Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Hansard source

I thank all the members, including those opposite, for their contributions to the debate on the Social Services Legislation Amendment (Welfare Reform) Bill 2017. By way of summing up the second reading debate, I note that the bill simplifies the welfare system. It strengthens conditionality for jobseekers, particularly those with drug and alcohol issues, and it introduces a new targeted and workable compliance framework. The point of the simplification—and I do note that the member for Jagajaga is here, thank her for her presence and also note that in her Growing Together manifesto it was said by Labor that consideration should be given to simplifying the working-age payment system. Of course, that wasn't done under the period of the previous government, but now we have before parliament a plan which is to simplify the welfare system in a very substantive way. I might deal with those three issues—complexity, mutual obligation and the compliance framework—separately.

With respect to complexity, we know we have a very complex welfare system. This bill seeks to turn seven payments into one to create a new jobseeker payment, so from 20 March 2020 the bill would introduce a new single jobseeker payment which would replace the seven existing payments as the main payment for people of working age. These changes would ensure a single set of rules and rates for people of working age with the capacity to work and aim to firmly entrench employment as the desired outcome for Australians who seek the jobseeker payment. That is a very significant simplification reform. In fact, given its scale, it's interesting that only two issues really have been raised with respect to consolidating seven payments into one. Those relate to two payments: bereavement allowance and the wife pension.

I'd like to thank the member for Mayo. In her speech on the second reading she did raise a genuine issue with respect to the potential for pregnant women receiving bereavement allowance to spend longer than 14 weeks on the payment and therefore be financially worse off under the proposed arrangements. Again I thank her for raising that issue and speaking to me separately about it. We realise that that's a special category and will continue to work with her and the Nick Xenophon Team on that particular issue.

The second issue relates to what are effectively 200 wife pensioners who reside overseas and would no longer be eligible for the wife pension from a future point in time. Those individuals are presently aged between 45 and 62. Where they don't reside in a country with an international agreement, like every single other person in the welfare system that is able to work they would not be eligible to be continually funded by the taxpayer while they're overseas. That payment as it presently exists simply does not reflect community values, and it shouldn't be continued after 22 years so that we support able Australians to live overseas and never look for work even though they are of working age. That would maintain a range of existing inequities in the social security system. It reinforces outdated social norms and it would do a huge disservice to the taxpayer.

With respect to the issue of mutual obligations, again this is very significant reform. Most complaints from members opposite related to the changes to the activity test for persons aged between 55 and 59. The bill will also strengthen the employment focus of mutual obligations and better target mature-aged jobseekers with the labour market. Labor's criticism of the measure to increase the activity requirements for those aged between 55 and 59 is twofold. There are two criticisms: first, somehow this change is unfair or not in the best interests of those people aged between 55 and 59, and, second, it could affect rates of volunteering.

The truth of the situation is that neither of those criticisms is correct. There is a central question of principle here. As a government, we take the view that jobseekers aged between 55 and 59 are not going to benefit from being totally excused from any effort to prepare for or search for work. In fact, the contrary idea—that it is actually in a person's interest to be in a system that requires some effort to search for work—is supported by many sources. The Department of Employment's data shows that, in the year ending December 2016, over all age groups, 32.4 per cent of jobseekers who participated in voluntary work were in employment three months later. Comparatively, 48.5 per cent of jobseekers who participated in jobactive were in employment three months later. Reputable data also exists to show that mature-aged people are 13 times more likely to find work when actively looking for it. Critically, alongside this reform is the fact that the government is investing over $110 million in mature-aged re-skilling packages to help older Australians retain and find work.

The government also rejects the argument that the reforms for the 55 to 59 age bracket would see volunteer groups somehow lose volunteers. In claiming a negative impact on volunteering, members opposite continually and conveniently ignore the fact that, of the 40,000 jobseekers aged 55 to 59, only around 7½ thousand presently use volunteering alone to meet their 30 hours of activity. Also, of course, members opposite ignored the fact that our reforms will, for the first time, require that 45,000 jobseekers aged over 60 will have some mutual obligations, where at present there are none, and be required to undertake 10 hours of activity per fortnight, all of which could be met through volunteering. That means a boost to the volunteering sector by providing a net increase of up to 337,000 volunteering hours a fortnight. How can it be considered a disadvantage to volunteering groups when it could provide up to 337,000 hours more volunteering a fortnight?

