Winnipeg Free Press

Winnipeg Free Press (Newspaper) - October 6, 1985, Winnipeg, Manitoba Winnipeg free press october 1985 issues Lek tiny family allowances economic reality demands changes Bill represents broken promises excerpts from a speech by minis Ter of health and welfare Jake Epp in the House of in the budget of May the government announced its intention to restructure the Federal child Bene fit system to provide greater Assis Tance to families with lower incomes at the same moving to bring our National debt under this Bill c70 represents a first step toward meeting those dual the major proposal contained in this Bill will modify the current method of indexing family and Spe Cial effective these benefits will be indexed Only for the annual increase in the Cost of living greater than three per any increase in inflation above three per cent will be fully i should also stress As is currently the no payment will be reduced if the rate of inflation drops from one year to the the principle of indexation will be family allowances will continue to be protected by partial indexation should higher inflation As universality under that proposal is not it is important that the govern ment show a Clear initiative in its approach to deficit it is regrettable that this Issue was not taken More seriously at an earlier the reason i say that is because one cannot separate so Cial programs and benefits from economic at the present the servicing of the debt on an annualized basis is approximately that is the budget for the department of National health and welfare and it is the largest single budgetary the current child benefits system today is so irrationally structured that it actually provides greater after tax benefits to families with children and with an income of 000 than it does to a family with the same number of children and an income of the revised sys tem which we Are proposing will provide its maximum benefits to families with children and incomes of less than beyond that income level benefits will gradually diminish but All families with children will continue to receive other changes this is not the first time that limits have been placed on full indexing of the family allowance in conjunction with other changes to the child benefits when the child tax credit was introduced in the monthly family allowance was scheduled to increase from per child to per it was reduced to per in 1983 and indexing of family allowances was limited to six per cent and five per cent by the so called Sian drive it is also not the first time that less than full consumer Price indexing has been applied As a restraint in when the family allowance was scheduled to Rise by per the government of the Day froze the level at the previous years that is Cost of living minus per not Cost of living minus three per there was no offsetting Benefit increase in any other pro Gram in the child Benefit system and the savings were fully applied to deficit Given current Levels of this Bill will mean that the increase in family allowance benefits in 1986 will be 94 cents a month less per child than it would have been had the current system remained in in addition we have the child tax credit for those in the lower income i would now like to describe briefly the minor amendments to the family allowances program which Are also included in the these amendments serve to improve the equity and administration of the program on a Day byway for one of the proposals would provide the minister of National health and welfare with the discretionary authority to remedy the consequences of erroneous advice Given or administrative error made by departmental Given the substantial number of applicants and beneficiaries under the family allowances it is understandable that errors which result in a person or Agency being denied an allowance May be made from time to while the act does allow for retroactive payment of benefits of up to one cases May occur in which a loss of Bene fits extends beyond this retroactive if this amendment is a remedial action to rectify the consequences of erroneous advice or administrative error will be another proposal in the Bill would provide the minister of National health and welfare with discretion Ary authority to remit or forgive an overpayment of family allowances under certain cur in cases where it is deter mined that an overpayment of allowances has been the administration has no alternative under the terms of the act but to proceed with the recovery of the even though it might be excessively costly relative to the amount owed or take an unreason Able length of time to do this amendment would give the minister discretionary authority to remit Benefit overpayment under these As Well As where the recovery of an overpay ment would cause the debtor undue hardship or where the overpayment arose As a direct result of administrative error or erroneous advice on the part of a departmental offi presumed dead one final amendment that has been included would authorize the where to Issue a certificate declaring that a child is presumed to be Infortuna we All know of tragic Circum stances where a child disappears and there is sufficient evidence to presume that the child is when this the necessary Benefit adjustments cannot be made until after a death certificate has been sometimes Many years after the Childs disappear the proposed amendment would authorize the where the circumstances of the disappearance warrant to Issue a certificate declaring that the child is presumed to be dead for the purposes of the act and stating the Date on which the death is presumed