Thursday, 7 December 2017
Social Services Legislation Amendment (Welfare Reform) Bill 2017; Second Reading
I would just say to Senator Bernardi: don't let the perfect be the enemy of the good, not that any piece of legislation that comes into this place is perfect. I rise to speak on the Social Services Legislation Amendment (Welfare Reform) Bill 2017. I will start with the drug-testing aspects of the bill, because, as foreshadowed by a number of previous speakers, the government will be moving amendments to omit schedule 12 and references in other schedules from the bill.
Drug dependency and alcohol dependency is a scourge—everyone in this place would agree with that—but welfare dependency is also a scourge. Generational welfare dependency condemns people to an existence which is, I think, certainly significantly miserable and very difficult to remove yourself from once you are in that situation. Almost without exemptions, it has proven to be very difficult for governments of any persuasion to come up with successful answers to generational welfare dependency. So, I think that, in this space, we must always be willing to try new things. That is why, whilst the government will omit the drug-testing trial in schedule 12, it is certainly not something that we are giving up on. The government remains committed to the drug-testing trial and believe it can be, in the future, an effective way of identifying welfare recipients for whom mandated treatment could be successful.
As chair of the Senate Community Affairs Legislation Committee, I was involved in the inquiry into this bill, and there certainly were criticisms of the drug-testing trial. There were some criticisms, for example, of the lack of evidence to support drug testing, but that is why we're having a trial. We need to have some evidence base on which to make these decisions. The way we get that evidence base—particularly as every jurisdiction internationally is slightly different in the nature of welfare that's provided and how people interact with the welfare system—is with trials, which are a way of nations finding out what works within their particular jurisdictions.
I think it's also very important to note in that regard that overseas examples of drug testing, where they have occurred, most often relate to penalising people on welfare or preventing them from obtaining welfare, neither of which the government's drug-testing trial did. I want to make that very clear: this was not about penalising people; this was not about refusing them access to welfare. This was about identifying people who had a problem with addiction and then moving them through into treatment. The Department of Social Services stated the drug trial is to:
… assess the value of drug testing as a way of identifying those for whom drug misuse is a barrier to work, and as a means of supporting them to undertake treatment … This trial is not about penalising jobseekers with drug abuse issues. It is about finding new and better ways of identifying these jobseekers and ensuring they are referred to the support and treatment they need.
They went on to state that the objective of the drug-testing trial is:
… to provide the evidence as to whether an additional trigger for people who are receiving unemployment payments and have substance abuse problems will encourage them to self-disclose and/or be found to have that problem and to be quickly linked to treatment.
Removing barriers to work is important. Getting people back into work is the best thing we can do for people. This drug-testing trial was a valuable way of seeing if we could, through this trigger, move people into treatment and, thereby, help them to deal with their abuse problems and get back into work.
There were also some questions raised on the cost availability and reliability of testing. There were going to be specific types of drug testing and specific drugs to be tested for. That was going to be done in consultation with the Department of Human Services and the company that was to secure the drug-testing-service contract. So there was going to be capacity to undertake the tests—obviously, it's not something where you would necessarily test for every single drug out there. You would be looking for the harmful drugs; the ones that are having the most impact on people being able to get back into the workforce.
There was also a question mark raised on the availability of treatment services. It should be noted that the number of expected positive tests in the trial sites was going to be very low. It was expected that 120 people were likely to test positive a second time and that those would be the people who would be sent for medical assessment. So we are not talking about a large number of people being identified. So the treatment services required were going to vary from counselling sessions through to, in extreme cases, residential rehabilitation. To that end, the government had put extra funding of $10 million in place to be available to provide assistance to drug treatment services at the three trial sites.
Obviously the trial will not go ahead at this point. I think that is a shame, and the government certainly does remain committed to it. The trial was to have combined drug testing with other interventions underpinned by two fundamental principles: if you limit the amount of cash available to someone with a drug abuse problem, it will reduce their ability to underwrite their illicit drug use; and, if you mandate treatment tailored to individual people's needs, it will improve their life and—this is the key point—it will improve their employment outcomes. That, again, is what our welfare system is all about. It's about getting people out of welfare dependency and back into work. The data and the evidence show that not waiting until people get themselves motivated to seek treatment can work. Recent evaluations of drug court mandated treatments in Australia show a reduction in recidivism and better employment outcomes for participants.
