Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Hansard source

This measure was announced as part of the 2012-13 budget. Our government is building on the initial reforms passed by this parliament on 9 May 2012 to make the system fairer for all recipients of the parenting payment. The Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 will amend the Social Security Act 1991 to give effect to these reforms and recognise that nearly two-thirds of parents are already subject to the requirements that are being introduced for the remainder. Equity and consistency of treatment are part of this legislation.

To make eligibility more consistent for all parents, regardless of when they first claimed the parenting payment, the government is removing the grandfathering arrangements for parenting payment recipients introduced as part of the Welfare to Work reforms in 2006. The government recognises that parents may have spent considerable time outside the workforce and is ensuring that affected recipients will have access to a range of additional assistance to ensure they have the support they need to build their skills, re-engage in the workforce and provide their families with greater financial security and a positive future.

As announced under the Building Australia's Future Workforce package in 2011, the government has provided $80 million for the national partnership on training places for single and teenage parents. It is now providing additional funding in the 2012-13 budget for professional career advisory services for single parents already established through employment service providers. The government also recognises the increased demand for the Jobs, Education and Training Child Care Fee Assistance Program as a result of more parents working. Additional funding to this program will assist parents on eligible income support payments, predominantly sole parents, to undertake work, study or job search activities without the cost of child care being a barrier. To enable those single principal carer parents who may qualify for Newstart allowance to see greater benefits from their participation and earn up to $400 more per fortnight before losing their eligibility for payment, the government has already introduced a more generous income test commencing on 1 January 2013.

The government believes that, together, these changes provide parents with the right balance of support and incentives to make the most of employment opportunities available, to find meaningful work and to provide themselves and their families with a better future. Under this government there have been better participation outcomes for individuals who have not been grandfathered under the Howard government's parenting payment single policy of 2006. In practical terms the evidence has shown us that, while grandfathered parenting payment recipients do better than most job seekers, principal carer parents on Newstart do even better. Government research shows that 65 per cent of principal carer parents on Newstart allowance are able to find paid employment, compared to 55 per cent of all job seekers. If we look 13 weeks later, these parents on Newstart are nearly 10 per cent more likely still to be in work—and after 26 weeks they are still more likely to be in paid work—than all job seekers.

The amendments align participation requirements for all parenting payment recipients. These requirements will start when their youngest child turns six, noting that parents will continue to have access to more flexible arrangements and exemptions to balance part-time work, study or training, or caring for a child with a disability. Let me be clear: the exemptions that apply to parenting payment will continue to apply to Newstart.

Unemployment is not something that Australians plan for, and reducing a person's modest savings before they can access income support often means it is hard for them to restructure their budget and the bills they have already accrued when unemployment strikes. This bill amends the liquid assets waiting period to allow newly unemployed Australians and new students to hold on to more of their savings and better adjust to their new circumstances. The eminently sensible change will provide unemployed Australians with modest savings access to income support up to five weeks earlier than under the current arrangements. The liquid assets waiting period thresholds were previously doubled in response to the global recession. The government is now in a position where it can afford to reinstate these thresholds permanently. The bill also introduces a technical amendment to the definition of termination payment for the purposes of the income maintenance period. This will clarify that any payments made to an employee in respect of the termination of their employment are included in determining the income maintenance period.

The changes in this bill form an important part of the income support reforms announced in the most recent budget. These reforms will result in fairer and more consistent treatment of income support recipients. The government understands that Australian families who rely on income support do it tough. We know the reality that many Australians do struggle to make ends meet. We understand that parents do sit around the kitchen table at night wondering how they are going to pay the next utilities bill or the next necessary school item for their children. We are acutely aware that cost-of-living pressures do impact upon income support recipients most significantly. While our income support system is targeted on the basis of need, paid at a basic level and affordable in the current economic climate, we understand that being on Newstart is no easy ride. That is why the Gillard government announced in the 2012-13 budget that it will also provide more than $1.1 billion over the next four years to help people who receive income support payments to manage unexpected cost-of-living pressures. The allowance will be paid in two instalments, in March and September each year, and linked to the consumer price index to keep up with inflation.

I know that there are strongly and sincerely held views by many, particularly in the community sector, about the measures contained in this bill. I believe that, at the core, the concerns are not about the inconsistent treatment of one sole parent compared to another but, rather, the adequacy of the Newstart rate of payment absolutely. I note that the Senate has initiated an inquiry into the adequacy of Newstart and the impacts of the changing nature of the labour market. This inquiry and the inevitable and appropriate public debate that follows will no doubt help the government to continue to implement sensible incentives that better enable individuals to reap the rewards of work. This principle remains at the core of our philosophy and will continue to guide our policy platform through time. I thank the members for their contributions to this debate. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

See this speech in context