Tuesday, 14 November 2023
Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023; Second Reading
My electorate of Gilmore, on the New South Wales South Coast, has one of the oldest demographics of any electorate in Australia. Not only this, as a regional town with farming roots and that old country attitude, we are also incredibly hardworking people. When you've worked hard your whole life, whether that be on the family farm, in the local hospital or in the local cafe, it's not so simple to just say: 'That's it. I'm done now. Time for retirement and living off a pension.' With the cost of living rising higher and higher every day, it's also not viable for many people, particularly for those who have worked in the caring, hospitality or health sectors, as just a couple of examples—and especially for women.
Sadly, over my years in this job, I have heard regularly from pensioners who tell me they feel like they are punished if they work more. They have worked hard their entire lives and they are now entitled to the age pension, but, if they keep working—even just a little bit—that pension is reduced, making it not worth it. They may as well not work because the extra hours don't actually give them anything extra in their pocket. It's incredibly frustrating for many, not just because they like or, in many cases, need the extra income but also because they are trying to keep themselves busy, trying to help their community and trying to do their bit.
Regional areas like ours are also struggling through an unprecedented workers crisis. We actually can't afford to lose our qualified nurses and doctors, our cleaners, our farmers, our tradies or our hospitality workers. Local businesses are struggling to stay afloat and struggling to find people with skills—just struggling to find anyone. It's something I am hearing all too often from local businesses across the South Coast.
Put all that together—an ageing population that feels punished for working and a workforce that is crying out for skilled and willing labour—and you've got the perfect storm. That's where this bill comes in and why I am so proud today to rise in support of the Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023. This is the perfect solution to that perfect storm and one that is so very welcome in my electorate of Gilmore on the New South Wales South Coast. It answers the call of hundreds of local pensioners and hundreds of local businesses. It'll help keep our economy moving and help local pensioners keep up with the cost of living. What could be better?
In the very first few months after winning last year's federal election, the Albanese government announced we would hold the Jobs and Skills Summit. We did this because we knew Australia was facing unprecedented challenges in the employment sector and we wanted to bring all sides of this together in one room to map out our employment white paper, which was released in September this year. The white paper outlines our vision for a dynamic and inclusive labour market where everyone has the opportunity for secure, fairly paid work. To ensure that local voices were heard during the Jobs and Skills Summit, I held the Gilmore jobs summit survey to find out what local people and businesses needed and what challenges they were facing and to hear their innovative solutions. Guess what? High on the list of solutions was allowing pensioners to work more hours without it impacting on their pension rate. Many people who responded to my survey talked about the underutilisation of, and barriers for, older workers. Many respondents talked about age discrimination and the disincentives to work that were built into the welfare system. Suggestions were made to change the impact of work on access to the pension, allowing more hours to be worked before deductions were triggered.
Older Australians have the skills, and many have the will to contribute, but they are kept outside the workforce because of these structural barriers. Peter said we should 'realign the pension system to give incentives for able-age workers to contribute to the workforce'. Rodney said we should 'increase the amount of wages that people on the age pension can earn before their pensions are affected'. Felicity referred to our older Australians as an 'untapped resource'. She said:
… many have skills, capacity and desire to work in retail, hospitality, but a major disincentive is the loss of benefits applicable should they work more than very minimal hours per week.
She went on to say:
With many of our businesses unable to operate for full opening hours or days, and a significant older population in the region, surely this is a potential solution?
Felicity said this is a 'win-win option—increased trading and income for businesses, plus earnings for employees that then have spending capacity and increased feelings of connection and worth in our community'. You know what, Felicity? We agree. I put these ideas in Gilmore's submission to the Jobs and Skills Summit, and, following the summit, the government put in place temporary measures that allowed age pensioners to work more hours without it impacting their pension. A commonsense solution brought forward by local people, listened to by government and implemented—how great is that? It's democracy at work.
This bill makes those temporary measures permanent. It implements the changes which were announced in our employment white paper in September. To put it simply, we are giving older Australians more choice and flexibility to participate in the workforce by permanently enhancing the pension work bonus. It includes an up-front credit of $4,000 to all new pension entrants over age pension age and to eligible veterans, and it permanently increases the maximum work bonus income balance from $7,800 to $11,800. This means that existing pensioners will continue to benefit from the elevated maximum work bonus balance of $11,800, with new pension entrants over age pension age to receive a starting balance of $4,000 instead of zero.
Older Australians give so much to our community, and having them continue to work for as long as they want and are able is only a good thing. It gives businesses invaluable skills, knowledge and experience while allowing them to keep the doors open. It helps to keep these highly valued members of our community engaged with purpose and connection. It has health and mental health benefits for them and others as well—not to mention the economic benefits. There are only wins any way you look at it. Having a system that is set up to disincentivise or, at worst, punish them for wanting to stay active and contribute to our economy makes no sense whatsoever. People in our community recognise that. They called for it, and we have delivered it here today. These changes will take effect from 1 January 2024, with no gap between the existing temporary measure and the commencement of the new ongoing provisions.
I could not be prouder to be part of a government that has listened to the views and concerns of the Australian people and businesses and that has made changes to better support them. We are serious about setting up a workforce structure for the future, one that is ready and prepared to meet the challenges Australia will face and is facing. Our employment white paper makes this a transparent process. It has made it a collaborative process. We have listened to industry, we have listened to consumers, we have listened to workers and we have made well-thought-out, economically viable, commonsense changes that will make a difference.
