Gary Humphries (ACT, Liberal Party) Share this | Hansard source

I rise to support the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 and to indicate that there is a very important need for Australia to restructure the nature of participation in the workforce in light of the dynamics of our society today.

Members of the Senate will be aware of the previous debates on this question. They will be aware of the inquiry by the Senate Community Affairs Legislation Committee late last year. That inquiry laid out a variety of issues being addressed in the transition of the Australian social security system from one which supported, and perhaps in some senses even encouraged, a very significant proportion of Australians of working age to receive benefits and not participate in the workforce to a system where the onus is placed on people who are capable of participating in the workforce to do so. By doing so, they help to address the serious imbalance emerging in the Australian economy between the number of positions being advertised and the number of jobs being thrown up in business and the economy generally, and the number of people available to fill them.

The Senate would be aware that we have seen in only the last few days wonderful news about the unemployment rate falling below five per cent. It is extremely important that we acknowledge the evidence that this represents for the change in the nature of the Australian workforce. There is now no longer a shortage of jobs so much as a shortage of workers. We should perhaps be focusing on other indicators of the health of our economy rather than on unemployment figures. We should be looking at ways that we can address that situation as it stands today. That situation is going to worsen in light of the ageing of our population. There will be an increasing vacation of the working population by those who get older and a lack of replacement of those people by others of working age who are available to contribute to manpower shortages in our economy. The Workforce Tomorrow study by the Centre of Policy Studies at Monash University illustrated that point extremely well. It described the phenomenon of the disparity between available positions and people available to fill those positions as being in the order of 195,000 within five years.

I particularly feel an urgency to ensure that this issue is pursued, because the ACT was identified as the jurisdiction which would have, after South Australia, the worst disparity of all. Indeed, in the ACT there are already serious manpower shortages in a range of areas. It is simply going to get worse unless measures are taken to encourage as many people as possible to participate in the workforce. There cannot be any doubt that that process represents a huge cultural change in the nature of Australia’s welfare system and its policies on participation in the workforce. It is an absolutely huge change.

In today’s debate, I have heard criticism by other senators across the chamber about the changes that the federal government is engineering with these bills, but I say to them that, in addressing the so-called shortcomings in these arrangements, they need to seriously ask themselves what they would do differently if they were on the government benches. What would they do to address the looming crisis in Australia’s capacity to be a productive economy that delivers a worthwhile standard of living to all of its citizens?

We know that providing a job is the best form of welfare that we can furnish to our citizens. We know that those who have the capacity to work ought to be encouraged to work. We know that services provided to people who have an obligation to seek work should focus on getting those people into the workforce at the first available opportunity, given other constraints and their particular conditions—such as their need to care for children or the problems that some sorts of disabilities may bring to a work environment.

We acknowledge those factors. However, having done that, you cannot then avoid the question of what you actually do to effect that change. It is a significant change. With respect to supporting Australians who for a variety of reasons choose not to be in the workforce, it is a change which represents, in some senses, the repudiation of policy of many decades duration. But it would be irresponsible to fail to address those issues. I hope that this debate goes beyond simply highlighting what are, apparently, in the eyes of some people, inadequacies or shortcomings in the government’s proposal.

I move to the question of what can be done to make those changes happen and to make that outcome actually occur for the sake of the standard of living of future Australians. Currently, Australia’s participation rate of working people is 73.6 per cent—at least that was the figure available from the OECD last year. It needs to be noted that that rate is significantly behind other major OECD countries, such as Canada, Denmark, Switzerland, the United Kingdom and the United States. Comparisons are perhaps odious, but they illustrate that we are not leaping into the unknown and we are not engineering some kind of unacceptable change in the nature of the workforce by taking measures that stimulate people’s involvement in the workforce. Frankly, in order to meet the skill and labour shortages that the Australian economy will experience in the next few years, we have to ensure that we get that participation rate up as high as possible.

At present, the net growth in the Australian workforce is 170,000 people each year. Access Economics has estimated that, over the decade from 2020 to 2030, the workforce will grow by just 125,000 people—that is, a growth in the size of the workforce of about 12½ thousand people each year. The side effects of the disparity between the size of the workforce and the size of the required workforce, if you like, will lead to an ever-diminishing tax base and revenue base for governments at all levels, not simply for the federal government. It will impact seriously on the ability to provide a range of government services, including pensions, income support payments, health services and education services—all sorts of services to the Australian community. So it is obvious that we will engineer an intergenerational inequity if we cannot provide the next generation of Australian taxpayers with the opportunity to pay taxes at a reasonable level and to get reasonable access to services of the kinds that are enjoyed by the taxpayers of today.

Of course, that was the issue that the Treasurer, just a few years ago, very clearly placed on the table with his Intergenerational report, in which he warned:

Although the ageing of the Australian population is not expected to have a major impact on the Commonwealth’s budget for at least another 15 years, forward planning for these developments is important to ensure that governments will be well placed to meet emerging policy challenges in both a timely and effective manner.

Having said that we have an insufficiently high participation rate of working people in our economy, we have to acknowledge that the nature of the Australian welfare system has led to a higher degree of welfare dependency than is appropriate in order to reverse the trend towards a deficit in the number of people available to fill positions.

