Dean Smith (WA, Liberal Party) Share this | Hansard source

At the beginning, I totally reject the accusations from Labor and Greens senators that somehow the government is attempting to demonise people, that somehow the government is trying to blame job seekers for the predicament that they are in and that somehow, through this legislation and other initiatives, we are vilifying job seekers. Nothing could be further from the truth. I just want to challenge Senator Cameron's contribution where he suggested that perhaps the personal experiences and the professional experiences of people on this side, and indeed their families did not allow them to bring any authority or any personal experience to these particular issues. To put it simply: what would Senator Cameron know about that?

You will not be surprised to know that I have got an alternative perspective on this issue. This is an important piece of legislation, one which builds on some of the reforms put in place by this government earlier in its term and which strengthens the support systems in place for job seekers so that they are receiving the support they need but also making sure that support is not being taken for granted. When it comes to providing support for job seekers, I would contend that Australia is a generous nation. We have struck a pretty good balance over the years, particularly when you examine the more limited support available to job seekers in some other places around the globe. But that support is not a one-way street. Certainly since the election of the Howard government almost 20 years ago, there has been a recognition that the support we provide to job seekers rests on a principle of mutual obligation. In other words, the financial support provided to jobseekers, courtesy of Australian taxpayers, imposes upon them a certain degree of personal responsibility.

Certainly this government believes that job seekers in receipt of support from taxpayers are entitled to a reasonable demonstration of good faith from those job seekers. They should be attending appointments with labour market service providers and working with them to make the transition from income support into paid employment as soon as is practical.

The legislation before us today is designed to build on some of the reforms that have already had a positive impact, both for jobseekers and for Australia taxpayers. When this government took office in late 2013, only 65 per cent of job seekers who missed an initial appointment with their job service provider actually turned up for their second rescheduled appointment. That was indicative of a problem, a certain entitlement mentality or, at a minimum, a complacency amongst some job seekers. This government then made changes to the system, which applied a 'no show, no pay' principle that gave a stronger incentive for job seekers to attend their appointments. There were, predictably, howls of outrage—of course, we expect that—about how this was unfair. Perhaps the most misused word in public discourse today is the word 'unfair', but that is a debate for another time. The point the government made at the time was we needed a system that was fair to job seekers but also fair to Australian taxpayers.

Ultimately, of course, the fairest system for job seekers is one that helps them find a job as quickly as possible. Given that employment service providers exist wholly for that purpose, incentivising attendance at appointments can only be of benefit to the job seeker. Remember what I said a moment ago: before the government's changes came into effect, only about 65 per cent of job seekers were attending rescheduled appointments after they missed one. By June of last year, that figure was significantly up to around 90 per cent of job seekers. In policy terms this is very much a win-win scenario, both for job seekers and for taxpayers. In terms of job seekers, it means more Australians in need of work are using the support system available to them to its fullest advantage and working with professionals who are dedicated to connecting them with job opportunities that will best suit them.

Of course, there is also an advantage for the employment service providers themselves. Higher rates of compliance with requirements from job seekers mean providers are spending less time dealing with the administrative tasks that flow from non-compliance. That means they can spend more time doing what they need and want to be doing—helping job seekers find employment opportunities.

There is further evidence that the incentives this government has introduced have been effective in making certain job seekers comply with their obligations under the system. For example, job seekers who have missed an appointment are re-engaging more quickly with their provider. There has been a reduction in the length of payment suspensions by 40 per cent. Between September 2014 and March 2015 the average payment suspension duration fell from 5.2 to 3.1 business days. That is a positive development and it means that job seekers are taking their obligations seriously.

Because the government's initial reforms have shown these encouraging signs what we now seek to do with the legislation before us today is broaden that successful approach and apply the same principles to other aspects of mutual obligation. These changes will further strengthen our system to make it more effective for job seekers and make sure that those benefiting from the system take a responsible attitude towards the support that is being offered to them.

Although mutual obligation was a key element of the reforms to income support made by the Howard government during its term in office, I think it is worth noting that aspects of the Keating government's Working Nation package earlier in the 1990s did place some obligations on job seekers in return for assistance. I note that simply to point out that mutual obligation has been embraced by governments of both political persuasions—it being a measure of accountability to the system and makes it more effective for job seekers.

An integral element of that system has long been that in return for receiving income support we expect Australian job seekers to undertake certain tasks which are designed to make their job search activities better targeted and more effective. To take one example, those who are in receipt of Newstart allowance are required to enter into a job plan. It sets out those activities that a job seeker must undertake in return for their income support, such as actively looking for work, attending appointments or participating in activities like work training or work for the dole programs.

Of course, different job seekers have different needs and circumstances and the system does take those things into account. It is neither unreasonable nor inflexible. Regrettably, though, there are some job seekers who flatly refuse to enter into a job plan. Now that is a breach of the principle of mutual obligation, but as things stand there is no penalty for this. If taxpayers are going to provide income support then it is reasonable for them to expect that job seekers will be proactive about taking the steps needed to find employment. This bill will underscore the importance of the job plan by implementing a payment suspension which will apply until the job seeker accepts their plan.

If a job seeker does not have a good reason for refusing to enter into a job plan they may incur a financial penalty each day until they accept their plan. As we have seen with the no-show no-pay changes introduced last year in relation to missed opportunities with job service providers, payment suspension is a very effective way to encourage job seekers to comply with the principles of mutual obligation. More than that it also sends an important signal to taxpayers that their contribution to supporting the activities of genuine job seekers is valued and is not being taken for granted. That is crucial in maintaining general public confidence and support for our income support system because if that confidence is not maintained it can lead to significant problems down the line and undermine the bonds of trust that are critical to maintaining our fundamental social cohesion.

