Senate debates

Wednesday, 1 October 2014

Bills

Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014, Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014; Second Reading

9:32 am

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

I follow my colleague Senator Siewert, who has led for the Greens on these bills, setting out our clear opposition and why that opposition needs to be loud and very clear.

These bills would bring in structural change to our social system that would result in a much more divisive society, a society where effectively people are excluded from opportunities. I am committed to—and I hope all senators would be committed to—ensuring that people are not disadvantaged because of where they live, because of economic issues or because of their level of ability in our society. This is very cruel, very mean legislation that warrants the widest opposition. I believe that, when the history of the Abbott government is written, this will be an example of the extreme aspects of this government that have set it apart; it is ruthless in how it approaches our economy, our social structure and the very nature of our democratic society.

The harshest cuts in this budget hit the most vulnerable. They are widespread—and I will come to aspects that hit people who want to undertake tertiary education—but the essence of these bills, if they become law, is that they go after the most vulnerable. This legislation deserves to be universally rejected. The Greens take that very strong position because we have had a longstanding policy of a commitment for guaranteed adequate income for all. It is a policy that we are all very proud of, because it recognises that people have different circumstances in their lives and that at all stages people should have a guaranteed adequate income so that there is common decency for all.

People should not be put in the position of having to sleep rough, of having to think twice about whether they can afford to buy medicine; where their children have no opportunity to gain a decent education; where they may not be able to send their young children on excursions. That guaranteed adequate income has been Greens policy for a long time. So when we approach legislation like this, we see the great harm that it would do, because it effectively removes this safety net that is so important.

This legislation really does contain some the cruellest welfare cuts in this budget. It is about ripping out millions of dollars; it is the theme that we have seen through the whole budget where the government has targeted the disadvantaged to make its savings. My colleague Rachel Siewert has set out very clearly the detailed problems with this legislation.

I would like to go into how this legislation hits students who wish to undertake higher education. This is where we do see a slash and burn approach with the government looking to save at least $300 million. The big change is in relocation scholarships. Students whose parents live in a major city would not be able to relocate to another major city and receive the relocation assistance—and the relocation assistance really makes a huge difference. I know many students who have received that relocation scholarship and they tell me that it made all the difference in their being able to proceed with the course that they had their heart on and to go to the university where that course was provided. One example is a young man who was living in the lower Blue Mountains and was able to go to Sydney University. I heard of a person in Brisbane who wanted to go to Sydney University to study vet science, and that opportunity was there because of the relocation assistance. It is not a huge amount of money; it adds up to about $7,000 through the course of an undergraduate student's life. It starts at a bit over $4,000 per year. That money is essential for all those basic costs—like the huge burden of rent which, you would all agree, can make life very tough when you hit Sydney. For basic living costs such as food and rent, that relocation assistance has been all-important.

Now we have these very cruel measures that, looked at individually, people might think, 'It's no big deal.' But for a single person undertaking their studies, they can really make life hard. The major cities include the capital cities, Newcastle, Wollongong, Central Coast and Gold Coast. If you wanted to move from one to the other, because your parents live in one of those areas, that would no longer be possible. I really would argue that it will further disadvantage and prevent many people being able to proceed with the education that they have worked so hard to undertake.

We also need to remember, when we are looking at this aspect of the legislation—which is about how students study and how they are going to live—that it further undermines the argument that we so often hear from the Minister for Education, that it is critical to the future of higher education that we make it competitive, that that will sort out the problems, solve the government's funding problems, give students all the choice—all those things that we hear ad nauseam from the minister. But when you look at what is going on here, with regard to the relocation scholarships, you see how this competition argument falls down, because Australia's vast geography is clearly a limiting factor. It does put a shadow on how people make their decisions, and the relocation scholarship has brought some balance to it. There can be no competition if you cannot afford to move cities to access a course. You might have your heart set on a specific course at a university in a capital city and want to move from one capital city to another. That would now be removed. If the government is successful with this legislation we will end up with a situation where it will be limited to the wealthy who would have the ability to assist their children to shop around, while low-income students from disadvantaged families, from working class families, would have no choice other than to study at the university that is closest to them. That is not competition. That is creating a very divided society—limiting opportunities for people and limiting Australia's potential—because, without ensuring that education is freely and widely available to all, we clearly limit our own innovative potential.

With regard to the relocation scholarships, I want to share with senators some very useful comments that came from the Australian Technology Network. The Australian Technology Network comprises five leading Australian universities. They teach well over 200,000 students. They do this at universities across the country and I think they have some centres overseas as well. When you look at the ATN's work you will see that they have put a great deal of effort into the issues of access and equity with regard to the ability of students being able to access their universities. They have made some comments on different aspects of how the government is trying to change the higher education system. On what we are addressing here now, the relocation scholarship, they said:

It may force some students to undertake longer hours of paid work; withdraw from their course; or reduce their study load.

They went on to say that they anticipate that taking away the scholarships could simply lead to recipients moving on to other social welfare payments like the Newstart allowance. They are very useful comments from the ATN. They identify the pressure that students are under when they undertake their studies and that removing the relocation scholarship could put them under more financial pressure—how they would cope with that. If you have to study for longer hours, a point comes when you cannot do your studies properly or you cut back on the level of your involvement in study, and that is not healthy. They also make the very valid point that people not able to allocate their relocation scholarship could well end up on another form of social welfare payment, such as Newstart allowance. So, by approaching it in the way that the government has by trying to save money—which I think has caught up with their elitist approach, but let's just talk about it in the context of saving money—would they save money if so many of those young people end up on the Newstart allowance? Again, it underlines the very narrow approach that we see—the sectional approach to higher education that the government is undertaking.

There are some more aspects to the way the government is planning on saving money in this bill when it comes to higher education and those are to do with the student support payment and the Income Bank. The student support payment is a form of youth allowance. It currently rises according to average male weekly earnings. Under this legislation the government wants to change that to the CPI, the consumer price index. Why does the government want to do that? Because the CPI rises at a much lower rate than the average male weekly earnings. So, clearly, over time they would save money. The government saves money, but, with the already small amount of money that students try to live on, it means less money for students to pay for rent and food—their living expenses. That means that the level of hardship will increase over time as the cost of living rises, but the amount of money that students receive from their student support payment rises more slowly. When the minister was getting advice on this, they might have said, 'It's really only a small amount.' When you are already on such a small amount of money—with which you need to try to pay your rent, catch transport and buy food—having your weekly allowance reduced by a small amount is very significant and can really make a difference to how you live and do your studies. Surely we should be working to improve the living conditions of students so that they are not under even extra pressure when they undertake their studies.

Another way the government plans to cut students' income is through changes to how the Income Bank operates. At present, students can earn a certain amount of money without loosing their student support payment. That is obviously fair. As a student's income rises above a certain amount, their student support payment is reduced. Again, that is part of the current system. The cut-off point rises according to the CPI. Again, I would say that was fair. Clearly, the amount that one could earn would not stay static. But now it will not be increased, which means that over time the amount students can earn without losing money from the student support payment will effectively be reduced. I guess the minister was advised, 'It's very insignificant; it'll only be a small amount,' but, over time, this becomes very significant. If the amount at which your payments start to be reduced becomes lower and lower, over time that brings more hardship.

These bills are another example of how cruel this government is. It has come up with a set of measures in these bills for people on welfare, people on virtually any form of government payment that is to assist those who are doing it tough—single parents, elderly people, the unemployed, students trying to gain a higher education. The government is pulling money off them left, right and centre. This is legislation that should never even have been drafted, it is insidious and it represents the very ugly side of neoliberalism that this government is now determined to bring in, and it should be defeated and defeated soundly. I move the Greens amendment circulated in Senator Siewert's name:

At the end of the motion, add:

but the Senate is of the opinion that, rather than punishing the vulnerable and most disadvantaged, revenue should be raised from big miners, bankers and polluters through:

(a) applying a "public insurance" levy on the big four banks that are too big to fail;

(b) removing fossil fuel subsidised fuel for big mining companies;

(c) implementing the original super profits mining tax;

(d) imposing a millionaires tax;

(e) taxing discretionary trusts as corporations.

That would certainly bring some balance back to how this government conducts itself. The amendment addresses many of the issues my colleague Senator Siewert addressed.

9:47 am

Photo of Linda ReynoldsLinda Reynolds (WA, Liberal Party) Share this | | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. Responsible governments do not take the easy way. They do what is right, they do what they are elected to do, and that is rarely, if ever, the easy way. This budget calls on everyone and every business to contribute and to grow the workforce, to boost productivity and to help build a stronger economy through more productive investment. It will do this while supporting the most vulnerable and it will also take significant steps towards ensuring that as a nation we once again live within our own means.

I believe good governance means ensuring that every taxpayer dollar is wisely spent and, in particular, that the welfare budget is as effectively targeted as possible to those in most need at the time. Those on the other side of this chamber often talk about fairness as if their point of view on what is fair and what is right is the right opinion and everybody else in this chamber is wrong—or, worse, that we are unfair and uncompassionate. The truth is that nobody in this place has a mortgage on compassion. Instead, we have differing philosophical perspectives on social policy outcomes.

For example, unlike those opposite, I believe that it is neither fair nor just to saddle our children and grandchildren with this generation's prolific debt, racked up so swiftly by the previous government. Sadly, this debt was used by the Labor government on recurrent expenditure to avoid taking the tough decisions that needed to be made over their six years in government. It was not used to nation-build, and today we are all saddled with that legacy. I believe this was simply bad governance and also irresponsible governance. That is not what the coalition government was elected to do. While we were not responsible for the circumstances in which we found the country, we have certainly taken responsibility for fixing it.

I agree with Ronald Reagan, who famously said, 'We should measure welfare’s success by how many people leave welfare, not by how many are added,' and that welfare's purpose should be to eliminate the need for its own existence. To me, this is the most compassionate outcome.

The context of any legislation is always very important and, in the context of this budget, understanding the starting point for the Abbott government is critical. Labor's budgetary legacy is a shameful one. Despite all of their rhetoric in this place and all of their spin, they presided over the fastest budget turnaround in Australia's history, with the sixth-largest budget deficits ever. In fact, gross debt was projected to rise to $667 billion and $123 billion in cumulative deficits for the Australian taxpayers to pay back. This was the starting point 12 months ago for the Abbott government and for our first budget in May this year. This is what Labor did in just six years, so let us have a look at what the Abbott government has already done in its first year. We have already reduced Labor's deficits by $43.8 billion through to 2017-18 and gross debt has now been forecast down to $389 billion in 2013 compared with the $667 billion that Labor left us. This includes provision for future tax relief to address bracket creep. But there is still much more to be done.

A key component of any budget is social security and ensuring that spending is sustainable into the future. All government programs must evolve and change over time to ensure they are sustainable. Change never just happens; it requires deliberative and often tough decisions by government. Nowhere are these decisions tougher or more important than in social security. The 2014-15 budget includes $146 billion in social security spending, which is a full 35 per cent of the total federal budget. In 2013-14, spending on the age pension alone will reach $40 billion for the first time in our history. We must do everything we can to ensure that it is well targeted and most effectively spent.

The Senate Community Affairs Legislation Committee, of which I am a member, noted in its inquiry into these bills that the changes proposed in both these bills are motivated by a desire to ensure a more sustainable welfare system. These measures seek to strike a balance between providing incentives toward greater individual responsibility and self-reliance and providing support to the most vulnerable members of our community, who need our support the most. The committee also noted that there was generally a high degree of support among submitters to the inquiry for the general intent of the bills, particularly the need to better target payments to those who most need them and to provide incentives for greater workforce participation. The committee recognised submitters' concerns regarding specific provisions of the bills but was satisfied that the measures are accompanied by appropriate safeguards to address these concerns. A number of the measures in these bills are based on the premise that everyone who can contribute to the economy should contribute, but we also acknowledge that not everybody can contribute in the same way. On this side of the chamber, we also believe that young Australians under 30 years of age who are able to work full-time should be either earning or learning. I believe most Australians would agree that it is reasonable to expect that our young should be earning or learning and not becoming, so early in life, welfare dependent. I was in Tasmania earlier this month, and those appearing before the Community Affairs References Committee looking into income inequality acknowledged that the best pathway out of poverty is employment. A job is always the best form of welfare. Like many others on this side of the chamber, I have been dismayed by Labor's misleading claims and that have unnecessarily and, I would argue, cruelly upset so many in our community—often the most vulnerable.

Why are these measures so important now? The 2010Intergenerational report projected that the ratio of working-age to pension-age Australians will fall from the present day five to one to around 2.7 to one by mid-century. This means that there will be fewer and fewer Australians participating in the workforce and paying tax to support those on the age pension. Without policy reform, the cost of the age pension is projected to increase by 70 per cent over the next decade, from almost $40 billion a year currently to $68 billion a year—a drain indeed on the next generation of taxpayers.

When the age pension was instituted in 1909 with an eligibility age of 65, average Australian life expectancies were 55 for men and 59 for women. Over the past century, average Australian life expectancies have lengthened by at least 25 years. Despite the claims from those opposite, this budget does not deliver any cuts to the age pension. It will continue to increase twice a year to keep up with the cost of living. In fact, the last increase was based on a cost-of-living increase which was higher than the increase in male total weekly earnings.

In conclusion, structural changes are being made to ensure the long-term sustainability of the budget and our social security system and to ensure that pensions remain a viable payment into the future. Targeted welfare payments are about making sure that we spend every taxpayer dollar in the most efficient way possible to ensure the Australians who need support get it and the Australians who are able to work do so. It is for these reasons that I commend these bills to the Senate.

9:56 am

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

I am pleased to be able to make a contribution today to the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. As we know, the 2014-15 federal budget was a tough, unfair and cruel budget for most Australians. That probably explains why we are here, in September, some months after the budget was released and the budget still has not got through the Senate chamber. The people of Australia understand what a harsh and punitive budget it is, as do we on this side of the chamber and, apparently, our crossbench colleagues.

