Thursday, 16 August 2007
Social Security Amendment (2007 Measures No. 1) Bill 2007
Debate resumed from 20 June, on motion by Dr Stone:
I rise to speak in the second reading debate on the Social Security Amendment (2007 Measures No. 1) Bill 2007. When it comes to welfare reform and workforce participation, we know that the Howard government really do not get it. They talk a lot but they have missed many of the fundamentals of this debate. Stuck in Australia’s past and growing more and more stale in office, they do not understand Australia’s future social and economic challenges and they certainly do not have any policies to deal with these challenges. As we know, the only thing that comes from government ministers these days is an attempt to provoke a fear campaign. They have ceased governing and they have no positive policies for Australia’s future.
This bill is just another reminder that the Howard government does not really understand how to help people who are living at the margins of Australian life to move into the social and economic mainstream. There are some very small measures to give extra assistance to some of those in our community who we would like to move from welfare to work. They are indeed steps in the right direction but they are very small steps; they provide very limited help in dealing with some of the barriers to participation. This may make you think that the government has been paying attention and that it has heard the calls about how to increase participation, but the measures are so small that it almost seems that the government is just playing political games, trying to look like it is doing something when there is an election just around the corner. However, because these measures are a step in the right direction—albeit a very small step—Labor will support them. Nevertheless, a Rudd Labor government would do more.
Our growing economy and our ageing population require permanent action to increase participation in our workforce. This is to say nothing of the social value of increasing participation. Work is a critical foundation of social inclusion; the evidence is there for all to see. No-one can read the findings of Tony Vincent’s research into geographical disadvantage in Australia and conclude that we are doing enough to bring people into the social and economic mainstream. I remind the House that that research has tracked persistent disadvantage by postcode, showing us those parts of the country, geographically, that are being left behind despite 16 years of economic growth. What is most troubling about Tony Vincent’s research is that, having done it more than once, he can show that disadvantage persists over time despite that economic growth.
If you compare his most recent work with his earlier work in 2004, you see that it shows that 70 per cent of the postcodes he had identified in 2004 continue to be persistently disadvantaged in 2007. There are, of course, many other commentators who are addressing these issues of participation and inclusion, but Tony Vincent’s work, as I have said, is powerful indeed, directing our attention to those parts of the country that are being left behind.
In its budget earlier this year, Treasury also highlighted Australia’s lagging international participation rate. Compared to its OECD competitors, Australia ranks 25th among 30 OECD countries with regard to workforce participation of prime working age males. Similarly, for child-bearing aged females—defined as being between 25 and 44—Australia is ranked 13th among OECD countries, including New Zealand, the United States, the United Kingdom and Canada. That is, we are behind those countries in our female labour force participation rate. In relative terms, we also have a low participation rate for older workers. That participation rate is 71 per cent in New Zealand and 67 per cent in Japan, while in Australia it is just 55 per cent.
ABS data also tells us that for all but two years in the past two decades, part-time employment increased at a greater rate than full-time employment. As a result, the proportion of people employed part time in Australia is now 30 per cent. Of course, part-time employment is an important feature of any labour market that wants to maximise participation and meet the needs of workers who must balance additional responsibilities such as child care or caring for a sick or elderly member of the family, or both.
In its latest Australian Social Trends work, released last week, the ABS revealed that the part-time employment level among Australian men is well above the OECD average, and it is also high in respect of the figure in comparable countries. Similarly, the part-time employment level among Australian women is also high with respect to comparable countries and very close to the OECD average. The ABS notes that while part-time work can supplement labour supply and increase participation, 67 per cent of men and 49 per cent of women who work part time reported that they would prefer to work full time. The budget also cited work that estimated that if Australia closed the participation gap with the highest ranking comparable OECD country in 2005 for each of these labour market segments there would be an additional 600,000 people participating in the labour force. However, the last two decades have seen a decline in male and an increase in female labour force participation and an increase in non-standard forms of employment.
A recent Productivity Commission staff working paper confirmed that in 2005-06 more than 2.2 million men were outside the labour force—that is, neither working nor looking for work. The commission found that, in contrast to women, the rates at which men are disengaged from the labour force have increased fourfold over the past century, rising particularly rapidly over the past 50 years. The pattern of falling male participation and part-time employment outgrowing full-time employment has serious implications for the pattern of social disadvantage in this country, because poverty and incomes research tells us that full-time employment is the most effective weapon to guard against poverty and disadvantage.
In addition to spending more time doing non-standard and irregular work hours, Australian workers have had to combat the use of Mr Howard’s unfair Australian workplace agreements to standardise their working conditions. As of course is a matter of record, these extreme industrial relations laws have enabled AWAs to exist and to strip back basic payments such as penalty rates and overtime that often make up a significant portion of the weekly wage of the low paid. For those families across the nation, whether they be in metropolitan Sydney or Melbourne or our great regional centres—in fact, across the country—who are dealing with rising interest rates and cost of living pressures, the ability of Mr Howard’s AWAs to strip penalty rates and overtime has been exercised, and that significantly jeopardises the chance of families surviving in homeownership and paying a mortgage. Of course, we should never forget that the Howard government invited employers to make such award-stripping arrangements with its original Work Choices propaganda that gave the example of Billy, who got a minimum wage job and lost all of his penalty rates and overtime. Through that propaganda the Howard government issued an invitation to Australian employers to strip away these basic conditions.
Against this backdrop, how do we lift the participation rate? The solution begins with understanding the problem and then tackling it. A range of factors inhibit full participation by those who could be working. First, and according to the evidence foremost, is a lack of skills among the jobless. It is a simple fact that people get a job only if they have the skills an employer needs. The second factor is a lack of incentive. People are naturally inclined to work; it is deeply ingrained in our psyche to take action to better our circumstances. However, governments can pervert that instinct when they create arrangements that prevent people from benefiting through the circumstances in which they work.
Few people need to be told that there are non-financial benefits to working. However, many people seriously weigh up the costs of work against the financial benefits when making a decision about entering the labour force. This is particularly the case for women who have been raising children, for those close to retirement and for those with a disability who fear the loss of the insurance of social security if they gain work. A range of highly practical barriers also exist, such as access to affordable child care for parents in the context of irregular and long hours of work and transport issues for people with a disability—that is, the practical issues of what they need to do to get to work. Employer attitudes are also an issue, particularly for people with a disability and mature workers, as is designing employment services to meet the needs of these groups. These are the challenges.
