Wednesday, 14 June 2017
Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017; Second Reading
I rise to speak on the Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017. The trial that is covered by this bill will give jobseekers an opportunity to gain short-term seasonal work without the risk of losing their Newstart payment or other social security benefits. It is a trial that Labor will support but, for the reasons which I shall outline, Labor will be casting a very critical eye over both the implementation and the outcomes of this trial.
Trial participants will be able to earn up to $5,000 in eligible seasonal employment, such as fruit or nut picking, in regional or remote Australia, without it impacting their Centrelink payment. Currently, single Newstart recipients without children can earn up to $104 per fortnight and young jobseekers receiving youth allowance can earn $143 per fortnight before their payment is reduced. Newstart recipients can earn $1,036 a fortnight before their payment reduces to zero. Youth allowance recipients can earn $648.50 a fortnight before their payment reduces to zero.
The trial would allow Newstart and youth allowance recipients to participate in specified seasonal horticultural work, such as fruit picking, and earn up to $5,000 dollars in a 12-month period before their payments begin to be reduced. The existing income test will begin to apply to trial participants once they have exceeded the $5,000 limit. The trial will be capped at 7,600 participants. It is due to commence on 1 July and last for a period of two years.
The bill also includes a seasonal work living away and travel allowance, which is an additional incentive for jobseekers to travel in order to participate in the trial. The allowance will be administered by the employment service provider and is valued at $300.
Labor has always believed in the importance of supporting jobseekers to find work, so we will support this trial. We also believe that appropriate safeguards must be in place. Employers and employment service providers must not be able to misuse the program. The government must ensure that the program upholds labour standards so that employers cannot rip off participants or undercut their competitors.
There have been a number of high-profile investigations of exploitation in the horticultural sector—many involving the seasonal work program—and they have exposed the rotten truth behind the fruit and vegetables on supermarket shelves. An extensive and detailed Fairfax Media report by Nick McKenzie and Richard Baker exposed the underworld of illegal labour and exploitation in Australia's horticultural sector in 2015. In addition, the Fair Work Ombudsman regularly receives complaints of rip-offs and exploitation in horticultural work.
Complaints to the Fair Work Ombudsman from seasonal workers and backpackers working on the harvest trail have included being ripped off on transport and accommodation costs. This is usually encountered through new arrivals agreeing to enter into arrangements with someone, normally an unscrupulous labour hire provider, who meets them at a regional airport or a bus stop and promises work, accommodation and transport for a certain sum of money. They are then driven to the accommodation, stopping at an ATM along the way, and required to provide money in advance for bond, transport and accommodation costs.
They are also promised work, normally at a farm that has some sort of arrangement with the so-called labour hire provider. The work is normally at a piece rate so low that it is not possible to pick enough fruit to make at least the minimum hourly rate required. When they complain or raise the issue with the provider, they are often bullied or told that they will not get their bond back nor have their visa extension signed off. Often the complaints relate to a dodgy provider who has advertised on a local or foreign website, or on social media, and simply provides an offer of work picking fruit or vegetables and a mobile number to call. The Fair Work Ombudsman receives complaints regarding substandard accommodation or accommodation that is crowded and unliveable. Seasonal workers have been found living in dilapidated houses, sheds and caravans controlled by criminal syndicates who operate the labour hire firms that employ them.
Other issues include labour hire operators gouging and inflating expenses such as transport both in and out of the country and to and from work. In some cases, the Fair Work Ombudsman has encountered situations where a person is virtually bonded to a particular provider on the basis that they have been told that they will not have their visa extension signed unless they 'see out the season with them'. The government must take action to end the rip-offs and exploitation in this industry and ensure that participants in the trial are not exposed to the systematic exploitation and abuse that is all too common.
Unemployment in May was 5.7 per cent. The rate of unemployment is higher today in Australia than the United States, the UK and New Zealand. The youth unemployment rate is now 13.3 per cent. Youth unemployment is unacceptably high, particularly in regional and remote parts of Australia. In total, more than 650,000 young people are unemployed or underemployed—defined as having some work but wanting more hours. That was in February 2017.
Underemployment at 18 per cent of the youth labour force in February 2017 is the highest in the 40 years since the survey began. Underemployment now affects more young people than unemployment. As the latest Brotherhood of St Laurence report Generation stalled notes:
In the past 15 years the average gap has widened between the actual working hours of young underemployed people and the hours they would like to work.
The report makes clear that:
The growing number of young people combining study with work does not explain the rise in underemployment—
On the contrary:
… the rise in the percentage of casual and part-time jobs has mostly been among young workers who are not studying.
Clearly, as policymakers, we do need to consider new approaches that address the problems of unemployment and underemployment, because not only do these high rates of youth unemployment and underemployment create significant risks for those young people affected; Australia's economic future is also put at risk not to mention the social problems arising from poverty and exclusion.
