Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

I rise to speak on the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012. This bill seeks to implement the income support measures that form part of the changes promulgated by the Building Australia's Future Workforce package. This bill seeks to make legislative amendments that include: (1) changing the criteria for youth allowance (other) and Newstart allowance; (2) changing incentives for single parents and parenting payment reforms; and (3) streamlining services for job seekers, including the alignment of daily penalty amount provisions

I will briefly deal with each of the key changes in turn. The changes to youth allowance (other) are given effect by virtue of an amendment to the Social Security Actso that, from 1 July 2012, 21-year-old persons who are unemployed may be eligible for youth allowance. Currently provisions mean that these young people may be eligible for Newstart allowance when they turn 21. The bill seeks to further encourage young people to take up work by amending the income-free area value from $62 a fortnight to $143 a fortnight for all youth allowance (other) recipients. Additionally, the bill increases the working credit limit from $1,000 to $3,500 for the same category of recipient. The 'earn or learn' measure would also be extended to 21-year-olds who have not achieved a year 12 or equivalent qualification.

Consequential amendments that are required to align with existing provisions will also be made, including: firstly, increasing the age at which a person will cease to be qualified for the youth disability supplement from 21 to 22 years; secondly, increasing the minimum qualification age for the sickness allowance from 21 to 22 years; and, thirdly, increasing the minimum qualification age for the long-term income support rate for students from 21 to 22 years. Transitional arrangements are also provided for.

This bill also seeks to make changes to the eligibility rules for grandfathered parenting payment recipients, namely those recipients who have been continuously receiving a parenting payment since before 1 July 2006. Under the existing arrangements, grandfathered recipients are eligible to receive a parenting payment until their youngest child turns 16 years, provided that child was in their care before 1 July 2011. Since 1 July 2011, any new child born to, or coming into the care of, a grandfathered parenting payment recipient no longer extends that recipient's grandfathered status.

Under the changes promulgated by this bill, from 1 January 2013, grandfathered recipients will cease to be eligible for the parenting payment when their youngest eligible child in their care before 1 July 2011 turns: firstly, 16 years if the child was born before 1 January 2000; secondly, 13 years if the child was born between 1 January 2000 and 31 December 2000; or, thirdly, 12 years if the child was born on or after 1 January 2001.

Additional changes apply for single carer parents receiving Newstart allowance. The current dual income test taper rate of 50c and 60c in the dollar will be replaced from 1 January 2013 with a taper rate of 40c in the dollar for income above the income-free area of $62 per fortnight. It is intended that this change will provide an incentive for people to re-engage in the workforce.

The bill also seeks to align, from 1 July 2012, the daily penalty rates for reconnection and no-show penalties. The government argues that aligning the rate at one-tenth will simplify the compliance framework and make the system fairer for job seekers by not penalising them for not connecting during weekends where providers are not available. The bill also makes amendments to education trusts and will make additional funding available for Indigenous education trust measures as part of the 12-month extension of the Cape York welfare reform trials.

Labor has presided over a culture of watering down social security arrangements, including reporting requirements and mutual obligation arrangements. Real reform is needed to strengthen our social security system. As usual, this government is absent of courage, absent of innovation and absent of any desire to tackle the big issues confronting this country. However, the coalition does not oppose this legislation.

Kate Ellis (Adelaide, Australian Labor Party, Minister for Early Childhood and Childcare) Share this | Link to this | Hansard source

The amendments in the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 form part of a broader package of reforms which we announced in last year's budget—the Building Australia's Future Workforce package.

Ours is a government that has its eyes squarely focused on keeping Australians in work. Our record in this regard is one we are proud to stand by. Since coming to government, we have seen the creation of more than 700,000 jobs. We know our economy has displayed remarkable resilience over the past few years and that we remain the envy of the developed world, with an unemployment rate of 5.1 per cent. This economic strength coupled with ongoing skill shortages in some sectors of our economy provides new opportunities for unemployed Australians to move into paid work—for some, for the first time in many years. Our government believes that we can do better than a lifetime of welfare dependency for citizens of this country and we are determined that no Australians will be left to fall through the cracks.

