Wednesday, 26 February 2020
Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020; Second Reading
Thank you for the opportunity to continue my comments on the Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020. While this bill should improve the ability of people receiving payments to manage their income, there are significant concerns about the government's ability to implement this system. The last thing that the Australian public wants to see is people having their payments cut off because of the sorts of technical errors that could result from this bill. The last thing they want to see is people left on the phone for hours on end if they have questions that need to be answered. The last thing they want to see is more people being saddled with unfair debts.
As we've heard from organisations who've made submission to the Senate inquiry into this bill, robodebt has caused a huge lack of trust in the community about these sorts of measures. Perhaps some of the concerns that those organisations raised might have been allayed if there had been any consultation by the government with people who are actually on Centrelink payments about the changes that are envisaged with this bill. The government might be better prepared for its implementation if it had thought to consult on the scheme and to test the approach with real people. In particular, there is real confusion about how these new measures will interact with gig jobs and casual jobs, where people might work one or two shifts every week. The Senate committee heard genuine concerns about how people's income will be averaged based on one-touch data for one week's work when a person may not work for the next two or three weeks. But there's been no consultation, no trials and no testing with people on social security to see how it's going to work. Despite the robodebt disaster, there's been no review included in the bill as it stands.
If they manage to get it right, this bill should simplify income reporting for people on payments. But what this bill won't do is fix the catastrophe that is the robodebt scheme. Let's hope we don't see a repeat of what is an undeniable mess. The government's robodebt scheme was not only mean and unjust; it's also been uncovered that the government knew about the faults with the robodebt system and, worse, they knew that it was illegal and they kept defending it anyway. They kept defending a robodebt scheme that caused stress, anxiety and financial hardship and, tragically, even contributed to suicides. When this government get it wrong, they don't apologise, they don't try to fix it and they don't try to write their wrongs; they just double-down and try to convince us that everything is just fine.
Robodebt was using a faulty and inaccurate algorithm that was unleashed against social security recipients, who, even if they'd reported their income correctly, were issued debts of thousands of dollars. It was using crude accounting measures to match up average annual income figures from the ATO and reported fortnightly earnings, apparently with very little thought about those in casual, insecure or intermittent work, who rarely do the same number of hours every fortnight. Some of the people targeted by robodebt were told to produce pay slips from over 10 years ago, leaving them stressed and anxious about trying to obtain those documents from former employers. So much time had passed that in some cases their old employers no longer even existed. Despite all of these problems and all of these issues, the government kept this scheme going for years, taking $1.5 billion in payments.
This cruel and unfair program was found to be illegal. Questions still remain about how long the government knew that their revenue-raising scheme, used to prop up their budget bottom line, was illegal. The government either got bad legal advice or got good legal advice but chose to ignore it—or they started the robodebt program without ever seeking advice as to whether or not it was legal. Whichever of these options actually took place, it doesn't exactly scream competence. It doesn't give us great confidence in the measures proposed in this bill. So you'll have to forgive my cynicism and lack of confidence in the government's ability to roll out yet another IT based program.
It's not just the government's lack of competence which concerns me. It's also their lack of care and their lack of compassion when it comes to those on the pension, Newstart and other forms of social security payments. Do they actually even care about getting the implementation of this sort of measure right?
This government has repeatedly attacked the pension and those on social security. Let's look at their track record on the pension. The current Prime Minister, Scott Morrison, when he was Treasurer, tried to increase the pension age to 70 years three times. In 2014 they cut $1 billion from pensioner concessions—concessions that are designed to help pensioners with the rising costs of living. In the same year, they axed the $900 seniors supplement to self-funded retirees. It didn't end there. In 2015 they made changes to the assets test, which meant a pension cut to around 370,000 pensioners. Since then, they've also tried to scrap the energy supplement for new pensioners and limit overseas travel for pensioners. And cuts to the pension are still on the books, in the budget. The government wants to take away the pension supplement from pensioners who go overseas for more than six weeks, costing pensioners around $120 million. And they still want pensioners who were born overseas to wait longer before being able to access the age pension by changing residency requirements.
Does this sound like the record of a government that cares about people who are on payments? Does it sound like the record of a government that cares about pensioners? What about people on Newstart? Is there any evidence that the government cares about them? This government is still refusing to raise the Newstart allowance, despite the fact that it is trapping people in poverty. If you're on Newstart right now, you are living significantly below the poverty line. Even though Newstart is supposed to be a temporary payment, the average amount of time that people are on Newstart is three years. That's not because they want to be on Newstart. It's not because they don't want to have a go, as some on the government benches may have you believe. It is because the jobs just aren't there.
