Thursday, 10 December 2020
Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020; Second Reading
I rise to speak on the Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020. As chair of the Senate Community Affairs Legislation Committee, I am pleased to make a contribution to the debate on this bill. This bill was introduced into the House of Representatives on 12 November this year. It was referred to the Senate Community Affairs Legislation Committee that day, with the committee delivering its report on 27 November.
The impact of the global coronavirus pandemic, which affected us so greatly this year, continues to be felt by Australians. Australia's highly targeted income support system is designed to support those who are unable to support themselves through work, savings or other means. Throughout the COVID-19 pandemic, the Australian government has assisted individuals, families, communities and businesses through the introduction of a wide range of temporary support measures. The Australian government is committed to supporting those impacted by COVID-19 through providing financial assistance to people who have lost their jobs or who have reduced income. To this end, we are extending the temporary coronavirus supplement for an additional three months, until the end of March 2021.
This temporary continuation of the coronavirus support measures includes extending the coronavirus supplement for an additional three months at a rate of $150 per fortnight; extending changes to the personal income test for recipients of the JobSeeker payment and youth allowance to allow earnings of up to $300 per fortnight; extending changes to the partner income test for the JobSeeker payment; extending expanded eligibility criteria for the JobSeeker payment and youth allowance to allow sole traders, self-employed and permanent employees who have been stood down by their employers or people who have been directed to self-isolate to continue to be eligible for payment; extending the waiting period waiver, seasonal work preclusion period and newly arrived residents waiting period; extending the period during which income support recipients can maintain eligibility for payment and retain their concession card while receiving no payments due to employment income until 16 April 2021; and other minor policy changes, such as extending pension portability arrangements, under the Coronavirus Economic Response Package Omnibus Act 2020.
This bill also allows the minister to temporarily modify social security law to respond to circumstances relating to the COVID-19 pandemic, such as when changes were applied in March and April to address the high volume of claims made to Services Australia at the height of the economic impact. Without this proposed extension, the minister's powers to make such changes will be automatically repealed on 31 December 2020.
We know that the temporary support measures that were introduced earlier this year have been successful in supporting Australians through a time of great economic shock and uncertainty. Eighty per cent of the 1.3 million people who lost their jobs or had their hours reduced to zero at the start of this pandemic are now back at work, and, over the five months to October, almost 650,000 jobs returned to the labour market. This includes almost 344,000 jobs for women and around 226,600 jobs for young Australians. The effective unemployment rate has come down from a peak of 14.9 per cent to 7.4 per cent, and the participation rate is at 65.8 per cent, which is approaching the pre-coronavirus level. October labour force figures show that market conditions have continued to improve, with employment increasing by almost 179,000 over the month. Full-time employment increased by 97,000, or 1.1 per cent, which is the largest monthly increase on record, and part-time employment rose by 81,000, or two per cent. The number of hours worked also increased by 20.6 million hours in October.
These labour force results show us that when coronavirus is contained and businesses have reopened across the country, jobs will return. National Skills Commission data show more businesses are looking to hire new staff now. In April this year, as we were grappling with restrictions imposed to combat coronavirus, less than five per cent of businesses expected to increase staff, but now that figure has risen to 24 per cent, and 47 per cent of employers are recruiting now, which is up 25 per cent on June's figures. After large falls between February and May this year, it is great to see gains in employment within accommodation and food services of almost 130,000 jobs, within retail trade of 59,600 jobs and within arts and recreational services of 53,000 jobs.
The NAB business survey found business confidence improved significantly in October 2020, rising by nine points to its highest level since May 2019. And the monthly Westpac–Melbourne Institute Survey of Consumer Sentiment index rose by 2.5 per cent in November, following an 11.9 per cent increase in October after the release of the federal budget. One of the reasons Australian business owners are confident is that their revenue is starting to increase. The ABS Business Indicators Survey showed 24 per cent of businesses reported an increase in monthly revenue in November, compared to 16 per cent in October, and 25 per cent of businesses expect their revenue to continue to increase, which is the highest percentage since this pandemic began.
The Reserve Bank of Australia has confirmed that Australia's economic recovery is well underway and has upgraded its forecast for Australia's economic growth and for our labour market. As Treasurer Josh Frydenberg pointed out when he spoke about the September quarter of the national accounts on 2 December, Australia's AAA credit rating has been reaffirmed, with Australia one of only nine countries in the world to have an AAA rating from the three leading credit agencies. In the September quarter, real GDP increased by 3.3 per cent, beating market expectations and making it the largest quarterly increase since 1976.
