Michael Sukkar (Deakin, Liberal Party, Shadow Minister for Social Services) Share this | Hansard source

I thank the House for the opportunity to speak on the Social Services and Other Legislation Amendment (Workforce Incentive) Bill, and I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes the severe workforce shortages across the country, record levels of job vacancies and almost a third of employing businesses having difficulty finding suitable staff;

(2) notes hiring and retaining employees remains a key challenge for small businesses; and

(3) calls on the Government to provide certainty by:

  (a) increasing the work bonus from $300 to $600 a fortnight to incentivise eligible pensioners to work more hours without penalty from 1 July 2023; and

  (b) reviewing this increase every twelve months to ensure these settings remain appropriate".

By way of background, I want to congratulate the government for adopting measures that were first introduced to this House by the former coalition government, which, on 10 February, introduced the Social Services and Other Legislation Amendment (Workforce Incentive) Bill to incentivise recipients of the age pension, the disability support pension and certain veteran entitlements to undertake paid employment or to increase their paid employment.

Under the coalition's legislation, pensioners whose employment income as total income exceeded the income limit would have their age pension suspended for a period of up to two years, rather than what was the case at the time, which is that it was cancelled after 12 weeks. If at any time during the two-year period their income was at a level where they could return to the age pension—rather than it being cancelled after 12 weeks—they would benefit from an abridged reapplication process that only required them to update their circumstances, including their income and asset information, with Services Australia. The former coalition government bill also allowed for working age-pensioners, disability support pensioners and certain veterans' entitlement recipients and their partners to retain their pensioner concession card for up to two years after payment ceased.

As is known to the House, the bill didn't progress due to the election. But not long after the election, in an attempt to encourage the government to actually take these workforce shortages seriously and move quickly, which, sadly, they have not done, the coalition announced that a future coalition government would support older Australians who choose to work more, by doubling the amount of income that age pensioners and veterans service pensioners can earn without reducing pension payments. It was quite a bold thing to do in the immediate aftermath of entering opposition, but it was very clear to us at that time that the government was not acting with any sense of urgency in an area that we had seen workforce shortages exacerbated and the government on a go-slow.

This announcement, through which we made a gesture of goodwill to the government, giving them an idea that they could adopt—as, to their credit, they've adopted many other good ideas and measures that were put in place by the former government, would enable pensioners and of course relevant veterans entitlement recipients to earn up to $600 a fortnight and still receive the maximum amount of the pension payment. We estimated that this would benefit about 80,000 age pensioners and veterans who are choosing to work. Under our announcement, pensioners would continue to accrue unused pension work bonus up to a maximum of $7,800, which can exempt future earnings from the pension income test. This increase would be reviewed annually.

On 3 August: credit to Senator Dean Smith, who introduced a private member's bill to give effect to the policy announced by the coalition. The bill he introduced also includes extended qualification for pensioner concession cards and suspension of benefits and entitlements instead of cancellation, in accordance with the bill introduced by the former government, as I said, in early February. Additionally, in September the Senate agreed with Senator Dean Smith and the opposition bill, successfully amending the government's social services legislation to include the measures that were contained in Senator Smith's bill.

The first two schedules in this government bill replicate those two measures, so we are in an interesting situation whereby those measures, which were agreed to by the Senate and put forward by the opposition in an attempt to actually get the government to understand the urgency that is required here, were voted against by the government. Those amendments that were contained in the bill were returned from the Senate, yet we see them back here today in this bill. So, we will of course be supporting the bill, save for the amendment I've already announced, because these are measures that were introduced by the former government and indeed encouraged by us in opposition to get the government moving.

So, credit where it's due. Congratulations to the government. They've been slow and, sadly, the workforce shortages faced by Australians since the election in May have just gotten worse and worse. When I have spoken to a number of groups, particularly those representing senior Australians, they have been quite frustrated at the snail's pace that has been adopted by the government on an issue that I think even they concede is a very urgent one. The entire purpose of this bill is to help alleviate those workforce shortages by removing the disincentives for those on a pension to engage in the workforce even more. So, we will of course be supporting them, late though they are.

Schedule 1 of the bill, which relates to the suspension of benefits and entitlements instead of cancellation, will essentially allow for what I mentioned earlier, which is for age pensioners and veterans entitlement recipients to have their payments suspended for up to two years instead of cancelled. That is the essence of schedule 1. The schedule also provides for the same suspension period for partners of age pension, disability support pension and certain veterans entitlement recipients where the partner is receiving a social security pension or other veterans entitlement. This schedule also makes some minor changes to the existing suspension provisions for disability support pension recipients.

Schedule 2, again, we support. It extends the qualification for pensioner concession cards, and this will provide for working age pension, disability support pension and certain veterans entitlement recipients and their pension partners to retain their pensioner concession card for up to two years after their payment ceases.

