Ms Catherine King (Ballarat, Australian Labor Party) Share this | Hansard source

I am very pleased to be here this morning to speak on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. I extend my thanks to the member for Shortland for giving me the opportunity to speak before her. It is a little tricky juggling some of my work and family commitments.

I want to support the comments made by the member for Lindsay in relation to NEIS. This scheme has been very important in assisting people in my electorate to start their own small businesses. I too am very pleased that the representations that members made, including the member for Lindsay, have been successful in ensuring that the scheme will stay as a stand-alone scheme. It is a unique feature of our employment services in this country.

This is a very important bill. It reverses some of the more punitive measures that were introduced under the previous government’s scheme—measures that the previous government would have had us believe actually helped people to find a job. From my own experiences of working with people in the most vulnerable circumstances, yes, you do need a system of mutual obligation but you also need to be very careful about not punishing vulnerable people to such an extent that you perpetuate their vulnerabilities or the cycle that they are in. I think much of what was done under the previous system did that. It entrenched people in a system where they were punished pretty continuously for failure to engage but it did nothing to assist them in understanding the need to engage or how they could actually engage more properly.

This bill ensures that those who are the most vulnerable are not punished simply because of those vulnerabilities but are assisted through the employment services system. Conversely, this bill ensures that people who are capable of working and who do not make every effort to work or who actively sabotage their chances of finding work are not propped up. The system does deal with them but it deals with them in a compassionate and effective manner.

When reflecting on the previous government’s attempts at developing policy to curtail breaches of noncompliance, I am reminded a little of Einstein’s famous definition of insanity: doing the same thing over and over again and expecting a different result. In 2006 and 2007 there were around 15,000 eight-week non-payment penalties applied. This more than doubled in the following financial year to about 32,000 people who had an eight-week non-payment penalty applied. The system failed to provide employment to job seekers. The system clearly was not working, and you did not have to be Einstein to realise that something needed to change.

The previous punitive system moved very quickly to enforce eight-week non-payment penalties, without asking the right questions. The system did not acknowledge that there were often very real reasons why someone was unable to work or attend an interview. It did not compel someone who was bereft of their payments to continue to engage with the Job Network system or with Centrelink. People were simply cut off—three strikes and you are out—with little or no recourse to have their payments reinstated.

The strike system in itself did nothing in the early stages to identify why someone may be breaching these requirements. There was no follow-up to ascertain why a breach had occurred. Nor was there sympathy, compassion or a desire to work with them to help resolve any difficulties or issues they had encountered. There was little effective intervention to assist someone or to identify if there were issues that someone needed help with in order to fulfil their Newstart requirements. They were not encouraged to engage with training or to attend work programs; they were simply cut off. This may account for the more than doubling of the number of people who were placed in the position of having their payments suspended for eight weeks. The previous government’s system was not supported by welfare agencies, which bore the brunt of supporting the people who were left vulnerable and at risk by the three-strikes-and-you’re-out approach. These agencies, which were already under considerable strain, did not need the extra work, particularly when it was of little benefit. The previous system was simply too harsh and the costs were simply too high—that is, too high for the welfare sector, not to mention for the 32,000 people placed on the eight-week non-payment period and having no income or support and for their families, who were dependent upon that income as well.

Labor is committed to ensuring that everyone who can work does work. The new system will provide personalised assistance to job seekers to help them secure employment. It is not about letting off the hook those who are capable of working, nor is it about letting off the hook those who refuse to work. It is about ensuring that we as a government preside over a compliance system that is not only fair but also effective. If a job seeker is persistently or wilfully non-compliant and they commit a serious breach then Centrelink will conduct a comprehensive compliance test. The decision to suspend payments for eight weeks will then be made by Centrelink based on this comprehensive test. The test will consider the reasons why a job seeker has failed to comply with their job-seeking obligations and it will take into account hurdles they may have encountered and Centrelink will make an informed decision on whether payments are suspended. It will not be an easy test to pass. Those who persistently and wilfully shirk their responsibilities will be dealt with and will pay a penalty. This government does not expect hardworking community members to foot the bill for those who can and should work, but at the same time we should be very careful about decisions that we make about people’s income—the income that they are reliant on—and those decisions should be made in light of all of the circumstances in which a person has failed to comply.

In order to reflect the reality of the workplace, any job seeker who does not attend a required activity—for example, an interview or training—will be issued a ‘no-show, no-pay’ failure. A ‘no-show, no-pay’ failure means that the job seeker will lose one-tenth of their fortnightly payment for each day that they do not attend their required activity. ‘No-show, no-pay’ failures will also apply to those who attend a job interview but actively sabotage their chances of being offered the job. This reduction in payment does not apply to rent assistance, pharmaceutical allowance or youth disability supplement. It does apply to any supplement the person is receiving as a result of participation in either Work for the Dole or a Green Corps activity. Payments can resume as soon as participation resumes, instilling a sense of responsibility onto the job seeker. This represents a far more balanced approach between participation and penalty. It places the onus back on the job seeker to ensure that they are actively seeking work in order to receive payments, but it makes a much better link between the notion of work and reward than the previous system.

This view is supported by the National Employment Services Association, the peak body for employment services. The CEO, Sally Sinclair, stated:

The proposed no-show, no-pay approach is more aligned to workforce conditions and engenders greater individual responsibility by job seekers for their actions.

