Senate debates

Tuesday, 9 October 2012


Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012; Second Reading

12:33 pm

Photo of Arthur SinodinosArthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | | Hansard source

The coalition will be supporting the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012, as it is a continuation of Welfare to Work reforms that were initiated by us in government in 2006. I go first of all to the intent of the bill, which is to amend the Social Security Act to remove the grandfathering provisions for parenting payment recipients from 1 January 2013. This will affect those parenting payment recipients who have been continuously receiving parenting payments since before 1 July 2006. Under the previous legislation introduced by the Howard government, recipients of a parenting payment could be grandfathered—or, as we sometimes say these days, grandparented—on this payment until their youngest child turned 16 years old, provided that the child was in their care before 1 July 2011. In addition to removing the grandfathering clause for parents, this bill seeks to double the permissible liquid assets, raising the maximum limit from $2,500 to $5,000 for singles and from $5,000 to $10,000 for those with dependants. It also seeks to define which payments should be categorised as termination payments to ensure that there is consistency across the board when considering the income maintenance period. This will bring the definition of termination payments into line with the policy intent of the Guide to Social Security Law, ensuring that termination payments such as for untaken long service leave, untaken maternity or paternity leave, early termination payments and other such payments are included in the income maintenance period.

However, while the coalition's Welfare to Work reforms were aimed at assisting Australians off welfare and into work, the main aim of this bill is to realise much-needed savings for the government, with expected savings from this bill of around $691.9 million over four years. That is a fair whack of money, and that is why the government has had this damascene conversion to Welfare to Work after years of opposing and indeed demonising the very measures that we are talking about here today.

For many years there has been a view within the OECD that we should increasingly move from passive income support to active income support—in other words, we find ways in which to use the public dollar, if you like, to encourage and support people in making a transition to work. This the Howard government did in 2006, when it invested $3.6 billion into Welfare to Work. It is good to see that Senator Bilyk is listening so intently! There were four under-represented groups of people who were targeted for assistance from Welfare to Work under this initiative, with parents being one of those groups. The 2005-06 budget saw an investment of $389.7 million over four years to specifically assist parents into work. The Welfare to Work reforms of 2006 built on our Australians Working Together initiative from 2003, when parents with children aged between 13 and 15 were required to undertake one or more activities such as job search, education, training or community work to assist them in preparing for a return to work.

From 1 July 2006 new applicants were eligible for parenting payment single when their youngest child was aged less than eight, and they moved to Newstart or another payment when their youngest child turned eight. Single principal carer parents in receipt of the Newstart allowance were also given access to the pensioner card, the pharmaceutical allowance and the telephone allowance. New partnered applicants would receive a parenting payment when their youngest child was six, and they would move to Newstart when their child turned six.

Both parenting payment single and parenting payment partnered recipients had a requirement to look for 15 hours or more of work a week. Parents who were on parenting payment single or partnered as at 30 June 2006 were grandfathered, enabling them to stay on that payment under the current eligibility provisions until their youngest child turned 16. However, job search requirements would apply from the later of 1 July 2007 or when their youngest child turned seven.

Where there were extenuating circumstances, such as a child with a disability or another reason why a parent may have full-time caring requirements, the Welfare to Work legislation permitted temporary exemptions. It was a very deliberate decision on the part of the government to grandfather people who were on these payments at a certain date. The reason for that was actually to make it easier for the public to accept the reform by making it clear that it was not having a retrospective impact but rather that it was focused on new recipients. This has been an important principle in a lot of social security legislation and, indeed, tax legislation over the years. Its purpose was to make it easier for the community to accept the reform.

In addition to access to concessions for single parenting payment recipients, the Howard government ensured that additional out-of-school-hours care was available for parents. However, recent childcare reforms are seeing out-of-school-hours care at great risk, with many centres to close as a result of the national reforms. A new employment participation service was offered to parents with school-aged children, ensuring that they had the skills needed to gain a job.

As part of the coalition policy, parents could refuse a job—and this is quite important—if they were not more than $50 a fortnight better off once we took into account the costs of employment, such as child care, or if they had to travel more than 60 minutes each way to work. Currently, parenting payment recipients are subject to different rules depending on when they first claim payment; so this legislation will bring all parenting payment recipients onto the same standard.

The research undertaken by the Department of Education, Employment and Workplace Relations on the Welfare to Work reforms demonstrates clearly that there was a 23 per cent increase in the number of single principal carer parents leaving income support after six months in comparison to the previous three years, with 38 per cent moving off payment during 2006-07. The report also showed that over 70 per cent of principal carer parents left income support for employment. In other words, they did not drop out of the workforce: they actually got a job. Similarly for partnered principal carer parents on Newstart allowance, 45 per cent were no longer in receipt of income support payments after six months compared to 32 per cent in 2005-06.

At the time of the Welfare to Work reforms the Howard government introduced a range of complementary services to assist parents in their transition to employment once the youngest child had reached school age. These were all designed to boost workforce engagement and to reduce the dependency on welfare. Regrettably, under the current employment services model many of these forms of assistance are no longer available and the government has not proposed any alternatives.

We recognise that the best way to help parents and their children is to help them get a job. Tony Blair used to speak about fairness in the workplace starting with the opportunity of getting a job. The coalition understands that those children who grow up in a jobless household often face greater disadvantage in their community and an increased likelihood of being welfare dependent themselves. We have seen over generations the intergenerational transmission of poverty, where people grew up in households where neither their grandparents nor their parents ever had a job and going down to the Centrelink office was seen as the way that you picked up your pay.

Intergenerational unemployment is a growing concern in this country, and the longer people remain on welfare then the more difficult the transition to paid employment becomes. That is why these measures are sometimes seen as tough love; in the short term they are seen particularly as applying the stick, subject to certain carrots. It is for the good of the welfare recipient in the long run, so they get back their capacity to participate fully and actively in the job market. With that goes their self-esteem—that goes up—their confidence goes up and their capacity to contribute to the community more generally goes up.

We do have concerns with this bill, even though we support it. Unlike the Welfare to Work agenda introduced by the coalition in 2006, there is no additional funding to support parents into work. This legislation is sending a very negative message: all stick and no carrot. If the government was truly committed to assisting parents back to work it would provide additional assistance. It would do it as part of a coherent, comprehensive, credible strategy around the return to work, or getting people into work. Instead, this government has slashed $162.2 million from Job Services Australia assistance for jobseekers and it has cut a further $44.3 million from outcome payments for Job Services Australia providers.

