Jill Hall (Shortland, Australian Labor Party) Share this | Hansard source

It is with great pleasure that I rise to speak to the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. As a person who has had a long history working in the area of employment and working with people who have been quite disadvantaged in entering the workforce, I find that this legislation is a welcome move. It is a move in the right direction. The bill will amend the Social Security Act 1991 and the Social Security (Administration) Act 1999 to give effect to measures announced in the 2008-09 budget. Those amendments were a key plank of the Labor Party’s platform in the lead-up to the last election. There was an undertaking given that we would review employment services, and coming out of that review is the legislation before us today, which will take effect in July 2009.

The key feature of this legislation puts in place a fairer and more effective compliance network. There will be new and more work-like aspects to it, with a ‘no-show, no-pay’ approach to failures to attend work, but it retains the connection and reconnection principle for failure—that is, it retains an eight-week non-payment penalty for persistent and wilful noncompliance, but there will be a new comprehensive compliance assessment before any eight-week non-payment period is imposed and opportunities for payments to be reinstated if job seekers participate in an intensive compliance activity. There are new hardship provisions to replace financial case management, a waiting period for job seekers who are voluntarily unemployed or unemployed because of misconduct, and general discretion for employment service providers in dealing with noncompliance. That is just a brief outline of the components of the legislation.

I welcome this legislation because the previous activity test, which led to breaching procedures, was a very harsh regime. It was all stick and no carrot. It in no way encouraged those people who were breached to reconnect and be involved in the activity of looking for work. Rather, it was nine weeks that the government, the employment services and Centrelink were just not interested in that person. We on this side of parliament actually want people to be able to move from being dependent on welfare to being able to find work and then contribute. I think that most people feel that way.

An interesting aspect is that, even though unemployment has increased recently, unemployment levels, generally speaking, are still relatively low. But I think the key factor is that the length of time that the most disadvantaged job seekers are out of work and long-term unemployed has increased. There has been an increase in the number of people who are long-term unemployed, from 74,000 people in 1999 to 110,000. This is unacceptable. These are the people who are the most disadvantaged in our community, these are the people who the system has failed and these are the people who under the previous system were most likely to be breached.

Under the previous government’s compliance regime, the penalties that were applied to people who were job seekers increased markedly. So we had an increase in the number of people who were being breached and an increase in the number of people who were long-term unemployed. There is no correlation between the two figures. For instance, each year after September 2006, when the new laws were implemented, the number of people who were breached for participation failures increased. It increased from 28.4 per cent in September 2006 to 58.4 per cent, the peak period, in September 2007. These were people who had a compulsory eight-week non-payment period placed on them for administrative breaches. I will share with the House some of those administrative breaches that constituents in my electorate came to see me about.

One woman came to see me when Centrelink was about to impose a breach on her because she changed her time for an appointment to look at her work plan with the Job Network provider three times. On the three occasions that the woman had changed her appointment time she was actually working. For a short period of time her Newstart allowance was cut off, so she had a period when she received no money, until I intervened, because the Job Network provider had reported to Centrelink that she had failed to comply with the requirement to attend appointments on three occasions.

I would like to share with the House another person’s circumstances. This is a person who lived in an area where young children were stealing the mail. It was not only the mail asking them to attend Centrelink or meet with the job network provider; it was their electricity bill, their water rates and numerous other accounts. On three occasions this person did not turn up for appointments. They did not know that they were supposed to turn up for the appointments; they had received no literature whatsoever. It was only when they discovered that they had not received any payment at all that they became aware that they had been sent mail to attend appointments with their Job Network provider.

The previous system was a system that did not work so well for those people who were seeking to reconnect and find employment. The real strength of what we have before us today is that it actually encourages and helps people to get back into the workforce. If a person is failing to comply for one reason or another, an assessment process is put in place. It is important to know, too, that the previous system not only failed to meet its important objectives, which were to encourage people back into the workforce, but 75 per cent of job seekers who received an eight-week non-payment penalty went back onto benefits. What we are hoping to do here is to make sure that people move from reliance on a benefit to actual employment. Most of those people were back on benefits within a fortnight of finishing their non-payment period, which is an indictment of the previous system.

