Thursday, 10 December 2020
Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020; In Committee
I move opposition amendment (1) on sheet 1149:
(1) Schedule 1, page 3 (before line 5), before item 1, insert:
1A After Part 1.3B of Chapter 1
Part 1.3C—Additional economic support payments to address inequities arising out of coronavirus pandemic
38X Minister must consider what additional payments may be required
As soon as practicable after this section commences, the Minister must consider whether to do any or all of the following:
(a) extend the COVID-19 supplement until 28 March 2021 at the amount of $250 per fortnight, in line with extensions to jobkeeper payments;
(b) better support recipients of the age pension, disability support pension and carer payment who are facing increased costs to protect their health in the face of the coronavirus pandemic;
(c) announce a permanent increase to the base rate of jobseeker payments.
This implores the minister not to cut the coronavirus supplement this Christmas, to announce a permanent increase to the base rate of unemployment payments and to help pensioners and carers.
Thank you very much, Senator Pratt. In relation to the amendment on sheet 1149, to apply a further elevated extension of the coronavirus supplement: as the government has been very clear on, the extension of the supplement past 1 January to 31 March 2021 is going to continue. What the legislation before us today seeks to do is to put into effect the legislation that will enable that supplement to continue to be paid, otherwise the payment will expire on 31 December. We have put in place an extension, amongst other things, to this supplement of $150 for the period of 1 January to 31 March. That is in addition to the other provisions that sit within this particular measure to support Australians.
Whilst we have seen some signs of recovery, and we've seen the jobs market start to improve, we recognise that the Australian economy, although much better than the world economy, is still in recovery mode. That's why the government made the decision that it would continue with this elevated level of payment for people who find themselves still unable to get employment, but at the same time we are also seeking, through other measures, to incentivise people to re-engage with the workforce. As an example, on 25 September, when the original coronavirus supplement was due to expire, we put in place an elevated level of the income-free area. Doing so, we were hoping to encourage Australians who were coming out of a pretty traumatic time; back in March we effectively shut our economy down overnight.
What we are seeking to do, which is why the government will not be supporting the amendment that's been put forward by the Labor Party, is to strike a balance between making sure we recognise that there is additional support needed out there at the moment to help people through the first part of 2021 and continuing to monitor the economic conditions—particularly the labour market conditions, but more generally the economic conditions—as we move forward, standing side-by-side with all Australians to make sure we walk the pathway of this recovery together. If you have a look at the budget that was brought down back in October, you will see that what we did was put a whole heap of measures in place so that we could support Australians outside of these particular measures that we're talking about today. We believe the most important thing we can do is to provide incentives for people to get work, and the best way we can do that is to make sure we've got a strong economy that is able to create jobs so that people who have found themselves unemployed as a result of the coronavirus pandemic, and those who were already unemployed prior to the pandemic, are able to find a pathway to employment into the future. The government will not be supporting Labor's amendment.
The Greens will be supporting this amendment. We have an amendment, which I will move later, that increases the supplement to the original $550. In the meantime we will support the $250 amendment.
During estimates, Minister, you and others made claims that the coronavirus supplement at the higher rate was a disincentive to people finding work. At the Senate inquiry into the bill, Professor Jeff Borland gave evidence to the committee that there was no evidence that the coronavirus supplement had acted as a disincentive for people to move into employment. These are two conflicting pieces of evidence that have been received at estimates and through the Senate inquiry into the bill. Firstly, can you provide the evidence you said you would provide us, that's beyond anecdotal evidence? Secondly, do you acknowledge that the supplement in fact doesn't act as a disincentive for people who are looking for work?
Thank you, Senator Siewert. You refer to some commentary that was made by an academic, Professor Borland. In terms of the professor's comments, I will make a couple of remarks before I respond to the final part of your question. Unquestionably, over recent months the labour market has seen unprecedented inflows and outflows as the economy has been impacted by the coronavirus pandemic. Clearly, any findings around recent experiences in the labour market cannot be analogous to or transferrable to normal economic conditions.
The other thing I would note about the data and the investigation undertaken by Professor Borland, which he referred to in the evidence he gave, is that the investigation almost entirely centred on ABS labour force data. It didn't go to administrative data on payment recipients, as an example. And, as you would well know, Senator Siewert, people on payment are not necessarily counted as unemployed. If they are exempt from mutual obligations or not looking for work, they could be counted as not being in the labour force. We understand that, currently, more than 20 per cent of JobSeeker payment recipients are reporting earnings, meaning that they have some employment and, accordingly, wouldn't be counted as being unemployed. I put that on the record so that we can get some context around the information that Professor Borland was seeking to present as the basis on which he was making his claims.
In relation to your overarching question on disincentives to work, we were receiving significant information from a number of different places in relation to the impact that higher levels of payments were having on, I suppose, the incentive for people to seek work. And don't get me wrong, Senator Siewert: I understand that, particularly at the height of the pandemic, it was a very traumatic time for people, and I'm sure a lot of people were particularly scared. I acknowledge that. However, as we were coming out of the pandemic, we started to see increasing numbers of businesses coming forward—either themselves or through employer organisations like the Australian Business Council, the Ai Group or ACCI. They were putting on the table data collated from surveys of employer organisations saying that employers were having difficulty finding people to fill jobs they were advertising. The National Skills Commission, for which Senator Cash has responsibility, does a monthly survey. In a survey of 2,000 businesses, 40 per cent reported that they were looking for employees, and the single most significant reason they were unable to get employees was that there were no applications for the jobs. In addition to that, the independent JobKeeper review found that, in effect, the elevated levels of payment were acting almost as a base floor in the labour market.
So there were a number of factors that contributed to that information. The other statistic that goes to this point is that we saw quite a significant uptick in people applying for jobs as the jobs market was opening. Clearly, we had to have the jobs available, and I think there was a 13.9 per cent increase in the number of job ads in November. We are starting to see people come back into the market.
