Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise to oppose the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014. I do so because I and, indeed, Labor are opposed to the cruel and unfair measures that are contained within this bill. I listened to the member for Lyne talk about why he supports the bill and I have to say that he does not seem to understand the true social impact and also the economic impact that this bill will have if enacted.

Let's be clear here. The bill seeks to include changes to compliance provisions that will impose an eight-week non-payment penalty for failures on people which will prevent them from re-engaging in the job-seeking process. When I was Minister for Employment participation from 2007 until mid-2009 the first thing I did as minister was abolish the bureaucratic and badly constructed Job Network. We dedicated the resources to those job seekers who were most disadvantaged. We created four streams. The third and fourth streams were the most disadvantaged job seekers, people who had vocational and non-vocational barriers to employment and needed support of a vocational and non-vocational kind from employment providers, training providers and others.

But we also, along with that, looked at the way in which we could ensure that people would comply with their obligations pursuant to social security legislation. We found that the notion of an irreversible eight-week penalty, even if the job seeker chose to then re-engage in that eight-week period, was not economically sound and not socially responsible. We found that—and let's remember that 76 per cent of the failures currently relate to people under 30—there was a high incidence of people being homeless or at risk of being homeless as a result of the eight-week penalty being imposed. The fact that there was no flexibility for government agencies to resume payment of any kind to those job seekers, if those job seekers chose to resume their activities pursuant to the obligations they had under the legislation, we found to be too inflexible and too harsh.

The whole point here is to ensure that we provide the environment in which people are useful in society, are productive, and get self-fulfilment from work. That of course increases their independence and their capacity to look after themselves. That has to be the priority of any government. If you have a policy that is so inflexible that instead of actually ensuring people resume or re-engage with their community—in this case, looking for, finding and undertaking work—then we have failed as a government. That is why we changed the penalty.

As minister, I kept an eight-week penalty provision for exceptional circumstances, or as a last resort. But let us remember this. Of the 26,879 serious non-compliance penalties applied last year, only 752, just over three per cent, were refusing a suitable job offer. As Labor has always said, we believe if you are offered a suitable job and there is no good reason not to take it, you must take it. You must take work if you want to be in receipt of income derived from the taxpayer. Of course you should. But many of these so-called serious non-compliance penalties were nothing to do with rejecting a job offer. For that reason, the idea that an eight-week penalty, without any capacity or discretion to reverse that if the person seeks to resume those activities, is too harsh and unfair and is not economically sound. It means effectively that rather than those people engaging and having the modest means by which to re-engage and look for and find work, they are more likely to be less able and less inclined to do that, and, ultimately, the cost to society is greater. The reason it is greater is that other agencies of government have to pick up the pieces as a result of people finding themselves, for example, without accommodation. For example, they may not be able to pay rent. They may find themselves on the street or precariously accommodated, which makes it difficult to find work, even if they have decided to disregard the government's offer to make some payment to them.

So it is not sensible to have this one size fits all approach. We also brought in a requirement that if there are breaches and people are not undertaking their obligations, then, provided the circumstances are right, there should be a suspension of income—a loss of income. But if they resume those obligations and activities, then that very modest income resumes. It is just like work. If you do not work you do not get paid. If you do not do the activities you do not get that modest income that might keep you from being homeless and falling into other very difficult circumstances.

That approach created a work culture in the mind of job seekers, many of whom had not even had a job before. It was to say, 'If you do not undertake these activities you will not receive that modest income.' So it was creating a culture of drawing a correlation between a form of payment and undertakings you must fulfil. It was also flexible enough to prevent the likelihood of a higher incidence of people being worse off because they had no means by which to look after themselves, or to dress accordingly for job interviews, or to pay for public transport to get to a job interview or to a Centrelink office or to a job provider.

