Archival Tape – Minister Katy Gallagher

“I was on the single parenting payment when I was in my late twenties, and I'd become a single parent after my partner died, I was – had a young baby. And for me, it gave me the financial support I needed to get myself together and to find a part time job and then it supported me for a while after that too.”

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SCOTT:

From Schwartz Media, I’m Scott Mitchell, filling in for Ruby Jones. This is 7am.

Tonight’s budget promises relief for Australia’s single parents, who will receive extra income support until their youngest child turns 14.

Archival Tape – Prime Minister Anthony Albanese:

“I have an important announcement, one I’m very proud to be giving… The payments for every fortnight increase by some $176.90 every fortnight and that is an important change.”

SCOTT:

So does this signal a broader attempt to address the standard of living for the most vulnerable Australians? Or, is it a rare bit of relief in an otherwise tough budget? Today, Finance Minister and Minister for Women Katy Gallagher on how her own time on the Single Parent Payment shaped her views… and what the government is doing about the housing crisis.

It’s Tuesday, May 9.

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SCOTT:

Minister Katy Gallagher. Welcome to 7am.

KATY:

Thanks for having me on.

SCOTT:

Minister, yesterday the Government announced it's expanding support for single parents. Parents will receive that extra level of income support until their child turns 14 instead of just eight. So how did the government arrive at that age?

KATY:

Well we consider this being pretty close detail. It's been recommended from a couple of reviews. The current arrangements have the eligible age of a child once that child turns eight, going on to a lower payment for single parents. There's been a lot of advocacy around how fair or unfair that is, particularly for women who are the vast majority of single parents. So we looked at it closely, looked at what was affordable and sustainable going forward and felt that that increase to 14, which is an additional six years, was the right place to land. By the time you’re 14, you are settled in high school, you are, for many kids, considering getting your own job. And we felt that that was the right place to extend that entitlement. And it gives women or single parents of whom the majority are women, that extra security of remaining on the higher payment to their youngest child is 14.

SCOTT:

Hmm. And you've talked before about how you yourself were on the single parent payment for a time that it changed your life. Tell me more about what you mean when you say that.

KATY:

Yeah, well, I was on the single parenting payment or whatever it was called back then when I was in my late twenties, and I'd become a single parent after my partner died, I was – had a young baby. And for me, it gave me the financial support I needed to get myself together and to find a part time job. And then it supported me for a while after that too, because you know, you can earn a certain amount while still getting the payment. So for me, it provided financial security and stability for my little family, which was just myself and my daughter at that stage. And it ensured I was in a position to get employment when she was a bit older. So, you know, I guess I bring that personal perspective, but as Finance Minister and Minister for Women, I've had to look more broadly at what's possible. What can we do to alleviate some of the barriers and some of the disadvantage that women face? And this was certainly an issue that was continuously raised with me.

SCOTT:

And minister, this effectively wins back a decision by the Gillard Government to cut that payment.

Archival Tape – Julia Gillard:

“We actually believe it’s very very important for kids in single parent families to see that their parent, very often a woman, to see that the parent in their home, is a person who has a job and goes to work.”

SCOTT:

Single parents used to get that payment until their child was 16. In fact, the legislation passed on the very same day that Prime Minister Gillard gave her famous misogyny speech.

Archival Tape – Julia Gillard:

“So our aim here is to get more single parents off income support and into work once their children are at school.”

SCOTT:

It's an example perhaps of how symbolism and actions can sometimes be at odds. Was kicking people off that payment once their child turned eight a mistake?

KATY:

It’s hard for me, you know, I wasn't part of that government and part of the considerations at the time. And what I would say with the benefit of hindsight and with the research that's been undertaken by Anne Summers and others, people understand that that drop in payment when your child turns eight has hit single parent households really hard. And I think Anthony Albanese as Prime Minister made no secret at the time that he didn't support that change. And as Prime Minister he sought to, you know, reverse that decision and return it to what we could afford. So it's hard for me, not a member of that government at the time, but I get the point of having to land a whole range of things in a budget. A budget can't be seen as one decision in isolation, but I think we all accept now with the knowledge we have that that has caused hardship on a lot of families across Australia. And this measure, this return to 14, seeks to put some of that right.

SCOTT:

And Minister, the payment used to go until children were 16 prior to that change. So why not raise it back to that level? What is the difference for the budget between raising it to to 14, which the government is, versus 16?