It is important to look at some of the submissions from peak bodies to the inquiry conducted by the Minister for Employment and Workplace Relations. ACOSS, which has a long history of working with people who are disadvantaged, made some pretty telling comments about the impact of the breaching regime under the previous government. It talked about the fact that large numbers of jobless people continued to be excluded from effective participation in the labour market, raising the level of the structural unemployment rate below which inflation is likely to increase. It also impacted on their capacity to be involved in the labour market, and it reduced the possibility of them finding employment. ACOSS has researched this very well and it identifies that we are facing a labour force or a skills shortage in this country. Here we have large numbers of Australians that have been breached and are sitting around idly with no requirement to engage. On the other hand we have a skills shortage. ACOSS made the point that prolonged joblessness and low payments lead to poverty and—and this is very important—45 per cent of people from unemployed households live below the OECD poverty line. Prolonged joblessness together with poverty levels of income are key contributing factors to severe forms of social exclusion. I feel that any scheme that is in place should be about participation. It should be about encouraging people to become part of our workforce. The previous system failed, and failed dramatically, on that level. ACOSS identified that very effectively in its submission.

The National Welfare Rights Network also made a submission to the inquiry. They highlighted the need for reform of the activity tests, which have now been renamed, and they emphasised the need to include a number of things in this review. Be mindful of these factors: people generally want to participate, but at a level that they feel capable of. Some people are not capable of participating at the level that was required under the previous legislation, and I feel very much that the legislation that the minister has put before the parliament takes into account the capability of the person and will work to increase that capability. The Welfare Rights Network also acknowledged that it is harder for people to participate the longer they are unemployed. Once again, we recognise the impact of long-term unemployment, and the assessments that will take place by specially qualified Centrelink officers will provide those long-term unemployed people with the skills that they need to re-engage in the workforce.

The National Welfare Rights Network submission also makes a point about how participation is not always predictable—the higher the level of unemployment, the more likely those people who are marginal or who have lower skills are to become unemployed, and often they are the first people to become unemployed. There is a need to encourage people who are reliant on some sort of welfare payment to understand that participating in the workforce can benefit them. Once again, I think that the legislation before us makes that point of encouraging people to understand and to see the benefits that can come from being involved in the workforce. At the same time, the Welfare Rights Network makes the point that participation should not be harmful to a person’s health, dignity, financial viability or family life and that different people participate at different levels for a variety of different reasons and acknowledges that barriers such as money, education, skills, competence, language and cultural barriers and other issues should be considered.

I also have here a submission from Homelessness Australia. That submission makes the point that unemployment leads to homelessness, that the breaching regime that has been in place has led to homelessness on a number of occasions and that there have been a number of people who, because of the breaching regime, have found themselves unable to maintain their current housing situation and as a consequence have found themselves unemployed and homeless.

In the time that I have remaining I would like to go through some of the changes that are included in this legislation—changes that deal with a number of the key aspects of how people will find it easier to participate. The first goal of this new compliance scheme is to not only ensure that people actually meet their participation requirements but also recognise that people are not participating for a number of reasons. As I have already pointed out, a large number of people—some 20 per cent of people who were breached—actually lost their homes because of the impact that that breaching had on them. There is the ‘no-show, no-pay’ failure. Once again this is creating a real-work-like situation where if a person does not turn up for work then they will be penalised. If this is a constant occurrence then Centrelink will look at why and will look at putting in place an employment pathway plan which replaces the activity test.

I think that is what it is about: it is about employment. It is about people who are unemployed re-engaging and entering the workforce. How do you do this? Is it through an activity test or is it through an employment pathway plan? I would go for the employment pathway plan every time. There will be an assessment by the Centrelink officer, who will look at the reasons for the person failing to meet their obligations, look at developing an employment pathway plan and look at how this can best be achieved. It is important to note that the breaching regime that will be in place will not affect rental assistance, pharmaceutical allowance or youth disability supplement payments. A comprehensive compliance assessment will be done by the Centrelink office. One of its officers will look at all aspects of the job seeker’s reasons for failing to meet their commitments.

This legislation is very definitely a move in the right direction. It is about linking the welfare payment with the activity that government wants to see take place. It is about re-engaging unemployed Australians in the workforce and doing it in a way that will actually achieve the goal rather than punishing the victim as the previous regime did.

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