Chris Trevor (Flynn, Australian Labor Party) Share this | Hansard source

I rise today to speak on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. It is the very relevant and important changes that this bill will bring to Australian job seekers that have prompted me to speak on this bill today. It is the bill’s focus on individual circumstances, which provides greater flexibility for job seekers in regional and rural Australia, that has also compelled me today to speak on this bill.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 aims to amend the current Social Security Act 1991 and the Social Security (Administration) Act 1999 and introduce the government’s budget 2008 announcements and welcome a new $3.9 billion employment services package and the introduction of a new compliance system for Australian job seekers and providers. This is a bill that is aimed at restoring balance into a system that the previous government had taken—in my respectful opinion—too far. In the light of their failed Work Choices regime, the previous government had engineered a system that was too harsh on vulnerable Australians and counterproductive to the goals that they were trying to achieve in the first place. To illustrate the need for change, I note that an alarming trend had surfaced from the previous government’s approach to helping Australians find work. The previous government believed in punishing first and asking questions later. They believed, without any input from the recipients, in a blanket, one-size-fits-all approach to employment services, payments and penalties.

In 2006 there were around 16,000 job seekers subject to the most severe action imposed on job seekers—that is, the eight-week non-payment penalty, eight weeks of no pay. But by 2007 this figure had nearly doubled to 32,000 people on an eight-week non-payment period. Within 12 months the number of people nationally serving the eight-week non-payment period had doubled under the current system. In fact, in my own electorate of Flynn in Central Queensland there was a 44 per cent rise from 2006 to 2007 in the number of people serving this eight-week non-payment period.

The eight-week measure was meant to act as a deterrent for people not to abuse the system but, unfortunately, this deterrent clearly proved inadequate and the government must now work at improving the ‘carrot’ side of the equation and not simply—and, in my opinion, cold-heartedly—focus on the ‘stick’ side of employment reform. Surely an effective system should result in an actual decrease in the number of serious penalties being applied. Surely, if the current system had been as adequate as the former government would like us to believe, we would have seen the number of serious breaches decline and the number of eight-week non-payment periods decline as more and more job seekers saw fit to work in the system and return to the workforce. But we have seen the opposite occur under the current system. We have seen a sharp increase in a very small period of time in the number of people serving a non-payment period and so we have seen a clear need for action and a need to amend the system to reflect the set of circumstances that we now face.

The current system of providing employment services was introduced in 2006 and replaced a decade-old welfare system. Today’s employment market is vastly different to that of 2006 and, given recent economic pressures, it is set to become even more different. It is important that a degree of flexibility is built into the system and that, as different pressures and forces are placed on our labour market, the system is able to respond to these changes without falling apart at the seams. I believe that the new bill achieves this by empowering those who work within it on a daily basis to make judgements and decisions with the best interests of the job seeker at heart.

Over the past decade, the employment market has shifted. We have witnessed unemployment fall. We have seen skill shortages in vital areas. However, this has not been to the benefit of all job seekers. Today’s unemployment figures include a significantly higher proportion of long-term unemployed and highly disadvantaged Australians. In 1999, one in 10 people receiving a benefit from Centrelink had been unemployed for more than five years. Today, almost one in four people receiving a benefit from Centrelink has been unemployed for over five years. This is an increase from 74,000 people in 1999 to over 110,000 people nearly ten years on. With the changing demographics and make-up of the unemployed, today these figures represent some of the most disadvantaged in our society. Some are battling with not only unemployment but also mental illness, literacy problems, poor education and homelessness. Our job is to design and implement a better system to help these long-term unemployed and vulnerable Australians into the workforce, and I believe that this new bill will encourage just that.

While the employment market and the make-up of the unemployment figures have changed, one aspect of the system has always, and will always, remain the same—that is, the Australian community strongly expects that those who receive taxpayer funded income support look for work. This is at the very core of our nation—giving others a fair go while supporting those whose luck seems to have faded. We will never alter the system so that it does not reflect this very basic of Australian understandings.

What we do need to do, though, is ensure that the system remains relevant and focused on getting job seekers back into the workforce. It is often said that the most demanding of all jobs is actually looking for one. We need to support those of us who are looking for work, but in a fair, balanced and productive fashion and not simply applying a one-size-fits-all approach. The market is full of different industries, different regions and different types of employers and employees, and they do not deserve anything less. Just as there are many differences in the make-up of the labour market, we need to implement a system that recognises the many different individual job seekers and the skills that they can bring to the workforce. We need a system that encourages their commitment and engagement, rather than the current punitive approach.

This bill will affect approximately 620,000 people who are receiving Newstart, youth allowance, parenting payment or special benefit and currently have a participation requirement. To improve the system we simply must better align it to reflect the ethics and characteristics of the workforce. A key part of this reform is the introduction of no-show, no-pay failures. The no-show, no-pay failure is introduced by this new bill and is aimed at job seekers who, without a reasonable excuse, fail to attend a prescribed activity—for example, training or work experience. Just like in the private workforce, if an employee fails to turn up for work for a day then they will lose a day’s pay, and in this case if a job seeker fails to attend a certain activity then they will forfeit one-tenth of their fortnightly payment for each day they have not attended. A no-show, no-pay failure will also be recorded against a job seeker who refuses to attend a job interview with a prospective employer.