This bill also contains changes for faster connection to employment services. From 1 January 2018, the bill will encourage jobseekers to connect more quickly with their employment service providers. Some members opposite have raised concerns on how this measure would impact on jobseekers in rural and remote areas. Again, the fact is that, under current arrangements, jobseekers in regional areas are exempt from RapidConnect where transport would not allow attendance at their initial appointment in a timely manner, and that safeguard remains.

Some issues were raised with respect to the removal of intent-to-claim provisions. Under this bill, the social security claimants would receive payments from the date they provide all material necessary to be assessed that is within their control, rather than from the date of first contact with the Department of Human Services expressing an intention to claim. That is opposed by Labor, but the fact is that, at present, an applicant can provide only their name and the payment which they intend to claim and be back paid to the date that they first made contact with the department. This arrangement simply does not align with community expectations and, again, does a massive disservice to the taxpayer. It is simply not an unreasonable request for applicants to provide the very basic required information when lodging a claim. This measure will improve the integrity and administrative complexity of the welfare system, and, again, adequate provisions and exemptions exist for people who do not have the ability to provide all relevant documents, including those who may be disabled or live in remote areas and those who are homeless or affected by domestic violence.

The bill, under the heading of strengthening mutual obligation requirements, deals with a range of substance abuse measures. It introduces three measures to strengthen requirements for jobseekers with substance abuse issues and provides improved pathways for them to pursue appropriate treatment.

Firstly, the bill establishes a two-year trial of drug testing for 5,000 recipients of Newstart and youth allowance from 1 January 2018. Members opposite oppose this trial, doing so on the basis that they say there is no evidence that it's guaranteed to work. Of course, the first point is that this position ignores the fact that it is a trial, designed to determine whether the welfare system can be effectively used to compel people into treatment. Further, that is the same argument that has been run against the cashless welfare card and against the No Jab, No Pay immunisation policy to link vaccination to family tax benefit payments, and yet both of those policies have proven very substantial and successful in changing behaviours and improving individual lives.

The exact reason that there is no evidentiary guarantee for a trial like this, or that it will work, is that it has never been done before in the way that we are doing it. Despite multiple false statements by members opposite, this trial will not cut people off from income support if they test positive for drugs. It is very different in that respect to the trials that have been conducted overseas. Instead, after a first test, our trial will limit the amount of income support that is provided in cash and, following a second positive test, it refers the individual to a doctor for an assessment on what treatment may be required.

I think the member for Barton typified the opposition's position in opposing this in her second reading contribution. She said that the trial won't work because, 'this requires a medical response'. Of course, a medical response is exactly what we are proposing. Every decision regarding treatment will be made by a qualified medical professional, paid for and provided by the government. The member for Barton also gave Labor's objection to the trial on the basis that income management was described as not being an effective tool to help people with substance abuse problems. Indeed, what I think was revealed in several contributions from members opposite was an equal opposition to the trial as to the consequences of a positive drug test being income management.

I must say to the member for Jagajaga that I share her views where she noted that income management is a useful and important tool for protecting vulnerable people—particularly for protecting children. It makes sure that welfare payments are spent on the essentials of life—things like food, clothing and rent—and not on alcohol or drugs. The Labor position also conveniently ignores the considerable body of evidence that exists around the effectiveness of compelling people into drug treatment.

The reason for trialling a new approach where there is not an evidentiary guarantee of success is to trial, test and learn. Equally, the fact that there may not be a guarantee of success is distinct from a lack of evidence to suggest that the trial of a new approach could reasonably be considered worthwhile. I worked in drug courts and, in fact, much of what we have done is based on the process there. Drug courts, of course, effectively mandate treatment and they have been very successful in mandating treatment for drug and alcohol problems. The data and evidence shows that this type of compulsion for treatment can be very effective. The Magistrates Early Referral Into Treatment Program—the MERIT Program—in New South Wales has resulted in the number of people in employment rising from 20 per cent at program entry to 27.5 per cent at exit. The Victorian Drug Court had a study which showed that 79 per cent of people appearing before it were unemployed. It showed that the benefits of the drug treatment compulsory order program included improved health and wellbeing, reductions in drug and alcohol risk and enhanced employment prospects and overarching life skills.

