Brett Raguse (Forde, Australian Labor Party) Share this | Hansard source

It is certainly a pleasure for me to get up and speak today on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. I would like to commend the member for Oxley for his impassioned speech. He understands the nature of his electorate very well and how the current legislation has certainly had major impacts on electorates like Oxley. It is not unlike the electorate of Forde where we do have a lot of dislocation and problems that are enhanced by the draconian approach of the current legislation.

It is important in the current economic circumstance that we encourage people into the workforce. This bill will encourage participation and compliance. This will be achieved by establishing a framework for a new compliance system that will make those who are seeking employment more accountable for their efforts to find and keep a job. This is very much along the lines of the policy of Labor governments generally and certainly the Rudd government in terms of a need for social reform. Looking at the previous government’s approach to this issue, I think it was just too hard. Our view, with the Labor Party’s very strong understanding of social justice, is to consider ways to support people who find themselves in the difficulty of being unemployed. The way to support people back into the workforce is not to have a penalty that is very hard and has major effects across the board.

For electorates like Oxley and Forde, the current legislation is very city-centric. It does not understand or have consideration for the difficulty that people have in their mobility around an electorate such as mine. I have spoken many times in this House about far-reaching areas to the southern end of my electorate, and those who have heard me talk about Duck Creek Road before will understand that it is an area of extreme remoteness. There is no public transport and very poor road infrastructure. That has a major effect on how we apply legislation to support people to find a way back into the workforce. I think the Howard government became tired on a whole range of issues. This was one issue that they felt it was better to leave in the too-hard basket. Essentially, it left a whole range of people finding themselves dislocated in our communities.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 will amend the Social Security Act 1991 and the Social Security (Administration) Act 1999 to give effect to the measures announced in the 2008-09 budget to support the new employment services, in particular the introduction of a new job seeker compliance system. The new compliance framework will apply to Newstart allowance, youth allowance for persons who are not full-time students or new apprentices, parenting payment for persons who have participation requirements and are not new apprentices, and special benefit for nominated visa holders.

A key feature of the new framework is the no-show, no-pay penalty. This new penalty will deter noncompliance and encourage re-engagement. As I said, re-engagement is what this is all about—giving people opportunities to train their way back into the workforce. It applies to a job seeker who, without reasonable excuse, fails to attend an activity or a job interview or intentionally acts in a manner that is reasonably foreseeable which may result in an offer of employment not being made. The no-show, no-pay penalty will be equivalent to one work day of a job seeker’s basic rate of payment and any approved program of work supplement—normally 10 per cent of a job seeker’s 14-day instalment.

When you compare this with the current eight-week, non-payment penalty, which is counterproductive and has wider impacts on society, it is clear that the new legislation will better incentivise job seekers, and that is really what this is all about. The bill contains several minor technical amendments designed to clarify and improve the operation of the current payment-pending review provisions, particularly in relation to the start date of penalties following the decision to apply a penalty.

In his second reading speech the Minister for Employment Participation stated that the key reason why these changes are necessary is that the current compliance system has resulted in thousands of counterproductive, non-discretionary and irreversible eight-week, non-payment penalties. For the duration of these eight-week, non-payment penalties there is no requirement for the job seeker to look for work or to have contact with either their employment service provider or Centrelink. The consequence of this failed approach to compliance and an obvious defect in the system is the eight-week separation of job seekers from participation requirements, including looking for work, gaining skills or undertaking work experience.

My background is as a TAFE institute director, a position I held for some time. Training was a very big part of our role in society—certainly for governments at all levels. In the years of the Keating government, training was a major focus. Essentially, training to a large degree has to be part of how we support people through these changes.

The results speak for themselves. The former government system has failed on noncompliance. In 2006-07 there were around 16,000 eight-week, non-payment penalties applied. In 2007-08 this had doubled to around 32,000 eight-week, non-payment penalties. If the current system were effective, it would have resulted in decreasing numbers of penalties because more job seekers would be participating. These figures confirm that the existing arrangements are just not working, particularly in an environment of strong employment growth. Certainly in South-East Queensland in my electorate it is quite difficult for large employers to get adequately trained staff. To have people falling out of the loop at a greater rate certainly rings the alarm bells.