To achieve this we must take a dual approach of putting in place firm but fair measures to ensure that unemployed Australians are genuine in their efforts to find work and also provide the right support and incentives to help them get a job. The bill before the House today delivers on our government's commitment to modernise Australia's welfare system and introduces measures to ensure more unemployed people are getting back into work.

The element of the bill I would particularly like to focus on today falls under my Employment Participation portfolio responsibilities and builds on the significant reform our government has already undertaken. To further simplify the compliance framework and reinforce the requirement that job seekers should be moving towards gaining employment, all daily penalty amounts for short-term financial penalties will be aligned at one-tenth of a job seeker's fortnightly participation payment. That is, from 1 July 2012, penalty amounts for failing to attend an interview with an employment services provider and the failure to attend an activity or job interview will be aligned at one tenth of a person's fortnightly rate of payment.

Currently there are two rates, one-tenth and one-fourteenth, based on business days and calendar days respectively. This amendment within this bill today forms part of the government's ongoing efforts to get unemployed Australians into jobs and builds on compliance action that we have already taken. It builds on last year's measures where we delivered on our election commitment to introduce tougher measures to ensure more unemployed people are actively involved in seeking work. We introduced a suspension of income support payments for job seekers following a failure to attend an appointment or participation activity with their employment services provider. This means that if job seekers then agrees to re-engage as required then the payment is restored in full. If the person fails to re-engage and does not have a good reason for missing their appointments then penalties are deducted from their very payment.

These changes were not about punishing Australians who have a valid reason for missing appointments or participation activities. What they do achieve is giving job seekers no choice but to stay engaged with employment services, which are there to serve them, if they want to receive their income support payments. The government has advanced major reforms to Australia's employment services that are providing much more effective assistance for job seekers, and of course we know that engagement with those services is absolutely vital.

I am pleased to inform the House that these new rules are working to make sure that unemployed people are being genuine in engaging and being supported in their efforts to look for work. The new rules came into place in July last year and since that time over 200,000 participation payment suspensions have been applied. We have already seen positive early signs that this tougher approach is making a difference, with more unemployed Australians showing up to their appointments and meeting their requirements over the past six months.

This is about placing a set of expectations on job seekers. In return for the support they receive from our government, they should be making every effort to find a job by meeting their responsibilities, showing up at appointments and taking advantage of the support and investment which the government places in them. It is also about ensuring they become job ready. Just as employees are expected to call in advance and have a good reason for not showing up at work, so should the unemployed with their government appointments. Frankly, I do not believe it would be doing anyone a favour to simply turn a blind eye to those who have been unemployed, some for a very, very long time, and have become so disengaged with the system that they do not even turn up to appointments with the people seeking to assist them. It is not helping them, it is not helping their families or communities and it is not helping Australian taxpayers.

Ours is a government that is all about helping Australians to find and stay in jobs. All Australians on income support should have the opportunity to work, but with opportunity comes responsibility, and we will continue to apply these new rules to make sure that those who are receiving government support and also meeting their responsibilities. The government is also providing the necessary supports for job seekers to be able to find work. One new measure that is already achieving outstanding results is the Wage Connect subsidy, in which we will invest $95 million over the forward estimates. The Wage Connect subsidy, which provides payments of around $5,700—the equivalent of the average rate of Newstart allowance over 26 weeks—helps offset wage and training costs for the first six months of the person's employment.

The subsidy, which came into effect in January this year, has already seen more than 1,000 long-term unemployed Australians find work. Of course we know that with everyone of these 1,000, that is a real life which has been transformed with support from this initiative. I am really pleased to see the early success of this new initiative, which has delivered 1,131 job placements since 1 January.