As our population ages, youth unemployment risks more than just the livelihoods of those young people who cannot find work. It also undermines the income tax base we will need as a nation to support our ageing population. Labor believes that Australia needs a renewed focus on supporting young people to find work and reach their full potential so that our country can reach its full potential.
It is very important for all of us to remember that we are talking about young people, real people—real people like 19-year-old casual worker James Bowen. In a BuzzFeed article in March this year, James said that he had been paying about two-thirds of his weekly income on rent. It says:
He currently works 10-20 hours a week in retail on the Gold Coast but is desperately trying to find a full time job. James says he applies for 30 jobs per month, and that it's not unusual for him to fill out a dozen applications in a morning.
James says he rarely gets called back from employers after applying for jobs. He says he receives $23 a fortnight from Centrelink, which covers the cost of a few meals. He is considering moving to Brisbane to look for work but has been put off by the cost of housing. The Liberal Party needs to stop blaming young Australians like James Bowen for not working in jobs that simply do not exist. James's story is becoming increasingly common.
The issue of youth unemployment—and, in particular, how we can help young people to make the transition from school into study or work—was a huge issue. I am sad to say that on this issue the Turnbull government has been an abject failure. In the 2014 budget, the Liberals axed funding for Youth Connections, a program that was highly successful in assisting vulnerable young people to transition through education and into work. It provided intensive case-managed support that helped vulnerable young people become job ready. And the Liberals axed it! They just got rid of it.
In the same 2014 budget they tried to introduce a six-month wait for Newstart for young jobseekers under the age of 30, one of the most reviled measures from the 2014 budget. And they spent the better part of two years trying to introduce a five-week wait for young people under the age of 25. They also spent years trying to cut support for young people between the ages of 22 and 24 by pushing them off Newstart onto the lower youth allowance, a cut of around $48 a week or almost $2,500 a year. And who could forget the government's attempts to deregulate Australian universities and $100,000 degrees, making it harder for people to go to university?
Then we have this Prime Minister's refusal to do anything about protecting weekend penalty rates. We have a Prime Minister who is happy to see a pay cut of up to $77 a week for retail and hospitality workers and workers in pharmacies. Many of the people facing a cut to their penalty rates are young Australians. Earlier this year, the Liberal government rammed legislation through the Senate freezing the income-free areas for jobseekers. They did a deal with the Independent senators to push through cuts to jobseekers, meaning that with each year they can earn less and less in real terms before no longer qualifying to receive their payment. That is a cut to the same income-free area that this trial would temporarily relax for participants.
This is a really important point: the Turnbull government recently passed legislation through the Senate, with the support of the Nick Xenophon Team, that will freeze the income-free areas for jobseekers, a change that will make life harder for people on Newstart who have a small amount of work. It is a change that will adversely affect around 264,500 Australians on the lowest incomes. These are people living on very low incomes, and the thresholds being frozen are incredibly low. For parenting payment, the threshold after which the payment is reduced is around $188 a fortnight.
So Labor takes the view that given the track record of this government and given its track record of cuts and attacks on young people, we need to be extremely careful about how this Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017 will be implemented. We will ensure that we monitor this legislation, if it goes through the parliament. We will look at the practical implications for young people. We will ensure that young people are not ripped off, exploited and abused by farmers or by people in that industry. And we will ensure that this is actually assisting young people, not simply throwing them into cheap and exploited labour in horticulture and other areas.
So Labor will support this bill, with those reservations. And we will continue to monitor this bill, if and when it comes into legislated form.
I rise today to contribute to the debate on the Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017.
The bill will trial a social security income test incentive aimed at increasing the number of jobseekers who undertake specified seasonal horticultural work. The trial will run for two years, commencing 1 July this year, and will have cap of 7,600 participants. Eligible jobseekers—Newstart, youth allowance and other recipients—who have been receiving these payments continuously for at least three months will be able to earn up to $5,000 each year of the trial from specified seasonal horticultural work, such as fruit picking, without this income affecting their income support payment. Any unused balance from the first year of the trial cannot be rolled over to the second year. This measure was proposed by the Nick Xenophon Team last year, and the government subsequently included the measure in its 2016-17 Mid-year Economic and Fiscal Outlook. The amendments in this bill are concerned mainly with the seasonal horticultural work income exemption.
The bill also provides for participants in the trial who undertake specified seasonal horticultural work more than 120 kilometres from their home to receive a seasonal work living away and travel allowance—a payment of up to $300 a year. This allowance will not affect the participants' income support payment as it will be excluded from the social security income test.