Over the last 18 months we have made a lot of really important changes to help and support those doing it tough. We've increased the rate of working age and student payments by $40 per fortnight. We've increased the maximum rate of Commonwealth Rent Assistance by 15 per cent, expanded eligibility for Parenting Payments Single to single principal carers until the youngest child turns 14—up from eight previously. We've increased the income threshold for the Commonwealth Seniors Health Card to help an additional 10,893 older Australians access the card. That is just to name a few.
This bill introduces another support by expanding the nil rate period from six to 12 fortnights, and expanding access to the nil rate period for those who enter full employment. What this means is people who have been receiving support payments such as JobSeeker, Youth Allowance, Abstudy, the Parenting Payment, the age pension, the Disability Support Pension and the carer payment can re-enter the workforce knowing that their safety net is still behind them should they need it. It means people can stay active in a system, retaining benefits like concession cards, childcare subsidies and other supplementary payments for a bit longer. If things don't work out for whatever reason—as we know can sometimes happen—people won't have to reapply or wait for the income support to come back. It helps to remove yet another disincentive, particularly for short-term contracts, casual work or work in the gig economy. The safety net remains a backup that is there when it is needed—as it should be.
When work comes up, no matter what it might look like, people should have no hesitation in saying yes. It shouldn't be in the back of their mind that when their contract is up they will be left with nothing but a long bureaucratic process. This will help reduce those barriers, keeping access to the supplementary benefits and automatically restoring payments if circumstances change. This is just one more way that the Albanese government is making sure help is there when it is needed most—by those who need it most.
There is no doubt we are facing tough economic times. Regional areas are harder hit than most, and local people want to know that their government is working to do everything possible to support them. Our 10-point plan on the cost of living is our highest priority, targeted to where people need it most. I have already mentioned several of these measures, but they are only the beginning.
We have given electricity bill rebates of up to $500 to around five million households—a common issue I hear and something that can make a big difference. We have made child care cheaper, helping families on $120,000 with one child in care save around $1,700 a year. At the same time, we are expanding paid parental leave to 26 weeks by 2026—good news for families and our economy. We have made medicines cheaper. I'm so proud of this in particular because we all heard the cries that the sky would fall in if medicines were cheaper, but those changes came in and—guess what? The sky hasn't fallen in. Instead, millions of Australians had the cost of their medicines for many chronic conditions halved with 60-day dispensing. On top of that, we have also brought the maximum copayment on prescriptions down from $42.50 to $30—significant cost savings now. We have tripled the bulk-billing incentive, which came into effect just this month and is helping children, pensioners and concession cardholders see a bulk-billed GP.
What else? Our Housing Australian Future Fund has officially started, building and supporting the supply of more affordable homes through our $10 billion fund, as well as our $3 billion new homes bonus and our $2 billion dollars social housing accelerator. I was a TAFE teacher, so you can bet that I am super excited that we have made TAFE fee-free for tens of thousands of students. TAFE, and vocational education in all its forms, changes lives. I've seen it firsthand, and we have made it so much easier to access. It's an exhaustive list, but it has been well thought out. It won't add to inflation; it will go to where it's needed most and to who needs it most. It's good for our country, it's good for people in my electorate and it's good for our future. I'll keep working hard every single day to ensure that local people in my electorate get the support they need when they need it. I commend this bill to the House.
I'm pleased to speak in support of the Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023. This bill implements social security measures announced in the government's employment white paper released on 25 September this year.
The employment white paper is a comprehensive roadmap for achieving a dynamic and inclusive labour market in which all Australians have the opportunity to secure fairly paid jobs. It envisions a country where workers, employers and communities can thrive and adapt to changing times. It's an ambitious vision that we are determined to turn into reality. It outlines the government's ambition for a dynamic and inclusive labour market in which Australians have the opportunity for secure, fairly paid jobs in a country where workers, employers and communities can thrive and adapt. Of course this segues nicely with the legislation that we have put to the House and the Senate, and which has come back in part from the Senate, which is all about getting jobs that are fair and also adaptive to the new environment.
Frankly, this is a critical piece of legislation that will have a significant impact on the lives of older Australians and those transitioning from income support to employment. The bill is a pivotal part of the Albanese government's efforts to ensure more Australians can benefit from the transformations taking place in our economy and society in the coming decades.
One of the key measures within the legislation is the enhancement of the pension work bonus. This measure reflects our commitment to giving older Australians greater choice and flexibility in their workforce participation. We will permanently increase the maximum work bonus income balance from $7,800 to $11,800. This enables pensioners to continue reaping the benefits of the elevated maximum work bonus balance. In addition, new pension entrants over the age pension age will receive an upfront credit of $4,000.
Many older Australians are choosing to supplement their age pension—an age pension they deserve—with paid work. No-one should be financially disadvantaged by choosing to stay in the workforce longer or returning to the workforce after some time away. In Lyons there are some 13,500 people receiving the age pension, all of whom can potentially benefit from these changes to the work bonus should they choose to. It's important to say that. This is a matter of choice. No-one on our side believes that age pensioners should be forced back into work, but I know from personal experience a lot of age pensioners are keen to remain in the workforce if they're able to.
I've already spoken to a handful of my constituents who are looking forward to this change. Like Malcolm, a pensioner from Old Beach, who recently wrote to me about wanting to increase his hours of work as a way of keeping active and in touch with his local community. Of course employers will benefit from these changes too. In many regional and rural areas, businesses are dealing with pretty chronic staff shortages. I know this is the case in particular for some of the hospitality venues on Tassie's east coast. This measure gives employers access to experienced people who are keen to work.
