House debates

Thursday, 23 October 2008

Social Security Legislation Amendment (Employment Services Reform) Bill 2008

Second Reading

Debate resumed from 21 October, on motion by Mr Brendan O’Connor:

That this bill be now read a second time.

10:45 am

Photo of John ForrestJohn Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Regional Development) Share this | | Hansard source

In the absence of the opposition’s next speaker, I will take this opportunity to make a few remarks in respect of the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. Having three social security offices in the division of Mallee and my own office not far from the one located in Swan Hill, there is an enormous amount of activity for my staff in assisting people through the plethora of programs that are offered. So I will be listening with great interest to debate on this bill. As the member for Dawson is now here, I reserve the right to perhaps continue my remarks on another occasion.

10:47 am

Photo of James BidgoodJames Bidgood (Dawson, Australian Labor Party) Share this | | Hansard source

I rise to speak on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. The bill will create a fairer, more effective compliance framework for our nation’s unemployed. Long-term unemployment is a challenge and addressing it requires a sensible and concerted approach by government and industry. It is not an issue that is going to go away overnight. Indeed, the proportion of people on unemployment benefits for more than five years has increased from one in 10 in 1999 to almost one in four today—an increase from 74,000 people in 1999 to more than 110,000 almost 10 years later.

The goal of the bill is to increase participation in the system, to get more long-term unemployed people into jobs, into training and into the work community. This new system will be fair, taking into account the individual circumstances of job seekers in rural and regional areas. That is applicable to many parts of my electorate of Dawson—for example, where issues such as transport difficulties may impact on the ability of job seekers to meet their participation requirements. This bill is not about keeping a system that punishes the long-term unemployed. Instead, it is about putting in a system that will get people back into work: off benefits and into our workplaces.

Despite what those on the other side may say, this government is committed to fairness in the social security system. This government remains committed to mutual obligation. We believe that those who can work should work, and those who are unable to work should be adequately supported to be in a position to be able to enter the workforce. We believe that this principle is reflected in the fairer and, most importantly, more effective compliance framework proposed by this bill.

Some, when talking about the unemployed, cannot resist taking a cheap shot at them and their circumstances instead of looking at the circumstance and the issue holistically. Some prefer to rely on preconceived stereotypes about the unemployed. We on this side of the House will not do that. We will instead look at the facts and deliver a system that will work for those who are unemployed. The government believe unemployed people need to be given every opportunity to enter the workforce not just for the sake of fairness to the taxpayer but for their own benefit. The simple fact of the matter is that work is rewarding and unemployment is not. I reiterate that point: we in the Rudd Labor government have a very clear mandate and we have very clear views on the benefits of being employed over the lack of benefits of being unemployed. It comes to issues such as self-esteem—that is, a person’s perception of their value to the community, themselves and their families and their individual self-sufficiency in being able to work and provide for themselves, for their families and for the ones that they love.

The compliance system that exists within the bill encourages commitment rather than the current, punitive approach used. That is an approach that saw too many people cut off from their benefit and from the employment search cycle. The previous system had a number of flaws that this bill will address. A key element of the new system is a no-show, no-pay clause, which aims to instil a work-like culture to employment services. In the bill, if a job seeker without a reasonable excuse does not attend an activity that they are required to attend, Centrelink will impose a no-show, no-pay failure. Centrelink will also impose a no-show, no-pay failure, for example, if the job seeker does not attend a job interview or if they attend the interview but deliberately behave in a way that would foreseeably result in a job offer not being made. This is fair.

The important thing to remember in this bill is that the extent of the penalty that a job seeker who is on government benefits receives will be in the hands of the job seeker. The job seeker’s actions will determine what happens within the system. It is important to note that in this bill we have not scrapped the eight-week non-payment periods. They have only been retained for job seekers who commit serious failures. A job seeker commits a serious failure if they refuse a suitable job offer or if they have been wilfully and persistently non-compliant. Again, this is also fair.

With the issue of fairness aside, the other issue here is that the previous government’s tactic in addressing non-compliance quite simply did not work. In 2006-07 there were around 16,000 eight-week non-payment penalties applied. In 2007-08 this had doubled to around 32,000 eight-week non-payment penalties. These statistics show that what was in place was not working. These figures are proof that the Liberal government presided over a harsh and counterproductive compliance regime.

We understand that wilful noncompliance is different from when a job seeker is experiencing circumstances beyond his or her control. We want a system with incentives to seek work. We want a system that has jobseekers actively participating and searching for work the entire time they are unemployed. We do not want them to be off the radar for two months, missing out on services aimed at getting them a job, as happens now.

In conclusion, the government is determined to maintain a strong but fair compliance regime to encourage people to look for work and improve their chances of employment. The new system will provide a stronger safety net for vulnerable jobseekers while reinforcing the idea that jobseekers who are capable have a personal responsibility to actively seek work and participate in activities to prepare them for work.

