House debates

Thursday, 17 March 2016


Social Services Legislation Amendment (Interest Charge) Bill 2016; Second Reading

1:00 pm

Photo of Ed HusicEd Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Hansard source

I do enjoy hearing contributions like that. The prospect fills my heart with joy that, if we have reform to this system, a coalition government would plough the savings back into social security. If only that were believable. I have constituents—20,000 or so—who, as a result of your family tax payment changes, will be getting less family tax benefit. There are people who were targeted by this government in terms of Newstart by withholding payments to them. A whole stack of people, as a result of the government's attacks on the payment system, are going to be worse off. Family tax benefit A and B still sit there. There is the notion advanced by the member for Canning that, in some way, the changes will be used to help people. I will wait to see whether that holds true in the test of time. Like the member for Canning, I share the view that, if you are not receiving a benefit that you are entitled to, you should have recovery initiated against you—absolutely. Let's not for a moment think that those opposite, if they tighten up the system, are going to plough that back into Centrelink payments. That is hardly possible, based on their track record.

The other point I will make—and I will expand on this further in my contribution to this debate—is that sometimes people are given a debt notice by Centrelink as result of an IT system that needs to be replaced and processes that operate in Centrelink that put an enormous amount of stress on people if they follow up a claim that they owe money to the government, when in fact it turns out to be in error. I will go through that and demonstrate in most vivid terms the impact on one particular constituent who was forced to go through an unbearable process. Regardless of your politics, you would say it is a completely unacceptable process to clear up problems with Centrelink payments as a result of processes and systems that the government has not addressed in the time that it has been in office. Mind you, I have been critical of my side of politics when we were in government, but I will get to that.

We have said that we do not intend to oppose the bill itself, but we will be reserving our position on it based on the outcomes of a Senate committee inquiry that is set to report back in June. A system like this, with the complexity that exists, will require a degree of investigation to determine whether the bill's intended effect can be expected to take effect. We understand, based on what the government has publicly declared, that the bill itself seeks to apply a new interest charge to former recipients of social security, family assistance, paid parental leave and student assistance who have outstanding debts and have failed to enter into an acceptable repayment plan. By way of background of the application of interest charges on debts in recent decades, under the current arrangements an interest charge may be applied of up to 20 per cent. Until 2005, a three per cent interest charge was applied, but since then no interest has been applied to the debts. According to the government, the initial rate of 20 per cent was considered too high and risked plunging people into financial hardship. The three per cent rate was considered too low by not providing enough incentive to repay, which is understandable. In short, the administrative costs were outweighing recovery. Clearly something had to give. We understand that is the motivation for this bill.

If the bill is passed, an interest charge will be applied to a debt if, by the 28th day after receiving a relevant notice, the debt has not been paid in full or the person has not entered into a repayment arrangement. The new rate of the proposed interest charge—approximately nine per cent—is going to be based on the 90-day bank accepted bill rate, which is about two per cent plus an additional seven per cent. This charge will be applied across the different payment types and there will be exemptions for debtors who are currently in receipt of relevant payments, including social security payments and family payments by instalment. This is expected to commence on 1 July this year. It should provide savings to the fiscal balance of roughly over $24 million over four years, with underlying cash balance savings of about $416 million. We will see, as I said before, whether that is redirected back into the portfolio, but I somehow think it will not be. As with the companion bill on enhanced welfare payment integrity, this has been referred for inquiry within the Senate and we will be reporting in a couple of months. We will examine those changes carefully.

In my opening remarks, I indicated to the member for Canning and the House that sometimes people are believed to be in debt as a result of system determinations that may or may not be accurate. There will be a degree of challenge to that process. This bill does not necessarily mean those processes will change, but we should be mindful of it. We believe that the Human Services portfolio has lurched from one disaster to another. We now have the third Minister for Human Services in six months. The new minister still has not released the details of a $484 million IT contract that was signed with IBM last week. The government cannot seriously expect us to accept that a one-page media release is enough to explain where half a billion dollars is being spent on the system. It is a five-year deal worth nearly half a billion dollars. The previous contract was $128 million. It would be interesting to hear the minister explain the reason for this massive jump. Will it reduce call waiting times for Centrelink? Will it speed up youth allowance processing times? Will it help prevent Australians being defrauded of Medicare rebates? These are all valid questions I would put to the House. But, in particular, if you are calling Centrelink to challenge something that you believe is in error with your payment and that may trigger a debt of the type this bill is seeking to address, what types of waiting times do you think are acceptable?