Parents who are working could be worse off financially as their participation requirements may force them into accepting a job where they are worse off financially. This is in contrast to the Howard government reforms, where parents were promised that they could refuse a suitable job offer if they were not better off by at least $25 a week. In the 2005-06 budget an underlying cash surplus of $8.9 billion was predicted, demonstrating strong economic growth. Unemployment was at its lowest level—5.1 per cent—since 1976, and forecast to trend down further. This is in contrast to Labor's most recent budget, which continued their unmitigated trend of running a deficit, and that is the context in which this legislation has come forward. That is why, as I said before, it is a grab for cash. It is a dash for cash, precisely because the government are running out of other options in order to try and get their budget into a wafer-thin surplus of $1.5 billion in 2012-13.

This means that the government has had to eat humble pie. Hypocrisy, thy name is Labor! Labor voted against the Welfare to Work reforms of the Howard government in 2005, even though those reforms included extensive assistance to help get people back into work—unlike this particular package. Just a few short months ago Labor moved to decrease the parenting payment cut-off age of the youngest child from 16 to 12. Making this further decrease now shows that this is more about achieving a budgetary saving than about a policy that is genuinely committed to assisting people from welfare to work, particularly given the tough economic times that are facing Australian families today.

As I said before, Labor have been hypocrites. On 15 September 2005, ACOSS Advocacy Day—ACOSS being the Australian Council of Social Service—describing the Howard package, Penny Wong said:

This package has nothing to do with moving people from welfare to work and everything to do with extreme cuts to the household budgets of Australian families who can least afford it.

This is even though the legislation at the time provided that you could refuse a job if you were not at least $25 a week better off. Under the government's package, some people will be forced to take a job even if they are worse off. You can have a no-disadvantage test in the labour market under this government because the unions will demand that, but if you are a welfare recipient you cannot get a no-disadvantage test under this government. We were trying to encourage people to go into the workforce and make it a positive experience. All stick, no carrot!

Kelly Hoare, a former member of the other place, said on 1 December 2005:

Labor is opposed to the changes in this bill and it opposes them on the basis that these changes simply dump people from one welfare payment onto a lower welfare payment and push the most vulnerable Australians over the edge by making extreme cuts to their household budgets.

The reality, as I indicated earlier, based on research commissioned by the Department of Education, Employment and Workplace Relations was that a significant number of people got into paid employment and were better off as a result.

Dr Carmen Lawrence, a member of the other place, said on 1 December 2005:

… the vulnerable people at whom this legislation is targeted are the ones not able to get the ear of the government. They are not able to walk these corridors with expensive, paid consultants to influence the government's policy, and the government refuses to listen to their advocates.

We did listen to the people who said that if you want to get people into work you have got to make it a positive experience and you have got to give them the assistance to do it. When I worked in the former Howard government, I was one of the people who advocated in 2005-2006 that we grandfather existing recipients, because it was important to get public acceptance of the reform. Labor has now gone further but has provided only stick and no carrot. Dr Carmen Lawrence, if she were here today, would be saying that the people who are not being listened to down the corridors and in the ministerial wing are the most vulnerable in our community.

We will support this legislation. There is no doubt in my mind that it is important we continue the journey of welfare to work. It is also important to recognise that the government have come to this damascene conversion, if I could call it that, on welfare to work simply by the exigencies of their own budgetary situation. It is a pity that, because of that budgetary situation, they cannot see their way clear to actually provide assistance which will facilitate and make the transition to employment a positive experience for parenting payment recipients and their families.

12:47 pm

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

Schedule 1 of the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 will drive already vulnerable single parents, the majority of whom are single mothers, further into poverty. What this bill does is drop single parents who are currently on parenting payment single down to a payment which is nearly $140 less than what they are on at the moment. We know that Newstart is now around $132 to $140 below the poverty line. In other words, we are dropping single parents onto the poverty line. Aren't single parents still parents? It is not only the mothers and fathers that we are dropping there, but their children as well. That is what you are about to pass in this place. The Greens will be opposing schedule 1 which is the schedule that drops those vulnerable parents onto Newstart. We will be opposing that particular piece of this bill, make no mistake.

The government is bringing this bill to this chamber despite the recommendations of two of the committee that it controls. The Education, Employment and Workplace Relations Legislation Committee recommended that this bill not proceed until the inquiry into Newstart concluded. Then the newly established Joint Committee on Human Rights, in their first major recommendation, recommended that this bill does not proceed until the Newstart inquiry has finished. Further, on the very last day of the last sitting—around six o'clock, if I recall, when they tabled their report—they said in essence:

If Newstart combined with other benefits is not sufficient to provide an adequate standard of living for affected individuals, the measures risk being a violation of human rights under article 9 of the International Covenant on Economic Social and Cultural Rights. The Committee was not yet convinced that the affected single parents would be able to maintain access to appropriate levels of social security support if placed onto Newstart. As a result, it would be premature for the government to introduce these measures prior to the completion of the Newstart Inquiry.

But the government is proceeding with this anyway. One of the few things that I agree with that Senator Sinodinos just said is that this is purely a savings measure on the back of some of the most vulnerable people in our community and on the backs of future generations. So if we are talking about entrenching poverty, that is exactly what this measure does: it helps entrench poverty. It helps condemn those children that we as a caring society are supposed to be nurturing and supporting. It helps condemn them to the poverty cycle.

How can we claim that we have a surplus if we have just thrust over 100,000 single-parent families and their children into poverty? How can we then claim that there is a surplus when it is on the backs of the most vulnerable in our community? Make no mistake, this measure reduces the income of single parents and their families, and as I said, over 85 per cent of those are women.

This schedule, if passed, takes away the grandfathered protections that were put in place when the Welfare to Work measures were first moved in this place in 2006. Recipients' parenting payments will cease when their children turn six if they are partnered parents and eight if they are single parents. That means they will end up on Newstart and that will mean a difference of around $140 because, if you remember from our discussion here last sitting, the indexation rates for Newstart and the parenting payment are different.

This measure will affect over 100,000 single parents. This group is the most vulnerable in Australia. Recent data from the OECD shows that around two-thirds of the children of single parents who rely on income support are living below the poverty line and 90 per cent of that particular group are women. Sole parent families on income support already struggle to meet essential living costs and 85 per cent of parenting payment recipients experience multiple deprivation. Multiple deprivation is when you lack three items that are vital for an adequate standard of living—for example, medical treatment, warm clothes, a decent and secure home, schoolbooks for children. Those are things that we consider essential items. I reiterate: over half of the parenting payment recipients are already living in what we would term serious poverty. Now we are talking about cutting their payments further.

