House debates

Wednesday, 29 March 2017


Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017; Second Reading

6:09 pm

Photo of Jenny MacklinJenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | | Hansard source

I am speaking tonight on the Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017. The trial that is covered by this bill will give jobseekers an opportunity to gain short-term seasonal work without the risk of losing their Newstart payment or other social security benefits. It is a trial that Labor will support. Trial participants will be able to earn up to $5,000 in eligible seasonal employment, such as fruit or nut picking, in regional or remote Australia without this impacting their Centrelink payment. Currently, single Newstart recipients without children can earn up to $104 a fortnight and young jobseekers receiving Youth Allowance (Other) can earn $143 a fortnight before their payment is reduced. Newstart recipients can earn $1,036 a fortnight before their payment reduces to zero. Youth Allowance (Other) recipients can earn $648.50 a fortnight before their payment reduces to zero. The trial would allow Newstart and Youth Allowance (Other) recipients to participate in specified seasonal horticultural work, such as fruit picking, and earn up to $5,000 in a 12-month period before their payments begin to be reduced. The existing income test will begin to apply to trial participants once they have exceeded the $5,000 limit. The trial will be capped at 7,600 participants. It is due to start on 1 July this year and will last for a period of two years. The bill also introduces a seasonal work living away and travel allowance, which is an additional incentive for jobseekers to travel in order to participate in the trial. The allowance will be administered by the employment service provider and is valued at $300.

Labor certainly does support the importance of helping jobseekers to find work. That, of course, is why we will support the trial. We want to make sure that there are appropriate safeguards in place so that employers and employment service providers will not be able to misuse the program. We would like to see the government make sure that the program upholds labour standards so that employers cannot rip off participants or undercut their competitors. We support evidence based policy making, so we will certainly be carefully reviewing the results of the trial evaluation.

We are also acutely aware that unemployment currently sits at 5.9 per cent—the highest it has been for more than 12 months. What is most concerning is that the rate of unemployment in Australia today is higher than in the United States, the UK and New Zealand, and youth unemployment is now at 13.3 per cent. Youth unemployment remains stubbornly high, particularly in regional and remote parts of Australia. In total, more than 650,000 young people were unemployed or underemployed, and that is defined as having some work but wanting more hours. That was in February 2017. Underemployment, at 18 per cent of the youth labour force, is the highest in the 40 years since the survey began. Underemployment—and this is a very serious issue facing this country—now affects more young people than unemployment.

As the latest Brotherhood of St Laurence report Generation stalled notes:

In the past 15 years the average gap has widened between the actual working hours of young underemployed people and the hours they would like to work.

The report makes clear that the growing number of young people combining study with work does not explain the rise in underemployment. On the contrary, the rise in the percentage of casual and part-time jobs has mostly been among young workers who are not studying. So clearly, as policymakers, all of us need to consider new approaches that address the problems of unemployment and underemployment.

Not only do these high rates of youth unemployment and underemployment create significant risks for the young people affected but Australia's economic future is also put at risk. We are all aware that as a nation we are ageing. Youth unemployment risks more than just the livelihoods of young people who cannot find work; it also undermines the income tax base we will need as a nation to support our ageing population. Labor believes that, as a nation, we need a renewed focus on supporting young people to find work and reach their full potential, for both the individuals concerned and our country to reach their full potential.

It is very easy in a debate like this to get caught up in the numbers and the figures, but, of course, we all have to remember that we are talking about young people—real people. I just want to give one example. Nineteen-year-old casual worker James Bowen was featured in a recent BuzzFeed article. He said he has been paying about two-thirds of his weekly income on rent. James currently works 10 to 20 hours a week in retail on the Gold Coast but is desperately trying to find a full-time job. He says he applies for about 30 jobs a month. It is not unusual for him to fill out a dozen applications a day. He says he rarely gets calls back from businesses after he has applied for jobs. He receives about $23 a fortnight from Centrelink, which covers the cost of a few meals. He is considering moving to Brisbane to look for work, but he has been put off by the cost of housing. I just want to say to those opposite that they really need to stop blaming people like James—young Australians who want to work but who cannot find work. They cannot find jobs that simply do not exist. Sadly, James' story is becoming increasingly common.