Let us review what the Howard government has done after 11 long years in office to meet these challenges. I will deal with one example. Faced with the challenge of a skills shortage in the labour market and lack of skills among jobless Australians, the Howard government has made it harder, not easier, for many jobless Australians to study or train. The Welfare to Work rules prevent parents or people with a disability with a part-time participation requirement fulfilling that requirement through real training or study. It has restricted access to the pensioner education supplement so that a parent or a person with a disability on Newstart cannot get that extra little bit of help to undertake training.
Of course, the loss of the pensioner education supplement was remarked upon in this House, but we have not seen any positive response from the Howard government. We should note that people were able to access this pensioner education supplement before the Howard government’s Welfare to Work changes; it was an entitlement removed for this class of person in those changes and, despite us consistently raising the issue, the Howard government has done nothing to address it.
In case this failure to train job seekers looks like an oversight, let us look at other examples. It is well documented that people on income support have little financial incentive to return to work because of punishing effective marginal tax rates. So what has the Howard government done? It has increased those effective marginal tax rates. After the welfare changes, the government is now taking back more of what single parents and people with a disability earn than before. They have reduced the financial rewards from working.
So that I cannot be accused of being selective, let us look at another example. What about practical barriers, such as child care? The childcare crisis continues in Australia, with no solutions from the Howard government. Not only are there no solutions but it is actually now harder for single parents to access the childcare assistance specifically designed to help them move from welfare to work—the Jobs, Education and Training Child Care Fee Assistance. Previously, this was available for single parents for long enough for them to complete a degree or real training course. Now it is restricted to 12 months—not enough time, for example, for a single parent to undertake a valuable course in an area of skills shortage, such as nursing.
When it comes to looking at the reasons why people are not participating in the labour market and providing practical solutions, the Howard government have actually gone backwards. They have made it harder than it needs to be for people to move from welfare to work. When it comes to the employment outcomes of this economy, of course we know that the resources boom has driven employment growth, but some of the policy settings that the Howard government could have adopted to deal with the issues that I have just outlined remain undone after 11 long years, and now we confront a circumstance where the government have effectively ceased governing.
I return to where I started. Labor will be supporting this bill. The measures within it are small—they are small indeed—but they are beneficial and on that basis we will support the bill, but we note that there is so much more that needs to be done and will never be done by this government. With those words 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:
- condemns the Government for making it harder for Australians to move from welfare to work;
- condemns the Government for reducing the financial rewards for people who move from welfare to work;
- condemns the Government for restricting access to training and education for job seekers; and
- calls on the Government to allow people with part-time participation requirements to fulfil those requirements through real training or study”.
I welcome the opportunity to speak on the Social Security Amendment (2007 Measures No. 1) Bill 2007 and note that the amendment proposed by the Deputy Leader of the Opposition represents the peak of hypocrisy. The Labor side of politics, and particularly this group, has done everything possible to oppose the measures that this government has introduced to improve opportunities for job seekers, to improve the economy and to provide the ability for people to go to work. When we look at the future that Australians face in the lead-up to the forthcoming federal election, we have an economy that is running at full speed and enjoying high levels of employment and high levels of income growth, still against the backdrop of a low-inflation, low-interest rate environment.
Yet, in the knowledge of that, the opposition propose to introduce a policy that they know will push up interest rates, push up inflation, cost some 300,000 jobs, according to Econtech, and result in lower real incomes for the people of Australia. Somehow that is to the benefit of the people of Australia, they would claim. This Forward with Fairness policy really is no fairness at all. It really does come from the architect of one of the most famous policy blunders in the history of the Australian parliament—Medicare Gold—a policy that has been buried. I see the Deputy Leader of the Opposition running out the door because she does not want to hear the facts. She does not want to hear that she has replaced one failed policy, Medicare Gold, with another failed policy—‘Forward with Alleged Fairness’, I would say.
I will for a moment dwell on the achievements of this government in the economic area and the way in which that has contributed to opportunities for Australian job seekers and improved the lot of Australian families. Let us again reflect on the fact that this government has created some 2.1 million jobs since 1996. Is that a happy coincidence? I suppose the members opposite would argue that it is. They have voted against every measure that we have sought to impose to produce those 2.1 million jobs, but somehow it is just a happy coincidence. Of those jobs, 1.2 million have been full time and almost 900,000 have been part time. We heard the world was going to come to an end with the introduction of the Work Choices legislation, but what have we seen? Not mass sackings but 387,500 additional jobs, of which 84 per cent have been full time—hardly a disaster, as the members opposite would claim. There are now over 10.4 million Australians in work—a record high. There are 7½ million in full-time employment and 2.9 million in part-time employment. The unemployment rate in Australia in July 2007 was 4.3 per cent.
The focus of this bill is to support job seekers. I think there is no better way of supporting job seekers than keeping unemployment at 33-year lows. Unemployment has been below five per cent for 15 consecutive months. Male unemployment is 3.9 per cent; female unemployment is 4.8 per cent. These are great figures for job seekers. In December 1992 under Labor what was the unemployment rate? Was it seven per cent? No, it was not. Was it eight per cent? No, it was not. Was it nine? Was it 10? No, it was not. It was 10.9 per cent—hardly an achievement to help Australian families and hardly an achievement to help job seekers. Yet we have the Deputy Leader of the Opposition coming into this place feigning some concern for working families and feigning some concern for job seekers. It is all a massive facade. Her only concern is appeasing her union masters. That is her only reason for being in this place—her and the Leader of the Opposition. The union bosses pull the strings and the Deputy Leader of the Opposition and the Leader of the Opposition do the dance. They are nothing more than manipulated puppets.
Let us look at long-term unemployment, one of the most intransigent problems for some job seekers. We see that long-term unemployment is now down to 65,900 people, the lowest level in more than 20 years. It has more than halved under the Howard government. The very long term unemployment level was some 36,200 in June 2007. That has fallen sharply by some 135,200, or 78.9 per cent, from its peak in November 1993 of 171,700. So we did have almost 200,000 very long term unemployed under Labor, under those members opposite, who somehow claim to be looking after the interests of job seekers. It is now 36,200. That is a staggering improvement, an improvement which has not been just a matter of happy coincidence but which has been achieved through the hardworking members of the Australian economy and good policy settings put in place by this government.