As well as the well-known inclusions—like the GP tax and much publicised increase to university fees that will particularly disadvantage women—families, the elderly, the unemployed and those with a disability will be hit even harder if this legislation passes through the Senate. The Community Affairs Legislation Committee investigated these bills and Labor senators put in a dissenting report which goes to the issue of the Abbott government's justification to introduce its punitive and harsh federal budget—that is, that there is some economic crisis in Australia and that welfare spending is out of control. Labor senators in their dissenting report to the Community Affairs Legislation Committee report clearly outlined that there is no budget emergency in Australia to justify such harsh cuts and that welfare spending is not out of control in Australia. That cannot be used as a justification for the harsh cuts in this budget. In fact, Labor senators pointed out that Australia's fiscal position remains fundamentally strong and that Australia has a low debt to GDP ratio, a AAA credit rating from all of the major rating agencies, low inflation and relatively low unemployment. We do not accept that there is justification for these cuts.

So you would have to ask: why are the government targeting the already most disadvantaged people in our community through their budget cuts? Why didn't they implement a budget that went after the big corporate end of town who, as we have heard this week, are seriously good at avoiding paying income tax? And why did they repeal good legislation like the mining resource rent tax that meant that big corporates would pay their fair share of tax on Australia's mineral resources? They took what they thought was going to be the easy option and targeted people who were already doing it tough and now they have come up against the Australian public, who do not like that kind of attitude from their government. They believe that a government should look after the people in our community who most need it.

Some of the most appalling aspects of these bills are in their sphere of income support for people who are unemployed or on a pension. If these bills were to pass the Senate, many young job seekers would be forced to live without any income for six months each year. I made some comments about that in my adjournment speech last night, but I reiterate that that situation would be catastrophic for young people. It would lead to more homelessness and financial crisis for young people and, if they had any income or support, they would have to manage it to the extent where they would probably forgo medical care—and, even worse, would they be able to feed themselves? It potentially makes it much harder for young unemployed people to find a job if they are unable to afford public transport to get to a job interview or, as I said last night, unable to afford suitable clothing or a haircut to make themselves presentable for a job. There is no indication anywhere that such measures actually assist young people who are unemployed for extensive periods of time back into work. We know that what does work with young people who are unemployed is intensive case management and real support to get into jobs.

We note also that the proposed changes to the family tax benefits will inflict more pressure and hardship on families, especially low-income earners and single parents, who already struggle to find the money necessary to support their children going to school and accessing health services for them. The proposed changes to eligibility requirements mean that the value of pensions will decrease over time and that people will have to wait longer to receive the age pension, Increasing the age at which people can receive the age pension to 70 years by 2035 will also cause hardships and suffering for many Australians, especially for lower-income earners and blue-collar workers, who physically cannot work longer than they already do.

Newstart allowance recipients who leave a job or refuse work without good reason will no longer be able to have the resultant eight weeks of nonpayment waived on hardship grounds, and those who do not meet the onerous activity requirements proposed by the government will only be able to have the eight-week penalty waived once during each of their periods on Newstart. Eight weeks is too long to deny people support. Again there is no justification for this and no hard evidence to suggest how this would actually help people back into the workforce.

I note also changes in the portability allowance for disability support pensioners that will see people's DSP payment cancelled if they are overseas for longer than four weeks. That measure, combined with a number of other changes that will adversely affect people with disability and their carers—including indexing the disability support pension and the carer payment by CPI only and cessation of the pensioner education supplement—is basically not fair. Australians do not choose to become disabled, but the government seems intent on implementing measures that punish them for being disabled.

Labor senators will of course oppose the majority of the measures in these bills. As the report from Labor senators on the Senate Community Affairs Committee inquiry into these bills suggests, there are some measures that may get Labor support but, overall, Labor senators are opposed to this budget and the dreadful things that it contains. I am sure that all senators have been receiving considerable correspondence from constituents about the likely impacts of these budget measures upon them. I thank all those constituents who have written to me about their concerns about what will happen to them and their family situations if these punitive budget measures get through.

I note one email correspondence, Michael, who said in an email to me: 'As a person who has to be very careful to make ends meet on the pension, I am not sure how I would manage if my income was reduced in any way. I understand that the proposed changes to the way the pension is indexed would mean a cut of $80 a week over 10 years to the single pension, which seems like a huge amount when it is already a stretch for me to pay my bills, buy my groceries and get to important appointments.' There are many other emails along the same line from constituents just like Michael who are already doing it tough. Frankly, for those of us in here, $80 a week is probably not a lot of money. But for someone like Michael, who has to think twice about whether he can afford that bus ticket or whether he can afford to go to the doctor and pay that $7 GP tax, it is a very large amount of money. As a compassionate nation and a very wealthy nation, we should be supporting people like Michael. We should be using our wealth to support people like Michael. We should not have governments that attack people like Michael.

I mentioned Michael. Of course, it is not just Michael who is saying that this is a bad budget. Organisations like ACOSS have been very critical of the budget. I note that the CEO of ACOSS, the Australian Council of Social Services, Dr Cassandra Goldie, has said that changes to the pensions proposed in these bills reduce further increases in pensions for the poorest older people, in effect freezing the real value of the maximum rate of the age pension, and she mentions the $80 a week as well. ACOSS, as we know, works very hard to support low-income and welfare recipients in Australia. I thank them for their work. ACOSS notes that pensioners who already live on around $20,000 a year just cannot afford any further cuts or reductions in their age pension income or in the way age pensions are calculated. Labor is very passionate about protecting age pensions. When we were in government, we worked very hard to ensure the biggest increase in the age pensions for more than 100 years. I well remember many pensioners writing and thanking the Labor Party senators and members of parliament who worked very hard to manage our budgets to ensure that pensions and pension increases were a focus.

I will conclude my remarks shortly, partly because I do not think my voice is going to hold up much longer. I am pleased to stand with other Labor senators in opposing the harshest aspects of the Abbott government's federal budget. There are no redeeming features of the budget. It is an unnecessary budget. We know that Treasurer Hockey is getting himself into all kinds of contortions today to try and explain why this budget has not been passed by the Senate. He is putting a lot of pressure on the Senate crossbenchers to cave in and accept some of the worst aspects of this budget, particularly in regard to pensions and how the budget treats welfare recipients including unemployed people, especially young unemployed people. I urge our crossbench senators to remain resolute and strong and join with the Labor Party to oppose the worst excesses of the Abbott government's current federal budget.

10:09 am

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. These bills are the mechanism by which the government wishes to implement all its heartless, selfish and un-Australian cuts to Australian pensioners, young job seekers and families. Australians believe in a fair go and helping each other out. It is a principle of mateship that underpins the Australian ethos. We believe that we should help those who are less fortunate.

The bills we are discussing today are the very definition of unfair. They target those who can least afford to lose any income at all. It is just another unfair part of an unfair budget. We know for fact from the Treasury analysis that those opposite removed from the budget papers and tried to keep hidden that Australians on lower incomes will be hit harder by this budget than those on higher incomes. These bills taken together would leave millions of Australians worse off and, by Mr Hockey's own analogy, those on low incomes are expected in this budget to do most of the lifting.

These bills include the measure to index pensions by CPI instead of wages, an attack on 3.2 million age pensioners, disability support pensioners, carers and single parents. They include measures to cut family tax benefit B when a child turns six, an attack on around 600,000 single parents and single income families. They include measures to cut young job seekers off Newstart for six months, an attack on a generation of young people looking for work that will push them into hardship and poverty. And they include measures to abolish the seniors supplement, a further attack on senior Australians. The Australian people did not vote for this.

The debate on this bill today is a very, very important one. As I said in the MPI debate last week, almost every Australian is affected or cares for somebody who is affected by the changes in this bill. These cruel cuts to pensions, family payments and young job seekers do not hurt faceless, fairytale bludgers out in tabloid TV land; these changes hurt Australians—Australian grandmothers, mothers, nieces, nephews, brothers and sisters. For those listening at home, these changes could hurt your aunt, your sister, your grandparent, your son or your daughter—the list goes on and on.

These cuts do not hurt abstract figures on a spreadsheet. It is your family and your friends who are being hurt by these cruel cuts. It is people you care for who will be affected—real people. These cuts cannot and should not be looked at in the cold, calculating way that this Liberal government have been looking at them. It is real people who will be hurt and the Liberal and National senators opposite should have the courage to go out into the community and look those people in the eyes and explain to them why they think that those who are least well off in our society should have to pay more than those with a higher capacity to pay.

The government say there is a budget emergency—unless the Treasurer goes to New Zealand, in which case there is no budget emergency—and that is why they have to introduce these cruel and savage cuts to pensioners, young job seekers and families. We all know that that is absolute rubbish. Two weeks ago, a group of 63 leading economists, including former Treasury Secretary Bernie Fraser, the Executive Director of the Australian Institute Richard Denniss, and academics from the University of Sydney, University of Adelaide and University of Melbourne put their names to a statement rejecting the idea that Australia is facing a budget emergency. The statement says:

'Australia’s ability to manage public debt is very strong', with the country not facing 'any present or imminent debt crisis'.

…      …   …

Major spending reductions by the commonwealth government are economically unnecessary and socially damaging. The first priority of Australian fiscal policy should be to strengthen investment, employment and growth. Government can and should pursue this priority without jeopardising its long-run fiscal strength and stability.

…      …   …

The most effective route to restored fiscal balance is to help more Australians find work, earn incomes, and pay taxes … major and unnecessary reductions in government program spending and public sector employment would have the opposite effect.

So there you have it: the whole explanation for the need for this bill blown completely out of the water by 63 leading economists. The truth is that the Prime Minister and the Treasurer have concocted a budget emergency to try to con people into accepting some of the most radical cuts in our nation's history. If there really was a budget emergency, the government would not be proceeding with a $22 billion plan to give $50,000 to wealthy women having babies. I know their Paid Parental Leave Scheme for millionaire mums is not supported by many on their own side. The Liberal senators opposite must be extremely frustrated that we are here today to debate Liberal cuts to pensions when they are giving large cash handouts to those who need it the least. That is fairly hypocritical.

The second falsehood is that Australia's welfare spending is out of control. It is not. Across the OECD, we spend less on welfare than any other country except Iceland. If we look at the figures we can see that welfare expenditure in Australia accounted for just 8.6 per cent of GDP in 2013 compared to the OECD average of 13 per cent. Recently, the Melbourne Institute released a report which clearly indicated that Australians are also dramatically reducing their dependence on welfare. In 2001, 23 per cent of working-age people in Australia received a welfare payment each week. In 2011, that had dropped to 18.5 per cent. Australian's need for welfare is not 'spiralling out of control', as those opposite would argue, but is actually decreasing and it is decreasing significantly.

So what is the reason for these measures? Why such a tough budget? Why all the cuts in these bills? Mr Hockey and Mr Abbott have led a campaign of deceit in order to impose an ideological series of cuts to low- and middle-income Australians. That is what this budget does and it is what this legislation contains. The government hate the idea that they have an obligation to help out their fellow Australians. Labor will fight them every step of the way with regard to this. Before the election, Mr Abbott said there would be no cuts to pensions. We now know that this was a hollow promise, like so many other promises that he has broken since the election.

It is through this legislation that the Prime Minister is making changes to pensions and dramatically so. Two point three million age pensioners will have less money in their pockets as a result of this lie. According to the Australian Council of Social Services, ACOSS, this measure will leave pensioners, as Senator McEwen just said, around $80 a week worse off over time. For pensioners, who already live on around $20,000 a year, this is a cruel attack on their financial security. Of course, it comes at a time when they will also be slugged with a new GP tax whenever they visit the doctor, the chemist or any other medical service, and a new fuel tax whenever they put petrol in their car. They will have to put off visiting the doctor, buying medicines or putting petrol in the car.

Australian pensioners feel absolutely betrayed by this government, and so they should. As I said, this government was happy to promise no changes to pensions. I would like to quote from a transcript—found on the Liberal Party website—of Mr Abbott's address to the National Press Club on 2 September last year. Mr Abbott said:

… the Coalition can more than fund tax cuts without a carbon tax through the sensible savings that were announced months ago.

There are no cuts to health.

No cuts to education.

Pensions don’t change.

Again, to Sabra Lane on AM on 5 September, Mr Abbott said: 'No cuts to health, no cuts to education, no cuts to pensions.' Mr Abbott and his government should be ashamed of themselves. Australian pensioners will experience pain and suffering because of the cuts and taxes of this government. It is absolutely unbelievable that, in a nation as prosperous as Australia, the government have taken these actions. That the government want to rip away support for people who have worked their entire lives to build this nation is quite immoral.

It is not just age pensioners who will be impacted. People on the disability support pension, carer payment and parenting payment single will all lose because of this cruel measure. To attack the living standard of those on a disability support pension for cheap political gain is, quite frankly, pathetic. We have an obligation to ensure that everyone has the ability to live a life of dignity and opportunity—that everyone has the ability to live a life of dignity and opportunity. I repeated that for those on the other side. I do not think that the message sinks in with them. The changes are causing real distress for those on the disability support pension and people have, understandably, become extremely anxious about the changes. For many of these people who spend large portions of their life on the pension because of their inability to work, this is particularly cruel.

The measure to index pensions by CPI instead of wages will see a cut in the pensions of 3.2 million Australians, including disability support pensioners, carer pensioners, single-parent pensioners and 2.3 million age pensioners. Frankly, they deserve better.

When Labor was in government we legislated for the biggest increase to pensions in 100 years. This measure brought millions of Australian pensioners out of poverty and ensured that their pension enabled them to live with dignity, because Labor understands that Australians deserve the security of a fair pension to support themselves in retirement after a life of hard work. Labor understands that the lottery of life means that some are born with or develop severe disabilities and that these people and their carers deserve the security of a fair pension to support themselves. This government is taking away this security. It is leaving pensioners with less money in their pockets and less security in their minds.

I have spoken many times in this chamber about the harsh measures in these bills, and the cuts to support for young job seekers, which are particularly bad. Here we have a government that is willing to throw an entire generation on the trash heap. And they have an attitude that everybody can get a job. Well, if you keep your commitment to increase the number of jobs available then that may well be true, but at the moment that is not happening and not everybody can get a job.