I hosted a jobs and skills forum in my own electorate just last week in West Heidelberg, and this issue of youth unemployment and underemployment was a particular focus. People at the forum particularly wanted to discuss better ways to help young people transition from school into further study or work. I am very sorry to say that, unfortunately, those opposite really have not been doing enough to make a difference for these young people's lives.

Of course, we all remember that back in 2014 the government axed the terrific Youth Connections program. This was a highly successful program that helped vulnerable young people to transition through education into work. Intensive, case-managed support helped these vulnerable youngsters become job ready. Unfortunately, the Abbott government axed it—they just got rid of it. In that same 2014 budget, the Abbott government tried to introduce a six-month wait for Newstart for young jobseekers under the age of 30. This became probably the most reviled measure from the 2014 budget—the government telling young jobseekers that they would have absolutely nothing to live on for six months.

To this day, this government is still trying to introduce a five-week wait for young people under the age of 25. I say to the government again: how on earth do you think young people are going to live with nothing to live on for five weeks? But that is what this government still wants to pursue through this parliament. Then, of course, there is the other cut to young people that the Treasurer has recently told us he is still going to pursue. He wants to push young people aged between 22 and 24 off Newstart onto the lower youth allowance. This is a cut of around $48 a week—almost $2½ thousand a year. That is what this government wants to take out of the pockets of young unemployed people. It was good that the government could not get that cut through the parliament last week, but the Treasurer has made it clear he is to going to pursue it. These cuts are still the policy of the Turnbull government.

We know the government also still wants to deregulate Australian universities, making it harder for young people to afford to go to university. Fees for university of up to $100,000 would leave our young people trying to get a higher education with enormous debts. We have had attack after attack on young people from this Liberal government. Of course, most recently we have seen the Prime Minister's refusal to do anything about protecting weekend penalty rates. We have a Prime Minister who is happy to see a pay cut of up to $77 a week for retail and hospitality workers—people who are working in pharmacies, chemists. Many of the people facing a cut to their penalty rates are young Australians—young people who cannot do without their penalty rates. They really depend on their penalty rates to get by. The Prime Minister has made it clear that he does not care at all about those young people. He is not going to do anything to stop the cuts in penalty rates.

We on this side know that it is incredibly difficult for people who are trying to manage on Newstart or youth allowance. We have even had the Business Council of Australia come out and say that the current level of Newstart is too low, but all this government does, through whatever method it has, is continue to say that all income support recipients are either criminals or rorters. The government wants to do anything it can to cut the incomes that these people are trying to survive on. These are very, very serious cuts that the government is still saying is its policy.

One of the most extraordinary contradictions is that, right this minute, we have had the government vote to freeze the income-free areas for jobseekers. So a few minutes ago everyone in the Liberal and National parties voted to freeze the income-free areas for jobseekers. They just voted for that. They did a deal with Independent senators to push through these cuts to jobseekers, which mean that with each year they can earn less and less in real terms before no longer qualify to receive their payment—Newstart or youth allowance, for example. It is a cut to the same income-free area that this trial would actually relax for participants. Talk about not knowing what they are doing! This is a really important point. On the one hand the government is saying to unemployed people that you are going to make it harder for them to earn a dollar, and then in this bill you say that you are going to give them some relief. The evidence is in the government's own figures. The changes that would freeze the income-free area would actually see 264,500 Australians on the lowest incomes—the absolutely lowest incomes—have their thresholds being frozen. The thresholds are already incredibly low.

That is what everyone over there just voted for. Just to give one example, the parenting payment threshold after which the payment is reduced is $188 a fortnight. Everyone over there just voted to freeze that. Then they come in here a minute later and say they want to put forward this trial that proposes to relax the same income-free area for participants in the trial. We support the trial and the improvements to the income-free area. But, honestly, you can hardly expect a pat on the back for attempting this trial while at the same time you are freezing the income-free areas for these very low-income and vulnerable Australians.

So while we support the trial today we certainly will not be forgetting the government's record of targeting young Australians. This is a small trial. It is worthy of support and we will support it today. For that reason I commend the bill to the House.

