Senate debates

Wednesday, 3 July 2024


Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024; Second Reading

6:26 pm

Photo of David PocockDavid Pocock (ACT, Independent) Share this | | Hansard source

The Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024 obviously seeks to increase the maximum rate of Commonwealth rent assistance by 10 per cent, or some $9.40 a week. While any increase is welcome, this obviously doesn't come close to what is needed. It also ignores two consecutive years worth of expert advice from the independent Economic Inclusion Advisory Committee. Last year, the EIAC recommended that the government increase the rate of CRA to reflect the long-term reduction and its inadequacy and reform its indexation to better reflect rent paid. While the Albanese government made much of its decision to raise CRA in last year's budget, the $30-per-fortnight increase in the minimum rate was wholly inadequate in the face of skyrocketing rents and fails to deliver on the committee's recommendations. As the committee pointed out, since 2000 the impact of rents growing faster than the rate of CRA has led to the maximum rate of CRA for singles falling, as a share of average housing costs from nearly 50 per cent to just above 30 per cent. The Henry tax review in 2009 recommended linking the maximum rate of CRA to the 25th percentile of paid rents in capital cities. This would represent an increase of over 190 per cent in the maximum threshold and an increase of 206 per cent in the maximum CRA payment.

While things like the Henry tax review and many other good pieces of work by committees and experts that the government commissions to do reports often gather dust in some corner of a minister's office, this is urgent for so many Australians. More and more Australians are starting to ask why we're not seeing the government, in a meaningful way, address the growing wealth divide in this country and rising inequality, including rising intergenerational inequality. This year the EIAC's top two recommendations were to substantially increase JobSeeker and related work-age payments, as the increases in last year's budget were inadequate, and to improve the indexation arrangements and increase the rate of Commonwealth Rent Assistance.

According to PropTrack average rents have increased 11.8 per cent since 22 June last year. That immediately wipes out any gains from this increase. In some areas it's even worse. Rental unit prices in Sydney and Melbourne have gone up by 19 and 17.5 per cent respectively over the last year. There are 1.2 million Australian households in rental stress. The vast majority of people receiving the payment continue to pay rents above the maximum amount of Commonwealth Rent Assistance—CRA. This means that CRA is not adequately addressing the additional costs faced by renters on government payments. As well as being the right thing for a wealthy country like Australia to do, it also costs the government far less to keep people in safe, secure housing now than dealing with an ever worsening homelessness crisis.

Again, I would like to come back to the bigger question around housing in this country. What is housing for? Is housing something that everyone in our communities should be able to afford and should have access to—a roof over their head and somewhere to call home? We know that it is fundamental to human flourishing. I would say that everyone in this Senate wants the communities they represent to be able to flourish. Yet when it comes to housing we're not willing to actually go after the root causes of the issues that we're seeing around this country.

When you look at housing availability and affordability, and a tax system that sets housing up not as something that should be affordable and accessible as a human right but rather as something that's an investment vehicle. That's how our tax system is set up and it's working exactly as intended, where if you're a first-home buyer and you turn up to an auction, chances are there will probably be an investor there who will outbid you. Investors get all sorts of tax incentives to do that. They can negatively gear their fifth, sixth, seventh investment property.

We have a system where it is arguably easier to buy your second home than your first. That has to change, and that's not going to change by having a grab bag of policies that are all doing $20,000 here, $10,000 a year there, $30,000 over five years. We've got to start to go to the root cause of the cost-of-living crisis and address housing in a meaningful way. All options should be on the table and we have to be able to talk tax.

We also need to be looking at our social security system. I believe we should be proud to be a country that chooses to have a safety net, that chooses to say to people, 'We actually have systems in place to look after you when you need support,' because we're an incredibly wealthy country and I think most people would agree with the egalitarian ideal that Australians hold dear, but that we're seeing fray and under increasing pressure as we kick the can down the road regarding serious reform when it comes to housing and to our social security system.

