May 15th 2010

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Articles from this issue:

COVER STORY: Henry Tax Review’s vicious attack on miners, families

FAMILIES: How Henry tax proposals will undermine families

EDITORIAL: Rudd to bankroll human rights activists

CANBERRA OBSERVED: Verdict on the Kevin Rudd experiment

FEDERALISM: Hawke, Howard and Abbott seek to curb states' powers

GLOBAL FINANCIAL CRISIS: Fault-lines widen in world's financial system

UNITED STATES: Is President Obama a real-life Manchurian candidate?

KOREAN PENINSULA: Torpedo attack suspected in mystery sinking

FOREIGN AFFAIRS: China and the West: war without guns

UNITED KINGDOM: Christianity criminalised in Britain

EDUCATION: Maths Online: the new resource for students, parents and home-schoolers

SOCIETY: How biotechnology affects the family

GENDER AND IDENTITY: Children with gender identity disorder

OPINION: America: the most generous nation on earth

Let's create new Australian states (letter)

Labor and Liberals on childcare (letter)

AS THE WORLD TURNS: Canadian province may scrap human rights tribunal; Lithuanian president told to support Baltic gay march; UK Lib Dems' secret support base - Muslims; Stalin's Ukrainian famine; Why the left can't stand Sarah Palin

BOOK REVIEW: KEYNES: The Return of the Master, by Robert Skidelsky


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How Henry tax proposals will undermine families

by Damian Wyld

News Weekly, May 15, 2010
The recommendations of Australia’s Future Tax System, more commonly known as the Henry Tax Review, pose a direct threat to the family as we know it — especially single-breadwinner families.

It is little wonder, then, that the Rudd Labor Government sat on the 138 recommendations from Christmas until May and, at the time of writing, has yet to respond to them all.

Some of the more insidious ones it has already rejected, but this means very little. Given the proximity of a federal election, adopting too many of Treasury Secretary Dr Ken Henry’s ideas at this point would be electoral suicide. Couple this with Treasurer Wayne Swan’s comments on a "long-term reform agenda" and it seems clear that the threat to families is not necessarily immediate, but looming on the horizon.

So what are the nastier of Dr Henry’s suggestions?

The theme of all recommendations concerning families is a blatant move to push more mothers into the paid workforce. Recommendation 85, for example, states that "income-support arrangements for parents should support and encourage participation in work".

Furthermore, it sets a condition on family assistance payments whereby parents would be required to seek part-time work once their youngest child turns four. To add insult to injury, once the youngest child turns six, single parents would be allowed to continue receiving support through the "family payment system", whereas couples would be shoved onto the "income support system".

One gets the distinct impression that full-time stay-at-home mothers (who provide the overwhelming majority of support for young children) are to be treated as little better than dole-bludgers.

Recommendation 90 states that Family Tax Benefits A and B should be "replaced by a single family payment". Currently, Benefit A is designed to assist parents in the costs of raising children and is means-tested. Benefit B is designed to assist single-breadwinner families (i.e., usually families with a full-time mother) and is not means-tested.

Were these payments to be merged, it is difficult to believe the Rudd Government’s assurance that single-income families would not be worse off.

Perhaps the Henry Review will solve that dilemma as the same recommendation states that the payment will "assist parents nurturing young children to balance work and family responsibilities". In other words, single-breadwinner families will not be worse off — they will cease to exist.

Bizarrely, recommendation 91 says that "the direct cost of the children component of family assistance should be a per child payment", but then goes on to axe the currently existing payments, Large Family Supplement and the Multiple Birth Allowance.

Apparently, these payments, and higher tax-free thresholds for larger families, "should be reconsidered as the case for these payments is not strong".

The case for supporting larger families is "not strong"?

Neither is the case for the Baby Bonus, it would seem. Dr Henry wants it abolished and replaced with "a small supplementary payment" to be paid over the first three months after birth.

Dr Henry seems oblivious to the fact that the current family assistance scheme, of which the Baby Bonus forms no small part, has played a major role in turning around Australia’s dismal birth rate, which has risen from a low of 1.72 (in 2001) to a much healthier 1.97 (in 2008).

Also evident in the report’s recommendations is the thinking whereby single parents receive a great deal more support than do couples. This is not to attack single parents, but it is amazing that bureaucrats still don’t see any benefit to supporting couples and families. Even the economic benefits, putting aside the social ones, are obvious; yet the prevailing attitudes continue to treat parents as individual economic units.

With some form of paid parental leave scheme seemingly inevitable, the compounding effect of the Henry Review’s recommendations — even if only partially adopted — would be the gradual demise of the stay-at-home mother.

Indeed, if she is treated as a burden on the system and receives diminishing support for her perceived "dole-bludging", no one should be shocked if the full-time mum becomes an endangered species over time.

Regardless of the Rudd Government’s initial or ongoing response to the Henry Review, what is needed, particularly before the coming federal election, is an ironclad guarantee that there will be:

• no reduction of existing benefits, especially the Baby Bonus and Family Tax Benefits A and B;

• no conditions placed on benefits in order to force mothers involuntarily into the paid workforce;

• no attacks on large families, single-breadwinner families or full-time mothers;

Both Mr Rudd and Mr Abbott must make a permanent guarantee to this effect.

Damian Wyld is South Australian state president of the National Civic Council.

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