The measures contained in these bills will see young people left without any income support at all for a period of six months, and possibly longer, when they become unemployed—without any income support at all. Having no income will make it even harder for young people to enter the workforce. If you cannot afford transport to a job interview, or appropriate clothing, or a mobile phone so that you can be contacted by an employer, how are you supposed to get a job? And what if you cannot afford public transport? Public transport is not always available, of course; I come from the state of Tasmania and, to be honest, in a lot of Tasmania there is no public transport available. In some areas, especially some of the lower socioeconomic areas, public transport is not as good as it should be. So these people actually have problems getting to job interviews in a timely way, and even have problems getting to doctors' appointments and things like that on time—let alone spending hours in a Centrelink office waiting for an interview and then having to wait hours to catch a bus home again.

But the government wants to shift blame onto young job seekers for not being in work rather than to keep its promise to create more jobs. Mr Abbott said in Devonport in Tasmania on 8 August last year:

I am confident that the Coalition's economic plan can produce one million new jobs in five years, 2 million new jobs in a decade, by reproducing the kind of jobs growth that we had under the former Coalition Government.

More than 200,000 jobs should have been created by now if that were the case, but the government is more than 80,000 jobs short on this commitment. The government needs to tell us where these jobs are and when we are going to see some action. That is what we need to help young people, not the changes in these bills.

If these bills pass and if, after six months without income support, that young person has not found a job, the Abbott government will require them to take part in a work-for-the-dole scheme, and if, after six months in a work-for-the-dole scheme, they have still not found a job then they will lose their payments for a further six months. So they will live on fresh air for six months. This Liberal-National government is saying to young people who lose their jobs that they just do not care. And this confines young people, as I have said, to an endless cycle of periods without income, leading them into poverty. We will see many, many young job seekers pushed into poverty, crisis and homelessness. We need to be offering support to young people now to ensure that they have the skills and opportunities to gain work. Leaving them with no money to survive on for six months is unfair, cruel, and, to be honest, completely counterproductive. And unfortunately it could have even worse effects for those with no income and no support base.

This budget includes extra money for the emergency assistance that the government knows will be required as a result of this measure. So they are knowingly making it so difficult for people that they will have to seek emergency assistance. They know that this budget is so cruel they will need extra emergency assistance for around 500,000 young Australians—yet they still make the cuts.

Australian families are also under attack by the Abbott government through the cuts to family payments. The social services and other legislation amendment bill includes $7.5 billion in cuts to family payments. Once again, low-income couples with children and single parents will suffer the most.

These bills seek to freeze the rates and thresholds for family tax benefits, including the low-income free area for those who receive the maximum rate of family tax benefit A of $48,837. According to the Department of Social Services, a freeze to the low-income free area for FTB A alone will see more than 370,000 families around $750 a year worse off in 2016-17. The Department of Social Services revealed at a recent Senate estimates hearing that around 700,000 families will also lose their FTB B if the government gets its way and kicks families off the payment when their youngest child turns six. Labor will stand up for the low- and middle-income families who will be so savagely hit by the measures in this legislation and we will oppose the cruellest measures before us today.

I am extremely disappointed that this government felt it should take the most from lowest income families, because the figures are quite clear on this. A single income family on $65,000 with two school-aged children will be around $6,000 worse off each year by 2016. That is around 10 per cent of their entire family budget. In contrast, families on the highest incomes can expect to be worse off by only a maximum of 1.7 per cent in the same time frame. This is utterly extraordinary and an unfair attack on low-income Australian families. They were promised by Mr Abbott and his cronies that they would be better off under his government. Can you really tell Australian families that they are better off when you have ripped $6,000 straight out of their pockets?

I would like to take a moment to remind the crossbench senators that if they vote for the Social Services and Other Legislation Amendment bills, they will be voting to cut pensions for millions of senior Australians, carers, single mothers and disability support pensioners; to lift the retirement age; to cut family tax benefits; to leave unemployed young people without any income for six months; and a host of other changes that will attack the most disadvantaged of your constituents.

I would like to make it very clear that if you vote for the Social Services and Other Legislation Amendment bills you will be absolutely complicit with this attack on Australian families, pensioners and youth. And you will have to explain to these families, pensioners and youth why you agreed with the government and why you think it is fair to rip support away from those who need it the most, because these changes will severely impact millions of Australians, particularly in my home state of Tasmania. These bills will hurt Tasmanian families, Tasmanian pensioners and young Tasmanian job seekers. Unfortunately, these bills give us a very good measure of the calibre of this government. It is a government that is completely out of touch. Their priorities are all wrong.

For the Abbott government to give tax breaks to miners while ripping money away from disability support pensioners and seniors is downright immoral and pathetic. They give $50,000 over six months to women on high incomes while ripping away money from age pensioners. And they spend $50,000 flying a celebrity chef to New York to feed delicacies to G20 finance ministers while ensuring young job seekers have no money to buy food for six months of every year. Australians are angry at this government's callous cuts to families, young job seekers and pensioners.

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

Go back and look at Kevin Rudd's itinerary!

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

I know that there have been mumblings from the other side of the chamber. They know that we are right, because they have to make such a loud noise to try to interrupt us and disrupt us.

Senator O'Sullivan interjecting

Senator O'Sullivan, you have not been here that long, but I will tell you a story. I used to be an early childhood educator. I worked with screaming three-year-olds. So you do your best, but you will not stop me talking, Mate. This government should be absolutely ashamed of themselves. They know it and that is why they are interjecting. I know that Australian pensioners are ashamed of them and ashamed of the fact that some of them even voted for them. I have had people come into my office and say to me, 'I actually voted Liberal and I really regret it. My life will be so changed and so damaged. And Senator Sterle said that people come into his office. You may think on that side of the chamber that you are very smart, but let me tell you: you are not. (Time expired)

10:29 am

Photo of Jacqui LambieJacqui Lambie (Tasmania, Palmer United Party) Share this | | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014.

When you calculate the financial impact of this legislation, an estimate will show that over the forward estimates the Liberal government has planned to target seniors, clean-energy users, families, parents, disabled people, students, unemployed and our veterans, and will take $13.4 billion, or $3.4 billion a year, from them. I was not elected to this chamber to take money and resources away from Tasmanian seniors, clean-energy users, families, parents, disabled people, students, unemployed and certainly not my Tasmanian veterans. I was not elected to take $3.4 billion a year away from Australia's and Tasmania's poor and disadvantaged.

Tasmania faces big economic challenges that other states do not have to face. It has the lowest building approvals and the highest rate of unemployment, at 7.1 per cent. And that is only using an unemployment figure calculated by saying that if you work one hour a week then you are employed. What a load of rubbish! Imagine if the official unemployment figures were calculated using figures which took into account those who officially worked only 14 hours a week. Then we would have an idea of the amount of misery and despair in our state is caused by underemployment.

We are a rich country. According to a briefing given to me by the Treasury officials—I thank Treasurer Hockey—we do not have a budget emergency. That Liberal myth has been busted and the science is now settled. I understand that as a nation with unemployment at 6.1 per cent we need to be careful and not waste money. However, we are a nation with between three and four per cent growth, according to IMF global growth forecasts, real GDP growth of 3.1 per cent, business confidence above the 10-year average and real GDP growth above the 20-year average. These figures are reason for optimism. We can afford to let our seniors, clean-energy users, families, parents, disabled people, students, unemployed and of course our veterans keep their entitlements, keep food on their table, keep paying their bills, keep their rooms warm on cold nights and, more importantly, keep their dignity.

The reason I say that is that we have other budget measures which could be reformed to provide a saving of more than $13 billion over the forward estimates. This government has stated that, over the forward estimates, it will spend over approximately $30 billion in foreign aid. That means about $5 to $6 billion a year for the next four or five years will be sent to overseas countries. Despite the foreign minister's smoke-and-mirrors trick over budget time saying that billions had been taken out of the budget, the fact remains that $30 billion over the next five years is a record amount of Australian taxpayers' money that this government has earmarked for foreign people. Never before in the history of Australian politics have the Liberal, Labor and Greens parties agreed to send $30 billion to overseas countries. This generosity by the Liberal politicians to foreign people comes at the same time that the acting Assistant Treasurer makes speech after speech in this chamber complaining about the amount of money we have to pay to service Labor debt. Perhaps he has a point, we all know that Labor and the Green coalition recklessly spent public funds and we have to be mindful of the amount of money that we put on the nation's credit card and the total amount of those repayments. However the Assistant Treasurer's argument about debt repayment loses credibility when you consider the fact that he is quite happy to send $30 billion over the forward estimates to overseas countries. Why should we give $30 billion to overseas countries while at exactly the same time we take away over $13 billion from Australia's seniors, clean-energy users, families, parents, disabled people, students, unemployed and our veterans?

The unfair, heartless Liberal budget 'savings' measures outlined in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014 are not needed. With the stroke of a pen the Prime Minister could halve Australia's record foreign aid budget from $30 billion to $15 billion and still allow our seniors, clean-energy users, families, parents, disabled people, students, unemployed and veterans to keep their entitlements. We could do that tomorrow. Actually, we could do that this afternoon! The government could put this legislation which contains so much heartache for ordinary Australians in the rubbish bin where it belongs. If we are going to be charitable with $30 billion of Australian taxpayers' funds let us be charitable at home, in our own country, rather than in foreign countries. We should look after our own backyard first.

Another area of the budget where savings measures could be applied to instead of taking entitlements away from our sick, elderly and young is the Liberal and National parties' infrastructure budget. According to Treasury briefings, over the next two years, 2015-16 and 2016-17, this government plans to spend approximately $7 billion on top of the just over $6 billion that is spent annually on infrastructure The majority of this money will be spent on mainland capital cities roads—especially in Sydney and Melbourne. This government has made plans to spend billions of extra dollars on infrastructure in Sydney and Melbourne in the lead up to the next federal general election. The infrastructure budget graphs supplied by Treasury do not lie. They show that while Mr Abbott and Mr Hockey are telling Tasmanians to tighten their belts the residents of western Sydney and Melbourne are enjoying a huge boost to the amount of federal funds which are being showered on them. If regional Australia and ordinary Tasmanians are to tighten their belts then why can't the belt tightening be carried out by the people of Sydney and Melbourne as well? For example, why has the Liberal government promised to provide $20 million over three years to the Lebanese Muslim Association and other Arabic-speaking people to build residential aged-care services that will provide 'culturally appropriate aged care in Western Sydney' when the budget shows that over the forward estimates savings of $12.7 million and $38.8 million respectively, $51.76 million in total, will be achieved by targeting our very own veterans who receive incapacity payments and disability pensions? I have never worked out how any government can describe as budget savings taking money and entitlements away from those citizens—our Defence Force veterans—who were prepared to lay their lives on the line.

Clearly, this Abbott government has been caught out taking away entitlements from seniors, clean energy users, families, parents, disabled people, students, unemployed and veterans in order to build up a Liberal slush fund—whose sole purpose is to pork-barrel Melbourne and infrastructure during an election year. What a disgrace! Liberal governments in Australia historically have tunnel vision when it comes to fixing budgets. They only seem to have two tools in their tool bags, and I suggest they need sharpening. These are: sell off government assets and slug the most vulnerable in our community. This government, like every Liberal government before it is doing the same old stuff and re-using the same old, worn-out political tools to do it—selling off government assets and ripping off the sick, the disabled, our veterans, our pensioners, our unemployed, hardworking families struggling to make ends meet. At the same time they are creating an economy where costs of living are continue to climb out of control and there are not enough jobs for those who want them. When you look at these bills and many others that this government is trying to pass, it leaves you scratching your head.

Under these bills the government wants to raise the retirement age. They want to push disabled people back into the workforce. Australian Bureau of Statistics figures show there are not enough jobs available now for our unemployed. Wouldn't it be smarter to create more jobs before forcing more people into the workforce for longer? Retiring at an older age might work well for a politician or a public servant who has not done physical labour all their life, but what happens to those honest Aussie workers who build our homes, fix our cars, nurse our ill and nurse our aged? Their bodies will not allow them to continue to working until 70. What happens to those people? Like many things this government is doing, it makes no sense at all. None! It is just plain, cold, heartless and senseless.

Under these bills the government wants to rip off $7.3 billion from hardworking families. As I have said before, that is about the same amount of money this government will be spending on roads, pork-barrelling marginal seats where it is trying to win future votes in future elections. We are right on your tail. These bills are not a response to an economy or budget in crisis; these bills are an expression of a nasty, born-to-rule political ideology that the government has decided to force once again on this nation of ours. If we allow these bills to pass it will be a step toward a future that will end our fair-go Australian way of life. We are a wealthy nation, but the Liberal Party and some of the National Party have decided—

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

Leave the Nationals out of it, Jacqui.

Photo of Jacqui LambieJacqui Lambie (Tasmania, Palmer United Party) Share this | | Hansard source

for the Australian public that we will no longer care for our most vulnerable. As that famous Indian pacifist Gandhi said:

The true measure of any society can be found in how it treats its most vulnerable members.

How would our society measure up, should these measures pass?

One of the budget measures under these bills is to force anyone under 30 years of age to wait six months before they can get paid a benefit. The unemployed are expected somehow—somehow!— to live for six months without housing, without food, without any money at all for transport. I would like to put every politician to that test. How will they look for work? They can't; they won't. They will be forced onto the streets and many could be forced to turn to crime just to feed themselves. How does this government expect they will be able to look for work when they have no means to eat, let alone get transport to job interviews?

This government does nothing to create jobs in high unemployment areas like Tasmania. Its only response is to propose budget measures that will make the poor poorer under harsh and cruel measures that will see them homeless and desperate. This government went to the election promising pensioners they would not lose a cent, but now it has put in measures that would see pensioners lose money, perhaps not right now but certainly into the future. Do you think pensioners would have supported this government if you had told them the truth? I very much doubt it. Do you think you would have been supported by the wider community if Australians knew what the coalition was really planning to do? I doubt it. This government lacks legitimacy. It is illegitimate because it misled the voters of Australia and lied its way to an election victory—it lied its way all the way.