Indeed, the work bonus initiative is not just about providing financial support; it's about recognising the wealth of experience and skills that older Australians can bring to the workforce. And when I talk about experience, I don't just mean position-specific hard skills. Older Australians bring life experience, maturity, wisdom and emotional intelligence to the workplace, often providing mentorship to younger workers. Not to mention, we know there are benefits for the older workers themselves: mental health benefits, social inclusion, staying active and community engagement to name a few. By increasing the work bonus, we hope to encourage more older Australians to remain engaged in the labour market should they wish to do so.
The changes brought about by this legislation will come into effect on 1 January next year, pending its successful passage through the parliament. This transition ensures there is no gap between the existing temporary measure and the commencement of these new, ongoing provisions. To maintain the integrity of the system, the work bonus measure includes safeguards to prevent individuals from cycling on and off payments in order to receive multiple new-entrant bonuses of $4,000. We've seen how easy it is for people to take advantage of good intentions, so we're trying to corral this as much as we can. It's important to note that the costs of this measure are only incurred if pensioners actively engage in work. The indicative cost for this enhancement is approximately $42.4 million over the forward estimates from 2023-24—an investment that we are confident will yield substantial returns in terms of the economic contributions of older Australians and the wellbeing of our community.
Another crucial aspect of this legislation is the extension of the employment income nil rate period. We recognise that transitioning from income support to employment can be challenging and the fear of losing access to essential benefits can deter people from even considering taking up work, particularly short-term, casual and gig-economy jobs. Frankly, it can all be a bit too hard to go through the rigmarole of dealing with Centrelink and the paperwork involved for what may be temporary, casual work.
A division having been called in the House of Representatives—
Proceedings suspended from 17 : 21 to 17 : 38
I'm really pleased to rise to speak to the Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023 because it is going to make a difference on the one hand to pensioners, and on the other hand to a whole lot of welfare recipients who get caught in this in-between place when they're finding their first bit of work and still trying to keep themselves afloat. It really tackles some of the issues that makes life difficult for people transitioning into work and for pensioners who might decide that doing a bit of work would be great for them, whether it's because they need the stimulation or they need the money. Either way, this is really dealing with some issues that have been outstanding.
Let me talk through a couple of the things that are really important and why this bill needs to get through this place. I'll talk about pensioners first. This bill means that pensioners wishing to return to the workforce can do so with much less fear of losing access to their other income support measures if they take up some work. From 1 January—and that assumes this legislation passes the parliament—it means that all new age pension and veteran pension entrants will be able to start with a work bonus in their income bank balance of $4,000 rather than no dollars. Why this matters is that that allows you to earn a certain amount of money. But, when you first go on to pension, you can't actually get it immediately. So that's one of the changes that we're making. It's an upfront credit of $4,000 to all new pension entrants, and, as I've said, that means people on the age pension or veterans.
The other part of it is the permanent increase in the maximum work bonus income balance you can have from $7,800 to $11,800. That's where it currently sits. A year or so ago we recognised that that would be a measure that would help get some older workers back into the workforce. Whether there's a skills shortage in a particular area or whether it's for things like a referendum, where the AEC is looking for a whole lot of extra workers, doing those small amounts of work can undermine their access to the pension. What we've found is that this is an effective way to do it, and we want to make this move from $7,800 to $11,800 permanent. It's about giving older Australians more choice and flexibility to participate in the workforce, and that's why we're going to permanently enhance the pension work bonus.
How it works is that existing pensioners will continue to benefit from that elevated maximum work bonus balance, with the new entrants starting with a balance of $4,000 rather than a balance of zero. We want to continue to ensure that the option to take up work is open to people. I know that in my electorate, Macquarie, particularly in the Blue Mountains, there are a large number of retired people who not only are on a pension or part pension but also are really keen to contribute. This is the sort of thing that will potentially make a real difference to the way they plan their next few years.
We recognise that there are not only substantial benefits for older Australians in continuing to work but also benefits to the entire community, particularly where we have skills shortages. They've got a wealth of experience and they're highly skilled in the things that they have done. When I think about my electorate, where we are short of tradespeople, the place we turn to is the Hawkesbury, where there are so many skilled and trained tradespeople. If this is an incentive to get some of them to move back into the workforce, it is well worth it, particularly if they are able to contribute, if they're keen to do so and if the only thing stopping them is that they'll have a disadvantage financially.
All of these changes will take effect from 1 January, pending the passage of the legislation. That will mean that there's no gap between the existing temporary measures that we put in place and the commencement of these new ongoing provisions.
It's worth pointing out that the work bonus measure also includes some safeguards just to ensure that individuals can't game the system by cycling on and off payments so that they receive multiple new-entrant bonuses of $4,000. We have thought that through to ensure there aren't incentives or, as we might say, unintended consequences of people doing that.
There is a cost to this measure, and that cost is potentially $42.4 million over the forward estimates from 2023-24, for the next few years. But it's worth remembering that the costs for this measure are only realised if pensioners do take up the work. If this doesn't get taken up, the costs will obviously be lower.
I'm really keen to hear from people about this. I know I've had conversations in the last few months talking to people about the ability to work in things like the referendum. We also had a state election in New South Wales, and I know that there are a lot of pensioners who really enjoy being part of that democratic process. For those pensioners who aren't working, we know that it's often due to a whole range of factors. Sometimes it's because of the type of work that's available or a desire to be retired. But this is here as an option. It's not a requirement, it's an option. It is about giving flexibility to older people.
The second part of this targets a completely different group of people, and that is the other benefit recipients: people on JobSeeker payment, youth allowance, Abstudy, Austudy, parenting payment, disability support pension and carer payment. It includes the age pension, but it is clearly much broader than that. This is the change we're making around what's called the employment nil rate period. This gives some flexibility so that as people are transitioning from unemployment into employment, or from a particular situation but they're in a position now to take up work, it takes away the fear by making sure that the social security support—the safety net—will still be there for them as they're working through the transition to employment.