Again I stress that these changes are not seeking to impose a rigid set of rules or a one-size-fits-all approach for job seekers. There are safeguards in the system that take account of job seekers' circumstances and no-one will be penalised for refusing to enter into a job plan that is manifestly unreasonable. Likewise, some job seekers are required as part of their program to attend appointments with training organisations or to participate in work for the dole activities.

Remember these are activities supported by taxpayers in the interests of developing a job seeker's skill set, making them more attractive to a wider range of potential employers. Given that, it is simply unacceptable that some job seekers feel they are entitled to not attend those appointments or behave in a non-cooperative or inappropriate manner whilst attending and yet believe they should still receive the income support that is offered to them in an unfettered way. Again, this is not what mutual obligation is about.

Under the current system it can take up to five weeks for a financial penalty to be applied after a job seeker misses an activity or a job interview. Ultimately, such long lead times end up rendering the penalties less effective. This legislation will remedy that situation by providing that job seekers who do not attend activities and do not have a reasonable excuse for their failure to attend will have their penalties deducted from their next fortnightly payment. Again, this change applies the same principle as in the bill last year to establish a more immediate link between a non-compliant action and its financial consequences.

Ultimately it is in the job seeker's own interests to take advantage of every opportunity the system affords them to support their search for employment, including training opportunities. Our system must be designed so that participation in these activities is incentivised to the fullest extent possible. However, job seekers who currently do not make an adequate effort to look for work rarely face meaningful sanction because the current system is too slow and is ineffective. It often takes months of inadequate job search efforts before a job seeker faces any real payment consequence. This bill will change that process so that job seekers who do not make adequate job search efforts without justifiable cause will have their payment immediately suspended until they demonstrate adequate job search efforts.

It is also a fundamental requirement of our social security system that job seekers must accept the offer of a suitable job when it is made. It is an important principle that a person in receipt of benefits has an obligation to accept suitable work when it is available. Granted, it may not be their dream job but our system was not designed to support people until they find their dream jobs. It exists to support them until suitable work is found. As we all know, once people find a job it becomes easier to source different employment—employment more in line with their personal preferences and perhaps even employment more in line with their dream job.

The government is aware of concerns that exist in the community that some people in receipt of benefits are able to refuse a suitable job. The term 'job snob' is sometimes used—people who feel they should be able to pick and choose while still receiving income support—but that is not the system's purpose and that is not the essence of mutual obligation, and the rules that govern it should reflect this fact. Under current compliance arrangements an eight-week non-payment penalty can be applied to job seekers who refuse work without good reason or who fail to start a job as planned. Unfortunately, amendments introduced by the former Labor government means that job seekers can have this penalty completely waivered just by agreeing to undertake some extra activity. This has led to the system being manipulated, the system being gamed, in ways that were never intended.

There is evidence that suggests, unfortunately, that job seekers are taking advantage of these waiver provisions to remain on income support rather than to accept a suitable job offer. In 2009-10 when the waiver provisions were introduced by Labor only 45 per cent of penalties for refusing a suitable job were waivered and 55 per cent were served by the job seeker. By comparison, in 2013-14, 78 per cent of penalties for refusing a suitable job were waivered. It is clear that these penalties are now failing to provide an adequate deterrent for refusing work because job seekers know they are able to return to payment with virtually no consequence.

Again, it is important to emphasise here that these are not jobs being turned down because the job seekers are physically incapable of performing them, or pose some other risk to health and safety, or massive personal inconvenience. In some cases these jobs are being turned down because the job seeker says the role is beneath them, or the hours proposed would interfere with their social life, or disrupt something else they would rather be doing.

Again, the system that supports our job seekers was never intended to be manipulated in this way. The changes contained in this legislation will help to make sure that it is not. Under the terms of this bill the waivers will be removed so that any job seeker who refuses an offer of suitable work without an acceptable reason will receive an eight week non-payment period. This change will ensure that job seekers face immediate and real consequences for turning down offers of work.

This measure is about fairness for taxpayers. It is about honesty in the pursuit of jobs. After all it is hardly reasonable to ask those people who make the effort to go to work and pay their taxes to support others who are clearly capable of working but believe they have a right to eternal income support instead.

Again, I should stress at this point that the government is not out to make life needlessly difficult for job seekers. These measures are about improving the integrity of our system. Within that we recognise that some job seekers are especially vulnerable and these changes will still take account of that important fact. Job seekers with particular personal circumstances or vulnerabilities will continue to be flagged on the IT systems used by the Department of Human Services and employment service providers. As is currently the case, job seekers who give prior notice of a reasonable excuse for not complying with an obligation will not have payment suspensions or penalties applied. This means the penalties will not impact on those whose failure to meet a requirement is beyond their control. For instance, if they are suffering from an illness or are required to care for family members and where they have given reasonable notice of those personal circumstances. Not surprisingly, this is an element of the reform—a very fair element and a generous element—that has not being mentioned by Labor senators thus far and that has not been mentioned by Greens senators thus far. If they want to make an honest contribution, they will recognise this particular element of the package.

In addition, employment service providers will still have the discretion not to report a failure to Human Services but use other servicing strategies to re-engage job seekers instead. All decisions involving financial penalties will continue to be made by the Department of Human Services. If a job seeker is not happy with the outcome they will, of course, retain options to appeal.

As I noted earlier in my contribution, the principle of mutual obligation has enjoyed support from both major parties in some fashion for the past couple of decades. What the government is proposing in the legislation now before us is to further strengthen those principles to make sure that job seekers are taking full advantage of all the support, including training, that our system offers to them. Compliance with the rules is ultimately in the best interests of job seekers themselves.

At the same time, these changes are a demonstration to Australian taxpayers that the contribution they willingly make to financially support job seekers is respected and appreciated by both the job seeker and the government alike.