These bills before the Senate today are evidence of this government's stinking deception and it has gotten away with this great deception and taken the keys to the Treasury benches. Does this Liberal government now expects us to endorse and approve of its bad behaviour by voting for its legislation? To rub salt into the wound, this government has presented before this chamber plans to rip money off our veterans by freezing their entitlement indexations. Even our disabled veterans will lose money because this government intends to rip as much as 12 weeks' pay off them. Shame on you! That sound you hear, Mr Acting Deputy President, is the earth moving as those who have died defending and in the service of our nation have rolled in their graves. Shame on this government and shame on those opposite who propose to vote for these cruel mean measures!

It is time that politicians, who like to make grand stirring speeches on ANZAC day and pose for photo opportunities with members of the Army, Navy and Air Force, live up to the ANZAC legend and not off it. The Palmer United Party fully opposes this Liberal government's legislation.

10:43 am

Photo of Sue LinesSue Lines (WA, Australian Labor Party) Share this | | Hansard source

I too rise to oppose these bills that are before us. I really want to understand why the Abbott government has declared war on the Australian community. It is hitting young people through its harsh unemployment measures and by hiking up university debts. It is imposing a new GP tax on the whole community and is launching a wholesale attack on pensioners. Why is it doing these things? There is no budget emergency, as the government first cried. Credible economists tell us we have a revenue problem. This week we have had a report by United Voice and the Tax Justice Network, which states that nearly one third of companies have an average effective tax rate of 10 per cent or less. The report also states that 57 per cent of the ASX-listed top 200 companies disclosed subsidiaries in secrecy jurisdictions—in other words, in tax havens. Sixty per cent of companies reported debt-to-equity levels above 75 per cent, which may artificially reduce taxable profits.

And what is the Abbott government is doing on tax—on increasing our revenue base, as credible economists urge them to do? It has made a vague promise of a white paper in 18 months. That is the totality of its commitment to looking at Australia's revenue base. It seems to me, and to Labor, that the Abbott government is more interested in reducing the quality of life of Australians—through its harsh budget measures—than in tackling tax and ensuring that those who should pay, do so; and that those who can afford to pay, do so. The two bills we are debating today showcase the harsh, cruel nature of the Abbott government's budget. I want to focus on the impact of the budget on young job seekers. I will do that because they are the future leaders and the future workers in the Australian community.

These bills contain a number of measures which will have a very serious impact on young job seekers but, before I focus on that issue, I also want to stress that it is not about taking from one group of Australians and giving to another. It is not about disadvantaging one group of Australians to advantage another. It is about creating a fair society—a fair society which offers hope and opportunity for all Australians, no matter what their postcodes and no matter what their circumstances. Foreign aid is another important measure—and we have seen cuts to our foreign aid budget—now more than ever, particularly given the emergence of new extremist groups. Providing for all in our community, whether it is for nursing homes in Western Sydney or for roads in Victoria, is why we as a community pay our taxes. We want to see a responsible government putting together a fair and just budget—not a budget which punishes so many ordinary Australians, and does nothing to look at the sorts of loopholes that United Voice and the Tax Justice Network have highlighted this week.

It seems to me that everyone except the government agrees that these proposed changes to unemployment benefits are some of the harshest welfare measures introduced in our country's history. These are the harshest cuts in our history. I have listened to the debate in the Senate, and it is obvious from the comments made by government senators that they believe that our young unemployed people need to be punished; that they need to be forced to take a job—any job; and that that will only happen, in the government's terms, if those young people are hung out to dry by starving them into submission. The comment made by a government member that, 'oh well, they will not be able to eat their Cheezels and play on their Xboxes', just illustrates the insult and the ignorance shown towards young Australians by the government. Seriously, how can someone who purports to be a respectable member of our community and a responsible member of the parliament believe such a thing, let alone say such a thing? These comments and others show the complete disrespect that this government has for our future leaders and for our future workforce.

Of the harsh measures which the Abbott government is trying to impose on young job seekers, the most serious include a new requirement that job seekers wait six months before receiving any income support. How is that going to work? How will young people punished in this way get to their required number of interviews? What will they live on? How will they buy food? How will they pay the rent, or indeed their mortgages? How will they pay their electricity bills? How will they put petrol in their cars? How will they be able to use public transport? Just how would they get by? We have not seen anything from the Abbott government about those questions—because they are into punishing our young people.

To make matters worse, the definition of 'youth' will be extended to 30. Thirty years old is hardly what most Australians imagine to be youth; it is certainly not the view of average Australians. For those people receiving Newstart—a benefit which gives young people less money to live on—the age range for eligibility has been extended, so that instead of cutting out at 22 it will cut out at 24 years of age. Apparently, the Abbott government rationale for that change is 'to line up benefits and fix differing age ranges'. But Labor believes it is just to further punish young job seekers—and for the government to make savings off the backs of young unemployed people. Labor senators, in their dissenting report on the Senate inquiry into this bill, were equally concerned when they said:

The Labor Senators on this Committee are extremely concerned about the Government’s attempts to withdraw the safety net for young jobseekers. Never before in this country has such a measure been proposed.

This measure has received widespread condemnation—

and indeed alarm—

from welfare agencies and other stakeholders. As the National Welfare Rights Network stated, '[t]his measure is a fundamental attack on the basic right to social security and the principle of adequate income support based on need.'

ACOSS, the premier umbrella organisation for social security organisations in this country, agreed that this measure ran counter to Australia's proud history of providing a safety net to anyone in need. That is certainly under attack here. The Abbott government no longer believes in a safety net. Even past Liberal governments have seen the need for Australia to have a safety net. Indeed, one of the distinctive differences between Australia and the US is that we have this safety net, we have a fair go, and we do not allow Australians, through whatever circumstances they find themselves in, to fall through the cracks. The Abbott government intends to rip that safety net away and to push its ideology—its view that somehow everyone should be able to take care of themselves—to the greatest advantage. We see that played out in these bills before us today. ACOSS said:

The removal of any income support for a group of people not in paid work fundamentally changes the Australian income support safety net. Traditionally, Australia has a safety net for all who need it, and requires participation in return. The budget turns this around by excluding an entire group of people from basic assistance … In this way, the measure would effect a radical structural change to the social security system.

This comes off the back of a government which promised no changes and no cuts; we have all been duped. To remove the safety net for some of the most vulnerable in our community is not fair, and Australian voters know that.

St Vincent de Paul is an organisation that all of us, I suspect, think does an amazing job in our community. All of us respect St Vincent de Paul, with many of us making contributions, whether through donations of clothes or money. Everywhere in Australia, when people are in need, Vinnies, the Salvos and a number of other agencies are there to help. St Vincent de Paul said of the government's harsh and cruel budget measure:

We find very concerning the idea that the government would intentionally remove any semblance of a social safety net for a particular group of people (job-seekers aged up to 30, for a period of 6 months). Unlike other cases in which someone may not be entitled to social security, because they earn too much, they are not a citizen, or they are deemed to have failed to comply with Centrelink requirements, this is a wholesale denial of any right to government support to a group of people for reasons completely outside their control, and who are highly vulnerable, being both young and unemployed.

When organisations like St Vincent de Paul, who work with the most vulnerable in our community, question the government and urge it not to implement its harsh, cruel measures, the government would be wise to listen.

Dr Ian Hamilton Holland from UnitingCare also gave evidence to the Senate inquiry into these bills. He said, 'This raises a very real risk of breaching these individuals' rights.' He went on to say:

… we do not believe that there should be any payment at any point that has rules attached to it that will penalize someone who is diligently seeking work, because, at the end of the day, there are people who are trained, who are qualified and who are being diligent in the labour market but who will not be successful at a given time in attaining a job—and they should not be penalized for that.

The Brotherhood of St Laurence echo these concerns. They highlight that, for those who do have family support, this measure risks pushing not just the individual but also their family into more challenging financial circumstances.

I do not know what the thinking behind these bills was. It seems apparent to me and to the Australian community that there was no thinking behind them. Does the Abbott government really think that every single job seeker it penalises and punishes by disallowing a benefit for six months has a family support network behind them? Of course they do not. To extend the age range up to 30 penalises these young people even more. For young job seekers who do have family support behind them, what are the circumstances of those families? Are they able to adequately feed another mouth in the household and provide financial support to enable that young person to continue to meet their obligations? What are the impacts? The Abbott government has not demonstrated to Australian voters or to the opposition in this place that it has done any research around the real impact of taking a benefit away for six months or more from young people who find themselves unemployed. We know from the questions we have been able to put to the government in the Senate inquiry, and in other places, that there are additional punitive measures, so six months is just the start. It is just the minimum. Some people will see themselves cycling in and out of six months periods without any benefit. They will have an opportunity to pick up benefits again but will be slung back on the scrap heap with no money, once again, being paid by the Abbott government. That is the truth of these bills.

We have had all of the major non-government organisations in this country condemn this and other moves by the Abbott government, but the Abbott government seemingly continues not to listen. The government ignores these agencies. They work with job seekers every day. They have the expertise and they have the first-hand experience, yet the government simply ignores them and instead favours its savings measures at the expense of some of the most vulnerable groups in our community. It is not as if these agencies are sitting on their hands and not providing solutions. ACOSS has provided substantial solutions to look at how welfare measures can be brought down, and how the cost can be brought down, but the government is not interested in it. ACOSS puts in budget submissions to governments of all political persuasions. They are the experts and they have a lot to contribute, yet the government does not seem to want to listen or want to talk to groups such as ACOSS, Vinnies, the Brotherhood of St Laurence, UnitingCare and so on.

This punitive measure to cut job seekers off benefits for at least six months will result in a new generation of young people trapped in a vicious cycle of unemployment and poverty. These bills are motivated by a government that is out of touch with Australians, a government blindly determined to claw back savings. It will not, as the government suggests, ensure a more sustainable welfare system. They might not spend as much money, but a sustainable welfare system involves a lot more than simply saving a few dollars off the back of Australia's young people. It is an attack on our welfare system, it is an attack on our way of life and it is an attack on a fair go for all. There is no other way to describe these harsh measures. We will no longer be the fair country. We will be the country that discards and punishes its youth, those who through no fault of their own find themselves unemployed or unable to find suitable work.

And what is the government's response to condemning young people into poverty? It has set aside $230 million to provide grants to community organisations to provide emergency relief. Never before have we seen such a harsh measure, where the government knows it is harsh and it has to up the emergency relief budget to provide for the six months when young people have absolutely nothing to fall back on. What kind of a punitive measure is that? And what evidence does the Abbott government have to say that 30-year-olds and those under 30 deserve such a punitive measure.

We have had unemployment benefits since 1944. Labor will not be supporting the harsh measures in these bills. It is time the Abbott government started to listen to the community and act in a much more responsible way and not punish the lifters of the future.

11:03 am

Photo of Bob DayBob Day (SA, Family First Party) Share this | | Hansard source

I rise to support the second reading of this bill. In the last financial year the national social services budget was $140 billion, rising to almost $170 billion by 2017-18. This represents more than a third of the total budget. It is unsustainable. The measures in these two bills are, on our best estimate, worth approximately $12 billion in savings over four years—so roughly $3 billion per annum out of a $140 billion to $170 billion budget, which is a saving of about two per cent.

I know every little bit helps, but someone has to go in to bat for families by trying to save those measures that will help low-income families most. The crossbench was part of the solution on the mining tax debate, pushing for the de-coupling of the family support and low-income support measures, and we succeeded. There will, until the next election at least, if not at some time after that, be a Schoolkids Bonus for those who need it most, and a low-income support bonus—and they said it could not be done.

Well, here we are again with the crossbench endeavouring to play a constructive role in this debate. I make no apology if colleagues get sick of hearing me say this, but I have been clear from day one, and I will be saying it for the next six years: debates about social security, like this one, would end tomorrow if the government would stop making it illegal for young people to work on terms and conditions that suit them. Let me repeat that: debates about social security, like this one, would end tomorrow if the government would stop making it illegal for young people to work on terms and conditions that suit them. The only reason the government has to go down this tortuous path of cutting welfare measures is that they will not let young people do their own thing.

Young people working and earning income takes them out of the social security spending costs for government, and in fact sees them paying income tax, accruing payroll tax in the states, and spending the money in the economy to generate GST receipts for states. Every day I hear captains of industry and commentators and others saying that Australia needs labour market reform. I agree. But where I differ is that I want to see job-seeker-driven labour market reform. I could not care less about what industry wants. I want what is best for job seekers. Why not let them pursue work opportunities on terms and conditions that suit them, rather than suit the government. Young people are beating a path to my door encouraging me to keep up the fight. Some of the nation's best and brightest young minds want labour market reform, where they can take steps towards building up their skills, start a successful career, get a house, start a family, travel and so on.

Now, there have been various reports that I am trying to find a compromise pathway on this bill. That is definitely true. The alternatives for budget repair—increases to taxes, charges, levies and the like—are just too ugly to contemplate. I support the second reading and the bill, subject to the compromises I have been advocating.

11:07 am

Photo of Helen PolleyHelen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | | Hansard source

I rise today to also speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. This is legislation that we, on this side, believe needs to be reconsidered before our support can be provided. It is our view, in fact, that substantive amendments are almost certainly required. Firstly, I just want to address this line of thinking that is prevalent in conservative politics that Australia is somehow plagued by high unemployment and people, particularly young people, are disinterested in obtaining work. In the same way that our Treasurer has persistently tried to depict Australia as being in the grips of a budget emergency, there is no emergency here either.

As the shadow minister, Jenny Macklin, said in that other place on 24 June this year:

…the government's best attempts to come up with a rationale for the harsh measures in these bill are based on a complete fallacy; a fabricated sense of crisis.

Australia's economy is strong. Our economic situation is certainly not the crisis that the government has done their best to make it out to be. We have low inflation, low interest rates and net debt well below comparable countries. More importantly, we heard the following words, which those opposite in the chamber need to sit up and pay attention to:

…since the election all we have heard from this government is false claims that Australia's spending on welfare is out of control. We have heard senior government ministers cry that Australia is on a path to countries like Greece and Spain. These claims are just not true.