It's very easy to think that one day someone's unemployed and the next day they get a job and off they go, but it isn't always a smooth journey. That would apply to students, to people on youth allowance and to people on the disability support pension. It would certainly apply to people on parenting payments where, even with all the very best of intentions of moving into work, things may happen that mean they still need to rely for a short time on that social safety net that we in Australia are so proud to provide people with.
The measure, the employment nil rate period, extends that period of time for income support payments from the six fortnights to 12 fortnights. So, we're going from 12 weeks to 26 weeks—from three months to six months—and it expands access to the nil rate period to those who enter full employment. It allows people to stay active in the system. They can retain supplementary benefits—such as concession cards, childcare subsidies and other supplementary payments—for longer when they first get back into work. That is the safety net that's now going to be in place.
The measure really addresses concerns about losing access to those benefits or having to reapply if things don't work out in your employment. Having to reapply and wait for income support if things didn't go the way people had hoped acts as a real discouragement for people to take up work, particularly short-term work. There's not much incentive in taking up an initial couple of months contract if you know that, at the end of it, there is total uncertainty and you've forgone the supports that you had. It also acts as a real disincentive for casual work and gig economy work. So, this is about giving people a bit more confidence to know that they can move forward without completely burning their bridges behind them.
We know that people who have some work are twice as likely to ultimately exit income supports as those who don't, so getting those first bits of work are really important. Therefore, to improve employment outcomes, it is critical that people are not disincentivised from taking on these short-term, sometimes ad hoc, opportunities. We want to make the transition from income support to employment as smooth as possible. This reduces the barriers for payment recipients so they can take up work, by extending the period they're accessing those supplementary benefits that remain payable during the nil rate period, with their payment automatically restored if their circumstances change. These changes will come in from 1 July 2024, pending the passage of this legislation.
Neither of these is anything other than a sensible step to genuinely support people, particularly as they're moving into employment, and, for pensioners, to allow them to continue employment. I think we should be very proud of these changes. I really hope that they are promptly passed through the House, and I want to touch on that point.
As I say, we brought some of these things in as temporary measures. The maximum work bonus income bank measures were increased a year ago, from 1 December. The current temporary work bonus measure is due to end after 31 December. That means that, from 1 January, the work bonus income bank balance of 2.3 million pensioners will be reduced from the high it is at now, back down to the standard level of $7,800. That means there's a big gap, a big lag. If we get this legislation through—and I'd urge the parliament to support it—it will make this a seamless process for pensioners, who really deserve to have their lives made as straightforward as possible, not tied up in some sort of parliamentary red tape.
I commend the bill to the house, and I'm very proud of these very sensible measures, which we hope will improve employment opportunities for everyone.
On behalf of the people in my community of Dobell, in the northern part of the Central Coast of New South Wales, I'm pleased to speak in support of this bill, the Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023. It has broad support across the parliament and broad support across my electorate. This is because, as the member for Macquarie has just said, this is a commonsense amendment with practical benefits which will flow not just to individuals but also to local communities and regional economies, like mine, on the Central Coast of New South Wales, and Susan's, in the Blue Mountains.
In Dobell we have a population which is older than the national average. Some one in five residents currently living in Dobell receive the age pension. Across the Central Coast, almost 70 per cent of people aged 65 years and over receive the age pension—which, again, is higher than the state average. I've heard from many seniors in my community about their experiences and their exposure to cost-of-living pressures.
Our government, the Albanese Labor government, is providing cost-of-living relief in many ways to help ease these pressures, particularly through our investment in Medicare, the largest since it was introduced 40 years ago. As the Assistant Minister for Rural and Regional Health, I know just how big a difference this will make, especially for older people living in communities like mine. In addition to that, I know from many conversations on the Central Coast that removing barriers to allow pensioners to earn a little more—some extra income—will make a genuine difference to households in my community.
As members know, the current work bonus measure was an outcome of the Jobs and Skills Summit last year. It aligns strongly with the priorities in our employment white paper, and I know, when it was first announced, people in my community were very keen to see it introduced and keen to know more about it. It began as a temporary measure and, with the passage of this bill, it will become permanent. This will be an ongoing and permanent change.
The increase in the work bonus since it was first introduced has allowed age pension recipients the flexibility either to remain in roles that they enjoy and find personally and professionally fulfilling or to re-enter the workforce and continue to earn without reducing their pension. New recipients of the age pension in particular will benefit from the $4,000 work bonus starting balance. As we know, this is a group of people who are much more likely to be keen to carry on in paid work. Pensioners will also benefit from a permanent increase to the maximum income bank balance limit, from $7,800 to $11,800. With the existing extension set to end on 31 December, passage of this bill will mean there is no gap between the temporary measure and the beginning of these new, ongoing provisions.
One person to benefit is Mark from Blue Haven in my electorate. Mark is 71, and he contacted my electorate office earlier this year. He was concerned because he'd heard that the work bonus measure was ending. It had allowed him to earn some more to cover his expenses while still maintaining his pension, and the benefits associated with it, and staying connected with his workplace and the broader community. It's people like Mark that will now be able to benefit from this measure in an ongoing manner.
We want our seniors to be supported in doing all of these things—staying connected in work, keeping their pension and the associated benefits, and earning a little more if they want to. I know that Mark represents the many seniors in my community who support this change, and I look forward to updating Mark and others on its passage through the parliament.