to have this will help families in terms of estate planning and so i believe this Bill merits the sup port of the it is part of a restructuring of the child benefits system which will ensure that the benefits Given to families with Chil Dren Are distributed on a fairer and More rational it will help improve the grave fiscal situation which faces us As a and it will make the Day today administration of the family allowances act More humane and excerpts from a speech by Liberal health and welfare critic Douglas Frith in the House of 1 would like to indicate that the title of this Bill should be changed to an act to reflect broken promises and lost opportunities on be half of the conservative govern let me remind people of some Campaign promises made during the summer of the election of in Brian Mulroney said i can give you the Assurance that no social programs at affecting anyone in need shall be touched by a progressive conservative i can give you that without people in need with family in comes of a year will lose purchasing Power As a result of this conservative last november finance minis Ter Michael Wilson stated we feel there is a real Opportunity Here to put a greater degree of focus on those who need it most and still leave some Money on the table that can be used for either deficit reduction or application in other ways to make a stronger econ ten Days in another inter Mulroney said that social benefits taxed Back from the Rich would be Given to the needy if the Federal government decides to end the Money would absolutely not be used to reduce the what the prime minister said Only 10 months ago is totally loggerheads with what happened six months later in the promises what did health and welfare minister Jake Epp say at that time in he rallied behind the prime ministers suggestion that the social benefits for High income canadians to help Channel More to the All of these promises contain the premise that if any of those benefits to our Middle income or other sectors of our Canadian econ omy will be they will be channelled to those who need them the this government has chosen to introduce capital gains exemptions for the Rich in our i have no quarrel with some of the other rec but the government has chosen not Only to de Index family benefits but to de Index per Sonal this Means that every family by whether earning or a year will lose purchasing i will give numbers from an anal Ysis done by an Independent Board of advisers to the minister of National health and the proposals Are an attack on children excerpts from a speech by nip health and welfare critic mar Garet Mitchell in the House of i speak with a feeling of sadness on Bill c70 because this Bill certainly symbolizes once again How this government really is prepared to conduct an attack on children and As Well As to allow an erosion of our Universal we All recall last Spring when pensioners across the country Rose up in indignation and anger to de Mand their right to have fully indexed we know now that the government was forced to Back Down and to admit that it was we have Bill a Bill which in effect will do the same thing to families and it will reduce the indexation on family allowance by three per cent and is repeating the same cynical and senseless attack on a Universal so Cial Many times the government continues its practice of saying one thing and doing National health and welfare minister Jake Epp Symbol izes this to the greatest extent of anyone in the except perhaps for the prime on repeated occasions he has said that he has a very Strong commitment to the importance of the the minister is saying that the family is so important while he is introducing Bill a Bill which attacks All not Only one segment of he is attacking a Universal program and he has the Gall to put Forward in his patronizing manner the Point that he cares about that they Are the basis of his social i cannot help but conclude just As the governments policy with pension ers was the same can be said about the family allowance the reduction to the family allow Ance which this Bill implements is Only one of the ways in which the government is undermining families and added to the erosion of family allowances is the lowering of the income limit to be eligible for the child tax despite the Promise not to take monies out of the family benefits to pay for the the government will save approximately Mil lion in 1988 and up to million by 1990 while families will lose this amount of Money in direct family the Canadian Council on social development did an analysis of the Impact of a three per cent reduction in indexation of family allowances combined with the other changes to family benefits which the budget will it refutes the ministers claim that he is helping families in greatest the a cd concludes that All families will be the losers of family benefits by the years even the very poorest that a sin Gle Parent with two children who earns under a year will lose under these by this family will receive less per year than it receives families in the income Range will lose in family those earn ing will have benefits reduced by the budget did not redistribute benefits from the Rich to poor families at what this government has done is to take Money out of family benefits this also applies to the which will save Money off the backs of according to the million will be withdrawn from family benefits by 1986 by some Mil lion will be lost to Canadas Chil the provincial and Federal treasuries will be the beneficiaries of this the family allowance is paid to he main parenting which could be the it is usually the