Tuesday, 2 August 2022
Social Security and Other Legislation Amendment (Self-Employment Programs and Other Measures) Bill 2022
I rise to speak on the Social Security and Other Legislation Amendment (Self-Employment Programs and Other Measures) Bill 2022. Small businesses in Australia have taken a battering over the last two years of the COVID-19 pandemic, and none more so than those who are just starting out. That's why it's more important than ever for government to support and encourage the development of new small businesses and to help viable businesses adapt to change.
Small businesses are a vital part of the Australian economy, with 2.4 million small businesses actively trading and employing around 4.7 million people. In Tasmania, the state I represent, 97 per cent of businesses are small businesses, and there are just under 40,000 small businesses employing around 100,000 people. That figure really hits home when you consider that there are around 263,700 employed people in the whole state—so nearly 40 per cent of working Tasmanians are employed in a small business. Almost a quarter of all Tasmania small-business operators are born overseas.
Labor knows that giving Australians the opportunity to be their own boss and own a business that offers them secure work and financial independence is absolutely vital. For many Australians, self-employment is a great alternative to traditional employment, allowing them to use their existing skills and experience in a work environment they get to shape and mould. It also assists Australians who struggle to apply their skills in other labour market settings to use those skills and succeed. It is particularly important as an option for people with disability, who still face significant challenges in having their skills recognised by employers. It is interesting to note that people living with disability are more than 40 per cent more likely to be self-employed than the rest of the general population.
But it takes time and other support to establish a small business, including financial support. The New Enterprise Incentive Scheme has operated for over 35 years across Australia, and it is designed to assist people receiving Job Network or Centrelink services to develop and launch their own small business. It was established by the Hawke Labor government and was launched as a pilot program on the first day of July in 1985. This scheme was very much designed to help unemployed Australians create their own employment opportunities and to provide a safety net for those just starting out, allowing them to start earning income from their new business while the scheme allowance was paid. The scheme was established as an ongoing program in 1987 after an evaluation report identified it was having a positive effect on sustained self-employment. In 1988, the program was modified to allow private-sector and non-government organisations to deliver NEIS services. Run through the Department of Education, Skills and Employment, it provides training in how to develop, plan and execute a business, and then allows people to operate their business with supported funding for up to 12 months. The program provides small-business training and 12 months of personalised mentoring support from contracted business owners or identified mentors. During the 12 months, NEIS participants offered an allowance equal to basic JobSeeker rates for up to nine months and rent assistance for up to six months. Since 1985, the NEIS has successfully helped over 198,000 business to start and run a small business.
Small businesses are particularly significant employers in the agriculture, forestry and fishing, rental hiring and real estate, construction, professional, scientific and technical services sectors. While the industries change over time, the most common sectors for new NEIS businesses are hospitality, retail trade, transport and logistics, and professional services. In 2012, concurrency for Disability Employment Service participants were introduced, allowing DES participants to have specialised disability supports while also accessing specialised small-business support from a NEIS provider.
In 2016, as part of the encouraging entrepreneurship and self-employment initiative, a range of new elements were announced to enhance the program. These included 'exploring being my own boss' workshops, aimed at encouraging people to explore whether self-employment would be right for them, with 1,000 workshop places available each year plus an additional 2,300 places made available each year to provide more opportunities. Eligibility to access the program was also broadened to allow people not on income support to access services. This was the first time the scheme was available to people that were not jobseekers on income support. However, people that were not in receipt of income support were not eligible to access the allowance. That allowance is equivalent to the single 22-or-over no-children rate of JobSeeker payment, which is $642.70 per fortnight. Entrepreneurship Facilitators focused on youth and the mature aged were also introduced in areas of high youth and mature-age unemployment.
In 2016, the high-disadvantage trial began, targeting a range of disadvantaged cohorts, including migrants, people with disabilities and those from culturally and linguistically diverse backgrounds. Six hundred places were allocated to providers to deliver these services. In 2018, the high-disadvantage trial was amended to focus on assisting migrants and refugees with NEIS providers, and they were able to access these places on an as-needed basis. Feedback from the trial indicated participants found that flexible training much better suited their needs. They valued the increased mentoring and coaching to develop business plans and started operating businesses.