The reality is that there are many circumstances that come past everybody in life which are beyond their control. From time to time, life circumstances—bereavement, the closure of industry or change in modes of production, or global economic crises, things beyond the control of everyday human individuals—mean that people are buffeted from pillar to post and they lose their sense of confidence. When they have lost their job or if they take time away from work through the shock of or depression caused by bereavement, or the loss of a loved one from an unforeseen accident, this can destroy a person’s confidence and their ability to do jobs well, thus affecting their performance.

I believe that the role of government in society is to help people like that and to give them a helping hand. I believe the emphasis and the purpose of this bill is to be fair, reasonable and just to people such as that, people who are genuine in their circumstances and who, for one reason or another, are not participating in the workforce. It is this government’s intention to encourage people who are genuine, to give them self-confidence and to bring them back into a productive workplace that increases their self-esteem, increases their self-worth, gives them dignity, respect and, God willing, a decent day’s pay for a decent day’s work. But this government does not go soft on people who deliberately and wilfully choose not to participate in the role of work and the productivity of this nation.

It is absolutely essential that we show very clearly that we will have no quarter with people who wilfully refuse to attend interviews and people who wilfully act and behave badly in interviews with the express intention of not wanting the job. We need to show that there is a role for government to be very firm and to bring disciplinary measures to pass. So, given all of this context, I commend this bill to the House.

11:00 am

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | | Hansard source

I rise to speak today on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 and the changes to the job seeker compliance regime. Labor’s proposed changes to the compliance regime comprehensively roll back the Welfare to Work reforms introduced by the coalition government, and this only reinforces the Labor Party’s weak approach to tackling welfare dependency. We have to ask ourselves why they are watering down the compliance regime. We know this is for base political purposes. This is because they wish to pander to the electoral advantage they can see in keeping people on the welfare teat. They see this as something that will help them electorally and at the ballot box.

The new system provided for in this bill is inherently flawed. And that is not surprising, as Labor are traditionally soft on people who just do not want to work. We know that, while that is only a small proportion of people, these people need sufficient incentive to work. In fact, as the shadow minister for employment participation and the member for Boothby, Dr Andrew Southcott, has pointed out, it will be the most lenient system that there has been since unemployment benefits were introduced in 1945. Labor’s no-show, no-pay principle means that, for each day of a mutual obligation activity that a job seeker misses, they are docked a day’s worth of benefit. For a single person on Newstart allowance, that is around $42.90 a day. It is all very well to dock somebody’s pay for a day, but that is not how the world works. If a worker repeatedly fails to show up for work without a valid reason, they will lose their job. It is the long-term disincentives that matter. It is ironic that the Labor Party want to quarantine welfare payments for truancy but they are happy to keep paying people who repeatedly fail to show up for work for the dole activities. What sort of message is that sending to the next generation?

In fact, when I was previously a schoolteacher many years ago, I worked in a school in a very low socioeconomic area whose principal—one Mr Ted Sleight—said to staff: ‘We are here as cycle busters. We are here as cycle busters because coming through this school there are generations of children that are on the same cycle as their parents whereby they do not wish to engage in the workforce and they continually want to stay on the welfare system and this is inculcated in their children. We as teachers have got to show them a better way.’  If teachers in schools have to show them a better way, the government have to do the same.

Under the model outlined in this bill, job seekers can miss six days of work for the dole activity or six job interviews over the course of six months before they risk any substantial penalty. In any case it is unlikely that the eight-week suspension period for noncompliance will ever be invoked because the comprehensive compliance assessment conducted following serious breaches gives Centrelink a wide breadth of discretion. In fact, it is a discretion so huge that it can mean that any of the following options is available: a job capacity assessment again, a review of the employment pathway plan, an eight-week non-payment period—that is there but whether they use it is another thing—or, finally, Centrelink are not obliged to take any action at all if they wish. Labor’s leniency on perpetual welfare cheats was confirmed when the Minister for Employment Participation, the Hon. Brendan O’Connor, wrote to job network providers in April encouraging them to go easy on those who breach mutual obligations. So you get a direction from the minister to go easy! That was followed up by a letter from the department reminding providers that they have a discretion when there has been noncompliance—in other words, again to go soft. There is also the risk that the changes will bring greater administrative costs to employment service providers, who are already under pressure because of the changes that Labor have made to the job network and training services, which I will go into later.

The coalition is unapologetic for its stance on welfare cheats and those who simply do not want to work. The coalition government designed the mutual obligation system with the aim of reducing welfare dependency, encouraging people into the workforce and giving them the necessary support to do so—it is often called the carrot and stick method. Our compliance measures were not designed to be punitive but were instead designed to encourage job seekers to return to the workforce and use available resources to better their opportunities.