As an incredibly wealthy country, we're saying to people, 'We have a social security system, but you'll be living below the poverty line.' Australia is a country where, whether we like it or not, to actually deal with things like inflation, unemployment needs to rise. We have to move past this rhetoric of lifters and leaners, and ensure that people who need the support can actually live above the poverty line. We saw what that did for singles and families doing it tough during COVID. All of a sudden, they didn't have to fret about how they were going to put food on the table. They didn't have to fret about the decision to go and see a doctor, to fill a script or to eat. They could actually look at how to get a job. What do I want to do? Is there a short course that I need to do? This is reinforced by expert advice saying that having a social security system that leaves people in poverty is actually an impediment to getting people back into work. This is costing us money in the long term. The government thinks it can save money by keeping people in poverty and by posting a budget surplus. But we're all going to pay at some point. We're already paying for that through people putting off health care, ending up in hospitals and people not having the services they need.

Not more than a few hours ago, we were talking about the lack of investment in community legal services. Many people may see that as the ambulance on the bottom of the cliff, but that is also part of prevention, of giving families, particularly young people,  the early access to support they need to break that cycle. Yet, we've got a government that talks a big game about not leaving people behind but then celebrates increasing payments to a level that still means people are living in poverty. And, yes, we'll hear the government talk about the pressures on the budget. It may be a valid point and one I'd be willing to entertain if we were looking at things like the amount of gas we export for free.

We're gifting our gas—the Australian people's gas—to multinationals to ship overseas and not pay petroleum resource rent tax and, in many cases, minimise their tax to less than one per cent. How is this a system that we're happy with? How can we, hand on heart, say to Australians doing it the toughest, to Australians who won't benefit from the tax cuts that we've heard the government crowing about this week, they won't benefit from that? What do we say to them about the fact that we're happy for them to live in poverty while we ship off our resources for free? INPEX, come and take our gas. You can send it offshore. Don't worry about the petroleum resource rent tax on that. Don't worry about your corporate tax. You can do some accounting where you carry forward your losses. That doesn't cut it. And that's what I hear from the people I represent here in the ACT. They want major parties to take this seriously.

We are squandering our resources. We're giving them away, and, at the same time, we're saying we can't afford to have a system of Medicare that's universal access. We hear people talk about universal access. What I'm hearing is that that is not the case. Look at the statistics. That is not the case. We need to do better. This myopic focus on the short term has to end. Let's lift our gaze. Let's start to consider the next generation. Let's stop externalising costs onto the health system and the criminal justice system, where we pay the cost, and think we're saving money by having a system where people are living in poverty on JobSeeker and youth allowance. We're saying to a whole group of young people in placement poverty, when they go to do their placements: 'From next year, there's a select group that we're going to help out. To the rest of you, good luck. If you didn't happen to be born to wealthy parents, we're sorry about that. You'll have to make a plan.'

We need to do better, and I urge the government to do better on this. You posted a budget surplus. There is a huge amount of money that we're just allowing to be shipped offshore. Do the right thing by Australians. Do the right thing by young Australians. This is possible. You have a Senate crossbench that is urging you to do better. We'd love you to raise the petroleum resource rent tax. We'd love to see you impose a windfall profits tax on companies that are making billions of dollars from the war in Ukraine and from the COVID pandemic. They didn't plan for those profits, and they didn't anything ingenious or special to deserve those profits. We've seen jurisdictions across the world recognise that and say, 'Actually, we're going to claw some of that back to deal with the problems we face.' Here in Australia, it's crickets from the major parties. They're very happy for these companies to walk away with billions and for us to turn around and say to people struggling to pay the rent, 'Here you go. Here's an extra $9.40 a week. We're doing a lot. We've got your back. No-one will be left behind.'

Let's move beyond this as a country. I would urge you to act in line with what Australians want. If the major parties don't act, then Australians will continue to decide to vote for people who are actually going to come into this place and put Australians and our communities first and, as a wealthy country, map a way forward that deals with these issues. On that note I move:

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) the Bill increases the maximum rate of Commonwealth Rent Assistance by $9.40 per week,

(ii) average rents across Australia have increased by 11.8 per cent since 22 June last year, completely negating the value of this increase to Commonwealth Rent Assistance; and

(iii) the increase in assistance will therefore fail to reduce rental stress in the Australian community; and

(b) calls on the Albanese Government to heed the consistent advice of the Economic Inclusion Advisory Committee, and the previous advice of the Henry Tax Review, to substantially increase Commonwealth Rent Assistance and to reform how the payment is indexed".