Indeed, they are false claims because—as shadow minister Macklin went on to note during her speech—the Treasurer's budget credibility was destroyed by analysis from the Melbourne Institute using Thehousehold, income and labour dynamics in Australia survey. What this data demonstrated was that, as a country, we have actually reduced our dependence on welfare. That is right, we have actually reduced it. But you certainly will not hear anything like that from those opposite. The coalition rarely lets the facts to get in the way of a good story. But, once again, the data has tripped them up.

In 2001, 23 per cent of working aged people in Australia received a welfare payment each week. In 2011, that had dropped to 18.5 per cent. In fact, if you compare Australia to all OECD countries, we spend less than every single one of them except for Iceland, which is a nation with about 300,000 people. That is not just to suggest that we should be complacent. Labor will always look for new measures to improve our welfare system and better the lives of Australians looking for work. But when I hear the Treasurer and company grandstanding that they are on some noble mission to end the age of entitlement, I cannot help but roll my eyes. It is all based on mistruths.

This bill and others in the back pocket of our Treasurer have the potential to destroy the fundamental pillars of our way of life. They seek to savagely cut support for ordinary working Australian families, whilst also pushing hundreds of thousands of vulnerable young people into poverty. I ask whether that is something that we really should be aiming for? Of course, it is not. It is certainly not what we want on this side of the chamber.

In viewing this bill in its entirely, I think it is clear once again that the Abbott government has its priorities all wrong. Team Abbott should not be focused on punishing people who are struggling to find work, who are down on their luck and who are living in parts of the country which perhaps are not thriving. That is the easy way out. That is the coalition's way. Instead, this government should be fostering a positive and proactive approach to creating jobs and encouraging new opportunities. When it comes to instigating policies to get people back into the workforce, Labor stands ready to help. But we do not want to use job seekers as a political toys. It is very easy to target people such as the long-term unemployed and young people struggling to find work. It is political fodder that conservative governments around the world have used to their advantage. But that does not make it right and it is not right for this country.

In fact, we need to do all we can to protect disadvantaged people who are down on their luck and struggling to find work. The coalition seems to think that every community around Australia is brimming with jobs and that people only need to try harder to find work. It would be ideal if everyone had the opportunities that have been bestowed upon those living in electorates such as Higgins, Kooyong and Wentworth. It would be ideal if everyone was born with a trust fund waiting for them as well! But that is not the case; some people are born into situations not of their making, which means that finding employment is not a straightforward task. We need to resist the urge to impose harsh measures which will only penalise them further and hinder their efforts at building a better life for themselves.

I just cannot support the transfer of responsibilities from the Department of Human Services to Job Services Australia. This government is intent on privatisation at all costs, even when it makes absolutely no sense when applied on the ground in practice. Human Services staff in Centrelink offices have a particular set of skills and corporate knowledge which means that they have experience in dealing with the reactions of those met with negative decisions. They deal with payment recipients; it is their job.

By shifting responsibilities onto Job Services Australia staff, this government is seeking to fit a square peg in a round hole, whilst also adding to the workload of Job Services Australia. Why is this a bad thing? Because it will distract from Job Services Australia's function of actually helping job seekers find work. So the entire approach of this bill is strangely self-defeating and muddled—but that is what happens when you approach issues like this whilst only thinking in the short term. We need to think logically about what we are actually doing here. It is the Department of Human Services that will be dispensing payments, so surely the decisions relating to whether or not those payments actually occur should rest with that same department.

There are several measures in this bill which may disproportionately affect some of the country's most vulnerable people. The decision to remove the right to a review of a decision in which payments are suspended needs to be approached with extreme caution and restraint. We certainly do not want to create a situation where job seekers are denied natural justice. For example, it would be disastrous for many people if the legislation were used in such a way that job seekers were stopped from requesting a review of the decision not to back pay where their reasonable excuse for missing an appointment has not been taken into account. There may be many reasons why someone misses an appointment. Each job seeker's individual circumstances are different. We cannot really look at job seekers as a class of people, because they are not. Let us look at some of the examples or case studies, if you will. In 2013 there were over 13,000 no-show no-pay penalties dished out to job seekers with vulnerability indicators that were known. Of this total number of job seekers, over 4,000 had psychiatric problems or a mental illness, close to 2,500 had a homelessness flag on their file, 286 had had a recent traumatic relationship breakdown and 276 had a cognitive or neurological impairment. It is also worth pointing out here that Indigenous Australians are overrepresented when it comes to those penalised. In fact, they received a quarter of the no-show no-pay penalties.

Once again, it is easy to fall into a pattern of thinking that portrays the unemployed as bludgers, as people unwilling to look for work and as people taking advantage of the system, without concern for those in the workforce. But here is the thing: on the ground in the real world the situation is a lot more complicated. We need to view job seekers for what they are—people with individual circumstances, with many of them at a vulnerable stage in their lives. They often need our support. Treating them fairly, treating them with respect and helping them to get back on their feet is the Australian way.

I would just like to close by saying that I have always and indeed will always support incentives that encourage young job seekers to take up employment. The worst thing we can do is to allow people to dwell in their current predicament and not remain active in and enthusiastic about furthering themselves in finding work. However, I have to say that, when it comes to my homestate of Tasmania in particular, the Abbott government has made this very objective much harder. I do not believe this government is really committed to encouraging job creation or assisting people to find work in Tasmania. The evidence for this is stark. The Abbott government did nothing to stop the closure the Australian Taxation Office in my hometown of Launceston. It did nothing to save the PSG Russell Smith, which was at a cost of 182 jobs across the state. It has sought to introduce higher education reforms which will see $30 million worth of funding cut from the University of Tasmania—the biggest employer in Launceston. The government's lukewarm commitment to the renewable energy target threatens jobs in the renewable energy sector—jobs that are vital in many areas of my homestate. The member for Bass, Andrew Nikolic has stood by and watched as all of this has unfolded, barely uttering a whisper.

When people lose their jobs it means uncertainty for their families and less money circulating in the community, yet this government has committed a series of errors which will do nothing to get more Tasmanians back into work. I ask them to explain how decreasing payments to low-income families and to job seekers and implementing a range of measures which will pull the rug out from under the disadvantaged will create jobs and boost economic development. I have said before that many of the Abbott government's policies will actually push people into poverty, into a position where they are unable to find work and so become more reliant on community and homelessness services. Marginalising already disadvantaged people is not the answer. This is just a rehashed, tired policy from the Howard government years.

If this government is committed to job creation, why has it cut crucial employment support? There is a $1 billion cut from apprenticeships, a $1 billion cut from trade training centres and a $128 million cut to the Youth Connections, Partnership Brokers and National Career Development. This does not make sense. Earlier this year, the Minister for Employment, Senator Abetz, said that it is just not acceptable to have job seekers sitting at home on welfare. This follows his incredible comment a week prior that unemployed Tasmanians should try fruit picking. Telling people from a range of backgrounds and disciplines to simply go and pick fruit for a living demonstrates how out of touch he is. Finding gainful employment can be much more difficult than his condescending instruction that people can go and pick fruit suggests.

It is hardly surprising to hear these sorts of comments from Senator Abetz, given that his party is led by a Prime Minister who basically said when he visited Tasmania that Tasmanians seeking work should leave for the mainland and try their hand there. Please, can someone explain to me how the Prime Minister of the day is going to help create jobs in this country, and particularly how he is going to help build a strong economy in my homestate of Tasmania, by telling young people to leave the state and go to the mainland—because, quite frankly, I do not get it. The people out in my communities who are struggling to find opportunities to even apply for a job do not want to be told by their Prime Minister to leave Tasmania and go somewhere else. How are they supposed to do that without any support? They have to leave their families and the communities that they have been a part of and grown up in. This is what we should be doing! What is even more incredible is that the doormats, the Nationals, are supporting this government. They are supposed to support country and rural Australia. What are they doing? My home state, apart from the capital of Hobart, is made up of rural and regional communities. That is how much this Prime Minister and this government actually think of rural and regional Australia.

I urge those people on the crossbench to stand up for communities like mine in Tasmania, to stand up for those young people who are desperately trying to seek a future for themselves. The promises this government made to the Australian community in order to get elected were lies. They told a bald-faced lie to the Australian community when they said, 'There will be no changes to education, there will be no cuts to health, there will be no cuts to pensions and there will be no changes to the pension.' The list goes on. What do we get? We get an Olympic gold medal performance of backflips and lies by this government. Well, the chickens have come home to roost, because the Australian community are not silly. The Australian community elected this government because they believed what the opposition leader at the time, Tony Abbott, had said. They believed that they would not be worse off, since people will always vote for the government that they believe will implement the policies that would support them.

This government has abandoned and deserted the most vulnerable in this community. Those in this chamber have heard me speak time and time again on what this government has done to one of the most vulnerable groups of people in our society—those who suffer from dementia and severe behavioural issues. When it comes to aged care, the government does not even consider ageing an important enough issue to have a minister for. The government has changed the way the pension will be indexed, which will have an effect on the aged-care sector and those people who are able to provide residential care. But those opposite still come into this chamber day after day and say: 'No, that is not true. That is just the opposition making up stories.' The reality is that the Australian people understand and know what this government has done to them.

When Tony Abbott, as the Leader of the Opposition, came to Tasmania, he campaigned there with what are now known as the Three Amigos, the members for Braddon, Bass and Lyons. He said, 'We are going to create jobs, jobs, jobs.' What have we seen in my home state? The loss of job after job after job. They did not even go as far as stepping in. The local member for Bass never stepped in to save the ATO office in Launceston, an office that was there to support small businesses. That is where we should be investing money. We should be doing everything we can to support those people. But, no, the Three Amigos did not ride into town; they just rode right past it.

Senator Bilyk interjecting

We all have our names for them, but they call themselves the Three Amigos. I would not want to hang around and wait for them to turn up to support me. More importantly, in Tasmania we have faced, as most people in this chamber would be aware, the closure of mines on the west coast. We used to have an employment coordinator available to us. There was one based on the north-west coast of Tasmania, where we have the highest unemployment. This government terminated it. When Tasmanians most needed support from this government, this government abandoned them.

This government will be known as the government of abandonment. This government has done nothing to support the most vulnerable people in our society. I look across the chamber and their heads are down. I would be embarrassed too if I were a member of this government. It is outrageous that those on that side are going to attack the most vulnerable in our community, such as young people trying to get jobs. As was said by a captain of the Salvation Army in Launceston only a few weeks ago, this will lead to greater homelessness, greater crime and more suicides. That will be on the heads of those opposite.

11:27 am

Photo of John MadiganJohn Madigan (Victoria, Democratic Labor Party) Share this | | Hansard source

I rise today to speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No.1) Bill 2014. I have been critical of this government's budget. It is quite possibly one of the most divisive and unfair budgets we have ever seen in modern Australia. And I am not alone in this view. I have received hundreds—no, thousands—of emails and letters and phone calls from angry, disaffected Australians. They have told me this budget is unfair, unreasonable and ideologically driven. I and many others accept the government has budgetary challenges. But why should those with the least have to pay the most? Why should thousands of good hardworking Australians—those with families, those with mortgages, those who each day step up and step out to do the right thing—pay the most? Why should those who are struggling, those looking for work, those impacted by disability, those who care for others, those who are sick, those on the pension pay the most? Why should those Australians on low incomes be targeted by this ideological—some would say pathological—numbers driven budget? Why should those with the least pay the most?

Over the past six months I have received a clear message from people across Victoria and across Australia. This is a bad budget. People have told me they are angry and distressed about the changes to the Newstart waiting period. They are angry and distressed about changes to family tax benefit part A and part B. They are angry and distressed about changes to pensions. They are angry and distressed about the increase in the pension age to 70.

I have often spoken about a constituent I know called Phil. Phil works in a forge and is supporting five children. He lives outside of Melbourne. Phil earns $43,000 a year, with another $8,000 on overtime. Phil's is backbreaking work. Phil is a big and strong man, with the strength and resilience of a draft horse, but he has often said to me, 'John, I'll never last until I'm 70.' Treasurer Joe Hockey expects Phil to keep doing what he is doing for another 24 years. I say to Mr Hockey: 'Mate, you're dreaming.'

As usual, I will be brief in my remarks today. I will let my voting do the talking. But, as this legislation affects families and job seekers, I cannot help but share my view. Families are the building blocks of strong societies. A strong family makes a strong individual. Strong people are the backbone of a strong country. The relationship between government and families should be one of mutual respect. Governments should support families.

Forcing both parents to be in the workforce when the youngest child turns six is not the kind of help families need. It is not the kind of thing our nation needs either, because the nation and the family are interdependent. Families are doing it tough. Most parents, particularly those in the paid workforce, recognise the importance of spending time with their children. But, for hundreds of thousands of Australian parents, the financial concerns they face overshadow their ability to do this. This is something our tax system, and my amendments, can address.

House prices add to a family's financial burdens. Single- and even dual-income family first home buyers are forced to compete with baby boomer investors as well as foreign nationals to buy their home. Today in Australia, families are often second-class citizens in the housing market. Why don't we look at negative gearing, amongst other things?

When we look at the economy and job security, we must further consider how Australians can focus their energy on their families. But we in this place are not discussing legislation which will make it easier for these families. Instead we are discussing how we can take more of their taxes away from them by doing away with benefits which were originally given to them in recognition of the important role they play. Take, for example, the removal of the current end-of-financial-year supplement, the freezing of the indexation of the family tax benefit allowance or the removal of the child add-on supplement. This legislation is not about supporting families. It is about making life harder for them.

I have circulated amendments which address these issues in a reasonable fashion. Most Australians are happy to do their bit, I believe. Most Australians are happy to take part in some of the heavy lifting our nation needs right now. But no Australian should be expected to break their back in the process.