I have had constituents in my office expressing their concern at the length of time it has taken them to access help from Centrelink. I have said previously that the waiting times in Centrelink offices, the times that people are made to wait just to get an inquiry managed, is unacceptable. I do not believe I am Robinson Crusoe on this; I believe on either side of this chamber there are people who get complaints from constituents about accessing a face-to-face form of assistance to manage their concerns. One of my constituents from Hassall Grove recently came to my office. She told me she does not have access to the internet, so whenever she has an issue with her pension she has to make a call to Centrelink. She said she is often left waiting on the phone for hours—I am using that word advisedly—to speak to someone.

In one particular case, a constituent was trying to call Centrelink's carers line on behalf of her 93-year-old grandmother. I was told she had to call twice and finally got through on the third attempt and waited for—wait for this!—over three hours on the phone. She actually took a screen shot of her phone. I have it here. She waited for three hours, four minutes and four seconds for someone to get on the line to help her manage this request on behalf of her 93-year-old grandmother. It was just a simple request. What is concerning is the fact that this lady was calling for an elderly relative who, without this person's help, would have difficulty contacting Centrelink herself.

I understand that Centrelink, both under our former government and under the current government of the minister at the table, has gone through the process of trying to enable people with smartphones to access services. This is a good thing, but not everyone is going to be able to do that. There is a generational gap where people will not be able to access that and they will rely on others to help, and that is simply unacceptable. It is unacceptable that I have a constituent waiting for three hours for the management of a simple request. Other constituents have echoed similar stories of having trouble getting through to the call centres and, once they are successful, having a long wait ahead of them. For many people who use prepaid mobile services because they cannot afford a contract for a mobile phone, that waiting time means they cannot stay on hold and run down the amount of credit they have on their phones. Again, this is unacceptable.

If long waiting periods are being used as a technique to get people off the line, that is not acceptable, because the use of phones was supposed to get people out of Centrelink offices, get them on the phones and better manage those services. Clearly, something is not working. It is simply unacceptable that people would be forced to endure that type of waiting time. I will be interested in whether the new IT system will help manage and triage those types of complaints. But, on the face of it, given the contract has gone from just over $128 million to nearly half a billion dollars, there is something that is seriously amiss with the current system if it requires that kind of support, an increased amount, to fix that now.

We are told that there is a new organisation, which we have not previously criticised, the Digital Transformation Office, which the Prime Minister says will speed up the way in which services like this are managed. The DTO, the Digital Transformation Office, is based on the UK model, one of whose aims is that it will enable citizens to get a better service. This is what the Prime Minister told a group of people back in October when talking about how this would make the government more efficient and how, through an open data agenda, they looked to make services efficient. I note in a Financial Review interview the head of the DTO, Paul Shetler, said that what this is aiming to do is provide for simpler, clearer, faster and more humane services by the government and that they had effectively established a digital service standard. I would be interested to see whether their digital service standard will be able to weed out people who are sitting on a phone for three hours waiting for assistance from Centrelink. This is what the DTO is supposed to be doing.

Those people who think that the Digital Transformation Office may be applying a new approach to improving the way in which services are delivered, mainly on a digital platform, may think, 'Okay, they might reach some success.' Back in October they apparently gave themselves 20 weeks to demonstrate significant changes in some places to improve government services. I have a constituent who waited for three hours for service from Centrelink. I have long lines of constituents in my electorate waiting for help through Centrelink. What is one of the jobs of the DTO? Is it to aid in that? No. They are actually looking to help the ACT government restructure the way in which, for instance, they manage public patients through the appointment booking system in the territory's seven community health services.

I have no problem with their working with other levels of government to improve service. But you have pressing needs at a federal level to address the types of things I have put on the table here today which I think are unacceptable and which I think those opposite would think are unacceptable too, because their constituents cop it. Why aren't we prioritising the work of the DTO to ensure that you make meaningful inroads into the quality of service being experienced by people in electorates like mine? Why isn't this being done? Yet, by all accounts, we have more money being poured into an IT system to fix that. You clearly have got a failure to provide service through the mobile phone system, and yet the DTO is working on the problems of other levels of government. How is that agile or nimble?

How is the DTO helping the citizens the Prime Minister says he wants to help? What is the DTO doing?

So I would certainly be calling on the government to (1) give us details about this new contract for the IT system there, (2) tell us whether or not the DTO has actually been appointed to aid in the implementation of this new system and oversee it, and (3) tell us what the DTO is doing to help people in Centrelink offices who are being forced to wait for long periods of time on their feet for some sort of human contact and, if they use a phone, are being told they have to wait up to three hours to get assistance. Let's see some of that applied because, frankly, if you are ringing up to deal with a debt, which is at the heart of this bill, and you are waiting for that period of time, that is unacceptable and should not be tolerated by anyone in this chamber. (Time expired)


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