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

I rise to speak in support of the Family Assistance and Other Legislation Amendment (2008 Budget and Other Measures) Bill 2009. This bill deals with three separate measures, the first being a component of the phase-out of the Community Development Employment Program; the second being the establishment of a review mechanism for administrative decisions made under the income management regime, which applies to those covered by the Northern Territory emergency response; and the third being a streamlining in the payment of the family tax benefit. I intend to deal with each of these provisions in that order.

I will start with the part of this bill which deals with the Community Development Employment Program. The Rudd government have committed to closing the gap on a range of social indicators between Indigenous and non-Indigenous Australians. We have established under that broad umbrella six specific targets, one of which is to halve the gap on employment outcomes between Indigenous and non-Indigenous Australians within the next decade. This is as important a target, as important a goal, as any of the gaps that we are trying to close in relation to Indigenous and non-Indigenous Australia.

Whether or not you have work has an enormous impact upon your prosperity. In Australia, work is the principal means by which we get a ticket to engagement in the prosperity of our society and all the things that a modern, developed economy has to offer. People who work have better health outcomes. People who work ultimately therefore have better life expectancy. So we cannot hope to close the gap in a range of areas if we do not first close this gap in employment outcomes. Right now, Indigenous unemployment runs at a rate of almost three times that of non-Indigenous unemployment. So there is a very significant gap to be closed. At the heart of this is reforming the Community Development Employment Program—otherwise known as CDEP.

CDEP was introduced 30 years ago and its original aspiration was to provide a transition for Indigenous unemployed people from being unemployed to being in the open labour market and to full employment. Indeed, in many places there have been real success stories around CDEP. There have been important community projects which have been undertaken, work has been provided to people and there has been a source of income. In simple terms, the way in which CDEP operates is that participants forgo their entitlement to other mainstream income support payments and payments are made by the government to a CDEP provider and that provider then makes those payments to the participants. At the same time, as part of providing those payments, the provider has participants working on community projects. As I said, there are very good examples out there of very effective projects being undertaken and good work being done. I think that comment is particularly apposite to more remote communities in Australia.

If we take a step back, it is fair to say that CDEP has not met its original aspirations. At one end of the spectrum there are people undertaking activities under CDEP which really do not constitute real work. It may involve very little, if in fact any, work at all. At that end of the spectrum CDEP starts to look like welfare, and in some cases like passive welfare. At the other end of the spectrum there are people operating under CDEP who are doing real work, and work which is very much needed within a community. But, as a result of doing it under CDEP, they are being paid far less than what they would be paid if that work were being performed in the open labour market. In that sense the CDEP is preventing these people from earning the kind of wage they would earn if they were doing that work in the mainstream labour market, and therefore denying them the prosperity and the range of other social benefits that come from being paid a proper amount for their work.

The unifying theme across that entire spectrum is that for far too many CDEP has stopped being a transition from unemployment into paid work and has in fact become a destination in itself. People go onto CDEP and they never leave. That is absolutely against the original aspiration of the CDEP. In terms of the programs that are offered by government, Indigenous job seekers ought to be afforded all the hopes and aspirations that are afforded to non-Indigenous job seekers. That is the way that government programs should approach Indigenous job seekers. But, given the entrenched disadvantage which exists in the rates of unemployment for Indigenous Australians compared with the rates for non-Indigenous Australians, it is necessary to have a particularly targeted program for Indigenous job seekers in applying a mainstream scheme. That is the way in which the Rudd government seeks to go.

That does mean the phasing out of the CDEP. Already the review board of the Northern Territory emergency response has commented that by virtue of the Commonwealth, the Northern Territory and a range of local governments in the Northern Territory fully funding various programs that they had previously undertaken through the CDEP, 1,536 jobs will be transferred from what would have been CDEP jobs to fully paid jobs—paid jobs the same as if they were being undertaken by anybody else. By June of last year, 1,300 of those jobs had already been taken up. That is a wonderful example of what can occur through the transition from CDEP into the open labour market.

In addition to that the Rudd government has implemented the Indigenous Employment Program, which sits in tandem with the mainstream income support programs but which is targeted to Indigenous job seekers. The Rudd government has committed $779 million over the next five years to targeted assistance through the Indigenous Employment Program. The Indigenous Employment Program will establish two panels. One will be an employment panel, which will focus on providing customised training to Indigenous job seekers as well as providing support to employers about how to recruit Indigenous employees and how to retain Indigenous employees. The second panel will be an economic development and business support panel, which will provide business support—much-needed basic business skills—to small indigenous businesses which are attempting to establish, as well as developing economic strategies for communities. All of this is a very important transition from CDEP to a mainstream income support program which is supplemented by the Indigenous Employment Program.

