Nick Xenophon (SA, Independent) Share this | Hansard source

I cannot support this bill, the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, in its current form. At the outset, I acknowledge the importance of and bipartisan political support for the concept of mutual obligation. Mutual obligation means that if you are a job seeker you have an obligation to look for work. The government, on the other hand, has an obligation to support you, the job seeker, to find employment. This support is financial but also practical. Job seekers expect and deserve to be able to access practical assistance in identifying suitable jobs and then applying for them.

I suggest that there is another concept that needs to be part of the debate. That is the role of government, the sensible, targeted role of government to ensure that our country has a strong manufacturing base. Contrasting what has happened in this country over a number of years with, say, Germany, we see that manufacturing as a share of GDP in this country has gone down from some 12 per cent in 2004 to under seven per cent now. We are bumping just above Botswana at six per cent and Rwanda at five per cent. I do not pick on those countries. They are wonderful countries, I am sure, but they are countries that have not had a large industrial base, as we have had in the past. Yet it seems that, in the next few years, unless we are careful, with the demise of the automotive sector we are going to go below countries that have never been manufacturing or industrialised countries. That is something we need to take into account and something I will refer to shortly.

I think government has a role to play in targeted, sensible investment to assist industry. By contrast with what has occurred in this country, the German government has an industry policy. It understands the importance of manufacturing. Today in Germany, the industrial powerhouse that it is, 22 per cent of that nation's GDP is based on manufacturing. Germany exports its technology to the world. It exports its motor vehicles and other industrial output to the world. It value adds. It has advanced manufacturing. It has a highly skilled, well-paid workforce. That is a model that we in this nation should be looking at, not a race to the bottom. We got lazy and complacent with the mining boom. I am not against the mining boom, but we got lazy and can placement. The warnings of the great Donald Horne, the author of The Lucky Country, before he died in 2005, in his last interview with Peter Hartcher from The Sydney Morning Herald, said that the mining boom made us lazy and complacent in terms of planning for the future, pushed up the exchange rate and made manufacturing less competitive. These are factors that we need to take into account in the context of this bill.

The government argues that this bill will create a simpler and more effective compliance framework to ensure job seekers are meeting their obligations under the mutual obligation requirements. However, I believe that this bill is too harsh on job seekers. I believe it goes too far and will result in vulnerable people having their Centrelink payments suspended for inconsistent and potentially arbitrary reasons.

Let us start from the beginning and put this bill in context. In my home state of South Australia we have the highest unemployment rate in the country. In December 2015, unemployment was at 7.2 per cent. That is 62,300 men and women who do not have a job to go to, who are missing out on not only the financial benefits of work but also the sense of dignity and self-worth that flows from having a job. A job should be a social right in a good society. We ought to do everything we can to make sure that those who are willing to work hard have a decent job to go to.

These unemployment figures are actually quite misleading, because a number of years ago the criterion for determining whether a person was employed or not was changed. The benchmark used to be working some 15 hours per week, as I understand it. Now if you work more than one hour per week you are no longer deemed to be unemployed. The level of underemployment can be very material as well, because you are not going to be able to afford to buy a car or take out a personal loan, let alone take out a home loan, unless you have a job that is not casual but is full-time and pays well.

The level of youth unemployment in South Australia is reaching crisis point. In December last year, the unemployment rate for South Australians aged between 15 and 24 was 20.1 per cent. That is the unemployment rate for those who actually do not have any work at all. If you have more than one hour of work a week you are in the underemployment category. That level can be much greater. The South Australian youth unemployment rate of 20.1 per cent compares to the national average of 15 per cent. The Conversation in a piece published in 2015—I do not have access to it now—talked about the underemployment, underutilisation and unemployment rate amongst young people being in the order of 32 per cent for females and 25 per cent for males. Those are significant figures. They are figures that we cannot ignore.

General Motors Holden, along with Toyota, is expected to close its doors as an auto manufacturer at the end of 2017. Ford in Geelong is only a few months away in 2016. There is still uncertainty as to where our fleet of future submarines will be built, whether it will be a local, hybrid or overseas build and whether the coalition's promise of 12 future submarines being built in South Australia will be honoured or not. These are uncertain times in my home state, but they have national ramifications. We need to work hard to identify ways to stave off this jobs crisis, to try and stop the tsunami of job losses that is looming not only over South Australia but over the nation, particularly in Victoria. We know about the Bracks review. The University of Adelaide studies by Professor John Spoehr talk about something in the order of 200,000 jobs being lost in the automotive sector unless we act urgently to stem those losses and their flow on effects in the automotive components sector. These are big issues.