On the issue of wages, we heard when Work Choices was going to be introduced that wages were going to be slashed, that conditions would be slashed and so on and so forth. But we can see what has happened. As opposed to under 13 years of Labor, when real wages fell, since Work Choices was introduced real wages have increased some 2.4 per cent. There has been under the Howard government a 20.8 per cent increase in real wages, as opposed to a 1.8 per cent decrease under those 13 years of Labor. It is a stark contrast. It bears evidence to the rank hypocrisy of those opposite, who say they have concern for Australian working families.
The purpose of this bill is to provide further assistance to job seekers and those who are seeking to make the transition from welfare to work. Before moving on to the substance of the bill, I want to reflect for a moment on the recent study by Econtech, which reflected on some of the provisions of the policy Forward with Fairness, or ‘Forward with Alleged Fairness’, as I might say. It seems amazing that when you look at the economic research—which shows quite clearly that a more flexible labour market produces positive benefits for the whole economy, positive benefits for job seekers and positive benefits for working families—the members opposite in this place are yet proposing a policy which is going to instil greater rigidity in our labour market, at a time when we need maximum flexibility, at a time when the economy is running at full speed.
If you put an impediment into the operation of our labour markets at a time when it is at full stretch, what is going to happen? There are a number of things that can happen. Unemployment could go up because of that impediment. Costs could go up. Wage inflation could go up. Wage inflation could push up interest rates. All of the proposals that are embodied in Forward with Fairness provide that rigidity in the labour market, a rigidity which the current Australian economy cannot sustain. The members opposite know that, but they ignore that because they are under the thumb of the union masters. At a time when this economy needs greater flexibility, they are imposing greater rigidity, taking our industrial relations regime back to a pre-Keating era—back to an era of higher inflation, higher interest rates and, potentially, lower wages. No Australian family looks forward to the members opposite introducing a policy that is going to reduce the potential income they can make or that is going to reduce their potential to get a job.
If you look through the report you will see that it makes some interesting observations. It notes that in a more flexible economy adverse shocks are less likely to be displayed by increased unemployment, where if you have a less flexible economy the adverse shocks to that less flexible economy can be embodied in increased unemployment outcomes, which no-one wants to see. The report also notes that the roll-back of the unfair dismissal laws will provide an incentive to hire more casual labour. They will also result in less positive employment outcomes. In fact, a study by Blanchard and Wolfers in 2000 found that a higher level of employment protection—that is, a stricter unfair dismissals regime, if you like—has a statistically significant and economically important adverse effect on unemployment. So we see that tougher unfair dismissal laws have a statistically significant adverse effect on unemployment, yet the members opposite are keen to bring that in. They say: ‘Let’s just do what our union masters tell us. We know it will ramp up the unemployment rate, but we don’t care. We’re on this side of the chamber. We’re working at the behest of the union movement. They are calling the shots and we obey.’ Also, the report looked at NAIRU, the non-accelerating inflationary rate of unemployment. That has fallen some three per cent. The report concludes that the reform efforts in this country have succeeded in achieving a lasting reduction in unemployment, a lasting reduction in NAIRU.
I would also like to consider the impact of trade unions. Trade unions are a very important element, as they run the Australian Labor Party. They call the shots, and the Australian Labor Party dances when the members of the trade unions call those shots. I again turn to the study of Blanchard and Wolfers, which found that a higher level of union density—that is, the proportion of trade union members relative to wage and salary earners—was associated with higher unemployment and that this effect was statistically significant. So higher union membership means higher levels of unemployment.
Furthermore, the OECD study by Nicoletti and Scarpetta also found that higher union density has an adverse effect on employment outcomes. It is also interesting to note that the work by Lye and McDonald in 2005 suggested that the decline in union density since the mid-seventies has effectively reduced the minimum equilibrium rate of unemployment by about three per cent and the growth of enterprise agreements during the nineties also reduced the minimum equilibrium unemployment rate by almost one per cent.
I note that in my electorate we have seen some eight consecutive quarters of falling unemployment. We have seen unemployment in my local government areas fall from around the 20 per cent mark to the point where all areas except one are in single-digit unemployment. It is a staggering improvement. We have more work to do there, but I would have to say that it does not reflect the claims made by the Australian Labor Party that unemployment and mass sackings were going to occur under Work Choices. Precisely the opposite is true.
Now that I have set the scene, I will turn to the legislation. This legislation aims to address three key areas in providing additional support for those who are seeking employment. Certainly, opportunity is one of the best things we can provide for those people looking for employment. Firstly, the bill extends eligibility for the mobility allowance. Secondly, the bill improves the equity of the youth allowance and provides more immediate support and employment assistance for young people once they cease studying. Thirdly, the bill removes the disincentives in the income support system for people with shared care of a child.
Mobility allowance is an income supplement payment to provide financial support to persons who have difficulty in using transport for reason of a disability, to help them engage in employment or work training. There is a standard rate of mobility allowance and there is a higher rate payable to those who qualify. The current qualification requirements for mobility allowance are that the person: is over 16; has a disability that prevents them from using public transport without substantial help for the next 12 months or longer; is undertaking vocational training, voluntary work, paid work, independent living or life skills training, or a combination of these, for at least 32 hours every four weeks on a continuing basis; has an agreement to look for work through the Job Network; is getting Newstart allowance, youth allowance or Austudy and is required to satisfy the activity test; or needs to travel to and from home as part of work, training or job seeking.
To qualify for the higher rate of mobility allowance, a person needs to be receiving the DSP, Newstart allowance or youth allowance, and one of the following must apply: the person must be working for 15 hours a week or more in the open labour market or must be looking for work for 15 hours a week or more under an agreement with a DEWR funded service provider.
The higher rate of mobility allowance was introduced with the Welfare to Work reforms that commenced on 1 July 2006. The proposed aim of the amendments is to expand access to the standard rate of mobility allowance to a person with a disability who is undertaking a vocational rehabilitation program. The amendments also will expand access to the higher rate of mobility allowance to a parenting payment recipient who meets the requirement to qualify for the standard rate of mobility allowance, and a recipient of Newstart allowance, DSP, youth allowance or parenting payment who is also working for at least 15 hours a week on wage levels set under the supported wage system.
