Wednesday, 12 February 2020
Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020; Second Reading
I rise to speak on the Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020. The amendment that has been circulated in my name reads:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes the Government's:
(1) stubborn defence for three years of its failed Robodebt program which frightened thousands of innocent Australians with false or inflated debts; and
(2) repeated attempts to cut the pension and social security".
While Labor support this bill, we are seriously concerned about the government's ability to implement these changes. We will be examining the detail very closely in an associated Senate inquiry. We are putting the government on notice to get the implementation of these changes right.
The bill will change the way income is reported to Centrelink so that it is reported when a person is paid, not when it is earned. It will improve the accuracy of income reporting by removing the requirement for people to estimate their total pay, based on the number of hours worked. In most instances, people will receive their pay slip before reporting their income. The shift to reporting income when it is paid will more closely align the receipt of employment income with the timing of Centrelink payments. It will make it easier for people to manage their budget.
The bill will also enable Centrelink to use Single Touch Payroll information from the Australian Taxation Office to prefill income for Centrelink reporting. It will not automate reporting. Individuals will still be required to check and certify income that is prefilled using the Single Touch Payroll system.
Improving the accuracy of income reporting will reduce the incidence of overpayment and underpayment. For many, the new reporting system will be more straightforward than the existing reporting arrangements. Many will find the prefilling of Single Touch Payroll data convenient when it commences. I note that ACOSS and other stakeholders support the changes in the bill because, if properly implemented, it could make interacting with Centrelink easier for people on social security.
The bill does not make any changes to payment rates, thresholds or eligibility criteria for payments, which is very important. The savings associated with the bill are related to the projected improvements in reporting accuracy only.
The government must get this right. Labor is very concerned that the government runs a very high risk of not being able to implement these changes, just as it could not implement the robodebt properly and has run down Centrelink services to the point where pensioners are waiting months to get the pension. The last thing we want to see is people having their payment cut off and being saddled with unfair debts because Centrelink failed to manage this properly. If people have questions, they should not be left waiting on the phone for hours. It is absolutely critical that the government has the right systems and resources in place to make this work.
The reality is that the government's track record on managing our social safety net has been pretty horrendous. The government must not let these new reporting arrangements go the way of robodebt. This is a government that has pursued thousands of innocent Australians with false or inflated debts for three long and extremely anxious and fearful years. For three fearful years, the government has stubbornly tried to defend this shambolic, cruel and illegal robodebt system. This is the government that has sought to make claiming or applying for income support so challenging, so difficult, so painful and so frightening, in the hope that vulnerable Australians will just give up. It is also the government that has axed thousands of Centrelink jobs and outsourced them to labour hire. Over that time, pension processing times and call wait times have skyrocketed. We have seen this clearly, particularly through the estimates process.
Older Australians who have done the right thing by this country—who have worked all of their life and contributed by paying taxes—have been forced by this very government to wait months for their pensions, spending hours on the phone just to speak to someone at Centrelink. It is little wonder that the community is so anxious about the government's ability to implement these new reporting arrangements. Pensioners are not fools. They will not be fooled by the government cutting the pension. In every single budget, the government has tried to cut the age pension. They have tried to cut the pension and increase the pension age to 70 in every single budget, including the three budgets for which the current Prime Minister had the job of Treasurer.
In the 2014 budget—and I know that sounds like a long time ago, but it still has effects—they tried to cut pension indexation, a cut that would have meant pensioners would be forced to live on $80 a week less within 10 years. This unfair cut would have ripped $23 billion from the pocket of every single pensioner in Australia. In the 2014 budget, the present government cut $1 billion from pensioner concessions—support designed to help pensioners with the cost of living. In the 2014 budget, this government also axed the $900 seniors supplement to self-funded retirees receiving the Commonwealth seniors health card. Also in the 2014 budget, this government tried to reset deeming rate thresholds, a cut that would have made 500,000 part-pensioners much worse off.
In 2015 this government did a deal with the Greens to cut the pension received by around 370 pensioners by as much as $12,000 a year by changing the pension assets test. In the 2016 budget, this government tried to cut the pension to around 190 pensioners as part of a plan to limit overseas travel for pensioners to six weeks. In the 2016 budget, they also tried to cut the pension to over 1.5 million Australians by scrapping the energy supplement for new pensioners. The government's own figures show this would have left over 563,000 Australians who are currently receiving a pension or allowance worse off. Over 10 years, in excess of 1.5 million pensioners would have been worse off. Those are just the plain facts.