The Salvation Army recently released a survey of people accessing its emergency relief centres. Of the 1,731 individuals surveyed, 81 per cent were on income support and 36 per cent of those were single parents with dependent children. The Foodbank report that was launched in this house recently reported that the three main groups being provided with food assistance were low-income families, unemployed people and single parent families. Are you getting the picture? These are families that are already under stress and already living in poverty or close to poverty. Of particular concern is the impact of this measure and of hardship on children. Over half of the respondents to the Salvation Army survey reported they were unable to afford to pay for out-of-school activities for their children and over one-third could not afford for their children to participate in school activities and outings. How is affecting the education of our next generation a sensible measure? And what does this mean for their mental health and their ability to interact and connect with their peers?

It is not surprising that a recent report from the National Association of Community Legal Centres found that the majority of the local government areas with high rates of sole parent households were also some of the most disadvantaged in the country. The people who will be most affected by this bill live in the areas that have poorer infrastructure, supports and services. This measure will make it even harder for them to find work. Get the picture about the multiple deprivation and the multiple barriers to finding work and supporting your family?

Sole parents are more likely than any other group of people to experience financial stress. According to the ABS, 70 per cent of sole parents are in the poorest 20 per cent of the population. How do we expect single parents to be able to survive when we take away more of their income? It is very clear that this group of Australians is very vulnerable and likely to be more marginalised by this measure. I have been quite amazed that the government thinks that, by stripping away further assistance and support for these people, it is actually helping them: 'Let's take more money and pretend we're helping people and pretend this isn't a savings measure.' What this is about is a savings measure dressed up as trying to be helpful. Well, please stop helping, because it is not.

I would like to articulate a few quotes from submissions received by the Senate inquiry. One woman said:

I have gained casual employment with the Salvos' retail, maybe two days per week, which is usually Saturday or Sunday, and occasionally one day during the week. It has taken me two years to find this job as employers don't seem to offer parent friendly hours for people who have limited child care. My elderly parents are two hours away and come when they can to look after her. We are just managing but won't on Newstart. I won't be able to keep what I have earned.

Another woman said:

Ever since the announcement I have been looking for a second job so that we can afford to live for next year. Who even knows how I'll juggle the child care. I can't get there, I'm just terrified. I've had one interview since May—

this was in July because the hearing was in July—

so where are these jobs they're talking about? I'm educated and already employed yet I am still finding it difficult. I can only imagine how desperate someone suffering after a difficult divorce with a very few children, no recent work history and little education must be feeling. It is hopeless, and hopelessness does not help people work and raise their children.

These two women, unfortunately, are not alone. Tens of thousands of women are going through similar crises. I have a very long list of similar emails and submissions from people. We do not support the government and the opposition pushing these women and their children further into poverty. There are countless examples of people who will be plunged into financial hardship with this measure.

I would like to tackle the view that this is about encouraging single parents into work. Nearly 50 per cent of single parents are, in fact, already working. They are juggling looking after their family, trying to find child care, finding work that has family friendly hours and supporting the children who are our future generation. Pushing families onto Newstart decreases their payments by about $60 to $100, depending on how many children they have and what their circumstances are. It subjects working parents to a much harsher income-free area, of $31 per week, than if they are on parenting payment single. There is also the removal of the additional child income-free area of $12.30 a week and the ending of eligibility for the pension education supplement of up to $31.20 per week. In other words, this is having multiple impacts on single parents. Sole parent who drop from parenting payment single to Newstart and have no current income will lose around $55 per week. The government tried to pretend it was softening this by saying. 'It's okay, we'll give you $210 a year supplementary allowance.' Great: four bucks a week! That is not even the price of a cup of coffee these days—not that you can afford a cup of coffee when you are on Newstart.

Are you getting the picture? People are going to be living on less money. These are people who are already struggling, who are in work part time or struggling to find work.

If you are living in a rural area, for example, child care only works generally in normal working hours, not shiftworking hours. So for a start that blocks you out of any type of shiftwork because you simply cannot get child care. For those that are already working, the income-free area means they get to take home less, so it is having a double effect. Parents out there are not only going to be dropped on Newstart, they are also going to have less money to take in their pockets when they are working. How does it work that we are encouraging people into work and then we are going to drop them onto a payment that has a lower income-free area? How is that encouraging, how is that an incentive? Again, this is not about incentives; this is about the government saving money on the backs of the most vulnerable.

If this payment passes in addition to the payment cuts outlined, parenting payment recipients who move onto Newstart will not be eligible for the $32.64 per week pensioner education supplement. The National Welfare Rights Network estimates that there are over 25,000 parenting payment single recipients who are receiving that supplement. They will be able to continue to receive it but new people will not be able to. This is discouraging and counterproductive for people trying to improve their qualifications and skills.

We cannot believe that this legislation will in fact help parents into work or encourage parents into work; it will make it harder. Once you are in poverty, that is yet another barrier to finding work. Senator Evans when he was the shadow minister for social security agreed with that. He said:

Simply cutting payments for people on welfare does nothing to help them get paid work, which is the best way out of poverty. By cutting payments to vulnerable Australians who are already financially disadvantaged, the Howard Government's budget will increase income inequality rather than reduce it.

Well said, Senator Evans, and we agree. There is no difference here between the Welfare to Work measures implemented under the Howard government and this. What they are doing is going after another group of vulnerable Australians.

It is also important to note that parenting payment single recipients are already subject to activity requirements. In other words, they are already supposed to be looking for work and undertaking these activities. This is supposedly to ensure that parents engage in the workforce. The majority of people are already on these sorts of requirements, so these measures will not lead to further activity requirements. The Greens, as I have said on many occasions, are already cautious about activity requirements and question their effectiveness when compared to more positive, less punitive measures. But it is still curious to see that these reforms, which are apparently about activating parents, provide no change in their requirements for this engagement. It makes you wonder whether the government admit that their measures are not being effective in encouraging people to find work.

