Tony Pasin (Barker, Liberal Party) Share this | Hansard source

Before I speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 I want to remark on what a passionate advocate the member for Lyons is for the community he represents and for Tasmania, more generally.

This bill will amend the Social Security (Administration) Act 1999 to support measures announced in the 2015-16 budget to further strengthen the Job Seeker Compliance Framework by providing stronger and more immediate consequences for job seekers who do not meet their mutual obligations. This bill will also simplify compliance provisions in the Social Security (Administration) Act 1999 to assist job seekers better understand their mutual obligations.

This government made a commitment to rein in spending and make more efficient use of taxpayer funds. That is what this bill is about. Australia does not have a revenue problem, it has a spending problem. The budget has forecast that federal government tax revenue will be 22.3 per cent of GDP this financial year. This is well above the 10-year average of 21.7 per cent and just below the 20-year average of 22.5 per cent, equal to the 30-year average and above the 40-year post-Whitlam average of 22 per cent. In fact, the tax-to-GDP ratio is scheduled to increase to levels well above the historical average. The tax-to-GDP ratio is forecast to be 23.4 per cent in 2018-19, a substantial 1.4 percentage points above the long-term 40-year average.

We on this side of the House acknowledge that we cannot tax our way back into surplus. We cannot balance the budget by increasing taxes—we understand that doing this hurts small business and hits families hardest and puts the brakes on our economy. Whilst it is evident that we are going to have to implement changes to our tax system, to address a bracket creep and ensure Australia's global competitiveness, it is equally evident that we have a spending problem. Government is spending too much and not getting the return on its investment that the taxpayer deserves.

According to the Parliamentary Budget Office, in 2002-03 to 2012-13, government spending grew by 45.2 per cent or 3.8 per cent annually compared to GDP growth of some three per cent. Of total expenses of $398-odd billion estimated for 2013-14, over 34 per cent was spent on social security. Since 2002-03 social security and welfare has contributed 15 per cent to the total growth of spending. In May last year the government's National Commission of Audit recommended that social welfare entitlements be better targeted. This is essential to help reduce government spending. The commission warned that the long-term outlook is ominous due to an unsustainable increase in expenditure commitments. This is a warning we take seriously. Edmund Burke, in his Reflections on the Revolution in France, wrote that:

Society is indeed a contract. … It is a partnership … not only between those who are living, but between those who are living, those who are dead, and those who are to be born.

This is a social contract we are obligated to adhere to, and we in the coalition government refuse to renege on that contract. Each and every dollar the government spends must be targeted and must have a tangible impact.

As I have outlined, Australia needs to rein in spending, not to increase taxes, which seems to be the automatic-pilot response of those opposite. It is absolutely critical that we address our spending and tighten accountability across the board. Whilst our comprehensive welfare system is an essential part of our commitment to unlocking the potential of each and every Australian, it is not some sacred cow. Whilst the vast majority of Australians do the right thing when it comes to utilising our social welfare programs, there is a minority who seek to exploit the compassion of the Australian spirit and do not meet their mutual obligations. Current provisions that allow penalties for serious failures to be waived essentially allow job seekers to refuse suitable work with impunity.

The data indicates that job seekers are increasingly taking advantage of the waiver provisions in order to remain on income support rather than accepting a suitable job. In 2009-10, when the waiver provisions were introduced, 45 per cent of penalties for refusing a suitable job were waived and 55 per cent were served. In 2013-14, 78 per cent of penalties were waived and only 22 per cent were served. The availability of the waiver provision is also acting as an incentive for noncompliance. In 2008-09, the year before waivers were introduced, there were 644 serious failures for refusing to accept suitable work and in 2013-14 there were some 1,626 such penalties. It is simply unfair for those on income support to refuse adequate employment in order to maintain their free ride on income support. It is a situation that this government will not abide.

Existing protections such as the reasonable excuse provisions and safeguards for vulnerable job seekers will still apply, and the bill will not change the process used to make decisions as to what constitutes suitable work. A job seeker cannot be penalised for failing to accept a job that they are not capable of doing or for which their employer will not provide training or a job that does not meet the applicable statutory conditions, involves unreasonable commuting or would aggravate a pre-existing medical condition.

The Australian Treasury is not a bottomless pit; there are finite resources when it comes to government funding. For every dollar that is wrongfully taken, a dollar is lost from an area where it is most needed. This is especially true in the social welfare space. There is an old adage which exemplifies the approach the coalition government is taking to this bill: 'That which is freely given has no value.' The bill builds on previous efforts this government has made to ensure recipients of social welfare meet their mutual obligation requirements. Through this bill, this government is putting in place a real framework of accountability and real incentives for job seekers in Australia.