A 2008 study published by the Crime and Misconduct Commission in Queensland examined the issue of mandatory versus voluntary treatment for drug and alcohol problems. It concluded as follows:

Our findings do not support the current treatment philosophy of waiting for people with drug and/or alcohol abuse problems to get themselves psychologically motivated and prove their readiness to receive treatment. On the contrary, the findings indicate that mandatory treatment seems a promising option to help offenders with drug and alcohol abuse problems.

This trial has been developed to test whether the welfare system can be used in a similar way to drug courts. If it does not work, of course there will be a need to try something else. If it does work, we will have improved the lives of people with those drug problems.

Two other measures in this bill also ensure that jobseekers with substance abuse issues remain actively engaged in appropriate activities, including treatment to address their barriers to work rather than being exempt from all mutual obligation requirements. From 1 January 2018, jobseekers will no longer be exempt from their mutual obligation or participation requirements if the reason they are unable to meet their obligations is predominantly due to drug or alcohol dependency. From 1 January 2018, the government will also tighten the reasonable excuse rules to allow for the closing of a loophole so that alcohol and drug dependency will not be accepted as a reasonable excuse for not meeting obligations when the jobseekers are not also actively engaged in treatment.

Again, Labor sought to characterise these changes as punitive, but what they failed to point out or to mention is that this change is accompanied by, and will run parallel to, one of the most important changes in this reform package—that is that for the first time all jobseekers will be able to have drug and alcohol treatment efforts count towards their mutual obligation requirements.

The fundamental principle the government reforms embody is simply this: citizens who are receiving taxpayer funds in the form of welfare benefits should not be able to claim drug and alcohol abuse as a reason for failing to undertake critical mutual obligations like turning up to job interviews unless they are also making reasonable efforts to undertake treatment or support for the problem. The system as it currently stands fails to detect people with drug problems and simply allows those it does not know about to be exempt from all mutual obligations. The purpose of all these measures is to ensure that, when people have substance abuse issues that are acting as a barrier to their employment, they are compelled into appropriate treatment.

With respect to the compliance framework, from 1 July 2018, a new jobseeker compliance framework will provide more support to those who are genuinely trying to meet their obligations whilst also introducing fairer and more contemporary penalties for the very small number of jobseekers who persistently and deliberately do not meet their requirements. The Labor Party called for the reinstatement of waivers and provider discretion, but that is the exact reason the present system is failing. The failure of the current waiver arrangements and the inconsistency in the use of discretion has made our proposed changes completely necessary. Under the framework, at present, 93 per cent of penalties for serious or persistent noncompliance are waived. This means there is no consequence for the overwhelming majority of jobseekers who repeatedly fail to meet their requirements or who refuse an offer of suitable work. Penalties only apply to those who repeatedly fail, with multiple barrier assessments and warnings before this could occur. Reasonable excuse provisions will of course continue to apply.

With respect to information management, I would also note briefly that the bill eliminates the requirement for the Department of Human Services to obtain information twice. It streamlines prosecution processes and reduces the administrative burden of criminal investigations. These changes do align with the Department of Human Services information-gathering powers and align it with that of other agencies at the Commonwealth and state and territory levels. The changes retain the common-law right to silence, preventing use of information or documents against the person that provided them other than in proceedings for the provision of false information. This exception is consistent with the guide to framing Commonwealth offences, infringement notices and enforcement that states that the privilege against self-incrimination does not apply where it is alleged a person has given false or misleading information.

In summary, it is critical to ensure that our welfare system is efficient, effective and sustainable into the future. We simply cannot afford a set-and-forget approach to the welfare system. It is for those reasons that I commend the bill to the House.

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