The Australian Greens will be supporting this bill. However, I will note some reservations we have with the bill. We have concerns that the bill is limited to one industry and that it allows for income support recipients, who are earning the same amount of money but from different work, to have income tested differently. In other words, we are setting up a different system. As the minister mentioned in his second reading speech on this bill, a recipient of the Newstart allowance, who is single and has no children, can earn up to $104 a fortnight before their payment starts to be reduced. This means that, over the course of a year, they can only earn $2,704 without their income support payment being affected. It is for this reason that we would like to see the policy broadened to all recipients of an unemployment payment by implementing an income bank of $4,000 that accrues over time for Newstart, youth allowance and other payments. This would allow for a more even-handed approach. I will be moving—and I will move it at the end—a second reading amendment relating to the issue of an income bank and note that many in the community services sector have been putting up the concept of an income bank for some time.
We have doubts regarding the bill's ability to achieve employment outcomes for those receiving an unemployment payment. The bill will not provide assistance to people to overcome barriers to employment nor will it address the underlying problem of the lack of available jobs or skill deployment and development in the long term. We know from Anglicare Australia's Jobs Availability Snapshot in October last year that, for every level 5 or low-skilled position that was available in May 2016, there were 6.33 disadvantaged jobseekers. In other words, there is just not enough work for jobseekers. This figure actually worsens when you look at the state and territory breakdowns. The ratio of disadvantaged jobseekers to low-skilled vacancies was 10.62 in Tasmania and 9.39 in South Australia. In other words, we have a very significant issue. While the Greens do support this bill, much more needs to be done to assist those receiving unemployment payments into secure, long-term employment.
Unfortunately, governments—and I am not just pointing the finger at this government, but this government is particularly adept at this—look at this sort of short-term, very seasonal work in the regions as an answer to our unemployment issues. It is simply not the case. While it will help for short periods of time, the concept of an income bank is worthy of support—in fact, that is why I am moving this amendment—but it should not just be restricted to this seasonal horticultural work, which is the very issue that Senator Cameron has just articulated.
I am deeply concerned that this in fact will not make a significant difference to those unemployment rates, but a broader scheme would. This proposes an income bank so people can have $4000, which not only would assist people but it would also get over some of the issues with Centrelink which we are currently dealing with—the difficulty of reporting payments and things like that.
At the end of the motion, add "but the Senate calls on the Governent to broaden this policy to all recipients of an unemployment payment by implementing an income bank of $4000 that accrues over time for Newstart and Youth Allowance (Other) payments".
As I indicated, the Greens will be supporting this bill, but we will be monitoring it very carefully to see the outcomes and we urge the government to consider the broader concept of an income bank for all people who are receiving those payments, and not just those who are involved in seasonal work.
I make a brief contribution, given that I have spoken on this issue on a number of occasions previously in the context of the so-called backpackers tax. I can indicate that I and my colleagues, including Rebecca Sharkie, the member from Mayo in the other place, strongly support this legislation because this is an idea that we put to government and an idea that we pushed for. We are now seeing it crystallised in this legislation. I note the comments of Senators Cameron and Siewert, but this is a start. This is not supposed to be a panacea to the dilemma that unemployed people who are on Newstart get slugged with effectively an incredibly high marginal tax rate or very strong punitive measures if they earn more than $104 a fortnight they get hit with 50 cents in the dollar reduction in their benefits until it whittles away to nothing. I think it is about $1023 a fortnight, and they are the latest figures I have.
On 20 September last year at Ceravolos Ashton Valley Fresh premises in South Australia, in the electorate of Mayo, along with Rebecca Sharkie, I met with Susie Green from the Apple and Pear Growers Association of South Australia and the Cherry Growers Association of South Australia, the Adelaide Hills fruit producer, Joyce Ceravolos of Ceravolos orchards, Andrew Flavell of Flavell Orchards, Ashley Green of Lenswood Apples and Tony Hannaford of Torrens Valley Orchards. We spoke to them about their issues in finding people to do their picking and the horticultural work they need, particularly on a seasonal basis. This was in the context of the backpackers tax issue, which was causing a lot of concerns in the regions, in agriculture and specifically in horticulture. They all agreed that it would be a very good idea to supplement the income of Australian job seekers—those on unemployment benefits—by giving them a fair go and an opportunity to earn thousands of dollars each year for this work without it in any way penalising their unemployment benefits.
That is why this particular program to allow that income to be earned is so important. My colleagues—Senators Griff and Kakoschke-Moore and Rebecca Sharkie, the member for Mayo—all see this as a very important first step to break that nexus and to ensure that young people are given a fair go to be able to work without being penalised as they are now. The current system with its very low threshold has been in force for many years under successive governments, coalition and Labor. It acts as a real disincentive for job seekers to give it a go and to work, even in seasonal work or any type of work, without being hit with severe punitive measures. This will mean that a number of young people in this trial of several thousand job seekers around the country will actually have a chance to earn up to $5,000. They will actually have a chance to get a taste of working in, for instance, horticulture and in agricultural concerns. Who knows whether literally hundreds of those 6,000 job seekers will find long-term permanent employment as part of this trial. That is my hope and that is the hope of my colleagues.