In 2020, eligibility to access the scheme was amended to support part-time businesses to assist those with caring responsibilities or working part time. Microbusinesses impacted by COVID-19 were also able to access support to pivot their business to remain viable.
From 1 July 2021, veterans transitioning out of the Australian Defence Force were able to access workshops and commence NEIS training while still in the ADF to explore self-employment while still employed. Strong demand emerged during COVID-19, with fewer traditional jobs available. Many jobseekers sought to create their own job by starting a new small business. Additional places for the NEIS program were made available to recognise this demand. Running alongside this is the Entrepreneurship Facilitators program, which compliments the Self-Employment Assistance program by promoting self-employment. It helped people to start and run their own business by providing information and advice, and by referring people to appropriate support services, including self-employment assistance providers. As of July this year, the Self-Employment Assistance program effectively replaces the NEIS and builds on its success through additional and more-tailored services that allow participants to choose what support they need for their small business.
This Self-Employment Assistance, or SEA, program commenced in all 51 employment regions across Australia and is a larger and revised version of the NEIS. It retains the successful components of NEIS while making small changes to small business and entrepreneurship services to make them more flexible and easier for jobseekers exiting and for microbusiness owners to access.
The bill we are considering, the Social Security and Other Legislation Amendment (Self-Employment Programs and Other Measures) Bill 2022 amends the social security law and related elements of the veterans and the family laws. It is designed to make it clear that the law operates in the same way when participants access self-employment through services through the Self-Employment Assistance program.
The SEA initiative aims to promote self-employment through a range of activities, including microbusiness courses, business planning, business advice and business health checks. New program features include idea generation and an introduction to self-employment workshops, an increased number of eligible participants and a range of flexible services. Self-employment assistance includes additional individual support components such as business plan development, business advice sessions and business health checks. Overall, Self-Employment Assistance is a more flexible and tailored program and allows participants to access the service components in any order, based on their individual needs.
Providers also need to ensure that their services are accessible to all participants, including those with poor digital literacy, those from CALD backgrounds and those without access to appropriate technology and information. So people who may have experienced barriers to entrepreneurship in the past can now engage in the scheme through a wider range of services. This builds on the flexibilities that were recently introduced which allow individuals with part-time employment, education or caring responsibilities to access effective small business support.
The changes made to the scheme recognise the changing nature of small business ownership in Australia by giving participants, including individuals from a diverse range of backgrounds, greater flexibility in choosing which support they need to start and run their business, how they can access it and when they receive it. It is intended that the micro-enterprises will receive services that are more flexible and authentic. In this changing and often unpredictable economic environment, eligible business owners who have recently started trading or who need help to adapt their business can access appropriate business mentoring and advice.
As was the case under the NEIS, eligible income support recipients who access the program can receive a self-employment allowance from the government. This helps supplement the income a participant earns from their business so they can reinvest their business earnings in the business. Self-Employment Assistance is building on the NEIS's legacy of success by continuing its valuable support, but through more flexible services that help a wider range of people secure their future.
We know this program works. NEIS has achieved excellent results from a diverse range of participants who have accessed its services. Three months after exiting the program, 82 per cent of participants remained in employment, and 68 per cent were still running their business. And it supported women's economic security, with more than half of the participants who accessed NEIS over the past seven years being women.
Recently we've also seen a clear demonstration that the government can play a key role in helping businesses adapt in uncertain times. Since the onset of COVID, the NEIS has helped many businesses pivot to deliver services in new and innovative ways to remain viable.
This bill will update the social security, veterans and family laws to make it clear that the Self-Employment Assistance payments will be treated in the same way by the law as any other NEIS payment. The same will apply if the Employment secretary ever notifies of a different name for Self-Employment Assistance. The bill will therefore provide increased clarity for participants as they support themselves by establishing the businesses.
Just one example of many exciting outcomes of the scheme is The Mountain Experience abseiling and rock climbing adventures based at Mount Wellington in Tasmania. After 10 years of working for other people as a tour guide and rock climber—