The new bill also, for the first time, makes arrangements for people who do attend a job interview but behave in a manner that would result in the prospective employer not wishing to make a job offer to the candidate—for example, the candidate stating during the job interview that they do not want the position. Previously, the system did not take into account job seekers’ deliberate attempts to not be employed and they focused only on the actual attendance of the job seeker at the interview. This meant it was possible for certain job seekers to avoid penalties by attending a job interview but behaving in such a manner that it would be unlikely they would be offered employment as a result. The loss of a day’s pay should act as an immediate deterrent for job seekers that choose not to attend activities that will improve their employment prospects. In an effort to remain fair, payments such as rent assistance, pharmaceutical allowance or youth disability supplement will not be affected should a no-show, no-pay failure be recorded; however, all parts of a job seeker’s payment will be subject to the reduced rate.

Another important aspect of this new bill is the introduction of what has been termed ‘connection and reconnection failures’. A connection failure will be recorded against a job seeker under the new system if they fail to attend an appointment—for example, an appointment with their employment service provider—and do not have a responsible excuse. Instead of imposing a harsh penalty for a connection failure, the new system will require job seekers to attend a reconnection requirement. A reconnection requirement could simply be another interview similar to the one that they had previously missed. The emphasis here is clear: this new bill is designed to encourage job seekers to communicate with their service provider and with Centrelink. Better communication will lead to a stronger connection between the two parties and result in a better chance for the job seeker to obtain employment or new skills.

A penalty will be imposed on a job seeker that fails to attend their reconnection requirement. This penalty will be similar to the one imposed on job seekers that have a no-show, no-pay failure; however, for a reconnection requirement failure the job seeker will lose one-fourteenth of their fortnightly payment for each day that they have failed to reconnect with the system and do not have a reasonable explanation.

Unfortunately, there will always be serious cases in which the system will have to deliver serious penalties. The bill retains the penalty for serious failures by job seekers—that is, the eight-week non-payment period—but with a different approach. A serious failure is regarded as a job seeker refusing an offer of suitable employment or missing three appointments or six days of activity. It is made at the request of the employment service provider and is aimed only at those who have wilfully and persistently not complied with repeat attempts by the system to have them re-engage with the system.

There are many differences between the eight-week non-payment period penalty in its current form and the one that the government through this bill will introduce. Previously the system was centred on a three-strikes mentality. The first recorded failure would see a job seeker’s payment reduced by 18 per cent for a period of 26 weeks, while the second failure within a two-year period would see payments reduced by 24 per cent, again over a 26-week period. The third strike would incur the eight-week non-payment period. Under the previous government’s system, during this eight-week non-payment period the job seeker was not required to have any contact with the job market or employment service provider. They must simply sit and wait for the period to end. There is no communication during this period, no connection and no chance of improved training or employment prospects. My government believes that there are better things for a job seeker to do than simply wait out an eight-week non-payment period at home. It is often said that the devil preys on idle minds and this, I fear, is what is happening to our job seekers who are caught up in the unproductive web of the eight-week non-payment period.

Under the new bill the eight-week non-payment period will be retained. It will be applied to the most serious, wilful and persistent cases but unlike currently a job seeker will be able to restore their payments back by participating in an intensive activity. An intensive activity will usually involve 25 hours a week for up to eight weeks in an activity such as Work for the Dole. This is the main point of difference and one that I feel very passionately about. There is no use in a person sitting at home and further disengaging from society and the workforce when we can present an opportunity for these job seekers to participate, to reconnect with the system and to potentially learn new skills or establish new networks simply by participating in an activity such as Work for the Dole.

As I stated earlier it is the greater flexibility of the new system and its focus on individual needs that will be beneficial to rural and regional Australia. This bill empowers those experts that are employed in this field and work in the front line to make decisions that will benefit their clients. Under the new scheme, employment service providers will have the discretion to decide to report noncompliance to Centrelink. Providers will be empowered to make this decision and act only if it is in the best interest of the job seeker to do so. Instead of reporting non-compliance, the employment service provider may choose to negotiate with the job seeker to find alternatives or to make up any noncompliance. Again, this will result in better communication and a stronger connection between the two parties.

For the long-term unemployed, I know that the path to employment is often difficult and full of hurdles. Whatever the hurdles that they face, they deserve a system that supports them and encourages them every step of the way. We need a holistic approach to job placement, one that takes into account any barrier to employment and removes hurdles faced by job seekers, whether they are personal issues or training gaps. The benefits of employment and participation in the workforce are immense and cannot be overlooked. So much of a person’s identity and social outlook can stem from participating in employment. The workforce belongs to all Australians—even those who have felt defeated and have given up. This is a bill that will support these Australians and this is a government that will introduce reform to tackle disadvantage head on. The end result will be a system with a heavy focus on communication, on participation, on engagement and on connection, and it is because of this focus that I commend the Rudd Labor government for its leadership on this issue. I also commend the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 to the House.

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