6:24 pm

Photo of Brian MitchellBrian Mitchell (Lyons, Australian Labor Party) Share this | | Hansard source

I rise to support the Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill. But the government's farcical bungling of its own backpacker tax will go down in parliamentary history as one of the worst own goals ever. There was a video doing the rounds on the internet recently of a goalie who bounced the ball into play, but he bounced it so badly that it dribbled into the back of his own net. Well, that video sums up the backpacker tax debate—a bad bounce, a bit of dribble, and an own goal.

This government introduced a damaging tax at 32.5 per cent that had fruit growers in my electorate howling and backpackers scrambling for the departure lounge. Then the government cut the rate to 19 per cent, without doing any research about whether the lower rate would be any more competitive, before reluctantly settling on 15 per cent, but only after getting its arm twisted by Labor and the Senate crossbench. And the performance of the Deputy Prime Minister, the agriculture minister, throughout that period? Well, that was something to behold. The vision of the supposed farmers' friend vigorously supporting a taxation regime that hurts farmers will not be forgotten in a hurry. The Deputy Prime Minister and his Nationals colleagues failed to stand up for farmers before the election, when the government passed the 32.5 per cent backpackers tax, and they stayed quiet in all the months afterwards. It was only after farmers and Labor pressured the government that action was taken.

But, out of that ridiculous period I am pleased to see some semblance of common sense emerging. Members may recall that early in the backpackers debate, on 22 September last year to be precise, I was interviewed by the ABC's The World Today and I suggested that one solution to the issue of farm labour shortages could be to offer a Centrelink amnesty to jobseekers. Essentially, I argued that Newstart recipients and pensioners should be able to pick fruit and not have the earnings assessed by Centrelink. My idea was that such an approach would act as an incentive for Newstart recipients to seek work that might otherwise seem unattractive because of the pay or the travel or the inconvenience, and it would also be administratively simple, with Centrelink simply ignoring earnings from such an endeavour. The thinking behind the proposal was simple. I wanted to get people onto farms as quickly as possible to pick the fruit.

I opposed the government's backpacker tax. I opposed it at 32.5 per cent. I opposed it at 19 per cent. I opposed it at 15 per cent. I reluctantly supported 12 per cent but my preference has always been to abolish it. I opposed the backpackers tax not because I have a great love for backpackers, though I am sure most of them are lovely young people, but because it is bad for Tasmanian farmers. It makes it harder for them to get labour on their farms to get their fruit picked. My sole motivation throughout this entire sorry debate has been to ensure we have people on farms picking fruit when it is at optimum ripeness so that farmers can get top dollar for it on the market.

To date, Australians have generally demonstrated a reluctance to take up fruit picking. It is long, hard work, the pay is not fantastic, it is often isolated and it is seasonal. For people living in towns it can be expensive, cumbersome and disruptive to travel to a farm and back and then have to deal with Centrelink, and then see most of your earnings disappear. For many it has simply been easier not to do it and to instead seek more stable and secure ongoing employment. For that reason, fruit picking has been ideal for backpackers, who are usually fit and young and regard the job as a rite of passage and part of their holiday experience. It also gives them a pathway to extended working holiday visa benefits.

I am happy to see backpackers continue to work on Tasmanian farms but I would dearly love to see jobs taken up by Tasmanians whenever possible. I saw my proposal as a way to achieve that. Unfortunately, the idea was not taken up at the time by the government, which means we lost the benefit of getting Australians onto farms this season. In recent months, however, I am pleased to see the government has opened itself to the idea of encouraging more Australian labour onto Australian farms, albeit reluctantly and only after pressure was exerted.

The amendment before us is not as simple a solution as I had proposed. In fact, it is a red tape picnic. With so many rules, conditions and limitations it will keep bureaucrats busy for hours to work out eligibility. But, it is a start.