6:42 pm

Photo of Tammy TyrrellTammy Tyrrell (Tasmania, Jacqui Lambie Network) Share this | | Hansard source

This bill, the Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024, will provide welcome support for some of the most vulnerable people in our communities, and I'm proud to support that, even though, as many of my colleagues have mentioned, there's a lot more we can do in this space. But in a debate about Centrelink payments I couldn't really miss the opportunity to point out the glaring mistake that Labor has failed to fix, and it is that those receiving JobSeeker payments aren't exempt from paying income tax. This hasn't been a problem in the past; the payment hasn't gone above the tax-free threshold of $18,200. But because of increases to the payment and to indexation, JobSeeker payments have gone above the tax-free threshold for the first time ever.

Around 25,000 people in Tasmania receive JobSeeker payments. This loophole means they'll have to pay back around $1,000 in tax to the federal government. A thousand bucks, to the federal government, is nothing. They wouldn't even stop to pick it up from the ground. But to someone on JobSeeker, having to shell out $1,000 to the government is absolutely devastating. It's the equivalent of two weeks payment. That could be their rent payment, it could be the difference between keeping their heater on or not, or it could be taking the kids to the doctor for a specialist appointment.

Tasmania has the oldest, sickest and poorest population in the country, and some of the people doing it the toughest right now are those on JobSeeker payments. They're making difficult choices about whether to put food on the table, to put petrol in the car to fulfil their mutual obligations or to go to the doctor to check out that cough that's been hanging around for weeks.

I know what it's like to live pay cheque to pay cheque. When I first left school, I worked on farms and in factories. It paid okay, but not a lot. I relied on Centrelink to make up the difference and to keep me afloat when the season was done and I was in between jobs. If someone told me back then that I'd be losing about $1,000 to the income tax man every year, I would've been devastated. It's a hit I wouldn't have been able to afford.

The Labor government say they're doing all they can to help people doing it tough, but, if they really wanted to help people, they would have fixed this loophole already. Instead, the federal government is giving money with one hand to the most vulnerable people in our community and taking it away with the other. Before anyone can stand up and say, 'We can't make JobSeeker exempt from income tax for this reason or that reason,' let's put it into perspective. The age pension is exempt from income tax. If pensions aren't taxed, why is JobSeeker? It's meant to be a hand up, not a handout, so why are we forcing some of the most vulnerable people in our country to lodge a tax return and hand money back to the government? I'm calling on all parties to support my amendment to immediately fix this issue.

I foreshadow my amendment to the motion for the second reading of the Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024.

6:45 pm

Photo of Nick McKimNick McKim (Tasmania, Australian Greens) Share this | | Hansard source

I rise to speak to Senator Tyrrell's foreshadowed amendment to the motion for the second reading of the Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024 in regard to the call that it makes for the government to make JobSeeker payments tax free. I want to be very clear that we have the utmost respect for Senator Tyrrell and for the motivation behind this amendment, which is absolutely to improve the lot of people on JobSeeker payments.

As I've pointed out this week in the Senate and as others in the Australian Greens have pointed out this week in the Senate, people who are on JobSeeker payments are unemployed or underemployed through no fault of their own. Either they've been shifted from other forms of income support onto JobSeeker payments because of punitive policy changes over the last few decades from governments made up of establishment political parties or they are unemployed or underemployed because the employment market in Australia is deliberately structured as a matter of establishment party policy to ensure that there are more people seeking jobs than there are jobs. The reason that that is done by establishment political parties is very simple. It's because it keeps wages low. We found that out while listening closely in particular to former senator Cormann who said the quiet thing out loud when he said that low wages were a feature of the policy of the former Liberals-Nationals government in Australia. He said that when he was the finance minister. I well remember him saying that quiet thing out loud.

