Mark Butler (Port Adelaide, Australian Labor Party) Share this | Hansard source

It is a pleasure to follow a fellow South Australian member of this House. It is well known that the member for Boothby is a clever and thoughtful member of the House of Representatives. I can only conclude that he had that particular speech and contribution forced upon him because it is well known that he is capable of something much better and much more thoughtful than that backward-looking, fairly base contribution to this very complex area of public policy. It was replete with dog-whistle politic terms such as ‘dole bludger’ and ‘tough love’. As a fellow South Australian I certainly expected something more thoughtful and clever than that.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 is yet another example of our fundamentally different approach to the opposition’s approach to the world of work and to creating a meaningful productivity and participation agenda for the future of Australia. You see that different approach reflected in a range of policy areas that interlink. Firstly, it is reflected in the education revolution. We want to make sure that our kids grow up as well-rounded citizens and are equipped with the range of skills they are going to need for jobs in the future—maths and science skills and basic numeracy and literacy skills.

You see it also in this government’s realisation that it has a role in lifting labour participation. The need for that role is nowhere more evident than in women’s labour participation, an area that stalled for years under the previous government. Under the previous government the percentage rate for participation got stuck in the high 50s. The rate was well below OECD averages, in spite of 17 years of significant economic and employment growth. The rate for women at child-bearing ages was especially low by OECD standards. It was 10 per cent below the labour participation rates for women in the UK and Canada and 15 per cent below the labour participation rates for women in Scandinavia, yet nothing was done by the previous government.

We know that, without family-friendly policies, the market does impose a glass ceiling on women’s participation. That is why this government—interlinking with all the other different elements of our productivity and participation agenda—has begun to look at paid maternity leave options, has increased benefits for families who require child care for their under-five-year-olds while attending work, has expanded the number of childcare places and has lifted the childcare tax rebate. This government is also looking seriously, for the first time in a dozen years in this country, at the work-life balance and what government measures are needed to improve the capacity of families to balance different aspects of their lives.

You see profound differences between the industrial relations policies of the government and those of the opposition. This government is committed to implementing its Forward with Fairness policy, a policy that was clearly articulated to the Australian people before the last election and that is in absolute contrast to the position that was adopted by the opposition before the 2004 election. This, of course, is a debate for another day—a debate that we on this side of the House very much look forward to engaging in.

You see it also in the area of vocational training. This is perhaps the greatest supply-side failure of the previous government in the labour market. It is not as if we did not see the skills shortage locomotive coming some years back. One estimate says that Australia in 2016 will be short some one-quarter of a million vocationally trained qualified workers. The previous government, instead of developing a meaningful and practical response to this challenge, engaged in petty ideological squabbles with state governments. It worried more about where young people were trained than how many were trained and with what skills.

Our approach is fundamentally different to that. The 2008 budget delivered on election promises from the Labor Party last year. It is delivering $1.9 billion over five years and 630,000 new VET places for Australian people. That already very significant number was increased in last week’s Economic Security Strategy to 700,000 places over five years, amounting to a commitment of over $2 billion over that time. Importantly, in that security strategy there was an injection of an extra $187 million in 2008-09, or 56,000 extra VET places, totalling 113,000 VET places funded by this year’s budget. That builds on the huge demand that has already been shown to be out there in the six months since the April 2008 announcement of our Productivity Places Program. Already 50,000 Australians are enrolled in that program. A very pleasing statistic is that some 1,000 participants referred by employment service providers have already obtained jobs after graduating from the Productivity Places Program.

For today’s purposes, you also see the fundamental difference in the important job of helping Australians get off welfare and get back to work. This is familiar territory for Labor—as the member for Boothby helpfully outlined—stretching back to the Chifley government. Mutual obligation in a meaningful sense was introduced by the Labor Party during the Hawke and Keating governments. It was the Labor Party that introduced an end to unconditional welfare entitlements. It was the Labor Party that introduced a meaningful requirement for recipients to actively seek work, enshrining it in the 1991 Social Security Act. And it was the Labor Party that developed a sophisticated mutual obligation concept that was enshrined in the 1994 Working Nation program, putting a stronger obligation on participants to accept a reasonable job offer and increasing penalties for failing to meet various obligations.

In stark contrast to the case management approach of Working Nation, particularly seen in the jobs compact for the long-term unemployed, the Howard government’s version of mutual obligation was harsh and ultimately counterproductive. The Howard government’s approach was punitive, even where circumstances might not necessarily warrant punishment. The Howard government’s approach showed a lack of balance between reward and punishment to promote participation. Ultimately, the Howard government’s approach led to a displacement of the problem to the welfare sector and the charitable sector. In particular, I draw the attention of the House to the impact of the eight-week suspension of payments after three strikes. Presumably, the introduction of that measure was intended to increase compliance. If that was the case, that aspect of the Howard government’s program was an abject failure. Penalties doubled from 2006-07 to 2007-08 across Australia. In my electorate of Port Adelaide, penalties more than tripled, the most obvious evidence of noncompliance with the system. Compliance plummeted after the introduction of a one-size-fits-all suspension system by the previous government. Suspension saw the recipient not only lose money but also disengage from the participation system. There was, bizarrely, no participation obligation during the period of suspension.

