Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Hansard source

I thank all of the members for their contribution, including members opposite. I might just make one brief comment before giving the more technical summary of the bill before us, which is the Social Services Legislation Amendment (Enhanced Welfare Payment Integrity) Bill 2016. The brief comment is in respect to a contribution from one of the members opposite, the member for Kingston, who said—I think this is a direct quote—that the Turnbull government 'demonises' people who rely on social security to get by. I must say that in general terms I think that is an inaccurate and most unfair criticism, particularly with respect to this bill. It cannot possibly be an accurate or fair depiction of the measures in this bill, or the way in which the measures in this bill have been advocated, or any possible or reasonable inference that could be drawn from this bill because this bill applies to former recipients of social security and family payments. The very point of this bill is that it seeks to recoup monies that were once paid to people who were once in the welfare system but who have, laudably, come out of the welfare system and become self-sufficient through pay as you earn employment or some other form of endeavour, but who have come out of the system with a debt.

The notion that somehow this is in the bill or that the Turnbull government in any way demonises people who are on social security or who find social security necessary from time to time to get by is inaccurate. As far as such a criticism relates to this bill, it is far off the mark because the very point of this bill is to look at proper and appropriate processes to apply to debts held by former recipients of social security and family payments. Indeed, part of the purpose of doing that is to ensure that the future payments inside the social security and family payment system are sustainable.

People who have accrued a social security or a family payment debt and are currently in receipt of payment have a portion of their payment withheld until their debt is repaid. That is the rule of thumb for those people who are inside the welfare system. However, there is no such option available, naturally enough, to the government to recover debts once the person has left the payment system. The whole point of this legislation is to ensure that the same rules apply to debtors who are outside the payment system, that is outside the welfare system,—and they are arguably in a better position to repay their debt in any event—as to those who are inside the system, who regularly have their payments reduced until their debt has been repaid.

I might also make the point that, had the previous Labor government, when in office, acted during their time in government to recover these debts and do more to exact more stringency and more robustness in the process to recover these debts, then we would not be in the unenviable situation that we find ourselves in today with over one million debts totalling $3.04 billion. Of that debt base, approximately $870 million is held by around 270,000 former recipients who do not make sufficient or regular repayments.

This bill introduces the legislative amendments to allow the use of departure prohibition orders to prevent targeted social welfare debtors from leaving the country, as the system currently applies to child support and taxation debtors. The bill also removes the current 6-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. With specific respect to departure prohibition orders, the government firmly considers, as was noted by the member for Reid, that it is not appropriate for an individual to travel overseas when they have the means to fund that travel but have not yet set up any arrangement to repay their outstanding debt to the Commonwealth. The new legislation proposes that the secretary may make a departure prohibition order, prohibiting a person from departing Australia for a foreign country, if the person has one or more debts to the Commonwealth and there are no arrangements satisfactory to the secretary for one or more of the debts to be wholly repaid. That is consistent with the treatment of people with child support and tax debts.

The government is of course mindful of the multiple reasons why people may be required to travel overseas from time to time, and so procedures were put in place to allow for people subject to a departure prohibition order to travel overseas in certain circumstances. So there is a discretionary safety valve here. Departure authorisation certificates might also be granted on humanitarian grounds or where the person's travel may be in Australia's best interests. It is further important to note that people who owe a debt or debts to the Commonwealth and are honouring their repayment arrangements will not be issued with a departure prohibition order.

With respect to the second measure—that is, the limitation of the debt recovery period—the government considers that, where there are debts owed to the Commonwealth, these debts should be recovered wherever possible and they should not be time limited and thereby bound by arbitrary time lines. The government is therefore introducing an amendment to allow for the pursuit and recovery of debts, similar to arrangements for the recovery of taxation debts. This will increase the Department of Human Services' capacity to recover outstanding debts. The measure requires the government to remove the current limitation on the recovery of debt where recovery action has not been undertaken in the preceding six years.

Social welfare debtors generally have more than one debt. Given the resources that social welfare recipients have to repay debts, debts are generally paid off one at a time over an extended period. It is possible in such circumstances for some of an individual's debts to reach the six-year limitation before recovery can be actioned. Individual debts to the Commonwealth form an increasing asset base that continues to impose very significant financial costs on the community, and these are critical financial resources that the government could use to support other priorities for the Australian community. Indeed, one of those priorities is to sustain, and make sustainable, the entire welfare system.

The enhanced welfare payment integrity expanded debt-recovery measures will also better enable the Department of Human Services to recover debts from current and ex-recipients of social security and family assistance payments. The measures provide additional funds to expand Centrelink's debt recovery operations and capacity to utilise the full extent of powers contained within existing legislation for pursuing the recovery of debts. These include pursuing an additional 1,500 high-value debt cases relating to ex-recipients who have been identified as having the capacity to repay the debt; increasing negotiated repayment arrangements with ex-recipients by 8,000 per month; negotiating higher repayments from ex-recipients currently making debt repayments but identified as having the capacity to pay more; and targeting current recipients who are on a partial rate of payment due to employment income so that they are in repayment arrangements suitable to their circumstances.

The government will also, of course, continue to focus on protecting the integrity of the welfare system. The enhanced welfare payment integrity expanding debt-recovery measure is estimated to achieve net underlying cash savings of $157.8 million over the forward estimates.

I consider that these sensible measures will resonate with the taxpayers of Australia, who know that in everyday life the need to manage a household budget often includes managing the repayment of debts.

This bill, in conjunction with the Social Services Legislation Amendment (Interest Charge) Bill 2016, provides a suite of measures that strengthen the government's ability to recover debts from former social welfare and family payment recipients. The government is of the view that people who owe money to the Commonwealth should be required to pay that money back before heading overseas on holiday or departing Australia permanently. The government also considers that the law as it stands, which allows people to repay their debts over time, is fair, but that it is not fair or equitable for other debts to remain unrecovered because they fall outside an arbitrary time limit. On that basis, I commend the bill to the House.

Question agreed to.

Bill read a second time.

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