Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Hansard source

I speak on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 with some experience, as the minister in the coalition government who ushered in the new Welfare to Work reforms. Therefore, I am particularly concerned about this bill. In regard to the further evolution of government employment services, I am pleased to see that the Labor government has in fact picked up on our evolved development from 2007, but what concerns me in particular with this bill is the changes to the compliance regime.

The fact is that all humans, being what we are, look for an easy way out. There is a strong sense in these new compliance components that near enough is good enough. I am very concerned that—whereas we had trends towards fuller employment, our workforce participation rates were some of the highest on record and our unemployment rates were some of the lowest on record—we will see that under this new regime there is not the sort of support there was before for the unemployed. I happen to be very sympathetic to the unemployed given that along with unemployment, especially long-term unemployment, go poverty, intergenerational distress, higher rates of mental health problems, more teenage issues such as engagement with unlawful activities and more homelessness. There are a whole range of problems associated with long-term unemployment, and our coalition government was very concerned to make sure that we reduced this intergenerational blight on big sections of the Australian community.

Of course, the coalition in government supported payments to the unemployed, and now this government supports payments to the unemployed. There has been an understanding over the history of welfare payments in Australia, however, that recipients of welfare support who are unemployed should also look for work. From 1947, the payment systems included penalties for noncompliance with the work test, as it was originally known. The penalties were linked to the failure of an individual to take an offer of work or behaviour that indicated a lack of interest or motivation to work. The penalty periods for a noncompliance, which was at the time called a breach, have varied over many decades from two to 12 weeks. In 1989 the term ‘work test’ was changed to ‘activity test’ to better describe the broadened types of activities that the unemployed were expected to undertake to show that they were serious about improving their prospects and were actively looking for work. Later on, to be more fair, distinctions were made between activity and administrative compliance requirements to separate activities that had a direct relationship to finding work from other activities such as failing to return a form or attend a review interview with Commonwealth agency staff. So different penalties or breaches reflected these different types of noncompliance.

When the former Howard coalition government came into office in 1996, we inherited some three-quarters of a million unemployed, a huge proportion of those being long-term unemployed. The Commonwealth Employment Service was moribund and lazy. It was responsible for seeing people more often directed into training courses, which kept them busy and changed the unemployment statistics but did little to help people into better work outcomes. The coalition were determined to give the unemployed on welfare a better chance. We developed and introduced a revolutionary new service delivery model, using the non-government sector in a competitive provision of employment services for the unemployed, including those with disabilities and special needs. I am not surprised that this Labor government is continuing this revolutionary model, which has now been acknowledged as world best practice. In fact, we have the Prime Minister’s wife very actively involved in seeing that our model is extended to other countries. Quite simply, the employment service provider was paid according to its success in actually placing a person in long-term work. If an individual was, in fact, already long-term unemployed then the payment was greater, recognising the greater difficulties the individual faced.

The new so-called Job Network commenced in May 1998, and at about the same time we introduced what we called mutual obligation. Mutual obligation recognised that human beings want to give back when much is given—much being the fact that the community or taxpayer was trying to support them and their families in their unemployed situation. We wanted mutual obligation to give to the individual respect and a chance to build self-esteem, and that proved to be the case. At the time, in 1998, Australia’s unemployment rate was 8.1 per cent. Single mothers were not required to look for work until their youngest turned 16; by then they had been so long out of the workforce that they had lost all work related skills and any qualifications they had were outdated, although most mothers on pensions had completed little more than year 10 at school. These women were in quite difficult circumstances in that they were often seen as a very unattractive employment option.

After nine years of a new employment services revolution, including the new employment services I have just described, we drove down the unemployment rate to just 4.5 per cent and workforce participation rates were amongst the highest ever, including for women. Let me say, though, that we were still challenged by the statistics for those with disability rejoining the workforce—a work still in progress when we left office. The Job Network focused on helping job seekers engage in activities that would help their employability and support each individual to actively seek employment no matter how disadvantaged they were. This included Indigenous unemployed, people with a disability, people who were in remote and rural regions and people who had very limited formal education. We wanted to take people off the merry-go-round of the old CES where it was: ‘Let’s pop you on another training program and, whether it is basket weaving or xylophone making, it will keep you busy.’

