Alan Tudge (Aston, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Hansard source

I rise also to speak on the Social Services Legislation Amendment (No.2) Bill 2015, which is before the House at present. This bill does a number of things. Most importantly, it extends the operation of income management for another two years in all locations across Australia. Most people who are on income management are located in the Northern Territory, but there are also trial sites of income management in other states as well. This bill commits $146.7 million to extend the operation of the income management regime, but in a more streamlined version, which I will get to in a minute.

The income management regime has been in place now for a number of years, and I commend the Labor government for continuing on with this and introducing it in many places. It is a system that has been shown to work for many people. It takes people's welfare payments and provides some structured support around those welfare payments. In essence, it helps people to set up individual accounts for typically 50 per cent of their welfare payments, which go into various things such as rent, food, whitegoods and into other accounts they may want to set up. By and large, the evaluations have shown that the 50 per cent of the welfare payments put aside for income management actually was spent on the things it was supposed to be spent on. We do not know much about what occurred for the other 50 per cent of the welfare payments, but for those under income management, the evaluations certainly showed that by and large it was spent on things that it was supposed to be spent on. That indeed was the whole purpose of it—to ensure that there is at least some money there to pay for things like rent, to pay for things like food and to pay for some of the basics, and in doing so to minimise child neglect and to ensure that money is being spent for the purpose which it was provided.

There are other ways that we could assess how successful the income management regime has been. You can ask people what they thought of it, and indeed in the evaluations that was done. When they did that, around two-fifths of people on the income management system thought that it had actually made things better for them. The anecdotal evidence bears this out, with many saying that it assisted in terms of putting food on the table and ensuring that there was money available across the payment fortnight, and a further third thought that there was little difference. So, almost three-quarters of people who were on the compulsory income management actually provided a very positive view of income management, or thought that it did not make much difference.

Perhaps the most telling figure though is the proportion of people who came off compulsory income management but decided to stay on it in a voluntary way. Almost two-thirds of people actually chose to stay on it in a voluntary capacity despite no longer being compelled to be on the income management regime. I think that is perhaps the most telling figure because it says that most people actually appreciate and enjoy the structured support that the income management system provides.

I know from my time in the communities where this operates and from speaking to many people about it that it is by and large—but not universally—supported, particularly from the women. They are often the ones that are left to ensure that the household budget is maintained and that there is food on the table, and this can very much support them in that role.

As well as providing the extension of income management for a further two years, this bill makes a number of amendments to streamline the operation of the income management system. This streamlined program includes the removal of social worker assessments through the vulnerable welfare recipient measure, as this was underutilised and resource intensive. The removal of this will allow social workers to better service their vulnerable clients. While participants remain able to adjust how they use their funds to meet priority needs at any time, they will no longer be required to discuss these arrangements with Centrelink every eight weeks. There will be a phased removal of the matched savings payments, which offer people on the compulsory measures up to $500 in matched savings if they complete an approved money management course and have demonstrated an approved savings pattern over a 13-week period. These will cease from 31 December 2015, as they were largely unsubscribed to and costly to administer. Indeed, the evaluation found that only 31 people had obtained a matched savings payment—31 out of, from memory, 27,000 people who were on income management.

The phased removal of the voluntary incentive payments, which offer individuals a payment of $250 for every continuous period of 26 weeks, will cease on 31 December 2015, as evaluations have shown that incentive payments are not the main driver for commencing income management and that they can create a dependency on the program.

The BasicsCard Merchant Approval Framework will also undergo administrative and policy changes that will simplify the model, improve the customer experience and remove unnecessary customer contact. These streamlined arrangements will achieve savings of approximately $36 million over two years. These changes will maintain service continuity for individuals using the BasicsCard and will take small steps to reduce the ongoing cost.

As well as those streamlining amendments the bill also makes amendments to reflect the two measures relating to aged care which were included in the 2014-15 Mid-Year Economic and Fiscal Outlook announcement. From 1 July 2015 the bill will cease payments of residential care subsidies to residential aged care providers for holding a place for up to seven days before a care recipient enters care. This will ensure the subsidy is appropriately targeted to people actually receiving care. Currently this subsidy is paid to providers at a reduced rate of 30 per cent of the full residential care subsidy that will be payable once the care recipient enters care. When the subsidy is ceased under this measure, the provider will not be able to recoup any lost residential care subsidy from the care recipient. However, the provider will still be able to charge the care recipient the standard residential contribution for the pre-entry period. Lastly, the bill will reflect the government's decision to abolish the Aged Care Planning Advisory Committees as part of the Smaller Government initiative.

That is a quick summary of the operation of this bill. As I said, most important is the extension of income management for a further two years so that that structured support can continue and the benefits can continue, but alongside that there is some streamlining to remove things that frankly either were not working or were not being taken up but nevertheless were quite expensive—I think that is a sensible streamlining and cost saving measure. There are also some important measures relating to aged care incorporated into this bill. I commend the bill to the House.

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