A connection failure is also imposed on a job seeker if, without a reasonable excuse, they do not attend an appointment they are required to attend. This pertains to situations such as Work for the Dole, a specific employment pathway plan or any other activity that may lead to employment. While there is no penalty as such for a connection failure, there is a requirement for the job seeker to attend a further appointment or other job search requirements. This is referred to as a reconnection requirement. If the job seeker fails to engage in this reconnection requirement and does not have a reasonable excuse then they will lose one-fourteenth of their fortnightly payment each day that they do not comply with the reconnection requirement. Once again, this does not affect rent assistance, pharmaceutical benefits or youth disability supplement. The eight-week non-payment penalty still exists under the proposed bill. However, there is a capacity for the job seeker to re-engage in an activity and to have their payments reinstated.

There are a few circumstances where a job seeker may have an eight-week non-payment penalty imposed. These include where a job seeker refuses an offer of suitable employment—that is, where there is no reasonable excuse to refuse an offer of a job—and where a job seeker does not attend six days of activity, such as Work for the Dole, or misses three appointments. In this situation, Centrelink will consider whether the person is wilfully not complying within the context of a comprehensive compliance assessment. The comprehensive compliance assessment will consider the suitability of work for the job seeker, whether the job seeker should receive an alternative source of income, such as a DSP, and whether a serious failure to comply applies, resulting in a non-payment penalty. The difference with this model is that the job seeker does have an opportunity to have their payments reinstated by participating in an intense activity. The non-payment period will also cease if it is deemed that it would cause severe financial hardship. No government should be responsible for causing hunger, homelessness or other severe hardship to people who are vulnerable. It is our duty to identify when somebody needs real assistance and to do our absolute utmost to help meet their needs.

The comprehensive compliance assessment will be undertaken by specialised Centrelink staff—and I cannot emphasise enough the need for that—who will look at a job seeker’s history and encourage discussion around any personal issues that may be impacting on that person’s ability to engage in appropriate activities. This may include issues that have not been disclosed before, such as mental health issues, physical challenges or structural barriers such as homelessness. This would allow an employment pathway plan that can account for those challenges and provide a way to assist the person with these problems. It does not allow for the job seeker to be thrust into a position of being further disadvantaged by being cut off from payments, cut off from carers and cut off from the system. Having said that, it still provides a system of compliance for job seekers if they are not meeting their obligations and do not have a justifiable reason as to why. They will be penalised and will need to take reasonable action to rectify their wrongdoing.

Any reforms to employment services must focus on engagement, participation and compliance. These three words are essential when talking about employment services reforms. With unemployment sitting at around four per cent and likely to increase, it is crucial to look more closely at who is unemployed and why they are unemployed. Significant proportions of today’s job seekers have experienced long-term unemployment or are particularly vulnerable and disadvantaged.

When I undertook my social work training some 25 years ago, we did a lot of work about how victims are blamed and how many systems blame the victims. My concern has always been that often we blame people who are on unemployment benefits for the circumstances they are in. Some of it may be of their own doing, but some of it definitely is not; some of it is long-term structural disadvantage, and we have to do everything we possibly can to recognise that and to assist these people through it.

Just cutting people off from payments does not change their situation. Cutting them off from a system that can identify their particular challenges and assist them to overcome these challenges does not change their situation. A measure of care and understanding is required in order to assist this segment of the job-seeking population to engage in and to hold on to work. A caring society partnered with and underpinned by an understanding government does not and should not leave these people behind. With the current skills crisis looming, it is an absolute imperative to our economy that these employment services reforms are put in place. We owe it to not just these job seekers but also the many businesses who require skilled and unskilled workers. These reforms are good not only for job seekers and for the Australian economy; they are also good for those people who work at the coalface of unemployment services. Centrelink staff will welcome these reforms, as they can now genuinely engage with job seekers and know that they can provide a service that will make a difference to their clients. They can actively participate and assist job seekers to obtain employment or, if not, work with them to ascertain the reasons and identify ways to resolve them. These reforms will provide satisfaction not only to our country’s job seekers but also to those who work tirelessly to guide and support them through the job seeking process. I also believe that the employment agency staff will be able to provide effective employment plans for their clients.

The Centrelink staff and the Job Network staff in my electorate do a fantastic job of assisting job seekers, and I look forward to those staff being able to offer an even better service and being able to use their skills to the maximum benefit of those who are unemployed. I also look forward to the other helping agencies in my electorate—for example, drug and alcohol counselling services—being acknowledged as having a role in the journey towards stable employment for some job seekers. These reforms are important. Upon their commencement on 1 July 2009, these reforms will provide proper pathways to employment for those job seekers who are long-term unemployed. These reforms provide real balance between those who are facing personal difficulties and who struggle with maintaining stable employment and those who wilfully shirk their responsibilities.

It is not that long ago that my constituents were saying to me that the Welfare to Work reforms were far too harsh. They commented that, while they believed everyone should contribute and be involved in the working life of this country, they understood that for some this was harder than for others. They were saying that some people needed help, not harsh penalties, and that harsh penalties often exacerbated already very difficult situations. I commend the bill to the House and I commend my colleague the member for Gorton and Minister for Employment Participation for listening to people—listening to job seekers and to agencies—who are bearing the brunt of these harsh measures and for providing the right balance in these reforms. I again thank the member for Shortland and the member for Throsby for allowing me to speak a little earlier than I had anticipated.

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