Welfare to Work was an incentive for people to re-engage. There was a clear link between receiving an income support payment and contributing to society through an employment related activity. I remember talking to a number of people in my electorate who said: ‘I really didn’t want to get involved in this. How dare they send me off to work so I can receive my payments!’ But they said, ‘Once we got into the workforce and realised that the minimum number of hours that we did were not onerous, we actually wanted to work more.’ They enjoyed being back in the workforce because of the people they met, the health and welfare it had brought to them through getting out and mixing with others, and the fact that they got more money.

The eight-week non-payment period acted as a deterrent for those who did fail to meet their end of the bargain, and despite what those on the opposite side of the chamber may think it was not unreasonable. Job seekers who missed three appointments, interviews, Work for the Dole activities or other mutual obligation activities over the course of 12 months without a valid reason could have their payments suspended for eight weeks. That certainly is an incentive to turn up and engage.

In Canning, the overwhelming majority of those people receiving income support payments do the right thing, meeting their obligations and actively seeking employment. But there are, as I said, a small percentage of Australians who just do not want to work to receive a benefit from the taxpayer. Following long periods of unemployment, there are people who simply become welfare dependent by choice. The longer they are out of work, the harder it is to get back into the workforce. That is why early intervention programs are so important. Under the new system you can be on the dole for 12 months or more before Work for the Dole kicks in—this is compared to six months under the previous government.

The coalition introduced Work for the Dole and it had almost 600,000 participants. Mutual obligation was designed to discourage those long-term unemployed from skirting their obligations—and it worked. In fact, in June 2006 there were 205,000 people who were deemed long-term unemployed. Two years later, in August 2008, that number had decreased to 146,000—quite an achievement. The coalition remains committed to ensuring all unemployed persons have the programs, assistance and support that they require to get upskilled and job ready, and this philosophy was instrumental in getting the unemployment levels in this country down to four per cent—and in Western Australia we know it got to under three per cent, into the twos.

Locally in my electorate, instead of Labor taking it easy on those who blatantly breach workplace obligations, perhaps the government should give greater assistance to those who really deserve it. I would like to take this opportunity to remind the House of the changes that the coalition made to social security legislation last year, particularly those relating to grandparent carers that extended participation exemptions to principal carers who are relatives but not parents of the children—in other words, grandparents who took the place of parents as principal carers or other relatives who took care of the children.

As I have said before, this should have been called the Margaret Saunders amendment, because Margaret Saunders from Pinjarra in my electorate was forced to leave her full-time job in her 50s when, because of a severe drug habit, her daughter became unable to look after her children. It is these sorts of people the government should be making sure there is flexibility in the system for. Margaret again contacted me this week regarding the government’s announcement of bonus payments to pensioners, carers and children. In Margaret’s email she said to me: ‘What really hurts is that grandparents looking after their grandchildren were overlooked again. Yes, some of us will receive the bonus for the kids, but a lot won’t.’ Margaret is certainly putting in her fair share, contributing to the community. She has a degenerative spine condition and the two young grandchildren. She takes them to school, makes lunches for them, runs them to sport and does everything she can, as she did many years ago for her own children.

Regarding the bonuses, Margaret makes an extremely valid point. The mother of her grandchildren will receive a bonus as a disability pensioner, and her 19-year-old granddaughter also has a baby, so she gets a bonus and then becomes her mother’s carer, so gets another bonus. While Margaret will receive some money for the children she is caring for as a grandparent, she is not entitled to the carers bonus that recognised foster parents will receive. It is an inequality and it should be addressed. Margaret is one of up to 50,000 grandparent carers who believe they are perpetually overlooked. While the exemption from workplace participation was a step in the right direction, together with childcare and immunisation assistance, these people deserve the same level of assistance as foster parents receive.

While I am on this social security topic I would also like to mention a recent event I attended in my electorate. Year 10 students at Armadale Senior High School held a ceremony and made a commitment not to collect dole payments in the future. On No Dole Day the students pledged that when they complete their high school studies they will not accept the dole, as they will do everything possible to get their careers underway through further studies, training or employment. This is a fantastic initiative of a group called the Beacon Foundation which makes young people really think about making a go of it. The innovative program is designed to break the cycle of welfare dependency and addresses the issues of youth unemployment. When I was re-elected as member for Canning in 2001, youth unemployment was around 17 per cent. While that number has come down to a single-digit figure, it is still a strong priority to get young people into jobs. Nationally this year 7,000 students signed the No Dole charter, with 55 schools participating. What a great example to set for young people.

Let us not forget it was the coalition’s economic management and workplace reforms that, as I said previously, resulted in lower unemployment levels. In March 1996, when I was first elected to this place, the unemployment rate was 8.4 per cent. Under the Howard government, unemployment fell to 4.2 per cent, the lowest level since 1974. On the coalition’s watch, 2.1 million new jobs were created. In Canning, unemployment was at a low 4.1 per cent in June this year, which is just over half what it was when I became the member in 2001.

