Wednesday, 16 July 2014
Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014; Second Reading
The Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 seeks to amend the changes that Labor made during our term in government, when we made changes to the former Liberal government's measures to ensure that job seekers who suffered a penalty for not actively seeking work or training were encouraged to re-engage and seek employment and training.
Under the current job seeker compliance provisions contained within the Social Security (Administration) Act 1999, job seekers receiving a participation payment—for example Newstart, youth allowance or parenting payment—may incur an eight-week nonpayment penalty for serious failures consisting of either their refusal of suitable work or persistent noncompliance with their participation obligations. These nonpayment penalties may be waived if the job seeker begins to comply with a serious failure requirement, such as work for the dole, job search training or undertaking more intensive job searches. The nonpayment period may also be waived if the job seeker does not have the capacity to comply with a serious failure requirement and would be in serious financial hardship if the nonpayment period was not ended. These waiver provisions are important as they encourage job seekers to re-engage in the process after noncompliance by allowing the nonpayment period to be ended if the job seeker re-engages with their participation obligations.
This stronger penalties for serious failures bill provides that job seekers who incur an eight-week nonpayment penalty for refusing suitable work will no longer be able to have the penalty waived at all. Job seekers who persistently fail to comply with participation obligations will only be allowed to have the penalty waived once using the same criteria during each period of continuous receipt of their participation payment. These changes will discourage re-engagement. As the government has confirmed, job seekers are not able to re-engage at all during the eight-week nonpayment period and their participation obligations will cease during this period. Even if a job seeker wanted to re-engage during the nonpayment period, this government has effectively prohibited them from doing so. This is at odds with the government's apparent intention to get people into work. It appears that this government is prepared to just give up on these job seekers, putting them in the too hard basket and imposing sanction after sanction rather than providing support, training and employment for them.
Many of these job seekers who are likely to have a penalty applied will already have been identified by Centrelink as having some vulnerability indicators—that is, they are likely to have a mental illness or be at risk of homelessness or have experienced a recent traumatic relationship or have some other vulnerability. These are very vulnerable job seekers that we are talking about. Indigenous job seekers are likely to be also represented among those penalised. Rather than providing further support for these already vulnerable and disadvantaged job seekers, this government wants to make them worse off by penalising them even more and making them suffer further financial hardship. Labor has some very serious concerns about this measure. The government is highlighting that it is intending to save $20 million over five years by introducing this measure. What it is actually doing is giving up on more than 6,500 job seekers each and every year for five years.
The Department of Human Services already has the ability to make a call on when to waive penalties and it already has the ability to use discretion with these job seekers. The Minister for Human Services in his second reading speech for this bill indicated that in the 2012-13 financial year the department decided to waive 68 per cent of the refusing a job cases and 73 per cent of cases of repeated noncompliance because job seekers undertook more intensive activity requirements instead. Isn't this what we want? We want people to re-engage and undertake activity. The numbers we are talking about here are very small—1,718 out of more than 600,000 people on Newstart and other payments have been deemed to have refused a suitable job. So it is a very small number of job seekers. We want these job seekers to re-engage, not to sit back and do nothing for eight weeks. This is how it should be—and this is the right balance between incentives and responsibilities, of both the government and the job seeker. Why would we prefer to have somebody on no payment for 8 weeks, rather than have job seekers more engaged? I really do not understand the government's, or the minister's, logic on this one.
The government has also confirmed its intention to amend the current Social Security (Administration) (Persistent Non-compliance) (DEEWR) Determination 2009 (No. 1). Indeed, the government tabled this new determination in the Senate just last week. This determination sets out what framework and obligations the Department of Human Services must take into account, when deciding whether to waive penalties and what constitutes penalties. With this social security determination, the government is seeking to make it harder for job seekers to argue that they had a reasonable excuse for turning down work, or for failing to comply with participation requirements. Labor is also very concerned by the exclusion, in this determination, of previously protected circumstances, such as where job seekers are homeless or have been recently imprisoned.
Another concerning aspect of this bill, the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, is that more than 76 per cent of the failures we are talking about relate to young people who are under 30. When this bill is viewed in light of the government's proposed draconian measures regarding young people on Newstart, it begins to become clear that this bill is designed to further oppress job seekers and increase their desperation, by providing the potential to enforce further non-payment periods of income support—in addition to the six months that the government has already said that it would force our young unemployed people to wait before becoming eligible for any payment of income support whatsoever.
Whilst on no payments for six months, those opposite also want to force young job seekers to apply for 40 jobs a month—that is, 40 job applications each and every month, when they are receiving no money to live on. No money for food, no money for shelter, no money for phone calls—but apparently we are going to require job seekers to apply for 40 jobs a month over the six months. These same under-30 job seekers could then be forced back into another period of non-payment for a further six months, after receiving income support for six months while undertaking work-for-the-dole obligations. So the cycle could continue: six months with nothing, six months of Newstart or Youth Allowance, and then six months again with nothing—and round and round we go, if this job seeker is unable to obtain work or go into training.