I now turn to youth allowance. The second key area that the amendments in this legislation address is equity in the treatment of youth allowance recipients who cease full-time study. Currently, youth allowance is payable to a full-time student aged 16 to 24 or to an unemployed job seeker aged 16 to 20. Unemployed job seekers aged 21 or more may qualify for Newstart allowance, and full-time students aged 25 or more may qualify for Austudy payment.
For a full-time student, once they cease full-time study they can only qualify for youth allowance, or Newstart allowance if aged 21 or more, if they are then an unemployed job seeker who satisfies the work search activity test. Under the amendments in this legislation, where a youth allowance recipient does not immediately advise Centrelink that they have ceased full-time study and there is a gap between when the study stopped and when they register as an unemployed job seeker, they cannot be paid youth allowance or Newstart allowance in the gap.
It is important to note that this measure will ensure that people finishing full-time studies will maximise their chances of obtaining employment by rapidly obtaining employment focused assistance from Centrelink and employment service providers. This amendment will ensure the equity of treatment of job seekers receiving youth allowance in that all recipients will undertake job-seeking efforts at an acceptable and appropriate level in order to remain eligible for the allowance.
I now turn to parenting payment partnered. The third key amendment in this bill is also part of the initiatives announced by the government in the 2007-08 budget. Essentially, the provisions are to expand access to a range of supplementary payments and concessions for parenting payment partnered recipients with a partial capacity to work, due to a disability. Currently, assistance and concessions are provided to parenting payment single recipients with a partial capacity to work. The extra assistance is to be provided to PPP recipients with access to the pensioner education supplement, the telephone allowance, the pensioner concession card or the pharmaceutical allowance. The increased access to payments for PPP recipients will ensure there is fairness and consistency.
This legislation is important because it continues to assist those who are seeking to join the workforce and those who are seeking to better themselves through further training and job-seeking activities. But one can add that there is no greater way to assist those people than to create the economic climate that is going to improve the jobs market. There could be no worse way to assist those people than to roll back our industrial relations regime to the pre-Keating era and introduce rigidity into the system that will push up interest rates, deter employers from taking on new staff and reduce the long-term income of families. I commend this bill to the House. I also decry the efforts by the Australian Labor Party to wind back the industrial relations clock, to wind back opportunity for Australian workers and job seekers.
That was quite some contribution. When I arrived in the chamber I heard a speech about trade unions, IR pre Keating, unemployment rates and recipients. It used a lot of statistics, and those statistics showed that if you look hard enough you can find statistics to prove anything you want to prove. The thing that really hit me about the contribution from the previous speaker, the member for Cowper, is that he did not say anything about the people who are going to be affected by this legislation. It was all about very abstract facts; it was all about attacking the Labor Party. There was a tiny part of his contribution where he actually spoke about the legislation. He showed absolutely no understanding of disability or the issues that people with disabilities face when they are seeking employment. It really said to me that here is a member of the government who truly believes what the Prime Minister has said: ‘Australians have never been better off.’ I hate to say this, but there are many Australians whom I represent in this parliament who are not better off, and there are many Australians represented by members of the government in this parliament who are doing it really hard. A group of people who are doing it very hard are those who have been affected by this government’s Welfare to Work legislation. I would argue, and argue very strongly, that members on the government side of this parliament do not understand those issues.
The Social Security Amendment (2007 Measures No. 1) Bill 2007 makes minor amendments to the Welfare to Work legislation, which was rushed through this parliament with indecent haste. The amendments made in this bill will largely benefit the people they affect but they do complicate the system a little. Whilst welcoming the amendments, I cannot but stand here and ask the question: why weren’t these amendments included in the original legislation? Why are we back here making these very minor amendments that will complicate an already very complex system?
When the previous legislation, the Welfare to Work legislation, was introduced into the parliament, I was very concerned about the impact it would have on people with disabilities. I have spent a very large portion of my working life working with people with disabilities and actually helping them re-enter the workforce or enter the workforce—perhaps it is the first time they have had a job. When I saw this legislation I knew it was going to create barriers for a large number of those people who are desperately looking for work.
One of the changes has affected a constituent in the Shortland electorate whom I have been working with for many years. We had previously linked him into CRS Australia, which was endeavouring to help him. Because there were some problems with his medical condition, his program was suspended and then ended. His condition stabilised and he is keen to go back to a program with CRS but has to go through the whole assessment process. He has to go and see a job capacity assessor and he has to be deemed suitable to be included in a program. The process is very bureaucratic and is putting barriers in place that are going to make it more difficult for this person to find employment.
Similarly, there is a young person with an intellectual disability. He had previously been a client of CRS in a different area. He had been involved in a program and had a placement. Because the level of support had fallen away he lost that job and needed to go back and get additional assistance to be helped back into the workforce. This young person had, for a period of time, been self-sufficient. Firstly, I had a lot of trouble getting this person deemed eligible for a disability support pension. He needed a disability support pension to give him a secure base to then go out and find employment and get all the assistance he needed to secure a job. After much toing and froing we were able to have his disability support pension reinstated. It was over the two-year period when it would be automatic. We then had to go through the process of having to be assessed and then referred back. It is very bureaucratic, complex and time consuming. I do not think it is the best way to get the optimal outcome, which is employment. On this side of the House we are 100 per cent behind people with disabilities or any person that is unemployed actually getting a job. We think that should happen, but for it to happen you need to have the right sorts of supports in place. Unfortunately, under this Welfare to Work legislation you do not have those proper supports in place. As the government finds out that this is not working, we are going to be back here discussing more and more amendments. For a person with a disability to actually find employment you have to have in place a system that works.
With regard to the mobility allowance, in the legislation there is going to be a very strong requirement on a person to report to Centrelink the moment they cease full-time study, because their mobility allowance ceases then. If they do not report it, there will be problems.
Some real problems already exist with the reporting system that is in place and the communication between Centrelink and people who are reliant on Centrelink for payment. I will share with the House the story of one young man who receives a disability support pension. He went to his bank on his usual payday and, when he checked to see whether there was any money in his account, he found he had not received his Centrelink payment. He immediately rang Centrelink and they said, ‘You did not come to your appointment.’ His response to the Centrelink officer was: ‘I did not receive a letter about any appointment whatsoever.’ The response from the officer was: ‘Regardless of whether or not you received a letter or notification, you are required to attend the interview.’
