Sid Sidebottom (Braddon, Australian Labor Party) Share this | Hansard source

This amendment bill, the Social Security Legislation Amendment (Employment Services Reform) Bill 2008I note this for the sake of the previous speaker, the member for Stirling—seeks to strike a greater balance between employment and compliance within the country based on the principles of fairness and reciprocal responsibilities. That balance is about giving people more incentives to work, contrary to the previous speaker’s comments, but also is about making it easier for those who have specific impediments in their way to receive benefits and not get dragged down into the mire of the inflexible compliance that existed under the former government.

Under the Howard government, the system was so complex and onerous and ultimately inflexible that it meant many people were forced into noncompliance and hit with heavy penalties, sometimes because they had no other choice. The number of eight-week non-payment penalties applied has doubled over the course of just one year, from around 16,000 in 2006-07 to around 32,000 in 2007-08. This is not a system that is working. What is the point of over 30,000 job seekers a year being given eight-week penalties if nothing is done in the system to re-engage them? The hallmark of an effective compliance system is not the number of penalties handed out to job seekers. A successful system should see fewer breaches because it encourages job seekers to meet their requirements and, ultimately, supports them in getting off income support and finding employment.

The opposition is claiming that its compliance regime reduced the number of long-term unemployed job seekers between June 2006 and 2008. We just heard that template of answers being trotted out by the member for Stirling. But it is not the full story, as we have learnt to our detriment over the last 12 years. Almost half the people on income support in 2001 were still unemployed in 2007. Three in four young women with little education who were on income support in 2001 were still on income support in 2007. That is the story we have not been told.

What reduced the number of unemployed in Australia between 2006 and 2008 was economic growth and the mining boom, which the previous government squandered, as well as a massive skill shortage that it did little to address. We are talking about job seekers and families already relying on these benefits being told to go without because of the harsh approach taken by the current opposition. We want to get it right with an effective compliance system that encourages people to find work and helps them when they cannot.

The reality, as opposed to the opposition’s rhetoric, is that the old system had too few deterrents in the early stages and was far too harsh, too late. For example, job seekers could be out of action for two weeks before any action was taken but then, soon after, they would be hit with an eight-week non-compliance or non-payment penalty—on any efficiency scale, not to mention fairness, this went too far—rather than being guided back to the right track. It is the latter which forms the weakness of the former Howard government’s system.

Restoring the balance for some may be as simple as recognising that a person in a remote rural area does not have access to transport like someone in a city suburb, that there is purely and simply a lack of public transport, as is the situation in my region, for instance. This may make it more difficult to get to important appointments in person. A solution to this may be as simple as using technology to help people overcome that impediment or assisting them with other transport options. We do not want to be taking the big stick to people who are actually trying their best. We do not want a sledgehammer as the preliminary action to an issue of noncompliance.

The opposition claimed that their compliance system established a clear link between the recipient of income support and the obligation to look for work. So let us look at this argument in depth—something the member for Stirling failed to do. A job seeker does not turn up to a job interview. Nothing happens. A job seeker does not turn up to a second job interview. Nothing happens. For up to a year after a job seeker misses that first job interview, if they so much as miss an appointment with Centrelink they receive an eight-week non-payment penalty. How does receiving income support equate with the obligation to look for work? There is no clear link between the first breach and when the eight-week non-payment penalty is applied. Currently, a job seeker can miss up to two weeks of Work for the Dole before any action is taken. Then they are given a chance to reconnect, and if they do so they incur no penalty at all. How does this clearly link income support and a job seeker’s obligations?

Compare that to what the Rudd government is proposing. A job seeker who misses a job interview is penalised almost immediately. They lose 10 per cent of their income support. Job seekers will clearly associate their behaviour with the penalty they receive and will change to a more worklike behaviour in the future. The opposition thinks that someone who misses six days of Work for the Dole will escape without penalty. A job seeker who misses six days of Work for the Dole will lose six working days of their income support. That is 60 per cent of their fortnightly pay. For a single person without children on Newstart allowance this means having to live on around $180 a fortnight. That is a substantial penalty in anyone’s language.

Where do these people turn when they are frozen out of the support system under the current regime? The welfare sector is reporting that vulnerable job seekers are coming to them because they have nowhere else to turn. This is taking support away from others who could be better served by welfare agencies while our job seekers are better catered for under their own system.