These were the things we needed to do. If in that eight-week period a job seeker is genuinely wanting to re-engage—say, after a week of not doing so during which time they might lose that one week's income—by undergoing training and other activities, whether it is Work for the Dole or other programs, then I think it is incumbent on the government to give that young kid a second chance and make sure they do not find themselves at the mercy of having no support, which too many young people in our society do, particularly those who do not have much family support. They may have very little family support and very few role models. We do have to provide that support. We can be tough, but we should be flexible. We can be tough, we can send a message, but if they re-engage they should have a chance of getting that modest income. That was the reason I, as minister, created that change. I believe that is a more suitable change.

It is also important to look at the proposed legislation that will remove for six months any entitlements at all for persons under the age of 30. This is on top of that. We have a situation where the government has proposed this to save, for budget purposes, about $1 billion. People under the age of 30, even if they are looking for work—each day, every day, every week and every month for six months—will not receive one cent of support from the Commonwealth and are supposed to make ends meet. Some people will be able to do so, because they can rely on their families I am glad to say. It might be hard for their families, who are struggling, but they will be able to rely on them. Others will not be so lucky to find any form of support as they look for work, but receive nothing. Let us be very clear here. This is the death of the mutual obligation. Mutual obligation, or reciprocal obligation, as it was first called, under Working Nation, during the Keating years, said this: you will get a modest form of income provided you are looking for work and engaging in activities.

The Howard government did the same—reinforced that principle, called it mutual obligation and said that you receive an unemployment benefit provided you are fulfilling your obligations. That is the 'mutual' part of mutual obligation. You do one thing; we provide some support to you, provided you undertake those things that must be done. This government has torn up the principles of mutual obligation and said, 'We don't care if you look for jobs every day.' In fact, they are forcing job seekers to look for 40 jobs a month and yet receive nothing for six months as a result of the proposal. I have to raise that, whilst it is not strictly a provision of this bill, because it is directly connected to these matters. I will now go to what could happen if these provisions were enacted.

A person under the age of 30 who is not in a job or in a learning institution receives no support for six months, even if they are looking for work. But if they are unfortunate enough to have a noncompliance breach that is deemed to be of a serious nature, they could have almost nine months without any support. If anyone had told me before the election that if this government were elected it would ensure that people under the age of 30 looking for work would receive no support from the government for up to nine months—certainly six months, which is automatic—then, even for this government, I would have said that that would be unlikely. Even for this Prime Minister and this Treasurer I would have said that it would be unlikely. Unfortunately, they surprised even me in proposing these initiatives. These initiatives are very, very harsh.

The government like to say that the reason they have had to bring about this change is to mend the budget. They have said it is a fiscal decision that they are making. If you are earning $200,000 a year for a temporary period you will be paying $400, because you are only taxed at two per cent on anything over $180,000. On the other hand, if you are turning 24 next year and you were hoping to get Newstart, you will see a reduction of about $2½ thousand in going from Newstart to youth allowance. So a person who is on about $12,000, going from Newstart to youth allowance, is going to lose 20 per cent of their income. Someone on $200,000 will lose $400. This is supposedly the government spreading the burden. It is a 0.2 per cent reduction in income for a person on $200,000 and a 20 per cent reduction for somebody on Newstart reverting to youth allowance. It is a hundredfold difference between the person on a very low income and person on $200,000. That is supposed to be fair. What a warped sense of fairness this government must have if it has the cheek to pretend that people are all sharing the burden in the same way. It is bad enough that there is almost a 20 per cent cut for 24-year-olds moving to youth allowance, but there is also a six-month waiting period. The bill before us in this place is just another nasty approach to helping young people, because it is primarily young people who will be found to have made breaches.

What really annoys the opposition, what quite frankly appals the opposition, is that it does not even allow for people to say: 'Okay, I understand why I lost some income. I want to undergo training. I want to get into the activities as outlined.' The eight weeks is irreversible. Let us think about how difficult it would be for a young person without the support of family to live for two months without a cent to their name, after, in some cases—if the government has its way—having lived six months without any support at all.

This bill cannot be supported by Labor. There is already in place a very flexible and effective means to ensure the system works. We would argue that the government should continue that and that it should withdraw this bill.

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