Michael McCormack (Riverina, National Party) Share this | Hansard source

I rise to speak on the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 which seeks to amend the Social Security Act to remove the grandfathering provisions for parenting payment receipts from 1 January 2013. It will see parents in receipt of parenting payment partnered-support transition to an income support payment such as Newstart when their youngest child turns six, and those single parents on parenting payment transition when their youngest child turns eight. In addition to removing the grandfathering provisions, this bill seeks to double the permissible liquid assets, raising the maximum limit from $2,500 to $5,000 for singles, and from $5000 to $10,000 for those with dependants. The bill also seeks to define which payments should be categorised as termination payments to ensure consistency across the board when considering the income maintenance period, and this will bring the definition of 'termination payments' in line with the policy intent of the Guide to Social Security Law.

It is very important that these grandfathering provisions for parenting payment receipts from New Year's Day next year are removed. Expected savings from this bill are $691.9 million over four years and, whilst the coalition's Welfare to Work sought to assist Australians off welfare and into work, this bill's aim is to make these savings, and in this particular parliament in this particular economic climate a saving of close to $700 million over four years will, I am sure, be welcomed by the Treasury coffers which are getting emptier by the day.

This bill builds on the reforms brought in by the Howard government in 2006 when $3.6 billion was invested to help people transition from welfare to work. That is so important. The word 'transition' is bandied around so often in this parliament, and certainly in this case transitioning from welfare to work is vital because there are too many people getting a social security payment in this country and we need more people working particularly as we are an ageing population. The more people working and in meaningful employment, who are paying tax to help pay for aged care the better. People in their twilight years ought not be expected to keep putting their hands in their pockets to pay for the higher and higher costs of living. It is so important that people who are able-bodied and willing to work—and even in some cases, who are unwilling to do so—be afforded the opportunity to work. The work does not necessarily have to be in a mine, but work which is going to help the Treasury pay for all the things that are going to be such an impost on the governments into the future, and certainly aged care is going to be one of those. Mental health care, particularly in regional areas, is also something which is going to be an even greater burden on government coffers and Commonwealth expenses in years to come.

From 1 July 2006, new applicants were eligible for parenting payment when their youngest child was younger than eight and they moved to Newstart or another payment when their youngest child turned eight years of age. Under this legislation, recipients of the parenting payment could be grandfathered on this payment until their youngest child turned 16 years of age providing that child was in their care before 2011. I know how often the minister for families talks about the cost of raising children, and the Prime Minister too as well as the opposition leader talk a lot in this place about the costs of raising children. It is a very great cost. I know: I have three children of my own, two of whom are still teenagers and both attend high school. The costs of getting those children to school, getting them uniforms and paying for excursions, is a great cost.

Single principal carer parents in receipt of Newstart allowance were also given access to the pensioner concession card, the pharmaceutical allowance and the telephone allowance, and for pensioners that is very important. My mother and mother-in-law are both pensioners and I know how much they rely on any assistance that they can possibly get to help them meet their daily cost of living.

This bill will bring the definition of 'termination payments' in line with the policy intent of the Guide to Social Security Law. However, whilst the coalition's Welfare to Work reforms were aimed at assisting Australians off welfare and into work—something that, as I said, was vital—the main aim of this bill is to realise much-needed savings for the government, and certainly this government can do with all the savings it can get. Expected savings from this bill, as I said, are going to be almost $700 million over four years.

A new employment participation service was offered to parents with school-age children, ensuring they had the skills they needed to gain a job. We know how important it is to get schoolchildren skilled up and ready to go into employment, certainly in this day and age when vocational trades are so important. We went through a period when it seemed that every school leaver was urged and encouraged to seek a university place. But we all know that university is not for everybody. We all know that some adolescents are not equipped with the academic qualifications or, in some cases, the desire to go to years 11 and 12 to complete their higher school certificate. They want a vocation—plumbing, electricity, all those sorts of occupations. For a period, children were more or less going to university because they felt that was the right thing to do and that was being encouraged. But these vocational trades are so important and things have changed. I am pleased to say that throughout the Riverina, and other places in Australia, young people are now encouraged to seek those vocations because we all know that we need the trades. We need plumbers and electricians to fix things when they go wrong.