But, on top of this, the government also spent five years trying to increase the pension age to 70. It took five consecutive rate cuts before they even adjusted the deeming rates—and then only after a concerted campaign from seniors groups and from Labor. The coalition government still has cuts to pensions in the budget. They want to completely take away the pension supplement from pensioners who go overseas for more than six weeks. This will see around $120 million ripped from the pockets of pensioners. This government also still wants to make pensioners born overseas wait longer before qualifying for the age pension, increasing the residency requirements from 10 to 15 years. There is no logic to any of this. There is no reason except to save money, on the backs of those people that have spent their entire life contributing to the Australian community and to society.
Labor has fought these cuts tooth and nail. This is the only reason the Liberals and the Nationals have flip-flopped and given in. No-one spends five years, including three as Treasurer, trying to cut the pension and increase the pension age to 70 unless it is what they believe really should happen. This is why pensioners know that this Prime Minister cannot be trusted.
The government also has a bill before the parliament to cut Newstart by doubling the liquid assets waiting period—once again, no reason and no logic, except a money grab. This government wants to make vulnerable Australians who have been made redundant wait for up to six months before they can access Newstart. There is no rationale, as I said, for increasing the liquid assets waiting period for people who lose their job or are made redundant. Once again, these are people who have worked hard all their lives and contributed always. As I said, it is nothing short of a cash grab, taking money out of the pockets of workers at the very time when their savings matter the most.
The existing waiting period of up to 13 weeks for people with modest savings is long enough. These cuts to Newstart will make you draw down on everything you've got before you can access support. This will push vulnerable Australians to the edge of poverty. They will have nothing left for emergencies, nothing left if their car breaks down, nothing left if their whitegoods need replacing, nothing left if a family member becomes ill. A waiting period that is too long or a liquid asset threshold that is too high is counterproductive. It doesn't help people get back on their feet. It pushes people towards desperation. For people who lose their jobs or are made redundant, having a financial buffer is incredibly important. It means being able to support yourself while retraining. It means being able to keep the car on the road so you can look for work and keep paying the rent or mortgage. If a person's circumstances spiral because they run out of savings, if they lose their home or their car, that just makes it harder for them to get back into employment.
The reality is that these cuts will disproportionately impact Australians aged 45 or over who have recently been made redundant. We all know—this is important, and I hope the minister in the chair is listening—that half of all Newstart recipients are aged 45 or older. Over the past six years, under the Liberal government, the number of Newstart recipients aged 45 or older has surged to 60,000, and a quarter of Newstart recipients are aged 55 or older. The psychological impact is enormous. These are people who have worked all their lives. They've worked, they've earned, they've contributed to taxes, and they find themselves in these circumstances. And now they have been made redundant in their hour of need.
With this incredibly cruel measure, the government wants to tell these people to wait longer. Not only will they have to wait up to six months but also we know that Australians aged 45 or older have the most difficulty re-entering the workforce. We know that it could be far longer than six months before they can re-enter the workforce, because, beyond money, they will need time to retrain, to upskill, to find another job—not an easy thing to do when you're 55. There are three Newstart recipients for every job vacancy. Two million Australians are either looking for work or looking for more work. And 130,000 Newstart recipients have a job but don't earn enough money or receive enough hours of work to get off the payment. This government has sought to demonise Australians who have done the right thing but have found themselves in unfortunate circumstances. This government refuses to accept the reality facing these Australians.
In conclusion, it is for these reasons that Australians simply do not trust the government to get social security right. These are Australians who have worked all of their lives and have done the right thing by contributing taxes all of their working lives and have then found themselves out of a job. They should not have to worry about how they will continue to keep a roof over their heads, food on the table and the bills paid. They just should not. They should not have to worry about waiting longer to access support. They should not have to worry about waiting months for their pensions to be processed. They should not have to worry about waiting for hours on the phone to speak to someone in Centrelink and they certainly should not have to worry about false or inflated debts being pursued against them. As I indicated at the beginning of my speech, there is an amendment to this motion that has been circulated in my name. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes the Government's:
(1) stubborn defence for three years of its failed Robodebt program which frightened thousands of innocent Australians with false or inflated debts; and
(2) repeated attempts to cut the pension and social security".