The RBA said the JobKeeper program has saved at least 700,000 jobs, and that government support programs helped to boost household savings in the June quarter. The figures speak for themselves. There were two million fewer workers and around 450,000 fewer businesses on JobKeeper in October, compared to September, and we have seen a drop in the number of people receiving JobSeeker payment. In mid-November, there were 1.46 million on JobSeeker and youth allowance, which is down from 1.57 million at the end of September. This recovery has been supported by the Australian government's record $257 billion investment in economic support through JobKeeper, JobSeeker, the cash flow boost, the coronavirus supplement and the two $750 payments to millions of pensioners and income support recipients, with more support in the form of two additional $250 payments on the way in coming months.
But we know we have a tough road ahead. We also know that the pandemic continues to provide challenging situations for many in our country. So we wish to extend the temporarily increased safety net for a further three months. The Australian government is very focused on supporting all Australians as we fight this virus and its impacts so we can open our economy again. The extension of support provided for in this bill will cost $3.2 billion, which builds on the overall response package of $507 billion invested since the crisis began. The 2020-21 federal budget was all about creating jobs, led by the $74 billion JobMaker plan to get people back into work. The HomeBuilder program has also been extended by a further three months, providing a $15,000 grant to build a new home or for a substantial rebuild and also boosting jobs within our construction industry. Jobs will continue to be our focus, because a healthy economy supports all Australians.
This government is focused on responding to this situation as it unfolds. While the coronavirus pandemic has resulted in a situation that nobody could have expected, we have demonstrated that we will continue to monitor the situation and provide appropriate support. But we won't pre-empt future circumstances. We have always been clear that these enhanced levels of social security support were temporary and targeted. The plan is clear until the end of March 2020, in that we are providing an additional level of support while encouraging and helping people to get back into the workforce. We must strike the right balance between temporary enhanced support and providing incentives to work.
The provisions outlined within this bill will further support Australians as we continue to deal with the effects of the COVID-19 pandemic. The bill builds in additional flexibility to adapt to new circumstances as the country transitions to a post-COVID economy. This bill is part of a broader suite of measures aimed at ensuring Australians are supported to engage with the workforce, which in turn supports our economy to recover. I commend this bill to the Senate.
I rise to speak on the Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020. The bill extends the coronavirus supplement from 1 January 2021 to 31 March 2021, at the reduced rate of $150 per fortnight. This bill will force almost two million people to try and live on $51 a day, at Christmas time, and then go back to the unliveable rate of $40 a day in April 2021. There is an abundance of evidence and information out there which shows that this is not an adequate amount to live on and actually entrenches welfare dependency.
Forty dollars a day is not enough to cover the basic expenses of food, housing, transportation and health care, let alone if you get sick and need to buy medication or have to go to the dentist, get prescription glasses or attend specialist appointments. There is barely any room in the tight budget for getting a haircut or buying new clothes—items which help individuals to be presentable when they try to get an interview. There is no money for unexpected bills. There is no money to engage in any hobbies or buy loved ones presents. How can people rebuild their lives if they can't have these basic things?
It's unfortunate that those opposite haven't had any lived experience and haven't actually talked to people that are unemployed and looking for work—because maybe then they would have a little bit of compassion and understanding about how difficult it is to rebuild your life when you have lost your job. As uncovered by the Senate inquiry, this low rate of payment results in entrenched poverty, which further exacerbates social exclusion and poor physical and mental health outcomes, and increases homelessness. The Liberal government's disdain for people receiving social welfare means that they don't look at the evidence of how increasing this supplement would not only help people's welfare but also, importantly, help the broader economy.
The impacts of this pandemic are likely to last for some time. Following the release of the quarterly GDP data last week, which showed Australia's economy had grown by 3.3 per cent, the Treasurer himself heeded the warning that it would be a long bumpy road to recovery. The government have predicted that employment will not return to pre-COVID levels by at least 2024, but they committed themselves to cutting support at the end of March and have given no indication that they will permanently increase the rate of JobSeeker. This bill is a missed opportunity for the Morrison government to deliver a permanent increase to the base rate of unemployment support. That's why Labor is moving an amendment calling on the government to permanently increase the base rate of the JobSeeker payment.
The majority of submitters to the inquiry into this bill welcomed the introduction of the coronavirus supplement in April 2020 and noted the positive effects that it had on individuals, families and the community. It meant that people were not living in poverty, particularly single parents with children. The Salvation Army and Mission Australia both commented that their organisations witnessed a significant decrease in the number of regular users of their emergency relief services—that's a good thing—because people could afford to buy essential items such as fresh food and were able to pay for their housing, health care and other basic needs, and were able to pay their electricity bills et cetera. These are things that everyone should be able to do.