Each of the people who have found a new job because of this subsidy has been unemployed for at least two years, but some of them have been unemployed for much, much longer. A couple of weeks ago I had the absolute privilege of meeting Ms Julie Penfold, one of the very first Australians to benefit from the Wage Connect subsidy. Julie had been unemployed for over 10 years. She now, with the assistance of the subsidy, has a full-time job at Hungry Jacks in Port Adelaide. She is enjoying her new role but she is also particularly excited because she will soon commence training to be the party planner for Hungry Jacks, Port Adelaide. As both a mother and grandmother, Julie has been very keen to be able to work with children as part of a new role.

Her story, one story out of more than 1,000 which already exist, shows us that having a job brings a sense of dignity, a sense of pride in being able to provide for yourself and your family and also a sense of connectedness with your community. We can put a value on the contribution Julie is now making to our economy by getting off welfare and into paying work, but we cannot put a value on that. The Wage Connect subsidy is going to help thousands of Australians like Julie to be able to enjoy the benefits of paid work. It will mean that Julie and others will be able to get the skills they need to start working and to keep working. I congratulate each and every one of these newly employed Australians, and indeed their employers, who have had their lives, the lives of their families and often their communities transformed by this government initiative. It can be no easy thing returning to the workforce after such a long, long time out, but it is that dedication and the courage of those individuals which we should be congratulating.

Finally, a significant grassroots initiative which I know that you are well aware of, Deputy Speaker Lyons, that our government commenced at the time of the global recession was a series of Keep Australia Working Expos. These were hosted in some of our hardest hit communities, where those expos served as what is in effect job supermarkets, bringing together employers, training agencies, government services and, of course, those who are looking for work.

It might sound like a very simple proposition but what was essentially a travelling jobs road show managed to deliver some simply outstanding results at a time when many Australians were doing it very tough. In fact, more than 15,500 Australians who were out of work were connected with a job opportunity at one of the 40 expos during this time. Our government knows a good idea when we see one and we decided that these expos had to continue in those communities that are doing it the toughest. I am pleased to update the House that we have already kicked off with the next phase of these Jobs and Skills Expos—and with great success.

Late last year I spent the afternoon at the expo in Burnie, chatting with residents and being introduced to local businesses by the forever-hardworking member for Braddon, Sid Sidebottom. At that expo we know that around 1,300 people attended and they took full advantage of the more than 500 job opportunities that were on offer that day. We know that at that one expo 766 resumes were submitted to the 60-plus exhibitors. We know that the average workforce participation rate in Burnie is well below the nation average, while their unemployment rate is well above, which is why it is one of government's priority employment areas. Among those who were job hunting in Burnie was one local resident, Daniel Fletcher, who I had the chance to speak to. Daniel had been out of work for a few months after he had suffered an injury which meant he could no longer work as a firefighter. Daniel told the local paper that he had been searching the papers and online regularly, but he said, 'When you don't hear from people, it's a bit of a downer.' But, with the Jobs and Skills Expo, employers and other agencies who could help Daniel were all in one place, and I am very pleased to report that he had a few leads on employment even before the end of the day.

Following on from this, and keeping with the Tasmanian flavour here, just last week I had the chance to join with the dedicated member for Bass—Mr Deputy Speaker at present—as I saw thousands of people turn up at the jobs expo in Launceston, hoping for the opportunity to see that the government was not walking away from them and that, even when we have relative prosperity compared to the rest of the developed world, we are standing shoulder to shoulder with those communities who continue to do it tough. That is what we were doing in Launceston on Friday, that is what we will continue to do, and I look forward to travelling around Australia to see the continued success of the expos and, importantly, to see more Australians being able to access the benefits of work as a result of them.