KATY:

So raising it to 14 is an investment of about $1.9 billion over the forward estimates. And I think if you went to 16, it would certainly be substantially more than that in the hundreds of millions. But it was more about and I go back to my point that one decision can't be seen in isolation of other pressures or other decisions on the budget. So this is a significant additional investment of moving an extra six years or providing single parent payment participants an extra six years of a higher payment. But we've got a whole range of other pressures coming at us and we did consider what life is like when you have a 14 year old and the fact that you are moving into a more independent period in an adolescent’s life. And I guess we balanced it up against a whole range of other pressures and believe that 14 is the responsible and affordable age to land on.

SCOTT:

Mutual obligations – so things like, having to apply for work, going to job interviews, proving that to Centrelink – they will still be in place for the single parenting payment, now it's been criticised as punitive by advocates. Will you be looking at overhauling or altering those mutual obligations?

KATY:

So the arrangements under the single parenting payment set mutual obligations peaking at six years old and that will remain. I would say that we have abolished the parents NICS program, which brought in mutual obligations for a subset of those on parenting payments with kids aged nine months to six years. And we have stopped mutual obligation for those on those payments from the 5th of May and that was recognition that it's hard when you've got kids, very young kids, to actually keep up all those appointments without the fear of losing your money. So we have made that change in this budget. But for those on the parenting payment with children over the age of six, then mutual obligation still apply.

SCOTT:

Hmm. And I want to talk about JobSeeker, Minister. There have been growing calls to lift that the Government's own Economic Inclusion Advisory Committee recently recommended a significant increase in and we know there are 1.3 million adults and estimates of 800,000 children living off that payment and associated payments. And that's below the poverty line. If the government doesn't bring the payments above the poverty line, are you essentially deciding to leave those children, those families in poverty?

KATY:

Well, the Prime Minister said I think he said it from opposition that every Labor government budget would look at the issue of payments and see what we can afford in terms of increasing those payments. And we've done that in this budget. We've had a look at it and what you’ll see in that cost of living package, the result of all of those decisions. And I would say again that the decisions in this budget and the packaging up of the cost of living measures are really a combination of a whole range of decisions about what the budget can afford, what's responsible going forward, and an assessment of what's possible. And you'll see that in the decision. And we're mindful that, you know, it's people on payments, but it's also how do we reach those who cost of living pressures are really hitting hard at the moment who might not be on payments. And so things like, you know, investments in cheaper medicines, on cheaper childcare in those areas are also part of our thinking in terms of how we address some of these cost of living pressures.

SCOTT:

Coming up after the break – is the government doing enough to address the housing crisis?

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Archival Tape – News Reporter 1:

“Housing affordability is now at its worst level since the global financial crisis more than a decade ago.”

Archival Tape – News Reporter 2:

“In all of Australia there were no rentals affordable for a person on youth allowance, and just 4 that a single on Jobseekers could pay for…”

Archival Tape – News Reporter 3:

"Those struggling to put food on the table, put a roof over their head, or visit a doctor hoping to help on Tuesday night.."

SCOTT:

Minister, we know it's harder today for young people to buy a home than ever before. For this generation, an average deposit is 260% of their annual income. It can take a decade or more to save that amount. What do you say to young people about whether it's even possible for them to ever own their own home?

KATY:

What we want. We know and we want young people to be able to buy a home in the area. The Commonwealth can make the most difference in pushing on the issue, on supply, additional supply. That's where the Commonwealth needs to be involved. We've had a decade of a Commonwealth government not believing they had a responsibility about housing policy. That's changed. We're at the table with the states and territories. The National Cabinet are talking about this. States have levers available to them around planning and rent and renters rights and the Commonwealth has capacity around supply and that's our focus. There's a whole range of housing measures in the budget. We are deadly serious about trying to make sure that there's enough supply for renters and for people to buy homes. And you'll see that in this budget. But there's no silver bullet that will change things overnight. But I think working with states and territories, local government and the Commonwealth all on the same page, we can really shift the dial in the area of housing…addressing some of the housing crisis that we see.

SCOTT:

And you talk about supply. You've committed to building 30,000 new social and affordable homes in the next five years. But Minister, this number doesn't even come close to the scale of the problem. The waiting list for social housing in Queensland alone is 27,000 right now. How is your plan in any way connected to the scale of what we need we see across the country?