A reduction of the coronavirus supplement will contribute to the rising inequality we are experiencing in this country, which has been exacerbated by this crisis. It is well recognised, including by previous Senate inquiries, that the rate of Newstart, now JobSeeker, is inadequate, and it has been recognised as such for a long period of time. The appropriate thing to do is to not only maintain the supplement but go for a permanent increase so that people who have lost their jobs can live in dignity until they become re-employed. This year has clearly highlighted—and all Australians have been alerted to this, I believe—that the rate of $40 a day is simply not enough. As members of the Liberal government themselves have stated, the idea of going back to $40 a day was a 'fairly cruel and unusual punishment'. It's okay to make those comments, and I appreciate those comments in the public arena or in this chamber. But you have to follow them up. You have to put pressure on your frontbench and on your Prime Minister to ensure that the rate for those jobseekers is increased.
Following the unprecedented measures put in place to protect our health from COVID-19 we've seen a once-in-a-generation recession—the deepest and darkest that we've experienced in over a century. Despite being delayed, the federal government's response with the COVID virus economic supplement support made a very positive impact on people's lives. We've seen people able to pay for their housing, electricity and gas bills, turn on the heating during winter, pay for their water, telephone and internet bills, pay for medications and, most importantly, eat enough healthy food, pay for their children's activities, buy clothing and shoes for themselves and their kids, participate in some activities and even address outstanding debt. We have seen women able to re-establish their lives with reduced anxiety, having left violent family situations, as well as recover and regain confidence in establishing themselves into a pathway of employment. Now we will see this support ripped away from people who are already vulnerable. People shouldn't have to fall into poverty because they've lost their job, but reducing JobSeeker back to $40 a day will do just that. Not only would permanently increasing the rate of JobSeeker improve the social welfare of hundreds of thousands of Australians; an increase would be good for our local jobs and local economies, particularly in rural and regional areas. Most importantly it would help my home state of Tasmania.
Social security recipients spend an estimated 58 per cent of their payments on retail goods or services at supermarkets, convenience stores, pharmacies, essential merchandise stores and other small businesses. It is projected that the scheduled end of the JobSeeker payment will take the equivalent of $8½ billion per year from the retail sector. That's $8½ billion every year. The equivalent of 130,000 Australian retail jobs are also on the line if we return the rate of the JobSeeker payment to its old base rate. Australians on social security will have less to spend on local and small businesses, and these local and small businesses will have less to spend on wages or on creating jobs. Even before COVID there were strong arguments for making a permanent increase in the JobSeeker payment. What COVID has done is give us a strong evidence base for thinking and realising—and for the government to come to terms with—that we need to make it a permanent increase, without it having significant adverse effects on the incentive to find work.
We could have a substantial increase in JobSeeker without adversely affecting incentives to take up paid work. I don't believe the sort of rhetoric that comes from people like Senator Hanson, who likes to come in here and try to grab headlines whenever she can to badmouth and run down people who are unemployed. If they're One Nation people or they're migrants, then they're targets for what she has to say. All people who are unemployed want to go out and find a job that is satisfying and will lift their standard of living. There has been no data to suggest that the higher level of JobSeeker during 2020 has had any considerable effect on incentives not to take up paid work. There has been no evidence of any significance, and that needs to be corrected on the record. The notion that it has had an effect is just based on the Liberal government's and Senator Hanson's distorted view of people who receive welfare payments and continues their ideological crusade. With more than seven jobseekers for each job vacancy, there are simply not enough jobs for everyone in my home state. It is even more difficult to find a job in our regions as a result of the government's failure to deliver a jobs program for it.
The travel restrictions imposed by COVID-19 in my home state of Tasmania have resulted in a dramatic reduction in tourism, which is an industry that directly and indirectly—as you, Madam Deputy President, and Senator Urquhart well know—employed 40,000 people and brought in approximately $4.5 billion to the state annually. Due to the ongoing restrictions and the downturn in economic activity, there are currently around 27 jobseekers for every job application, and the unemployment rate is set to increase throughout next year. There are seven jobseekers for every job across Australia, and there are 27 jobseekers for every job in my home state.
It essential that we continue to provide adequate support for these people so that thousands of Tasmanians and Australians who are unable to find work can attain a basic standard of living. That is not only something that Labor has been calling for for some time; economists, those on the crossbench and industry specialists have all said that there needs to be a permanent increase in the rate of JobSeeker. Right now it is more important than ever, with 1.8 million people set to be on unemployment support by the end of this year—and numbers are still predicted to be above pre-recession levels until 2024.