Over two million Australians are either looking for work or looking for more work; 1.1 million Australians are underemployed. Just last month we saw another rise in the unemployment rate, from 5.1 to 5.3 per cent. And 130,000 people on Newstart actually have a job, but they just can't get enough hours to make ends meet and get themselves off the Newstart payment. The rate of Newstart is so low that it actually prohibits people from getting out and having a go and doing what they need to do to get a job. It's trapping people in poverty. You can't live on $40 a day. That doesn't cover the cost of living, let alone the additional costs associated with looking for work, such as access to an internet connection, appropriate clothing and transport to interviews. If you're really struggling to make ends meet—to pay your bills and support your family—that is obviously a barrier to your being able to get out and look for the job that the government so wants you to get.
And this government currently wants to cut Newstart. Scott Morrison wants to double the liquid-assets waiting period from three to six months. That means that Australians who have some money in the bank would find themselves having to eat into their savings, into their own personal safety net, if they found themselves out of a job for even longer. The Prime Minister has said that the harder your work the better you do. Well, really? He's essentially suggesting that it's all down to you—'just try a little harder; just do a little better'. What he's saying is that if you're poor, if you're stuck on Newstart, it's your fault, and that's it. But that couldn't be further from the truth, because, as we know and as people on Newstart know, the jobs just aren't there—two million people unemployed or underemployed. The jobs just aren't there, not to mention that this government has sought to demonise people on social security payments with insulting schemes like their cashless welfare cards and the invasive and degrading proposals for mandatory drug testing that they want to roll out. Does this sound like a government that cares about people on Newstart?
When you look at the government's sheer lack of competency—I'm thinking about the robodebt scheme—and at their sheer lack of compassion, you have to wonder whether they are really capable of implementing the changes that are contained in this bill. When you consider that this government hasn't talked to people on Centrelink payments about how this is going to work, that they haven't asked for feedback on their new system and that they haven't trialled it with real people—the same real people who have been so adversely impacted by the robodebt mess—you have to wonder if this is a government that just wants to do things to people on Centrelink payments instead of developing a policy with them that will work to get them back into work in a respectful way.
I do want to believe that the government can get this right, because, if they can, this bill will certainly serve to deliver some improvements for people on social security payments. But the government's track record suggests otherwise. If they can get this change in reporting right then they stand to actually make the process easier for many others who are on Centrelink payments. But if they botch this change in Centrelink income reporting, just like they botched robodebt, then there is the potential that they will cause more stress, more anxiety and more pain to those who are already struggling on social security. We will be watching.
The Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020 changes the way employment income is reported and assessed for the purposes of determining income support payments. From 1 July, income support recipients will report gross income that has been paid to them by their employer rather than estimate the amount of income that they have earned. It is a change that will affect about 1.2 million income support recipients who report earnings each year, so it is critical that we get these changes right.
While the Greens support this bill in principle, we are seeking to resolve a number of issues identified through the Senate committee process and are looking at putting a number of amendments. We are disappointed that there was an incredibly limited consultation phase for stakeholders to consider this bill. It is a sad hallmark of many of these inquiry processes that the government seem to give only the shortest possible window to people to give their feedback on very complex policy areas.
It is clear that the success of this bill rests on the quality of its implementation by Services Australia, and there are serious questions about the capacity of Services Australia to deliver this. Staffing, organisational and technical capacity have all been flagged as issues and are of concern to us, particularly in relation to Services Australia's ability to implement this before 1 July 2020. It is absolutely essential, in our view, that Services Australia communicates the changes effectively to people and that people are also able to ask questions in person, on the phone and online.
We all know, sadly, the consequences when automation and data matching goes wrong. The absolute failure of robodebt offers salient warnings about the harms that arise when we rely on algorithms and remove the human element. After every failure and scandal that we've seen from the government in this area—from robodebt to My Health Record and everything in between—a little bit of me does think that this is an administration that has proven over and over and over again that it has lacked the capacity or the understanding to pull off these types of changes.
I very much agree with the concerns that have been echoed by other senators in regard to this and also with the warning that has been given of the potential negative impact that this change could have. We in the Greens strongly hope that the government has learned from the disasters of robodebt and is implementing those learnings before implementing further automation processes within the wider social security system. While they're at it, we also personally hope that they take time to reflect upon and consider the mentality that they bring to these discussions. In our politics today there is far too much discourse and belief which places poverty and the creation of poverty upon those living in poverty. There's far too much normalisation of a thought process which blames people who are struggling that struggle. It's as though they've done something wrong morally, fundamentally. That's got to go, particularly when we sit here in a chamber which, thanks to the government and some members of the crossbench, finds it necessary, at regular intervals, to doll out millions, in fact billions, in fact hundreds of billions, to their corporate mates.