Obviously, the work bonus change offers the option of an important top-up to a pensioner's income and to their household. Equally, at a time when skills shortages persist in regional communities like mine that are an hour and a half outside of major cities—we have a persistent skill shortage, but it's only being exacerbated at the moment—our government is investing in many skills measures, and this is one of them. So, in many sectors of the economy where we have experienced, willing and capable older workers who are keen to stay in the workforce, it makes sense to encourage them to do so and to support their efforts in doing so. Older Australians bring a wealth of experience, expertise, skills and economic value to workplaces and boost regional economies right around the country. I know employers too, and I have spoken about this with the local chamber of commerce, Business NSW (Central Coast), and I know that they are very keen to see these changes and will welcome the prospect of additional capacity and capability in our local labour market.
Alongside these pension changes, the supporting the transition to work bill will address disincentives to those in the income support system taking up new work by extending the nil rate period from 12 to 24 weeks. I spoke about this with the member for Richmond earlier and about the real benefit that this will make in communities like mine and like hers. It means that people can stay active in the income support system. The example that we were talking about is someone who might be engaged in starting a new job and who's not sure whether it will be the right fit for them or for the employer, but, at the same time, they have the security to be able to retain other benefits such as concession cards, childcare subsidies and other payments for longer when they first get back into work. I think that it's really important in this job market at the moment to make sure that people have that certainty and that stability for their families and for their households. Once again, my own community is strongly representative of why this practical change is a positive step towards more employment and empowerment for low-income households. We know that people who have some work are twice as likely to exit income support as those who don't have work, so removing barriers to employment opportunities, even if they're short term to begin with, can change an individual's outlook for the better.
Lastly, I'd like to touch on the social and health benefits. As an assistant minister for health, I know just how important being engaged in the workforce is for people's mental health and wellbeing. For many older Australians, there are great benefits to be had from continuing to work. We know that staying in work keeps people connected in their community and connected in their workplaces and leads to many mental and physical health benefits. Many choose to volunteer for the same reasons, and I want to note the equal importance and value that we place on volunteering and the vital contribution that volunteers make across our community. Employment, inclusion, social engagement, physical activity, financial security—all these are protective factors for good mental health, to boost your mental health and wellbeing.
As the Albanese government progresses cost-of-living relief and other equity measures such as those in this bill, we are also motivated by a drive for greater equity, stronger mental health and stronger communities. The Albanese Labor government is working every day to address cost-of-living pressures across portfolios, across the whole of government. Once again, I'm pleased to support this bill as a positive part of that agenda.
I too rise to speak on the Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023. I'm pleased to be following the member for Dobell, and I certainly commend her for that speech and echo much of the sentiment that she and many other speakers have shared about the immense benefit of the changes that this bill brings for a whole host of people. It's one that this government is very proud of, in terms of the very practical measures that it makes, particularly for our seniors but also for a lot of people that are in receipt of different pension payments as well, and I will get to all the details of that.
As the Assistant Minister for Social Services, I'm very proud to be speaking on this very critical bill, which sets out the smooth transition between income support and employment. It has a lot of benefits. As the member for Richmond, I also have a large proportion of seniors in my electorate—as the member for Dobell spoke about—and I'm very fortunate to have many senior Australians in my area. As I often say, these are the people that built our nation and we should always be cognisant of serving their needs whatever they may be. A lot of the changes in the bill are ones that have echoed what they have told me over a period of time.
In terms of our government, the Albanese Labor government's No. 1 priority is helping all Australians, ensuring that no-one is left behind or held back and are provided with the support and changes that they may need. We've certainly seen that in a whole host of our cost-of-living initiatives, which, particularly in terms of our seniors, have been of great benefit—whether that be cheaper medicines, energy bill relief or our absolutely huge investment in Medicare, in terms of tripling the bulk billing rate, which has been absolutely crucial for our seniors, who rely on those particular services. We are also very focused on job creation and driving employment, and that's vital in regional economies too to ensure we have strong economic growth through employment in our regions.
The changes in this bill will permanently enhance the pension work bonus and also extend, very importantly, the employment income nil rate period for those on income support. The bill will give people the support they need to be able to work. Following on from last year's Jobs and Skills Summit, the Albanese Labor government has undertaken a number of measures that focus on inclusion and reducing some of the barriers to employment. This includes our work bonus boost, the Carer Inclusive Workplace Initiative and the development of the Career Pathways Pilot for people with a disability.
Through our landmark employment white paper released in September, we set the road map for a more dynamic and inclusive labour market—one that will deliver sustainable employment, underpinned by job security and wages growth. It's so important to have all that in place. We really want to continue to ensure that older Australians have the option should they wish to take up more work and do more work. I certainly hear that from many of my local constituents as well. Some of them are keen to do that and pursue it and have the capacity to do it. That's what this bill is allowing. This bill really does represent the very immediate actions we're taking to deliver on many of the objectives of that white paper.
The changes to the pension work bonus will enable our older Australians who choose to work—and only if they want to—to earn more income from working before their pension is affected, and that could be through a variety of different forms of employment at times of the year when different circumstances arise. They want to be able to have that flexibility.
This builds on the temporary work bonus measure the government announced at the Jobs and Skills Summit, which gave all eligible pensioners a one-off $4,000 upfront credit in their work bonus balance and increased their work bonus income balance from $7,800 to $11,800. This temporary measure was in place from 1 December 2022 to 31 December 2023. But now, with this bill before the House, we will permanently extend these changes, from 1 January 2024, to all eligible new recipients who are of age-pension age, who will commence with a work bonus balance of $4,000 from day 1 instead of starting with zero. We're making this particular objective permanent. It's wonderful that that will be in place. It gives people certainty for the future they are planning as well. Throughout this bill we will retain on a permanent basis the maximum income balance of $11,800 for all eligible pensioners and veterans to accrue in their work bonus income bank. It's a massive change that will assist many of our seniors and our veterans.