Schedules 1 and 2 commence on the latter of 1 January 2023 or the day after the end of the period of one month beginning on the day that the bill receives royal assent. This highlights the urgency that we have tried to bring to this debate, the urgency that we have tried to impart on the government: these workforce shortages are acute and they've been acute for the last five months, since they have been in government. Sadly, we did not see that level of urgency from the government, but, again we will support them because it's better late than never.

Schedule 3, the pensioner work bonus temporary increase, will enable eligible Social Security pensioners over pension age and, again, certain veterans entitlements recipients over the qualifying age to benefit from a $4,000 increase to their work bonus concession balance, and a temporary increase to the maximum concession balance that they accrue until the 30 June 2023. In essence, it just means that pensioners will be able to earn more before the pension income test is applied and their payments are affected. Schedule 3 reeks of a government who saw the announcement that we made months ago and have sought to achieve the same effect in a different way, although there is one significant issue with what the government has announced. This is why I have moved an amendment here. These workforce shortages are not going to go away in a hurry, and levelling the playing field for pensioners and others on fixed incomes to do a little more work won't end the problems on 30 June next year. The problem with schedule 3, the problem with the temporary $4,000 increase, is that it in no way, shape or form takes into account what are clearly going to be ongoing issues into the new financial year. Had the government listened to the opposition, they would have put in place a longer term solution in accordance with what we announced, which would allow for the government to make a decision on a yearly basis. If there were continued workforce shortages or if the policy had to change for whatever reason, the government would have that flexibility to do that. Just giving this sugar hit between now and 30 June will give six months of respite, in a sense, to those pensioners who want to work more. It is a very short period of time, and I think it is very courageous for any government—or indeed any opposition—to assume that the issues that have brought this to the fore are going to be gone in six months time. So we encourage the government to support the amendments we've put in place, which will enable it.

In its prebudget submission last December, ACCI said it well when they noted there is an army of old workers with the skills Australia needs who'd like to work but don't participate in the workforce to the full extent because it reduces their pension. There are so many industries in Australia that are feeling the effects of these labour shortages, which is why we have implored the government to get moving with this and put this on the agenda, particularly in regional areas. As members throughout the House would know, regional areas have felt this in a more acute way than the rest of the country, partly because of depressed labour mobility and, of course, the reduced migration we have seen due to the pandemic over the last couple of years.

These are measures that are really important to businesses throughout our country, particularly in regional areas, and this highlights the problem that employers are still facing. Indeed, the ABS recently reported than almost a third of employing businesses are having trouble finding suitable stuff. I must admit I thought that was a bit low, when I compare that to the anecdotal evidence I get out there speaking to businesses, but, by any measure, the ABS saying a third of businesses are struggling is a huge wake-up call, and we hope these problems will be partly alleviated by this bill.

We know that about 80,000 age pensioners are supplementing their pension income with paid employment. That's part of the reason we made our announcement so shortly after losing government. Yes, it was partly to give effect to things that we had introduced in bill in February, but it was also to get the government moving to create that sense of urgency—urgency that we haven't seen. That announcement was on 26 June. We announced that we would support older Australians by increasing the threshold by which you would have your pension impacted from $300 to $600 a fortnight. It was essentially a very neat way of ensuring that people can double the hours and the amount of income without it impacting their pension.

We support the intent of schedules 1 and 2, which replicate what we put in place in a bill before the election, in February. With schedule 3, as our amendments highlight, there are huge inadequacies. It is being very slow, and the workforce shortages we have been dealing with, as highlighted today, have been here since the election. They've been getting worse since the election. We have had a government on the go-slow with these changes. Indeed, we have a government that voted against identical amendments the last time we sat. There's no obvious explanation why they would have voted against those amendments, supported by the Senate in the last sitting period, yet they will put these forward today. We won't do that. Measures that we supported last fortnight, we will support again. We won't show the same pigheaded this that the government has shown. Sadly, with the government not supporting those amendments when we had a bill return from the Senate with those amendments contained in them, Australians have suffered and waited even longer.

We have a Minister for Social Services who has, sadly, been on a go-slow here and who has, sadly, put in place in schedule 3 a measure that assumes that the workforce shortages and incentives that should be provided to pensioners now will be in place only until 30 June next year. For those pensioners who might be looking at putting in place more permanent work arrangements—going from one to two days on a more permanent level—they have that great uncertainty, under schedule 3 of this bill, of not being able to plan or commit to their employer in any serious way past 30 June. If the government thinks that the workforce shortage issues that have brought this to light are going to disappear by 30 June, they should come out and say it. They should show us what economic evidence they've got to back that up—evidence I've not seen.

In the absence of that, we would encourage the government to support the amendments that I have moved, which would mean that the government will be able to provide a further incentive, post 30 June of next year and into the new financial year, that will provide pensioners with the certainty they need to be able to enter into some of those commitments that they might want to enter into with their employer, doing those extra hours without it impacting their pension. Otherwise, we support the bill, because in the end it contains all of the coalition's proposals, albeit months late. But, as I said, we will support them because it's better late than never.

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