I rise to speak on this very important piece of legislation, the Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020, and to support and commend the bill to the House. First, after the contribution of the previous Labor speaker I think it's very important to point out to members of the House that this bill contains no changes in the rates of payments that people are receiving. In fact, this bill is simply about accuracy in ensuring that people who are receiving assistance from the Commonwealth are getting the right amount each time that they are entitled to under Australia's safety net.
I'd also take umbrage to the previous speaker's comments regarding pensioners, because, as members of this House will remember, this government is the best friend that pensioners have had. That's for a few reasons. Firstly, it was this government that stopped Labor's insidious retiree tax. When the previous Labor speaker talks about supporting retirees, imagine what would have happened if the Labor members opposite had been successful at the election last May and had had the opportunity to implement their insidious retiree tax. It would have cut into retirees' savings at the time when they most needed it. It would have changed the goalposts at a time when they had made investment decisions for their retirement, to look after themselves. They have worked all their lives and have made investment decisions and it would have been the Labor members opposite who would have changed the goalposts on them and ripped that out from underneath them. Imagine if the Labor members opposite had had the opportunity to implement $387 billion of new taxes. Imagine what it would have done to pensioners if, instead of the Morrison/McCormack government reducing power prices and their costs of living, they had the Labor members opposite in government putting up power prices, because they were trying to meet targets for carbon emissions that they didn't know how to cost and they simply couldn't meet. Once again, it is this government that is supporting pensioners more than ever before.
We're also supporting those seeking work. You would have taken from the comments of the previous Labor speaker that they are the only ones out there supporting those who are seeking work. It's this government that's been more successful than any government before it, certainly more successful than the previous Labor government, in helping people seeking work in the way they need it most, which is to find a job. The proportion of working-age Australians depending on welfare has fallen to 13.5 per cent, the lowest level in more than 30 years. For that I really want to commend Minister Ruston and the fantastic work that she and her team are doing.
This bill is important because it demonstrates good government. That is what this administration is all about. Good government is not simply set and forget. It is not simply governing for today, but governing for the future. Good government constantly reviews its processes to see how they can be improved and streamlined and how we can achieve the best possible outcomes for Australians. This bill does exactly that. On this side of the House we are focused on growing the economy, getting more people into work and delivering well-targeted social security funding through a strong budget—social security that acts as a safety net for some of our most vulnerable Australians.
The Morrison government recognises the need for a fair and sustainable welfare system that helps Australians get the support they need when they need it. However, the current system can be complex for recipients when it comes to reporting. Currently recipients must undertake a calculation to report their or their partner's earnings, based on the number of shifts they have worked and the hourly rate, rather than the amount they were actually paid. Under these changes, more than 1.2 million welfare recipients who earn an income each year will be able to report their fortnightly earnings to Centrelink as it appears on their pay slip. This makes for a much easier user experience and will ensure that recipients receive the right amount.
People who work shift work or casual work have found difficulties in reporting the pay they will receive over a proceeding period. Currently the process can be quite difficult for those recipients who were genuinely just trying to access the correct payments. The changes outlined in this bill take the manual component out of the reporting process. It takes the guess work out of the process for recipients, making it easier and less stressful for them to receive the correct payments.
We believe that all Australians have an expectation, as they quite rightly should, that the welfare system should be there to provide financial support to those who are eligible, no more and no less. This change is timely, particularly off the back of new Single Touch Payroll technology. As technology advances, so do we. Through Single Touch Payroll enabled software, employers report employees' payroll information, such as salary, wages and super, to the ATO each time they pay their employees. From July 2020, as proposed under this bill, the ATO will begin providing employment details to Services Australia through the Single Touch Payroll where the recipient has been established as a mutual client. Again, this will eliminate guesswork and ensure greater accuracy in payments.
The streamlining of this process will not only provide a better experience for recipients but also represent significant savings in processing. Through the improvement of this process the government will save $650 million each year, making our system more sustainable well into the future and allowing us to reinvest those savings. It is again important to emphasise for members of this House, particularly given the contribution of those opposite, that there are no changes to the rate of payments proposed by this bill. It is simply the way we improve accuracy in getting people paid the right amount. On this side of the House, our stable and certain approach to all facets of government is always seeking to improve the way we do things: to help Australians, to make our system fairer and to strengthen our budget.