KATY:

Yes. So the Housing Australia Future Fund is just one part of our approach because I completely understand the point you're making. So the fund which we want to set up is essentially putting in place permanent architecture going forward, like the Future Fund, which says over the next years, five, ten, 15 years you will have a constant supply of money coming out of that fund to invest in social and affordable housing. So it's an important start. But there are other ways. There's the housing agreement that we have with the states and territories working on what we can deliver through that. There's the housing accord that we're working with the Treasury around how it can generate and incentivise housing and particularly build to rent housing. So there isn't, as I said, one single measure that's going to make the whole difference. We've got to pull together a whole range of measures and keep working at it. That's what we want to do. We really want the Housing Australia Future Fund to pass the Senate in Budget week. That would be a great outcome. We've still got a bit of turbulence to go there within the Senate and making sure we've got the votes, but that will make a big difference if we can get that fund up not just for the short term but for the longer term in terms of a commitment of revenue going in to build extra supply.

SCOTT:

Minister, one advocacy group – Everybody's Home – says we need 20,000 homes every single year built for the next 20 years. I mean, your plan of 30,000 over five years. Is that really enough? And are there points to the debates you're getting in the Senate that this package needs to be improved and expanded to pass?

KATY:

Yes. So supply is the big issue here. So I don't disagree with some of the advocacy that's happening from those housing groups. We have to increase supply, the speed with which you can do that with some of the constraints in the market, particularly at the moment, I think is another question about how much you can deliver each year. And we are working with industry on that. And in terms of the debate about “Well is 10 billion enough?” And we'd like to see more like I'd just say, let's get it up and running, shall we? We want to make it an investment of 10 billion and then draw down earnings from that fund. But let's see how it goes. And at the moment we can't get 10 billion through. So I'm not sure the argument is about, you know, the size of it. We need to get it up and running. We've got the Medical Research Future Fund. We have a whole range of other funds that have been established. They've been successful. They've generated returns once they're up and running. And I think Housing Australia Future Fund is exactly the same. But we've got to get it up and running first. Hopefully it'll pass this week and then we'll get it going so that we can start drawing down and building those homes. In the meantime, we've got NHFIC and other bodies that are making investments into social and affordable housing and people will see that in the short term. So we're doing something in the short term while we try and get this fund up and through the parliament so it can start delivering for the longer term.

SCOTT:

And Minister, as you head into budget day, your government finds itself in a historic position that very few Labor governments have ever had. You're way ahead in the polls and you have more money coming into the budget than you expected last October. When it comes to things like raising Jobseeker in a meaningful way or truly addressing the scale of the housing crisis, do you ever worry that the government is being too conservative and letting an incredibly rare opportunity for historic reform slip through its fingers?

KATY:

Well, we're a government that's deadly serious about reform in a whole range of areas, and you'll see that in the budget when it's handed down. In terms of the improvement to the budget. We are seeing some short term improvement to the budget, largely because of the things we sell overseas. We're getting good prices for. But most importantly, the fact that our unemployment rate is so low and we have so many more people in jobs than had been predicted. And so that's flowing revenue into the budget. But that's in the near term in, you know, in the out years of the budget and in the medium term, you'll see that the budget is still in structural deficit. And so what we're trying to do in this budget is meet cost of living pressures where we can, with an affordable package, do some fiscal discipline, so show some restraint and return some of the revenue back to budget repair and create room for the future for all of these pressures that you've outlined, like housing and also other areas like health and aged care and the NDIS, because we've got to make room for those programs that are growing really fast and we can only do that if we get the budget into a more sustainable footing. So I mean, this is the point I've been trying to make in conversations with journalists this week is the budget can't be seen about one decision in isolation of all of the other decisions we take in the budget, and it's a balance to try and get all of those decisions right. People who have their views on that when the budget's handed down.

SCOTT:

Minister, thank you so much for your time.

KATY:

Thanks very much for having me on.

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SCOTT:

Also in the news today…

Greens leader Adam Bandt says the Greens still want to negotiate with the government on its fund to build social and affordable housing.

Speaking yesterday, he argued that in its current form – the government would not be committed to spending a single dollar on housing, if the investment fund it sets up fails to make gains, which he said would have been the case last year.

And…

Victoria’s Chief Commissioner of Police Shane Patton has apologised unreservedly at hearings of the state’s truth-telling inquiry.

The inquiry, which was set-up to expose historic wrongdoing against Indigenous people, heard of the impact of bail laws, overrepresentation of Indigenous people in custody and other justice practices.

Patton said, quote: “I wish to formally and unreservedly apologise for police actions that have caused or contributed to the trauma experienced by so many Aboriginal families in our jurisdiction.”

I’m Scott Mitchell - this is 7am. Ruby Jones will be back tomorrow.

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