At this stage, I thank my colleague Senator Kim Carr, who has worked with me to advocate for Australia's car-making industry. I acknowledge the work that the Minister for Industry, Innovation and Science, Christopher Pyne, has done in relation to this. Along with Senator Carr and me and others, he has been quite hopeful that we should do everything we can to encourage the proposal by Punch Corporation of Belgium and its CEO, Guido Dumarey, who was here in Australia, in Canberra, on Monday and Tuesday meeting with a whole range of people. He met with the Minister for Industry, Innovation and Science, Mr Pyne, he met with the Prime Minister, Mr Turnbull, and he met with Opposition Leader, Mr Shorten, as well as a number of others. Hope has not been lost in relation to this. It is difficult to try to revive a sector where a decision has been made by General Motors Holden to end manufacturing. But Punch Corporation, and there are others out there, genuinely want to engage with General Motors Holden to see what can be done to take over that plant and to revive auto manufacturing. With the Australian dollar hovering around 70 cents to the US dollar, this is something that we should not dismiss and this is something that we should encourage.

I hope that, when members of the South Australian government and the South Australian Premier meet Mr Dumarey and his team tomorrow in Adelaide, they will be doing all they can to encourage—to fight for an opportunity to explore this and to give it a fair go, an opportunity to succeed. This will require the involvement of state and federal governments, but we should not give up on our auto sector. We should not give up on a sector that is so important to this country and that has such a long history—it does have a future. I will not give up on it.

There are those who say, 'Don't give workers at General Motors Holden false hope'. I understand that, but how are you giving people false hope if you are giving it your best shot to try to revive the auto sector in this country and, with it, save many thousands of jobs?

I believe that the federal government will do all it can and I believe that the federal opposition will do all it can to encourage this proposal. I am encouraged by that. I hope that the South Australian government will do all it can and not take a negative approach to this, because this is very important. They should listen to their federal counterparts, both the government and the opposition, in terms of their approach to this proposal.

Job creation is just one piece of the puzzle; what the government does to support job seekers into employment is another. This bill aims to strengthen and streamline the job seeker compliance framework. That, in itself, is not a bad thing. Amongst other things it does this by enabling job seeker support payments to be streamlined, but it also has a number of nasties in it: it seeks to support a job seeker's support payments to be suspended immediately if they fail to comply with a number of requirements. Mutuality requires that you do your best to find a job. But under the current framework payments will only be suspended in the fortnight following a no-show no-pay failure. The rationale behind this delay was to give job seekers time to organise their finances and their budget so as to reduce the negative impact of the penalty, because there are others involved in relation to that: family members who rely on these payments, including children.

The government has argued that this delay is problematic. That it places too much distance between the behaviour that caused the penalty and the penalty itself. I understand what the government is trying to do by changing the system so that payments are suspended immediately, but I have real problems in agreeing with it. I have reservations about the consequences of this and the unintended consequences of this. For example, a job seeker may have children or other dependants who rely on those Centrelink payments. Stopping those payments immediately may place families in a situation in which food and other necessities cannot be bought.

During the Senate Education and Employment Legislation Committee's inquiry into this bill, the National Welfare Rights Network also raised concerns that immediate payment suspension may, in fact, result in additional penalties from third parties. This would be the case where there is not enough time for a person to vary the timing of direct debits. It has a cascading effect. It could be that they have something that they are paying on a lease or a rental arrangement, where they have their goods repossessed. It could be that they are evicted from their home and forced into homelessness—and goodness knows what the social and economic costs of that would be.

Another aspect of this bill that causes me concern is the requirement for a job seeker to enter into an Employment Pathway Plan within 48 hours of their first appointment with their employment service provider. Currently, a job seeker is able to negotiate their plan with their provider and is given the opportunity to consider it in detail before they sign it. In my view, imposing an obligation on job seekers to sign an Employment Pathway Plan within 48 hours of their first meeting or risk having their payments suspended immediately does not lend itself to realistic and workable plans being agreed to. Additionally, a job seeker will not be paid back any of their missed payments even once they have entered into an Employment Pathway Plan.

Jobs Australia, the national peak body for not-for-profit organisations that assist people into work, raised concerns during the Senate inquiry in relation to this measure. In their submission Jobs Australia wrote:

In relation to the failure to enter into a Job Plan, there is some risk that frontline employment services staff may seek to use the new rules to compel job seekers to enter Job Plans that have not been adequately negotiated and explained. A Job Plan is meant to be a document that is negotiated with the job seeker and tailored to their needs, rather than a standard set of requirements dictated by the provider.