Participation in employment is not as simple as it sounds, but thankfully there are people out there trying to provide opportunities. I came across one such example earlier this year in my electorate which I would like to share with you all. I am only too pleased to use them as an example of the potential that exists. The Minister for Employment Participation, the Hon. Brendan O’Connor, visited in August. The vision of the people behind New Life Industries at Lillico, just out of Devonport, is hard to appreciate until you see the scale of their current operation. New Life is a hydroponic grower of capsicums and is planning to see the business grow in a massive way over the next few years. This is a high-value crop with a small physical footprint and high employment needs.

Johann Joubert and his business partner, Ronald van Leerdam, and their wives have big plans for the capsicum operation and are looking to reach this target by including people who have been long-term unemployed and teaching them the skills which will benefit their business. They have great belief in the potential that exists in every person. I have been able to see what they have already achieved with some of their labour coming from people who have been out of the employment scene for years, some for up to a decade.

New Life is already the largest grower of their type of capsicum in Australia, but Dr Joubert says that Tasmania has the perfect climate and conditions to become a world leader in capsicum production. The business currently employs about 50 people and is contracted to supply 900,000 kilograms of premium capsicums a year. They are packaged and identified as Tasmanian grown and compete with imports from New Zealand.

The management and care of the capsicum plants and their environment is very technical, and minor changes can mean big gains or losses. A lot of this depends on the skills of the people involved. Dr Joubert says that he believes that local people can over time be trained up in the skills and eventually become the backbone of the business. But they are not sitting back waiting for trained people to land on their doorstep. They are going through the process of creating their own training program to ensure that they have a skilled workforce for the future to secure their expansion. New Life is also looking to the heartland of the industry in Europe to bring expertise to Australia as part of the growth of their operation and to feed into the in-house training.

Dr Joubert says his is not the only company that sees the potential for large-scale hydroponic food production in Tasmania. He can see the day when hundreds, if not thousands, of people are employed in this field. The meeting and tour with Minister O’Connor was very positive. We are doing everything we can to see that New Life Industries succeed and achieve their vision. Giving people the incentive to be part of the job market, which this bill is all about, is critical to helping businesses like this succeed.

Dr Joubert mentioned during a visit that he sometimes had problems when employees who travelled together for a variety of reasons failed to turn up for work because of mechanical difficulty or the driver was unwell. Because four people may be travelling together he will have not just one person unable to work but all four. This is also an issue for people who are limited in their ability to access job services and opportunities. If they are organised for a ride to meet their obligations and that does not happen, then we need the flexibility to accommodate them in these circumstances. The Rudd government is all about giving this flexibility and restoring the balance between benefits and the need to genuinely pursue employment. But this is not about a free ride, as was implied in the comments by the member for Stirling. Australians believe that, if you are on taxpayer funded income support, you should be working hard to find work. In fact, that has been the principle since 1945 and it has been reinforced since 1979.

Just like a job, if you do not turn up to compulsory activities without a reasonable excuse, then you will not be paid. Noncompliance will have an immediate financial impact, but the size of the penalty will directly relate to the length of time a job seeker failed to participate. So, rather than casting job seekers into oblivion for weeks on end and removing the incentive to be out there and active in the job market, this will encourage them to get back out there.

This government believes there must be some penalty for those that deliberately rort the system, and the eight-week nonpayment will remain for wilful and persistent breaches. But there will not be an automatic escalation in the severity of the penalty. The big difference is that job seekers will be asked why they are not complying. If an eight-week non-payment period is in place, job seekers that focus on getting a job can with proof have their payment restored.

The new system will also look after those who have severe financial hardship and do not have the capacity to participate in intensive job seeking, provided they do not have liquid assets of more than $2,500 or $5,000 if they have a partner. They will continue to receive income support and have participation requirements in line with their situation, replacing the current restrictive financial case management arrangements. It also provides discretion for employment service providers when a job seeker is not complying with their obligations by giving the service provider some flexibility and the option of negotiating with the person to make up an activity or another day, further reinforcing the importance of participation.

The bill also provides more security for job seekers undertaking work experience in relation to superannuation and workplace relations legislation unless they are undertaking paid work. It will include strict guidelines on unpaid work experience activities to protect the employment of current employees and to prevent the exploitation of job seekers. The new system will provide a stronger safety net for vulnerable job seekers while reinforcing that job seekers who are capable have a personal responsibility to actively seek work and participate in activities to prepare them for work.

It will not be a return to the days of the dole bludger but will see us as a government working in partnership with job seekers, employers and employment service providers to offer support and encouragement to get them back into the workforce. It is an essential part of the Rudd government’s $3.9 billion employment service and I commend the bill to the House. In my final comments, I would also like to congratulate the Minister for Employment Participation, the Hon. Brendan O’Connor, on the excellent work that he, his office and the department have done in creating this flexible, more balanced employment support program.

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