David Coleman (Banks, Liberal Party) Share this | Hansard source

I am very pleased to have the opportunity to speak on the Social Security Legislation Amendment (Stronger Penalties For Serious Failures) Bill 2014, because it goes to the question of how the government manages people's money and how we as a society place requirements on people who receive welfare benefits to do the right thing by society, who is paying the cost. It is a really important issue.

There is widespread support for helping people in genuine need, and I certainly support that, as do the government and the vast majority of Australians. But there is an equally important principle, which is that if you are getting benefits from the taxpayer you should be doing the right thing by the taxpayer. The Australian people will not support a system where people who are abusing the system or not taking their obligations seriously are putting their hand out and accepting a cheque without actually doing the right thing and trying their absolute best to get a job. That is entirely understandable, and that is why we are making these changes.

Social security is an enormous part of the federal budget. It is by far the largest expenditure item. In the 2014-15 budget it is estimated that there will be about $415 billion of Commonwealth spending. Of that, about $55 billion in GST payments flow straight through to the states. So the amount that the Commonwealth effectively allocates is $360 billion. Social security and welfare make up $146 billion of that $360 billion. That is about 41 per cent of the discretionary $360 billion that the Commonwealth has to spend. So it is an enormous amount of federal expenditure. There are many important programs in the social security area, but those numbers really underscore how important it is that we manage this area very effectively.

As a government, we spend more than twice as much on social security as we do on health; we spend five times as much on social security as we do on education; and we spend about six times as much on social security as we do on defence. So it is an enormous area of expenditure and therefore it is very important that we administer these programs in a sensible way. We spend about $10 billion a year on job seeker income support, in its various forms. That works out at roughly $1,000 per household per year, spread across about nine million households. So it is a lot of money. We absolutely owe it to the people of Australia to manage this area effectively.

This bill ensures that people who are not complying with the rules under which they receive benefits suffer a consequence. That sounds pretty obvious. If you do not face a consequence for inappropriate actions then there is not much incentive to stop those actions. But, under the previous government, that is what happened. An extraordinary amount of people were in breach of the rules as they existed, but the penalty that they should have suffered was waived time and time again.    In 2012-13, 68 per cent of people in that category had their penalty waived. That does not make any sense at all. Why have a system of mutual obligation when in fact the obligation is only on one side? There were over 25,000 failures for non-compliance with the job seeker rules. Most of those failures relate to not engaging with employment service providers, as required under the act, and basically not working hard enough at getting a job. But 73 per cent of the time—almost three out of four times—the penalty was waived. What sort of message does it send to a young person in particular who suffers no consequence when they receive benefits but consistently do not show up for interviews or to see their job service provider?

That just does not make any sense at all, and that is why we are making these changes.

Under the bill, job seekers who fail to accept or commence a suitable job will incur a mandatory eight-week non-payment period. Again, it is a very simple principle—if there is a job for you and you do not accept it then it is absolutely right that there should be a consequence. If you are consistently noncompliant with the rules under which you receive your benefit then, similarly, you will face that eight-week suspension of your payment. There is still the capacity for one waiver if there are exceptional circumstances, but as a general principle you will meet your obligations or you will face that eight-week non-payment period. That is a very, very powerful incentive for job seekers to do the right thing by the taxpayer and to do everything they can to try to get a job.

Those measures will save about $20 million over five years—a significant amount. But as important as the amount of money involved is the principle of mutual obligation—the fact that, if you are going to accept welfare, you have to do your bit. You have to put your hand up and get out there and try to find a job. As I mentioned before, the problem in this area was the previous lack of enforcement. That created a scenario where people would just flout the rules, frankly—and that is what we will be putting an end to through this legislation.

The legislation is part of a broader package of measures which the government has introduced in this whole area of encouraging people to go from welfare into work, because we all benefit when that happens. Obviously the benefit primarily goes to the person who gets the job, but it is also good for the economy to have people in jobs and it is good for our society to have people with the dignity and focus that work brings. Getting people out of a welfare situation and into work is absolutely critical.

There are three important areas where the government has taken measures in this space. One is the job commitment bonus—a payment of $2,500 for young people aged between 18 and 30 after 12 months of continuous employment and being off welfare and a further $4,000 if they remain in continuous employment for another 12 months. This is a really powerful incentive. On the one hand, we want to make sure that people do the right thing, which includes the difficult measure of removing their assistance for eight weeks to encourage that. On the other hand, we offer some bonuses and incentives to further encourage people to get into work.

Relocation assistance is also important as, particularly in rural and regional Australia, jobs are not always nearby and the cost of moving away from friends and family to take a job is a very significant impost. So the government has moved to assist people who are relocating to take up a job, with up to $6,000 available for people who relocate to a regional area, $3,000 for people who go from a metropolitan area to a regional area and an additional $3,000 in the case of people with families with children—so up to $6,000. These are really positive measures to encourage people to get back into the workforce.

Another similar program is the Restart program, which will provide employers with a payment of $10,000 for taking on people who are over the age of 50. I was recently at the Peakhurst fruit market in my own electorate for a meeting with the owner. He is very enthusiastic about this particular program because older workers have so much experience, so much expertise and tend to be very reliable. This $10,000 incentive for hiring workers aged over 50 is going to be a real godsend for small and large businesses all around the country.

There are two sides to the coin. On the one hand, we need to be very clear with people who are accepting social security benefits that they have to put their hand up and do the hard work and that, if they consistently fail to comply with the rules, there will be a consequence. On the other hand, we want to provide incentives to individuals and businesses that are assisting in getting people from welfare into work.

All of this is a huge contrast with the efforts of the previous government, or lack thereof, where we saw a failure to enforce the rules and a record on employment generally that was really quite appalling. We talk so much in this place about the economy, big numbers—billions of dollars—and so on. At the end of the day, though, why does all of that matter? Why do we care about the economic measures of the country? The basic reason we care is that it means jobs—economic growth means jobs. But, under the previous government, unemployment rose substantially from 4.4 per cent in November 2007, when they came to office, up to 5.7 per cent in September 2013—a very significant increase. Those opposite so proudly claim to be the friend of manufacturing workers, but we actually lost one in every 10 manufacturing jobs in the country under Labor. In that six-year period, 10 per cent of all manufacturing jobs were lost. There were 200,000 more people unemployed at the end of Labor's reign than at the beginning, which obviously is very poor testament to the Labor government.

Our welfare initiatives will give people an incentive to get in and work. They will require people to play by the rules. We will also drive employment through good economic management, because there is no greater indicator of employment than economic growth. How do you grow the economy? You manage the budget sensibly so that people know they can have confidence in the financial future of the nation. You get free trade agreements, as we have with Korea and Japan, and we are working on one with China at the moment. You get silly red tape out of the way, and you build things like the WestConnex extension in my electorate and other fantastic infrastructure projects right around the nation. You also get the environmental approval process working effectively, as we are doing with the one-stop shop. Prior to Christmas last year projects worth some $400 billion of economic activity were approved. You have to undertake a wide range of measures to grow the economy and develop a culture where the people of Australia know that their tax dollars are being used wisely. About 41 per cent of all of the discretionary spending of the government is in social security and welfare—that money needs to be managed effectively, and that is what this legislation is about.

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