John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Pursuant to standing orders 38 and 166, I present documents listed on today’s Order of Business at item 11 which were presented to the President, the Deputy President and temporary chairs of committees since the Senate last sat. In accordance with the terms of the standing orders, the publication of the documents was authorised. In accordance with the usual practice and with the concurrence of the Senate I ask that the government responses be incorporated in Hansard.

The list read as follows—

Committee Reports

1.

Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Account––Report––Examination of annual reports 2004-2005 (received 21 March 2006)

2.

Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Account––Report, together with Hansard record of proceedings and documents presented to the committee––Operation of native title representative bodies (received 21 March 2006)

3.

Community Affairs Legislation Committee––Report, together with Hansard record of proceedings and documents presented to the committee––Provisions of the Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006 (received 24 March 2006)

4.

Legal and Constitutional Legislation Committee––Report, together with Hansard record of proceedings and documents presented to the committee––Provisions of the Family Law Amendment (Shared Parental Responsibility) Bill 2005 (received 24 March 2006)

Government responses to parliamentary committee reports

1.

Community Affairs References Committee––Report––Poverty and financial hardship––A hand up not a hand out: Renewing the fight against poverty (received 7 March 2006)

2.

Joint Standing Committee on Foreign Affairs, Defence and Trade––Report––Review of the Defence annual report 2003-04 (received 23 March 2006)

Government documents

1.

Foreign Investment Review Board––Annual report 2004-05 (received 14 March 2006)

2.

Department of Communications, Information Technology and the Arts––Reports on reviews of the Digital Television Regulatory Framework (received 23 March 2006)

Report of the Auditor-General

Report no. 34 of 2005-06––Performance Audit––Advance Passenger Processing: Department of Immigration and Multicultural Affairs (received 16 March 2006)

Returns to order

1.

Statements of compliance with the continuing order of the Senate of 20 June 2001, as amended on 27 September 2001 and 18 June, 26 June and 4 December 2003, relating to lists of contracts are tabled by:

• Department of Defence (received 3 March 2006)
• Department of Families, Community Services and Indigenous Affairs (received 7 March 2006)
• Agencies within the Veterans’ Affairs portfolio (received 21 March 2006)

2.

Statements of compliance with the continuing order of the Senate of 30 May 1996, as amended on 3 December 1998, relating to indexed lists of files are tabled by:

• Australian Public Service Commission (received 2 March 2006)
• Defence portfolio (received 3 March 2006)
• Agencies within the Families, Community Services and Indigenous Affairs portfolio (received 7 March 2006)
• Agencies within the Agriculture, Fisheries and Forestry portfolio (received 8 March 2006)
• Agencies within Treasury portfolio (received 9 March 2006)
• Agencies within Finance and Administration portfolio (received 10 March 2006)
• Australian Research Council (received 23 March 2006)
• Department of Education, Science and Training (received 23 March 2006)
• Department of Communications, Information Technology and the Arts (received 23 March 2006)

Ordered that the reports of the Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Account, the Community Affairs Legislation Committee, and the Legal and Constitutional Legislation Committee be printed.

The government responses read as follows—

Government response to: Senate Community Affairs References Committee Report on poverty and financial hardship

“A hand up not a hand out: Renewing the fight against Poverty”

December 2005

Introduction

This Government has demonstrated a long and ongoing commitment to improving the well-being of all Australians. The Government is also committed to an Australian community that supports fairness, opportunity and reward for effort. Therefore, the inquiry by the Senate Community Affairs References Committee into Poverty and Financial Hardship was of particular interest to the Government.

In responding to the report of the Committee, the Government acknowledges the significant contribution made by community organisations and individuals in the preparation of the more than 250 submissions provided to the Committee and in appearing as witnesses.

The Government recognises the underlying concern for the well-being of Australians that motivated these submissions and values the significant contribution made by many of the organisations in delivering services and support to those Australians who are vulnerable and facing hardship.

The Committee’s report comprised a majority report by Senators Hutchins, Lees, McLucas and Moore and a minority report by Senators Knowles and Humphries. In accordance with the Senate’s resolution, this response addresses the findings of both these reports. The two reports draw significantly different conclusions from the evidence presented to the Committee.

The minority report of the Committee commences by noting that its members had no option but to view the majority report and its recommendations “not as a serious attempt to enhance existing successful strategies but rather a shallow, naïve and purely political attempt to condemn the government of the day. This is a sad outcome for those for whom this inquiry was initiated” (page 444).

