Mike Symon (Deakin, Australian Labor Party) Share this | Hansard source

I rise today to speak in support of the Social Security Legislation Amendment (Employment Services Reform) Bill 2008, which will amend the Social Security Act 1991 and the Social Security (Administration) Act 1999. The main purpose of this bill is to encourage commitment from job seekers to find work through a tough but much fairer compliance system, a compliance system that reflects modern times and helps job seekers find and keep a job.

These reforms are necessary because over the last decade employment services have been operating under policy and administrative constraints that have failed job seekers and employers alike. This is at a time when the economy is crying out for skilled workers and when we are facing a shortfall of up to 240,000 VET qualified workers by 2016. These reforms will be of benefit to the 620,000 people on Newstart allowance, youth allowance (other), parenting payment or special benefit and having participation requirements.

Before the last election Labor promised that we would review the Job Network and other employment programs. We did so with a view to replacing the current compliance system that is clearly now out of step with a modern labour market—a system that has become flawed, ineffective and, importantly, counterproductive. Compared to 10 years ago, the rate of unemployment is lower. But there is a significantly higher proportion of highly disadvantaged and long-term unemployed amongst the job seekers.

The rate of those on unemployment benefits for more than five years has increased from one in 10 in 1999 to a figure of one in four by March 2008. This only emphasises the need for a modern compliance system that adapts to current challenges, because it is clear that the Liberals’ old, outdated system has failed in its central objective—that is, to improve employment outcomes. Through the new compliance system we will instil a work culture to the process that brings in a ‘no-show, no-pay’ ruling—meaning that, just like a job, if you do not show up without a good excuse then you will not be paid. And, just like a job, the size of the penalty will now directly relate to the length of time the job seeker fails to participate. It is really no different to taking sickies when you do not have leave from a job of employment.

The current system provides too little deterrence or intervention in the early stages of noncompliance, and it comes in too harshly and too late. In fact, as things stand under the current compliance system, job seekers can miss out on almost two full weeks of participation before any action is actually taken. But then, after three failures, job seekers are stung with an automatic and irreversible eight-week non-payment penalty. There is no coming back from that; that is just what you are given. While the new system will still retain the current approach for failure to attend or not showing enough initiative, the emphasis will be on employment outcomes. It will be a case of fairer, not softer, and, importantly, allows a pathway for prompt reconnection into the Job Network.

Under a ‘no-show, no-pay’ failure, job seekers will lose one-tenth of their fortnightly payment for each day they do not attend. However, this action will not affect their rent assistance, pharmaceutical allowance or youth disability supplement payments. For instance, a job seeker who misses six days of Work for the Dole will lose six working days of income support—that is, 60 per cent of their fortnightly allowance under Newstart. This provides a clear message to the job seeker that they need to keep looking for work whilst ensuring they are not thrown into a cycle of poverty or alienation. Under this new system, as soon as a job seeker resumes participating, their income can be restored. There will be more chances for job seekers to re-engage with job providers to avoid sanction. There will be no automatic escalation in the severity of penalty where job seekers are having trouble.

Importantly, job seekers will be asked why they are not complying when there are signs out there that they are not. That is the critical difference between the old and the new compliance system. Centrelink will now have the capacity and the resources to actually talk to job seekers who are in breach, assess their reasons and determine if those reasons are valid or not. For instance, they might have been made homeless or they might be suffering from domestic violence. They might have become ill or they might even have been short of money to get to the job interview. These may all be valid reasons which can be considered by Centrelink through the use of a comprehensive compliance assessment before any penalty is applied.

There is also scope for employment services providers to exercise their professional judgement on when to report or not report noncompliance of a job seeker. Employment services providers will not be required to report noncompliance to Centrelink if they feel it will ultimately be counterproductive to the progress of a job seeker. So we see added flexibility now built into this part of the process.

Whilst the government will not tolerate those who go deliberately out of their way to avoid work, we cannot punish those who miss the chance for work due to genuine personal reasons. Even in cases on which Centrelink has imposed an eight-week non-payment period under the new system, this will no longer be irreversible. Built into the system will be the chance to re-engage. Any job seeker who is prepared to participate can have their payment reinstated by participating in a compliance activity such as full-time Work for the Dole. Therefore, participation in intensive compliance activities such as Work for the Dole for up to 25 hours per week for up to eight weeks will allow for the reinstatement of those payments. For those job seekers who wilfully and persistently are noncompliant, the eight-week penalty will be retained. The compliance system then goes from being about punishment and coercion to being about incentive and re-engagement. I believe that has to produce better outcomes. Under the bill, when passed, these reforms will come into place from 1 July 2009.