As part of a trial to get young Australians working on farms, eligible job seekers will now be able to earn $5,000 a year in 2017-18 and again in 2018-19, with farm earnings not affecting their Newstart or youth allowance. There is a bunch of eligibility criteria, but the guts of it is that someone can, essentially, work on an approved farm for a limited amount of time and keep the cash. It is a sensible proposal that I am happy to support, and that I am happy my party is supporting. Assuming full-time hours, someone earning the minimum adult wage of $17.70 an hour will reach their $5,000 limit in 7½ weeks. Fruit picking seasons generally last longer than seven weeks, so this trial program, which is capped at 7,600 participants, could well fall short. Personally, I would like to see it go further. I know there are many people on the age pension, for example, who would not mind earning a little extra pocket money. How fantastic would it be to see our seniors picking fruit, without the government picking their pockets? Fruit gets picked, older Australians are socially connected and get some fresh air and exercise, and we expand the available labour pool on our farms. It is a win-win all round.

This amendment, as it stands, is welcomed by the industry. I have spoken with Phil Pyke of Fruit Growers Tasmania, and he is genuinely excited about the opportunity this presents. As members know, the fruit and produce of my electorate is some of the best in the world, and this measure will help ensure it gets to market, rather than rot on the vine or the tree. Just today The Advocate newspaper in my state reported on the situation facing Sassafras apple farmer John Brown. Mr Brown told the paper he has thousands of bins worth of apples to pick but nobody to do the work, and he stands to lose hundreds of thousands of dollars. Mr Brown says a combination of the backpacker tax fiasco and other sectors employing his usual labour pool was the cause of his shortage. Mr Pyke from Fruit Growers Tasmania told The Advocate there is a shortage of farm labour across Tasmania, especially on apple farms. He says:

We haven't seen it get to this level before.

Mr Brown described the backpacker tax as 'a disgrace', and I agree with him. He is pleased with this amendment but he says he needs fruit pickers now, not after 1 July:

We are desperate. We're about 60 pickers short and need more pickers in the next few days

It is a shame that this government took so long to act, and that it did not listen to me back in September when I first raised the idea of a Centrelink amnesty for jobseekers. If this government had acted sooner, we would have people on farms right now, picking fruit.

It is my sincere hope that this two-year trial will encourage unemployed people, and especially young unemployed people, in places like Derwent Valley, Brighton and the Central Highlands onto local farms. Workforce planning undertaken by councils in my electorate shows that over the next three years there will be a 36 per cent increase in agriculture jobs in those areas alone. The more local people we can get onto local farms now, the better placed they will be to take up the full-time jobs that may eventuate over the next three years.

We know times are tough and that it is incredibly difficult to live on Newstart or youth allowance. Australians are choosing not to work on farms not because they are lazy, but because it is often more expensive to take the job than not. It can be difficult, in fact nigh on impossible, for people on these income support payments to afford the petrol that it would take every day to get to and from work on what can be isolated farms. There are many in this country who acknowledge the rate of Newstart and youth allowance is too low. Indeed, even the bleeding hearts at that well known hotbed of communism, the Business Council of Australia, have said Newstart is so low it is an impediment to jobseeking.

Unlike the government, Labor is committed to reviewing the level of Newstart. These amendments give people on Newstart a glimpse of what life can be like on a working wage. The $5,000 annual limit equates to just under an extra $100 in weekly income when averaged over the year. I doubt anyone will be booking air travel to Paris or buying shares, but it is nothing to sneeze at. If seven weeks of working on a farm gives someone the positive encouragement they need to get out of bed and groom themselves for a day at work, and then a little more incentive to find ongoing work, then I reckon it is money well spent. And I reckon it is a safe bet that most of that extra money will be spent where it can do the most good—in local shops.

6:35 pm

Photo of Rebekha SharkieRebekha Sharkie (Mayo, Nick Xenophon Team) Share this | | Hansard source

I was part of the Nick Xenophon Team negotiating on the working-holiday maker reform package, and we were able to secure this excellent initiative, which will see more Australians working in horticulture and more Australians in the labour force. The Nick Xenophon Team comes to this parliament with the intention of ensuring that, wherever possible, we will seek to improve government policy and legislation. We are not obstructionist. We are determined to work constructively with government, and this bill is a shining example of that intention.