Despite the worsening labour market under the current financial conditions, Labor has slashed funding to employment services by $279 million to 2012. Not only is funding being cut but services are being consolidated by combining seven contracts into one. Providers will now have to offer the following services: Job Network, Personal Support Program, Job Placement Employment and Training, New Enterprise Incentive Scheme, Harvest Labour Services, Work for the Dole and Green Corps. They are all going to be lumped together for providers. That is a lot of work for any one provider, and no doubt many aspects of these programs will suffer.

As I have spoken about before, I think it is a terrible waste and tragedy to axe Green Corps as we know it now, and I know that those who are involved in the program agree with me. In fact, I attended a launch in Mandurah a few weeks ago and they were all talking about it. Last week I met with a local Green Corps coordinator who is desperate to find a way to keep Green Corps operating in its current form. It was designed to be a youth training and development program and it has been extremely successful in securing outcomes for young Australians as well as for the local environment. Now Labor is merging it with Work for the Dole and other services in a scaled back form. Green Corps provides young Australians with far greater skills than practical horticultural skills; it gives them certification. In many cases the experience helps shape these young people’s directions and gives them the confidence they need to get ahead in life and their future careers. In fact, the City of Mandurah council is on its 17th Green Corps program. Tragically, this will end some time next year. It has done a great deal of good for the local environment, as I said, and also for the many young people who have entered into Green Corps.

One of the great tragedies of the Labor Party messing with this program is that young people entering the program now will not get the same opportunities because they will be lumped in with all of these other programs including Work for the Dole. The age demographic will change, payment to the young participants will change and the whole ethos of the program in the community will change. I know that there are many people in my electorate who are very concerned about the way the Labor Party has essentially undone Green Corps in this country.

The government wants us to believe that this bill is fair. I heard the previous speaker, the member for Dawson, waxing lyrical—it certainly did not bring a tear to my eye, but it probably brought one to his. The fact that he was suggesting that people after bereavement could not work may have some validity in the short term, but eventually those people should go back to work. It is probably better for their health that they re-engage rather than sitting back disengaged from the community and the workforce. It is actually healthy to work. I find it appalling to use those examples for long-term unemployment, but then again I suppose you get that from the dripping wet Left.

It is certainly not fair for people who want to do the right thing and re-engage and for those who believe that the work ethic is honourable. The Minister for Employment Participation has already signalled his leniency on perpetual welfare collectors, but he was right about one thing. Those who can work should work and the government should do all it can to get people back into the workforce as soon as possible. Going light on those who abuse the system and delaying mutual obligation activities for the newly unemployed will only increase a dangerous cycle of welfare dependency. In the coming economic circumstances, where the Labor Party has already predicted in its budget that 134,000 jobs will go and many commentators are saying 200,000 people will be out of work, getting people back into the workforce, particularly the long-term unemployed, should be a priority, rather than making it easier for them not to engage.

11:16 am

Photo of Chris TrevorChris Trevor (Flynn, Australian Labor Party) Share this | | Hansard source

I rise today to speak on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. It is the very relevant and important changes that this bill will bring to Australian job seekers that have prompted me to speak on this bill today. It is the bill’s focus on individual circumstances, which provides greater flexibility for job seekers in regional and rural Australia, that has also compelled me today to speak on this bill.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 aims to amend the current Social Security Act 1991 and the Social Security (Administration) Act 1999 and introduce the government’s budget 2008 announcements and welcome a new $3.9 billion employment services package and the introduction of a new compliance system for Australian job seekers and providers. This is a bill that is aimed at restoring balance into a system that the previous government had taken—in my respectful opinion—too far. In the light of their failed Work Choices regime, the previous government had engineered a system that was too harsh on vulnerable Australians and counterproductive to the goals that they were trying to achieve in the first place. To illustrate the need for change, I note that an alarming trend had surfaced from the previous government’s approach to helping Australians find work. The previous government believed in punishing first and asking questions later. They believed, without any input from the recipients, in a blanket, one-size-fits-all approach to employment services, payments and penalties.

In 2006 there were around 16,000 job seekers subject to the most severe action imposed on job seekers—that is, the eight-week non-payment penalty, eight weeks of no pay. But by 2007 this figure had nearly doubled to 32,000 people on an eight-week non-payment period. Within 12 months the number of people nationally serving the eight-week non-payment period had doubled under the current system. In fact, in my own electorate of Flynn in Central Queensland there was a 44 per cent rise from 2006 to 2007 in the number of people serving this eight-week non-payment period.

