Brendan O'Connor (Gorton, Australian Labor Party, Minister for Employment Participation) Share this | Hansard source

I rise to sum up in this debate. Indeed, before I go to the substantive matters I thank the very large number of members who have taken part in the debate on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. The bill proposes compliance arrangements that provide a two-way nexus between participation and payment that is genuine mutual obligation not the ham-fisted mutual obligation of those opposite. The new compliance system does not seek to punish job seekers for punishment’s sake. Rather it is a tool to maximise job seekers’ participation in activities that will better assist them obtain employment. This bill introduces a more work-like, no-show, no-pay penalty that will apply when a job seeker fails to comply with a required activity without a reasonable excuse. It retains a deterrent eight-week non-payment penalty for persistent and wilful noncompliance. It predicates payment on the job seekers’ participation. In short, it will be a more effective compliance system than the one it is replacing.

The current compliance system, which the opposition says ain’t broke, has not improved compliance. If the current system were working as the opposition claims, it would result in declining breaches because it would encourage job seekers to meet their requirements and would ultimately support them in getting them off income support and into employment. Yet 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. An effective compliance system should result in improved participation. However, since the introduction of the present compliance system, there has been no improvement in attendance at Job Search training, Job Network interviews or customised assistance. An effective compliance system should clearly link the receipt of income support and the obligation to look for work. Again, the compliance system falls well short. A job seeker can miss up to two weeks of Work for the Dole before any action is taken. Then a job seeker has a chance to reconnect and, if they do, they incur no penalty at all. To use the opposition’s inaccurate stereotype, that is two weeks at the beach without any penalty.

An effective compliance system should provide a timely and proportionate response. Presently there is no real or immediate consequence for deliberately failing to attend activities or job interviews initially. If a job seeker does not turn up to a job interview, there are no consequences. If that same job seeker does not turn up to a second job interview, still nothing happens. Yet, if that job seeker misses so much as an appointment with their provider any time in the 12 months after they failed to turn up the first time, there is no choice but to impose an irreversible eight-week non-payment penalty, effectively suspending participation. There is no doubt in my mind that the lack of an early deterrent, something more than a letter in the mail, is a key reason for the explosion in eight-week non-payment penalties in recent times.

Under the new system, job seekers will receive, proximate to when the breach occurs, a clear message that their actions are unacceptable, resulting in more work-like conduct in the future. The eight-week non-payment penalty will continue to deter persistent and wilful noncompliance. In addition, job seekers who fail to comply with activity requirements will incur a no-show, no-pay penalty. The Liberal opposition is out of touch if it thinks the no-show, no-pay penalty is not enough money to deter a job seeker from noncompliance. One-tenth of a job seeker’s main income support payments—around $44.90—may not seem a large sum to those opposite. The equivalent lost income for those opposite would be around $500 a day for nonattendance. If I may again revert to the opposition’s cheap shots, that is an expensive day at the beach. To discourage job seekers from leaving employment voluntarily without finding another job, the government will also retain an eight-week preclusion period. In future, we will refrain from labelling this behaviour as a failure warranting a penalty, as presently occurs. Indeed, although it reflects poorly on the shadow minister, I am duty bound to point out that this so-called penalty is the single largest reason for an eight-week non-payment penalty, not failure to attend an appointment or Work for the Dole as he claims.

The opposition has relied on the absurd proposition that the current compliance system is responsible for the recent decline in unemployment. The former minister, the member for Murray, has tried to make an even more ludicrous link between the global financial crisis and the compliance system. The compliance system has nothing to do with employment growth and whether a resources boom or the global financial crisis affects it, and it is scaremongering to suggest otherwise. What we do know is that the current compliance system makes it harder for people to find employment. A departmental survey of job seekers who received eight-week non-payment penalties found that around three-quarters of job seekers reported that having no income support made it harder to look for work. However, they do not have to look for work. Job seekers serving an eight-week non-payment period under the current compliance system are not required to participate whatsoever in activities that could help them find employment. They do not even have to turn up to Centrelink or their employment service provider. It is no wonder that 75 per cent of job seekers who received an eight-week non-payment penalty went back onto benefits, most of them within a fortnight of finishing their non-payment period.

I also need to correct another falsehood by the opposition members in this debate. I know it has been a while since the member for Murray was the Minister for Workforce Participation, so one could almost forgive her for her blatant mischaracterisation of financial case management. It is not, as she stated, available to all job seekers. In fact, only 4,050 job seekers were eligible for financial case management last year, which is around 10 per cent of all the penalties applied. Indeed, the shadow minister for employment and workplace relations, the member for Stirling, also needs to be better briefed. His contribution reveals his profound ignorance in this area of public policy generally and this bill in particular. He does not understand that we are replacing a limited financial case management scheme with financial hardship provisions. The new provisions apply to all job seekers who incur serious failures but do not have the capacity to participate in compliance activities and also to vulnerable job seekers who are subject to the eight-week preclusion period.

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