While we're talking about this good-news story in the bill, when it comes to the betterment of our payment system it would be remiss of me not to also talk about another significant achievement of this government—as I did just a few minutes ago—and that is the drop in welfare dependency. Whilst, importantly, our welfare system exists as a safety net to support those in need, there is no greater achievement than providing opportunities for Australians to get back into the workforce when they are able to do so.
Over 1.4 million jobs have been created since 2013 by this government. With the release of the latest figures, the proportion of working-age Australians dependent on welfare has fallen to 13.5 per cent—the lowest level in more than 30 years. We know that the best form of support is to provide people with a job. It gives meaning to people. It gives support to families. It gives people the opportunity to do better for themselves and for those they love. That's what this government is dedicated to doing: delivering the opportunity for people to get into work by delivering the economic arrangements that are needed to create jobs in this country. We on this side of the chamber believe that, if you have a go, you will get a go, and we are proud to get people off welfare and into work.
In conclusion, these new measures will make it easier and simpler for recipients, make our payments more accurate, ensure our system is fair, provide a significant cost saving to the budget and help maintain our welfare system well into the future. I commend the work of Minister Ruston and her team as well as that of Minister Roberts for delivering this important bill to the House.
I rise to speak on the Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020. I am speaking in support of the bill but also in support of the very sensible second reading amendment that was moved by the shadow minister for families and social services, the member for Barton, which raises serious concerns about the government's ability to implement these changes properly—and I'll come back to that.
In the second reading amendment, the member for Barton has referenced this government's bad faith and ultimately what amounts to casual cruelty through its actions in the social security sector. Much of this bill should objectively improve the accuracy of Centrelink information and social security information; indeed, that's its real purpose. However, it becomes difficult to separate the intentions of this legislation from the reality of the people who will be charged with implementing and executing its promise.
This is not a group of people—and I'm referring to the government—who in recent memory have covered themselves in glory when charged with similar projects of advancing the use of digital technology to make lives easier for Australians—the recent conga line of Liberal governments that this country has endured, right up to the current Morrison government, in particular to the charming but accident-prone Minister for Government Services, Mr Robert. I'm referring to the litany of digital disasters they have presided over. It is a litany, which makes the public realise that this government doesn't have a great record of rolling out new technology. We will be watching closely to ensure that Single Touch Payroll does not enjoy the suite of catastrophes that the Australian public has learned to expect from any Liberal digitisation project.
As this government boldly takes us into the world of Single Touch Payroll and social security, let me remind people about My Health Record. Almost $2 billion was spent on an e-health scheme that many doctors and patients refuse to use because of legitimate privacy concerns, including breaches. Then, of course, there's one of my favourites: the 2016 census. For almost 48 hours, Australians were unable to access the census website, due to a series of denial-of-service attacks, incurring a $30 million cost blowout to the Turnbull government. More recently, there was the 2019 myGov outage where, euphemistically, technical difficulties brought down the entire online government service portal for a day when people tried to access the ATO accounts and lodge financial year tax returns. Australians need access to functional government services, not for taxpayer money to be wasted mopping up mistakes because the Liberals cannot be trusted with digital service delivery.
The bill may contain the term 'simplifying income reporting', but what is this really about? Is it an attempt to cure the disease that this government has concocted in its artificial intelligence laboratory and unleashed on the social security recipients of Australia, better known as robodebt? Perhaps we should call the bill by its real name: the 'Trying to quietly fix our robodebt mess' bill. Some of the measures here should help that cause. They should make government information more accurate, not because—as this bunch of bunglers would have you believe—there are hordes of welfare recipients giving the government inaccurate information; it's quite the opposite. Under robodebt, the government has been punishing welfare recipients with the government's own inaccurate data and dodgy mathematics.
The government's robodebt scheme unleashed a faulty algorithm against social security recipients who, even if they had reported their income 100 per cent correctly, were slapped with debt notices sometimes in the thousands of dollars. Robodebt used a crude, lazy calculation of averaging annual income and pretending to average that over every fortnight as if all Australians earn the same amount of money every fortnight. This would then discover a discrepancy by comparing it to a Centrelink recipient's reported fortnightly income, which may not conveniently fit into the artificial intelligence of robodebt. Many Australians have lumpy income due to insecure or intermittent work in the gig economy—casualisation, often balanced with study and other commitments. Many Australians rarely have the same number of hours each fortnight, yet robodebt simply assumed they did and, if there was a discrepancy between the reported fortnightly income and the artificial averaging of an income over a year, the person was issued with a debt notice. This was crude accounting at best. The work experience kid could have spotted the fault in the logic; yet, upon these shaky foundations, the whole robodebt edifice was constructed.