I would now like to address the issue surrounding the government's proposed changes to Newstart. Job seekers are in a tough job market. One only has to do check the Ballarat Courier or the Latrobe Valley Express from Saturday to see how many jobs are being advertised. When the government allows the employment market to be flooded with 457s, what do we expect? When the government goads industry upon industry to leave our shores, what do we expect? When the government cannot figure out how to manage its defence procurement needs over a long period, what do we expect? When the government cannot figure out how to use our abundance of natural gas for our own cheap electricity, what do we expect?

For these and many other reasons, Australians' expectations of government are at an all-time low. Why should it be job seekers, people who are prepared to work, people who want to work, people who are trained, equipped and able to work, who are punished because of successive governments' poor decisions which have led or contributed to their redundancies?

If people opt to work for the dole then they should be entitled to their full allowance during the six-month waiting period. If people have spent years studying as a student then that period should be recognised as work to be deducted from the exclusion period. If people would prefer to spend the exclusion period not working for the dole but rather concentrating full time on finding a job then they should still be able to receive 40 per cent of the Newstart rate.

We must create hope. We must create opportunity. We must increase the cake, not diminish it. The future of our country and the welfare of our people depend on it. We often hear about business and individuals being told to innovate. It is about time the government innovated.

11:36 am

Photo of Chris KetterChris Ketter (Queensland, Australian Labor Party) Share this | | Hansard source

I have listened to the considered contributions from both Senator Polley and Senator Madigan and I am fortified in my view that this is a government which is totally out of touch with the needs of Australians. There is no more compelling evidence of this than these two budget bills which are the subject of debate today. There is no greater evidence of the fact that this is a government which is based on broken promises and twisted priorities.

As I have been sitting here I have received an email from one of my constituents in relation to the pension—'Hands off the pension'. I would like to read that email: 'Dear Senator, I am very concerned about the proposed changes to the age pension announced in the May budget, which you will have to vote on soon. As a person who has to be careful to make ends meet on the pension, I am not sure how I would manage if my income was reduced in any way. I understand that the proposed changes to the way the pension is indexed, for example, would mean a cut of $80 a week over 10 years to the single pension, which seems like a huge amount when it is already a stretch for me to pay my bills, buy my groceries and get to important appointments. I just don't have any way to make up that difference. I implore you to seriously consider the impacts of the pension changes on people like me and vote against these harsh measures, which take such a large slice of the income of age pensioners, especially when others who are better off are not being asked to contribute.' That is from one of my constituents by the name of Margaret.

It is not possible to traverse the full range of cruel budget measures that are the subject of these two bills, but I do want to touch on a couple of them, and I make the observation that Australians did not vote for $7½ billion in cuts in family payments. I know it has been said before, but I want to touch on the fact that there is absolutely no justification for this savage and heartless attack on the more vulnerable in our community. The government has sought to justify what it is doing on the basis of the budget emergency, and we have heard speaker after speaker busting that myth and saying quite clearly that our fiscal position is fundamentally strong. We have a low debt-to-GDP ratio, a AAA credit rating and low inflation. The other justification this government attempts to use is that somehow welfare spending is out of control, and of course that justification does not bear close scrutiny either. When we look at the facts we see that Australia is the spends the second-lowest amount on welfare in the OECD. In 2013 that constituted 8.6 per cent of GDP, in comparison with the OECD average of 13 per cent. How does this government justify these savage attacks on the more vulnerable in our community?

As I said, I want to focus on just a couple of these changes. Firstly, the Newstart change: it is quite clearly one of the harshest welfare measures introduced in our country's history—so harsh, in fact, that it was recently the subject of an inquiry by the Parliamentary Joint Committee on Human Rights, and the report on that has been handed down. That report investigated the issue of the 26-week waiting period for social security payments for under-30-year-olds, and the committee sought the advice of the Minister for Social Services as to whether that 26-week waiting period was compatible with the right to social security and the right to an adequate standard of living and, in particular, whether the proposed changes were aimed at achieving a legitimate objective, whether there is a rational connection between the limitation and that objective and whether the limitation is a reasonable and proportionate measure for the achievement of that objective. The minister responded to the committee's request for information. Suffice to say that the committee was somewhat nonplussed by the minister's response. It noted that the response did not provide any further information as to how young people are to sustain themselves during a six-month period without social security. The committee noted in its original assessment that information regarding the likely impact of the measure on individuals and their families and about how individuals who are subject to the measure will retain access to adequate shelter and food is necessary in order to assess the human rights compatibility of this measure. The finding of the committee was that the measure is incompatible with the right to social security and the right to an adequate standard of living. That is an indictment of this government and these harsh measures it has sought to introduce.

In passing, I mention also that the same committee investigated the issue of whether there was potential indirect discrimination against women arising from these bills. Once again, the committee invited the Minister for Social Services to provide a response to their concerns in that regard, and I wish to quote the committee's comments following the minister's advice being received:

The committee notes the minister's advice that the measures affect all recipients, regardless of their gender. While the measures therefore appear neutral on their face, the committee remains concerned that they may have a greater impact on women than men, as women are more likely to be recipients of social security and particularly payments provided to the primary caregiver of children.

The committee then went on to seek further advice from the minister about that. Once again, it is an indictment of the actions of this government in addressing this issue.

There have been many organisations and community stakeholders that have condemned various aspects of the budget, and I will address the comments made by the Australian Council of Social Service—in particular, its response to the report I just quoted from. It is ACOSS's estimate that 100,000 young people are affected by this particular measure in respect of the waiting period.

I note that ACOSS made reference in their media statement yesterday that in their view the measure would see the government breach its part of the mutual obligation deal. I was interested in that because I heard Senator Abetz yesterday talking about mutual obligation. It is worthwhile reflecting on the fact that, with the removal of the Newstart benefit for a six-month period, the government is in breach of its mutual obligation. Governments have a duty to provide income support and to help people get a job, while people who are unemployed are required to search for jobs and participate in employment programs. This penalty being imposed on young people is totally unwarranted and, as I say, a breach of the mutual obligation deal.

This government is not only hell-bent on attacking social welfare for young people; it is also conducting a war of attrition on the aged. I draw the Senate's attention to the cuts for older Australians which are part of these bills, the indexation of the age pension by CPI and the raising of the age pension qualifying age to 70. Labor believes that the indexing of the age pension by CPI only will erode the purchasing power of the pension and diminish the living standards of Australia's 2.3 million age pensioners. On the issue of the age pension qualifying age being raised to 70, I make the point that, for many of the workers employed in physically demanding work, working to 70 will be a significant challenge. In my work as an official of the Shop, Distributive and Allied Employees' Association, prior to my becoming a senator, I had many interactions with members employed in the retail industry, the fast food industry and distribution centres. My heart particularly goes out to workers in distribution centres. Warehousing involves heavy lifting on a day-to-day basis—backbreaking work which takes its toll on the human body over an extended period—and for those people this raising of the retirement age will be an intolerable burden. I call on the government to reconsider particularly this aspect of the bills. Labor is also concerned that raising the retirement age to 70 could lead to a large cohort of mature-age unemployed people who will be unable to overcome discrimination in the workforce to find work in their sixties.

I have touched on some of the feedback from community stakeholders and I will touch on a number of other areas of feedback that bear upon these bills. National Seniors Australia have said that 'Joe Hockey's first budget is full of little nasties'. The CEO of the St Vincent de Paul Society, John Falzon, has said:

There are measures in this budget that rip the guts out of what remains of a fair and egalitarian Australia.

Industry Super Australia says it is too much to expect those in manual occupations to work until they are 70. Going back to ACOSS, the ACOSS submission to the Senate Community Affairs Legislation Committee's inquiry into the social services bills said:

… we strongly oppose budget measures which would impose an unfair burden on those least able to carry it. This includes changes to social security payments … which are likely to increase poverty and inequality in Australia and cause great hardship and suffering.

In summary, this government has misled on Medicare, pensions and 'no new taxes'. The Prime Minister said he would help families with the real cost of raising children, yet his government is cutting $7.5 billion in family payments—cuts which will leave some families around $6,000 a year worse off. The Prime Minister also promised there would be no cuts to pensions. He has broken that promise. This government wants to cut pensions and make Australians work for longer. So where does that leave us? Now we are left with the remnants of a tired, lost and friendless budget which has been comprehensively rejected by the Australian public—a budget still wandering these corridors in October looking for a bed, a couch, anywhere to have a good lie down and be put to rest.

11:51 am

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

There are many elements in these social services and other legislation budget measures bills that I simply cannot support. In my view, many of these measures are punitive and cruel, and they will further disadvantage the people in our community who most deserve our support. The Treasurer does have some structural issues to deal with in the budget. I agree with the cool heads, such as Jennifer Westacott from the Business Council of Australia, who say that we are going to have proportionally many fewer people in the workforce and many more people who will be ageing and demanding benefits, as they should, in the sense that we will have fewer people paying taxes and more people drawing on government revenue. So there are some structural issues that we need to deal with in the coming years. My concern is that this budget, and these budget measures, are retrograde and will not fix the problem.

It is also important to put into context a key element of the Treasurer's budget speech when he said that we need to be lifters, not leaners. Setting aside the fact that we do not need to be encouraging the idea of dividing our society into haves and have-nots any more than we already do, I say this is a simplistic approach to a very complex problem. When it comes to lifters and leaners, let us put this in a bit of perspective. I note that The Sydney Morning Herald, on its front page just two days ago, made mention of the fact that the rate paid by one in three of Australia's top companies is less than 10c in the dollar.

One company that I have a particular interest in is James Hardie. It effectively pays a tax rate of zero per cent because of the way it has restructured overseas and in the Netherlands. I should indicate that, as a long-time patron of the Asbestos Victims Association of South Australia, I know a little about what James Hardie's products have done to people. James Hardie knew, or ought to have known for many years, that it was peddling a very dangerous and indeed deadly product. James Hardie seems to be going down a path where it is having very healthy profits, and that is a good thing—I want James Hardie to do well so that it can keep up its compensation fund. But there appear to be shortfalls in that fund, which was established by a former senator in this place, who at the time was Premier of New South Wales, Bob Carr. I congratulate Bob Carr for the work he did in holding James Hardie to account, but it seems that there may be shortfalls in that fund.

The Sydney Morning Herald report indicates that nearly one-third of companies have an effective tax rate of 10 per cent or less. Mr Acting Deputy President Back, I am sure that, in transiting to and from Perth, you would have been to Sydney Airport on many occasions, and I presume you would be as outraged as I am about some of the fees that we pay at Sydney Airport. They do very well out of the hapless members of the travelling public and out of airlines, yet they are paying a tax rate of two per cent. Echo Entertainment, owner of Star Sydney Casino, pays a rate of five per cent. Leaving aside the issue of the enormous damage that the gambling industry causes, given the fact that a gambling establishment, Star Sydney Casino, is paying a five per cent effective rate of tax, then I reckon they are leaners, not lifters, when it comes to our nation.

The measures in these bills demonstrate that the government expects the most disadvantaged amongst us to do the heavy lifting for everyone else. Not only is that not okay; those on top of the heap are encouraged to lean on those below—that is what it looks like to me. This is not something I can or will support. I do believe we need to take action to repair the budget, but I think it is bad policy and bad economics to look at a graph and conclude that, since social services is the biggest area of expenditure, that should be the area to cut. What about areas of revenue? My concern is that, when it comes to revenue, we have not done enough. I do not agree with all that the Australia Institute says. Just so that I can put this in perspective, I think our think tanks in this country play a valuable role, and I am also grateful for the work that the Institute of Public Affairs does. It actually contributes to the public debate in a meaningful way, although I may disagree with many of the conclusions it reaches. But I think you need to have organisations such as the Institute of Public Affairs at one end of the spectrum and the Australia Institute, from the left-of-centre point of the spectrum, to trigger good public policy debate.

Dr Richard Denniss from the Australia Institute has done a lot of good work in relation to superannuation tax breaks, which have been described by the Australia Institute as 'the Hindenburg of the federal budget'. Back in April, before the budget, Dr Denniss said: 'It's the big elephant in the room. If we talk about the pension ballooning, well, this is the Hindenburg.' These tax breaks are not sustainable in the longer term. I believe we should encourage private superannuation. In fact, I have a private super fund. I do not mind people paying more tax on private super once they get to a certain sum. I think a benchmark or threshold of, say, $2 million for a private superannuation fund before an additional rate of tax were imposed would not be unreasonable, and that would be a significant source of revenue for the Commonwealth. We need to look at that in a way that is fair and equitable, because it is not sustainable given that we are looking at tens of billions of dollars for the cost of private superannuation tax concessions in the years to come.

I think the cuts imposed through this legislation are bad policy and bad economics, because they fail to take into account both the social and financial impacts. The measures in these bills will entrench the vicious cycle of disadvantage that exists in too many areas of our society. For many of us here it is difficult to understand or appreciate what it is like to live and grow up in these circumstances. I do not want to presume to speak for the people who will be affected by the measures in these bills—they have the right to speak for themselves. But what we do know is that punitive measures do not work. Instead, they lead to increases in crime, in substance abuse and in further disadvantage. In particular, the proposed Centrelink allowance waiting period could have a huge impact on people's ability to feed themselves or their family and could mean the difference between having accommodation and being made homeless.

The other issue is that jobs are just not out there. You could almost see a rationale for this in a period of full employment, but things are getting grim in terms of employment. In my home state of South Australia we are looking at many thousands of jobs being lost in the coming two to three years unless we can do our best to manage the transition from General Motors Holden leaving manufacturing in the state, along with all the component suppliers that they are involved with. And, of course, if we get the shipbuilding and submarine-building programs wrong, many thousands of jobs will be lost in my home state and across the country. Why would you want to punish a young job seeker when the jobs are simply not out there? We have failed our young job seekers, and our unemployment rate—with a headline rate of between six and seven per cent, depending on which state and which month—is inherently misleading. This is because a number of years ago the rules were changed, albeit internationally, so that if you are working one hour a week or more you are no longer deemed to be unemployed. The level of underemployment in our community is massive, particularly among young job seekers. You cannot afford to pay off a mortgage, get a loan for a car or plan your life if you are working only eight or 10 hours a week. So let us put that in perspective. I know my friends in the ALP and the Greens oppose me on this, but I think we need to have some flexibility on penalty rates for small businesses with 20 employees or fewer in the retail and hospitality industries. If there is some flexibility there, not on paying the award rate—I do not support reducing the award—or paying a casual loading, which are important, but on getting rid of some of the more punitive aspects of those rates we will see more people being employed.