The eight-week measure was meant to act as a deterrent for people not to abuse the system but, unfortunately, this deterrent clearly proved inadequate and the government must now work at improving the ‘carrot’ side of the equation and not simply—and, in my opinion, cold-heartedly—focus on the ‘stick’ side of employment reform. Surely an effective system should result in an actual decrease in the number of serious penalties being applied. Surely, if the current system had been as adequate as the former government would like us to believe, we would have seen the number of serious breaches decline and the number of eight-week non-payment periods decline as more and more job seekers saw fit to work in the system and return to the workforce. But we have seen the opposite occur under the current system. We have seen a sharp increase in a very small period of time in the number of people serving a non-payment period and so we have seen a clear need for action and a need to amend the system to reflect the set of circumstances that we now face.

The current system of providing employment services was introduced in 2006 and replaced a decade-old welfare system. Today’s employment market is vastly different to that of 2006 and, given recent economic pressures, it is set to become even more different. It is important that a degree of flexibility is built into the system and that, as different pressures and forces are placed on our labour market, the system is able to respond to these changes without falling apart at the seams. I believe that the new bill achieves this by empowering those who work within it on a daily basis to make judgements and decisions with the best interests of the job seeker at heart.

Over the past decade, the employment market has shifted. We have witnessed unemployment fall. We have seen skill shortages in vital areas. However, this has not been to the benefit of all job seekers. Today’s unemployment figures include a significantly higher proportion of long-term unemployed and highly disadvantaged Australians. In 1999, one in 10 people receiving a benefit from Centrelink had been unemployed for more than five years. Today, almost one in four people receiving a benefit from Centrelink has been unemployed for over five years. This is an increase from 74,000 people in 1999 to over 110,000 people nearly ten years on. With the changing demographics and make-up of the unemployed, today these figures represent some of the most disadvantaged in our society. Some are battling with not only unemployment but also mental illness, literacy problems, poor education and homelessness. Our job is to design and implement a better system to help these long-term unemployed and vulnerable Australians into the workforce, and I believe that this new bill will encourage just that.

While the employment market and the make-up of the unemployment figures have changed, one aspect of the system has always, and will always, remain the same—that is, the Australian community strongly expects that those who receive taxpayer funded income support look for work. This is at the very core of our nation—giving others a fair go while supporting those whose luck seems to have faded. We will never alter the system so that it does not reflect this very basic of Australian understandings.

What we do need to do, though, is ensure that the system remains relevant and focused on getting job seekers back into the workforce. It is often said that the most demanding of all jobs is actually looking for one. We need to support those of us who are looking for work, but in a fair, balanced and productive fashion and not simply applying a one-size-fits-all approach. The market is full of different industries, different regions and different types of employers and employees, and they do not deserve anything less. Just as there are many differences in the make-up of the labour market, we need to implement a system that recognises the many different individual job seekers and the skills that they can bring to the workforce. We need a system that encourages their commitment and engagement, rather than the current punitive approach.

This bill will affect approximately 620,000 people who are receiving Newstart, youth allowance, parenting payment or special benefit and currently have a participation requirement. To improve the system we simply must better align it to reflect the ethics and characteristics of the workforce. A key part of this reform is the introduction of no-show, no-pay failures. The no-show, no-pay failure is introduced by this new bill and is aimed at job seekers who, without a reasonable excuse, fail to attend a prescribed activity—for example, training or work experience. Just like in the private workforce, if an employee fails to turn up for work for a day then they will lose a day’s pay, and in this case if a job seeker fails to attend a certain activity then they will forfeit one-tenth of their fortnightly payment for each day they have not attended. A no-show, no-pay failure will also be recorded against a job seeker who refuses to attend a job interview with a prospective employer.

The new bill also, for the first time, makes arrangements for people who do attend a job interview but behave in a manner that would result in the prospective employer not wishing to make a job offer to the candidate—for example, the candidate stating during the job interview that they do not want the position. Previously, the system did not take into account job seekers’ deliberate attempts to not be employed and they focused only on the actual attendance of the job seeker at the interview. This meant it was possible for certain job seekers to avoid penalties by attending a job interview but behaving in such a manner that it would be unlikely they would be offered employment as a result. The loss of a day’s pay should act as an immediate deterrent for job seekers that choose not to attend activities that will improve their employment prospects. In an effort to remain fair, payments such as rent assistance, pharmaceutical allowance or youth disability supplement will not be affected should a no-show, no-pay failure be recorded; however, all parts of a job seeker’s payment will be subject to the reduced rate.

Another important aspect of this new bill is the introduction of what has been termed ‘connection and reconnection failures’. A connection failure will be recorded against a job seeker under the new system if they fail to attend an appointment—for example, an appointment with their employment service provider—and do not have a responsible excuse. Instead of imposing a harsh penalty for a connection failure, the new system will require job seekers to attend a reconnection requirement. A reconnection requirement could simply be another interview similar to the one that they had previously missed. The emphasis here is clear: this new bill is designed to encourage job seekers to communicate with their service provider and with Centrelink. Better communication will lead to a stronger connection between the two parties and result in a better chance for the job seeker to obtain employment or new skills.