At the request of Senator Siewert, I move:
At the end of the motion, add:
", but the Senate calls on the Government to:
(a) come clean on the robodebt disaster;
(b) provide all legal advice relating to the robodebt program to the Senate; and
(c) use the savings generated from this bill to compensate robodebt victims".
The Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020 will improve the process for reporting employment income to Centrelink. From 1 July 2020, social security recipients will report their employment income to Centrelink when it's paid by their employer instead of when it's earned. Assessing employment income when paid will make it easier to report income correctly. This will better support people receiving the right amount of income support each time it is paid, no more and no less than they are eligible for, reducing the likelihood of overpayment. It will also pave the way for future prefilling of employment income using the Single Touch Payroll information system, supporting easier reporting arrangements for recipients. I thank the Community Affairs Legislation Committee for their report, which was released on 20 February this year, and for recommending that this bill be passed.
I note that recommendation 1 calls for further targeted consultation and user testing to be undertaken prior to commencement. The government accepts this recommendation. User experience testing with customers and staff across a number of products and services related to the simplification of employment income reporting is already well under way, with more to be undertaken prior to the changes taking effect. Consultations have occurred across a number of locations with customers who reflect the diversity of our population, including people who live with disability, Indigenous Australians and people from culturally and linguistically diverse backgrounds.
Services Australia, who deliver Centrelink social security payments and services to Australians, will continue to listen and act on the feedback from customers and use this to inform the design of key communication products such as bulk mail-out letters and changes to the online reporting support tools.
I also note recommendation 2 of the report, which calls for the initiation of an implementation review within 12 months of commencement and that the review be tabled in parliament. The government accepts this recommendation. The government does not believe this needs to be included in the legislation to ensure that the review can be undertaken at an appropriate time. Setting the hard date for the completion of review would be restrictive, given the dependencies on the rollout of the Single Touch Payroll system and given that it is not known what employer take-up will be by 1 July 2021, but I do give my commitment to the Senate and the community that a review will be initiated by July 2021.
I acknowledge that a number of other recommendations have been made by Labor and the Greens, concerning user testing and providing further guidance about the operation of the measure. User testing and further guidance will be done prior to the implementation to ensure income support recipients and the staff of Centrelink have a clear understanding of the changes. I'm also aware that questions on details of the legislation were raised through the committee process. Some parties have sought clarification on certain terms within the legislation, including terms like 'employment period', and guidance on how the secretary will determine whether or not an employment period can be identified—that is, whether employment income is or is not paid in respect of a particular period.
In relation to what constitutes an employment period, if the employment pay period is specified on a recipient's payslip, this will be the pay period in the majority of circumstances. However, in a limited number of circumstances, a recipient may provide supplementary evidence and the secretary may record a different period reflective of that employment. 'Pay period' is not defined in legislation, so we can make sure that we provide flexibility. It will be addressed in the guide to social policy law, which is publicly available.
In determining whether payments are paid in respect of a particular period, consideration will be given to a number of factors, including the nature of the recipient's employment, the payment frequency and particular individual circumstances. A person can be paid weekly, fortnightly, monthly or paid in respect of intermittent work. It is not desirable to prescribe those specific rules as it would limit the application of the term 'employment period'. In drafting the legislation we've avoided defining some terms in order to provide that level of flexibility for unique circumstances and to allow the legislation to adapt to the changing nature of work. Including specific provisions in the legislation could limit the ability to take into account a person's specific circumstances.
Setting out how the legislation operates in the social services guide enables the legislation to be interpreted in a beneficial manner, provides clarity to stake-holders and enables flexibility to respond to any unanticipated issues that may arise. This is because the social security guide supports decision-making under the legislation by assisting in understanding the social security law and policy and its application. Importantly, decision-makers must base their decisions on the social security law having regard to Australian government policy and intent, which is reflected in the social security guide. It is open for tribunals for refer to the social security guide to assist in making decisions in accordance with the legislation.
Assessing employment income when paid will contribute to the simplification and delivery of modernisation of Australia's social security system by allowing the use of technology to prevent overpayments before they happen, but without reducing the responsibility of the individual to ensure that they do report correctly. This bill will also help to ensure that Australia's welfare system remains sustainable into the future. I commend the bill to the Senate.