It's disappointing to hear the minister indicate she's not willing to support Labor's amendment. Listening to her answers to questions posed by Senator Siewert, it is very clear that the government is operating on a deeply flawed understanding of how the Australian economy works, of how the labour market works and, indeed, of what the impact of these changes will be on communities all around the country, in particular regional communities. Let's be clear what the effect of the Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 is: this is a bill that confirms the return to the $40-a-day rate for JobSeeker at the end of March and it cuts the rate of payment from 1 January next year. There are some good things, of course, about the bill. It continues the coronavirus supplement for youth allowance student and apprentice recipients after December, which is important. It continues the more generous income-free areas and taper rates in partner income tests. Those things are important. But, at the heart of it, because of an ideological belief about people who suffer from unemployment being somehow at fault for their own circumstances, somehow indolent, somehow not interested in work, this bill essentially seeks to cut support provided to people who are unemployed.
Colleagues on this side of the chamber have been putting a very simple proposition to the relevant minister, Senator Ruston, and others on that side and it's this: this bill does represent a cut to the coronavirus supplement at a time when the economy cannot afford it. This is a case of very simple mathematics. The supplement started out at $550 a fortnight, effectively doubling JobSeeker. Then from 20 September it was reduced to $250 a fortnight and from 1 January next year it'll be reduced further to $150 per fortnight. Now, the mathematics on that are pretty straightforward: $250 is lower than $550; $150 is lower than $250. If the government want to cut the coronavirus supplement, they should be up-front about that, because that would make for a more honest debate, at the very least, about the amendments before us now and some of the other amendments that we'll be considering in the committee stage.
The cut in support is happening and will be happening, and the context for that is desperate. Here are some of the facts: there are 1.8 million Australians who are expected to be on unemployment support by the end of the year. Unemployment is expected to continue to rise. The OECD suggests it will hit 7.9 per cent next year, and that will be beyond the experience of many Australians, particularly younger Australians who haven't experienced very high levels of unemployment. The OECD is pretty clear about the remedy for this kind of thing and pretty clear about the risks in the policy decision-making. They have warned us about premature cuts to vital support, fiscal support delivered through mechanisms such as the coronavirus supplement, saying that cuts at this time could risk jobs and the economy. You can ignore that advice if you come into this chamber and you say that what you're doing is not a cut, but it's a silly semantic argument. We are experiencing the worst recession in a hundred years. It is not a time for silly semantic arguments. It is a time for grappling with the serious economic circumstances that are facing Australian families, Australian workers, Australian communities and, frankly, Australian employers. The cuts contained in this bill, the cuts anticipated in this bill for next year, will have implications for all of those participants in the economy.
This government likes to talk about employers a lot. This government isn't very interested in people who work for a wage. They're very interested in employers. We on this side of the chamber are interested in all of the participants in the economy and we're interested in structuring an economy that will work for everybody. Part of that means that businesses and employers need to be operating in an environment where there is demand for their products and services, and all of the advice before us suggests that withdrawing fiscal support at this time presents a very serious risk to economic performance. The exposure to that risk is not just to people presently receiving benefits through JobSeeker; it's spread right across the economy. I tell you what, it will hit hard in regional communities, like the community that I came from in northern New South Wales. It will hit a lot harder there than it will in some of the more affluent suburbs that some of those opposite are more familiar with and prefer to frequent. It will be noticed in regional communities, because this is a recession with very uneven effects. I am very worried about the communities that I know and love in my home state and the approach to economic policy being taken by this government.
It's not just the OECD warning us; the Reserve Bank are also expecting a further rise in unemployment. They expect, as the best case, that unemployment will be above prepandemic levels as late as 2022. There are still far more jobseekers now than there are job vacancies—many, many more. The vacancy report put out by the National Skills Commission showed that there were 155,000 vacancies in October. That compares with data from the Department of Social Services showing there were over 1.3 million people on JobSeeker in October. What does that really mean for people in the labour market? It means when they're going out looking for a job they're facing a lot of competition. Those jobs are just not there. Many, many more people are dependent on benefits provided by government and, as I've indicated already, the consequences of that dependency flow into the businesses and communities in which those people live.
Instead of reverting to $40 a day for JobSeeker, the government should be permanently increasing the rate. That's not contemplated in this bill. In fact this bill anticipates the circumstances where the coronavirus supplement comes to an end very soon. There are 1.3 million Australians currently on JobSeeker, and they've been through a lot this year. They've experienced uncertainty—personally, financially, psychologically—and they're facing down a very uncertain Christmas and a very uncertain new year. They'll be wondering what level of support will be available to them after 31 March next year. That's the date when JobSeeker drops back to $40 a day. All those people, some of whom haven't experienced unemployment before, will be facing a very uncertain labour market and very low rates of vacancies. They'll be rightly worried. They will be worried about how they'll pay the bills, how they'll put food on the table and how they'll pay their rent. It will make for an uncertain Christmas.
I do wonder about the motivation of those opposite in leaving that uncertainty in place at a time when—surely, after all that has happened this year—people deserve the capacity to have a secure Christmas with family and some certainty about what next year might bring for them economically. It's true for business too and I've talked about that already. It isn't just the recipients of benefits that we should be concerned about. These recipients are spending in small businesses locally. They play a vital role in helping to create and sustain jobs, and that is incredibly important as we emerge into a COVID-normal situation.
This amendment is not a radical amendment. It's an amendment that is tailored to the economic circumstances we find ourselves in. It asks the government to provide certainty for people who are experiencing great uncertainty at the moment.
Senator Siewert, as I have constantly been saying inside and outside of this chamber, the government is absolutely committed to remaining agile and flexible to try and respond to the unfolding implications of the pandemic and our recovery. We are in a very volatile economy at the moment. We are, pleasingly, seeing some good signs of economic recovery and jobs market recovery. But, as we saw back in July when we thought we were through the worst of it—we thought that Australia had come out of the pandemic almost as unscathed as any nation in the world—and only a matter of seconds later we saw the outbreak in Victoria and the devastating impact that had on the Victorian economy—communities, families and people generally in Victoria.