People that are on parenting payments and trying to find work face multiple barriers. These multiple barriers are the issues that we need to be addressing. It is not easy when you are raising children to be also juggling work in quite child-unfriendly environments. You are more often than not in temporary employment, in casual employment, where you do not know what your regular hours are. I was at the gathering outside Parliament House this morning talking to a group of single parents about this legislation. They were urging this place not to support this particular part of the legislation. In particular I was talking to a single mother who has repeatedly been trying to find work and has been in and out of work—and then, when she is in and out of work due to no fault of her own, she is having problems with Centrelink because it is casual and temporary work. So the system does not help people either. The government would be better off investing in how to address those barriers rather than putting in place more and more punitive approaches to people who are trying to raise their families.

The other issue that has also been raised, and I will be moving an amendment on this if I fail to convince the chamber to oppose this legislation, is the timing of this. This is coming in on 1 January, when every family in this country has trouble paying their bills; they are in debt because of Christmas. 'Here is your great Christmas present. Now you are going to be dropped onto Newstart and get $130 a week less. Then you have got to prepare your kids for school and buy their school uniforms. Sorry about that, sorry that you have got less money. We do actually want your kids to get a better education but we will just make it harder for you to send your kids to school.' We will be moving an amendment to at least move the start of this revolting piece of legislation to 1 July.

I want in the last couple of minutes to address the liquid assets waiting period. The Greens welcome finally seeing this particular piece of legislation, which is schedule 2 of the bill, which reduces the length of the liquid assets waiting period by doubling the maximum reserve threshold for liquid assets. This is a positive measure and one that should have been continued after the GFC package ran out. As people will recall, this was actually part of the GFC package and the Greens strongly advocated that it be retained. In fact, it was our lobbying that got it into the package in the first place. We think it is a positive measure that will help the recently unemployed being faced with very stressful prospects of emptying their bank accounts before they can access income support. So it is a measure that we will be supporting, which is why we are not opposing the bill outright but will be voting separately on both of the schedules of this bill. However, I will be moving a second reading amendment because, as per usual, the government has not dealt with the issue of appropriate indexation. So I will be moving a second reading amendment that the Senate calls on the government to bring forward additional legislation to provide appropriate indexation of the liquid assets maximum reserve threshold.

As I said earlier, the Greens will be opposing schedule 1. If we go down on that and on the arguments of all those single parents who are going to be negatively impacted by this legislation and not manage to sway senators—even those senators who, with their hands on their hearts, have said that they are concerned about those single parents but are still going to vote with the government—I will be moving an amendment, as I indicated, that this legislation commences on 1 July 2013 rather than the Christmas-New Year present that the government proposes for single parents on 1 January. We will not be supporting this legislation, and we urge all senators in this chamber to reconsider their vote and to consider the impact that this legislation will have on single parents and their children.

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party) Share this | | Hansard source

Senator Siewert, do you have an amendment that you wish to move?

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

Yes, I do. I move the second reading amendment on sheet No. 7272.

At the end of the motion, add:

but the Senate calls on the Government to bring forward additional legislation to provide appropriate indexation of the liquid asset maximum reserve threshold.

1:06 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

I compliment both Senator Sinodinos and Senator Siewert for their contributions to this debate on the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012. I think the comments that both of them have made are very telling and should be taken on board. There are two elements to this bill for which I have concern. The first is that it fails to promote greater workplace participation, workforce participation, for those people who will be affected by it. The second is that, obviously, this is an attempt by the government to try to balance the budget—a fact which, of course, will never happen under this government—and to do so at the expense of and on the back of the most vulnerable—in this case, low-income earners, carers, single parents and inevitably, as Senator Siewert has eloquently indicated, their children. Those are concerns that I will return to during this presentation.

We also have real concerns about the primary objectives of the legislation, and that is its failure to promote greater workforce and workplace participation as well as its failure to provide appropriate incentives to encourage those who are out of the workforce to find, to maintain or to re-enter useful employment. They are areas that are obviously of concern.

In the inquiry that we held into this matter, the Department of Education, Employment and Workplace Relations cited evidence which indicates that children who grow up in jobless families are themselves much more likely to experience unemployment as adults. Following on from Senator Siewert, I want to focus on the impact of this legislation on children. If I may quote from the submission by the department to the inquiry:

Children who grow up in jobless families are far more likely to be out of work as adults compared to those who had a working parent—

or parents.

It is therefore vital that the income support system seeks to incentivise work in order to break the dependency cycle. The system must provide the right balance of support and incentive to work to ensure that parents are in a position to benefit from the opportunities the economy has to offer, particularly as their children get older and the parent's capacity for work increases, and provide their families with positive role models and greater financial security.

I will repeat those—as I am sure they go to the heart of what we all would agree in this place—and they are: positive role models by parents or their carers for their children and greater financial security being stability.

It was at the same inquiry that Ms Netty Horton, the Territorial Social Program Director of the Salvation Army—and I must say that she was not supportive of the legislation—explained to the committee:

We would like to be very clear in that we are fully supportive of moving as many people as possible—single parents or unemployed people in general—towards being able to work, and some of the focus of our submission has been around our experiences in working with the most disadvantaged group of those people in the community and recognising that they need additional support and incentives to move them into the paid workforce.

She went on to conclude:

We recognise that that is the best way out of poverty and the best way to ensure participation both for them and for their children in the community.

Those are very telling comments.

The regrettable aspect of the matter that we are discussing today has, of course, been the inability of this government to carry on the work commenced by the Howard government under the Welfare to Work reforms of 2006. At the time, those reforms were predicated on the basis of some $8.9 billion in cash surplus that had been generated following the repayment of the debt of the then Keating government. It was because of that surplus that the Howard government was able to implement its Welfare to Work reforms. It invested some $3.6 billion in 2006, with $400 million over four years of that specifically directed to assist parents into work—the very people we are speaking about. The Labor government today have made some effort to try and continue those initiatives, but because they have now got themselves into the circumstance of such deep indebtedness and deficit, we see them taking these sorts of actions in an attempt to try and save some $789 million over four years at the expense of who, I would say, are the most vulnerable in the community.

The Howard government initiatives, amongst others, had a requirement that single and parenting payment partnered recipients seek at least 15 hours of work each week and to start that process themselves, psychologically as well as physically, to return to the workplace. In addition to that, there was access to concessions for single parenting payment recipients. Here the Howard government ensured additional out-of-school-hours care to be available for parents. But we know that only recently under a different guise childcare reforms are seeing this out-of-school-hours care being placed at risk in 2012, with many of the centres being forced to close as a result of the so-called national reforms. So we are going to see a double whammy here, and that is an inability for people to ensure their children are cared for whilst they either seek employment or, indeed, undertake those works.