This created enormous problems for this young person, who also has an intellectual disability. He lives independently and is achieving really good outcomes. He works for the House With No Steps in the electorate of Shortland and he has a very responsible job within that organisation. His mother contacted Centrelink, but little setbacks like the one that he suffered create enormous anxiety. The requirements that are placed on the person who receives a payment from Centrelink are much greater than they are on Centrelink, particularly with regard to communication. That is all enshrined in legislation.
I do not think it is because the people at Centrelink are heartless—not by any means. There are some wonderful people there who have helped so many people who have been badly affected by the Welfare to Work legislation; they have tried to get the best outcome for them. Unfortunately, the young man I mentioned experienced enormous difficulties. It is a ludicrous situation if you are supposed to turn up for an appointment that you do not know about and you have your payment stopped. Centrelink did communicate with him that his payment had stopped. However, this notice was received later on the same day he went to his bank to get money out for his rent.
The level of accountability and the lack of support that has been given to people with disabilities who are trying to find a job, undertake study and get back into the workforce do concern me. I have worked in a system where there was support for people with a disability and where there was assistance to find employment: there were proper assessments, proper placements, proper support and long-term jobs.
This government has introduced into this parliament and into our Australian community a system that places the onus on the person with a disability rather than gives them support. This legislation is making it easier for them and I welcome that. But, in welcoming it, I condemn the fact that the government initially introduced the legislation without including it. It has created hardship for a number of people, and I have some concerns about the reporting requirement because I have demonstrated already how there can be problems with it.
Job seekers within the electorate of Shortland have also experienced many problems. The most striking example was over the Christmas period when a woman, who has since found employment, had her payment suspended because she was not notified of the time of her appointment. She also had to change one of her appointments because, on the day the appointment was taking place, she was working. She was told that her ultimate responsibility was to attend the Centrelink appointment, as opposed to working. To my way of thinking, I wonder how the Welfare to Work legislation has actually helped this older working woman.
In my area, I understand that there has been a pilot done—which I think has since been disbanded—directed towards mature age people seeking employment or receiving the Newstart allowance. I was visited frequently in my office by 64-year-old or 63-year-old women who were just short of being granted the age pension and had been told by Centrelink that there was a requirement to report fortnightly even if they were doing volunteer work. Thankfully, the pilot has ceased and those people have been put on a more sustainable reporting regime. What this demonstrates is that the Welfare to Work legislation, when it was introduced into this House, was more about making people jump through hoops; it was more about the government saving money than actually helping people get work.
I return to my original comments about people with disabilities. People with disabilities need support and security, and they need to know that if things fail there is a fallback position, but under this government they feel very threatened. Unfortunately, I believe that much of this Welfare to Work legislation was ill-conceived and will actually be counterproductive. Labor have a much better plan. Labor believe passionately that people with disabilities should be able to work and that that opportunity should be created for them. We believe that proper support services should be put in place, as with single parents and all the other people who have been targeted in the government’s Welfare to Work legislation.
Today we acknowledge that the amendments before us will actually help people who have been affected by the Welfare to Work changes. I hope that the government come back to this House before the election with some more changes to the Welfare to Work legislation and look at the plan that the Labor Party have for actually helping people re-enter the workforce. We are very happy for the government to steal whatever initiative they would like from Labor’s plan to help people with disabilities and single parents get back into the workforce. We will support it; we will come here and vote for it. I conclude by recommending that that is the action that the minister takes.
I rise this morning to speak on the Social Security Amendment (2007 Measures No. 1) Bill 2007. This bill brings in legislation to support several measures, including those in the government’s budget of 2007-08. Amongst other things, it provides for: enhancements to the provision of mobility allowance; a tightening of the transition to employment assistance for former full-time students on youth allowance; enhancement of access to supplementary payments for parenting payment—partnered recipients with a partial capacity for work; changes to the payment rate rules for some allowance income support payments—this will allow the care provided for a child to be recognised by the higher with-dependant child rate for persons providing a significant level of care; and changes to the participation rules regarding the acknowledgment of self-employment for mature age unemployed job seekers.
I would also like to refer, as the previous speaker has, to the part of these changes that is effective in relation to the Welfare to Work and participation issues generally. I refer quite happily to a paragraph in the Bills Digest, supplied by the Parliamentary Library, which says:
As a result of that government’s Welfare to Work changes, the numbers of jobseekers required to look for, and accept work, with different characteristics from those of the past and who also have differing needs is likely to increase.
In other words, as a result of these changes there will be more people out there in the Job Network system and not within the disability support system. Job seekers with a partial capacity for work—that is, those who would have previously qualified for the DSP, the disability support payment—are the persons assessed as being able to work for more than 15 hours a week and therefore now do not qualify for the disability support payment, but they may not be capable of full-time work. These job seekers would have only part-time employment participation requirements.
I want to make a point about that. The Welfare to Work changes that the government has brought in have a very dramatic effect on members of our community who, for one reason or another, have an incapacity or a disability and who, under these new rules, face the 15-hour-a-week capacity-to-work test—some of whom we know will never be able to work full-time anyway and, in fact, will be in need of support in one way or another. The issues that that sort of change bring have always been of concern to me. This is not the first time—and, sadly, it will probably not be the last time—that I have stood up in this place to speak on behalf of the people in our community who are affected in this way.
There are certain things that we must be absolutely certain of when we are playing with the lives of people with disabilities or incapacities, with the lives of their carers, their families and the people around them generally. We must ensure—as the previous speaker and others have said—that, if they want to work and, particularly, have the capacity to work, we encourage them in every way we possibly can to do so. We must make sure that they have adequate training and support around them so that they can actually fulfil that wish, and we should not be at all surprised when we hear how many of these people are capable of working and wish to work. There are rewards for society in general—there are economic benefits and all sorts of reasons—and we should allow these things to happen in a right way. I am not a stick-approach person. I think there are other ways to do it. Sure, we should have limitations around criteria and so on to ensure that people are doing the right thing and trying their hardest, but I do not know that hitting them with a stick is the way to do it.
