John Alexander (Bennelong, Liberal Party) Share this | Hansard source

I rise to speak on the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011, which includes a compilation of amendments across a range of legislation. These include variations to eligibility parameters within the family tax benefit scheme for secondary school students aged 16 to 19, together with changes to the youth allowance parental income test, which was covered in great detail earlier by the shadow minister for families, housing and human services. Other changes in this bill allow for a larger baby bonus instalment to be paid upfront to assist with the costs faced by families with newborn children, and an amendment to ensure that the beneficiaries of the Thalidomide Australia Fixed Trust are able to have their payments exempted from income tax and welfare tests.

The particular changes within this bill on which I wish to focus my attention, are the amendments to the Social Security Act 1991 and the Veterans’ Entitlement Act 1986. These will affect changes to the work bonus scheme, which was introduced by the Rudd government in September 2009. Shortly after its implementation it quickly became apparent that the legislation was not achieving its intended outcomes, as it did not take into account the nature of the work actually being undertaken by many of those eligible. Many pensioners perform seasonal work or have temporary jobs such as being school exam supervisors or Christmas Santas. They were effectively being penalised by the new system that was supposed to reward them for their initiative.

In February 2010, only months after the passage of this legislation, the coalition raised these concerns directly with the minister and in the media, followed by detailed questions in budget estimates. After sustained pressure from the coalition, leading to an obvious fear of electoral backlash from the significant pensioner community, the new Gillard government finally adopted these changes as part of its election policy. Now, more than 12 months after the coalition first highlighted the problems with this legislation with the minister, we find ourselves here today to speak on the amendment.

This amendment will make changes to the pension work bonus to exempt the first $250 per fortnight of employment income from the income test and enable pensioners to accrue any unused amounts of the $250 fortnightly exemption to a maximum of $6,500 and to offset future assessable employment income. In simple terms this will increase incentives for age pension recipients to work by enabling them to keep more of their pension when they are working. It is important in a society where welfare dependence is far too common that the government provides these incentives for people who want to extend their time as participants in the workforce, particularly as we understand our changing demographics and the evolving needs of an ageing population.

However, it is also essential for government to follow this up with incentives for businesses to employ those who are of or approaching pension age. It is no surprise to hear of the cynicism that many of my older constituents express about government strategies to keep older people in work as their experiences show that companies are generally disinclined to provide them with opportunities for this employment in the first place.

In reply to an email I sent on this bill last week one such constituent claimed that whilst she supported the idea of this legislation she found it to be, in her words, ‘mainly academic’. The quote continues:

You can’t increase the incentive for older people to work if there is no work available for them—apart from, as you mention, working as Father Christmas once a year.

She went on to say:

I think that the Government should consider incentives to EMPLOYERS not just employees. Maybe if there were some financial benefit to employing older people, companies may consider it. There are loads of other benefits—we have experience, we tend to be more reliable, we don’t get pregnant, we tend not to miss work on Mondays because of hangovers etc etc. The problem is getting the employers to recognise these!

Whilst I will not go so far as to sully the image of non-pension-age employees as generally unreliable or around the corner from pregnancy or a hangover—hopefully, not both at the same time—I believe that this constituent has a very valid point.

It is for this reason that the coalition went into the 2010 election with a policy to provide real incentives to help unemployed Australians to re-enter the workforce, stating in our policy that:

The Coalition is determined to ensure that people aren’t abandoned to a lifetime of welfare dependence but are engaged in work if they are reasonably capable of it.

The coalition’s policy for real action on employment participation included the introduction of a $3,250 seniors employment incentive payment for employers that hire workers aged 50 or older. This one-off payment was designed to help overcome the initial reluctance of some employers to appoint mature job seekers. This policy recognised that finding work becomes increasingly difficult for those over 50, not because of a reduced desire to work, a reduction in skill levels or ability to contribute but because many employers prefer to give job opportunities to younger workers. Therefore, the incentive built into this bill may be positive but it is all but a toothless tiger in attacking the problem of mature age employment participation unless it is coupled with a program to provide incentives for the employer to offer these people jobs in the first place.

These incentives would serve to encourage those looking for work, and also to motivate many of those who are currently ignored in the official unemployment rate as they have given up hope and simply stopped looking, and therefore do not even present as a statistic in our unemployment data.

According to a pre-election submission by the National Seniors Association:

In 2009 almost 60,000 Australians aged over 55 counted as discouraged workers, that is: they wanted to work but had stopped looking because no one would employ them. The main reason cited was ‘being considered too old by employers’.

The incentive payment offered by the coalition was worth $250 a fortnight to the worker for a total subsidy for six months of $3,250. That is roughly equivalent to half the cost of the current Newstart allowance. The incentive payment would have been paid in a single lump sum directly to the employer after six months’ continuous employment by the eligible worker.

According to analysis performed by the National Centre for Social and Economic Modelling, approximately 900,000 people aged between 50 and 65 could be eligible for this form of incentive payment. The uptake of this incentive by even a small amount of those eligible would lead to considerable savings to taxpayers through reduced benefits and increased taxation revenues, as well as the obvious positive impact on both the community and the individual through increased levels of employment.

On this broader issue of employment participation, the statistics make it patently obvious that Labor has comprehensively failed to help unemployed Australians to get off benefits and back into the workforce. Since 2007, the number of long-term unemployed Australians has gone up. Mutual obligation has been watered down to be all but unrecognisable, and as a result the number of penalties for breaches has been drastically reduced. I urge this government to balance the incentive in this bill for the older job seeker to find or maintain employment with a strong incentive to the job provider to hire from this important, reliable, industrious and growing segment of our society. In not opposing the overdue amendment in this bill, the coalition adds the disclaimer that we in this place still have much work to do to achieve real outcomes on this important issue.

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