As part of that coalition policy at that time parents could refuse a job if they would not be more than $50 a fortnight better off once the costs of employment were factored in—including, of course, child care—or if they had to travel for more than 60 minutes each way to work. Very sensible initiatives, but of course they have also unfortunately gone by the wayside.

I heard my colleague Senator Sinodinos quote from the then department of education and workplace's Welfare to Work reforms that showed there were significant increases, 23 per cent I believe, in the number of single principal carer parents leaving income support after six months in comparison to the three previous years as a result of those initiatives, and 38 per cent moving off the payment during 2006-07. That was for single principal carers, and the report showed that more than 70 per cent of principal carer parents left income support for employment. For partnered principal carer parents on the Newstart allowance, 45 per cent were no longer in receipt of income support payments after six months, compared to 32 per cent the previous year—an increase of some 13 per cent. So we could see evidence of improvements being undertaken and at the same time systems were in place to ensure that there was child care for children, and there was the capacity for an orderly transfer to work.

These measures were designed to boost workforce engagement, reduce dependency on welfare and, returning to the comments made earlier, to try to break that cycle of long-term intergenerational unemployment, which of itself unfortunately generally leads to a circumstance in which the growing child comes to expect a life themselves of unemployment, and that is unacceptable. I referred to that in my first speech in the Senate on 17 March 2009; I reflected that in a country like this we should surely never see a circumstance in which we look to a situation in which young people particularly would not find useful, gainful and obviously lucrative employment.

There are benefits to this bill. We do recognise that the best way to help parents and their children is to help the parents find a job. We do understand, as I have just indicated, that children growing up in a jobless household will be much more likely themselves to face long-term unemployment, underemployment or the third of that trifecta—that is, unfulfilling employment. It is not just the fact of getting a job or keeping a job; it is the fact of aspiring to a job that of itself will be of interest and of itself will help the person grow over time. All of us in this place have seen the experience that is denied young people when they themselves have not had that opportunity.

Intergenerational unemployment is a growing concern in Australia and the longer people remain on welfare the more difficult it becomes. I agree with Senator Siewert; indeed, the coalition shares its support for the increase in the level or limit of the liquid assets waiting period. In fact I have some difficulties even with the level or the limit to which it is being placed. I would like to see over time that figure potentially being increased because, as we all know, there are unforeseen problems that occur in families, be they emergencies or whatever, and it is unreasonable that we should not penalise somebody having some sort of a cash reserve, either as a single or as combined parents, to be able to overcome those emergency periods.

We do have concerns with the bill. I have tried to outline some of them. There is no additional funding to support parents into work, and I cannot emphasise that enough. I think that is one of its great deficiencies, in contrast to the Howard initiatives of 2006. I believe it is incumbent on the government to go back and re-examine these figures and see whether or not they cannot return to providing that additional assistance. It is the case that the government have slashed some $160 million from Job Services Australia assistance for job seekers. That is a very, very significant sum, and the impact of it will be adverse on those seeking employment and ultimately on their families. A further $44 million has been cut from the outcome payments for Job Services Australia providers. All of these are directed at the ultimate failure of the legislation that is before us.

The deep concern I have and to which I referred at the beginning, and which so many people are acutely conscious of—whether or not government senators do come out and say so publicly remains to be seen—is the effort of this government to try to hive off some $700 million over four years from the most vulnerable and those least able to afford it. Why is that? Why was it that in 2006 the Howard government was able to inject some $3.8 billion into the Welfare to Work initiative, some $400 million specifically to assist parents into work? It was because the economy was in surplus and because there was a surplus budget. That is what we were able to do.

We see a circumstance now where I believe these figures really are terribly telling. I want to focus on this circumstance. In 2007 this government inherited $70 billion of surplus. In this year's budget, it was estimated that the debt would blow out to $147 billion from a $70 billion surplus. But of course that is now not the case. We learnt only today—I believe Senator Williams said it, through you, Mr Acting Deputy President—that we are now looking at a national debt of some $250 billion. Not the 147—

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source


Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

I am sorry, it is $252 billion—that last $2 billion would certainly have gone to paying this, Senator Williams. So from a $70 billion surplus in 2007 we now have an estimated $147 billion debt this year—in fact, it is already $252 billion.

Let me put that into perspective for you, Mr Acting Deputy President, if I may. The annual interest bill alone is $6.6 billion—that is, $6,600 million each year. Just the $600 million would account for the $700-odd million that the government is trying to save in this exercise. When the Howard government came into office following the Keating period, Peter Costello was able to pay back $96 billion of debt and, in so doing, saved some $5 billion over the remaining period of that government. We are not talking $5 billion over the remaining period of a government; we are talking about $6.6 billion of debt every year at our current debt levels. Here we are arguing—and we listened to what I would certainly agree was an eloquent representation by Senator Siewert—about the impacts on the most vulnerable people in the community in this move to try to save $700 million over four years when we seem to be accepting $6.6 billion worth of interest payments alone on a debt of $252 billion. This is all in the name of trying to protect a budget surplus.

The budget deficit, the annual difference between revenue and expenditure, was estimated by Treasurer Swan to be $22 billion in 2011-12. It doubled and it blew out to $43.7 billion. Since Labor came to government the deficit, the difference each year between revenue and expenditure, when put together over the life of this government has become $170 billion. They are telephone book figures. So any capacity by this government to actually balance a budget when it has a track record to date of accumulating a $173 billion deficit is a nonsense. It has no capacity to do so. There are many other areas in which the government should be looking for savings so as not to put the yoke upon the shoulders of these most vulnerable people and their children. But, of course, that is the circumstance the government finds itself in because of its profligate spending and because of its waste. The burden is now being carried particularly by those who are most vulnerable.

I will finish my contribution on this with the lamentable observation that not only do we have currently $252 billion of debt and $6.6 billion of annual interest payments on that debt but also, to date, we have seen unfunded commitments of some $120 billion further by the government leading into the next election, whenever that is held. The emphasis must be on two areas. Firstly, there must be sufficient funding so that people do not live in that level of poverty to which others have referred, as I have. Secondly, there must be adequate funding to make sure that those who become eligible to return to the workforce have the financial wherewithal to seek employment, to get to interviews, to complete a task and to have their children minded as needed. Just having clothing and being able to present yourself in a physical and psychological way so that you are attractive to an employer or to those who are interviewing you for employment, as indeed those of us who are participating in these inquiries can, are of themselves critically important. I simply urge that before this bill is given its final concurrence, which, as Senator Sinodinos said, the coalition will not be opposing, we re-examine the circumstances of adequacy and those other incentives, and return the incentives that the Howard government had in place that marked the success of this program so that we can give some dignity to those people.