I think it was last week that I had the privilege of attending the Prime Minister’s annual employer awards dinner in the Great Hall in Parliament House. This is the 17th year of this dinner and awards system—a process started, in fact, under our government, and I am pleased to see it has continued under the current government. It is a worthwhile thing to be doing. The reason this is an important set of awards is that they reward employers of people with disability. When you listen to the comments being made not only at the table at which you sit but around the room, the commentary is about the wonderful contribution that these people make to our society, economically and socially, to the workplace in which they are engaged, and the benefits that their families, friends and carers get as a result.
All of those businesspeople stood up and testified very strongly that the most notable thing was what people with disability brought to the workplace and how determined they were to be loyal, honest workers. These are all things that we would wish to see epitomised when you put a group of people with disability into a workplace and offer them the right support and training. We should not be at all surprised to know that this actually works, and you do not need to hit people with sticks to get them to do it. What you have to do is to put processes in place so that participation in the workforce becomes a lot simpler, easier and welcoming.
As far as I am concerned the Welfare to Work changes have achieved one major thing which alarms me—that is, they have moved a great number of people onto lower payments. It actually costs hard money to live with disability and incapacity. It is not a cheaper form of living; it is expensive. It costs more if you happen to have a disability, chronic illness or incapacity and you are attempting to live a full and proper life in our society. How on earth can we rationalise moving people onto a lower level of income by moving them off the DSP and putting them onto Job Network payments and so on? I do not understand the logic behind that and it worries me incredibly.
It puts a lot of people with disability under enormous financial pressure. These folk must be assured that they can obtain the full training and support they need to obtain the elusive job which many of them want. Then, of course, we hope that they can retain as much of that income as possible and not have it taken away by the government through taxation or other disincentives, which will probably occur. We now have what I think can only be interpreted as a far more complex welfare system than we have ever had.
I want to take advantage of the debate on this particular bill to talk a bit more generally about disability issues. In particular, I want to refer to the level of unmet need that is still out there in our community. It is all very well for government to talk about getting people out, participating, making them get jobs and all the rest of it, but we have a very broad range of incapacity and disability out there in the community. We have an incredibly serious problem—that is, the level of unmet need in servicing the needs of an enormous number of these people. I want to refer to a media release put out very recently by the Australian Institute of Health and Welfare. It said:
A new report by the Australian Institute of Health and Welfare ... quantifies the level of demand for disability support services now and in the future, and shows that the number of people aged under 65 with a profound or severe limitation in basic daily activities is projected to increase to over 750,000 people by 2010.
That is three years away. The media release further states:
The report, Current and future demand for specialist disability services, reports on how much unmet demand there is for accommodation and respite services, community access services and employment services, what factors affect demand, and how levels of demand are expected to change over coming years.
It goes on to say:
‘Conservative estimates indicate that in 2005, there were 23,800 people aged 0-64 with unmet or under-met demand for accommodation and respite services,’
… … …
Based on projected ageing trends, the segments of the population likely to require disability services are projected to grow substantially in the next few years.
In addition to the obvious factors—the ageing of the population in general and of people with disabilities in particular—other factors that may contribute to an increase in future demand include:
- increases in the prevalence of some disabling long-term health conditions
- increases in need for assistance due to ageing service-users and the ageing of their carers—
I will come back to that point in a moment—
- trends towards community-based living arrangements for people with disabilities
- decreases in access to some mainstream housing options, and
- a projected fall in the number of informal carers relative to the number of people with a disability.
And I will come back to that. The second point:
- increases in need for assistance due to ageing service-users and the ageing of their carers
and that last point:
- a projected fall in the number of informal carers relative to the number of people with a disability—
come in part to a question that I put to the minister in the chamber in an adjournment debate on 20 June this year. I was talking about the Commonwealth State Territory Disability Agreement and all of the issues surrounding that. The question I put to the Minister for Families, Community Services and Indigenous Affairs—and I asked him if he could possibly come back to the House at some stage with this information—was: how many people, how many family units, how many older parents are there across this country, who are currently caring for an adult child with a disability in their own home, be they widowed, single or a couple, and what are the government’s plans for addressing that growing number?
Mr Deputy Speaker Quick, I know you have a personal concern about this. So do I and so do a lot of us in this House. We are concerned about the enormous number of instances where we have ageing parents caring for a child, who is an adult with an intellectual or other type of disability in their own home, hidden away out there with nothing being planned for their future accommodation or service needs en masse. I am unaware of a plan. If we are talking about accommodation and respite services for people with disability, this is what we should be talking about. If we are talking about the ageing of the population in this country and what we need to do about it generally, why are we not talking about this issue with equal import? At some point those parents are going to leave this earth and, when they do, what is going to happen to those adult children? What is happening to them now?
I know, from personal experience and from my own work in the community, that a lot of parents have difficulty letting go. I understand that. Part of the reason for that might be because they do not see any alternative. I feel very strongly about this, and I still have not had an answer or any information come from the minister as to what he is going to be doing about that. But, when I look at the Commonwealth State Territory Disability Agreement status right now and at the whole issue of servicing the disability sector in general, I despair. I despair about where we are going. Words are cheap, and ministers can come in here and say, ‘We have spent X billion trillion dollars in the last whatever.’ None of it is really attaching itself to the core needs of the families and the people in my community and around the country when we talk about the need for disability services to be addressed in a far more serious fashion.
There is the Commonwealth State Territory Disability Agreement and there is the wonderful Senate inquiry report of February 2007. It is only a few months old, and talks in detail about the current government’s approach to funding through the CSTDA. According to this report, the government made an offer to the states and territories on indexation for the CSTDA of 1.8 per cent. I am not a mathematician, but I can tell you that that is a very low figure. And the government is critical of the states and territories for not doing enough and is saying, ‘Come on, unless you up the ante a bit, we are not going to do much.’ The ACT’s indexation in the same period was 3.7 per cent. The Northern Territory’s was 4.15 per cent. Tasmania’s was 3.8 per cent. They are all above the Commonwealth level of 1.8 per cent, so I do not quite know how the minister can be confident about the 1.8 per cent when it is lower than all of the others and also too low to actually have any meaning in terms of funding for disability services around the country.