This legislation relates to a two-year trial which will allow more than 7,000 Australian jobseekers to do seasonal work and earn up to $5,000 without affecting income support payments. This is a major breakthrough. Until now, there was a disincentive for unemployed Australians to engage in seasonal work, as it meant that they would immediately lose their support payments. For growers in my electorate, this trial means that they will have better access to a wider and deeper pool of labour and will be supported by jobactive providers. This will give more jobs to more Australians—Australians on Newstart and youth allowance will be targeted, and they will be targeted into temporary work.

This bill will have a real and positive impact on unemployed Australians. If you are only offered a short period of work, particularly if you are a long-term unemployed person, you would be particularly anxious that you would lose you income support payments. If you consider that if you lost your income support payments you would have to deal with Centrelink to get those supports reinstated—we all know what an arduous process that is—it is clear that job seekers are being deterred from entering seasonal fruit picking work.

This bill seeks to reduce those barriers to entering into short term employment. Under the trial, unemployed job seekers who travel more than 120 kilometres to a farm will receive a $300 living away from home allowance on top of the wage for working on a farm, on top of their Centrelink payments. This is crucial to attracting metropolitan-based job seekers to the regions and attracting regional-based people to harvest in the regions. Jobactive providers will also be eligible for incentives under this trial, receiving up to $100 per participant per week. Again, this is a crucial measure to ensure that employment providers view seasonal work as a viable option to place people and offer them an incentive to work on a farm.

It is well known that there is high unemployment in the regions and this continues to grow. This is coupled with the fact that for too long successive governments have focused on the major cities and turned their back on regional and rural Australia. Schemes such as this one will encourage unemployed people from regional and metropolitan areas to work in areas they might not have considered before. I believe many will find they like the work they do in this trial and many will possibly stay on in the agricultural and horticultural sector. Certainly farmers tell me there are many jobs on farms after harvest, even with pathways to management. This makes this bill and this trial incredibly exciting.

My community has been faced with robocalls, television and radio ads and Facebook posts in the last 48 hours, run by the CFMEU, saying that I was not supportive of Australian jobs and that I was seeking for foreign workers taking Australian jobs. This is a lie, and I want to use the debate on this bill to confirm that. Here is a perfect example of the work that the Nick Xenophon Team is doing, in conjunction with government, to promote Australian jobs. Seasonal work is predominantly undertaken by international backpackers and migrants. While it has been used as a tool by backpackers as a means to make some money, and is often an opportunity to meet the requirements to stay another year in Australia, in my discussions with local growers it is clear that they are desperate for more workers in the agricultural sector, particularly during peak periods. All of those who undertake seasonal work will be trained in the tasks they are performing. For overseas workers, this can present issues. Growers have spoken to me about the significant language barriers they face in many instances when they try to communicate with their workers. There is also an issue that overseas workers will work for one season and then leave. This means training must be performed over and over again, at a significant cost to the farmer. If Australians are engaged in seasonal work there is a higher chance that they will return the following season. This means less training costs. It also gives the worker an opportunity to grow and develop new skills.

I want to address claims made by the CFMEU and the ACTU that I do not stand up for Australian jobs. I want to let the parliament and people of Australia know that these claims are blatant lies and fearmongering. My office has been inundated with constituents who are upset and angry that they have been robocalled by these unions. They are not upset and angry with me—the majority of callers are quite satisfied with the policies of my party, because they understand the difference between facts and lies. I say to the CFMEU, save your union members' hard-earned dues. Do not waste their money. Where were these robocalls when we had large amounts of 457 visa approvals? Let's look at this. Between 2007 and 2012-13, 457 visa approvals increased from 87,000 to 126,000. When was that? During the last Labor Government's years.

It is hypocritical for the finger to be pointed at the Nick Xenophon Team, when time and again we have stood up for Australian jobs and Australian families. I urge the Government to protect Australians from these unsolicited robocalls. Such calls should be required to clearly provide, at the beginning a message, information indicating where the call is coming from and who is funding the call. The receiver should then have the option to continue the call or terminate the call.