1:27 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

I have some significant concerns in relation to the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012. At the outset, it is important to note that the Senate Education, Employment and Workplace Relations Committee report on this bill raised a number of key issues, and let us put them into perspective. I read from the committee's report, which says:

Schedule 1 of the bill seeks to remove 'grandfathering' provisions established on 1 July 2006 and would supersede transitional amendments passed in 2011 and earlier this year. If the bill is passed, from 1 January 2013—

less than three months away—

• eligibility for parenting payment for partnered recipients would cease when the youngest child under their care turns 6 years old, or when the youngest child of a single parent turns 8 years old.

• all grandfathered recipients would have participation requirements when their youngest child turns 6 (currently this is not until that child turns 7).

So this is a further tightening up. This is further penalising of those recipients. I note your contribution in the media, Mr Acting Deputy President Cameron, which I thought expressed in a very measured way concerns about these measures. I thought they were wise comments about proceeding in such haste. I think your comments, Mr Acting Deputy President, reflected widespread community concerns.

The recommendations of the report of the committee were that this bill should not be debated until the Joint Committee on Human Rights had concluded its inquiry and until the Senate Education, Employment and Workplace Relations Committee had completed its references inquiry into the adequacy of the Newstart Allowance and other payments. The Joint Committee on Human Rights also recommended that the bill not be debated until the inquiry into Newstart is complete. That makes a lot of sense. Why are we rushing this? I do not believe it is appropriate to go against the recommendations of these two inquiries to debate and vote on this bill now. It is hasty. It is unwise.

If the government are serious about the intention of this bill, which they have stated is to encourage people to join the workforce, then surely it is worth the time to make sure there will not be any unintended consequences and, furthermore, that these measures will actually work. This bill will have a significant effect on the people it is targeting. This is the second time this group will have an end date put on their parenting payments, and I find it very concerning that this date is continually being brought forward. These kinds of decisions make it hard for people to plan for the future, and the financial uncertainty this has caused for them is nothing short of unfair.

We must also keep in mind that this group represents something like one-third of parenting payment recipients. The other two-thirds of recipients are already living under the harsh conditions this bill seeks to enforce. There are two facets to this problem. Firstly, there is the issue of Newstart. It is a woefully low allowance, and it is very easy to see how it could hinder, rather than help, job seekers. It grinds people into the ground. If it demoralises them, if it dispirits them, if it means that they are just living from hand to mouth on a week by week basis, I cannot see how that empowers people to look for work, to be job ready. In my view, it is vital that this bill be delayed until the inquiry into this allowance is complete and any recommendations it makes are implemented. Things are bad enough already for the people on this allowance. We do not need to add to their number at this stage.

Secondly, there is the issue of reducing allowances to encourage people into employment. I agree with the government that it is important for people to have a job, and not just for the fiscal argument—being gainfully employed, in whatever field, whether full or part time, plays a vital part in a person's self-esteem. It helps to keep us connected, to know that we and our contributions are valued. I do not see how this bill will encourage people to work. Punitive measures are not the solution. If the government genuinely wants to help people, particularly single parents, transition back into the workforce, then they need to work towards that aim. Everyone here knows it is not as simple as, 'Do it or else!' If higher employment in these areas is genuinely the goal then we need to look at targeted measures to support and encourage people. We need to have a bit of carrot rather than just all stick.

These kinds of programs are not cheap, but just throwing cash at the problem will not solve it either. In fact, if the government were serious about their stated aim, they would not be looking at it as a saving—anything but. Instead they would be setting money aside and working out where to spend it for the best impact. They would be consulting with experts, community groups and people working at the coalface on these issues. But it appears that none of this has happened. Instead, they are insisting on punitive measures, which we know just will not work.

There is another argument here: that all parenting payment recipients should be on an equal footing. I agree with that, but, instead of reducing the allowance to meet the lowest common denominator of Newstart, what if we raised it? What if we just take into account the special circumstances that sole parents are in in so many cases? What if we raised Newstart too? And what if we looked at getting people into work as more than a 'follow the rules and tick the boxes' process? Then maybe we would see the outcomes the government is predicting.

Ultimately, I cannot support this bill. I do not support its intentions in the sense that they appear to be primarily punitive. Of course we want to encourage greater participation in the workforce. Of course we all want people to have meaningful work. But I do not support this bill being rushed through, debated in this place and being voted on against the recommendations of two committees—two committees that have carefully considered the implications of this bill. It is time for the government to take a step back and to take the time to look at the whole issue and how it can be appropriately addressed. This bill is not the solution. It is not even part of the answer. I cannot support this bill.

1:33 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

I rise today to indicate that the Australian Greens, of course, will not be supporting schedule 1 of the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 that is before us, as my colleague senator Rachel Siewert has indicated earlier in her contribution. This route goes to the heart of what sort of country we want to live in in Australia. It literally goes to the heart of what the purpose of a budget is. A budget and an economy are nothing of themselves. Budgets and economic tools are only there to deliver for the community at large. There are only two real things in the world: people and nature. We developed economic tools to govern that relationship so that it would be a sustainable one in the longer term and to govern the relationship between people. At the heart of the relationship between people needs to be equity—equal opportunity for all. Surely that goes to the heart of what is the point of an economic system and its economic set of tools. What we have here is economic tools delivering appalling outcomes for the community. If that is the case then the tools need to be changed. We need to be looking at what the indicators are of what we want to be measuring in Australia to determine whether we are successfully having tools that deliver in the broadest sense—so that we have ecological sustainability and a healthy and happy community into the longer term.

The bill before us impacts 100,000 single parents, 85 per cent of whom are women, who are dropping from the payment they have to a Newstart allowance payment, which puts them at the poverty line. They are going to lose between $60 and $100 a week when you take into account not only the loss in payment but also the tax thresholds. You have a point where you are saying that in order to reach a budget surplus, which is a political surplus, you are prepared to put 100,000 people into poverty. I ask you, Acting Deputy President Cameron: how is that justified on what we hear time and time again from the Prime Minister about Labor values and working families? How is putting people into poverty a Labor value? How is people putting into poverty a Labor value when at the same time you see the ongoing areas where we could be raising money, like getting rid of fossil fuel subsidies for a start; like blocking the loophole in the MRRT—any number of ways we could be raising money. But, no, in order to reach this surplus, the government is prepared to put 100,000 single parents into poverty.