We want to make sure that, as long as the coronavirus pandemic is an active threat within our economy, we maintain flexibility so that we can move, as we have done with the continuation in September of the supplement and once again with the bill that is before us today which seeks to extend the supplement past 1 January. In response to your question: right now, we are very focused on the here and now, and the circumstances we find ourselves in. We will continue to monitor the situation as we go forward and as vaccines become available—as an example—and we will continue to make decisions that reflect the economic conditions that are with us at the time. But I reiterate that the level of uncertainty that exists within Australia, as evidenced by what's happening around the rest of the world, means that we will remain in this temporary, targeted, scaleable and responsive mode, where we can respond to people's needs on an as-required basis.
You aid you want to respond to people's needs on an as-required basis. You saw fit to note that $40 a day wasn't going to be sustainable in the context of a pandemic. I take from what you're saying that you're quite prepared to go back to $40 a day and that there is no commitment from the government at all to assess the baseline of what Newstart should look like. I want to ask you, please, what assessment the government has done of rents in Australia to know how survivable that payment is, about the basket of goods that people need to buy, about people's capacity to pay their utilities, and their capacity to pay for school excursions, clothing, and home telephone and internet connections.
The decision in March to put in place the coronavirus supplement for people who find themselves on working-age payments at the level of $550 recognised that, almost overnight, the Australian jobs market closed. On 23 March—I think we will always remember that day—the states and territories shut their economies down and hundreds and thousands of Australians lost their jobs in the space of a matter of days. So the response by the government—and I acknowledge the support—
The TEMPORARY CHAIR: A point of order?
The minister, sadly, is not answering my question. My question was specifically about the rate of Newstart, not the supplement, and the adequacy of that payment, without the supplement, to meet people's daily needs.
The TEMPORARY CHAIR: Senator Pratt, you've reminded the minister of the question. I'm sure she will return to that.
Through you, Chair, on the point of order, I draw your attention to the preamble to Senator Pratt's question, where she made reference to the fact of the increase in the payment because of the coronavirus supplement. I was just trying to explain to her why that had been put in place, and provide the explanation around the $550. It was for an extraordinary set of circumstances. Before you took a point of order on me, I was about to acknowledge the fact that those opposite were absolutely 100 per cent behind the actions of the government to be able to put in place all of those measures that were put in place to help us when, as a country, we found ourselves in that situation. I want to acknowledge the bipartisan support that was provided to the government through the management of the early stages of the pandemic. I think all Australians appreciated the fact we worked together to do that. But, as I said, it recognised the fact that the jobs market closed overnight: there were no jobs, and hundreds of thousands of people lost their jobs. That was the reason that we put it in place, along with the JobKeeper payments, which very successfully sought to help people maintain their engagement with their employer.
In reference to some of the further commentary in Senator Pratt's questions, some of the things that she was insinuating that I have been implying in my commentary are not necessarily correct. If she refers to my previous response to Senator Siewert, I've made it very, very clear that the government still considers what we're doing to be in a very temporary space, and we're looking at what we might need to do to respond to the economic conditions in the labour market, particularly what's currently before us.
That's why, Senator Pratt, we made the decision for the measures that are before us today in this bill. But, most particularly and clearly, the most important component of that is the extension of the coronavirus supplement post 31 December, which will provide an additional $3.2 billion over that three-month period in payments to Australians who find themselves on working age payments, so that they continue to have that elevated level of support, recognising that we are still in a COVID-19 affected world, a COVID-19 affected economy and a COVID-19 affected jobs market. That is where we are at the moment, and we will continue to work to make sure that we monitor the situation. But I also remind Senator Pratt that, with the constantly used '$40 a day', we always fail to recognise that very few people are on the base payment. In fact, I'm sure next to nobody is.
Senator Siewert interjecting—
It's not just the comments that we're getting from the other end of the chamber from Senator Siewert. Australia has one of the most comprehensive, targeted social safety net systems in the world. It is created as a safety net; it's not created as a wage replacement. It is targeted, and, as part of that targeting mechanism in our system, we actually look at the individual circumstances of people. If someone has children, they are supported through the family tax benefit system. If people are in a situation where they are renting, there's Commonwealth rent assistance available to them. If people are on low incomes—it's not just people on working-age payments, but people more generally who are on lower incomes—there are many subsidised and often free services for them in relation to being able to get access to pharmaceuticals, health care et cetera, and Australia does have a general healthcare system and an education system. So we have a very comprehensive welfare system, and it is very, very targeted. The constant references to '$40 a day' fail to recognise all of those other things that are associated—not just payments, but access to other services that would otherwise be required to be paid for, in, for instance, pharmaceutical allowances and supports and healthcare.
You said in your remarks, Minister, that the government was monitoring the situation and trying to be flexible.
Nevertheless, on the one hand this bill retains the current power to keep paying the coronavirus supplement—it reduces the rate—but it also ceases payment of that supplement on 31 March. Why does this bill have this provision, in terms of not wanting to keep the power to pay the coronavirus supplement—and it leaves it totally in the government's discretion to lift it, raise it or get rid of it; you don't have to pay it just because you've got the power to pay it. Why is it that you are, in this bill, seeking to remove the power to pay that supplement?