In relation to 457 visas, I want to see greater scrutiny in employer testing of the market. I want to see a tightening of the skilled occupation list and, importantly, I want to see an intensive focus on training Australians in occupations on those lists. We must put our effort into supporting the building of our own workforce in areas of need, particularly in regional Australia. With increasing unemployment, especially youth unemployment, we should need very few, if any, 457 visa holders in our country. Once again, we have shown initiative and willingness to negotiate with the government to achieve an outcome that will be significantly better for up to 7,600 unemployed Australians who are recipients of Newstart and youth allowance. Hundreds of growers of Australian produce will benefit from this. Importantly, this trial will be reviewed, and I believe the program will show an economic benefit across the regions and will be extended to other industries in regional Australia. I also urge the government to ensure that funding is set aside for this program to be promoted. Promotion needs to be undertaken with industry and business groups as well as economic development offices in regional councils and jobactive providers.

In summary, I thank the government for its negotiations in good faith on this trial. I hope that everything possible is done to promote it and that we see it blossom into a fully-fledged, permanent incentives scheme. Unemployed Australians will benefit. Australian farmers will benefit. Regional Australia will benefit. I commend this bill to the House.

6:43 pm

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

I thank all the members for their contributions during the second reading debate state of this bill. By way of summation of the second reading debate, I would note that the bill introduces a measure that was announced in the 2016-17 Mid-Year Economic and Fiscal Outlook, which will provide a two-year trial of incentives aimed at increasingly the number of eligible jobseekers who undertake horticultural seasonal work such as fruit picking. The measure responds to valid concerns about the ability of the Australian horticultural industry to attract significant numbers of seasonal workers by introducing three incentives aimed at increasing the number of job seekers who undertake horticultural seasonal work. Incentives will commence as a trial from 1 July 2017 for two years, and will be capped at 7,600 participants. There are three incentives. Under the first, Newstart and youth allowance recipients who have been receiving those payments continually for at least three months will have access to a seasonal horticultural work income exemption. Under this exemption, eligible Newstart and youth allowance recipients who participate in the trial will be able to earn $5,000 a year for eligible seasonal work without it being assessed under the social security income test.

Eligible jobseekers will be able to access the $5,000 income test incentive in each of the 2017-18 and 2018-19 financial years. The concession will apply only to earnings from specified horticultural seasonal work, and eligible employment for this measure will be seasonal, short-term employment in the horticulture industry picking and packing fruit, nuts or other crops in rural and regional Australia. Qualification rules will be relaxed for this group so that they continue to qualify for Newstart and youth allowance, other, while undertaking eligible horticultural seasonal work. The amendments in the bill relate mainly to this incentive. This income test concession will provide a strong incentive for jobseekers to participate in the trial and undertake horticultural seasonal work and a practical opportunity to build work experience and skills.

The second incentive is a seasonal work living-away and travel allowance of up to $300 a year for eligible jobseekers who undertake horticultural seasonal work more than 120 kilometres from their home. This payment removes a disincentive to undertake seasonal work by recognising the additional expense that may be incurred by jobseekers travelling significant distances from their principal place of residence to take up an eligible seasonal job. The bill includes a provision so that seasonal work living-away and travel allowance would not be assessed as income for income support purposes. The third incentive is for employment providers, who will be eligible for a provider seasonal work incentive payment of $100 per week for up to six weeks a year for each eligible jobseeker they place with eligible farmers.

These three incentives are expected to cost $27½ million over the forward estimates. This amount includes funding for the Department of Social Services and the Department of Employment to evaluate the effectiveness of these incentives during the two-year trial period. The incentives for jobseekers to undertake seasonal work will help in responding to the concerns of the Australian horticulture industry about their ability to attract sufficient numbers of seasonal workers. They are aimed at helping to increase the number of unemployed Australians who participate in seasonal work and therefore the number of seasonal workers available to work on Australian farms and orchards. The incentives will also provide jobseekers with a practical opportunity to enter the workforce and to build work experience and skills. They are certainly in the best interests of the Australian horticulture industry and jobseekers, and I support the parliament for the passing of these measures.

Photo of Steve GeorganasSteve Georganas (Hindmarsh, Australian Labor Party) Share this | | Hansard source

There being no further speakers, I will now put the question that the bill be read a second time.

Question agreed to.

Bill read a second time.