In addition to enhancing the work bonus, from 1 July 2024 this bill will also double the length of the employment income nil rate period from 12 to 24 weeks and extend access for people who start full-time work. Of course, the employment income nil rate period is available to people on a whole range of different payments, including the JobSeeker payment, youth allowance, Austudy, the ABSTUDY living allowance, the parenting payment, the disability support pension and the carer payment. Having that in place will make such a huge difference, because people on these particular pensions won't be penalised or have their pension affected if they are working for that period of time. As we all know, once people gain employment, they have to see whether it does actually work out and if it meets the objectives that they and the employer had hoped for. Having those 24 weeks gives a certainty for all involved, particularly to those people who are in employment and making sure that it is exactly the course that they want to take. Of course, having to go off those pensions and then come back on, for many people, is a very lengthy process. To have the opportunity for choice gives a real certainty and a security to those people as well, just having that extension of time to 24 weeks.
There are two very important parts to this bill. We understand, as a government, not only the substantial benefits for older Australians and the broader community, with older Australians returning to work in response to the changes in the bill, but also the economic benefits to that as well. When we look at our older workers, we know they have a wealth of experience and highly skilled working backgrounds to contribute, if they are able and want to be able to do that. I hear from many of my older constituents about the extensive experience and great wealth of knowledge they have that they'll be able to use in a whole variety of employment settings. I know a lot of employers are very keen to hire older workers purely because of that reason. It gives them an opportunity to do that and to be able to fit in employment with whatever they have in their busy lives as well.
This bill will ensure that more than 195,000 senior Australians who commence getting the pension each year will be given added incentive to maintain their connection to the workforce and have that choice. It is important, and, of course, absolutely invaluable when it comes to both our labour market and our local economies to have those people working as well.
The maximum income bank balance of $11,800 also means pensioners who are not working regularly are able to accrue credits with this higher maximum balance, allowing them to earn more, if they do take up some work, before their pension is even affected. It also means pensioners who haven't used their one-off $4,000 credit will be able to keep it in their income bank to use at a later date. Together, the higher maximum income bank balance limit and the starting balance are targeted and effective changes that really will deliver benefits to those pensioners who do choose to work. By doubling the length of the employment income, it will allow people to be more involved in the system and retain these benefits for longer when they first get back into work.
We know that to improve employment outcomes, it's critical that people are not disincentivised from taking on short-term or ad hoc opportunities that could and may turn into longer term work. The changes to the income nil rate period are expected to benefit about 138,000 people each year, particularly those receiving JobSeeker and youth allowance, and it really is a game changer particularly for those younger people, to have the time to really see that they are settled in that employment environment. All of that allows us to provide more support for people to get back into work, without the fear they would obviously have if that social safety net wasn't there if they do need it again; they know it is there, over that period of time, and that is so incredibly important.
In conclusion, the Albanese government is committed to giving many Australians more choice and flexibility to participate in the workforce, particularly older Australians with the work bonus. These changes deliver on our commitment of building on a really strong social security safety net that protects our vulnerable Australians and doesn't stigmatise people for needing help. We are very proud of our history of doing that. Our suite of safety net measures includes additional support for working age and student payment recipients. We would have seen, too, our increases to the Commonwealth rent assistance and expansion of the parenting payment, as well, providing that targeted support when it is required. The importance of this bill is that it really does work to overcome barriers to employment and broaden opportunity by reducing disincentives in the social security system and supporting more people to take up work. The measures in this bill will provide a broad range of support to many more Australians, and I commend the bill to the House.
I rise to speak in favour of the amendment moved by the member for Deakin in the other place. As he outlined in his second reading contribution as the lead speaker for the opposition, we will support the Social Security and Other Legislation Amendment (Supporting the Transition to Work) Bill 2023, but we have an amendment to the second reading to add some very important context to this debate. One of the reasons we are supporting the bill is that in many ways we never needed this bill in the first place. If 12 months ago the government had adopted the policy position that we put forward, and made a lot of these measures permanent, then we wouldn't be needing to pass this bill, which takes those temporary measures into permanency and gives that certainty to people that are benefiting from this sensible scheme announced by Peter Dutton in one of the first policy announcements we as a coalition made after the last election. The government were in a position where they couldn't possibly concede to a good idea from their opponents, so instead they had to mangle it a bit, change it and make it temporary. Now here we are 12 months later, debating legislation that fully implements the policy suggestion that we made to help more pensioners participate in the workplace.
We all know the three Ps: population, participation and productivity. At the moment, population is well under control, if not galloping at quite a frightening rate. More than half a million people are due to join the ranks of this country from net overseas migration, according to the latest Australian Bureau of Statistics population estimates. Population is growing very rapidly, and we have concerns about whether or not elements of that program are too high, particularly when we're not investing in or apportioning the right amount of infrastructure, and making sure we are bringing in people that our economy needs rather than a lot of people potentially coming in under other avenues that aren't necessarily within the spirit of our skilled-migration program.
On the participation side, this is absolutely a measure that makes an enormous amount of sense, which is why Peter Dutton suggested it after the last election. The government have tried to pretend it was their idea and now, 12 months later, are finally making it permanent, which is giving an opportunity for more people to participate in the workplace without impacting or affecting their pension. Quite reasonably, a lot of people are happy to work more hours in our economy if it doesn't impact their full entitlement to earning their pension, and there's a fair degree of human nature around that.