The Government agrees with these sentiments and is disappointed with the way that the majority members failed to make any attempt to work with the minority members of the Committee to develop a bipartisan approach to the important questions being considered by the Committee.

The Government’s disappointment with the approach of the majority members to the drafting of the report has been compounded by the nature of the majority members’ recommendations. The Government considers that the diverse and numerous recommendations included in the majority report represent a grab bag of ideas that lack any cohesiveness or coherence. In many cases the majority report recommends significant increases in expenditure without attempting to demonstrate how these proposals would actually help those in the community who were the focus of this report, and without costing the proposals or identifying how they could be funded.

This approach by the majority devalues all the hard work and thought that went into the drafting of the submissions provided to the Committee.

Many of the recommendations would involve policies that, if implemented, could only be funded by major tax increases, by major reductions in expenditure on other Commonwealth programs or by unsustainable budget deficits.

The majority members’ recommendations revolve around policies that have not worked in the past, rather than proposing policies that would actually assist those in need. Even where the majority members identify a goal for a policy, the report produces little, if any, evidence that the policy will in fact assist in achieving that goal.

By basing their recommendations on unsuccessful policies, the recommendations of the majority members unreasonably raise community expectations—both that such programs are feasible, and that they would have the impact the majority report implies they will.

The Government’s response to the report of the Committee comprises three sections:

• The Government’s commitment to building a strong and resilient economy which will continue to deliver increased levels of well-being across our society and opportunities for all Australians to contribute to and benefit from this; and a sustainable welfare system which both supports this and secures these gains in the face of demographic change;
• An overview of the Government’s policies to address the issues identified in the reports, highlighting the Government’s achievements to date, and its commitment to continue addressing social disadvantage; and
• The Government’s responses to the recommendations of the majority and minority reports.

Attachment A to this response provides a detailed review of the analysis presented in the majority report. It demonstrates that the case presented by the majority members of the Committee is both faulty and misleading. Attachment B provides more details of Indigenous policies and programs as these represent a critical element of the Government’s strategy to address disadvantage.

The Government’s achievements and commitment to addressing social disadvantage

This Government has a strong record on and commitment to improving the well-being of all Australians and to addressing social disadvantage by assisting and supporting people in establishing their own goals, making their choices, accepting responsibility and taking advantage of opportunities.

The Government has an important responsibility to provide an environment where people can both make and take these opportunities. This responsibility is complemented by an important and ongoing role, which the Government shares with other governments and the community, in providing assistance to those facing hardship and disadvantage. This is undertaken within the framework of an equitable understanding of the obligations of all members of the community. In supporting choice and opportunity, it is not our role to tell people how to live their lives, nor can governments guarantee outcomes.

A job is not only fundamental to an individual’s ability to generate well-being for themselves and their family, but is also the best form of protection against hardship and disadvantage. The most positive step that can be taken to enable people to get jobs and alleviate hardship and disadvantage is to maximise the sustainable rate of economic and employment growth and to provide opportunities to participate in the benefits of this growth. Social welfare is generated by a strong and growing economy.

This is best achieved by:

• Macro-economic policies consistent with low inflation and interest rates;
• Micro-economic policies that reduce structural unemployment and generate the productivity growth essential to underpinning higher living standards;
• Workplace relations policies conducive to sustainable employment growth through the development of a more productive and flexible workforce;
• Policies in areas such as taxation, social welfare, mutual obligation, industry and small business entrepreneurship, education and training and employment assistance; and
• Increasing participation in the workforce through appropriate incentives for work, education and training whilst ensuring an appropriate balance between incentives, assistance and obligations.

The success of the Government to date is clear. Australia has been one of the world’s best performing developed economies with annual average GDP growth since the March quarter 1996 of 3.6 per cent—amongst the highest of countries in the OECD. The Australian Economy is now in its 15th consecutive year of growth and the 2005–06 Budget projections were for solid Gross Domestic Product (GDP) growth to continue, at 3 per cent in 2005-2006 and growth of 3.5 per cent in 2006–07 and 2007–08.