My understanding is that the majority of the crossbench do support the drug-testing trial. However, there is some concern around the use of random testing as a method of selection. The government is therefore amending the bill to remove schedule 12. We will continue constructive discussions with the crossbench and seek to progress the drug-testing trials through separate legislation. However, it is very important to note that this bill is about a lot more than drug-testing trials. The trial is only one of 17 schedules in the bill. Again, welfare reforms in general are very important, and we need to continue to make sure that our welfare system is the correct one for our society and one that is affordable and provides the maximum amount of support to those in genuine need.
We're embarking on what is a very comprehensive reform of Australia's working-age welfare payments—probably the most comprehensive reform in decades. There's a consolidation of seven existing payments and we are introducing a new jobseeker payment. The jobseeker payment will be the main payment for people of working age, ensuring consistent treatment of recipients. Australians of working age who need the support of the Australian taxpayer will no longer be required to navigate a confusing and complex welfare system with multiple categories of payment that treat people who are in similar circumstances differently.
The jobseeker payment will have the same basic qualification, payability and rate settings as Newstart allowance; however, the payment will be broader in scope than the Newstart allowance. Provisions will be made within the jobseeker payment to allow access for people who are sick or injured or have a job or study to return to after recovery and would otherwise receive sickness allowance. The new payment will also provide assistance for people who have experienced the death of a partner. Around 811,000 existing payment recipients will transition to the jobseeker payments from 20 March 2020. This measure will simplify the welfare system and reduce the need for recipients to transfer between payments. Of the people impacted by this package, 99.93 per cent will have the same or a higher payment rate. I will state that again: 99.93 per cent of people impacted by this package will have the same or a higher payment rate.
There is relief from activity tests for persons aged 55 to 59. This measure will strengthen the employment focus of mutual obligations for mature-age jobseekers, with a view to better connecting them to the labour market. This involves changing the activity test arrangements to ensure Newstart allowance and special benefit recipients aged 55 to 59 experience greater workforce participation. The activity test is a requirement to actively look for work and accept any suitable work. Currently, Newstart allowance and special benefit recipients aged 55 or over can satisfy the activity test and meet their annual activity requirement through 30 hours per fortnight of approved voluntary work, paid work or a combination of both. A person's annual activity requirement is the number of hours jobseekers usually must complete in approved activities when they are in certain phases of servicing from their employment provider. Whilst volunteering is beneficial, participation in paid work and reduced reliance on income support should be the ultimate goal for jobseekers. Jobseekers aged 55 to 59 are of prime working age. They have many years of working ahead of them, and our welfare system should be encouraging them to get back to work sooner. From 20 September 2018, amended legislation will ensure Newstart allowance and special benefit recipients aged 55 to 59 are taken to satisfy the activity test if they are engaged in at least 30 hours per fortnight of paid work or a combination of paid and voluntary work, at least 15 hours of which must be in paid work.
Jobseekers aged between 60 and the age pension age would not be impacted by this legislation, but, under a complementary measure, this group of people will now have annual activity requirements of 10 hours per fortnight, which they can meet through voluntary work. This reflects a graduated approach to requirements, noting recipients aged 60 years and over currently do not have any participation requirements apart from job search activities. Commensurate changes would also be made to jobactive guidelines to prioritise paid work on the annual activity requirements for these recipients.
International evidence shows that the best way to reduce welfare dependency is to activate welfare recipients to search for work and undertake activities that increase their chances of finding work. The OECD has found there is an unmet activation potential in Australia's labour market and has recommended increasing participation requirements for several cohorts, including older Australians. The Treasury's 2015 Intergenerational report also raised the need to encourage older workers to stay in or re-enter the workforce. The proposed changes are expected to have a minimal impact on the number of volunteers or the hours contributed towards the volunteering sector. To complement this measure, the Australian government is also investing over $100 million to increase the skills and experience of mature-age jobseekers from 1 July 2018.
