Richard Marles (Corio, Australian Labor Party) Share this | Hansard source

Making up for it. In all seriousness, let me give the member for Gippsland a plug. I am told that he lost his locks in a very good cause, raising $1,500 in support of cancer sufferers. I commend him for that.

I speak in support of this bill, which seeks to amend the Social Security Act 1991 to improve access to income support for those who have lost their job as a result of the global economic recession. It will improve access to income support by altering the operation of the liquid assets waiting period. The liquid assets waiting period is a period of time which needs to elapse before a person who has lost their employment and who has liquid assets above a certain threshold can receive income support.

As it currently operates, for a single, that threshold is $2,500. For every $500 above that threshold, a person needs to wait a week before they can receive income support. For couples and people with dependants, that threshold is $5,000, and they need to wait a week for every $1,000 of liquid assets that they have above that threshold.

The rationale for such a waiting period is that people who have some substantial liquid assets ought to in part rely on them before receiving income support. We do not seek to alter that general rationale which currently exists in the long term. But we are seeking a temporary amendment to double these thresholds, and that will improve access to income support. For singles, the threshold will be $5,000. For couples and people with dependants, it will be $10,000. That means that, if you are a single with $5,000 in liquid assets or you are part of a family which has $10,000 worth of liquid assets, you will be able to receive income support after a week, whereas under the current provisions, prior to this amendment, it would take five weeks before income support would come on board. The amendment to those thresholds is sought to be put in place temporarily, for what is intended to be a two-year period, to deal with the current global economic crisis, and this will be reviewed in next year’s budget—that is, the 2010-11 budget—to see whether that period of two years is appropriate.

There is also another amendment in this bill which is sought to be made on a permanent basis, and that is to change the definition of a liquid asset to remove the cash-in value of a life insurance policy. Liquid assets currently include money, deposits, term deposits or even shares—any asset which is easily turned into money pretty rapidly, and of course the cash-in value of a life insurance policy may fall within that category. But to include that in the definition of a liquid asset unfairly penalises people who have been maintaining life insurance policies whilst they have been working. Obviously, it particularly impacts upon those who might ultimately be the beneficiaries of a life insurance policy—the family of the person who is working. So this amendment will remove that from the definition so that there is no drawing down of that value or any pressure to cash in a life insurance policy. Of course, the cash-in value of a life insurance policy is normally far less than the accumulated total of the premiums which have been paid up until the point where the cash-in occurs.

These provisions seek to target people who have lost their jobs as a result of the global economic crisis and, as I have said, it will provide for much quicker access to income support. We are going through a very difficult time, and it is a time which is being experienced across Australia and certainly in my electorate of Geelong. For example, Centrelink in Geelong has reported a 30 per cent rise in weekly claims for the Newstart allowance since Christmas. The Geelong Centrelink office has increased its staff by 20 per cent to deal with the influx in new applications for support, and the Corio office, which operates in the northern suburbs of Geelong, has boosted its staff numbers by a similar amount in anticipation of an increase in requests for support.

In dealing with this measure, we are perhaps talking about the people who are most severely affected by the global economic crisis, and many of those who are losing their jobs through this time are losing their jobs for the first time—that is to say that they are entering the income support system for the first time. Many of these people do have modest liquid assets and this bill is being put in place so that they are able to access income support more quickly but also so that, in years to come when they return to employment, they are not in a position where they look back at the global economic recession of 2009 and say that this was the time when they lost their life’s savings, that this was the time that gave rise to a legacy which will last for years and years. By increasing the thresholds, what we do in effect is ensure that $10,000 or more for a family, or $5,000 for an individual, remains as a nest egg. If it has been built up over a period of time, it cannot be touched as a result of this global economic crisis.

These provisions are sought to be made effective from 1 April and, as I said, it is intended that they are put in place for two years, with a review in next year’s budget. For any person who is currently serving a waiting period prior to receiving their income support on 1 April this year, the provisions contained in this amendment bill will operate upon them. That is to say that, if on 1 April they have met a waiting period sufficient for this bill, any further waiting period would be expunged. If this bill would seek to reduce the waiting period which they would need to serve, then it would be so reduced. Similarly, if the provisions cease to operate two years from now, on 31 March 2011, anybody who is in the middle of a waiting period at that point will only serve the waiting period in accordance with the provisions in this bill.

This does not affect the way in which redundancy payments and leave entitlements, which are paid out at the termination of a person’s employment, operate in relation to the income support system. Those payments will still be subject to an income maintenance period. The rationale is that a redundancy payment is paid in order to tide people over during a period when they are unemployed. So those provisions will not be disturbed. But this will significantly reduce the liquid assets waiting period.

I am very proud to be a part of a government which, during this global economic crisis, has acted swiftly and decisively to deal with the single biggest economic shock which has been experienced by the globe since the Second World War. Immediately on this shock being crystallised, in a sense, we acted to provide a bank guarantee, which has stabilised the Australian financial system. In October, we put in place a $10.4 billion stimulus package, which has helped keep the economy going over the Christmas period and beyond. In February of this year, we put in place the Nation Building and Jobs Plan, which, in turn, provided a stimulus to the economy which will keep the economy going but which gave significant expenditure to much-needed infrastructure in the areas of schools, insulating our homes and putting more solar hot-water systems around houses in this country. All of that will not only give rise to a fantastic legacy from the stimulus package in years to come but will also drive employment during the period of the global economic crisis. In addition to that suite of measures, we have this bill, which is directed at those hit perhaps most harshly by the global economic crisis—those who lose their job through no fault of their own. This will ensure that the savings they have built up through years of employment will not be unduly whittled away by virtue of their having lost their job as a result of the global economic crisis. This is a very important measure and a very compassionate measure, and I commend it to the House.

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