Senate debates

Wednesday, 9 July 2014

Matters of Public Importance


4:06 pm

Photo of Concetta Fierravanti-WellsConcetta Fierravanti-Wells (NSW, Liberal Party, Parliamentary Secretary to the Minister for Social Services) Share this | Hansard source

As usual, Senator Cameron, is true to Labor form: why let the facts get in the way of a good scare campaign? As Parliamentary Secretary to the Minister for Social Services, I want to place some important facts—facts, Senator Cameron—on the record about our proposed Newstart changes. The coalition believes that the best form of welfare is a job and everyone who can work should have the opportunity to do so and those who are unable to work should be adequately supported. We acknowledge that it is important to maintain an adequate safety net for those who cannot provide for themselves. There are today more than five million people dependent on some form of welfare payment, and current government expenditure on all pensions, allowances and supplements is more than $100 billion a year. There are currently 17 working-age payments and 22 supplementary payments in this area.

As part of the budget we announced some changes to the Newstart allowance, which will be subject to a six-month waiting period before becoming available as income support assistance. I refer to some comments that were made by Minister Andrews on 26 May. He said:

… Newstart as the name suggests is not meant to be a permanent payment. Newstart is actually a payment for a person who is out of work with the view of getting back into work and the reality is that about 50 per cent of people who go on Newstart get a job within six months. So what we need to do is to concentrate especially on that group that don’t get back within six months usually because of some reason such as a lack of skills, for example …

and assist them to get back into the workforce. He also says that, if they do not have a job, 'the best thing that a young person can do is to get into a course and get the training and skills which will get them a job'.

I also state that, as the minister has indicated, it is important that, as we all know, out there there is intergenerational unemployment and often the intergenerational poverty that goes with it. That is why it is important that we do take some measures to tighten the way in which people can get onto Newstart or unemployment benefits and particularly aim them at young people so that we can cut the cycle of intergenerational unemployment.

Let me turn to some facts. Each change will affect different people in different ways depending on their individual circumstances. At 12 months, an unemployed person will finish their first period of time limited income support and the Work for the Dole placement and they will enter a six-month non-payment period followed by another period of time limited income support at 18 months, at which point they will also undertake to work for the dole for 25 hours per week. After two years—that is, if they remain unemployed after two years—they will enter another six-month non-payment period. After the completion of the six-month Work for the Dole placement, a wage subsidy will be available for a potential employer.

Senator Cameron and those opposite who are peddling misinformation, I state for the record that there are exemptions to the six-month waiting period. I would like to put these on the record. The following individuals are exempt from the six-month waiting period: people in full-time education, people assessed as having a partial work capacity of less than 30 hours per week, a single parent receiving family tax benefit for a child, a part-time apprentice, a principal carer parent, a job seeker assessed as requiring stream 3 or stream 4 assistance under the current employment services arrangements or the Remote Jobs and Communities Program equivalent, or a person eligible for disability employment services.

For every one year of work history, one month will be discounted from their waiting period, pro rata for part-time casual work, to a maximum of five months discount for the waiting period. In recognition of the importance of education and training in preventing future unemployment, young people who return to school or take up full-time vocational education or university study will not be subject to the six-month waiting period. Waiting periods are designed to ensure unemployed people with cash reserves—including from redundancy, termination payments and compensation payments—do not draw on the welfare system before first supporting themselves while looking for another job. Some waiting periods may be served at the same time, while others must be served consecutively. This depends on the circumstances of the claimant and their overall means of support.

Newstart and youth allowances are not meant to be permanent payments. They are temporary payments to support people while they find a job. We believe that introducing a six-month waiting period and time limits on income support payments will give young people a stronger incentive to learn or earn. During the waiting period job seekers will have access to a full range of supports to help them become work ready such as access to employment services, relevant training or relocation assistance to move to a stronger jobs market.

Welfare is a critical safety net for those who are unable to work. For those who are able, work is the best thing that they can do for their own wellbeing and that of their families and children. We believe that introducing a six-month waiting period and time limits on income support payments will give younger people a stronger incentive to learn or earn. Young job seekers can also choose to participate in further education or training to help increase their employability and may be eligible for youth allowance study for student or Austudy payments to help them do so. Job seekers will not be required to relocate. However, if there are no jobs in their immediate vicinity, they will need to move to work in order to support themselves. Their employment services provider will assist the job seeker if they identify a job in another area. This includes relocation assistance.

The income support system should not make unemployment a viable and in some cases more attractive option for young people. The changes to income support payments provide an incentive for workforce participation and encourage self-reliance while the system continues to support those finding it hardest to get a job. Income support will no longer be a lifestyle choice for those who are able to work. Our welfare system does need to be sustainable so that the people who need support have access to welfare and those who are capable of working are encouraged to get a job.

These changes aim to maximise everyone's ability and incentives to participate in the economy. More stringent payment conditions and activity requirements are essential to ensure the sustainability of our income support payments. Most importantly, support must be targeted to those most in need. Changes are designed to help people move into employment when they are able to do so. This is particularly important for young people so they do not become trapped in a lifetime of welfare dependency. These changes will help to ensure that a strong social safety net can be preserved for everyone's future and will continue to support those who need it most.

The best form of welfare for most people is a job, which not only brings financial rewards but also has a lot of psychological benefits as well. As part of this, the government recognises that people affected by this measure may require some assistance during these waiting periods. The package provides an additional $229 million in funding over four years for job seeker support. This funding will be provided to selected community sector organisations to assist eligible job seekers to buy essentials. It is really important that our welfare system is sustainable. It is important that people do have a job, and it is also important that we maintain an adequate safety net, most especially for those who cannot support themselves.

Recently we have seen reports and some misinformation in relation to allegations about people being on Newstart. It is really important that people view Newstart as a payment that is not permanent. It is a payment to assist people for a period of time to help them get back into work. Over half the people looking for work find a job within six months. So it is vitally important that our important resources in this area are retained to assist those most in need.

In the short time available to me I also want to make a couple of the points that the minister has sought to underline in his various public comments. It is really important to stress that there are exemptions. What is very clear from those opposite who are running a scare campaign about this matter is that they are being conveniently misleading in relation to the exemptions in this area. As I have indicated, the government believes that assistance to unemployed people should help them move into employment, rather than provide incentives for them to remain on welfare. From 1 January 2015 we will introduce the six-month waiting period and time-limited income support payments for new job seekers under 30. As I have said, this will give young Australians stronger incentives to either learn or learn.

Senator Polley interjecting—

Senator Polley, you were not really interested when you were in government. Your legacy—


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