There is a change to the start date for some participation payments. From 1 January 2018, the income support payments for all new jobseekers who have claimed Newstart allowance or youth allowance and who are subject to RapidConnect will commence from the day they attend their initial jobactive Transition to Work appointment, instead of being back paid to the date they first contacted the Department of Human Services. These changes are designed to encourage jobseekers to connect more quickly with employment services to help them find and keep a job. Jobactive and Transition to Work providers are already required to make appointments available for jobseekers to attend within two business days. This will be maintained to ensure that jobseekers have every opportunity to connect with employment services as quickly as they can. If no provider appointments are available within two business days, then the jobseeker's income support will be backdated to the date their income support claim was finalised by the Department of Human Services. If a jobseeker has a reasonable excuse for missing their initial appointment and they attend a subsequent appointment, their income support will commence from the appointment they missed rather than the subsequent appointment.
The work first initiative is an important initiative that seeks to change jobseeker behaviour and ensure that they take personal responsibility to connect with the services that will help them find a job as quickly as possible. In all these cases, time is of the essence. The quicker you are interacting with services to help you get a job, the more likely you are to get a job. The initiative re-enforces the community expectation that, where an individual needs income support, they should be doing all they can to find work as quickly as possible.
The bill also has a removal of intent-to-claim provisions. From 1 January 2018, social security claimants will receive payments from the date they lodge a proper claim rather than from the date they first contact the Department of Human Services expressing an intention to claim. The claim process will be strengthened by DHS no longer accepting a claim until all information under the claimant's control has been provided. Claimants will continue to have additional time—up to 14 days—to supply some third-party documents, such as medical reports, which may take longer to obtain. These changes will encourage social security claimants to provide timely and complete information in support of their claims. DHS will provide clear information about what must be provided as part of the claim process. Together, these changes will simplify the claims process by removing provisions that allow a person to receive payments for periods prior to lodging a claim. These changes are part of a number of changes we are making from this budget to remove unnecessary administrative practices, which, ultimately, cost the taxpayer. Arrangements already exist as part of the application process for special benefit payments to be made to people in some disaster situations. Special benefit is only paid where people qualify, and part of this includes not being able to qualify for another payment.
The bill also contains the removal of exemptions for drug or alcohol dependence. The bill will remove the ability of jobseekers to be exempted from their mutual obligation or participation requirements where they have an illness or other circumstances affecting their ability to meet their mutual obligation requirements which is primarily attributable to drug or alcohol abuse. This measure reflects that people with substance abuse issues that prevent them looking for work or undertaking other activities should be taking active steps to address their issues, including through appropriate treatment, rather than being exempt from all requirements. Currently, jobseekers may be granted an exemption on the basis of temporary incapacity due to drug or alcohol dependency. Exemptions may also be granted in some other circumstances that may be directly attributable to drug or alcohol abuse—for example, a jobseeker may be granted a major personal crisis exemption because they have been evicted from their home due to their drug use.
From 1 January 2018, jobseekers will no longer be able to be exempted from their mutual obligation or participation requirements where the reason for the exemption is predominantly due to drug or alcohol misuse. This means that an exemption may no longer be granted where a jobseeker applies for a temporary incapacity exemption if the primary condition is drug or alcohol dependency. In addition, jobseekers will no longer qualify for a special circumstances exemption—for example, due to major personal crisis or major disruption at home—if it is determined that the main cause of those circumstances was the person's own drug or alcohol misuse. Jobseekers who are no longer eligible for an exemption will instead remain connected to their employment services provider. They will be required to participate in mutual obligation requirements tailored to take into account their particular barriers, including their drug and alcohol abuse issues. The government is investing $28.8 million in this measure to provide employment services to those no longer eligible for an exemption. This will support these jobseekers with drug and alcohol abuse issues to remain actively engaged in appropriate activities to address their barriers to work.
For the first time, all jobseekers with substance misuse would be able to undertake appropriate treatment as part of their job plan to meet their mutual obligation requirements. It is estimated that around 11,000 jobseekers annually would no longer be granted drug or alcohol exemptions. This measure will apply to recipients of Newstart, youth allowance, disability support pension recipients who are under 35 and have participation requirements, special benefit recipients with activity test requirements, and parenting payment single recipients with participation requirements. This measure will not apply to jobseekers in the Community Development Program, CDP. CDP has a separate mutual obligations approach, which is specifically designed to address the particular circumstances in remote Australia. CDP jobseekers are already able to participate in drug and alcohol treatment activities as part of their mutual obligation requirements.
The bill is a very large and complex bill, and there is certainly much more to go through. However, I will restate that this is a comprehensive reform package. The government has amended the bill to remove the drug-testing trial. However, the government remains committed to that trial. I commend the bill to the house.