Under the existing compliance regime introduced by the Howard Liberal government, a job seeker receives an automatic eight-week non-payment penalty after three breaches. We know that 15 per cent of those who have received the eight-week non-payment penalty suffered from mental illness and over half the job seekers serving eight-week non-payment penalties have not paid their rent or board on time. Even more disturbing, 15 per cent of that group have been evicted from their homes. Under the current regime there is no requirement to look for work, training or work experience, and there is no requirement to front up at the job seeker’s employment provider or even turn up at a Centrelink office when you are in that breach period. Many job seekers are already in a very vulnerable state. In fact, 237,000 of the current case load have a recognised vulnerability. This includes 102,000 job seekers who have a mental illness or psychiatric problems. Many more job seekers have unstable housing or living arrangements. This is backed up by the various welfare groups, who are out there on the front lines dealing with problems caused by the existing compliance regime.

Welfare groups of all types have written to us about this issue because their resources are now under strain as more job seekers whose Newstart allowance has been cut off are presenting for assistance. In fact, over 160 organisations from across Australia, ranging from welfare agencies to job placement companies, unions and peak industry organisations, tendered submissions to the government prior to the introduction of this bill. So many submissions express real concern with the gradual shift of the compliance system from one of employment outcomes to one of coercion and punishment. For instance, the National Welfare Rights Network told us that the relationship between the eight-week non-payment penalty and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime, is both categorical and direct. Homelessness Australia told us about research from the University of New South Wales’ Social Policy Research Centre which found that up to 20 per cent of people who underwent an eight-week breach lost their accommodation or were forced to move to less appropriate housing.

Berry Street, in their recent submission on this issue to the federal government, told the story of a 19-year-old young man who they called Zac so as to conceal his identity. They said that Zac’s literacy and numeracy skills were very limited. He undertook a job capacity assessment through DEEWR and was determined, by that assessment, to be ready for employment. Zac failed to keep appointments and his payments were regularly breached, leading to greater instability in accommodation and a downward spiral towards engagement in more serious self-harm and crime.

We know that, more broadly speaking, many of the job seekers who are in the Job Network at present are extremely disadvantaged. Eight weeks without an income does of course impose severe financial hardship in many cases and this in turn can exacerbate other personal and family problems. Compounding this problem was that there were no requirements during those eight weeks for job seekers to look for any work or to maintain contact with Centrelink or, as I said before, their job service provider. At the end of those eight weeks, they are miraculously expected to have a change of mind or a change of heart and somehow find the motivation after being in financial hardship for nearly two months to go back into job hunting again with the network that they have just been breached from.

There are more and more cases of people in this situation. There is evidence to suggest that job seekers do not engage during the eight-week non-payment period. For many job seekers, the downward spiral of poverty and alienation is only sped up. Under the compliance regime introduced by the Howard government, 75 per cent of job seekers who received an eight-week non-payment penalty went straight back onto benefits, and most of those were within two weeks of the lapsing of their eight-week non-payment period.

Last financial year, there were around 32,000 eight-week non-payment penalties imposed. But in the financial year before, there were around 15,000 non-payment penalties imposed. This means that non-payment penalties have doubled in the space of one year. Even though there was a doubling of the number of eight-week non-payment penalties between the years 2006-07 and 2007-08, attendance at job search training has not improved. This pattern also holds for Job Network interviews and customised assistance. This is a very obvious sign that the current compliance system is more about punishment than results. This is especially so when we consider that the social security compliance system has been changed 10 times since its introduction way back in 1945. Half of these changes were during the term of the Howard government.

In my own electorate of Deakin in Melbourne’s outer east, there was a 59 per cent increase in the number of people hit with eight-week non-payment penalties when comparing this year to last. Of the many electorates surrounding Deakin, the figures were even higher. In light of this, I believe the bill should not be delayed in any circumstance at all. It is vital that we get it put through as soon as possible so that, come 1 July next year, a new system will be in place, ready to go and available to assist those who really do need help in searching for a job. On that note, I commend the bill to the House.

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