Using this dodgy algorithm, a red flag would be created against a person's name and a debt letter would be issued to the recipient. In some cases, a decade had passed since the reporting period in question, leaving many—often former—social security recipients shocked and distressed that they would have to retrieve pay slips from an old employer, who may have gone into liquidation or simply not kept the records, in order to disprove a discrepancy alleged by the government. Others, including vulnerable people on the bread line, were forced to find the money to pay their bank for statements to show what they had known all along—that they had always reported carefully and that no debt had accrued. The government would pretend that this process of issuing debts had human oversight, but it didn't have human oversight where it mattered. There was no checking and no interrogation of the algorithm's results. There was an almost religious faith in the artificial intelligence of the algorithm. Robodebt was king, so why bother worrying about hiring and paying humans to ensure that what it was spinning out was actually just and fair? We believe it is important to provide efficient, user-friendly government services and systems. We don't support the ongoing agenda of cuts to the Public Service and the outsourcing of key government work to labour hire companies.
With robodebt, we have also seen that a great deal of injustice occurred for people. People in the flood zone of Townsville received robodebt letters. We've had parents report that their adult children have taken their own lives because of the stress of robodebt. Figures obtained through the Senate have found that almost 2,000 people died after receiving a robodebt notice. But, unfortunately, all the talk of unfairness over the last three years wasn't enough to stop the government from simply marching ahead. At estimates, it was revealed that the department took money from 73 estates of people who had died.
Following the election, I certainly formed the view that robodebt didn't even have a legal basis. It didn't even have a basis in law giving the government the power to issue these debt notices. So the question is: how long did this government know that it didn't have the power to issue robodebt debt notices based upon the use of the algorithm-averaging system? The minister is at the table, so perhaps he could answer that question.
We have discovered—through a document which the government didn't want released, but Labor and the Greens were able to get the numbers in a Senate committee to put this letter up online—that the chief counsel of the Taxation Office wrote to the Chief Commissioner of Taxation late last year and said, 'Actually, we'd better stop garnishing people's tax bills, because the Department of Social Security has informed us that we don't have the legal power to issue the notices.' Hang on, read that again. This is a smoking gun of a document. What it says is that someone in government's told someone senior in government that we have been told there is no legal authority for what the government has been doing with robodebt. But have we heard from the government how long they knew before that day?
There are only two interpretations of what's happened. Either this government, in a belief in its own superiority, never checked for 3½ years if it had the power to issue robodebt notices—for 3½ half years. Are we seriously to believe that this bunch of incompetent bunglers—and, actually, when you say it is aloud, it is possible—issued notices and never checked to see if they were allowed to issue the notices? This is a scandal. How did we get to a state of affairs in this country where a government, with all of the power of departments, can simply issue debt notices and then at some point, 3½ years after the process started, simply discover, 'Actually we can't do this'?
One interpretation is that they never thought to ask. One interpretation is that they decided: 'We're just going to shame the poor. We're going to say that we are going to have a welfare compliance campaign to prop up our fake budget numbers,' and they didn't care about the detail. That is entirely possible. The alternative is that they knew before 19 November last year and just didn't tell anyone. That would actually be worse. But there's no happy ending for people who, for the last 3½ years, have been subjected to this robodebt scheme.
This single touch legislation is sensible, although we put question marks around the ability of this government to ever implement anything. I wouldn't send this government down the street to the milk bar to get a litre of milk. They'd get that wrong.
There goes the minister. I'm going to take his interjection. This bloke is the invisible minister for robodebt. He never goes out in public and explains what happened with robodebt. Instead, he wheels out the poor old department—no medals for bravery for this minister when it comes to facing up to the music.