When we came into the coronavirus pandemic, one of the very core understandings was that the powers that were given to me by this chamber—and there were powers given to the Treasurer, in the other chamber—were almost unprecedented because of the situation. The basis of that was the inability of the parliament to sit to make legislation, pass legislation or create regulations. It has often been a very strongly held view that we should, wherever possible, embed any powers in primary legislation, especially powers that are as significant as these. So the reason that the government has sought not to accept the amendment that would grant me an extension of quite extraordinary powers in this area—powers that were very much warranted back in the turmoil of the initial stages of the pandemic—is that now that we are in a situation where the parliament is able to meet we believe that the power of the parliament should be respected and that we should allow the parliament to make those decisions when the time comes and when we have more information about what may be required post 31 March. At the moment, we clearly don't know that. So, Senator Pratt, the reason why the government is not seeking to put provisions in this bill to extend those powers is that we believe, principally, that powers of that nature and magnitude should be embedded in primary legislation.
Minister, why don't you go back to the issue of $40 a day. You just outlined things that are available to people. If all those things are so fantastic, if you think the system is so wonderful, why did you put the coronavirus supplement in place?
One of the things that we probably need to be a little bit careful about in here is when we elaborate, conflate and inflate with flowery adjectives what somebody had said. However, I did say that $40 a day is not all of the support that is provided to people who find themselves on working age payments and that the comprehensive and targeted nature of our welfare system enables people to receive additional supports that relate to their particular circumstances. But, in relation to the principal part of your question—which was very much the same as the question I was just asked by Senator Pratt and spent some time going through—the reason we put the $550 a fortnight coronavirus supplement in place in March was that, on 23 March, the Australian economy closed down. It just completely closed down overnight. Hundreds of thousands of people lost their jobs overnight, completely unexpectedly. No-one could have foreseen what was about to happen to the Australian economy. Nobody knew what was about to happen over the forthcoming weeks. And so, by putting that payment in place, the government sought to recognise that there were no jobs. Even if there were jobs, no-one could go to work because of the shutdown and the lockdowns. So we put in place a blanket for Australia, to cushion the period of uncertainty. This was so we could get to the other side of that uncertainty and so we could make some decisions in relation to how we would put in place ongoing supports for the Australian economy.
The coronavirus pandemic has very significantly impacted people right across the country, but we are now seeing the recovery starting to come in quite strong—though that is mixed across the country. There were states that were able to open up more quickly because their health measures were dealt with quite swiftly and comprehensively, but then in other states and regions across Australia there has been a delay in their opening. That of course is creating an environment where we have a really mixed response in the economy. But we are seeing some communities recovering and the labour market picking up.
In my home state of Western Australia, in speaking to a lot of small businesses that operate across Western Australia, I have discovered that things are going quite well. In fact, some businesses are even saying that things are better than before. There is some real stimulus out there, possibly because of the stimulus that the Morrison government has brought in as part of the overall package to deal with the coronavirus pandemic and the related recession that we were in for a moment—which, thankfully, as a country we have emerged out of. Nonetheless, the impact has been felt. But there are businesses across Western Australia that are actually recovering—for example, a plumbing business in my patch, in the southern section of Perth, where I live. This plumbing business is run by Brad and Trudy. They're working in the residential market, which of course has been stimulated because of the housing support that we brought in. That's enabled their business to grow. They've also been able to hire a new apprentice in the last couple of months, because they've taken advantage of the incentives that we've provided.
But some employers are having difficulty attracting the staff that they need to meet the demand that they've actually got, and we're seeing that in agriculture. It is harvest time in Western Australia and, as my good friend and colleague Senator Brockman will be able to attest—because of his vast experience, knowledge and background in the agricultural sector—Western Australia is going through a good season. But some employers are struggling to find the workers necessary to take up these jobs and to take up the fantastic opportunities that are available, particularly for young people, to go out to the regions. There are incentives for people to go to the regions. For example, under one program, an individual can get up to $6,000 in reimbursements if they relocate, and you only need to work a minimum of six weeks to take up those opportunities. But we have seen through this pandemic and the resulting economic shock that employers say that they are not able to attract staff, and I believe there's a whole bunch of reasons why that has happened.
Of course, with the pandemic, we necessarily had to put a pause on mutual obligations, because the last thing we wanted was for people to turn up to their employment service provider, their jobactive provider, or maybe, in a regional or remote area, their Community Development Program, or CDP, provider. Because of the health restrictions that were put in place, you couldn't expect people to turn up and engage in activities—in training and job search requirements. That pause, which was absolutely necessary, meant that, while in some cases there were actually jobs available, some people chose not to take it on themselves to get out and search for jobs, because there wasn't that requirement. We hear of employers saying they advertise but then no-one's applying.
The other aspect was that, at the time when the coronavirus first hit us as a nation and we were dealing with the impacts of that, the government saw fit, and it was absolutely right, to provide the coronavirus supplement payment to people so they were able to deal with the shock of being told to stay at home. Some people, as we know, were stood down from their jobs. As we know, many, many Australians, sadly, even lost their jobs. That is a big impact. That's a big impact not just on individuals but, of course, on their families. So the support that has been there has been really profound, and it's been a real game changer for many individuals and many families.
But we've heard feedback within the community that there has been an disincentive to get out and search for work, and it was important that we follow through with what we said at the beginning. When the Morrison government implemented the coronavirus supplement, we said it was a temporary program. It wasn't to go on forever; it was short and it was sharp. This was absolutely necessary because, if we baked in certain elements, those disincentives for individuals and also the impact that it would have upon the budget position would be ongoing. It would be something that future generations, for many generations, would have to deal with. So following through with that commitment that we made that it was just a temporary program has been important. So the stepping down of the coronavirus supplement payment is, I think, a very necessary thing to ensure that people are active in taking up the many, many opportunities that are available.
My question to the minister is along these lines: if someone is able to maybe pick up a little bit of extra work—there may not be a full-time job that's available to them at the same level that they were at prior to the pandemic, but there may be some part-time work and opportunities—I understand that this bill amending the coronavirus supplement will enable individuals to earn up to $300 per fortnight and still receive JobSeeker or the youth allowance. Minister, how will that work in practical terms? People will be able to go and maybe get some part-time work and earn that money before it starts to impact them, and I'm interested in understanding what happens if they earn over that and what impact that would have on their take-home pay.