To conclude this morning, I am incredibly proud to be a part of a government whose commitment to keeping Australians in jobs and creating more jobs for the future is steadfast. I am also proud of our record of keeping people in work during the global recession, acting to protect manufacturing jobs today and overseeing the creation of more than 700,000 jobs since 2007. We are committed to jobs because we know the many benefits that come with work. We know that a job means more than collecting a fortnightly pay cheque. We know that a job gives people dignity, a sense of self, a sense of pride and, indeed, a sense of social connectedness, as well as providing the opportunity to contribute to Australia's economy. This bill, amongst other things, builds on the government's ongoing work to support more Australians into jobs, to make sure our unemployed are serious in their efforts as well and to build on our compliance system, which is an important part of our system. I commend the bill to the House.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

Thank you for running the 44th jobs expo in Launceston last week.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I talked in my speech in relation to the carbon pricing about my motivation for coming into this place and being elected. One of the things that really motivated me was a commitment to education, training and jobs. I am a bit of an old-fashioned Labor MP; I actually believe the best way to redistribute the wealth in this country is to give a person a job. In my previous life as a lawyer, I was always amazed at the pride, self-esteem and satisfaction a young person had on their face and in their whole countenance when I offered them a job and said, 'The job is yours.' I will never forget a young woman who was about 16 years of age; her name was Stephanie and she came to work for me straight out of school. She did not have much self-esteem; her whole countenance and visage were quite downcast. But, when I offered her the job, her face lit up in a smile. I can never forget that smile. That happened on dozens and dozens of occasions when, as senior partner in the law firm, I interviewed person after person, from the most senior lawyer to the most junior person that worked in running around messages and deliveries. I have to say that I always loved doing that job because I saw what impact it had not just on individuals but on their families as well.

I think we are at risk in this country of people falling through the cracks. When we have about 320,000 Australians aged between 15 and 24 not in education, training or employment, we face serious challenges. 'Learning or earning' is really the motivation of this government, and I think we cannot let people fall behind. It is important not just for their self-esteem but for their financial security and the security of their children and their children's children. Intergenerational poverty cannot continue. I live in an area which is by no means classified as a high socioeconomic area, the Ipswich and West Moreton region. We cannot have a situation where there are about 520,000 dependent children in jobless families throughout the country, at risk of terrible socioeconomic disadvantage. Role models and mentors are important. In the home, it is important that mum and/or dad are working, because then their children will see the benefit of that. I strongly believe that the emphasis that this government and this parliament are putting on jobs and participation and training is absolutely crucial. We as a government are committed to good economic management and strong employment growth. The fact is that unemployment in this country is low by international standards, at 5.2 per cent. In my region in Ipswich it is at 4.9 per cent.

To put that in its context, during recessions when Ipswich was a far more manufacturing oriented place than it is today, with the service industries today far larger in size, it was not uncommon for the unemployment rate in Ipswich to be twice the national average. Now it is at 4.9 per cent. That is an indication of the commitment of this government, of the Queensland state Labor government and of the Ipswich City Council to work in partnerships with the Ipswich Business Enterprise Centre—another federally funded body—and the chambers of commerce across the whole region, particularly the Ipswich Chamber of Commerce. Recently, I was at the Healthy Businesses Expo in Ipswich. It was about improving businesses and making sure that small business, which employs about five million people in this country, can provide jobs and opportunities.

You have to look at the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 in the context of all of the commitments that we are making. The minister mentioned the jobs expo. We had a jobs expo in Ipswich. Hundreds of young and old people got employment through that. I pay tribute to the state government and also to the private providers, big organisations as well as small, who came that day. I walked around with the then parliamentary secretary Jason Clare, the member for Blaxland, and went on the radio to talk about it on River 94.9. I saw the enthusiasm and connections that that job expo provided for people, with employers and employees getting together. We know that most businesses are families and most employees are treated well in small business. If I can be political for a moment, that is why Work Choices was so outrageous and egregious: it made good employers bad employers.

There are three main changes in this legislation. It should be seen as part of the broader reforms being made by this government through the Building Australia's Future Workforce package. Henceforth, I will talk about it as a package. We want to make sure that we get people to participate in the life of our community and in the workforce and business generally. There are changes being made to the eligibility criteria for youth allowance and Newstart allowance. There are changes being made to the incentives for single parents and there are parenting payment reforms being made. Services for job seekers will be streamlined.

Some of the changes will motivate people. I know that in this legislation there is to a certain extent a carrot and stick approach, which has been outlined in detail by previous speakers. Part of the carrot is the greater opportunity provided by the increase in the income-free part of youth allowance to $143 per fortnight and the increase in the work credit limit for job seekers to $3,500.