A penalty will be imposed on a job seeker that fails to attend their reconnection requirement. This penalty will be similar to the one imposed on job seekers that have a no-show, no-pay failure; however, for a reconnection requirement failure the job seeker will lose one-fourteenth of their fortnightly payment for each day that they have failed to reconnect with the system and do not have a reasonable explanation.

Unfortunately, there will always be serious cases in which the system will have to deliver serious penalties. The bill retains the penalty for serious failures by job seekers—that is, the eight-week non-payment period—but with a different approach. A serious failure is regarded as a job seeker refusing an offer of suitable employment or missing three appointments or six days of activity. It is made at the request of the employment service provider and is aimed only at those who have wilfully and persistently not complied with repeat attempts by the system to have them re-engage with the system.

There are many differences between the eight-week non-payment period penalty in its current form and the one that the government through this bill will introduce. Previously the system was centred on a three-strikes mentality. The first recorded failure would see a job seeker’s payment reduced by 18 per cent for a period of 26 weeks, while the second failure within a two-year period would see payments reduced by 24 per cent, again over a 26-week period. The third strike would incur the eight-week non-payment period. Under the previous government’s system, during this eight-week non-payment period the job seeker was not required to have any contact with the job market or employment service provider. They must simply sit and wait for the period to end. There is no communication during this period, no connection and no chance of improved training or employment prospects. My government believes that there are better things for a job seeker to do than simply wait out an eight-week non-payment period at home. It is often said that the devil preys on idle minds and this, I fear, is what is happening to our job seekers who are caught up in the unproductive web of the eight-week non-payment period.

Under the new bill the eight-week non-payment period will be retained. It will be applied to the most serious, wilful and persistent cases but unlike currently a job seeker will be able to restore their payments back by participating in an intensive activity. An intensive activity will usually involve 25 hours a week for up to eight weeks in an activity such as Work for the Dole. This is the main point of difference and one that I feel very passionately about. There is no use in a person sitting at home and further disengaging from society and the workforce when we can present an opportunity for these job seekers to participate, to reconnect with the system and to potentially learn new skills or establish new networks simply by participating in an activity such as Work for the Dole.

As I stated earlier it is the greater flexibility of the new system and its focus on individual needs that will be beneficial to rural and regional Australia. This bill empowers those experts that are employed in this field and work in the front line to make decisions that will benefit their clients. Under the new scheme, employment service providers will have the discretion to decide to report noncompliance to Centrelink. Providers will be empowered to make this decision and act only if it is in the best interest of the job seeker to do so. Instead of reporting non-compliance, the employment service provider may choose to negotiate with the job seeker to find alternatives or to make up any noncompliance. Again, this will result in better communication and a stronger connection between the two parties.

For the long-term unemployed, I know that the path to employment is often difficult and full of hurdles. Whatever the hurdles that they face, they deserve a system that supports them and encourages them every step of the way. We need a holistic approach to job placement, one that takes into account any barrier to employment and removes hurdles faced by job seekers, whether they are personal issues or training gaps. The benefits of employment and participation in the workforce are immense and cannot be overlooked. So much of a person’s identity and social outlook can stem from participating in employment. The workforce belongs to all Australians—even those who have felt defeated and have given up. This is a bill that will support these Australians and this is a government that will introduce reform to tackle disadvantage head on. The end result will be a system with a heavy focus on communication, on participation, on engagement and on connection, and it is because of this focus that I commend the Rudd Labor government for its leadership on this issue. I also commend the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 to the House.

11:34 am

Photo of Peter LindsayPeter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | | Hansard source

Let me first of all welcome Von Harrington to the Main Committee this morning. Von was Townsville’s loss and Canberra’s gain when she came here—sorry, Von; I am embarrassing you—and we worked well together when she lived in Townsville.

The provisions of the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 really need to address the issues of those who are smarties and who, in fact, want to use the system not to work but to get around the conditions that the government places in terms of mutual obligation. It also needs to address those who do not understand their responsibilities or do not have the capacity to understand their responsibilities, and they need to be helped. I have always thought that we should not be penalising people who are in that particular position. It is very hard to develop one-size-fits-all legislation, rules and policy for Centrelink, because we do not live in a black-and-white world; we live in a grey world. I just wish that we as legislators could find a way to allow our public servants to take more responsibility in making decisions in the interests of their customers. The problem is, of course, that if one public servant makes a decision here and one makes a different decision over there then that is a risk and causes some problems and conflict, but private business handles this okay. Managers in private business are able to make decisions depending on circumstances, and we should be able to trust the members of the Public Service to also make decisions and be assured that there will be no criticism for taking those decisions.