Thanks, Senator O'Sullivan, for a comprehensive analysis of what is an extraordinarily important piece of legislation. I think none of us would ever have thought we would be in a position where we would be talking so many times in this place about unprecedented measures to support our country through a once-in-a-century pandemic. However, there are a number of really important elements in the contribution that Senator O'Sullivan just made that I would like to expand on a little bit.
First of all, we have seen disproportionate impacts depending on where you are and what types of jobs are on offer, the types of skills that are available and the geographically different demographics. So, whilst we went into the pandemic with probably a bit of a one-size-fits-all response, with the coronavirus supplement, as we're starting to come out of the pandemic we're actually seeing that different regions, different industries and different groups of people are coming out of it at different rates. Some of it is good news. It's great to see that 80 per cent of the jobs that were lost during the pandemic have now come back.
In relation to the work incentives that Senator O'Sullivan was talking about, we have certainly seen that rural and regional communities have been much harder hit by an inability to access a labour force than perhaps some of our metropolitan areas have been. Coming from a rural and regional area myself, Senator O'Sullivan, I've certainly seen the great and grave concern amongst our rural and regional employers about their ability to get a workforce for entry-level jobs, the lower paid jobs, but also, very specifically, in agriculture, particularly harvest jobs, and in hospitality.
So we have a situation where there are parts of the country that are screaming out for a workforce, and we put in place a number of incentives through the budget so that people maybe look at the incentive and think, 'Yes, I'll give that a go; that's worthwhile.' There is the $6,000 relocation allowance that was offered to people who were prepared to move to specific regional areas where harvest labour was required. For young people trying to get independent status, there is the incentive of the opportunity for an accelerated work test measure by going out to the country and working in the agricultural sector. They can work on the harvest and more quickly be eligible for independent status so that they are able to, for instance, put themselves through university with Abstudy. So we tried to do that, but, disappointingly, I'm afraid we've had quite a slow take-up of this. We'd certainly encourage anybody who is listening to this debate to take that up. If you find yourself unemployed and you're in an area where employment opportunities are more restricted, there are opportunities if you're prepared to move and there are incentives and supports in place to help you if you would like to move. Certainly, the farmers of Australia would love to see more people come out there and put up their hands to do the harvest. Yes, it is hard work and, yes, it can be pretty hot out there in the middle of summer, but I know from having been brought up on a farm and picked and cut apricots every summer it actually is quite fun, and people in the country are super-duper-friendly too. So I would encourage people to maybe have a think about it. It may not be the job that is your life's ambition. It may not be a job that is as engaging or as fulfilling as one you may have lost. But, if you re-engage with the workforce, we know that, if you report any hours of work, you are more than twice as likely to come off payments in the short term than those people who are on payments who don't report any earnings.
That is probably the most significant driving factor behind the income-free area that Senator O'Sullivan referred to in his contribution. Previously, the income-free area was at $106 per fortnight. We did see quite a number of people reporting earnings, but the increase to $300 per fortnight appears to have had quite a significant impact on the number of people doing so. Maybe people looked at that $300 and thought: 'It's a couple of shifts a week or a fortnight. If I go and do that I won't lose one cent of my payment for the first $300 I earn.' For every dollar you earn over the $300 until you reach the cut-out threshold—the cut-off threshold equates to an income of $1,257 per fortnight received by the individual, because it only tapers off at 60c in the dollar.
We were, and we remain, really keen, as we transition out of providing supports to people to help them cope with the impact of the intensity of the shutdowns when the pandemic first hit, as we're walking the walk with Australians through this pandemic and through this recovery out to the other side, on transitioning so that we maintain a balance between the support we referred to and the incentive for people to get out and re-engage with the workforce, but at the same time we have a package of measures that incentivises the creation of jobs. Only this week the ATO opened registrations for people interested in availing themselves of the opportunity presented by the JobMaker hiring credit scheme. Also, very significant investment has been put into the JobTrainer program so that we can make sure people who may not be able to go back to the industries or the businesses they were previously working in have got the kinds of skills that are going to be relevant and in demand as we go forward. We know our economy is changing. It was changing before we went into the pandemic, but the pandemic certainly accelerated the change in the market balance between the types of jobs that are in demand.
Senator O'Sullivan, in response to your question: in summary, it is about trying to create incentives so that people will look up and think that it's worth having a go; keeping in place a level of elevated support, recognising that we've still got a way to go with the recovery; and at the same time remaining agile so that, should anything change—it can overnight, as we well know—we still remain fleet-footed so that we can change in response to any situation that may be brought upon us because of the extraordinary volatility and uncertainty of this coronavirus pandemic and the impact it's had on our country.
Minister, in the context of your powers to raise the Newstart rate, you said that you didn't want to overstep the discretionary—sorry, the JobSeeker—
Senator Ruston interjecting—
No, no, I understand that; the parliament has the powers to do that, and the government has the powers to make the suggestion to do that. Can you explain to me the process, please, for raising the rate of JobKeeper substantively?
The rate of JobSeeker has not changed. The base rate of JobSeeker has remained the same throughout the pandemic. For those who are confused about all the names: JobSeeker is the new name of the consolidated payments that were primarily, in the past, the Newstart rate. Just by some extraordinary quirk of coincidence, the day that those eight payments became one payment, the JobSeeker payment, happened to coincide with the onset of the coronavirus pandemic. I think there is a misconception in a lot of places that the JobSeeker payment is a coronavirus-specific payment; there just incidentally happened to be a name change to a consolidation of payment from the Newstart rate. I just want to put that on the record so that we have clarity around what we're talking about.