The fact that low wages are a feature of Liberals-Nationals policy wouldn't have come as a surprise to anyone watching politics closely in this country over the last 30 or 40 years, but to have it stated so boldly and so overtly did come as a bit of a surprise. But the fact that it was stated so explicitly allows people who want to understand why people are unemployed or underemployed in this country to have that understanding: that low wages are a design principle of our employment policies in this country. That statement applies equally to governments from either side of the establishment spectrum here in Australia. The mechanism for delivering on that policy of keeping wages low is ensuring that there are more hours of work being sought in Australia than there are hours of work available. Then, of course, the laws of supply and demand kick in, and wages are lower than they otherwise would be.

None of those words are Senator Tyrrell's. She may agree, or she may not; I don't know. But what I do know, having listened to her contribution, is that she has come in here today to try to make the life of people on JobSeeker better and she's trying to make sure they have more dollars in their pockets. Do they need more dollars in their pockets? Absolutely they need more dollars in their pockets. That's why it's been a longstanding position of the Australian Greens that the JobSeeker payment should be raised to $88 a day. This would lift people on JobSeeker out of poverty.

In fact, we don't only have a policy of raising JobSeeker to $88 a day; we have a policy of raising all income support payments to $88 a day. That would allow people who are unemployed or underemployed through no fault whatsoever of their own to lead a dignified life. That would allow them the opportunity to have a decent home; to be able to put food on the table for themselves or their families, if they've got a family; and to engage in other aspects of life that so many of us have the privilege of being able to take for granted but that people on JobSeeker can only dream of because they simply can't afford to engage in those elements of life that we all in this place would undoubtedly take for granted because of our financial privilege.

I do want to say, through you, Acting Deputy President, to Senator Tyrrell, that the Greens aren't in the business of making tax policy on the run, so we're not in a position to be able to support Senator Tyrrell's amendment today. But I do want to thank her for bringing it on, to acknowledge the generosity of spirit that is behind this motion and to explain to the chamber, again, that, rather than effectively taking JobSeeker payments outside the tax system or raising the tax-free threshold—it's not clear which of those mechanisms Senator Tyrrell's motion would trigger—it is the Greens position to raise JobSeeker to $88 a day. In effect, that comes from the same place as Senator Tyrrell's second reading amendment on this legislation, and, for avoidance of doubt, that place is where a motivation to improve the financial circumstances of people on JobSeeker stems from. While we aren't able to support the mechanism proposed by Senator Tyrrell's amendment, we do acknowledge her and thank her for bringing this on.

Through my contribution today, I hope colleagues can come to an understanding that the Australian Greens absolutely believe that the financial circumstances of people on JobSeeker in this country need to be improved. Poverty in Australia, in a wealthy country like this, is a political choice, and it has been made by too many governments of both political stripes, the establishment parties, for far too long. Something needs to change. The way the Australian Greens will go about changing that situation and improving the financial lives of people on JobSeeker and, in fact, of everyone on all streams of income support is to raise all income support to $88 a day, which would haul so many Australians out of poverty and allow them to lead a dignified life.

6:54 pm

Photo of Carol BrownCarol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | | Hansard source

I'd first like to thank all senators who have participated in the debate on the Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024. The Albanese Labor government is working for all Australians and, with our measures in this year's budget, we are providing responsible cost-of-living relief that eases pressure on people and doesn't add to inflation. The measures in this bill are complemented by new power bill relief, cheaper medicines, the extended freeze on social security deeming rates, strengthening Medicare and, of course, the delivery of tax cuts for every Australian taxpayer.

From this week, on average, Australian taxpayers will receive a tax cut of $36 each week. Through this bill, we are further strengthening Australia's social security safety net with targeted and responsible cost-of-living support which eases pressure on people and does not add to inflation. The government recognises that many people are struggling with high rental costs, and this bill increases the maximum rates of Commonwealth rent assistance by a further 10 per cent, providing recipients with more support to manage their rental pressures. This builds on the Albanese government's increase to maximum rates in the last budget and means that, combined with indexation, by 20 September 2024, when this measure is due to commence, maximum rates of rental assistance will have increased by over 40 per cent since the Albanese government was elected in May 2022. Regular indexation will be applied on top on the same day.