Now let us go to this issue that somehow that will help people get jobs. We know that driving people into poverty will preclude them from employment. It actually costs money to become job ready. In fact, the only increase in employment support that ACOSS have been able to identify in the budget is $3 million to extend a telephone career counselling service. They go on to say that they understand that the increased allocation for JET childcare assistance reflects higher demand for an existing childcare subsidy, not an extension of access to that program. The fact is if you are unemployed and you are going to have even less money to be able to be job ready then you will be less likely to be able to achieve employment.

Let us go back and talk about what will happen to the children who will be affected when the single parents, 85 per cent of whom I have said a moment ago are women, are in these circumstances. I would like the Prime Minister to tell Australians how the children of single parents who are now being forced into poverty are going to have equal opportunity with other children in Australian society. The reality is they will not—and equality of opportunity is not only important in terms of a value. Let me put a monetary figure on it. We know that in countries where the gap between the rich and the poor gets wider and wider there are many increased costs in terms of the level of public safety, for example, and we also know about the health care and other associated costs that go into the mix as a consequence of where you have gated communities of the wealthy and other communities of the very poor. That is where this is headed in Australia and that is what I find so offensive about what the government is doing. It cannot be justified. I understand that there was a vigorous debate in the Labor Party on this particular issue and I understand that the views were reasonably evenly divided in relation to the matter.

Nevertheless, the test of this will be to see who actually crosses the floor on it. We heard from Senator Back a little while ago about how appalling it is to drive people into poverty—and he was absolutely correct that it is—but, Senator Back, will you vote against schedule 1? That is the point. It is all very well to rail against poverty but when push comes to shove and the vote is called on this, who is going to vote to prevent the 100,000 single parents losing this payment? Who is going to vote to prevent them being pushed into poverty? I think everybody concedes that Newstart is actually driving people into poverty to the point where you have parliamentary committees having met in this place and having said that this will drive people into poverty with, in fact, those committees saying the government should delay this legislation until the committee looking into Newstart, for example, actually reports.

Then you have got the humiliating scenario where the Australian Council of Social Service, the National Welfare Rights Centre, the St Vincent de Paul Society, the National Council for Single Mothers and their Children, Women Everywhere Advocating Violence Elimination, the Council for Single Mothers and their Children Victoria, Women's Legal Services New South Wales and the Human Rights Law Centre have become so desperate that they have all been getting together to send a letter to a United Nations special rapporteur over the federal government's decision to bring on this legislation against the advice of those parliamentary committees. In that letter it is pointed out, of course, that the Joint Parliamentary Committee on Human Rights had already advised the government to delay the bill, citing major reservations. One of them was:

• If Newstart combined with other benefits is not sufficient to provide an adequate standard of living for affected individuals, the measures risk being a violation of human rights under article 9 of the International Covenant on Economic Social and Cultural Rights.

How humiliating is it in a global sense for a rich country like Australia to be risking violation of article 9 of the International Covenant on Economic, Social and Cultural Rights because we are driving people into poverty and the people being driven into poverty are not only single parents but also children? Where does that leave us in terms of global standing in the UN system? We have already embarrassed this nation with violation of human rights when it comes to the treatment of refugees. Now we are going to humiliate ourselves again by being in violation of human rights when it comes to economic, social and cultural rights.

The Joint Parliamentary Committee on Human Rights was also not convinced that the affected single parents would be able to maintain access to appropriate levels of social security support if placed on Newstart and, as a result, it argued it would be premature for the government to introduce these measures prior to the completion of the Newstart inquiry. This is really an extraordinary situation and I think it puts paid to any notion when the Labor Party stand up and say that they stand for Labor values and that the Labor values somehow go to equality of opportunity, a decent life for all, minimising the gap between the rich and the poor, and facilitating people getting into meaningful work, with the human dignity that is associated with that. They cannot claim to be promoting all of these things if they legislate to save $700 million off the backs of single parents and their children. It is disgraceful that this is being driven through this Senate at a time when parliamentary committees have said quite clearly this is premature and they need to look a bit more at what is going on with Newstart.

Actually, they really do not need to look any further into what is going on with Newstart. We have heard from practically all the social justice agencies in the country, who have submitted that Newstart is actually entrenching poverty and acting as a barrier to people looking for work. We have heard that from Dr Cassandra Goldie, the Chief Executive Officer of the Australian Council of Social Services, we have heard it from the Salvation Army and we have heard it from many others. The Salvation Army submitted that:

Newstart allowance is inequitable and inadequate as it is lower than pensions for retirees, below the poverty line, and has a more restricted earning threshold compared to the Parenting Payment.

That is what this parliament is going to vote on, and I think it has come to the point where people need to put their vote where their values are.

It is no justification to say, 'I fought this in the caucus' or 'I fought that in the party room, but ultimately I am going to vote for what the party line is.' In the future when we see a single parent with their child and we see the poverty line consequences of actually taking this money from them, every single one of us who votes in support of this legislation has voted for that outcome. That is why the Greens will not be supporting this bill. We think that if the government is so committed to the surplus it should find money elsewhere—for example, by taking away the fossil fuel subsidies, by blocking that loophole in the MRRT. There are any number of ways by which we might raise money. But raising money on the back of single parents and their children is a disgraceful comment on the state of social justice, on the state of generosity and on the state of equity in this country.

I would defy any senator to take a child from your own family and go and live for a week on the amount of money that is going to be allocated, and see how you do trying to clothe and feed a child plus put a roof over their head in the current circumstances. We know that is poverty and we know exactly what we are doing—and there is no excuse for it. And there is no pretence about it either. Let us not have any suggestion that people here do not know what they are doing. Of course, everybody knows what they are doing. You only have to go to any one of those providers of support and welfare in the community who will tell you exactly what this parliament will be doing.

It will be a very sad day for Australia if this legislation gets through. It will also be a line in the sand in terms of the community and what they think political parties stand for. I can tell you that the Greens stand for equity. We want equal opportunity for people in Australia. We want to reduce the gap between the rich and the poor in this country. And we want to make sure that the economic tools that we have actually measure the things that count—that is, the level of education, the level of homelessness, the level of health and happiness in the community and sustainability in terms of our engagement with the environment. They are the sorts of things that are basic to everybody—food, shelter, clothing and being able to live on a planet that is able to sustain us.