This bill sets time lines for the phasing out of CDEP. Under this bill, from 1 July this year new CDEP participants will not be paid through CDEP, but will in fact be paid through the normal income support mechanisms with the IEP in place. But they will be able to access CDEP programs in terms of the work that they undertake. Existing CDEP participants will continue to have access to CDEP wages and programs under this bill until the end of June 2011 before transferring to mainstream income support supplemented by the Indigenous Employment Program. CDEP will be enhanced for those participants who continue over the next two years so that those who are not doing work under CDEP will also have access to training around life and foundation skills, English literacy and numeracy and basic work skills, and they will have their situation case managed. A community development stream will also be put in place to fund community projects and local capacity under CDEP programs, which will be aligned to the existing local job opportunities within the particular community. That is to say that the projects that are undertaken by the CDEP over the next two years in these communities will be focused on skilling participants in that program with skills which are likely to be able to be used within those communities.

That is a very important measure in phasing out the Community Development Employment Program. What is important to understand is that young people and school leavers will immediately go onto the new regime of mainstream income support supplemented by the Indigenous Employment Program. They will not be caught in the CDEP trap. There is a period of transition for those who are working under CDEP, where those participants can prepare themselves for 1 July 2011 and the day on which they will then transfer to mainstream income support—of course, at that time also supplemented by the Indigenous Employment Program. Existing CDEP providers will be encouraged to become Indigenous Employment Program providers at that point as well.

During this transition there will be intensive support provided to both CDEP providers and CDEP participants. This is an intelligent, compassionate and gentle phase-out of the CDEP program and it is a much improved way of getting from where we are now to where we want to be than what was proposed by the Howard government. This phase-out is being done in the context of a much broader investment by this government in employment services for Indigenous jobseekers, and so I very much commend that part of this bill to the House.

The second measure contained in this bill provides for the establishment of a review mechanism for administrative decisions made under the income management regime which forms a part of the Northern Territory emergency response. I have seen in recent weeks the operation of the income management regime firsthand, I have seen how its operation has increased the purchasing in remote communities’ stores of fresh fruit and vegetables, for example, and I have seen how it has been welcomed by many women in Indigenous communities. The way income management works is that people who are in receipt of welfare payments have a certain proportion of those payments deducted by Centrelink and placed into an income management account, which is dedicated to that person and is there to provide for priority needs such as food, housing, clothing and household items. The introduction of the income management regime was a function of the Northern Territory emergency response. As of March this year, 15,204 welfare recipients have their welfare managed under the IMR provisions in the Northern Territory and 30 people from the Queensland Family Responsibilities Commission.

When the Northern Territory emergency response was first put in place by the Howard government, there was no mechanism for appealing administrative decisions made in the management of the income management regime. The reason that was given at the time was the unique circumstances of the emergency response. In June last year the Rudd government put in place a review of the Northern Territory emergency response, and that review reported on 30 September last year. One of the key recommendations of that review was that all welfare recipients who have their welfare payments managed as part of the income management regime ought to have access to a merits review, ought to have access to appeals in relation to administrative decisions made in the course of administering the income management regime. That is an appropriate thing to do.

Decisions for these people in relation to the income management and the way that it applies to them have all of the significance, have all of the effect on their lives, as administrative decisions that are made for non-Indigenous Australians in relation to normal income support payments. So it is appropriate that there be the same rights of appeal in relation to those decisions that exist in other parts of the income support system. What this will do is put in place a right of appeal to the Social Security Appeals Tribunal and, after that, to the Administrative Appeals Tribunal. Again, I commend that part of this bill to the House.

The final measure that is contained in this bill is a streamlining of the payment of the family tax benefit. Currently the family tax benefit—both A and B—is paid on a fortnightly basis and that, in turn, is based on an estimated income, or the other option is to have the family tax benefit paid at the end of the year as a lump sum through Centrelink or Medicare, but also through the tax office based on a tax assessment, which of course is a self-assessment. Mr Deputy Speaker, 90 per cent of people who are in receipt of family tax benefits choose to receive them on a fortnightly basis, and it is fair to say that those people who choose to receive them as a lump sum are generally in the higher income bracket of those who are in receipt of the family tax benefit.

What this measure will do is say that if you choose to receive your family tax benefit as a lump sum at the end of the year, then you will not be able to do that through the Australian Taxation Office. This does not remove the choice of the way in which you can receive it, because you can still receive the lump sum through the Medicare or Centrelink process; it just removes it being received through the tax office. Nor does it change the level of the benefits that you would receive.

But there are two important reasons why this measure is being put to the House tonight. The first is that the means by which eligibility for the family tax benefit is assessed is different through the Centrelink and Medicare process than it is through the Australian Taxation Office process. Indeed, there is a more thorough assessment of the eligibility requirements done by Centrelink and Medicare, whereas the ATO uses a self-assessment process. So this provides some consistency in the way eligibility to this particular payment is assessed. The second reason, and perhaps just as significantly, is that by taking this function away from the Australian Taxation Office nearly $20 million of public funds will be saved this year and that will rise to up to $30 million a year within three years. That is a very simple measure that we can take which provides a very important saving for the public purse and for that reason I would also commend this part of the bill to the House.

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