The package of changes in this bill will help to ensure that more effective and consistent compliance arrangements are in place for each stage of a job seeker's pathway back into work. It is important that we elucidate the particular measures in this bill that we are about to enact that will develop a better result for Australian taxpayers and for Australian job seekers. First, the bill simplifies the compliance framework. This government understands that often-complex bureaucratic processes make accessing assistance difficult. Further, this government is not so callous as to enact stricter compliance measures without simplifying the system. The purpose of the bill is not to stop people from accessing assistance but rather to ensure that they are compliant with the system. In order to assist job seekers to better understand their mutual obligation requirements, the bill simplifies the language surrounding failures: it renames all failures resulting in short-term financial penalties as 'no-show no-pay failures'. This change reinforces to job seekers that, across the board, when it comes to participation in the job seeker process—be it interview attendance or turning up to an appointment with a provider or any other organisation—failure to show up and participate will result in penalties. This government is of the mind that if you do not show up you should not expect income support.

The purpose of engaging people in the job seeker process is employment, because this government knows that the best form of welfare is a job. That is why this bill strengthens compliance to an employment pathway plan. When a job seeker fails to enter into an employment pathway plan, that job seeker's participation payment may not be payable until they comply with a further requirement to enter into an employment pathway plan. The employment pathway plan is an essential part of the job seeker's process. It is a process which guides an individual towards employment and off income support, which is the endgame of this process. In order to incentivise compliance, if the job seeker does not have a reasonable excuse for failing to enter into an employment pathway plan, a penalty amount would be able to be deducted from the job seeker's participation payment under provisions made in this bill.

Currently, no financial penalty is imposed for an initial refusal to enter into an employment pathway plan, despite it being a basic qualification requirement for job seekers to receive participation payments. It is ridiculous that, at a preliminary stage of the employment process—entering a plan—there is a complete lack of accountability. With this bill this government is rectifying that situation. This government has nothing but praise for the workers in our social services sector; they do a difficult job, and they do it well. That is why we have taken measures to ensure that, if a job seeker acts in an inappropriate manner during an appointment such that the purpose of the appointment is not achieved, that job seeker's participation payment may not be payable until they attend a new appointment. In addition, if the job seeker does not have a reasonable excuse for acting in an inappropriate manner during the appointment, a penalty amount would be able to be deducted from that job seeker's participation payment. In the coalition we believe in personal responsibility. We understand the importance of imposing consequences for behaving in an inappropriate manner. It is absolutely imperative that there are penalties for behaving inappropriately when engaging in the job seeker process. Failure to impose such penalties simply reinforces such behaviour. Effectively, failing to adequately penalise inappropriate behaviour whilst maintaining income support equates to rewarding such behaviour. That is a situation that had to be rectified, and I am pleased to say that it will be.

This bill also takes steps to increase participation in the job seeker process. Under provisions in this bill, when a job seeker fails to participate in an activity such as training or Work for the Dole, the penalty amount will be able to be deducted from the instalment period in which this type of no-show no-pay failure is determined. This ensures there is appropriate compliance mechanisms when it comes to participation in the job seeker process, which is essential if employment is to be achieved. Crucially, this bill increases the impact of the penalty through more immediate penalties than under the current legislation, which requires that the penalty amount be deducted from a later fortnightly instalment period.

Further, this bill promotes engagement with job searching activities. When a job seeker fails to undertake adequate job searching efforts, a job seeker's payment may not be payable until the job seeker demonstrates adequate effort. Once adequate effort has been demonstrated, a job seeker would receive full back pay. Again, the immediacy of these penalties will have a significant deterrent value and will enhance compliance with mutual obligations. I suspect that it will also have a fairly specific deterrent effect. Currently, it can take at least 14 weeks of ongoing inadequate job search—that is, 14 weeks—before a job seeker's participation payment is impacted in any way. This is simply not good enough.

Whilst the bill takes significant steps to enhance participation with the process of job seeking, it also rectifies significant issues in employment acceptance. The current system simply does not enforce acceptance of employment offers, and it is at this point that many individuals are simply refusing to re-enter the workforce, which perpetuates unemployment and waste of taxpayer funds. Under provisions in this bill, when a job seeker refuses or fails to accept an offer of suitable employment, and has no reasonable excuse for such failure, a job seeker will no longer be able to seek to have the existing eight-week penalty period ended by agreeing to undertake additional activities. This change will affect those job seekers who have shown they can obtain suitable employment but are simply choosing not to work.

This bill delivers a better system of compliance for job seekers. It is part of this government's approach to rein in spending and making government more efficient. This government remains committed to lower taxes and smaller government, and that is why, when it comes to the social welfare space, we advocate effective and accountable processes that will ensure that welfare recipients meet their mutual obligations. This bill is entirely consistent with our values and with the undertakings we announced both prior to our election to office and in this year's budget.

I strongly commend this bill to the House, and I hope it has the support of this place.

See this speech in context