The powers that we were discussing, Senator Pratt, were in relation to the powers that are on offer through the amendment that's been put forward by the opposition—to vest in me, as the minister for social services, ongoing powers to make changes in relation to measures that relate to the pandemic. There are a number of measures that were impacted. We all talk about the coronavirus supplement—and that's certainly the headline thing that we've been talking about—but there are a number of measures that are impacted. I know that, by this instrument, you're seeking to enable me to have the power to be able to make changes, whether they be to the partner income taper rate or the eligibility for people to be able to get access to payment. We have quite a large number of people who currently have access to payment who would otherwise not have access to payment, whether they be sole traders, people who've been stood down, or somebody, for instance, who has to isolate because they have the virus or they are caring for somebody who has the virus. Another one that relates to this power is the income-free area and the ability to be able to change the rates of the income-free area. The matter that you're referring to, in terms of the powers that you are seeking to provide to me as the minister for social services, relates to coronavirus-specific actions that were put in place.
As I said to you, Senator Pratt, the reason that the government is suggesting that we don't proceed with this particular power is that we believe that the parliament is able to sit and that, as a result of it being able to sit, the parliament should be allowed to exercise its power and responsibility over this type of decision. It is because of the magnitude of the decision that we believe that it should be something that we should ask the parliament to make a decision about instead of just vesting that power in the minister for social services. I recognise that that has been done in the past, but the reason it was done in the past was that we were concerned that the parliament might not be able to sit as a result of the fact that the coronavirus pandemic had restricted any movement by us as politicians, as it did every other member of the population in terms of their ability to move around the country.
Yes, of course. We've been through the debate on 1149, and of course many of my questions related to our amendment 1161, which strikes out the parts of the bill that repeal the minister's current powers to pay that virus supplement, so I'd like to move that now. In doing so, I will also move sheet 1162, which strikes out those parts of the bill that repeals the minister's current power to exempt people from the liquid assets waiting period—
Senator Pratt, from a procedural point of view, we already have a question before the chair, which is the first amendment you moved, so you can't move the other amendments until that question is dealt with.
An honourable senator interjecting—
The TEMPORARY CHAIR: Amendment (1) on sheet 1149 has already been moved.
The CHAIR: The question is that amendment (1) on sheet 1149 be agreed to.
The opposition opposes division 2 of part 1 of schedule 1 in the following terms:
(1) Schedule 1, Division 2, page 3 (line 12) to page 5 (line 25), to be opposed.
We just need to be clear, Senators—through you, Madam Chair—about what this amendment does. We've had a significant debate, here and now, about the fact that this minister says that it is beyond her authority, that she wants the commission and the trust of the parliament, that she only wants to take action that she is allowed to take by the parliament and that too much discretionary power is no good. That is of course a principle that we can accept, apart from the fact that this government stubbornly refuses to increase the rate of the JobSeeker payment. It's all very well to say, 'We need more parliamentary oversight on these issues,' and, 'I don't want to be able to exercise too much discretion to give money to people in the course of this pandemic.' I would be the first to admit that this amendment wouldn't be necessary if the government just got on and raised the rate of JobSeeker. I put the question.
I want to make it very clear that what this amendment seeks to do has nothing to do with what Senator Pratt just alluded to: that it is somehow for me to increase the rate of JobSeeker. That is not what this amendment does. What it seeks to do is give me the power in relation to the JobSeeker supplement and it gives me the power in relation to other measures that sit around that, such as the taper rate for partner income, accessibility for different eligibility categories to be able to get access to payments and the income-free area. It does not address the rate of JobSeeker.
The CHAIR: The question is that division 2 of part 1 of schedule 1 stand as printed.
I move opposition amendment (1) on sheet 1164 revised:
(1) Schedule 1, item 44, page 10 (after line 21), after section 1262, insert:
1262A Minister must immediately consider required modifications
As soon as practicable after this section commences, the Minister must consider whether the period for which a determination can be in force under section 1263 should be extended to allow determinations to be made for as long as the impacts from COVID-19 continue to exist.
Example: This could allow for the continuation, after 31 March 2021, of the extended partner income test, $300 income free areas and eligibility rules for people who are self-employed or sole traders.
This amendment calls on the minister to consider extending the beneficial regulation power that has been used to increase the partner income test, increase the amount of money a person can earn before they lose the payment, and make it easier for sole traders and self-employed people to access unemployment support. The minister has said a lot in this place about the extra support that has been extended to sole traders and self-employed people through the JobKeeper and JobSeeker payments; however, in this legislation the government does not want to extend that power, so we are here calling on the government to consider extending that power on an ongoing basis so that the government can be flexible in responding to the needs of people.
Earlier in the year, at the beginning of the pandemic, we negotiated a general regulation power with the government. Labor pushed the government to do that. The government rightly used that power to intervene and help Australians struggling in the time of the coronavirus. This included paying students and apprentices the coronavirus supplement. This was particularly important because students and apprentices would have lost access to their part-time work and Newstart would have gone down to the base rate. It also enabled the minister to double the partner income test to around $80,000. This helped households where one income earner had lost their job. Around 100,000 households benefited from this change. It also enabled the minister to increase from $106 to $300 the amount a person could earn each fortnight before their payments started tapering out.
As I highlighted before, the government has been very happy to talk up the support it has given sole traders and the self-employed access to. The government says it wants to do the right thing, monitor the situation and keep Australians supported during the time of the coronavirus. It should be doing these actions. Just as our opposition to schedule 1 on sheet 1161 would have enabled the government to keep making higher payments, here again the government should be allowing itself the flexibility to do the right thing by Australians.
We're not worried about too much power being in delegated legislation in the case of the government taking this action, because the government would need to bring back primary legislation to do this. We think it would be a good thing to do that. Just like the increased payments themselves, we need to see changes that continue long after March because the impacts of the coronavirus, as all economic reports show, will continue a long way past March. There are projections that 1.8 million people will be unemployed and that that will continue to grow.