The change to the compliance system set out is part of the $3.9 billion package of necessary reforms to Australian employment services that commence on 1 July 2009. These reforms are crucial because in the last 10 years employment services have been operating under policy and administrative constraints that have hindered disadvantaged job seekers, their families and their communities. These policies and constraints have also failed employers, who desperately need skilled workers to fill vacancies. I have used the example of the electorate of Forde, but it applies generally to many parts of Queensland. Certainly in the resource rich areas of Queensland, where a lack of capable and competent people to perform tasks means that we have high demand, we should be able to channel people who are available into those job opportunities.

In the last 17 years of economic growth we have had improved job prosects for thousands of people. On the other side of the coin, many others have had a bleak employment outlook. As I just mentioned, we are still experiencing skill shortages—something that was not addressed by the previous government—and this has been clearly identified by the Rudd government as our priority. There is a priority for training and support. The member for Oxley has made the point very well many times that this is about giving people opportunities. Without a doubt the best social security we can have in this country is through giving people job opportunities, a career path and the ability to increase their skills.

The general wellbeing—certainly psychologically—of any person, and that person’s family and all of their contacts, depends on their self-reliance and independence, and their ability to look after themselves and to take advantage of great job opportunities without considering penalties simply because of their circumstances. The harshest element of the current system is the eight-week, non-payment penalty. It is not hard to envisage the situations that come out of eight weeks of non-payment—people unable to pay their bills or their rent. This can cause people to become destitute and dislocated, just adding to the potential for community stress and dysfunction.

As I have mentioned before, in my electorate of Forde we have a major demand on rental properties. At one stage people had access to affordable rent and there were available rental properties. If you consider that people have no continuity in their income you can imagine the stresses of being unemployed. They may then be further concerned if a breach occurs—sometimes because they did not receive a letter or because a piece of information went missing. They were very much dependent on the administrative systems being able to accommodate and understand the processes. I am sure that the staff of Centrelink were very understanding of people and their situations, but at the end of the day they had very little latitude in terms of how they could ease the distress of people who, for whatever reason, may have breached a particular condition of their payments.

As I said, not having the income stream for two months, and having people evicted, certainly leads to issues of hunger. While that almost seems, in this day an age, an anomaly in our society, I know, from the groups that operate in my electorate—I am sure it is the same in many other electorates—that much support goes to families who simply do not have enough food to put on the table. A large component of that is people who are not only unemployed but have, for whatever reason, been penalised for some form of noncompliance. We can see how this issue can contribute to the housing crisis and charities being overwhelmed by people needing food and clothing.

As I said, the unfortunate part of our modern society is that there are people who are in all sorts of situations at different levels. There are people who have quite generous salaries and there are people who are simply not getting by, who are highly dependent on a government system. For that reason we should not be penalising people who find themselves in that situation—not to the degree of this eight-week arrangement.

This legislation allows a more measured approach to people being penalised for noncompliance, whatever might have caused that noncompliance. It is an irony, when you consider the global financial issues that confront us now, that a major questioning at the moment is about executives on high salaries and benefits. As I understand it, one company in the US—a failed bank—had paid their top executive over $468 million over a period of 10 years, in salaries and bonuses. I remember that in the inquiry there was a great protest from that particular individual who said, ‘No, it wasn’t $460 million; it was only $320 million.’ It was an enormous amount of money. The reality is that people who were operating in that environment had major failures and were noncompliant in terms of the sorts of things they were doing and yet they still got a benefit. Yet the people who are least able to look after themselves in our society get punished in such a harsh way—through taking the very means of their existence away from them. The dependency that people have, in receiving those sorts of benefits, shows that this is not an adequate way to do this. A measured approach is certainly the way to approach it.

According to Homelessness Australia, 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. These job seekers are some of our community’s most disadvantaged people. Against the issue of the excessive executive salaries that I spoke about, it just does not make sense that people are having their means of survival taken away from them when they are breached. This issue with job seekers is one that confronts us all.

The first goal of the new compliance system is to ensure job seekers meet their participation requirements and make every effort to get themselves off welfare and into a job. As the member for Oxley said, this is about making people responsible for their actions. A system of breaching is an important part; it is part of the incentivising. But the harshness of the penalty has to be something that is very measured and I believe that this legislation will certainly resolve that. The current system provides little of deterrence or early intervention. A major concern is the lack of immediate consequence for initial failures to complete activities. It comes as one big wallop—and the eight-week breach of payments is a major wallop.