If our current economic tools do not deliver those outcomes, there is something wrong with the tools and we should change them. We should not drive people into poverty in order to meet the strictures of reaching a budget surplus simply because the government cannot withstand the attacks from the coalition by not meeting its political surplus, when every economist in the country would be saying: 'Look at the state of the economy. The Reserve Bank is cutting interest rates. Can't you see things are slowing?' It is inappropriate to continue with this obsession with the surplus and this refusal to raise money from people who can afford to pay and instead take it from children of single parents. It is disgraceful.

We will not be supporting this bill and nor will we be listening to the excuses of people who say, 'We voted for it because it was the party line.' This is actually a matter of true and core value. What do you value as a person? What sort of society do you want in this country? That is what this piece of legislation stands for. It goes to the heart of the matter. Stop people on a street corner anywhere in the country and ask, 'Do you think single parent payments should be reduced to the point of Newstart so that we drive people into poverty?' Do you think people on street corners would say that they thought that was a good idea—especially if you put to them that we could raise that $700 million by removing a fossil fuel subsidy or that we could get that $700 million by not repaying to the big miners the royalty increases that states might have made? Just about everybody on a street corner would go for the latter options and say, 'Raise the money elsewhere; don't take it from the backs of children.'

This is really a moral issue. It is a totally moral issue and it is a matter of choice about what sort of country we want to live in. The Greens are very clear about the direction we want to see the country go in—and this is totally the wrong direction.

1:50 pm

Photo of Bob CarrBob Carr (NSW, Australian Labor Party, Minister for Foreign Affairs) Share this | | Hansard source

The Social Security Legislation Amendment (Fair Incentives to Work) Bill will give effect to further reforms to parenting payment and build upon the changes this parliament passed on 9 May 2012 to make the system more equitable for all recipients of parenting payment. The bill will also introduce two other amendments: one relating to the liquid assets waiting period, announced as part of the 2012-13 budget; and another change relating to the income maintenance period.

The reforms to parenting payment are an extension of the broader reforms already introduced as part of the Building Australia's Future Workforce package announced in 2011. These important changes to income support payments for parents continue this government's focus on providing greater incentives and opportunities, particularly for single parents, to re-engage in the workforce and share in the benefits that work brings. The removal of grandfathering arrangements will provide greater equity and consistency in the parenting payment eligibility rules by ensuring that all parents are assessed the same, regardless of when they first claimed income support. The changes to parenting payment will encourage parents with school-age children to re-enter the workforce sooner and ensure a fair and consistent set of parenting payment eligibility rules where all parents receiving parenting payment will be treated the same.

Under this government there have been better participation outcomes for individuals who have not been grandfathered under the Howard government's parenting payment policy of 2006. In practical terms the evidence has shown us that, while grandfathered parenting payment recipients do better than most job seekers, principal carer parents on Newstart allowance do even better. The Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 was passed by parliament on 9 May and introduced changes to the existing transitional payments for parenting payment recipients. These changes reduced the age of eligibility of the youngest child from 16 years to 12 years. The current transitional arrangements are available to parenting payment recipients who have been continually receiving payments prior to 1 July 2006. Since 1 July 2011, children born to or coming into the care of parents who have been receiving parenting payments since before July 2006 have not extended these parents' eligibility for payment.

This bill will continue the reforms to parenting payment so that from 1 January 2013 transitional arrangements will be removed for these parents and they will in the future cease to qualify for parenting payment when their youngest eligible child turns six, for partnered parents, or turns eight, for single parents—the same as other parenting payment recipients. Under these amendments, all parents will have participation requirements when their youngest child turns six, completing the alignment of the parenting payment provisions. There are no other changes to participation requirements. This removes the inequity and inconsistency that currently exists for parenting payment recipients by ensuring that all parents are assessed the same.

To ensure that individuals and families, particularly those affected by the parenting payment changes, are not disadvantaged when making the transition to new parenting payment arrangements, the government has already made amendments to the Social Security Act 1991 to reform the income test. The introduction of a more generous income test, from 1 January 2013, allows these parents to earn over $400 more per fortnight before they lose eligibility for payment. This provides stronger incentives for parents to undertake paid work by allowing parents to retain more of their income support as their employment income rises.

It is not easy for parents to take up or return to work, and the government considers that the range of training, employment services, child care and career advice assistance that we put in place will reduce those barriers and will greatly assist these parents to find and keep a job. In recognition that these parents are likely to have spent significant periods on income support and out of the workforce, the government is also providing additional support for these parents to ease their transition back into the workforce. As well as additional training places and community based support for single parents announced under the Building Australia's Future Workforce package, the government has provided additional funding in the 2012-13 budget for professional career advisory services.

Additionally, the government is providing additional funding to support increased demand and to better target the Jobs, Education and Training Child Care Fee Assistance Program. The government also understands that parents need to balance their family and caring responsibilities with their participation obligations, and parents will continue to have access to the more flexible arrangements to balance part-time work, study or training. The government believes that, all together, these changes provide parents with the right balance of support and incentives.

The bill amends the liquid assets waiting period to allow newly-unemployed Australians and new students to hold on to more of their savings and better adjust to their new circumstances. From 1 July 2013, the maximum reserve amount for a person who is single will be doubled. A previous temporary doubling of the liquid assets waiting period threshold ceased on 31 March 2011.

This bill also introduces a technical amendment to the definition of termination payment for the purpose of income maintenance period. To help with some of the cost of living pressures that are affecting low- and middle-income Australians and their families, the government is investing $1.1 billion to create a new income support bonus that will be paid to recipients of Newstart allowance and similar payments. The changes in this bill form an important part of the income support reforms announced in the budget.

The government is now in a position where it can afford to reinstate those thresholds permanently. The amendments proposed by Senator Siewert in relation to the liquid assets waiting period would not affect the calculation of waiting periods and, on this basis, it is more appropriate and practical for the government to continue to periodically review the thresholds in line with the current economic situation.

The changes in this bill form an important part of the income support reforms announced in the 2012-13 budget. These reforms will support more Australians when they are going through tough times and encourage more Australians to participate in and share in the benefits of paid work. The changes will result in fairer and more consistent treatment of income support recipients. I thank senators for their contributions and I commend the bill to the chamber.

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

The question is that the second reading amendment moved by Senator Siewert be agreed to.

2:06 pm

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

The question now is that the bill be read a second time.

Question agreed to.

Bill read a second time.