Only a few weeks ago we debated the government's proposed changes to the penalties for serious failures relating to Newstart allowance. That bill, which was thankfully voted down, would essentially have made the penalty of an eight-week non-payment period the default for any serious failure. It removed the secretary's discretion not only to waive the penalty but also to end the penalty early where there was serious financial hardship. During the debate on that bill I quoted 2008 data from the Department of Education, Employment and Workplace Relations which showed that approximately 15 per cent of people subject to a non-payment period lost their accommodation and a further 50 per cent experienced difficulty in paying their rent and were put at risk of homelessness. It is not difficult to extrapolate that the proposed six-month exclusion period will have an even greater impact.

It is important to remember that these measures will affect more than those who are suffering serious disadvantage. The changes to the indexation of pensions and the family tax benefits may not have the same severity of impact, but the impact could still be significant. In relation to the family tax changes, these proposed amendments will likely affect the ability of families to access childcare and similar services. In turn, this may mean it is no longer financially viable for the lower earning parent to remain in paid work. Statistics tell us that this is most likely to be the mother. As such, the proposed changes will have a further impact on the ability of women to remain in the workforce. I have quoted the following statistic before, but in my view it is an incredibly important one. In 2012 the Grattan Institute released its paper Game-changers: economic reform priorities for Australia. The report stated:

Removing disincentives for women to enter the paid workforce would increase the size of the Australian economy by about $25 billion per year. The most important policy change is to alter access to Family Tax Benefit and Childcare Benefit and Rebate so that the second income earner in a family — usually, but not always, a mother — takes home more income after tax, welfare and childcare costs.

It is important to note that the paper estimates we could achieve that $25 billion by increasing the participation of women in the workforce by just six per cent. The amendments in this bill will do the opposite. Not only is that bad for the economy and a lost opportunity to add $25 billion to our GDP but they will also have a significant impact on the individuals and their families. Being out of the workforce does not just mean you are not taking home money right now, it means you are disadvantaged in terms of superannuation in the future. There is also the social context to consider. Participating in the workforce has benefits that go beyond just the financial.

On similar lines, I want to make a particular point regarding the proposed changes to the indexation of the single-parent payment. I acknowledge the government's view that this is the only payment that is indexed to the CPI and benchmarked to 25 per cent of male total average weekly earnings, as opposed to being indexed according to the higher of the CPI and the Pensioner and Beneficiary Living Cost Index and benchmarked to 27.7 per cent of male total average weekly earnings. However, it is important to note that recipients of the other allowance received a one-off weekly increase to compensate for the change in indexation when that occurred in 2009. PPS recipients never received that one-off increase, and indeed the eligibility requirements for the allowance were tightened even further in 2013. Under the proposed changes PPS recipients will be worse off in the future because their allowance will increase more slowly than it would under the current arrangements. This measure is a slap in the face.

I started by talking about what some companies are paying in tax. The effective tax rate for about one-third of companies is 10 per cent. I think most workers who are on a reasonable income would love to be paying a tax rate of 10 per cent. I agree with Senator Bill Heffernan—

Senator O'Sullivan interjecting

I am not sure why Senator O'Sullivan is smiling. I agree with Sen Heffernan on many issues; some others we will agree to disagree on. He is right. He has warned that if you turn a blind eye to the billions of dollars going out of the door and offshore you are doomed to being unable to provide what people expect from government—roads, schools and hospitals. In Senate estimates not so long ago I asked about the approximately $130 billion that is being transferred offshore from Australian companies. If transfer payments are taking place that is costing the Commonwealth a lot of money in revenue. I acknowledge that the Treasurer, Mr Hockey, has been very vocal about this at the G20 and has actually done some good work about this. I think the Prime Minister recently made mention of this as well. If a tax transfer is occurring with, for instance, Apple then we need to be aware of that so that they pay a fair share in tax. If there are price differentials and the like then we need to know about that and we need to act on it. We need to have a budget that is much more equitable. I see that the government has put so much emphasis—too much emphasis—on these changes that I think are cruel and counterproductive.

Finally, on behalf of those self-funded retirees who are very concerned about getting rid of the Seniors Supplement of about $800 a year—I send a cheerio to my Aunt Effie, who has been in this country for over 50 years. She has worked her guts out and is a self-funded retiree with my uncle. It takes a lot to get my Aunt Effie upset—in fact, I have never seen her upset in all years that I have known her. She was upset about getting rid of the Seniors Supplement. Her words to me were that she has paid her taxes, she has worked hard all her life and she is self-sufficient. The Seniors Supplement was very important for her and her family for getting by, for helping out her grandchildren. That was just snatched away from her. I think the government could find that Aunt Effie and many others in a similar position who may have been supporters of the coalition may be swinging in another direction on their lower house vote. I assume she votes for me in the upper house.

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

Secret ballots!

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

It is a secret ballot, yes, Senator Dastyari. Although my Aunt Effie valiantly handed out how-to-vote cards for me for a number of hours. If someone is happily handing out how-to-vote cards you are probably safe to assume that they are more likely to have voted for you.

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

Don't be that naive!

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

I will plead guilty to that. I think a lot of Australians would have accepted a number of measures in this budget if they felt that the pain was being shared more across the board. I think the government has miscalculated in a number of measures. I hope the front page of the Financial Reviewthe story by Laura Tingle and Phil Coorey—was accurate this morning; I understand the Treasurer said that it was not accurate. I do believe that there is a task to repair the budget; I do not believe there is a budget emergency. I get what the government is saying about repairing the budget; I just disagree as to the path it has gone down to achieve that. I hope that we will see some further dialogue with the government in an attempt to remedy the budget task, but in a way that is much more equitable than it has been to date.

12:07 pm

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

I think this is actually a very welcome debate for this chamber to have. Sometimes in this chamber we get caught up in an individual piece of legislation or the impact of an individual measure. We should do this as we scrutinise legislation, but sometimes we need to take a step back and ask: 'What is the discussion here about?' The question is fundamentally about the kind of Australia we want to be. What kind of a society do we want to be? What are the responsibilities different people have within that society?

Yes, there are issues relating to Australia's budget that need to be addressed. Do those issues amount to a budget emergency? No. Are they manageable? Yes. Do we have to look at spending and saving measures to address them? Of course. As it moves away from an expansionary phase—which we were in post-GFC to stimulate the economy— any prudent government should be looking at measures as the economy starts moving out of that phase to start reducing spending. No-one is objecting to that in principle, and in fact it is welcomed. The questions are: who is paying for it and how are they paying for it? Ultimately, that comes down to a set of priorities and a set of values.

There is a fundamental challenge at the heart of the Australian condition. Yes, on every socio-economic indicator we are getting wealthier—people are living longer, everyone's income scale is improving. If you look at every graph and study, you know that we are in the top two or three countries in the world in which to live. That is a good thing, but it does not tell the story of how much pressure everyone is under—and every family is under. Everyone is under an incredible amount of pressure—social pressure, financial pressure and time pressures. When you look at a budget and at these kinds of measures, you need to ask yourself the question: what can we be doing as a government, a parliament and a society to ease some of the pressures that people are under? What is our role?

There is a real debate we need to have around the issue of the quality of life and what the government of Australia can do and should be doing about the quality-of-life challenges people are facing. The reason I fundamentally disagree with huge elements of this bill is that it buys into the idea that we are going to be balancing the budget on the backs of people who are already doing it really tough. I do not object to the principle that something needs to happen from time to time, but you have to ask yourself about priorities. I cannot accept that we as a society and a nation should be looking to balance the budget on the backs of those who rely on welfare, who rely on the state or society and who are doing it so tough, while at the same time it is somehow appropriate for us to be looking at a paid parental leave scheme that is far too generous and geared towards some of the wealthiest in our society. The two measures are irreconcilable.

That is fundamentally the issue I have. It comes down to what the government says it wants its priorities to be. The priorities it is outlining in this legislation are the wrong priorities. Today the Financial Review has a front page story that claims that the Treasurer is walking away from a whole series of budget measures because of the lack of support in this chamber—that the government is looking at not introducing them and looking at doing a mini-budget of sorts as part of the MYEFO process later in the year. I hope that is true. I know the Treasurer went on the radio this morning to say it was unequivocally not true—that it was a lie and that he was proud of his budget.

The reason people on this side of the chamber do not support these measures is that they are bad. It is a bad measure to put a $7 tax on someone who goes to see a doctor. It is a bad measure to say, 'I am going to be pricing a generation of young people out of higher education.' It is a bad measure to be trying to introduce a bill like this on those who have the lowest income and are doing it so tough. It is a bad measure when you turn around and tell young people under 30 they have to wait six months to get welfare, when we know that youth unemployment is not only in double digits across the country but in particular regions well over 20 per cent.

These are bad budget measures. The Treasurer on radio this morning kept talking about how proud he was of them—how they were good measures and it was tough medicine. A notion has developed that the tougher, crueller, harsher, harder we are, the stronger the resolve of the government is. I say this to the Treasurer: 'If you are so proud of these budget measures, of these bills and of what you have proposed to the Australian people as part of your budget, then bring it on.' Bring the bills into this chamber, let us have the debate and let us see where the Australian public are going to line up, because they are not going to support you. I am bothered by the conflation between two separate arguments: one argument says we need to do something about fiscal discipline and the other says we need to do something about the budget emergency. Again, yes, we should be looking at measures that stop waste and mismanagement and we should always be looking at opportunities for trimming elements of government. We should always try to put ourselves in a sustainable position, but this is not the way to do it. It is not the way to do it, as Senator Polley said, on the backs of hard-working, struggling Australians. That is the easy way out. It is the easy way out to say, 'we are going to tackle those on welfare, and yet we are going to let some of the biggest, most powerful companies in Australia get away with a tax regime that has allowed them, internationally, to be able to run away from that regime'. Now—suddenly—the Treasurer has become a convert to the whole issue of multinational tax avoidance—when a couple of years ago he was actually voting against every proposal that was brought into the other place!

We have to ask ourselves: what kind of a society do we want to be? Who is it that we are responsible to? Surely, as a wealthy, middle-income nation, we can afford to make sure that those who are doing it tough and those who are struggling—those who rely on things like social security—are not the ones who are going to be paying for it. We need to make sure that we are not going to be a society that says yes to a Paid Parental Leave scheme which is unaffordable and which is skewed towards the wealthiest; that we are not going to be a society that turns its back for far too long on tax avoidance; that we are not going to be a society that says we will not look at things—like in super and in other areas—where we can actually consider raising revenue; and that we are not going to turn around and say: 'We are going to be a society that will achieve those kinds of economic objectives'—which are, in part, valid but have been exaggerated and blown out of proportion—'to achieve an ideological agenda, and we are going to achieve those objectives on the backs of some of those people that are really struggling.'

It comes down to this issue about the cost of living. I think, sometimes, people have misunderstood what the debate means. I believe that cost of living is one of the three key components to the big issue, which is quality of life. People are under cost-of-living pressures, they are under time pressures, and they are under social pressures. Cost of living is certainly a very large, if not the largest, component of that. But there is more to it, for us as a society. Acting Deputy President, I think you will find that the Australian public—the Australian people—want a welfare system that they can rely on. They want a safety net. They want measures out there which protect those who are on low incomes, and which protect those who are struggling. Part of what makes this country great—part of what makes us so proud to be part of this nation—is the fact that we have a society that will look out for those who are struggling. We have a society that will be there for those who are doing it tough. And part of that has been built around the welfare safety net. What worries me is that in all of these measures there is a fundamental attack on what it means to be Australian. There is a fundamental attack on the principles which underpin our social safety net—and that is what concerns me. That is what bothers me. It is about stating your priorities.

We have had the debate before, and we will have it again, about a government of broken promises; about a government who said before the election that there were not going to be cuts in areas like health and education; to the ABC and SBS

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

You were going well until then!

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

Order, Senator O'Sullivan!

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

Well, Senator O'Sullivan, we kept being promised this new high standard; we kept being given assurances that these promises were not going to be broken—and they have been broken.

As I said before, we have had the debate and we will continue to have the debate about promises that have been broken. I really want to try and take a step away from that debate, because I think there is a fundamental question here: what is it we are saying about the society we want to be? My issue is not just that the promises have been broken—I think that is reprehensible, and I think politicians who do that pay a price. The lesson, from all sides of politics, over the past twenty years has been that if you make commitments before an election, and if you do not meet those commitments after the election, the Australian public will hold you to account at the ballot box. I think there are numerous examples, from all sides of politics in the past few decades, where politicians have paid the price for that. That has been a bipartisan failure across politics in this country for a long period of time, and people have paid the price at the ballot box at federal, state and local government levels, repeatedly, for not learning that lesson.

I believe that a lot of this really comes down to an attack on the value system. This says a lot about the government. It says a lot about their values and about their priorities. And there is no group that is more badly affected at the moment than those younger Australians who are being attacked on so many levels. That is my concern: yes, they are not the most powerful group when it comes to speaking up and being politically engaged; they are not the most powerful group in terms of lobbyists. I commend the amazing work of organisations like National Seniors and the Council on the Ageing. They have done an incredible job in speaking up openly and publicly about their concerns. Unfortunately, I think the group that is getting really squeezed in all of this is young Australians who, for many reasons—disengagement with politics, priorities, lack of organisation—have not really spoken up.

If you look at what is happening to younger Australians as part of these budget measures, it is really concerning. You start off with the cutting of funding to school programs through Gonski—the fact that, after a couple of years, the funding will not be continued, and the educational opportunities at a schooling level will be affected; and then you add the fact that apprenticeship program are starting to disappear—gone! When you have a nation that is not prepared to protect its manufacturing base and the priorities of a manufacturing society, the opportunities go. We have to be prepared to accept the fact that we need to create different paths for different people, and for young people, to go through. Not everyone wants to go to university, or should go to university, or needs to go to university. But we have always been a country that was proud of our apprenticeship programs and proud of our manufacturing base. If that is not the nation we want to be, that is another opportunity gone.

