Wednesday, 2 August 2023
Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023; In Committee
Thank you for those contributions. I want to set out the government's position in relation to this amendment. The government will be opposing the amendment. The features of this package are designed to increase support for Australians who are on working-age or student payments. That's what the bill is about. It furthers the government's commitment to a strong social safety net.
Supporting workforce participation has been and will be at the core of the government's broader economic strategy. It's why the government has implemented reforms like making child care cheaper for Australian families and improving paid parental leave. But doubling the income-free area, as is proposed in this amendment does, of course, bake-in a significant structural spend for this budget and future budgets. I note that a costing for the fiscal impact of this proposal does not accompany the Greens party's proposed amendment. There is no evidence before us that a proposal of this sort would deliver the participation outcomes claimed. In fact, if you look at this proposal, we know that increasing the income-free area would mean an additional 50,000 Australians would become eligible for JobSeeker because the income cut-out thresholds would increase. The outcome of the proposal would be more Australians on JobSeeker. That's not a credible proposition.
The reality of the system is that around 77 per cent of people on JobSeeker are not reporting any earnings at all. There is already an income-free area, and 77 per cent of Australians on JobSeeker are not using it. Even for those JobSeeker recipients who do report earnings, 23 per cent of JobSeeker participants, there is no evidence of bunching—that is, people keeping income from paid employment intentionally low so that they earn less than the income-free area. Doubling the income-free area will only benefit those income support recipients who are already earning and earning regularly. These recipients already benefit and are rewarded for taking up work through the gradual tapering of income support as they earn more. Amidst all this, of course, amendments to the income-free area will not assist the 77 per cent of JobSeeker payment recipients who don't utilise it. It's on that basis that the government won't be supporting this amendment.