On 28 June, I think it was, we had the big announcement from the government. On the one hand, we had the minister saying to the states and territories: ‘No more money. Go away. That is the end of the negotiations on this.’ Then, on 28 June, the Prime Minister and the minister made a very big announcement on the government’s disability assistance package, which is going to be in the order of $1.8 billion. That is a lot of money. An enormous proportion of it is going out in forms of cheques to families around this country who may have a child aged under 16 who may qualify for, I think, a disability carer payment. I stand to be corrected on that, but the qualification is there. So, if you are in that category, I think you might be receiving a cheque for $1,000 in October—very nice timing, when you look at elections. A great proportion of that money is being expended in that way. The minister, as I understand it, said to his territory counterparts, ‘I will give you the detail by 31 July on how this money for supported accommodation and so on will be used.’ As far as I know—and again, if he can refute this, I would be happy to know—none of that detail has yet been made available.
The remainder of the $1.8 billion was supposed to be helping, for example, with supported accommodation for the adult children of parent carers aged 65 or more—the very people I was just talking about. It is outside the CSTDA. It is altogether separate, so we have another system, we have another process and we have another minor bureaucracy attached to it. We do not know yet how it is going work. We do not know—although the minister may have advised that and, if I look carefully, I could possibly find out—how much of the $1.8 billion is going to be left for this purpose. So, does this really mean that we have an alternative to reaching an agreement on the funding for the fourth Commonwealth State Territory Disability Agreement? What does it actually mean? I understood that Minister Brough had said, prior to this, that he would match the states and territories fifty-fifty for unmet need for services. That was probably a reasonable offer. I do not know if it is entirely reasonable if we still stick to those indexation figures, but it could have been reasonable. Then, on 4 July, that offer was completely withdrawn. It is no longer available in light of the disability package that the government announced on 28 June.
I had the privilege yesterday of meeting with a group of people in my office who represent the National Council on Intellectual Disability. They came to see me to talk about their children. I think they may have seen other members of the House at the same time that they were here. I met three family members—two parents from two families and a sister—of people with intellectual disability. Their story was that they were under supported employment through Disability Employment Network providers—and that is a whole other debate that we do not have time for today. But the reason I bring it up is that it was just such a privilege to sit and listen to these people explain to me the success that was being achieved by good, proper support for people with disabilities to get active and participate in the workforce—be it short-term, part-time or for a longer term—and what that meant to their family member with a disability and to their families. I want to reiterate that it is no surprise. You do not have to be a Rhodes scholar to understand that people in this country with a disability would really like to walk in our shoes and not their own. They would really like to be able to participate in the workforce and in our community in the best way that they possibly can.
Please do not hit them with sticks. Please do not put ridiculous requirements on them and penalise them financially. Get real: sit down and talk to these people and understand that, if you resource it properly, if you put support and proper processes and programs around them, then you will be amazed at the outcomes. We see the stories all the time. The minister has just come into the chamber. She hosted the dinner last week that I referred to earlier. It was a wonderful dinner. But, again, there is story after story. Give them a chance, look at what they can do and look at what they can bring to their own lives, to their work colleagues and to the workplace where they are engaged. I can but hope that, at the end of all of this, we do see some sense—that we do not see politics but sense at the Commonwealth level: dealing honestly and appropriately with the states and the territories and not holding them to ransom but sitting around a table and saying, ‘We all have one thing in common, and that is that we all know of people with a disability who want to participate.’ If we are going to have a bill about work participation, this has to be a very big part of the debate. I live in hope that we will one day see that outcome emerge. If it does not, when we are in government it will.
In summing up the Social Security Amendment (2007 Measures No. 1) Bill 2007, I would like to thank those who participated in the debate. It was a rather amusing contribution from the opposition. I was about to stand up during the remarks from the member for Canberra and remind her that she was not referring to the content of the bill at all. The bill is about helping people with a disability into work; it is not about mental health interstate agreements and so on. She seems not to have read the bill at all, especially the explanatory memorandum.
The member for Shortland was most engaging in suggesting that all we need to do is adopt Labor policy on welfare to work. That is most bemusing when you look at Labor’s record of underachievement over its 12 or 13 years in government, before 1996. If you were disabled, unemployed long term, a single parent or an Indigenous worker—a highly disadvantaged person in the Australian community—under Labor, you were caught short. You were in a very long queue waiting for someone to give you a hand. You certainly did not get the sort of assistance that our government has offered and delivered, which has seen record rates of workforce participation, including for the most disadvantaged in our society, and which has seen unemployment drop to record lows.
Perhaps I need to remind those opposite of some of these statistics, because I have never been asked a question in question time in this chamber from anyone from the opposition side on the performance of our Welfare to Work policies. The opposition totally opposed all of the measures which delivered the $3.6 billion budget for Welfare to Work which has caused this extraordinary shift of the unemployed into the workplace. I am not the only Minister for Workforce Participation who has never received a single question from the opposition on this work; neither did my predecessor in the same portfolio, Peter Dutton. Heaven help us if the opposition ever does again take charge of the economy of this country. We would see unemployment levels back to where they were, with the most disadvantaged in this nation once again severely and significantly isolated, stigmatised, and living a different life to the one most Australians aspire to.
I will remind the member for Shortland of exactly what we have achieved and of what Labor did in their days in office. Unemployment was 8.2 per cent in 1996 when the Howard government was elected. It had peaked at 10.3 per cent in 1993 when Kim Beazley was the Minister for Employment, Education and Training. Later, of course, he was to become a long-term opposition leader. Of course, we all know that unemployment is now at 4.3 per cent—the lowest in 30 years. Labor were only able to create 53,400 full-time jobs in their last six years in office. The coalition has created 309,900 full-time jobs in the past year alone. The employment program cost-per-job outcome—that is, how much the taxpayer pays to place one individual into work—was $12,800 per job seeker under Labor’s Working Nation. Under our program, which we generically call Australian government employment services, the cost is down to $3,900. That is almost a third of the cost to place substantially more people into real jobs. That is around a 72 per cent reduction in the cost to taxpayers for a much more efficient system. I hope the opposition is noting that in particular.
Long-term unemployment reached a peak of 329,800 in May 1993. This was reduced to a mere 66,000 by June this year. Teenage unemployment under Labor was a horrific problem. Young people looking for full-time work were despairing. Their unemployment peaked at over 10 per cent in 1992. Teenage unemployment has been reduced to just under four per cent now. You can imagine what a difference that has made in the lives of so many young people in Australia under the John Howard government.