But let's go back to the real issue here. This government's proposing legislation which, in and of itself, is a net addition. The reason that it is a net addition is that it is going to say that, before we start issuing debts, we're going to make sure that we get the facts right. But what I despise about this arrogant bunch of bunglers is that they have been propping up their budget and shaming the poor. They have a view that, if they can just sting the most vulnerable on Centrelink, they may figure that there's no sympathy from other people. They concocted this idea that everyone on Centrelink is out there cracking open lobster shells while sitting on a banana lounge in some resort and they are all taking money that hardworking people give them. The reality is that Centrelink payments are a safety net that people have a legitimate right to. Every Australian citizen, no matter their circumstances—no matter if they vote for the LNP or for Labor; no matter how much money they have in their bank account; no matter where they live; no matter what their surname is; no matter who they know in the government; and no matter how digitally connected they are—has the right to be treated lawfully by the government.
We have discovered that this government has been sending out debt notices when it didn't have the power to do so. This is a scandal. But, in this responsibility-free, blame-free vacuum which is the government, somehow you can send out hundreds of thousands of notices which are illegal, you can raise hundreds of millions of dollars of unjustly enriched money against our most vulnerable citizens, and no-one's responsible. This is a blame-free vacuum. No blame ever seems to stick to anyone in this government. How do you raise debts against hundreds of thousands of Australians, which we've now found out through government documents—
Ms Bell interjecting—
The new member for Moncrieff can complain about what I'm saying, but it's a scandal. You're not allowed to do it. It's not your fault, in particular; you just got elected—but, of course, it's not anyone's fault in this government. The Social Security Act does not authorise the raising of these debts. It's not a matter of going around the Monopoly board once and then trying to retrofit what you did. You weren't allowed to go. This was illegal. Is there no shame left in the government that they can illegally obtain hundreds of millions of dollars off hundreds of thousands of people? The legal advice materialises and it's no shame, digger! No shame here. And the problem is that this government isn't even sorry. As much as the government members may want to stick their heads in that firm, familiar bucket of sand and pretend it hasn't happened, this is outrageous. Maybe it doesn't make the front pages of our media papers all the time, but I know that this government caused misery for hundreds of thousands of Centrelink recipients. I know this government has unjustly enriched itself with tens, if not hundreds, of millions of dollars. I know this government did not have the power to raise a valid debt owed to the Commonwealth and no-one cares on that side. No-one seems to think this is not just business as usual.
You relied on the algorithm. You took the human oversight out of the system. You wanted the money. You thought you could get away with picking on poor people and it has blown up in your face. It doesn't matter about the little eye rolls we get from some of the loyal backbenchers saluting the government flag; your government didn't do the right thing. This legislation is an attempt to fix up some of it, but what I don't like is the fact that 10,000 applicants have got to go to court to force the government to pay them back what the government were never allowed to take in the first place.
Apparently in this bungling, woeful, responsibility-free government they want the limos, they want the pay, they want the office and they want to be called 'the honourable' but the problem is they're not good at their job. In this case what you did is a scandal. You took hundreds of thousands of people down a path you never should have. Shame on you.
I rise to speak on this Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020, that will improve the process of reporting employment income to Centrelink and, therefore, strengthen our welfare system.
This government is on the side of Australians who are trying to find work, unlike the Labor Party and those opposite who have abandoned Australian workers. Those opposite are not interested in strengthening Australia's welfare system. They are only interested in politicising every issue of the day. The issue of improving our welfare system should not be politicised. As we saw, they also recently politicised the issue of the bushfires, so they're not really doing their job. They're just politicising issues for their own agenda. We have heard the member for Maribyrnong barking his rhetoric during the election and the Australian people didn't listen to him then, so I suggest they don't listen to his rhetoric now.
From July 1 2020 social security recipients will report their employment income to Centrelink when it's paid by their employer, instead of when it's earned. The assessment of employment income when paid will make it easier to report income correctly. Around 550,000 people report their income to Centrelink in any given fortnight. Around 1.2 million people report income at least once a year.
The government's priority is for an accurate, fair and simple welfare system. This will better support people receiving the right amount of income support each time it is paid—no more and no less than they are eligible for—reducing the likelihood of overpayments. It will also pave the way for the future prefilling of employment income using Single Touch Payroll information that supports easy reporting arrangements for recipients. Under the current system recipients must do a calculation to report on their or their partner's earnings based on the number and value of shifts they have worked, not what they have actually been paid. Reporting earned amounts can require recipients to do unnecessary, multiple calculations.
Under this change people can refer to their or their partner's pay slip in order to report employment income to Centrelink, making reporting easier and ensuring they get the correct amount of payments. While this method changes the way employment income is assessed, it also aligns it with Single Touch Payroll—STP—data, which is based on when an employee is paid, to make reporting even simpler.