As part of the coalition's policy, parents could refuse a job if they were not more than $50 a fortnight better off once the costs of employment were factored in, such as child care or if they had to travel for more than 60 minutes each way to work. I know how important child care is to the shadow minister at the table, the member for Farrer, who has campaigned tirelessly on behalf of people in her electorate. I know she is coming into the Riverina electorate during the winter recess to talk to people about how important child care and tertiary education are to regional students. They are so often disadvantaged when it comes to child care and gaining independent youth allowance and those other things which enable them to get a university degree and to get a vocational trade. It often seems that regional students are unfairly disadvantaged and not just because of the tyranny of distance that they have to put up with but also in many ways through bad policy. Governments need to recognise the value of regional areas and the value of regional students. I am constantly amazed by the great work that university students from my electorate and other regions do in all sorts of areas, whether that be achieving wonderful inventions, access to better jobs that are making a difference to this nation and making this nation a better place in which to live for all of us.

Research undertaken by DEEWR from the Welfare to Work reforms shows that there was a 23 per cent increase in the number of single principal carers leaving income support after six months in comparison to the previous years with 38 per cent moving off payment during 2006-07. The report also showed that more than 70 per cent of principal carers left income support for employment. Similarly, for partnered carers on Newstart allowance, 45 per cent were no longer in receipt of income support payments after six months compared to 32 per cent in 2005-06. At the time of the Welfare to Work reforms, the Howard government introduced a range of complementary services to assist parents in their transition into employment once their youngest child had reached the school age.

There are concerns with this bill. Unlike the Welfare to Work agenda the coalition introduced in 2006, there is no additional funding to support parents into work. Another concern is that, if this Labor government was truly committed to assisting parents back into work, it would provide extra assistance. This government has slashed $162.2 million from Job Services Australia assistance for jobseekers. We so often hear the Treasurer talk about the great employment figures of around 5.4 to 5.5 per cent unemployment. Compared to other countries that seems pretty good, but those figures mask the real unemployment figures. There are many people who are underemployed in this country. There are also those who are not covered by those statistics. If the true measure of our real unemployment figures were made public, I think that figure would be far higher and certainly to a level which I do not think the Treasurer, who so often espouses these figures, would be willing to come into this place and take too much credit for.

This Labor government has also cut a further $44.3 million from outcome payments for Job Services Australia providers. Those providers do a wonderful job. So to have that amount of money taken away from their programs and provisions is considered by many to be penny-pinching and a hard cut. Parents who are working could be worse off financially as their participation requirements may force them into accepting a job where they are worse off financially. We do not want that. People, particularly with the carbon tax coming in on Sunday, do not need to be worse off in their employment. In fact, the household assistance package will not go far enough to cover the sorts of cost-of-living increases that they are going to have. These people do not need to be any worse off. The Treasurer has described the past two budgets he has brought down as being truly Labor budgets. Labor often says it is the government and the party for the underprivileged and that it certainly has a social conscience. But as we have seen so often, particularly yesterday, that does come into question.

This is in contrast to the Howard government reforms where parents were promised that they could refuse a suitable job offer if they were not better off by $25 a week. That $25 a week back when the Howard government was in government between 1996 and 2007 was a lot greater in real terms than $25 a week is going to be into the future and from Sunday when the economy wide world's greatest carbon tax comes into effect. The environment for jobseekers when a coalition government introduced this legislation was vastly different from that under the Labor government today. Instead of strong surpluses and low unemployment, we are now experiencing massive deficit and debt, the interest rate of which is going to take a lot of servicing with rising unemployment and a business sector reluctant to hire. I know from when I speak to small businesses in the Riverina how reluctant they are in the current economic climate, and certainly in the current political climate, to hire more people to help them to grow their businesses. There is not much incentive to grow business in the political climate that we are currently in. This will make the unsupported transition from welfare to work that much harder for job seekers. Thank you, Mr Deputy Speaker, for allowing me to speak on this bill.

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