Senate debates

Tuesday, 9 October 2012


Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012; Second Reading

1:06 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | Hansard source

I compliment both Senator Sinodinos and Senator Siewert for their contributions to this debate on the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012. I think the comments that both of them have made are very telling and should be taken on board. There are two elements to this bill for which I have concern. The first is that it fails to promote greater workplace participation, workforce participation, for those people who will be affected by it. The second is that, obviously, this is an attempt by the government to try to balance the budget—a fact which, of course, will never happen under this government—and to do so at the expense of and on the back of the most vulnerable—in this case, low-income earners, carers, single parents and inevitably, as Senator Siewert has eloquently indicated, their children. Those are concerns that I will return to during this presentation.

We also have real concerns about the primary objectives of the legislation, and that is its failure to promote greater workforce and workplace participation as well as its failure to provide appropriate incentives to encourage those who are out of the workforce to find, to maintain or to re-enter useful employment. They are areas that are obviously of concern.

In the inquiry that we held into this matter, the Department of Education, Employment and Workplace Relations cited evidence which indicates that children who grow up in jobless families are themselves much more likely to experience unemployment as adults. Following on from Senator Siewert, I want to focus on the impact of this legislation on children. If I may quote from the submission by the department to the inquiry:

Children who grow up in jobless families are far more likely to be out of work as adults compared to those who had a working parent—

or parents.

It is therefore vital that the income support system seeks to incentivise work in order to break the dependency cycle. The system must provide the right balance of support and incentive to work to ensure that parents are in a position to benefit from the opportunities the economy has to offer, particularly as their children get older and the parent's capacity for work increases, and provide their families with positive role models and greater financial security.

I will repeat those—as I am sure they go to the heart of what we all would agree in this place—and they are: positive role models by parents or their carers for their children and greater financial security being stability.

It was at the same inquiry that Ms Netty Horton, the Territorial Social Program Director of the Salvation Army—and I must say that she was not supportive of the legislation—explained to the committee:

We would like to be very clear in that we are fully supportive of moving as many people as possible—single parents or unemployed people in general—towards being able to work, and some of the focus of our submission has been around our experiences in working with the most disadvantaged group of those people in the community and recognising that they need additional support and incentives to move them into the paid workforce.

She went on to conclude:

We recognise that that is the best way out of poverty and the best way to ensure participation both for them and for their children in the community.

Those are very telling comments.

The regrettable aspect of the matter that we are discussing today has, of course, been the inability of this government to carry on the work commenced by the Howard government under the Welfare to Work reforms of 2006. At the time, those reforms were predicated on the basis of some $8.9 billion in cash surplus that had been generated following the repayment of the debt of the then Keating government. It was because of that surplus that the Howard government was able to implement its Welfare to Work reforms. It invested some $3.6 billion in 2006, with $400 million over four years of that specifically directed to assist parents into work—the very people we are speaking about. The Labor government today have made some effort to try and continue those initiatives, but because they have now got themselves into the circumstance of such deep indebtedness and deficit, we see them taking these sorts of actions in an attempt to try and save some $789 million over four years at the expense of who, I would say, are the most vulnerable in the community.

The Howard government initiatives, amongst others, had a requirement that single and parenting payment partnered recipients seek at least 15 hours of work each week and to start that process themselves, psychologically as well as physically, to return to the workplace. In addition to that, there was access to concessions for single parenting payment recipients. Here the Howard government ensured additional out-of-school-hours care to be available for parents. But we know that only recently under a different guise childcare reforms are seeing this out-of-school-hours care being placed at risk in 2012, with many of the centres being forced to close as a result of the so-called national reforms. So we are going to see a double whammy here, and that is an inability for people to ensure their children are cared for whilst they either seek employment or, indeed, undertake those works.

