Jennie George (Throsby, Australian Labor Party) Share this | Hansard source

The bill before us, the Social Security Legislation Amendment (Employment Services Reform) Bill 2008, will amend existing social security laws to introduce a new compliance framework within the context of our decision to overhaul all of the existing employment services. As we are aware, the new employment service will commence operation on 1 July 2009. I commend the minister for the extensive consultations that have occurred with a range of community groups and employment service providers in the lead-up to the announcement about the major components of the new scheme.

Essentially, the new welfare compliance system will, I think, strike a reasonable balance between participation and penalty for nonparticipation. As the member for Throsby I have had a lot of concerns expressed to me by my constituents about the current system. It has been regarded as very punitive and counterproductive by many who have come to talk to me about the impact of the policy of three strikes followed by an eight-week non-payment period. I think the weakness of that compliance system was that it failed to encourage job seekers to find and maintain employment and resulted in many of the most vulnerable job seekers disengaging completely, particularly in that eight-week non-payment period.

As the minister’s figures have indicated, the number of penalties issued more than doubled over the past two years, with more than 30,000 eight-week non-payment penalties imposed in the last financial year. In looking at the figures for my own electorate of Throsby, I saw that 163 local people had eight-week non-payment periods applied to them in 2007-08. This was a substantial increase of 75 per cent from the previous year, when 93 people were affected by this penalty. As we know, the people affected by the penalty—the eight-week non-payment regime—were often the most vulnerable people. They were people suffering from homelessness, people of no fixed address, people with mental illness and other vulnerabilities that made it very hard for them on many occasions to avoid these very harsh penalties. We had local agencies tell us about the distress that many people found themselves in over this period.

So we believe that an effective compliance system should encourage job seekers to continue to engage with and look for work. Under the current regime, the job seeker was not required to engage with their provider or, indeed, with Centrelink for the entire penalty period. It was not surprising, therefore, that three-quarters of job seekers who received an eight-week non-payment penalty came back onto income support, most of them within a fortnight of finishing their non-payment period. It seemed to me a case of punishment for punishment’s sake rather than looking at ways of engaging the job seeker and continuing to provide them with the skills, training and opportunities to find meaningful employment. My concern about the way the system operated locally was not just a one-off situation, as the National Welfare Rights Network argued in their submission:

The relationship between this—

eight-week non-payment—

penalty and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime is both categorical and direct.

So in a sense we really had a system that was punishing those who are most vulnerable in our communities.

The government is determined, however, to maintain a strong but fair compliance regime. We are not abandoning in any way the sense of mutual obligation, but we want to put in place a system that actually encourages people to look for work and that trains and skills them for work opportunity and in so doing improves their chances of gaining meaningful employment. I am very pleased that in the reforms that this bill will introduce there will be a better safety net for the most vulnerable job seekers, particularly those with mental illness or those facing homelessness, while at the same time reinforcing the onus of personal responsibility of participants both to engage in activities that help them prepare for work and then to actively seek work.

I think, overall, the minister has secured in this bill a good balance between participation and engagement and maintaining appropriate penalties, particularly in the event of wilful noncompliance. We need to discern the incidents of wilful noncompliance from those factors that mitigate for a variety of reasons, and I referred to some examples earlier. A key feature of the new compliance framework expressed in this legislation will be based around the principle of ‘no-show, no-pay’. ‘No-show, no-pay’ will result in the job seeker losing a 10th of their fortnightly payment for nonattendance. Connection and reconnection failures are also encompassed in the new regime. If a reconnection requirement is breached without a reasonable job excuse, the job seeker will lose a 14th of their fortnightly payment.

The ultimate penalty for wilful noncompliance will continue to be the eight-week non-payment penalty for serious failures. However, before that harsh penalty is visited upon people there will be some safeguards and provisos attached to that eight-week non-payment penalty. As the bill indicates, prior to the imposition of that severe penalty there will be a thorough and comprehensive compliance assessment. Unlike in the current scheme, a job seeker can have their payment reinstated during any eight-week period if they agree to participate in an intensive compliance activity for 25 hours a week; usually it is some form of work experience or Work for the Dole scheme. I am pleased to note also that, in cases of severe financial hardship and where the job seeker does not have the capacity to participate in an intensive compliance activity, consideration will be given to maintenance of income support.

I think the balance is right. It is not a one-size-fits-all approach. The system will give consideration to the individual circumstances while at the same time make clear to people that we expect the obligation and responsibility on their part to continue. For them to be engaged in meaningful activity is all about helping them to be job ready and to find meaningful employment.

I believe the previous government’s system was very harsh and in some senses counterproductive not just in terms of the compliance regime but overall. There are a range of shortcomings in the current Job Network scheme which I hope will be addressed in the changes that come into place on 1 July. The goal of our improved services is all about helping the unemployed. As clearly articulated, our goal is to provide all job seekers with the vocational skills and other forms of support, outside the traditional range of training and work experience, that people need to both find and keep a job. In that regard, there is a high emphasis on both training and work experience in helping job seekers find ongoing employment.