As all of us in this place know, the government has already said that it's going to phase out JobKeeper. Once JobKeeper is phased out we will have to rely on the sustainability of those businesses to pay the wages of their own workers. Sadly, some of those workers will end up on JobSeeker payment, and the minister should have the flexibility to enable people in that environment, sole traders and self-employed people, to continue to access unemployment support. We want to see concessions continue. There'll be double the number of people on unemployment payments in Australia for some time, so the government needs to be held to account on this. We call on the government to make these changes, just as we call on them to raise the rate of JobSeeker.
The thing that's really stuck out for me throughout this year has been that the response from the Morrison government has been varied and has enabled a very tailored response to the coronavirus challenge and the pandemic that we're dealing with. We've got a mix of cases. We've got to face all sorts of problems and challenges across the country in dealing with the economic impact of the coronavirus challenge, and the coronavirus supplement has enabled people to provide for their families at a time when, having dealt with the immediate shock of maybe being stood down from their job, they don't have secure employment because they've lost their job. The coronavirus supplement has enabled them to meet those important needs, but it's actually part of a tapestry of responses. It wasn't the only thing that the government did, and we of course know about the JobKeeper payment.
When you go around Western Australia, as I've been able to do, and you speak to businesses, you speak to people on the ground, you get a real appreciation of the impact that that program has had in making sure that people were able to remain connected to their employer. That's much better than having to go on to the JobSeeker payment, because those people were able to remain connected to their employer. What we've seen throughout this time is a remarkable response from the Morrison government in ensuring that there's a tapestry of support, a real mix of support, to ensure that that support is getting to where it's needed, so that individuals and families are not left high and dry, so they're not just left out on their own, but they're actually supported. We've seen that across the board—the housing stimulus has enabled tradies to keep their jobs. So I think, as we're discussing this, the coronavirus supplement has been incredible in ensuring that individuals who weren't able to take up those sorts of opportunities that came through the stimulus have had the opportunity to be able to receive that support.
What I would like to do in my contribution is put on the record, to make sure that everybody in the chamber has absolute clarity, what this amendment will actually do. I believe that this amendment is almost identical to a similar amendment that I think the Australian Greens have on sheet 1160. When the Australian government put in place the coronavirus supplement in March, the initial coronavirus supplement had a provision that said that, for as long as the supplement was in place, people who came on to the payment would not be expected to wait for any liquid asset waiting period. It applied to two payments. It applied to JobSeeker payment and it applied to youth allowance (other). It did not apply to any of the other working-age payments.
So when we made changes, when the coronavirus supplement was due to expire on 25 September, we made the decision to extend the supplement. The process of extending the supplement meant that the liquid assets waiting period and the assets test, as they applied to those two payments only, would remain in place. At the time, the government sought the support of the chamber to remove those two provisions, to allow all of the other provisions that were put in place subsequent to the first coronavirus supplement provision, to no longer waive the liquid asset waiting period and to no longer waive the assets test. This chamber voted for that to occur.
This seeks to reintroduce, from the period of 1 January to 31 March, a waiving of the liquid asset period for the two payments of JobSeeker and youth allowance (other) only. I have no discretion whatsoever. It is an automatic action that anybody who comes onto payment after 1 January would not be required to wait the liquid asset waiting period. It would not matter how much money that person had in the bank. They could have hundreds of thousands of dollars or they could have $20,000 and I would have no discretion whatsoever in the provisions that are contained in the amendments on sheet 1162 and 1160 to say something to somebody who has $150,000 in the bank. I would put on the record that there are a lot of people who have come onto payment in the last couple of months who are subject to the liquid asset waiting period that do have significant amounts of money in the bank. I have no discretion whatsoever in terms of being able to say that this provision would only affect people under a certain level of resources.
So I just want to make sure that this chamber is absolutely clear. This is not giving me a power to have discretion to say: 'If you have many hundreds of thousands of dollars in the bank, you will be required to have a liquid asset waiting period. But, if you only have a few thousand dollars in the bank over the $5,500 limit where you don't have to serve any period as a single or $11,000 as a couple.' I have no discretion whatsoever. As soon as somebody exceeds that—I have no discretion at all. So it wouldn't matter how much money somebody had in the bank, they would automatically be able to access payments from day one, because, as you would be aware, the one-week waiting period is waived at the moment. That continues to go through. So nobody has any waiting period if they are eligible. However—I just want to be very clear—this is not a discretionary power you are giving me. It is something that is embedded in this legislation that says that anybody coming onto payment from 1 January 2021, no matter how many liquid assets they have in the bank, will not have to wait any waiting period. So I just wanted to make sure everyone was very clear about that.
Can I just ask a question in relation to what you just said, Minister. Can you give me some feel for how you have exercised the discretion to date. What sorts of considerations have you made? What are the sorts of circumstances in which you have exercised the discretion?
I don't have any discretion. I've never had any discretion. What we sought to do in March, when we put the coronavirus supplement in place—so we could get people onto payment as quickly as possible for administrative ease because, of course, we all saw those long lines around Centrelink and we worked so quickly and so hard to make sure that we got rid of those. One of the ways that we did that was to streamline our process, and one of the mechanisms was not to require many of these other things that we would normally require under normal circumstances for people to provide proof about other circumstances in their life. So we waived a number of the things that we required of them, and one of them was the liquid asset waiting period. So for the period from March to 25 September the liquid asset waiting period was waived for everyone. But what we sought to do—and we were successful, with the support of this chamber—was to reintroduce the liquid asset waiting period from 25 September. It is currently in effect for people coming onto payment who are over the threshold of the no-waiting period. What this particular amendment seeks to do is to reintroduce it on 1 January through to 31 March for two payments only—not all of the payments, just those two, albeit two big ones—with no discretion whatsoever: you serve a waiting period or you don't serve a waiting period.
In those circumstances, moving forward, can you give some idea of how you would exercise a discretion, assuming this amendment didn't get up? If this amendment didn't get up, I understand that a discretion would then apply—the minister would have a discretion. Can you give me some idea of how that would be exercised?