This bill also expands eligibility for the higher JobSeeker rate, extending access to single recipients who have been assessed as only being able to work less than 15 hours per week due to a physical, intellectual or psychiatric impairment. These recipients will receive at least an extra $59.90 in support each fortnight. Subject to the passage of this bill, this measure will also commence from 20 September 2024. This is the same day as a regular indexation of JobSeeker payments, which means the actual increase will be higher. This measure builds on our changes to payments in the last budget, including the $40-per-fortnight base rate increase for working-age and student payments and extending the higher rate of JobSeeker payment to single Australians aged 55 or over who have been on payments long term down from 60. Expanding eligibility for the higher JobSeeker rate to those cohorts is designed to strengthen the system by better targeting support to people based on their age, stage and circumstances.

Alongside the targeted increase in income support, the government remains committed to our workforce participation agenda. The third measure of this bill introduces more flexibility for carer payment recipients to manage their work commitments and caring responsibilities, aligning with the government's road map in the employment white paper to remove barriers to employment and improve workforce participation. This includes provisions to change the 25 hours per week participation limit for carer payment recipients to instead allow up to 100 hours over a four-week settlement period, effective from 20 March 2025. Changes will also be made to ensure education and volunteering activities will no longer be counted in the participation limit.

This measure also introduces a six-month suspension period for recipients who work over the new flexible limit, meaning, if their circumstances change, they won't need to reapply to access the carer payment. They will also retain their pensioner concession card during this period. Policy changes will remove travel time from the calculation of the 100-hour participation limit. Policy changes will also provide for the use of single temporary cessation of care days for one-off or occasional instances of exceeding the participation limit. Combined, these measures are designed to give carers, who are predominantly women, greater flexibility and choice to structure their work, study or volunteering commitments around their caring responsibilities. These measures provide responsible relief, including to some of the most vulnerable in our community, and help to remove barriers to work for carers. The Albanese Labor government believes in a strong and sustainable social security system, and, with these measures, we are providing more support in the safety net.

I will now touch on Senator Tyrrell's second reading amendment. The government will not be supporting this amendment. The social security system already provides tax offsets and support for income support recipients. A range of tax offsets ensure that most income support recipients with low to moderate levels of private income pay no or limited tax. For instance, the beneficiary tax offset is available to recipients of allowance payments, such as the JobSeeker payment. The tax offset directly reduces the amount of tax an income support recipient may have to pay. An income support recipient already pays no tax for the year if they receive any of the qualifying allowances and payments, and have no other taxable income.

The low-income tax offset is also available to individuals with taxable income below certain thresholds. This is currently $66,667 for recipients of JobSeeker payments and other taxable allowances. Where there's an expectation they will undertake paid work, taxability of their payment avoids the situation where a person in receipt of a benefit for part of the year and in work for the remainder of the year could be better off than a person who worked for the whole year for the same total income.

I commend the bill to the Senate.

Photo of Jess WalshJess Walsh (Victoria, Australian Labor Party) Share this | | Hansard source

There are two second reading amendments, and I will put the questions on those. I note, of course, that there will be no divisions this evening and that any divisions required will be held over until tomorrow. The first question before the chamber is that the second reading amendment moved by Senator David Pocock be agreed to. A division having been called, the division will be held tomorrow. Senator Tyrrell, earlier today you foreshadowed your second reading amendment. Can you now formally move it?

7:03 pm

Photo of Tammy TyrrellTammy Tyrrell (Tasmania, Jacqui Lambie Network) Share this | | Hansard source

I move:

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) for the first time ever, individuals receiving Jobseeker payments for the entire 2023-24 financial year will earn above the tax-free threshold,

(ii) these individuals will need to pay income tax to the Government on those payments; and

(iii) the Age Pension is tax-free; and

(b) calls on the Government to make Jobseeker payments tax-free".

Question negatived.

7:04 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

by leave—I withdraw the call for a division tomorrow.

Photo of Jess WalshJess Walsh (Victoria, Australian Labor Party) Share this | | Hansard source

The question in front of the chamber is that the second reading amendment moved by Senator David Pocock be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.