Then you start looking at the university sector, and you look at what the deregulation is going to do. Again, I worry less about those future lawyers and doctors who can take on $100,000 of debt to become, for example, a top-notch lawyer, and this and that—those people, in many cases, will be fine in any kind of system; those who can afford it. But I worry about the migrant kids in Sydney, whose parents flew out here—similar to the way my parents did—and who do not have those kinds of connections, or the income, or the opportunities. For them, going to university would have been their path out. I worry about what happens to universities, like UWS and others, in this kind of deregulated system. I am a Sydney Uni boy; but I do not worry about the Sydney University law school—I am sure that the Sydney University law school is going to do very well out of this. But the Sydney University law school should not be the priority of this government. The priority should be those people in struggling universities, those people who are the first person in their family to go to university and those people who often have to make a financial decision about whether they can incur and carry that kind of debt or whether they are not going to pursue a higher education.

On top of that, there is an increasing rate of youth unemployment. Youth unemployment has consistently been out of control. I want to take the politics out of this. Frankly, this is an issue which governments have wanted to tackle in the past 20 years, but there has been a bipartisan failure to tackle the real underlying issues of youth unemployment. To add to that genuine issue, there is this whole notion that young people will have to wait six months before they are able to access welfare—

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

You are ignoring the question. How do you fund it? Do you borrow more money?

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

It is not as if there are an amazing number of jobs out there at the moment that young people are choosing not to take. If you look at any statistic or any report, it is not there. Senator O'Sullivan has been interjecting and asking me, 'How do you pay for it?' This is the point that I am making, Senator O'Sullivan: we have to ask ourselves as a society what our priorities are. It is a question of priorities. I do not believe that the priorities are right when you say that you are going to have a Paid Parental Leave scheme worth billions of dollars—

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

Just answer the question. You are saying, 'Just borrow it; just borrow the money.'

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

That is not what I am saying at all. I am saying that I do not believe that your priorities are right when you turn around and say that you are going to have a Paid Parental Leave scheme worth billions of dollars. I know that in the party room you express private concerns about the Paid Parental Leave scheme. I know that when you are not before the cameras you have spoken words other than those that you are prepared to say when you get up and speak today. But I question your priorities, and it really comes down to a matter of priorities. We are not saying there is a bottomless pit of money here. We are saying, 'Ask yourself what your priorities are going to be.' The problem with the social security bills that we are debating now is that the priorities within them are wrong.

Senator O'Sullivan interjecting

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

Senator Dastyari, continue your remarks through the chair and ignore the interjections.

Photo of Sam DastyariSam Dastyari (NSW, Australian Labor Party) Share this | | Hansard source

Fundamentally, it comes down to where the priorities are. The point that I am making is that the priorities here are wrong. Fundamentally, there is a bigger question here: where do we want to go as a nation and what kind of a society do we want to be? I think those in this chamber have a responsibility to protect the social security system and to protect the welfare system. We need to accept the fact that those of us who have the opportunity to be in this chamber have had many things in our lives—we have put in a lot of hard work and a lot of dedication, but we have also had a lot of luck and a lot of opportunity. Not all Australians have had those kinds of opportunities. The privilege and the honour of being able to serve in places like this increase our level of responsibility to those Australians, some of whom are doing it really tough.

Fundamentally, when we look at these issues of budget and when we look at issues around tackling fiscal challenges, we have to ask ourselves: whose backs are we doing it on, how are we doing it and what are the priorities and values that underpin it? I disagree with those on the other side of the chamber. I believe that these bills—and certainly many elements within these bills—fundamentally fail the test of priorities and the test of values.

I was here when Senator Ketter was talking earlier. He outlined how these measures will affect older Australians, and he outlined the great work of COTA and of National Seniors. I think that we also have to remember that younger Australians are at risk of being the most damaged as part of this process. Just because they are not necessarily the loudest or the most organised group does not mean that their issues and what is happening to them are of any less significance.

In conclusion, everything comes down to priorities and values. When we debate bills in this chamber, we should not only look at the specifics of legislation—and there has been a lot spoken about the specifics of these bills—we should take a step back and say: 'What is this saying about our society? What is this saying about Australian identity?' Fundamentally, I and many others in this place believe that the problem with these bills is not just that there are individual measures within them that are wrong—though I believe there are. The problem is that they are a fundamental statement about what kind of a society we want to be, and the society that these bills suggest is not the Australia that I am proud of, not the Australia that I want to see in the future and not the Australia that I want my two young girls to grow up in.

12:27 pm

Photo of Kate LundyKate Lundy (ACT, Australian Labor Party) Share this | | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. The measures that the government seeks to introduce in these bills are indicative of the government's intent to dismantle the systems that represent the Australian values of fairness and equal opportunity. It is why the people of my electorate in the ACT, and indeed across the country, have expressed their strong opposition to many of these proposed changes—changes which were made public for the very first time on budget night.

The proposed legislation is a clear attack on those on low and middle incomes, a particular attack on young people, an attack on families and an attack on older Australians, while leaving the top 20 per cent of households virtually unscathed. It exposes the government's intention to target those in Australia who have the least, ever increasing the divide between those who have and those who have not. What is worse, the language used in the statements made by the government in introducing these changes shows that they do not respect some of these fundamental principles within our community.

I think it was US Vice President Joe Biden who said that people are only able to show their values through their actions. While the government can lay claim to their values, it is this budget that gives us the greatest insight into what they value. As a result of this budget, we know that they do not respect the values of fairness and equity in our society and that they do not respect the fundamental value of those who are capable supporting those most in need. Pensioners, young people and families raising children are those who primarily are targeted in this legislation. That is why Labor will be moving amendments to remove those inequities. Following the removal of those inequities through our amendments we will, under those circumstances, support this legislation.

12:30 pm

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

In commencing my contribution to the debate on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the associated bill, I would like to outline the general budget context in which we are forced to put forward such changes to social security in this country. Most Australians would know that Australia does indeed find itself in a circumstance that is unprecedented in our history. We have a significant national debt, some hundreds of billions of dollars, whereas only six or so years ago we had zero net national debt—from zero to several hundred billion dollars of excessive spending in only six or so years.

It is the unfortunate remit of this conservative government to redress the economic damage that has been done to our society and to the budget—to our nation's books, if you will—by six years of spendthrift government. In doing so, there are tough choices that need to be made. Make no mistake about that. The government has made it clear that everyone within the community is going to have to do a bit of the heavy lifting.

I am on the record as saying that I do not agree with all of the measures put forward in the budget, but I do have to say that it has the balance about right, because it does apportion responsibility to those who successfully earn and to those who receive often much-needed benefits, by instilling in them ideals like mutual obligation. Perhaps we can limit some benefit increases for the purpose of maintaining a more cohesive and sustainable whole of nation. That is the essence of what we are discussing here.

But, of course, there are people, irresponsible people, who believe that it is okay somehow for this generation to take and take and mortgage the future—to say, 'It does not matter. I am not going to be around. I am going to let my children, grandchildren or great-grandchildren pick up the slack, because I am not prepared to wear any of the pain now.' I think that is wrong—it is morally wrong. It is incumbent upon all of us to accept our own responsibility today so that we can take a bit of the heat out of our children's future.

Gross government debt in this country is forecast to be $389 billion in 2034-24. That is if we can pass the budget measures this government is proposing. If we do not, if we continue down the previous path—the Labor/Greens alliance path—the gross government debt would be almost double that, at $667 billion. That is the extraordinary legacy of having governments that do not have a clue about how to manage money.

Let us make no bones about it, the bill we are talking about here deals with social services, and it deals with much needed change in social services. The reason it is such a substantial bill and has such an important impact upon our budget bottom line is that this year's budget, the 2014-15 budget, has over $146 billion in social security spending in it. That is about 35 per cent of whole of government expenditure.

In the 2013-14 year, spending on the age pension alone—a much needed and very important pension for so many in our community, is scheduled to reach $40 billion for the very first time. Given the demographics of this country—that we are ageing and living longer, and thank God for that—we are going to have more and more people who will be dependent on either private means, or on public means when private means are not available, to sustain them through their retirement years. The upshot of this is that, based on demographics, we are going to have fewer people working and being able to pay the taxes to sustain these sorts of expenditures. These are very important things for people.

So there is $40 billion in age pensions. We know that $19 billion or so is scheduled to be spent next year on family tax benefits. Once again, these are a very important component of sustaining family life in this country. I would prefer government to take less tax in the first place, and allow people to keep more of their own money. That is a philosophical disposition. I would love to see things like income splitting or tax-free thresholds increased for single-income families. There is a whole range of measures in which things could be done, but I have to address myself to the matter in hand. Successive governments have said that the family tax benefit is one way of addressing some of the imbalance in our community and within our tax system. So we have a substantial amount of money, $19 billion, being spent on family tax benefits in the last budget. Then there is another $10 billion—these numbers just roll off the tongue, I know—being spent on assistance for unemployed and sick Australians. That is a truly significant amount of money. We have worked out that with the ageing population, the ratio of working age Australians to pension age Australians is going to fall from the current ratio of around 5:1 to around 2.7:1 by the mid-century. I will be a pensioner by the mid-century if I am still alive—

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party) Share this | | Hansard source

Even earlier, Cory, if we have our way!

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

I could be pensioned off much earlier, Senator Sterle. You are quite right.

Photo of Michaelia CashMichaelia Cash (WA, Liberal Party, Assistant Minister for Immigration and Border Protection) Share this | | Hansard source

You do not get a pension.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Although, I do not get a pension. But that is not the point. The point I would make is that there were going to be less people working to sustain an ageing population. That means that we have got to look at how we can make important reforms to make the pension and other benefits available sustainable. Without policy reform, the cost of the aged pension is projected to increase by over 70 per cent for the next decade. That means it is going to go from around the $40 billion figure that I told you today to around $68 billion in 10 years' time.

It is worth reminding ourselves that when the aged pension was instituted in 1909, it had an eligibility age of 65. At that point, the average life expectancies for Australians were 55 years for men and 59 years for women. The aged pension kicked in after about 10 per cent extra on life expectancy. Over the past century, I am very thankful that the average Australian life expectancy has lengthened by about 25 years. But with that has come an assortment of more people being on the aged pension for a longer period of time than ever was conceived of in 1909. Also, it adds significantly to our medical bills. They contribute enormously to our quality of life and the general fabric of society, but we cannot deny the realities that with all the benefits comes a substantial amount financial cost. No-one I know wants to rein in the benefits of medical technology, but all of these things need to be put on a sustainable footing.

That is what this bill seeks to do. The budget does not actually cut the aged pension. It is going to continue to increase twice a year to keep up with the cost of living. I think that is absolutely important. But there are structural changes and these are sort of far-sighted, visionary changes that I think are truly important to the future of the country. That is because we need to make sure that payments of this type are viable into the future.

I would just like to touch on some of the changes that have been incorporated into the Social Services and Other Legislation Amendment Bill. They are far-reaching, which is why there is such a substantial amount of debate on this. Firstly, there are some changes to indexation and payment rates. This bill contains several measures that make changes to the indexation of government benefits. There is a lot of toing and froing and hopping and puffing about these sorts of things, but ultimately these changes are designed to help reduce debt.

That is meant to help put Australia back on a more sustainable economic and fiscal footing without reducing payments. That is a very important thing for the Australian people to understand. It is designed to help reduce debt, but not reduce your payments. There are income and asset free areas for all working age allowances and parenting payments, with the exception of student payments. They are going to remain at their current levels for three years. Once again, it is important measure of sustainability.

Also, there are certain family tax benefit income thresholds that are going to remain at their current levels for three years. That is, until 2017. Once again, we are asking people to absorb some of the pain in the interests of making things sustainable. The bill also ensures that single parenting payments are indexed because the consumer price index. This will deliver savings, but at the same time it is going to ensure that payments for single parents do keep up with the cost of living. These measures alone—the changes to indexation and payment rates—will ultimately save the budget nearly $1.2 billion over the forward estimates. They are not without some inconvenience for people, because the cost of living does continue to rise. If you freeze benefit payments, it is going to impact people. But we are asking everyone to shoulder a little bit of the burden so that no one group has to shoulder a heck of a lot of it.

There is no more important group—it is always a risk saying that. My sympathy and empathy does not go out to any group as much as it does to those who are living with a disability. I think that goes for many in this place. It is incredible to think of the hardship that they endure themselves, as well as what their carers endure. The benefits that so many deserve have been redressed or addressed in this place through the work of Senator Fifield, as the former shadow Minister for Disabilities, and the National Disability Insurance Scheme and others. We recognise it is very important thing.

But there are some changes to the disability support pension, which will help support young people with disabilities to enter the workforce if they are able to do so. I think that is a very, very good aspiration to have. That is because the government, to their credit, recognises that people with disability who are able to participate in the workforce have better long-term outcomes if they do actually engage in work. The social, economic and health benefits of active participation should never be understated. That is why compulsory work-focused activities—such as work experience, education, training and job searching—will help some DSP recipients, those principally aged under 35, to find and keep a job. What an important experience that is.

Some DSP recipients aged under 35 will also have their work capacity reassessed and their eligibility reviewed. They will be supported to the maximum possible level to help them maximise their work capacity. This simple, prudent change and this important measure is going to cost the government $46 million over five years. But it is going to actually deliver better outcomes for those DSP recipients who will be able to gain meaningful work as a result of this. We are investing in people's dignity and we are investing in people's futures. That is because we recognise that one of the best things that anyone can have in this country is a job, working to the maximum of their own capacity.

There are also some changes to student payment portability. I would refer to them as common-sense amendments to portability rules for student payments. Students can continue to claim their income support payments while they are holidaying overseas for up to 6 weeks. It does not mean they are taking a gap year and getting student payments; it means that for up to 6 weeks they can continue to receive benefits from being a student, because we believe that investment in education is in the interests of the individual.