We acknowledge that there is a stick approach here as well. We make no apologies for what we are doing. We believe that it is in the best interests of everyone to participate in economic life because that is how they get to participate in community life. People who work are more likely to be engaged in community activities and to take a more communitarian approach to P&Cs, churches, RSLs, sporting clubs, rural fire brigades and the SES. People who work are more likely to participate in the community. They not only have a higher self-esteem but want to give back. It is not just about them or the economy; it is about the community in which they live. There are changes to the grandfathering provisions and in the welfare to work provisions. We are applying a lower taper in this legislation for all single principal carers. We know we are aligning daily penalty amounts for failing to attend a job interview with an employment services provider and the failure to attend an activity or job interview at one-tenth of a person's fortnightly participation payment. We know there are changes being made here, and we know we are making changes that some people will criticise us for—perhaps from the left—but we think it is important. We think it is important because we want to make sure that everyone participates in society. Changes to the single parent pension and parenting payment reforms align the rules for one parent with those of others. We think that makes for more equitable treatment of parents in similar circumstances.

We think it is important that people do have the capacity to earn more. I mentioned before the $143 a fortnight income free area. That is up from $62 a fortnight. It means people can keep more without their social security payments being impacted. I mentioned before the working credit limit. That has increased from $1,000 to $3,500. It is important to note that. The changes there will mean that all young people aged between 16 and 21 under similar circumstances will be treated the same way. I have two daughters, both at university, and they both work part-time. Most of their friends are in the workforce, and I know from talking to them what pride they have in the jobs they have and the study they are undertaking. Those who fall out of the system, who do not really engage with job service providers, who do not engage with employers or who do not engage with friends and relatives, fall through the cracks, and that is where we get miscreant behaviour; that is where we get situations where people engage in other activities, shall we say, which are not helpful to themselves and can be injurious to the economy as well as to the community.

We are putting $3 billion towards new skills and training programs over the next six years. One of those programs is Kickstart. I know about this from talking to people like David Handyside at Apprenticeships Queensland in my electorate of Ipswich. I have talked with apprentices there who have been picked up as a result of incentives like that. We have seen hundreds of young people in my area picked up in traditional trades as a result of the Kickstart program. Many times I have been to providers and talked with them and seen young people, and older people, undertaking jobs training. Alison McGrath also runs great jobs programs in my area. We have seen that through our investment in TAFE as well. This government has taken responsibility like no other government at a federal level to increase funding for TAFE. The $2 million that was given to Bremer TAFE, based in Ipswich, where there are 80,000 students, has made a huge difference.

This government puts its money where its mouth is. It actually invests in things. We think it is important to invest in institutions and in education, and we have done that. We have seen 900,000 computers rolled out across the country. For some inexplicable reason those opposite still oppose that program. We are putting in trade training centres. St Edmund's boys secondary education college in Ipswich and the two grammar schools—Ipswich Grammar School and Ipswich Girls Grammar School—are part of that process. There will be a new trade training centre at Ipswich State High School, where five schools will connect together for a trade training centre. There will be one in the eastern corridor as well. All this action is critical. I cannot understand why the Leader of the Opposition calls them glorified sheds with lathes in them. I cannot understand that when I go there and see how important these facilities are.

So we are helping; we are providing funds and putting investment into TAFE, into secondary and tertiary education, and into jobs training. There will be 130,000 more quality training places. I know this is important in my home state. A lot of the apprentices and students get picked up from Bremer TAFE and go off to the mining sector. Some of them stay in the local area. We are crying out for more employees, and I know it is important for industry in the area to get carpenters, electricians, plumbers and engineers. And not just people in the trades but in the professions as well. We want people to graduate and work locally. That is important in an electorate like mine, Blair, which is in regional and rural Queensland.