The member for Gilmore, in her contribution, made the spectacular concession that under the government she is a part of it's harder and harder for people to retire now onto the pension, particularly with the spiralling, increasing cost of living. We have a member of the government making a point in a debate that the government they are a part of is failing the people of this country, particularly the most vulnerable people of this country—people who are on fixed incomes—and making it impossible—because of the spiralling increases in the cost of living under the government that she is a part of—to make ends meet without also joining the workforce. I'm happy for her to make the point in the debate. It's curious, politically, to be a member of the government and say, 'We are failing on cost of living,' in a debate that is recorded and able to be used in a whole range of politically advantageous ways by her opponents, but I welcome the honesty. We don't usually get that. According to the member for Gilmore, the cost of living is spiralling out of control. That's on her watch and the watch of the government that she's a part of. We agree with her, of course. She's absolutely right, and it's nice to have a member of the government be honest about the enormous cost-of-living burdens that are on people.
As the member for Deakin makes clear in this amendment to the second reading, these cost-of-living burdens are making it really hard, particularly for people on a fixed income. We were told by this government during the election campaign, when they were seeking to become the government, that if people voted for them, they would ease their cost-of-living burdens. It was a core part of their message and narrative in the campaign. We heard claims that power prices would fall by $275 for the average household power bill. We heard that mortgages were too high under us, apparently. We had the famous comment from the Prime Minister, the then Leader of the Opposition, during the election campaign that mortgages were too high under the coalition. I think we all know what's happened since then. We have a cash rate—the Prime Minister wouldn't know what it is, but I know what it is—of 4.5 per cent at the moment. It went up one-quarter of a per cent at the last Reserve Bank meeting. Since the election it's gone up from 0.35 per cent, so a full four percentage points—it's increased by 400 basis points—on the cash rate. The overnight cash rate has only increased since this government was elected and so mortgages, if they were tough under the last government, are only four per cent harder under this government.
That $275 power bill cut certainly hasn't manifested itself in my electorate or in my home state. We've seen increases across the country. How's this? We have a government that say they will decrease power prices by $275. In my home state they've gone up by more than 22 per cent—22 per cent—on the default market offer in the state of South Australia. I think the national average is about 19 per cent. It's quite a spectacular departure from what we were told would happen if an Albanese government was elected—the average power bill would fall by $275 for the average family in this country, but instead they've gone up by about 20 per cent only 18 months later.
These huge cost increases are crippling for families, and they're particularly crippling for pensioners and people who are on a fixed income. So this bill is welcome because, regrettably, as the member for Gilmore conceded, quite remarkably, people do have to continue to work when they reach retirement age to make ends meet under this government. And that's no surprise if power prices are going up like they are. If you are retiring and you've got any mortgage left over, or if you rent—God help you if you rent and you're retiring onto the pension what with the way rental costs are going up at the moment!
I have pensioners in my electorate who have told me they've moved from buying fresh fruit and vegetables to frozen because it's just too difficult to make the budget stack up under this government and with the way in which inflation has spiralled out of control. Some of the most essential items—rents or mortgages, depending on your circumstances; fuel; fresh vegetables; electricity—all these things people can't do without—are going up at an even greater rate than the overall inflation rate in our economy. It's making it really difficult for pensioners, really difficult for people on fixed incomes to be able to make ends meet.
This bill does present us with an opportunity to allow pensioners to earn more money before it affects their pension. But, as our second reading amendment points out, we would like to see that go further. We think the work bonus should go up from $300 to $600 a fortnight. That would be $600 a fortnight before your pension is impacted because people need to earn that extra $600 a fortnight at the moment for all the reasons I've just outlined. They are having to make really difficult decisions—they're having to cancel family holidays or scale back the Christmas presents for the grandkids, whatever it might be. There are very few places that they can limit discretionary expenditure. Some of the most enjoyable things that people look forward to are having the family over for a Christmas celebration or buying the grandkids their Christmas presents, but now they've got to think really deeply about how they trim back the amount of money they spend on those things because it's all being gobbled by these huge increases in things like power bills.
A lot of these people would be thinking: 'It's funny. I voted for the Labor Party because they said my power bill was going to come down by $275 a year, and that seemed good to me. I wouldn't mind having my power bill dropped by $275 a year.' They made the not unreasonable assumption, although they've now learnt a lesson here, that the now Prime Minister wasn't a liar when he said: 'Power bills would drop by $275. Vote for me. I'd like to run this country and one of the big things I'll do is reduce your power bills.' A lot of people probably reasonably thought that he would honour that promise. They probably thought that was the truth, and now here we are, eighteen months later, in a totally different reality under this government. The people that were deceived by those sorts of promises will have their revenge on this government, and they'll do it through the great processes of our democracy, particularly at the ballot box, at the next opportunity that they get. That is completely at the feet of the people who make and then break promises to the Australian people. Voters take them at their word, elect them and expect them to implement those promises.
We support this bill. We would like to do a lot more to help senior Australians earn more money and contribute to the economy by taking a job and earning more in a fortnight before it impacts their pension. We know we've got very acute workforce issues across the board in this country at the moment. We of course would love to see senior Australians supported—not forced, but given the option—to stay in the workforce longer if they would like to, provided they get the commensurate and reasonable financial reward they would expect: being able to earn money without it impacting the pension they're entitled to.
We'd like to see the bill go further, but we nonetheless support it. We urge others to support this amendment on the second reading because it's important to acknowledge the significant cost-of-living burdens on all Australians, particularly the Australians that will be impacted by the bill that we are passing. It's a burden that they're enduring at the moment, as the member for Gilmore outlined in her contribution. We urge people to support this second reading amendment, which I commend to the House, and we are then equally happy to see this bill passed.