Initially through COVID, the Morrison government demonstrated that they had the will to spend money on welfare. But they have failed to acknowledge how important it is to ensure that people who are unemployed have a basic living payment to give them dignity and allow them to rebuild their lives. These people have been given a reprieve until the end of March. But what happens to them in April 2021? They will go back to receiving an amount of money that it is impossible to live on. I remember only too well, back in the eighties when my family were trying to survive, that you can't live on welfare payments; all you can do is try and survive. There are unexpected expenses, or your children want to go on a school excursion and you don't have the money. It can be that you get to the end of the fortnight and you can't find enough coins to buy a carton of milk—that's the reality. If your washing machine or your fridge breaks down, or even something as simple as your iron breaks down, you won't have the reserves to be able to buy a new appliance.
That's the reality for people who are on welfare. And it's certainly not because they don't want to work. It is certainly not because they waste their money. But every bit of their money is circulated in their local economy.
That's the difference between the government and the people on this side and most of the crossbench: we understand. We understand because we listen to these people. We have these people coming to our offices and contacting us on a daily basis—people who are desperate. We have them crying in our offices. This is the time for the Morrison government to step up, and they need to do it now.
I'd like to make a contribution in this debate today, really just to put on record my concerns about the government's intention to scrap the increased rate of JobSeeker, come March next year. Really, the government's position, which is that JobSeeker should revert to the pre-pandemic level of $40 a day, is another example that, for all of their claims that Australians are in this together, that is not what this government are about. In fact, what they are preparing to do is to leave millions of Australians behind while we remain in the worst recession that this country has seen in decades.
Labor is putting forward amendments to this bill that I sincerely hope the government will support, because those amendments are intended to ensure that we continue to see the higher rate of JobSeeker that we have seen through COVID-19 remain in place once we get to March next year. As I say, if the government doesn't support those amendments, then, come March next year, the well over a million people in this country who are unemployed and the similarly huge number of people who are underemployed, unable to find the number of hours of work they need, will return to the poverty-level JobSeeker payment that we saw prior to COVID-19, that rate being $40 a day.
It is well documented, whether it be in the Senate inquiry reports, in other research or just from talking to someone who was on Newstart prior to the pandemic, that the $40-a-day level that the government had in place and stubbornly refused to increase condemned Newstart recipients to poverty. I've heard stories, whether it be in the media or in direct conversations with unemployed Australians, about the difference it made when the government agreed to the coronavirus supplement and a higher rate of Newstart than it had been pre-COVID. It meant, for instance, that single parents were able to actually put salad—a piece of tomato, a piece of lettuce—on their kids' sandwiches when they went to school, because pre-COVID, when we had the $40-a-day level, kids in single-parent families weren't able to have a bit of salad on their sandwiches because their families didn't have enough money to pay for it. No Australian and no Australian child should be forced to live in that sort of situation because of the mean-spiritedness of their government. But that is what we saw from this government before the pandemic when they stubbornly refused to increase what is now JobSeeker, and that's what we will see again if the government does not accept the amendments that Labor is putting forward to make the increase to JobSeeker permanent after March. If the government doesn't do it, it will condemn those Australians to poverty. And we're talking about not just unemployed Australians. We're talking about, all up, around two million Australians who will be affected by this, who will lose the increased payments that have been in place through COVID-19. It's unemployed Australians, it's young people receiving youth allowance, it's sole parents, it's students receiving Austudy or Abstudy, it's widows receiving widow allowance and it's farmers receiving the farm household allowance. A very wide cross-section of the Australian population will go backwards and be left behind by this government unless the government accepts Labor's amendments.
That will obviously be terrible for those individuals, but it will also be terrible for the Australian economy. In the middle of a recession we should not be pulling out economic support for Australians which they need for themselves and to be able to buy the very things that will create jobs in the wider economy. If we are really in this together, as the Prime Minister and his government continue to tell us they think we are, then they will back Labor's amendments and keep the higher rate of JobSeeker on a permanent basis.
( Quorum formed )
I move the Greens second reading amendment as circulated in the chamber:
At the end of the motion, add: ", but the Senate:
(a) notes that the measures in this Bill will cut the coronavirus supplement from $250 a fortnight to $150 a fortnight, and throw an additional 330,000 people into poverty, which means the Government will have forced a total of 1.16 million Australians below the poverty line since September 2020; and
(b) calls on the Government to immediately announce a permanent and ongoing increase to the Jobseeker Payment and Youth Allowance so that unemployed and underemployed Australians can live above the poverty line".