Like most members of parliament, I have seen many examples of the smarties. The member for Hinkler told me just the other day about an example where a fellow wanted to continue to be on income support. He had an orchard and wanted to tend his orchard, but he wanted income support at the same time, so he was saying that he could not get a job. Apparently that became public in Bundaberg, and the fellow who lived next door to this guy rang up and said, ‘I’ll give him a job,’ but then he would not take it because he wanted to tend his lemon trees or whatever they were, but he still wanted his income support. None of us believe that the Australian taxpayer should be funding that kind of scenario. Then you see people who trawl the websites of businesses, get details from them, put them on the form which they send in to Centrelink and say: ‘I’ve asked for jobs at all these places. I pass the activity test,’ or whatever it is; ‘please pay me my income support.’ Centrelink does not have the resources to follow up to see if that actually happened, and none of us as members of parliament would want that to continue.

I take exception to the member for Flynn, who said earlier that people should not have to wait at home doing nothing during an eight-week non-payment period. I do not think he quite meant that, because clearly nobody has to wait at home doing nothing if they are not being paid income support. They can still be out there looking for a job. The people who do not actually want a job are the ones who wait at home doing nothing. So I think the member for Flynn would really agree with me that we would expect people who do not have a job and want income support to actually be looking for a job.

The social security of this country is a policy issue that my coalition colleagues and I take very seriously. Substantiating this claim is the former government’s well-measured policy decision in 2006 known as the Welfare to Work reforms, one of the major reforms that we instituted in the 11 years of the Howard government. Our reason for these reforms was a clear and sensible one then, just as it is still a clear and sensible one now. You see, we believed then and we still believe now that Australians who are struggling to find employment should be able to turn to an Australian government that will help them in such an obvious time of need. We also believed then, as we do now, that a person should be entitled to receive a regular welfare payment, contingent upon certain conditions. These conditions are ones such as proof that he/she is actively seeking employment and attending workshops and meetings, when required, that might better his/her chance of gaining employment. It is quite sensible. We also strongly believe in the added social security benefit of maintaining such conditions upon welfare payments. For example, if a person contributes to the facilitation of their own job seeking, he/she is then contributing to his/her own future financial stability and nonreliance on social welfare payments.

Welfare to Work is clearly a good thing. It is a good policy. Statistics alone show this. These Howard government Welfare to Work measures are working at reducing dependence on welfare in this country and assisting those Australian people who are struggling to find stable employment. The scheme is still working. Not only is it working but it is working remarkably well. It is a very good scheme. In June 2006, for example, we recorded 205,212 long-term unemployed people in Australia. By August 2008, because of the Welfare to Work policy, that number had dramatically fallen, to 146,533 people. That is a reduction of 58,679 people. Those 58,679 people can now have meaningful employment that allows them to live more comfortably. It also allows them to pay tax, of course! Those people have now instilled in themselves a sense of pride and self-worth and have gained meaningful employment that allows them to break the often vicious cycle of welfare dependency.

However, unfortunately, there is one fundamental difference between the former Howard coalition government and the current Rudd Labor government. It is as simple as this: the Rudd government is attempting to introduce changes to the sensible penalties for those who treat the Welfare to Work scheme as a handout scheme. The Rudd Labor government must surely be well aware that Australian people who are deemed physically and mentally capable of doing so are better off gaining meaningful jobs than being reliant on welfare payments each fortnight.

But, if indeed they do agree with the coalition opposition that employment is better than welfare dependency, why do they wish to introduce changes to a system that is currently and effectively encouraging and facilitating self-help job seeking for unemployed Australians? Why would the Rudd government wish to protract the financial instability and welfare reliance of some of the country’s most vulnerable people? Considering that this Rudd Labor government claims to be deeply concerned about providing opportunities for struggling Australians, it seems to me these amendments, which will relax the responsibilities of welfare recipients regarding welfare payments, are peculiar and ill thought out proposals.

The coalition will ultimately support this legislation, but we do have concerns and they have been noted accordingly.

11:43 am

Photo of Maxine McKewMaxine McKew (Bennelong, Australian Labor Party, Parliamentary Secretary for Early Childhood Education and Child Care) Share this | | Hansard source

I rise to speak in support of the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. It is part of a package of reforms being enacted by the government as part of our agenda on workforce participation and productivity. Two of the government’s ambitions in this area are that all working-age Australians have the opportunity to develop the skills and qualifications needed to enable them to be effective participants in and contributors to the labour market, and of course to help those individuals to overcome barriers to education, training and employment.

The government is working on a number of fronts to meet these ambitions and the role of this bill is to introduce changes to the Employment Services’ compliance system to ensure that Australia’s job seekers meet their participation requirements and maximise their chances of being in the workforce. The bill brings about a range of possible responses to encourage participation and, importantly, the specific response will reflect the assessment of a job seeker’s individual circumstances. I think this new framework provides a flexible and, importantly, fair response by the government to Australia’s job seekers.