This economic growth has delivered:

• Almost 1.7 million new jobs have been created between March 1996 and June 20051. An additional 807,000 men and 887,300 women have jobs today, an increase of over 20 per cent in the number of working Australians. More than half these new jobs are full-time;
• An unemployment rate in June 2005 of 5.0 per cent. This is the lowest rate of unemployment recorded in Australia since November 1976, that is, the lowest for more than 28 years; and
• A more than halving of long-term unemployment, and a reduction of 72.2 per cent on its peak under Labor;
• Strong earnings and income growth as real earnings reflect higher productivity, as support for families has increased, and as taxation is less intrusive;
• Average full-time adult total earnings have increased, to February 2005, by 19.5 per cent in real terms, that is after taking account of changes in prices;
• The incomes of families with children have been further boosted by the Government’s increased levels of support to families; and
• ABS reports that the real average equivalised incomes of low-income households increased by 11.6 per cent between 1995–96 and 2002–03.

Continuing reforms are essential to ensure that these gains are maximised, and that as a nation Australia can address future challenges, including responding to demographic change. The comprehensive ‘Welfare to Work’ package introduced in the 2005–06 Budget along with ongoing workplace reform is critical to creating a sustainable economy and welfare system for the future. These reforms tackle the goals of lifting workforce participation and reducing welfare dependency while maintaining a strong safety net for those who need it.

They are reforms that both complement, and are complemented by, our other initiatives including: support for families; our commitment to improving education and training; labour market reforms and support for older Australians.

While achieving higher levels of economic participation is fundamental to improving and extending well-being, the Government recognises that an effective social safety net is important for those unable to work, and those who have retired after spending their lives in the workforce and raising families. Our commitment to the safety-net is clearly demonstrated by our decision, for the first time in Australia, to legislatively commit to maintaining the pension at 25 per cent of Male Total Average Weekly Earnings. This means that Australian pensioners—in particular, aged pensioners—have had their pensions adjusted not only for increases in costs, but in line with the improvements in living standards enjoyed by those in work.

Policies for the Future

While the majority members of the Committee looked to the past, this Government has been working to implement the policies this nation needs for the future.

The Government’s 2005–06 Budget is built around shaping a sustainable future by maintaining strong productivity growth, increasing labour force participation and adopting policies which continue to address future budgetary pressures.

It was a budget that continues to demonstrate the Government’s commitment to taxation reform, to support for families and to the development of a more sustainable welfare system.

It builds upon the Treasurer’s consultation paper Australia’s Demographic Challenges prepared in response to the findings of the Government’s 2002 Intergenerational Report. This report concluded that, as a consequence of the expected increases in expenditures on health, aged care, education, pensions and other areas associated with the forecast structural changes in Australia’s population, government expenditures are projected to exceed revenues by 5 per cent of GDP by 2041–42.

Although the implications of this finding were recognised in the discussions of the minority report, this does not appear to have been an issue considered by other members in their preparation of the majority report. This is of concern, not just because of the challenge of meeting future demands on Government resources to meet the needs of an ageing population, but also because these requirements represent a real constraint on what government can do in other areas. Similarly lacking in the majority members’ report was any coherent approach to tackling welfare dependency, or to addressing the importance of flexible workplace relations to maximising employment growth and employment opportunities and to maintaining and improving our standard of living.

‘Welfare to Work’—Building a sustainable Welfare System

An ongoing focus of the Government is to increase labour force participation and reduce reliance on income support among working age people. It is essential that all people of working age are given the maximum encouragement to increase self-reliance in accordance with their capacity and to reduce their welfare dependency. This means not just expecting people on unemployment benefits to move from welfare to work but expanding the focus to all people of working age who are on income support and who have some capacity to work, including sole parents and people with disabilities.

Supporting and encouraging people to move from welfare to work involves providing the right balance of incentives, participation requirements and assistance. Providing the right incentives means ensuring there are immediate financial returns from moving from welfare to work, while participation requirements encourage people to undertake activities that will enable them to find work. Employment assistance needs to provide the right help for people in getting sustainable employment.

The Government’s ‘Welfare to Work’ package announced in the 2005–06 Budget invests $3.6 billion to increase workforce participation of parents, mature age people, people with a disability and very long term unemployed people. The reforms introduce new requirements, supported by increased investment in employment assistance, training, rehabilitation and other support programs, as well as changes to payment arrangements. These important reforms will provide clear incentives for people of working age to move from welfare to work, including new and expanded services to help people into employment.