Labor’s old CES—Commonwealth Employment Service—had only 300 permanent sites available to assist job seekers. So, if you were not lucky enough to be near one of those 300 CES offices, it was just bad luck. We have over 1,066 permanent offices right throughout Australia in some of the smallest communities manned by our Job Network, our Disability Employment Network providers and others. We have made job seeking more accessible to the most disadvantaged in this country. Therefore, it is no surprise that the workforce participation rate was standing at a record high of nearly 65 per cent in June 2007. The average participation rate under Labor in two terms in office was only 63 per cent. I suggest that the member for Shortland look very closely at those statistics. When she suggests that we should have regard to ALP employment policy, I think she must be joking. Either she is joking or she does not understand.
The ALP’s discussion paper and platform advocates going back to their failed Working Nation policy. All I can say is that would cause real despair for the parents of the unemployed young people and also for those who are still seeking work. Nearly half—44 per cent—of disadvantaged job seekers who received targeted assistance under Job Network were employed only three months after completing their assistance program. This compares with only around a quarter getting into work under Labor’s Working Nation. I have already mentioned that the cost of helping people into work has been substantially reduced under our government, but with a far better program delivered.
Throughout Welfare to Work, the coalition has provided greater assistance for the long-term and the very long term unemployed in getting a job. Given the extraordinary emotional and physical detrimental effects that long-term unemployment can have on an individual person, we are proud of the fact that so many more Australians have been given a decent life chance in this nation as a result of our Welfare to Work reforms.
It is not just unemployed parents and single mums who suffer when they cannot get work—there are 600,000 children in Australia who do not have a household breadwinner. We inherited that from Labor. Under our Welfare to Work changes we now have a situation where, instead of parents staying on the single parent pension until their youngest child is 16, they are assisted into at least a part-time job when their youngest child turns six. This means that we are going to break the cycle of intergenerational despair and distress caused by one generation after another not being able to get work. This particularly affects Indigenous Australians. As part of our recent move into the Northern Territory in an emergency response to the enormous distress there, we are going to change the intergenerational cycle of disadvantage that has seen unemployed Indigenous people with a very different set of life experiences to other Australians.
Right across the board we are now seeing mothers being helped to find work, which means that they have hope of offering their children a different life to that which they experienced, having been outside the job market for so long. In particular, we have record numbers of job placements for sole parents. In the last 12 months, over 44,000 sole parents have been helped to find work, around 50,000 Indigenous Australians have been helped into work and 11,000 people on disability support pensions were helped to move into work.
I thought it amusing that the member for Canberra suggested that there was an issue in Australia about an ageing population and people with disability wanting work. Well, hello! None of those issues were addressed under the Labor regime, but our Treasurer produced for the first time in a developed nation an intergenerational report that documented very carefully exactly what the impacts would be of our changing demographics—our baby boomer generation moving into retirement, with lower rates of fertility meaning that, coming up behind them, there will not be a similar sized workforce to be the taxpayers and to support working age people on welfare and older aged people as our country moves forward. This government has responded to the intergenerational issues through a whole range of measures including superannuation changes and different incentives for saving, but, in particular, by raising workforce participation.
The Social Security Amendment (2007 Measures No. 1) Bill 2007 is an extraordinarily important further development of the ways in which we are assisting some of Australia’s most disadvantaged to move into either part-time or full-time work. The point about work is that in our society, as in so many others, you are what you do. If you are denied independence through your own capacity to work, your self-esteem will often suffer, you will often be stigmatised in our society and your children will be less likely to work. This bill, by making eligibility for mobility allowance more consistent, continues the focus under the Welfare to Work reforms to ensure greater fairness in the treatment of groups with similar needs. It upholds the Howard government’s commitment to make it easier for people with disabilities who can work 15 or more hours a week to find work in the open labour market. We changed access to disability support pensions under Welfare to Work reforms. We say that if you can do at least 15 hours of work a week in open employment, after two years of support if needed, we will help you to find a job. If you have a capacity for some work, we are not going to simply dismiss your future work opportunities by parking you on the disability support pension.
Our higher rate of mobility allowance was introduced under Welfare to Work to encourage people with disabilities into the open labour market. This bill remains consistent with that original intent. The bill was supported by the Senate Standing Committee on Employment, Workplace Relations and Education. The bill also supports greater equity for young people who are looking for work and are claiming youth allowance. It helps ensure that all young people who are transferring from youth allowance—these are full-time students to youth allowance job seekers—will be linked promptly with assistance from Centrelink for job searching when they cease full-time study. We want to transition people quickly so that there is no chance of them becoming despairing and long-term unemployed. The result will be that young people’s labour market potential will be very substantially improved.
Welfare to Work reforms that support parents are being extended. Partnered parenting payment recipients who have a partial work capacity due to disability will have access to more support in the form of concessions and supplements. This additional support is consistent with that received by disability support pensioners. We are making sure that there is equity across the way our welfare support is administered and accessed. In addition, current disincentives in the income support system for people with the shared care of a child will be removed. There will be increased access to higher payment rates for these people. This recognises the costs incurred by parents who share the care of a child—even though the child may not live with them—and reflects important recommendations of the 2006 ministerial task force’s report on child support. The bill also rectifies an oversight that currently prevents job seekers who are 55 or over from combining self-employment—as well as other types of employment—with voluntary work in order to meet their activity test requirements. This was the original intention of the Welfare to Work measures.
I will say once again that our Welfare to Work reforms are the most important thing to have happened since 1996 for those who were unemployed during the Labor regime. We have seen the most substantial assistance—and a response to that assistance—coming through where people with disabilities, parents, the long-term unemployed, Indigenous people and mature age workers have found a new lease of life through employment. There has never been a better time to get a job in this country because of the very steady hand on the tiller in terms of economic management. Both despite the domestic shocks of things like the worst drought on record and the worst floods on record and despite the international shocks such as the war on terrorism, SARS epidemics, oil crises and so on, our Treasurer and our Prime Minister, John Howard, have presided over the most significant economic growth this country has ever seen. They have kept this country stable and that has enabled record numbers of the 2.5 million unemployed working age people that we inherited from Labor to move into work. I therefore commend this bill to the House.
The original question was that this bill be now read a second time. To this the Deputy Leader of the Opposition has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.
Question agreed to.
Original question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.