Even after young job seekers have served out their six-month waiting period, they still cannot rely on a full six months of income support, because the eight-week non-payment periods—which will no longer be able to be waived under this bill—could be served when they are in receipt of their Newstart allowance. In fact, the department advised during senate estimates that the period for non-payment penalties could be up to 11 months without Newstart. What is worse is that the department has acknowledged that no evaluations have been done into whether or not these changes would even be successful. There has been no research done, and no evidence obtained, to indicate that these measures will result in better outcomes for job seekers. This begs the question: does this government even care about better outcomes for job seekers, or is this simply a savings measure? Why would the government utilise unproven methods for getting people into work, in place of ones that we know and have proven to get people to work?
Labor also opposes the government's plans to push young people under 24 from Newstart onto the—lower—Youth Allowance. This is a cut of $48 a week, or almost $2,500 a year, and another attack on young people. For those people shifted from Newstart to Youth Allowance, this represents an almost 20 per cent cut in support. If you compare that to someone who is earning $200,000 a year paying $400 per year in debt tax, that is a huge difference. The person on $200,000 a year is getting a meagre 0.2 per cent reduction in their income, while the young person is getting a reduction of 20 per cent. That is not fair. As a result of measures in the budget, young people will be paying 100 times more, as a proportion of their income, than the high-income earners.
There are more cruel changes to come, with the Abbott government overseeing the death of mutual obligation. What this government should be focusing on, of course, is creating new jobs—not burdening our young people with application requirements and participation requirements. Labor is not only concerned by changes to mutual obligation but also increasingly worried about the government's repeated attempts to increase penalties for jobs seekers, rather than focusing on job creation. We know that the government has tried to sneak in other penalties, under the Social Security Legislation Amendment (Increased Employment Participation) Bill, where it sought to impose a six-month non-payment period—for those who received a relocation payment and left their employment within six months—rather than the status quo of a twelve-week non-payment period. This government appears to be all about harsher punishment and penalties—not about creating jobs. Unemployed people should not be punished for being unemployed; they should be supported into work, training, and education for future work—which is what Labor was doing when we were in government. Unemployment is a serious social issue for those affected, but the best response is a job. Programs by government should be focused on job creation: on ensuring people have the right skills, the right training, and the right education for jobs now and for the jobs of the future. Governments should be continuing programs that worked—like Youth Connections and the Partnership Brokers Program, both of which have been cut in this budget. The government should not be introducing measures that are not proven to work and that could have an adverse outcome.
As I have said previously in this place, Labor focused on supporting people to finish their schooling, and to get the training and higher education they needed for well-paying jobs. We as a government considered a whole range of different policies to address the issues of unemployment. We did not instinctively revert to punitive measures. We improved the accessibility of training and employment services. Prior to the election, we announced changes to Job Services Australia. We introduced a system with the flexibility to match individual job seekers with available jobs. We prioritised resources for those in the greatest need. We were planning to include employers much further in job seekers and outcomes. As a result of all of our measures, we achieved significantly greater outcomes than the government before us and we improved outcomes by 90 per cent for the most disadvantaged job seekers.
I reiterate what I have said before in this place. When we were in government, Labor helped over 1.6 million people secure jobs across the employment services portfolio. Our employment services system was recognised by the OECD as playing a central role in keeping unemployment low in the wake of the global financial crisis. During the GFC, Labor provided support to the economy to maintain jobs, saving an estimated 200,000 jobs.
Labor recognises that punitive measures designed to force people into employment will not work where there are no jobs available. Driving jobs growth should be the role of government. You cannot punish job seekers for not obtaining employment when there is a lack of jobs to be obtained.
Australians deserve a government that will fight for jobs, create jobs and support workers and job seekers. In office, we responded with assistance to maintain manufacturing jobs in Australia. We also provided additional support for workers who lost their jobs and were affected by this downturn in the manufacturing industry. We provided retraining and Job Services stream 3 as additional support for people who had lost their jobs. This is what governments should do. We did this because we believe that unemployed people should not be stigmatised but should be supported. We know that many people fall on hard times through no fault of their own, and it is the obligation of a responsible government to provide safety nets when this occurs. We should not be ostracising people for failing to obtain work and we should not be forcing them to survive in poverty.
This government is further alienating vulnerable people by ensuring that they never receive opportunities. They are doing this by not only taking away vulnerable people's rights to affordable higher education which will lead to greater employment prospects but also restricting the avenues for training to find work and ceasing programs that were proven to get people into work. They are also eroding payments under Newstart and leaving people without even a right to exist with their dignity. In government, Labor supported, assisted and encouraged people to find work.
We do not agree with the measures in this bill. We believe that the measures in this bill are punitive, we believe that they are unreasonable and we believe that they are unfair. There is no evidence that any of these measures would work. They put job seekers who have been penalised and who have lost their payment and want to re-engage into a position where they cannot.
This bill goes a step too far. It removes the discretion Centrelink currently has to waive penalties for vulnerable Australians. So in the best interests of those vulnerable jobs seekers who may be adversely affected by these measures, Labor will be opposing this bill.