The reforms seek to change the focus of people’s work capacity to look at what they can do rather than what they cannot do. Of the 2.6 million working age people currently receiving income support, only around one in six have job search requirements, and only around one in ten parents in jobless families are required to look for work as a condition of their payment.

Improved participation not only offers these individuals and families improved levels of well-being while they are of working age, but also, through enhanced retirement savings, helps them to retain those improved levels of well-being in retirement. Earlier participation in the workforce by parents with children can also assist with their on-going participation after their children grow up and are no longer dependent.

Parents’ employment is not just important to enable families to achieve an improved standard of living but also for the many other benefits it provides—to their own self-esteem and for the future prospects of their children. This can be seen clearly in the initial results of research using the Longitudinal Survey of Australian Children that is being conducted by the Australian Institute of Family Studies for the Australian Government.

In this survey parents reported positively on the role of employment in their lives and that of their families:

• 70 per cent of parents agreed that work made them feel more competent;
• 84 per cent considered that their working had either a positive or a neutral effect on their children; and
• Most disagreed with a statement that family time was less enjoyable because of work.

The ‘Welfare to Work’ package provides financial incentives to work, particularly incentives that encourage parents and people with disabilities to work part time. This includes a new, generous income test and taper rate for Newstart Allowance to help income support recipients keep more of their income from working.

The package introduces changes to income support arrangements to reflect the increased requirements for parents and people with disabilities to seek work. However, the measures ensure that people of working age continue to receive important benefits that assist in overcoming financial hardship and disadvantage. People with a disability and single parents who receive the new enhanced Newstart Allowance will maintain eligibility for the Pensioner Concession Card.

A New Workplace Relations System

Productivity growth is central to Australia’s future well-being because it ensures increasing real wages, while at the same time keeping inflation and interest rates low and employment growth strong.

The workplace relations system plays a very important role in improving the productive performance of Australian enterprises. The Workplace Relations Act 1996 (‘the WR Act’) provided a framework for cooperative workplace relations, giving primary responsibility for determining matters affecting the employment relationship to the employer and employee at the enterprise level. Enterprise bargaining has provided workers and employers with greater flexibility in negotiating working conditions and has helped to ensure that wage rises are underpinned by productivity improvements. This is important for Australian business to operate competitively in global markets.

The end result is strong, sustainable wage increases closely linked to productivity improvements at the workplace level. The vast majority of employees now rely on formal and informal workplace agreements for their pay setting, with only 20 per cent of Australian employees reliant on awards in May 2004. Australian companies with enterprise agreements have achieved high productivity and growth rates, and there is evidence to suggest that the adoption of workplace bargaining contributed to productivity growth in the 1990s^2,3,4. Australia’s productivity growth has increased markedly over the last nine years from both historical and international perspectives.

The importance of these policies has been highlighted by the OECD5, which reported that:

• “The resilience of the [Australian] economy to shocks has been improved by reforms which have made the labour market more adaptable to rapid changes in the economic environment and has permitted the economy to work closer to potential over time as a result”; and
• “The move to decentralised bargaining was underpinned by fundamental changes to the former exceptionally rigid and legalistic award system. Less adversarial labour relations and greater labour flexibility are likely to have … contributed to the observed acceleration in productivity in Australia over the past ten years or so”.6

There is a strong contrast between the recommendations of the majority of the Committee and the policies that are needed to support participation and improved outcomes. The majority of the Committee was firmly wedded to the concept that all Australians want a full-time job—with those jobs provided under a ‘one size fits all’ industrial relations system. It is clear, however, that this does not reflect the diversity of choices Australians want. Many Australians, particularly working mothers and full-time students, prefer casual and/or part-time employment because of the flexibility it offers.

Casual and part-time employment also provides an important first rung on the employment ladder for the long term unemployed, the low skilled and people who have experienced disadvantage. The Australian Bureau of Statistics (ABS) February 2004 Labour Mobility Survey found that, of those persons who had changed their employment status during the year, 61.0 per cent had made the transition from part-time work to full-time work. In addition, casual employees receive a loading, commonly between 20 and 30 per cent, to compensate them for not receiving paid leave entitlements.

The WR Act provides employers and employees with choices encompassing all forms of employment, including greater access to regular part-time employment. The provisions are intended to encourage a more appropriate balance in the mix of employment types by providing employers and employees with improved access to their preferred arrangements by removing arbitrary restrictions.