As I said before, the coalition understood that long-term unemployment often became intergenerational. We were not prepared to tolerate this in a country that likes to imagine it is egalitarian and humane. In introducing in 2006 the Welfare to Work reforms, we determined that, for example, single parents receiving welfare support would be helped to return to work when their youngest reached school age—a very significant reform and one still way behind those of some other countries in terms of the age at which parents were helped but a huge step forward. These women—and they were mostly women, although some men too were single parents—were being helped back into work with training support but also they were not expected to travel more than half-an-hour to their new workplace, they were expected to work only if there was appropriate child care and if the payment for their work was more than what they were receiving in welfare. You can imagine that this meant a new life for so many of our mostly women in the single parent category who had needed to work for a very long time but could not break out of the long-term disadvantage brought on by years of lack of employment.

Along with these changes there were compliance measures. The member for Braddon would have us believe that our compliance regime was a bit like some horrific medieval circumstance. Our penalty or compliance regime was extraordinarily fair and humane. For example, if you had three cases of noncompliance with a work related activity, the test was always: is there a reasonable excuse? Was it impossible for you to travel to that job interview? Was it that you were sick on that day? Was it that you could not get child care? Was it that you were a victim of domestic violence in the days preceding? A reasonable excuse was always sought and, if there was one, it was taken into account. If, however, there was no reasonable excuse for a person not attending their job interview or for them chucking in their job after a day or two then, instead of three strikes and being subject to a penalty, there could be one serious breach and they would be subject to a penalty of a number of weeks without welfare.

We did not simply leave a person without support. In every case, the individual who did receive a penalty of nonpayment of their welfare was assessed for case management. Their personal circumstances and the circumstances of any dependants were carefully examined and a number of non-government organisations were, through a tendering process, employed by the government to manage the situation, supplying in-kind support—whether it was rent relief, food on the table or prescriptions to be filled—so that no individual was left high and dry if they were not receiving their welfare payments because they had been in breach of the obligations associated with their welfare. It was a very humane situation.

There is also a real blowing-out of the statistics identifying how many people did in fact end up being breached with a nonpayment of their welfare. I note that the library’s own Bills Digest points out that the statistics are a little different from what is being quoted by the government. In fact it was a very small number—about one per cent or less—of cases that ended up with a breach and were penalised with withdrawal of welfare support. The point about it all was that this was a work-like situation where, if you had no reasonable excuse, there were consequences. We believe that our use of that particular breaching protocol was part of the success of our program. It was humane, it was fair and it was applied very judiciously. There was a full appeal process.

The new mechanism proposed in this bill is that the decision is up to an officer in Centrelink, who may or may not feel good on the day. We know that now in Centrelink there is extraordinary harassment in a number of offices. Centrelink staff are reporting that they are being intimidated by the growing queues of unemployed that Labor management of the economy is bringing about. You are asking those same officers to decide if a person’s reason for not going to their job interview was reasonable or not. That is acceptable, because we had the same first step, but it seems that there is no appeal beyond the individual officer’s decision and it is up to the individual officer alone to decide whether or not this is a breachable situation. Alternatively, if the individual has very poor financial circumstances, it is up to the officer to decide that they are not to suffer a financial penalty in the form of loss of welfare.

We managed such a situation by using case management. There was, as I described before, an alternative system for supporting that individual and their dependants if they lost their welfare. Obviously, most long-term unemployed—or those who have been unemployed even for a short time—are going to have minimal finances to fall back on, not much in the way of savings. It seems quite extraordinary that this government should suggest that if an unemployed person does not have substantial financial resources to fall back on they will not be breached. It is almost a tautology.

I suggest very strongly that the new Labor government make the new penalty regime or breaching regime or compliance regime in this bill a trial. I suggest that they look very carefully at how it works over a 12-month period. If, as I fear, it becomes just a joke, I beg them, for the sake of the unemployed of Australia, to revisit it and have a very close examination of the previous system, which, after quite a period in action, proved to be very humane. It had great results in that individuals adopted a work-like response to a job or to a job interview.

Let me say that the coalition built back the economy we inherited in 1996 with over $90 billion in Labor debt. We left the government in 2007 with a surplus of over $20 billion. We left Labor with one of the lowest unemployment rates in 35 years and with a workforce participation rate that was envied by other nations. We are already plummeting into an extraordinary national economic crisis. Unemployment figures are going through the roof.

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