for Many women this is the Only Cheque they receive in their own some mothers who Are working use the Money to help pay for the Cost of child we need More help for child parents on average incomes use it to help buy costly Winter Coats and clothing and to help cover schooling important it is important that the family allowance and old age pensions re main Universal because they Are paid out to everyone As a there is no stigma and no need for a huge bureaucracy to Deal with individual cases through a Means it is declared on income tax forms and partially recovered from those on higher the family allowance is especially important because it is one of the few benefits which go to Middle income earners who carry the greatest tax Burden to pay for our social pro we Are proud of our our hospitalization our Public educational system and our unemployment insurance just As we Are proud of Universal family allow ances and old age these Are programs which the govern ment seems intent to this kind of partial de indexation now is just the first it is a first step which will eventually Lead to the erosion of our social net if we do not protest and Stop it changes in social policy must address the changing needs of today families with we have to look at the whole concept of families families have changed so much and our social policy is not adapting to the different circa social policy should also address the growing needs of the who now number million Canad the number of poor people Rose by a Day in 1982 and so we must think of social policy re form in the context of Overall tax the two Are tightly in this is Why we regret that the conservatives refused to talk about tax we wanted major reforms in the tax system so that we could be More particularly in increasing the child tax credit and maintaining fully indexed family we pro posed several ways of gaining extra income a return to the pre1982 marginal tax rates which would have brought in billion More the imposition of a 20 per cent minimum tax on canadians with incomes of per year or the prime minister promised to do something about we have seen no analysis shows that the govern ments direction in social policy is completely at Odds with policy directions recommended by All organizations advising let us take a look at the effects on Canadian by including the changes to personal income taxes and to the family benefits a two child family earning per year will lose in purchasing Power As a result of the a family earning or almost six times the will Only lose there Low income families will lose More per year than High in come and Middle income families will lose three times As much As High income what kind of perverse logic leads a government to bring in such a Bill at the same the capital gains exemption and pension deductions mainly Benefit High income As a result of the capital gains those with in comes of Over per year will receive More than million in tax while changes to the child tax credit and the child tax exemption will save the govern ment Only giving advice the Canadian Council on so Cial funded by the Federal has been giving advice to the government of the nation for it indicated that the budget would decrease the buy ing Power of a typical family with two children by More than in it went on to Point out that the Middle income earners and the elderly would lose More As a percentage of income in real a family earning a Gross income of will lose four per cent of disposable income by whereas a family earning will lose per cent of disposable How the family earning will gain per How can the conservatives Rise in the House of commons and Tell us that the budget will help to redirect savings toward those who need them the most when it goes totally opposite to the direction intended As a result of by 1990 the government will gain it managed to give to the multinationals billion Worth of tax credits As a result of the changes to the National Energy at a time when it pro poses to take away billion by 1990 from health and pos secondary it gives away billion on capital gains the de indexation of income the removal of the Federal tax deduction an the changes to the child benefits sys tem will account for almost billion of that the Lack of logic of the government in bringing in this budget is recommendations what did the Canadian Council on children and youth have to say about this budget in pre budget consultations with the Here is what it recommended pre serve the universality of the family allowances and As a tax Benefit eliminate the child tax exemption partially raise the child tax credit for Low income families partially raise the threshold at which child tax credit is Here is what the government ended up it de indexed the family Al it reduced the child tax exemption by 34 per cent Over three years and subject to it increased the child tax credit Over three years but chose to de Index it after which Means even the poorest of the poor will lose under this proposal beginning in it indicated that Middle in come families will be the hardest As the Liberal believe the principles inherent As a guide to the creation of a new child Benefit system should be universality of family allowances should be maintained Low income earners should receive More than those in the upper income brackets and higher benefits should be paid to lowering come we believe that indexation should be maintained and that family benefits should be adjusted to reflect changes in the Cost of and most the sharing of the Cost of these Universal programs should be borne and shared by All corporate and through a fair taxation ;