In the minister’s employment services review, the government received countless submissions detailing the arbitrary impact of the previous government system. The previous government’s focus on compliance without support ignored the characteristics of job seekers today, and this was a feature of many submissions to the employment services review, and I would like to draw the House’s attention to a couple of those. The Australian Council of Social Services drew the government’s attention to these facts:

• Although the skills required by employers have risen, most jobless people on working age income support payments have a Year 12 education or less.
• A growing proportion has not experienced stable employment for a year or more. For example, over 150,000 people have received Newstart Allowance for more than two years.

That is why our government matches a new compliance system with a meaningful approach to vocational training, particularly for the long-term unemployed. The Brotherhood of St Laurence said:

Demand for low-skilled labour has declined both in Australia and overseas. This is evident from the data that shows that nearly three-quarters of new jobs in the period 1990–2003 were taken up by university graduates. Only one in eight of the jobs went to job seekers without post-school qualifications …

Again this stresses the degree to which the characteristics or the demographics of employment services recipients have changed in recent years.

The impact on those who had payments suspended was also a feature of a number of submissions received by the government. The National Welfare Rights Network told us:

The relationship between this penalty—

the eight-week suspension—

and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime is both categorical and direct.

Homelessness Australia reported on some research undertaken by the University of New South Wales which found:

… 30 per cent of people who underwent an 8 week “breach” lost their accommodation or were forced to move to less appropriate housing.

The legacy of the Howard government in getting people back to work is best reflected in the statistics for the long-term unemployed. As we know, there was over the last 10 or so years very significant employment growth in the Australian economy on the back of the resources boom. But, if we look at the figures for those who were unemployed for more than five years, we see that between 1999 and today—the peak period of the resources boom—those numbers have increased from 74,000 back in 1999 to over 110,000 today, or, more relevantly perhaps, from one in 10 persons unemployed for over five years in 1999 to almost one in four now.

It is not as if the previous government was not warned about the consequences of the compliance system it introduced. The former shadow minister, Senator Wong, now responsible for other policy areas, made a number of speeches predicting that exactly what has come to pass would come to pass. I have read those speeches, and I pay tribute to her for keeping these issues in the public domain and ensuring that, on coming to government, the Labor Party undertook the employment services review and is now seeking to introduce the reforms that it is.

Australia’s unemployed and the Australian economy more generally need a new approach, and that is what we are getting from Minister O’Connor: a new, $3.9 billion employment services program to start on 1 July next year—a system that will be responsive to today’s circumstances of lower unemployment, very deep skill shortages and a pool of unemployed characterised by disadvantage and high needs such as we have not seen many years.

After an intensive period of consultation with the community, the government is introducing a new compliance regime, a regime that is set out in this bill. The regime will apply to all job seekers with participation requirements in receipt of Newstart and youth allowance, parenting payment and special benefit including parents. The new compliance regime restores balance to the system. It remains based squarely on the philosophy of mutual obligation, a concept supported by the Labor Party for many years, but it is a system recognising two realities. Firstly, it recognises that individual circumstances in this area do vary; and, secondly, it keeps front of mind that the goal of the system is to increase participation, not punish for punishment’s sake.

In contrast to the previous government’s one-size-fits-all approach in this area this bill calibrates the system’s response to, firstly, the seriousness of the offence and, secondly, the willingness of the person to return to activity or participation immediately. This bill retains the eight-week suspension for refusing a suitable job offer or for a series of missed appointments or activities but it recognises a series of lesser offences not recognised in the previous regime with a much more immediate and much better calibrated response. The first one is the no-show no-pay failure, which treats the recipient effectively as if they were employed. If you miss a day’s activity, for example, Work for the Dole, then you lose a day’s pay. This is an immediate penalty in contrast to the delayed response in the old regime. Secondly, there is a similar system in missing appointments such as with employment service providers. For those whose payments are suspended for eight weeks due to a serious failure, incentives are built in to encourage redemption and improvement in their behaviour. To avoid the nation’s government continuing to simply shift cases of severe disadvantage to our already overstretched charity sector, more meaningful financial hardship provisions are built into this bill.

While retaining the concept of mutual obligation at the core of our social security system, this bill introduces a 21st-century compliance regime to complement the training and participation opportunities presented through the Productivity Places Program. The current compliance system introduced by the previous government is broken. The statistics bear that out. This bill presents the solution and I commend the bill to the House.

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