As part of that coalition policy at that time parents could refuse a job if they would not be more than $50 a fortnight better off once the costs of employment were factored in—including, of course, child care—or if they had to travel for more than 60 minutes each way to work. Very sensible initiatives, but of course they have also unfortunately gone by the wayside.

I heard my colleague Senator Sinodinos quote from the then department of education and workplace's Welfare to Work reforms that showed there were significant increases, 23 per cent I believe, in the number of single principal carer parents leaving income support after six months in comparison to the three previous years as a result of those initiatives, and 38 per cent moving off the payment during 2006-07. That was for single principal carers, and the report showed that more than 70 per cent of principal carer parents left income support for employment. For partnered principal carer parents on the Newstart allowance, 45 per cent were no longer in receipt of income support payments after six months, compared to 32 per cent the previous year—an increase of some 13 per cent. So we could see evidence of improvements being undertaken and at the same time systems were in place to ensure that there was child care for children, and there was the capacity for an orderly transfer to work.

These measures were designed to boost workforce engagement, reduce dependency on welfare and, returning to the comments made earlier, to try to break that cycle of long-term intergenerational unemployment, which of itself unfortunately generally leads to a circumstance in which the growing child comes to expect a life themselves of unemployment, and that is unacceptable. I referred to that in my first speech in the Senate on 17 March 2009; I reflected that in a country like this we should surely never see a circumstance in which we look to a situation in which young people particularly would not find useful, gainful and obviously lucrative employment.

There are benefits to this bill. We do recognise that the best way to help parents and their children is to help the parents find a job. We do understand, as I have just indicated, that children growing up in a jobless household will be much more likely themselves to face long-term unemployment, underemployment or the third of that trifecta—that is, unfulfilling employment. It is not just the fact of getting a job or keeping a job; it is the fact of aspiring to a job that of itself will be of interest and of itself will help the person grow over time. All of us in this place have seen the experience that is denied young people when they themselves have not had that opportunity.

Intergenerational unemployment is a growing concern in Australia and the longer people remain on welfare the more difficult it becomes. I agree with Senator Siewert; indeed, the coalition shares its support for the increase in the level or limit of the liquid assets waiting period. In fact I have some difficulties even with the level or the limit to which it is being placed. I would like to see over time that figure potentially being increased because, as we all know, there are unforeseen problems that occur in families, be they emergencies or whatever, and it is unreasonable that we should not penalise somebody having some sort of a cash reserve, either as a single or as combined parents, to be able to overcome those emergency periods.

We do have concerns with the bill. I have tried to outline some of them. There is no additional funding to support parents into work, and I cannot emphasise that enough. I think that is one of its great deficiencies, in contrast to the Howard initiatives of 2006. I believe it is incumbent on the government to go back and re-examine these figures and see whether or not they cannot return to providing that additional assistance. It is the case that the government have slashed some $160 million from Job Services Australia assistance for job seekers. That is a very, very significant sum, and the impact of it will be adverse on those seeking employment and ultimately on their families. A further $44 million has been cut from the outcome payments for Job Services Australia providers. All of these are directed at the ultimate failure of the legislation that is before us.

The deep concern I have and to which I referred at the beginning, and which so many people are acutely conscious of—whether or not government senators do come out and say so publicly remains to be seen—is the effort of this government to try to hive off some $700 million over four years from the most vulnerable and those least able to afford it. Why is that? Why was it that in 2006 the Howard government was able to inject some $3.8 billion into the Welfare to Work initiative, some $400 million specifically to assist parents into work? It was because the economy was in surplus and because there was a surplus budget. That is what we were able to do.

We see a circumstance now where I believe these figures really are terribly telling. I want to focus on this circumstance. In 2007 this government inherited $70 billion of surplus. In this year's budget, it was estimated that the debt would blow out to $147 billion from a $70 billion surplus. But of course that is now not the case. We learnt only today—I believe Senator Williams said it, through you, Mr Acting Deputy President—that we are now looking at a national debt of some $250 billion. Not the 147—


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