As I said, this government has invested billions of dollars because we think it is important. I also make the point that the funding we have provided for language, literacy and numeracy services is particularly important. I know that we work in partnership with the state governments in relation to those types of programs and others. I have seen the importance of English language training to upskilling migrants at Bremer TAFE. I remember speaking to a class there. Of the class of about 30 students, I think they had come from about 25 different countries. Their level of language skill was improving as they went through the course. I have come across students from that class who then got jobs. At mobile offices they have told me they met me at that class and how important that literacy, numeracy and language training was.

This is not some esoteric and airy-fairy thing we are doing. This is particularly important because it changes lives. It changes the lives of not just individuals but families. It changes families in a way that can take them from despair, despondency and deprivation and lift them up. This government is not about handouts, it is about help-ups. It is important to do that. These measures are important because they are part of the matrix, fabric and framework of what this government wants to do in job skills training and education. It is important that we recognise what we are doing as part of that fabric.

It is also important to acknowledge that this side of politics takes decisive action when times get tough, like the global financial crisis. We have hundreds of thousands of people in employment across this country now because of the steps we took during the global financial crisis. I have seen that in my community. I have seen that in BER projects. I have seen that with the 10,000 people who worked on the Ipswich Motorway upgrade. That upgrade was opposed during three elections by those opposite. I think it is important that we put this in the context of what we are doing. We are committed to making sure that everyone in this country gets a helping hand. We are committed to making sure that everyone who needs a job gets the opportunity to get one. We are committed to families. We are committed to the material improvement of families. (Time expired)

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I rise to speak against this bill. I have heard speeches from speaker after speaker from both of the old parties, that are in many respects indistinguishable. They justify this bill at its core on the basis of the importance of work. Let me say that I agree we should be doing everything we can to provide meaningful employment for people. In a moment I will tell you about what I am doing in my electorate of Melbourne to make that happen. But sometimes I think there is complete incomprehension by members of the old parties about what life is like for people in this country who, for whatever reason, are unable to find work or unable to find work that is meaningful and suitable for them.

Let us be clear about one thing: this bill is a budget cutback. It is not a measure to improve the job prospects of sole parents on income support. In my electorate of Melbourne there are more public housing dwellings than in any other electorate in the country. It is an electorate of significant wealth disparity: home to some quite wealthy people and home to some people who are doing it really tough. I spend a fair bit of time with people from right across the income spectrum. To live in public housing, by definition you are not doing well income-wise, you are in some of the lowest percentiles. I spend a fair bit of time talking to the people there. The one overwhelming message that I get from most of the people that I speak to, especially those who have come here from overseas on non-skilled migrant visas—and they make up a significant proportion of the people in public housing—is that they want work. They want meaningful work and they are doing everything they can to find it. What they find as they look for it is barrier after barrier.

Many people who have come here from overseas on refugee or family reunion visas have degrees or skills in their country of origin that are not recognised here. They try to get them recognised. They try to get some recognition of prior learning. They try to get work in the equivalent sector and people tell them, 'Unless you have got an Australian qualification or you have Australian work experience, we are not going to give it to you.' As a result we have in Melbourne someone from Somalia who used to pilot jumbo jets but is now driving taxis. At a time of shortage in the medical workforce, we have qualified doctors who are now driving taxis or working in takeaway joints because they cannot get their skills recognised. It is having flow-on effects through their families as well. The kids in public housing look at their parents and say, 'You worked hard to try to get a job. Now you are driving taxis. Why should I bother?' It is double-edged too because some them have actually got degrees from RMIT and other institutions in Melbourne and they are finding when they turn up to go for work that they are not even getting an interview because of the name on their application or perhaps because they turn up with a hijab or some other reason.

It is not just that group of people; there are many others as well whose health has suffered because of their income. There are people who have got significant dental problems. There is rightly a lot of attention on dental care and it is something that the Greens have sought to put on the national agenda. Dental care is not just a health issue; it is a social justice issue. I ask you, Mr Deputy Speaker: if you were an employer and someone turned up to a job with some of their teeth missing, would you look at that person and be less likely to give them a job? I reckon most employers would do that. These are the kinds of barriers that people are routinely facing every day.