The role that workplace reform has played in improving and sustaining our economic performance cannot be overstated. The workplace relations system is still complex, however, with bureaucratic rules and regulations, and there is scope for further improvements to simplify the system, making it even more flexible, accessible and effective.

The new reforms recently announced by the Government will further encourage negotiation of conditions of employment at the workplace through agreements, while retaining a genuine safety net. The new workplace relations system will contain a single set of rules for minimum terms, conditions, awards and agreements. Key planks of the new system are outlined below.

• The current adversarial process for setting minimum wages and conditions will be replaced by the Australian Fair Pay Commission (AFPC). This will establish a better balance between fair pay and employment, and ensure minimum wages operate as a genuine safety net for agreement making;
• Key minimum conditions of employment will be set out in legislation. These, together with the minimum wages set by the AFPC, will form the Australian Fair Pay and Conditions Standard. The Standard will provide genuine protection for all Australian workers and drive continued jobs growth through easier access to workplace bargaining;
• Agreement making will become streamlined, simpler and less costly, making it simpler to bargain at the workplace level;
• Further award simplification will ensure that awards provide a true safety net of minimum conditions, and a task force will be established to rationalise existing awards and award classification structures;
• The Government will create a national system for unfair dismissals, exempting businesses that employ up to 100 employees from unfair dismissal laws, and exempting small businesses from making redundancy payments. Employees will continue to be protected from dismissal on discriminatory grounds such as race, sex, and pregnancy; and
• The Government will work towards a more streamlined and efficient unified national workplace relations system.

The Government’s proposed reforms will maximise economic growth and employment opportunities so as to maintain and improve our standard of living in the increasingly globalised economy. Importantly, they will create additional employment opportunities for unemployed Australians.

Providing Support and Opportunities

These initiatives build upon the significant policies and programs that we have already put in place to provide support and opportunities to Australians, and address disadvantage. Key areas include:

• Support for Australian Families;
• Education and Training;
• Health;
• Employment services; and
• Homelessness.

Providing Support and Opportunities: Support for Families and children

The goal of assisting Australia’s families and the children who live in them is at the heart of our social policies. Families are not only the single most important building block of social stability, but they also have the responsibility for the physical, moral and social development of Australia’s children and as such play a critical role in determining the capacity of these children to take advantage of opportunities throughout their lives, and in building their resilience to factors and events which might otherwise lead to disadvantage and hardship.

Supporting families with children

Families are diverse with a wide variety of caring and working arrangements. This Government recognises that support to families must be sufficiently flexible to provide for that diversity.

Through substantial reform of the family payments system, the Government has provided greater assistance to families in a way that supports their choices about caring and work responsibilities. In July 2000, as part of A New Tax System, the Government introduced the Family Tax Benefit (FTB), which is structured to ensure substantial assistance for families when they need it, for example, when one parent is providing primary care for children, and also to ensure sufficient rewards from work for parents who combine family and work responsibilities. Each year FTB benefits around 2.1 million families with 4 million children. In all, since coming to office, the Government has increased total assistance to families by over $6 billion a year.

Since 2000, the Government has built upon the FTB initiative to further enhance assistance to families. As part of the 2004–05 Budget, FTB Part A has been increased by $600 a year, paid as a supplement at the end of the year. An increase in the rate of FTB Part B was brought forward to 1 January 2005. The loss of income that families can experience when a child is born was addressed with the introduction of a new Maternity Payment. The Maternity payment is currently $3,079 and will increase to $4,000 in July 2006 and to $5,000 in July 2008.

The success of these changes has been illustrated by analysis undertaken by NATSEM⁷ that concluded: “The results presented here clearly show that average real incomes did rise between 1997–98 and 2004–05 for Australian families with children in the bottom income quintile”.

Specifically the study showed that:

• The average real disposable income for the poorest 20 per cent of families increased by 18.5 per cent from 1997–98 to 2004–05;
• This strong growth, which is similar to that experienced by middle income families, is attributed to the real increase in family payments provided by this Government; and
• The 2004 Budget changes alone raised the average income of the bottom 20 per cent of families by approximately 5 per cent.

In addition to increased assistance, the Government has improved rewards from work. Changes to the FTB Part A and Part B income tests ensure that rewards from work are improved with families now able to earn more before their family assistance payments are red