Craig Laundy (Reid, Liberal Party) Share this | Hansard source

I rise to add my voice to those who, like my good friend from Tasmania, Mr Whiteley, have spoken before me in support of the Social Services Legislation Amendment (Enhanced Welfare Payment Integrity) Bill 2016, which Minister Porter has introduced into the House. I will pick up on something that Mr Whiteley mentioned: the fact that we are talking about taxpayers' dollars here. I have said many times prior to coming to this place that there are a lot of things that my father has always said to me—I spent 23 years working for my father—and they will stay with me for life. When I leave here, I will go back to work for him. One of them is: 'If you watch the pennies, the pounds look after themselves.'

Minister Porter oversees a budget that sits at around $147 billion today and that is forecast over the forward estimates to rise to a tick under $190 billion. We are talking here about $3 billion, but we are talking about taxpayers' money and we are talking about a principle. I have been in this place for 2½ years and the thing that has surprised me more than anything else is the mindset of people in response to spending taxpayers' money. I do not know whether it is—as the minister for agriculture alluded to in question time today—because not a lot of people currently in this place have a background in business. After being elected and coming here, I joined the Joint Committee of Public Accounts and Audit. For 2½ years I have in week after week of sitting weeks listened to reports from the Auditor-General of this country on programs delivered across a wide range of topics, including the Early Years Quality Fund where $300 million went out the door in about three hours to a team that had worked on the compilation of the policy. One of the department officials said that in his 23 years in working for the department he had never seen a 'first in, best dressed' tender system design. The department strongly advised the former government against it, but they went ahead with it and we ended up with a debacle—$300 million out the door.

The problem with this mindset is that it is not just at the politician level. The risk we run when dealing with taxpayers' money is that the mindset will permeate down through departments. One of my favourite examples is that, in inquiring into the management of the disposal of specialist military equipment, we had a situation where we agreed to sell six aircraft refuellers to a foreign company for $10.5 million. There was just one problem, and it was pretty major: no-one did any due diligence on the company's ability to pay the cheque. After the company had agreed to buy them, we then worked out there was a delay in getting the replacement aircraft refuellers. So over the next seven to eight years, in a tale of woe, it ended up that the company at one stage—I underlined this at the time and I will today—offered a contra to paying the money back because of the defence capability gap that had been created. The Department of Defence saw this approach as potentially supplementing their budget by obtaining some $6.2 million in services. That was in lieu of the money they were owed by the purchaser of the aircraft. Cash received would have had to be returned to consolidated revenue rather than retained by Defence.

It is this mindset that has to change. The risk we run in not making the changes that are enshrined in this legislation is not only that we will be allowing this mindset to continue inside government and bureaucracy but also that it will permeate large parts of our community. The risk we run is that people will say, 'We don't need to pay back government.'

The quantum is, to be brutally honest, staggering. As at the end of 2014-15 there were 36,834 debts worth $131.2 million that were due that year to reach their expiry date. So there is another $131.2 million that would have been written off. The total as of June 2015 of loans in this category was $3.04 billion. You are talking about big bickies. 54,200 debts worth $166.81 million have already reached their expiry dates, so they cannot be recovered. They are out the door. A further 4,595 debts worth $12.96 million were permanently written off over the 2014-15 financial year due to the statute of limitations, which is the six years that my friend from Tasmania so eloquently mentioned.

What are we doing here? We are doing what is right. We always default to 'the government', but it is not that the people involved in this owe the government this money. They owe the taxpayer this money. This money was given to them in a time of need. That is the social compact. I get that. But if you incur debt then you should pay it back. If it is good enough to receive from the taxpayer, it should be good enough to give back what you owe.

This bill contains two measures which will strengthen our capacity to recover social welfare and family payment debt. The amendments allow for the use of the partial prohibition orders to prevent targeted social welfare debtors from leaving the country. But there is a safety net in that. There is the ability for those people to make an application for reasons such as family ill health. It will be viewed empathetically and sympathetically at the time if so needed. That is fair. If you owe money to the Australian taxpayer—I want to keep saying that: it is not the government; it is the Australian taxpayer—and you have the funds to head off on an overseas trip for no good reason I think it only fair that you use those funds to pay back your debt to the taxpayer who funded your life in your time of need. The second amendment is to remove the current six-year limitation mentioned in the figures before.

Year by year we have more money falling off the cliff into that $3 billion abyss that we are talking about. A debt to the Commonwealth is obviously incurred when a welfare recipient receives an overpayment. That does happen. While the average value of that debt is $2,357 and the average length of time taken to pay that debt is just over three years, we have instances where the oldest debt is 30 years old and the amount is in excess of $300,000. These are situations that quite clearly need to be fixed. Of the debt base that we are talking about, approximately $870 million is held by around 270,000 former recipients who do not make sufficient or regular payments.

What the minister is doing here—and I note that he has joined us in the chamber—is bringing this system in line with how other parts of government operate, most notably the taxation system. As the member for Lyons so eloquently put it, try avoiding paying money that you owe the Australian Taxation Office. In his traditional Taswegian way he explained, all so subtly, that, 'They know where you live.' I can tell you, firsthand, from employing people whose wages were subject to garnishing that they are the first to line up for their money. I think it only fair that the Minister for Social Services has the exact same ability but, more importantly, defaulting to the position that the Minister for Social Services is recouping the money that the taxpayer has paid. Some debtors deliberately avoid their obligation to repay their debts to the Commonwealth by not entering into acceptable repayment arrangements and in extreme cases they head overseas, beyond our reach. This is why the changes made to the travel order are just so important, with the exception of the compassionate clause that if application is made for reasons that are deemed appropriate then that travel will still be allowed.

As I said at the start of this contribution, if it is good enough for the welfare recipient to receive welfare in a time of need—as it should be and as is our social compact—then it is good enough for that welfare recipient, who is off welfare at the time, if owning money to the Australian taxpayer, to pay it back. I said at the start, my father has always said to me, 'If you watch the pennies, the pounds will look after themselves.' We are talking about $3 billion in a budget that comprises almost half of the Minister for Social Services $147 billion this year on its way to a tick under $190 billion at the end of the forward estimates. Is it a big amount in the grand scheme of the minister's overall budget? No, but it is the right thing to do because, not only does it bring it into line with the way other parts of the government function, but it also sends a strong message to the taxpayers of Australia that this government will always be responsible with the way that, not only it spends its money, but also, if money is owed, the way that is goes about recouping it on behalf of the taxpayer so that it can be spent in ways that we deem completely appropriate.

I commend the minister for, as he has done in his time in this portfolio, introducing sensible, common-sense legislation that, not only looks after the taxpayers of Australia, but also allows us, if recouped, to either use the money to decrease our existing deficits or to use it in a more suitable fashion. I commend this bill to the House.

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