I acknowledge the government has indicated that job seekers will be allowed 48 hours 'think time' before any payment suspensions are imposed. However, I am concerned that this, in some cases, may not be a reasonable amount of time for a job seeker to obtain advice or assistance in renegotiating a plan.

The bill also states that a job seeker's payments can be immediately suspended if they act in an 'inappropriate manner' during any required appointments and the purpose of the appointment was not achieved. Worryingly, the bill does not define what behaviour might be considered 'inappropriate'—I think it ought to. The bill does provide that the secretary is able to determine, by legislative instrument, matters that must be considered by the secretary when deciding whether a job seeker has acted in an 'inappropriate manner' at an appointment. However, the bill does not require that such an instrument be made, and that concerns me. The bill ought to require that such an instrument be made so that we know what the framework is and we know what the rules are. If there is going to be a new set of rules, we at least need to know what they are—rather than being completely ill-defined.

The Department of Employment has advised that there are various safeguards in place to ensure job seekers are not unfairly penalised. According to the department, penalties would not apply where the inappropriate behaviour was outside of a person's control due to a psychological or psychiatric condition. That, in itself, could be problematic as to how that is determined. Would there be appeals to the Social Security Appeals Tribunal or would there be appeals to the Administrative Appeals Tribunal in order to settle what those conditions would be and how it would apply? Despite this assurance, I remain concerned about the application of this measure. I agree with the Australian Council of Social Service, who say that sanctions for inappropriate behaviour 'are likely to be applied inconsistently and to penalise behaviour related to underlying mental health, alcohol and drug or other underlying complex issues'.

Can I just say that we do have a significant issue with substance abuse in this nation. OECD reports indicate that we have very high levels of substance abuse and that our level of crystal methamphetamine use, particularly in some communities, is quite shocking. These factors need to be taken into account. It breaks my heart to speak to constituents who have had to take out loans on their homes or have cashed in their super because they cannot get help for their loved ones with a serious crystal methamphetamine problem, and they need to get them into a proper and decent rehabilitation program. These are people who do not have money to throw around but who, in desperation, take out large loans, in the tens of thousands of dollars, to get their loved ones in a comprehensive rehabilitation program either here or overseas.

The Australian Unemployed Workers' Union were similarly unconvinced by the government's proposed safeguards, raising concerns that the ability to impose sanctions would exacerbate the already uneven power dynamics between job seekers and employment services providers.

Another measure in this bill which makes me uneasy is the removal of waivers for serious financial penalties applied under the act when a worker refuses to accept a job. I think there must be some reasonableness and some flexibility in this. Under the current system, a person is subject to an eight-week nonpayment period when they refuse to accept a suitable job. However, a waiver to that nonpayment period can be obtained. I acknowledge that there does appear to be a concerning upward trend in the number of penalties applied to job seekers who fail to accept suitable work. Figures from the department of education show that the number of serious failures for refusing or failing to accept suitable work has more than doubled from 644 in 2008-09 to 1,412 in 2014-15. I think we need to look at how that waiver system works, but I believe that removing the waivers altogether is not necessarily the best way to go about addressing the issue of job seekers not accepting jobs, particularly some of the entrenched underlying issues at stake. In fact, removing the ability to grant waivers may have the perverse outcome of job seekers becoming further disengaged from the system, as there is no opportunity for them to engage in an activity to address their noncompliance and deal with those underlying causes.

To me, this bill seems to be all stick and no carrot. It does not provide encouragement for job seekers to improve their engagement with employment service providers. I have real difficulty in supporting this bill in its current form. If I can go back to what I said at the outset, the best way to deal with this issue is to make sure that we have good jobs—real jobs—and that involves governments being involved at a state and federal government level to ensure that there is appropriate industry support, taking a leaf out of the book of the German government. Manufacturing is 22 per cent of that nation's GDP. It is an industrial powerhouse with good, well-paying jobs, where they make things that the rest of the world wants, with advanced manufacturing. Here we are slipping to well under seven per cent of our GDP being based on manufacturing, compared to 12 per cent just a decade ago, and that could slip to well below five per cent in coming years unless we have an active jobs plan that involves not just manufacturing but a strong approach to government procurement policies so that there is a 'buy Australian first' policy in respect of the tens of billions of dollars that Australian governments—state, federal and local—spend on procurement in this nation.

With those remarks, I can indicate that I believe the bill needs to be amended significantly in order for it to pass. I will support the second reading of this bill, but I have real concerns about the third reading in its current form.