Not only that but, as I will go into in a moment, many of the people who are going to be affected by this are caring for other people, some of whom have disabilities and their own barriers to full participation in school, education, training or work. It is these people that this bill, for the sake of a budget cutback, is turning its full ammunition on. It is shameful. If adopted, this bill would cut the social security payments of almost 100,000 sole parents and young people over the next four years. These are the people who deserve our support, who do not deserve to be attacked by this government. This measure delivers cuts of approximately $58 per week for sole parents with 12- to 15-year-old children.

Sole parent families on income support are already among the poorest in the country. An OECD report estimates that most parents on the maximum rate of sole parent payments are living in poverty. This bill will deepen their impoverishment without improving their job prospects. Plunging families deeper into poverty will not help them get into paid work. These parents are already finding it hard to secure paid work and around one in seven are also caring for a child with a disability. They may have a disability themselves or have limited qualifications.

The bill would also bring in cuts of $42 a week for young unemployed people aged 21 years. Twenty-one-year-old unemployed people would lose access to Newstart allowance from July this year and remain on the lower youth allowance for a year after their 21st birthday. Youth allowance for single young people living away from home is $201 a week and Newstart allowance is $243 a week, so it is a cut in payments of $42 per week for young unemployed people living away from home and independently of their parents. $243 is a miniscule amount and it is going to be cut by about 20 per cent. I ask whether anyone can realistically live on $243 a week, let alone $201 a week. During the course of the campaign and talking to people in my electorate of Melbourne, I met a bunch of students who are living together in a three-bedroom house in Collingwood—a brick house, completely unremarkable. It costs $540 a week to rent that place somewhere near where you are going to TAFE, where you are going to university—all these things that we hear from the government about the opportunities that they are providing. That is $190 per person for a bedroom in a three-bedroom house, and we are looking at youth allowance of $201 a week.

Under this bill, when a young person is living at home with their parents, a youth allowance rate of $133 per week applies. Where that person has not demonstrated financial independence from their parents, parental income tests will apply and this will further reduce payment for those young people. The main argument in favour of this measure is that the gap between lower student payments, youth allowance, Austudy payments and higher unemployment allowance—Newstart—discourages participation in education. This may be true but the solution is surely to increase the low level of student payments for people living independently of their parents, not to close off access to the higher unemployment payments. This bill would cut the maximum rate of income support to unemployed 21-year-olds regardless of their parents' income.

This is another example of governments failing to put people first. Governments in some sense used to be about people. It is clearly the case that if you are a powerful corporation you can expect to receive money from this government, but if you are someone doing it tough you can expect them to turn their back on you. Instead of increasing the mining tax to a sensible amount where we might have enough revenue to look after some of the people in our community who are doing it tough, we are now saying we would rather give a dollar to the big miners than to single parents. That is what this government is saying, and it is failing to put people first.

Overall, we should be increasing welfare payments, not cutting them. It is a measure of how bad this bill is that the government is being outflanked to the left by Judith Sloan and Ian Harper. Ian Harper, the economist hand-picked by former Prime Minister John Howard to set the minimum wage, has said the dole is too low. He warned that giving people so little to survive on is causing desperation and depression. Judith Sloan, hardly a friend of mine or someone with whom I would ever suggest I would agree with on economics, also argued at the tax summit last year that the dole was no longer adequate.

The ACTU has also called for unemployment benefits to be increased. In the face of this rather unusual coalition of voices, the government should be saying, 'Something's going on here with the people who are doing it toughest in this country. Let's have a look at it. Let's have a look at how we can help them out.' Instead, we are saying we would rather give a dollar to the big miners by forgoing a proper mining tax than pay a proper level of unemployment benefits. This bill should not be supported.

Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

I am not sure I have appeared in front of you, Mr Deputy Speaker Lyons, so congratulations. We are a government animated with ideas and policies for the future to strengthen our economy, to prepare ourselves for the challenges and opportunities ahead, to back our people and to build our workforce of tomorrow and beyond.