There are currently 2.6 million working age Australians—that is, people between the ages of 15 and 64—who are on income support. I acknowledge that the retirement age is now a moveable feast—and so it should be—but, if we take that to be the age at which people might be expected, in all circumstances, to work, there are 2.6 million Australians who are on income support, of which only 15 per cent are required to be actively searching for a job. In other words, a relatively small minority of that 2.6 million is actually required to go out into the workforce. There is a variety of issues confronting those approximately two million people who are not required to seek employment and who are on income support. Of course, there are some who will never be in a position to participate in the workforce, but it cannot be denied that we have, at the present time, a system in which far too many are capable of participating but are simply not appropriately encouraged by the nature of the system to take that decision and to seek employment.

With the present unemployment rate, there has never been a better time to seek those positions. Some people may have been discouraged by a lack of available positions on the basis of, for example, having a disability, being a mature age worker or having a low skills set, and they may have had a long history of rejection and inability to obtain employment. But what is different about the environment today, particularly with the measures that have been announced in the Welfare to Work package, is that active steps are being taken by government to engineer people through the difficulty of having a problem which perhaps makes them, in the eyes of some, less attractive employees than otherwise might be available. We acknowledge that there are many factors that can contribute to a person not obtaining employment, but we should not allow a situation to remain whereby one of those factors is their unwillingness to participate despite a capacity to do so.

In the 12 months prior to June 2004, 55 per cent of people transferred to the disability support payment from another payment in Australia. That was in reaction to changes in government policy which tightened up access to other forms of payment. In the seven years prior to June 2004, the DSP had grown to 26 per cent and the parenting payment single by 33 per cent. It needs to be recorded that there are now more working age Australians on the DSP than there are on the Newstart allowance.

There may have been factors which contributed to an increase in the number of Australians with disabilities—there may have been factors related to definitional changes which led to people having an eligibility for that payment which they did not previously have—but I think we also need to be up front and sincere enough to acknowledge that some people have taken advantage of the system to make that transition and that in some cases the disabilities complained of are not in effect a barrier to participation in the workforce, particularly given that systems are now being put in place to allow people’s particular conditions to be much more readily taken into account in their role in the workplace than has ever been the case in the past.

Money was made available, under the package announced last year, for workplaces to be modified to allow those issues to be addressed and for advice and support to be given to employers who choose to employ a worker with a disability of a level that we have not previously seen in this country. We are at last serious about getting people with disabilities a role in the workforce. Admittedly, circumstances may have forced that on us, rather than a philosophical change of viewpoint, but the fact is that those changes are taking place now. It is important that we indicate to people, particularly those with disabilities, that the system we are putting in place is now about accommodating those requirements, working through those needs and treating those with disabilities who want to participate in the workforce as citizens who have a greater capacity to do that than ever before.

I hope that, as with last year’s legislation, the changes in this legislation that are being discussed will be sympathetically considered by senators. We realise that none of these decisions is necessarily very easy. It is certainly possible for people to be miscategorised by a system which places a greater emphasis on participation. It is certainly possible for people who do not have a capacity to work to be required to work in a way which causes them some disadvantage or some loss of income support. But I am convinced that the best measure to overcome that potential is goodwill and an accepted willingness on the part of Centrelink and other agencies of the federal government that deal with people in these circumstances to address people on the basis of their individual circumstances, and to not use inflexible rules to apply to people irrespective of those individual circumstances—not, in short, to attempt to force a square peg into a round hole.

We owe it to future generations of Australians to ensure that we do this sensitively and with regard to those individual circumstances. I believe that the flexibility exists in the legislation and in the approach being taken by agencies of the federal government to engineer that outcome. I do not, of course, preclude the possibility of stories of people being mistreated by the system—and I have no doubt at all that, when those cases occur, the media will hungrily lap them up and there will be headlines. However, at the end of the day, as long as we are fair minded, we are prepared to approach this on the basis of providing for an acceptable and appropriate transition to a different kind of welfare operation in Australia, and we accept that a measure of flexibility can be applied and should be applied, I think we will be on the right track. I hope that that is the outcome of the exercise.

The Senate Community Affairs Legislation Committee recommended last year that the system be overviewed and monitored, and I believe that that is important. I understand that the Minister for Employment and Workplace Relations has accepted the recommendations for a mechanism that reports to parliament on the way in which these changes operate. Personally, I think we need to see the system in operation in order to be able to gauge just how well that transition has been made. I know that some would prefer to front-end load this so that no problems can possibly occur. With respect, I think that is naive. We are not going to be able to do that. What we need, however, is a capacity to acknowledge when things do not work and to make changes when that is appropriate.

That is my sense of the response that the minister gave to the report. I certainly will take that approach as a representative of this territory in my discussions with the minister in identifying what issues arise for my constituents in facing that transition. I hope that that will be a phenomenon repeated across other parts of Australia. We certainly owe it to our constituents to give them as much opportunity to bring those issues to our attention as we possibly can so we can help fix them. I support this legislation. It is important to provide this outcome for the people of Australia. This is about the future living standards of our community and, as such, it deserves to be supported.