Ironically, under the current system skills shortages have dramatically worsened, during the period of the Job Network scheme. As we all know, this has acted as a severe brake on economic growth and productivity. While we all take heart from the fact that national unemployment rates fell, far too often little attention was given to the causes of and solutions to regional unemployment, in particular, and to the plight of the long-term unemployed. I know of the frustrations in my own region we all experienced—a region with above-average rates of unemployment, particularly among young people—with the one-size-fits-all approach to finding solutions to regional unemployment. Overall, the proportion of people on unemployment benefits for more than five years in fact increased under the Howard government, from about one in 10 long-term unemployed in 1999 to almost one in four today. In numerical terms, that number has grown from 74,000 people to more than 105,000 now. So, in a sense, while we took great delight in the national unemployment rate declining, when you look behind those global figures you realise that we often failed to see the plight of the long-term unemployed.

In that regard, I think the present scheme has failed too many disadvantaged job seekers, many of them having to wait for up to two years to receive assistance through the personal support program. I know that the job seeker accounts were not used very effectively. In the Illawarra we undertook a trial pilot project under the former government, with the assistance of the then minister, to try and get the Job Network providers to use the available job seeker accounts to assist disadvantaged and long-term unemployed people, but we had quite a battle in trying to get those accounts used effectively. Despite that, with our own solutions to our local problems, we have in the Illawarra successfully placed over 300 young disadvantaged people into apprenticeships. That system was made possible by the commitment of the state government to a range of prevocational opportunities so that young unemployed people were able to avail themselves of prevocational training so that, on leaving, they were at the level of a first-year apprentice. In some instances, but not in all, the job seeker accounts were then used to supplement the incentives for local small- to medium-sized businesses to employ the young person.

My concern has always been that the Job Network scheme, as devised by the Howard government, was too focused on a one-size-fits-all approach without providing incentives for local regions such as ours to come up with their own initiatives or indeed look at sustainable employment pathways for individuals. That resulted in far too many job seekers moving into and out of employment services—with a great capacity for churn—and not receiving the kind of assistance that they needed to get them out of their predicament in the long term. Departmental research shows that almost half the people on benefits in 2001 were still unemployed in 2007. Only one out of every three participants in the Work for the Dole program was employed three months after completing their activity. I think those national trends would be borne out in any detailed regional analysis of the impact of these programs in the Illawarra region.

In recognition of these fundamental flaws in employment services delivery, our minister has put the emphasis in the new system, which will emerge from 1 July, on ensuring that each job seeker will be placed into one of four streams where they will receive a level of assistance commensurate with their level of disadvantage, so the system will be much more tailored to the individual needs of the job seeker. I think that is a really good starting point. Employment service providers will work with the job seeker to develop an individual Employment Pathway Plan supported by a flexible pool of funds to access non-vocational services as well. I think that is very important. Despite the best work experience programs we can provide, we all know that some of our long-term and disadvantaged job seekers need to access other, non-vocational services such as mental health support, counselling and rehabilitation.

The new system is focused on developing a work culture where training and work experience will be provided in a wide range of activities, including the very successful Green Corps program. That will now be open to people of all ages. It has certainly been a very successful local program in the Illawarra. I trust that through the employment brokers program and the innovation fund we can develop better programs to address the barriers to employment at a regional level. Certainly, the emphasis on the Productivity Places Program will help to do that.

In concluding my remarks on the bill, I would like to make some comments on matters affecting local Indigenous employment opportunities. As we know, the rate of Indigenous unemployment is three times the rate of unemployment for other Australians. At the last census, only 48 per cent of Indigenous workforce-age people were in employment compared to 72 per cent of non-Indigenous Australians. Our government’s commitment to halving the gap in employment outcomes means we need to provide a huge number of additional ongoing employment opportunities for our Indigenous communities.

In that regard, I want to say that there is a high level of anxiety about the proposed changes to the CDEP and IEP programs in rural and regional Australia. In my own area, we have a very effective CDEP program, located at Windang, which is a key component of community development and employment opportunities for our Indigenous community, with approximately 120 CDEP participants currently involved. Recent data I obtained from the Parliamentary Library, however, showed a very worrying picture. For the Wollongong statistical area, the number of Indigenous people in the labour force was 1,071, which included participants in the CDEP program. The official number of unemployed Indigenous persons was 250—that is, 25 per cent of those officially recorded as being in the labour force. Equally disturbing, however, was that there were 785 local Indigenous people not in the labour force, of whom 259 were in the 15 to 24 age group.

The local information from Indigenous leaders that comes to my attention seems to suggest that large numbers of Indigenous people become totally disengaged from our existing employment and welfare systems and programs. So any changes to the CDEP and IEP programs locally must take into account the features of our own regional labour market in the Illawarra to ensure that we do not compound the disadvantage facing our Indigenous community members. A number of highly effective programs, including one with the local police force, could be at risk if a decision is made to terminate the existing CDEP programs without a replacement community development and employment program.

I note the minister’s reference in his speeches to the $41 million innovation fund, which will allow the development of place based solutions to address barriers to employment for highly disadvantaged job seekers, including of course, Indigenous job seekers. The minister has also indicated:

Employment services will also improve access to the small business program, NEIS, for Indigenous job seekers …

So I am hoping that with the introduction of the changes from 1 July, the new compliance regime outlined in this bill, we will be able to give much better focus to individual Employment Pathway Plans and that we will bear in mind the continuing disadvantage that long-term unemployed people are facing and the challenges and barriers that face a lot of people in regional Indigenous communities like my own.

I commend the bill and I commend the minister for the extensive consultation leading up to the changes that he has announced. I think our new compliance regime will provide an appropriate balance between participation and penalty, and I am hoping that as time goes on we can look back to the introduction of the new scheme and see the progress that has been made, specifically in terms of addressing long-term disadvantage and disadvantage faced by Indigenous people.

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