As part of Building Australia's Future Workforce package announced in the 2011 budget, the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 will amend the Social Security Act 1991 and Social Security Administration Act 1999 to give effect to important income support reforms. These reforms will provide greater incentives for young Australians to engage in education, training and employment, while encouraging parents to re-engage in the workforce.

We know that many Australians find it tough to make ends meet but we also know the best thing to ease cost-of-living pressures is to have a decent-paying job. Putting in a place a system that ensures fairness at work is therefore important, but we also need to do everything we can to encourage, prompt, stimulate and inspire people into work. The Gillard government wants to ensure that all Australians are able to share in the vast opportunities available in our strong economy. It is an economy that, despite some of the softness, is still one which many countries abroad are very envious of; an Australian economy that is expected to grow solidly and become even more prosperous, more fair, more skilled and more creative.

The reforms to income support payments for young people and parents represent a significant and continued investment by the Australian government in education skills and the future of Australia's workforce. This reform package will also provide greater incentives and support for young unemployed people to engage in education, training and employment. By delaying access to Newstart allowance from 1 July 2012, all eligible 21-year-olds will receive the same rate of youth allowance whether they are unemployed, in training or a student. This, along with the extension of the earn or learn participation requirements, will encourage study and help overcome structural incentives which currently exist to discourage employment.

Be in no doubt: we believe that structural disincentives to getting a job do need to be addressed. From 1 July 2012 there will be a more generous income-free area of $143 a fortnight, instead of the current $62, and a larger working credit limit of $3,500 compared with the current $1,000. We will reward young people who take up part-time work as a stepping stone to full-time employment. Young jobseekers receiving youth allowance will be able to earn more and still retain their payment.

This reform package also amends a number of payments and supplements to align the ages at which a person will cease to be qualified for youth disability supplement, sickness allowance and the long-term income support payment rate for students. These amendments will ensure that all young people aged 16 to 21 years of age who are under similar circumstances are in receipt of the same income support payment.

To provide greater incentives for parents of school age children to re-engage in the workforce, and to make eligibility more consistent for all parents, regardless of when they first claim parenting payment, the government is phasing out the grandparenting arrangements for parent payment recipients for a youngest child aged 12 to 15 years to enable those single principal carer parents who may qualify for Newstart allowance to see greater benefits from their participation and to earn up to $400 more per fortnight before losing their eligibility for payment.

A more generous income test will be introduced from 1 January 2013. Affected parenting payment recipients will have access to a range of additional assistance to ensure that they have the support they need to build their skills, to re-engage in the workforce and to provide their families with greater financial security and a positive future.

This reform package will also simplify the compliance framework. Announced as part of the Building Australia's Future Workforce package, daily penalty amounts for jobseekers failing to attend an interview with an employment services provider will be aligned with the penalty for failing to attend an activity or job interview, which is one-tenth of a person's fortnightly rate of participation payment. This change will ensure jobseekers are not penalised because a weekend happens to fall before they have the opportunity to re-engage with an employment services provider.

Finally, this reform package will amend the Indigenous Education (Targeted Assistance) Act 2000 to provide the appropriation to fund the 12-month extension of the student education trusts measure as part of the extension of the Cape York welfare reform trials announced by the Minister For Families, Housing, Community Services and Indigenous Affairs in 2011. Parents and caregivers in remote Indigenous communities in Far North Queensland will continue to be supported in saving for the costs of their children's education, a key element in Closing the Gap targets in Indigenous education.

Let me say again that we know that many Australians do find it really tough to make ends meet. We are a Labor government fighting for Labor values and looking out for ordinary, everyday people who pay the mortgage or the rent and the bills at the end of the month and do not have much left over. We do get it that things are not easy out there for many. But the best way to deal with cost-of-living pressures and to make ends meet is to have a decent-paying job. These reforms will help get more of our fellow citizens into work and into a job, and able to reach out to their future.

I thank members for their contributions as I commend the bill to the House.

Question agreed to.

Bill read a second time. Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.