For example, a recipient of youth allowance can work on a Friday night, Saturday morning and Sunday afternoon for the same employer with a different rate of pay for each shift, which is quite complex. It can be difficult to report the correct amount of income if recipients have to factor in varying hours and duties, multiple employers and changing award rates. Over the course of 2017 there were over 15 million corrections to recently reported earnings, where people discovered when they got their pay that they had incorrectly reported their earned income for the previous fortnight.
Through this bill the government will deliver a simpler way for social security recipients to report their employment income. From July 2020 the ATO will provide employment income details to Services Australia where available through STP and where the individual has been established as a mutual client. This information will then be used to assist payment recipients to report accurately—a system made simpler. Where STP data is used, recipients will still be responsible for correctly reporting their income and will have the ability to review, edit or add additional employment income before finalising their report to Centrelink. This will support payment recipients further to accurately report their employment income, ensuring they get paid the right amount from Centrelink the first time. As employers begin reporting additional information through Single Touch Payroll in the next financial year, recipients will start seeing their employment income prefilled in their reporting solutions in the same way that income from interest appears prefilled when completing a tax return. This will mean that for most people reporting income at the end of each fortnight will be a simpler process, a process of confirming that their prefilled income is in fact correct.
The resulting improvements in payment accuracy are expected to deliver savings to the government and the Australian people of $2.1 billion over four years from 2019-20 to 2022-23. This is because some people who begin employment do not contact Centrelink to report their earnings and may inadvertently continue to receive a payment while in receipt of employment income. Some people may underestimate their employment income while remaining on a payment. Some do not report their income. Some report their net earnings rather than their gross earnings.
The government is not reducing payment rates, but simply making it easier for social security payment recipients to report their employment income accurately and, in turn, get paid the correct rate. Over 80 per cent of savings delivered through this reform will be from working-age recipients, because these recipients are shown as the most likely to incorrectly report employment income. Preventing overpayments in this way will contribute to the sustainability of the welfare system. It will mean that these individuals are paid what they are entitled to. The measure will provide additional financial support to people who find work, as they will be able to get government support up until their employer first pays them, removing the current timing gap between starting work and receiving payment.
In conclusion, I make three key points. Accessing social security payments until employment income becomes available will provide greater support to vulnerable Australians transitioning to work. We are helping vulnerable Australians. We are helping those who want to go from unemployment to work. That's what we're here for. That's what the Morrison government does. We help Australians, unlike those opposite, who have abandoned the Labor Party. They have abandoned their own members. They have abandoned the Australian worker. Assessing employment income when paid will contribute to simplification and will deliver modernisation of Australia's social security system by allowing the use of technology to prevent overpayments before they happen, but without reducing the responsibility of the individual to ensure that they report correctly.
This bill will also help to ensure that Australia's welfare system remains sustainable into the future. I congratulate Ministers Ruston and Robert for their work to strengthen our welfare system. I commend this bill to the House. It will help Australians move from unemployment into work. It will strengthen our system. It will return money to the Australian taxpayer. This's what it's going to do: it's going to save money and it's going to help Australians who currently are trying to find work. I've got people in my own family trying to find work. This will make it easier for them to report what they've been doing and where they have been working. It will all be prefilled in for them and then they'll have to report. It will be much simpler for an unemployed person who is actively looking for work. This is what the Morrison government does; we help people to transition. This is what the safety net is all about. It's there to help people transition from unemployment into work, and this system that we are proposing will simplify that. It'll make it easier for Australians to be correct with what they write on the form. Therefore, Centrelink will be able to save money, save resources and give that money straight back to the Australian taxpayer.
Those opposite cheer and they laugh and they make faces, but we've heard it all before from them. Australians cannot trust those opposite with our coffers. They cannot trust those opposite. Look at the debt and the deficit that they left. They cannot be trusted with Australians' money. Only a Morrison government can deliver a surplus. The first surplus in 11 years is what we've just delivered for the Australian people, and we will continue to deliver for the Australian people. That's what we on this side believe. We believe in LNP values. We believe in hard work. We believe in moving from welfare to a job. We believe in feeding our families through a job. That's what we believe in. We believe in going to work and building our families. That's what we believe in. We believe in taking people from unemployment into work.