Sarah Henderson (Corangamite, Liberal Party) Share this | Hansard source

I too rise to speak on the Social Services Legislation Amendment (Enhanced Welfare Payment Integrity) Bill 2016, and it is my great pleasure to do so. As we have just heard from the very fine contribution from the member for Ryan, this bill contains two measures which strengthen our capacity to recover social welfare and family payment debts. There are amendments to allow for the use of departure prohibition orders to prevent targeted social welfare debtors from leaving the country, as currently applies to child support debtors. The bill also contains amendments to remove the current six-year limitation on the recovery of social welfare debt that would otherwise be non-recoverable, aligning the treatment of social welfare debt with the recovery arrangements in place for other Commonwealth agencies. While the average value of social welfare debt is some $2,350 and the average length of debt is just over three years, the oldest outstanding debt that the Commonwealth is currently facing is over 30 years old and the greatest amount of debt is in excess of $300,000.

The situation is this: at the end of June 2015 there were over one million debts owed to the Commonwealth, with a value of $3.04 billion. It is with great pride that I stand here and say that is not good enough. Why didn't Labor tackle this question? Why didn't Labor pass these amendments when it was in power? This is a monumental amount of money. It is taxpayers' money. It is owed to the taxpayers. Consider what this amount of money could do—the schools and hospitals it could build, the passenger rail that it could develop, the roads, the contribution it could make to our economy in many different respects. Led by the Minister for Social Services, Minister Porter, this demonstrates that our government has a very strong commitment to making sure that every single dollar that we raise by way of revenue is properly spent and making sure that we deliver the money into the Commonwealth with great responsibility. Where there are these very significant debts, we will make sure that we do everything we can to recover them.

These debts have increased in value by almost 10 per cent since June 2014. They are skyrocketing. And yet, under the previous Labor government, we did not see appropriate action put in place to recover these debts. I think most Australians would agree that this is a very fair and reasonable measure. This money is owed to the Commonwealth. In many respects it concerns those who were on a welfare payment and who have now exited the system. We assume that they are working, earning an income and making a contribution to their family and, of course, to the broader society, but they are doing this with a black cloud hanging over their head, and this is impacting on the Australian economy very significantly. We are determined to do something about it.

Of this debt base, approximately $870 million is held by around 270,000 former recipients who do not make sufficient or regular payments. Current recipients of social welfare payments who also have a social security or family assistance debt have their welfare payments reduced until their debts are paid, so there is a mechanism in place for the Commonwealth over time to recover those debts. However, there is no similar arrangement in place to recover debts once a person no longer requires social welfare or family assistance payments, because, of course, they are no longer part of the system, including Centrelink. The government considers that it is entirely reasonable for people who owe debts to the Commonwealth—to the taxpayers of Australia—to make the necessary arrangements to repay that debt in full within a reasonable amount of time.

Some debtors deliberately avoid their obligation to repay their debts to the Commonwealth by not entering into acceptable repayment arrangements. In extreme cases, they head overseas, beyond Australia's jurisdiction. This legislation will allow the secretary of the department to issue a departure prohibition order to prevent targeted social welfare debtors from leaving the country as currently applies to child support and taxation debtors. This has been a very effective mechanism. Departure prohibition orders have been very effective in recovering outstanding child support debts. Between 2005 and 2015, 4,551 new departure prohibition orders were issued, resulting in the collection of $52 million in outstanding child support payments. We say that, if it is fair enough to recover child support payments from those who are refusing to meet their obligations—and I think every mother and father would agree that child support must be paid and a parent wo has that obligation leaving the country should not reasonably be able to do so without paying their debts—we should take the same approach for other social welfare debtors.

People who have a departure prohibition order issued may still depart Australia in certain circumstances such as for humanitarian reasons or in Australia's best interests. This might include a visit overseas to attend to an ill relative, a funeral, a cultural ceremony of a deceased relative or where international travel is a condition of employment. Where people do need to depart Australia on humanitarian grounds without paying their debt in full, they can make an application for a departure authorisation certificate. The application must be verified by, for example, provision of a medical report regarding the condition of the relative or a death certificate. But we say we are not going to allow this to continue any longer. We have a good system in place to recover child support debts when parents attempt to leave the country and not meet their proper obligations, and why should other debtors in our social welfare system be treated any differently? This was, frankly, a form of discrimination that prevailed under the previous government. We think this is a very important issue to address and to fix and we are very pleased to be doing that.

The other important aspect of this bill, as I mentioned, is that it introduces the legislative amendments required to remove the six-year statute of limitations on the recovery of social welfare payment debt. This will allow Centrelink to recover the social welfare payment debt regardless of the age of the debt. This is a very important measure. As at the end of 2014-15, there were 36,834 debts, worth $131.2 million, that will reach their expiry date within one year. That is before the legislation has been passed. Centrelink has not touched these debts for six years and will not have the capacity to reach those debtors and recover those debts. There are 54,200 debts worth $166.81 million that have already reached their expiry date and so cannot be recovered by compulsory means, which includes by withholding, garnishing wages, garnishing through taxation means or any sort of civil action.

When you look at the amount of money involved, it absolutely stands to reason that this limitation period of six years should be extended so that at any time the Commonwealth can rightly say, 'This money is owed to us. We want it back.' We want it back because we need to spend it on behalf of the Australian taxpayer for our schools, our hospitals, our roads, our rail, our social services and the many other functions that the Commonwealth performs in looking after the Australian people. What has been happening is that these debts have been written off, and we are literally seeing money going down the drain. This has become, in effect, an interest-free loan from the taxpayers of Australia. Stay out of the radar of the Commonwealth for some six years and then you get off scot free. We say that is not good enough. Those Australians who do owe a debt to the Commonwealth should not be able to get off scot free. As the chair of the Coalition Backbench Policy Committee on Social Services, I am very pleased that Minister Porter, the Minister for Social Services, received very strong support from the committee to implement these measures.

That is not to say that there are not some Australians with these debts who will encounter some hardship and who may need some time to pay these debts off, and we encourage them to talk to staff at Centrelink about their ability to pay off the debt over time. In cases of severe financial hardship, a thorough review of their capacity to repay will be undertaken and debtors will be given a fair amount of time to repay their debt. We are not expecting this debt to be paid overnight and we do not want to put someone through acute financial hardship as a result of the recovery of the debt, but we want something in place to make sure that over time this debt can be recovered.

This is one of the many measures the Turnbull government is undertaking to implement a fairer system that makes sure that the money that the Commonwealth raises is spent on those who most need our help. We have done this in many ways. Another very important way is the government's new multinational tax avoidance laws—unfortunately, opposed by Labor; inexplicably opposed by Labor—which came into effect on 1 January. They will ensure that major international companies operating in Australia but booking profits offshore have to pay tax here.

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