Sorry, Senator Patrick. I should have been clear: I don't have a discretion. It reverts back to the existing provision in legislation that says what the thresholds around the liquid asset waiting period are. Just as a bit of a summary, single people who have $5,500 or less in the bank do not serve any waiting period at all, and couples who've got more than $11,000 in cash in the bank don't serve any waiting period at all. Then it's one week for every $500 up to a maximum of 13 weeks. As an example, people sometimes do have significant levels of their own resources when they come onto payment. I suppose one of the fundamental, underlying premises of Australia's welfare system is that there is an expectation that people draw on their own resources and assets to support themselves before they actually ask the taxpayer to support them. That's the fundamental underpinning of why the liquid asset waiting period is in place.
Honourable senators interjecting—
The CHAIR: No, it's 1164.
I do appreciate the minister's explanation. I will make a comment on the other amendment shortly, but I figure it's not appropriate to do it now, given that we've got sheet 1164 revised before the chair.
The CHAIR: Senator Siewert, I just remind you of the hard marker at 6.30. Keep going, but you might run out of time.
It'll make life easier for the chamber if we do this now and then get to that other one.
My apologies, I was talking to sheet 1162. I apologise. I actually thought that was what I heard Senator Pratt move. The amendment that you're referring to, which is the one on sheet 1164 revised, basically gives me the power to consider whether I would like to act in this area. It has no substantive impact. The one that has the substantive impact is the one on sheet 1162.
The CHAIR: The question is that amendment (1) on sheet 1164 revised be agreed to.
Subject to the wishes of the chamber, given that the substantive issue that might merit some discussion is the next amendment, we're happy to call off the division on the basis that, obviously, the opposition is recorded as voting 'aye'—subject to Senator Siewert's views.
I say ditto. I think we actually need to deal with the next one. Can you record us as supporting the amendment?
The CHAIR: I will. So we don't need a division. We've done this before. We're going to record the agreement of the Labor Party and the Greens.
The Greens will be withdrawing our proposed amendments on sheet 1160 as they relate to the liquid assets test. I just want to explain, very briefly, why. We actually very strongly were trying to get to the position where the minister could ensure that the liquid assets test suspension could last as long as the coronavirus supplement, for example—as long as the pandemic lasted. We didn't seek to make the liquid assets test permanently suspended. Just for the record, we actually support very fundamental reform to our social security system and support the concept of the guaranteed adequate income, which puts the liquid assets test in a different frame. But, while we have the current system, we do think that there needs to be some issues related to the amount of savings someone has. But we very strongly wanted the minister to have the discretion to suspend it, particularly while we're in the pandemic. We thought that the amendment we got drafted did that. We believe the explanation that it doesn't in fact do that, and so we will be withdrawing it. But we particularly want people to be able to access the JobSeeker payment and the coronavirus supplement while we're in the pandemic and the recession because people shouldn't have to wear down their savings.
The principle of our amendment is the same. We wanted to see the government be able to vary that assets test, in the context of doing the right thing by people during the pandemic. However, we don't want to see it deleted entirely so that an assets test waiting period does not apply on a permanent basis. We call on the government to address this issue themselves by reform of this issue in further legislation.
by leave—I move Greens amendments (1) and (2), which are in the form of requests, on sheet 1124:
That the House of Representatives be requested to make the following amendments:
(1) Clause 2, page 2 (at the end of the table), add:
(2) Schedule 1, page 14 (after line 31), at the end of the Schedule, add:
Part 7—Increasing the COVID-19 supplement
Social Security Act 1991
53 Subsection 504(4)
Repeal the subsection, substitute:
Amount of supplement
(4) For the period beginning on 1 January 2021 and ending on 31 March 2021 the amount of the COVID-19 supplement per fortnight is $550.
54 Subsections 504(5) to (8)
Repeal the subsections.
55 Subsection 557(4)
Repeal the subsection, substitute:
Amount of supplement
(4) For the period beginning on 1 January 2021 and ending on 31 March 2021 the amount of the COVID-19 supplement per fortnight is $550.
56 Subsections 557(5) to (8)
Repeal the subsections.
57 Subsection 646(4)
Repeal the subsection, substitute:
Amount of supplement
(4) For the period beginning on 1 January 2021 and ending on 31 March 2021 the amount of the COVID-19 supplement per fortnight is $550.
58 Subsections 646(5) to (8)
Repeal the subsections.
59 Paragraph 1210B(1 ) ( d)
Repeal the paragraph, substitute:
(d) the amount of the COVID-19 supplement per fortnight is $550.
60 Subsection 1210B(2)
Omit "paragraphs (1) (b), (c) and (d)", substitute "paragraphs (1) (b) and (c)".
Statement pursuant to the order of the Senate of 26 June 2000
Amendment (2) is framed as a request because it amends the bill in a way that would increase expenditure under the standing appropriation in section 242 of the Social Security (Administration) Act 1999.
The effect of the amendment would be to increase the amount of the COVID-19 supplement from 1 January 2021, from $150 to $550 per fortnight, for persons receiving an eligible social security payment. The amendment would therefore increase the amount of expenditure under the standing appropriation in section 242 of the Social Security (Administration) Act 1999.
Amendment (1) is consequential to amendment (2).
Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000
If the effect of the amendment is to increase expenditure under the standing appropriation in section 242 of theSocial Security (Administration) Act 1999 then it is in accordance with the precedents of the Senate that the amendment be moved as a request.
This amendment is consequential on the request. It is the practice of the Senate that an amendment that is consequential on an amendment framed as a request may also be framed as a request.
This relates to increasing the coronavirus supplement back to its original level of $550 a fortnight.
Can I have it recorded that the Greens, of course, supported our amendments.
The CHAIR: Yes.
Bill, as amended, agreed to.
Bill reported with amendments; report adopted.