The changes presented in this bill will replace the current compliance arrangements which, I think, are counterproductive, nondiscretionary, and contain an irreversible eight-week non-payment penalty. The bill is an important component of the new $3.9 billion Australian Employment Services that will commence on 1 July 2009. The new Australian Employment Services will help address the needs of today’s labour market, which is defined by skill shortages, historically low unemployment and a growing percentage or proportion of disadvantaged job seekers. Over the last 10 years the proportion of job seekers unemployed for more than five years has increased from one in 10 to one in four. These people are from the most disadvantaged in our community, many suffering from language, literacy and numeracy difficulties, poor educational attainment, disability, mental and physical health issues, and homelessness.

The approach of the previous government included the use of an irreversible eight-week non-payment penalty for some job seekers. In my own electorate in the last year about 80 people found themselves in this situation, and I note the possible consequences of this irreversible eight-week non-payment period. They are severe, and they have the potential to extend well beyond that eight-week period. Homelessness Australia reports that up to 20 per cent of people who underwent an eight-week breach lost their accommodation or were forced to move to less appropriate housing. Thus the approach adopted by the previous government created more crises, more homelessness and more disengaged people from the Employment Services.

The new Employment Services are designed to encourage compliance by introducing a work culture atmosphere. A work culture atmosphere will successfully support job seekers. Like any workplace, the new services will function on a no-show, no-pay system. This is the key I think to creating a balance between participation and penalties for job seekers. Those who do not participate without a reasonable excuse will incur a no-show, no-pay failure. This failure, though, incurs a penalty of one-tenth of the fortnightly payment for every day that they do not attend. Further, if a job seeker fails to attend a meeting with their Employment Services provider, they will incur a connection failure which calls for a reconnection requirement. That is, the job seeker is required to attend another meeting with their Employment Services provider and, if a job seeker continues to fail to reconnect, they will incur a penalty which is one-fourteenth of their fortnightly payment. So a significant change to the current non-payment penalty is that job seekers have the opportunity to re-engage and immediately participate in an appropriate activity.

I think this is a balanced approach which will not send job seekers into situations of crisis. Rather, these deductions in their payments are designed to create a clear incentive for job seekers to participate in a positive way with the system, to re-engage with service providers, to attend training activities and participate in Work for the Dole events. All of these activities are designed to increase job seeker skills.

The current system’s eight-week non-payment penalty will be retained but only enforced in situations of serious failure and continuous noncompliance. To safeguard those job seekers experiencing genuine periods of hardship, this will be assessed by a new comprehensive compliance assessment. It is not the intention of the Labor government to follow in the footsteps of the previous government and to allow noncompliance and associated penalties to increase. Nor is the government interested in creating severe hardship for those already struggling to find a secure foothold in the community. As part of the new Employment Services this bill also replaces the current activity agreement with a more suitable employment pathway plan. That allows Centrelink and Employment Services to create specific pathways which suit the circumstances of individuals.

Under the current system job seekers go it alone for an initial three-month period before service providers are required to actively address their needs. For those new to unemployment, those with vocational and non-vocational barriers, navigating this space on their own is pretty daunting and very difficult. So the new plan’s assessment process is designed to quickly identify job seekers’ unique needs and skills and to actively establish pathways which overcome barriers to employment.

Job seekers assessed as the most disadvantaged will receive the most assistance. To help with this process, employment service providers will be measured on the social outcomes attained by disadvantaged job seekers. These include improvements in language and in literacy and numeracy. Increased opportunities to participate in work experience and training will also be available to disadvantaged job seekers. Programs that assist all of these groups will be implemented as part of the new employment services. This is of particular relevance in my electorate of Bennelong because constituents in these groups often contact my office for assistance in managing the complexities of Centrelink.

We help mature age job seekers—and, of course, these include people with caring responsibilities—with reskilling and retraining opportunities. For job seekers from culturally and linguistically diverse backgrounds and for refugees, these programs include assistance which addresses specific language difficulties. To assist with this process, employment service providers will offer specialist assistance from staff of similar backgrounds as well as staff of mature age. Parents are another group of constituents that regularly require the assistance of my electoral office staff, and the new services also offer more appropriate services to parent job seekers. So opportunities to reskill in areas of shortage and to participate in work experience will be available to parents and mature age job seekers, and I think these changes will be of great benefit to them.

To address the skills shortage as well as the global economic crisis we are experiencing at the moment, the Labor government announced last week it would increase the commitment to the Productivity Places Program by offering more than 700,000 new places to be created over five years.

A division having been called in the House of Representatives—

Sitting suspended from 11.52 am to 12.49 pm

Debate (on motion by Ms Grierson) adjourned.