I will finish by acknowledging Peter Dutton for the excellent idea, which he first raised, that will now be implemented through the passage of this legislation.
I've stood for federal parliament seven times and won six in a row, and I would tell the new member for Sturt over there a couple of things. He's pretty confident that he's going to win at the next election, but you can never take the people of Australia for granted. You get judged when you're in federal parliament by what you do and how you vote. The member for Sturt goes on about the cost of living and how the legislation before the chamber is going to help with cost-of-living pressures. Well, I hope that he goes back to his constituency and tells them that, when given the opportunity to provide $1.5 billion in electricity price relief, he voted against it. I hope he tells them that, when given the opportunity to support cheaper medicines with 60-day scripts, he didn't support it. I hope he tells his constituents that, when given the opportunity to support cheaper child care, he didn't support it and, when given the opportunity to support social and affordable homes in the Housing Australia Future Fund, he didn't support it. I hope he goes back to his constituency and says that, when given the opportunity to support a minimum wage increase, he didn't support it and, when given the opportunity to support wage rises in the aged-care sector, he didn't support it.
Don't come in here and denounce us for a good cost-of-living measure in this bill and then give us the faux unction and sanctimonious drivel that we just heard. Let me tell you: you get judged by how you vote. The voters work you out, so don't come in here and be so self-confident. As for the idea that the member for Dickson, the opposition leader, came up with this transition-to-work stuff—it was just an idea. There were no costings at all that they provided in relation to this, nor indeed in their second reading amendment.
This is good legislation that will provide cost-of-living relief and assist older Australians as they transition to retirement. This is legislation that comes from this side of the chamber, not the other side of the chamber. I say to the new member for Sturt: have a bit of grace and a bit of humility when it comes to how the voters will vote, and think about how you cast your vote before you so self-confidently think that you're going to turf out this government and get yourself re-elected in a marginal electorate. I've been in this place for six terms, representing a rural and regional electorate in Queensland as a Labor MP, and I can tell you that I'm the only one that's there in regional and rural Queensland as a Labor MP. So I think I might give a bit of advice, knock on his door, perhaps, and say, 'Have a look at that.' Don't be so self-righteous when it comes to this stuff.
This legislation is important. It focuses on helping Australia secure and reconnect, and maintain that connection to, the workforce, and that's what this bill's all about. I know it's important because local constituents have talked to me about it. People have sat in my electorate office and talked to me about the challenges they face. But it's also about life choices that people want to undertake, and the bill implements a key outcome of the Jobs and Skills Summit. I held one in Blair, in my electorate, at the Brothers Leagues Club, and this was one of the many issues that were raised on that day. Housing was also raised at that thing on the Jobs and Skills Summit. Those opposite didn't support housing reform and the need for more houses in this country.
The Jobs and Skills Summit was a very important summit that happened after we came to office. One of the immediate outcomes of the employment white paper is to help remove the barriers often faced by those on the age pension and veterans looking to re-enter the workforce, so this is important legislation that we're looking at today. At the Jobs and Skills Summit there was a very important message: it doesn't matter whether you're young or you're old. To use the words of the panel for positive ageing and those wonderful people like Brian Howe, the late great Susan Ryan and Everald Compton, one of Australia's true Independents: it's about turning grey into gold. There are a lot of older Australians who want to work more and want to gain the opportunity to be included in the workforce. That is a great productivity measure. It's also a great resource for us to tap into, with their wisdom, expertise and capacity, and this legislation promotes equal opportunities.
The government took steps to address this, including the temporary work bonus boost, the Carer Inclusive Workplace Initiative and partnering with the Business Council of Australia—those opposite claim that they know what the business community wants, but the business community supports this legislation—and the Australian Network on Disability to develop the career pathways pilot for people living with disability. The next stage was to develop the employment white paper, Working future, which was released in September. It sets out a pathway for more Australians, as we make structural changes in our economy and our society. The economy is always changing, and our society is changing. It's always dynamic, and the labour market's the same. It's always moving about. Jobs that were there a while ago—remember those typing pools all those years ago?—have gone. The video stores are no more. The labour market moves around all the time, but we want everyone to have an opportunity to access well-paid, secure jobs, and that's really important.
The white paper is a commitment to work together to deliver sustainable and inclusive employment. It signals ways we can reignite productivity growth, lift skills needs, build our future workforce and broaden opportunity, and that includes for older Australians. This bill gives effect to that vision and aims to provide more choice and flexibility for older Australians and eligible veterans, through an enhanced pension work bonus. It smooths the transition to work for income support recipients by doubling the employment income nil rate period and extends access to the nil rate period for recipients who enter full-time work. These changes remove barriers, and that's what that report from the panel for positive ageing talked about—removing barriers. One of the great things I enjoyed in my life was listening to, and having lunch with, Brian Howe in Melbourne, when he talked about the issues and Labor history. But he also talked to me about the need to harness—I remembered that a few years ago—that older vote for Labor's point of view but also as a matter of equity, a matter of fairness. Older Australians need to get access to any form of short-term, casual or gig economy work they can.
This bill provides support at the right time to get more people in employment. You could almost say it was influenced by that Nordic or Danish 'flexicurity', which is a flexibility with security—or having flexible welfare and workplace arrangements backed up by a strong safety net. What we're seeing more and more is that older Australians are choosing to supplement their age pension with paid work, and good on them for doing so. We need to make sure that the system is incentivising them to work if they want to. No-one should be financially disadvantaged by staying—
The member for Blair will resume their seat. It being 6.30 pm, the debate is interrupted in accordance with standing order 192B. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The member for Blair will have leave to continue speaking when the debate is resumed on a future day.