An important element of the no-show, no-pay failure is to promote a work-like culture to employment services. If a job seeker does not attend an activity that they are required to attend without a reasonable excuse, it will result in the job seeker losing one-tenth of their fortnightly payment for each day they do not attend. This does not affect rent assistance, the pharmaceutical allowance or the youth disability supplement, but it does apply to any supplement the job seeker is receiving for participating in Green Corps or Work for the Dole. As is currently the case, access to healthcare cards and family tax benefits will not be affected. When the job seeker resumes participation, it will result in a resumption of payment. Resuming participation will result in resumption of income support. A no-show, no-pay failure means that noncompliance will have an immediate financial impact, but the extent of the penalty will be in the hands of the job seeker.

Another key difference between the current and the new system is that in the current system a job seeker who gets an eight-week penalty must serve it no matter the circumstances or if they assume an activity. As I said earlier, this is draconian and certainly puts more pressure on the services, particularly the Centrelink staff who have to deal with enraged people. If you have ever looked at or joined the queue at a Centrelink office, or have an understanding of the frustration of people in this process, you will find Centrelink staff are very dedicated to their job—but it is a tough job. Adding this level of pressure is just not fair on those people who are working hard as servants of the public but are being berated by people who for some reason have been dislocated in the system. Under the new system, any job seeker subject to an eight-week, non-payment penalty for persistent noncompliance or refusal of a job offer can have their payment reinstated if they agree to undertake a compliance activity. This will generally be 25 hours a week of full-time Work for the Dole for eight weeks, but may include other similar activities as appropriate.

We need to provide encouragement to people to engage with the system and get people back into the workforce. The electorate of Forde is part rural-regional and part metro. It has quite a diverse range of communities. The lack of services and public transport means that people have added pressure when they are looking for a job. It is necessary for our economy and future economic growth that we try to get people into the workforce, and it is important now, more than ever, in the current economic climate. The current global financial situation will put pressure on all areas. Employment will no doubt be a possible victim. Manufacturing industries are usually the first affected by slowdown or some cataclysmic financial event, such as what we are seeing in other parts of the world right now. The seat of Forde has some major industrial areas—the Yatala Enterprise Area being one. It is currently one of the largest industrial areas in the country. It also has a fairly large manufacturing base. They are continually looking for workers and people with particular skills. When there is a downturn, people in the manufacturing industry are usually the first to suffer.

Contact made with my office about the system has been made by people who have been concerned about the way the current legislation has been enacted, and this is something that has been going on for many years. As a new member I very quickly became aware of the pressures that people found themselves under in dealing with the whole job-seeking arrangement.

Of the areas in the south of my electorate, which I have said before are large areas for future growth, the area of Bromelton has been announced as a state development area, which means an area of development controlled by the state. It will be a major area of investment for infrastructure in building what will be the largest industrial centre in the country. Currently I have one of the largest areas of development, in the Yatala area, but for the future it is considered that within only seven or eight years there will be 8,000 jobs taken up by that particular development in the Bromelton area. The positive side is that, with the economy running at a certain level, there are huge opportunities in my electorate for 8,000 people in what will be service and manufacturing industries. Those people would also be victims of any major change in the financial circumstances. If, for whatever reason, bad times come, we must ensure that people who are locally and regionally based who do not necessarily have the opportunity to travel out of their areas will be looked after under our systems and ensure that they will not be penalised simply because of the circumstances of where they live and issues of mobility.

As I have said many times in this House, my electorate of Forde at the northern end is only 40 kilometres out of the city of Brisbane. From that point to the farthest end, a distance of some 160 kilometres, there are seven or eight communities which are not serviced by adequate infrastructure or public transport. People who lose their jobs in regions of my electorate cannot necessarily afford to run the two cars that they need to get around the electorate. If they are out of work, a breach because of noncompliance for whatever reason puts them in an even worse situation. They do not have the opportunities that many people in the city regions have and I am sure that any member of this House who represents a country, regional or remote area will understand exactly what I am talking about. So, Mr Acting Deputy Speaker, for all of those reasons I commend this bill to the House.

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