I note the Greens have moved the second reading amendment. Senator Siewert has moved that amendment. I can tell Senator Siewert that we support the amendment. We believe that the low income threshold is a punitive measure that needs to be broadened out. This punitive measure needs to be mitigated against significantly by allowing unemployed people in this country the chance to earn more without being penalised severely, as they are now. So, of course, we will support that. But this is a first step. This is something that we as a team fought for and that we as a team believe is good for the regions, good for agriculture and good for horticulture in particular. It will give literally thousands of young Australians a chance to get into the workforce, a chance to earn a supplementary income and a chance not to be penalised, as they have been in the past.
I want this trial to work. I want this trial to be expanded. I want us to think differently about the way we treat unemployed people in this country who are penalised so heavily even if they earn a bit of income, even for seasonal work, where they are slugged so severely and which acts as a huge disincentive for people to give it a go in the workforce. So, with those words, I can indicate that we strongly support this measure. It is something that we instigated. It is something that we believe should be given a go. We also support the second reading amendment. We would like to think this trial is the start of something that can be expanded more broadly, because we believe that there are huge social and economic benefits not just for those unemployed Australians but also for small and medium businesses around the country.
I rise to speak to the Social Services Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Bill 2017. I am the Greens spokesperson for agriculture and regional affairs, so today I want to comment on the Greens support for this bill and what it will mean for our regions and for agriculture in those regions. In the last session of parliament, the Greens ended the political deadlock over the backpacker tax and helped legislate for a fairer backpacker tax, providing certainty for the thousands of horticulturalists and farmers in Australia's food bowl who require seasonal labour on their farms. We also secured a handy $100 million extra for Landcare—an achievement of which the Greens are quite proud. But, that aside, we know how important seasonal labour is for these farmers. Without access to pickers and workers during harvest time, fruit rots on the vine, crops die and millions of dollars of produce are unnecessarily lost. It is a massive waste of Australia's resources.
The bill before the parliament today is part of the crossbench deal that the government had to strike to get their changes to the backpacker tax passed. The trial being proposed in this bill has the opportunity to be a great boon for our farmers, and it will stress test the rhetoric of the coalition. During the backpacker tax debate, we heard many government senators carry on about lazy, unemployed Australians who could not be bothered to do the hard work available to earn a wage out there in the seasonal agricultural industry. This, we pointed out, was a farce as there are so many reasons that unemployed Australians are not able to do seasonal labour, including ongoing caring commitments, education commitments, existing lease arrangements, career paths that cannot be disrupted and a host of other things.
However, this trial will deal with one significant barrier, and that is the effective marginal tax rates and the loss of payments due to earnings over a social security threshold. What is common knowledge to many people living on social security payments is the challenges that come with earning money just slightly over the maximum permitted each fortnight. By doing so, they often face effective tax rates well in excess of 60 cents in the dollar, so it is just not worth undertaking that work. It serves as a massive disincentive for people who do want to work to relocate for a region, particularly when the work is only for a month or two. They make all of that effort and have this massive marginal tax rate on their earnings, they do the work for a couple of months and then they have to resettle themselves back in their hometown.
My colleague Senator Siewert has already spoken to the problems involved with privileging one industry over another. Senator Siewert has moved a second reading amendment that would ensure that regardless of which industry people on social security payments would seek to enter an income bank would be created of up to $4,000 so that those on payments can undertake any form of non-ongoing work without compromising the stability of their support payments that provide for them across the rest of the year. This will be a massive boon and a massive improvement to the lives of people living on social security payments. It will given them access to a wider range of work experiences which will help them in achieving ongoing, viable, meaningful work in many instances.
To reiterate, this trial will give the opportunity to thousands of Australians to be able to earn that extra money over the picking season without facing punitive effective marginal tax rates and facing potential cuts to their support payments. It will also help thousands of farmers get their produce harvested and get it to market. That will be something I am sure those farmers, horticulturists and agriculturalists will be very pleased about, as will the general community. When people see coverage in the media of fruit rotting on the vine and produce not being taken to market they think: 'What a waste! Surely we should be able to manage our society and manage our economy better so that we can make use of this valuable produce and get it to market and get it into people's kitchens.' It is a sensible change and it will complement the modified backpacker tax that the Greens succeeded in getting through the Senate, providing confidence for farmers that they will be able to secure the seasonal labour force for harvest season. For these reasons, I really commend this bill to the Senate.
Given the hour, I will thank senators for their contributions. I indicate that the government will not be supporting the second reading amendment, but, as I said, I thank senators for their contributions. I commend the bill to the Senate.