and can end up ahead.

The Prime Minister has written to all premiers and chief ministers outlining our expectation that the clean energy supplement and clean energy advance be permanently excluded from the calculation of public and community housing rents-as other pension supplements are.

The government's household assistance is for households, not state government housing authorities.

Details of the bill

This bill provides for increased payments to pensioners, allowees, veterans, self-funded retirees and Australian families.

These payments are designed to put many Australian families and pensioners ahead, by providing assistance greater than the average expected price increase from putting a price on carbon.

The bill provides for an initial lump sum advance payment to be made to eligible households before the commencement of the carbon pricing scheme. The advance amount will vary by household type-for example, it will be $250 for single pensioners, and up to $110 per child for those who receive family tax benefit part A.

The advance will be paid over a rolling period from 14 May 2012, with most payments to eligible recipients to be made by 1 July 2012.

The clean energy advance will be paid automatically to those eligible and receiving payments in May and June 2012-people will not need to apply.

Families who choose to claim their family tax benefit at the end of the year can, at any time, apply for their payments fortnightly and they will receive their clean energy advance at this time.

If an individual becomes eligible for a relevant payment after 1 July 2012 and before the clean energy supplement commences, they will receive a pro rata clean energy advance. If an individual moves onto a higher rate of payment-for example, they reach age pension age or have a new baby-they will receive a top-up on their advance.

The clean energy advance will cover a period of between nine and 18 months from the start of the carbon price on 1 July 2012, depending on when the normal indexation of a recipient's underlying transfer payment starts to incorporate the impact of the carbon price on the consumer price index.

At that point, this increase to transfer payments will be delivered as a new ongoing clean energy supplement. This supplement will be a new component of the rate of pensions, allowances and family tax benefit.

The supplement will constitute a 1.7 per cent increase in payments to age, disability and carer pensioners, allowees, veterans, self-funded retirees and Australian families.

This 1.7 per cent comprises:

1.

the expected additional impact on the consumer price index from carbon pricing-0.7 per cent; and

2.

an additional increase of one per cent.

The annual amount of the clean energy supplement will be around $338 for single pensioners, and up to $110 per child for recipients of family tax benefit part A. The exact amounts of the supplement will be subject to future indexation increases to each payment between now and when the clean energy supplement starts to be paid.

Around eight million Australian households will receive assistance either through payment increases or tax cuts, or both.

More than four million households will get assistance that is at least 20 per cent more than their expected average price impact.

The clean energy supplements will generally be paid fortnightly, in line with regular payment cycles, although the person may elect to receive them as quarterly payments in arrears.

The clean energy supplement will be permanent, and indexed, to maintain its value in real terms.

For families with shared care arrangements, the advance and supplement will be shared in accordance with normal rules.

Families on a single income will also benefit from the single income family supplement, a payment of up to $300 at the end of each year. This supplement will make sure that families on a single income will receive similar assistance to dual income families, who may benefit from tax cuts to both incomes. Self-funded retirees who hold a Commonwealth Seniors Health Card will receive automatic assistance before the carbon price starts through an advance payment of $250 for singles and $190 for each member of a couple. This advance payment will be paid in May to June 2012.

Then, from 20 March 2013, Commonwealth Seniors Health Card holders will be paid their own version of the clean energy supplement. This will be paid on an ongoing quarterly basis at the same time as the seniors supplement. Each year, Commonwealth Seniors Health Card holders will receive around $338 for singles and around $255 for each member of a couple in this supplement. This will be the same assistance as received by age pensioners.

This bill also includes provision for new payments for low-income households and households with higher than average electricity costs.

Low-income households that do not receive adequate assistance through the tax system or government payments, including self-funded retirees who do not hold a Commonwealth Seniors Health Card, may be eligible for the low-income supplement.

The low-income supplement will be paid annually as a lump sum of $300, from 1 July 2012. Claims for the supplement can be made with Centrelink from 1 July 2012, closer to when the carbon price is introduced.

A new essential medical equipment payment will be available for households that have significantly higher-than-average electricity costs due to a medical condition, ageing or disability. These are costs that are unavoidable and essential to their health.

These households include those with eligible concession cards where people are using life-support equipment in their homes, as well as people who are unable to self-regulate their body temperature and who therefore have to use additional energy for heating and cooling.

The essential medical equipment payment can be claimed by either the person with medical needs, or their carer if they share a residence.

Arrangements will also be made to ensure that household assistance will be shared fairly between aged-care residents and their aged-care facilities. The new clean energy advance and supplement paid to pensioners and Commonwealth Seniors Health Card holders will be shared with aged-care providers through an increase in the basic daily fee payable by a resident of an aged-care facility. From 1 July 2012, the aged-care fee will increase from 84 per cent to 85 per cent of the total basic pension amount.

These arrangements mean that pensioners and Commonwealth Seniors Health Card holders living in aged-care homes will get to keep any tax cuts they receive in addition to keeping almost 50 per cent of the assistance paid through their pension or seniors supplement.

Aged-care residents who are not eligible for the age pension, service pension or the Commonwealth Seniors Health Card and who are living in an aged-care home on 30 June 2012 will not be disadvantaged by fee increases due to the carbon price. A new Australian government aged-care subsidy will be paid to aged-care homes in respect of these residents so that the residents will not pay the increased daily fee. These new arrangements will start from 1 July 2012.

This assistance is complemented by tax cuts, delivered by separate bills in this package, which amend the tax laws to deliver tax cuts to taxpayers with taxable income up to $80,000. The government will deliver an $8 billion package of tax cuts over the next four years as part of its plan for a clean energy future.

The increase to payments provided for in this bill, together with tax cuts, mean that nine out of 10 Australian families will receive assistance to meet the costs of putting a price on carbon.

The household assistance provided through this bill will give most assistance to the Australian households that need it most, including pensioners and low- and middle-income earners, but we should remember that many prices, particularly for food, will hardly be affected by the new carbon pricing arrangements.

On average, we expect weekly spending to rise by around $9.90 per household, including $3.30 per week on the average electricity bill and $1.50 per week on the average gas bill. On average, food will go up by less than $1 per week for households.

Households will receive, on average, $10.10 a week in assistance.

This is more assistance than the expected average price increases from putting a price on pollution, which means families end up ahead.

Conclusion

This bill ensures that, as we meet our responsibility to build an Australia ready to face the challenges and embrace the opportunities of the future, we put Australian families and pensioners first.

Passage of this bill means it is the big polluters, and not Australian families and pensioners, who will pay for their pollution.

Passage of this bill means that Australian families and pensioners will receive support to meet the expected average price increases of putting a price on carbon, and in many cases will end up ahead.

This support will be permanent and will increase over time to make sure that payments keep pace with the cost of living and Australians get the help they need to balance the family budget.

And with this bill, Australian families are supported to play a part in building a clean energy future for our country and for our children. I commend the bill to the House.

Debate adjourned.