George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to table the explanatory memorandum and have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

SOCIAL SECURITY (HELPING PENSIONERS HIT BY THE SKILLS SHORTAGE) BILL 2006

The Social Security (Helping Pensioners Hit by the Skills Shortage) Bill 2006 aims to ensure that pensioners who sell their home in order to build a new dwelling do not lose their benefit entitlement due to construction delays resulting from the Howard Government’s skills shortage.

Under the social security legislation the proceeds of the sale of a primary residence are exempt from the assets test for 12 months where those funds will be used to buy or build a new primary residence. After 12 months the proceeds of the sale are assessed as assets on the non-homeowner assets test scale and benefit eligibility is adjusted accordingly.

Australia is experiencing a shortage in construction trade skills caused by the failure of the Howard Government to invest in skills and training over its ten long years in office. In Western Australia, the resources boom is placing an additional strain on the supply of skilled labour. This has driven up new home completion times to the extent that it is becoming increasingly difficult to complete a home building project within one year. In May this year The West Australian reported: “In WA, it takes 15 months from the time land is bought to the time a home is finished—four months longer than it did a year ago.”

As a result of these delays, a small number of pensioners are finding themselves with reduced pension benefits when their building project extends beyond the 12 month limit. I have been contacted by constituents regarding this problem and this bill is a response to their concerns.

The bill seeks to provide the Secretary of the Department with the discretion to extend the period where sale proceeds are not included in the assets test to up to 24 months, where there has been an unavoidable delay in construction. Currently that discretion does not exist.

In a recent letter to a pensioner affected by the current rule the Minister, Mal Brough MP, clearly acknowledged that the problem exists but then goes on to say “I have no discretion under the Act to make or change decisions on individual cases. There is no immediate intention to change the 12 months exemption period.”

The Howard Government knows that pensioners are getting caught by this problem but have no intention of fixing it.

Unlike the Minister, Labor recognises that this is a problem worth fixing.

This measure will ensure that pensioners are not disadvantaged by the Howard Government’s incompetent approach to skills and training.

What this bill cannot do is address the wider challenges to WA’s economy presented by the Howard Government’s failure to invest in skills and training. Western Australia is the engine room of the Australian economy, accounting for more than half of the nation’s trade by volume and almost 30 per cent by value. Each year since 1987, the state has made a net fiscal contribution to the nation. The WA Department of Treasury and Finance estimates that in 2005, the state made a net financial contribution to the nation of $4 billion—or $2000 for every Western Australian.

Forecasts suggest that the continuing boom in the resources sector, as well as new commitments in infrastructure, mean the demand for skills will continue to grow. The WA Government has initiated a range of programs to develop the state’s labour supply. At the last state election, WA Labor promised to lift the number of apprentices and trainees to 30,000, a promise which was honoured within a matter of months.

Unfortunately, despite the significant contribution WA makes to the nation’s finances, Prime Minister Howard is not meeting the commitment of the state’s Labor Government. In the period from 2001 to 2004 the WA Government’s increased allocation to vocational education and training was nearly three times that of the increase in funding provided to the state by the Commonwealth. Under the current funding agreement the Commonwealth’s growth funding to WA is less than $5 million a year. The Howard Government needs to make a stronger commitment to skills development in Western Australia.

Australia needs a nation-building Labor Government which will commit to the skills development that will grow our economy over time. In the meantime, this private senator’s bill, the Social Security (Helping Pensioners Hit by the Skills Shortage) Bill 2006, will provide a simple and logical measure to ensure that pensioners are not unfairly disadvantaged by the current stresses in the skilled labour market. I commend the bill to the Senate.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.