Linda Burney (Barton, Australian Labor Party, Shadow Minister for Families and Social Services) Share this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 and I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes the Government's plans to cut coronavirus support for businesses and individuals; and

(2) calls on the Government to permanently increase the base rate of the JobSeeker Payment".

I'd also like to indicate that Labor is planning to move detailed amendments to this bill with the aim of doing a number of things. We aim to stop the government from cutting payments to around two million people at Christmas, including people on unemployment support, students and apprentices and single parents. We also aim to require the minister to urgently consider a permanent increase to the base rate of JobSeeker Payment, because the only way unemployment support can be increased is if the government decides to do it. It simply cannot be done from the other side of this chamber because it involves expenditure. We also want to reverse the government's unfair reinstatement of the liquid assets waiting period and require the minister to urgently consider extending the beneficial changes that have been made to the income test, how much a person can earn before losing their payment and the eligibility rule for sole traders, among other things. I hope the government will support these amendments.

In relation to the bill itself, the effect of this bill will be to return unemployment support to the old base rate of Newstart on 31 March 2021 by earning the minister's power to make regulations extending the coronavirus supplement. Of course, the government could choose not to use that power and cut payments at any time, as they have done twice already, but the complete and total removal of this power gives a clear indication of the government's plan to take unemployment all the way back to the old Newstart rate in March, hence our amendments. One point eight million Australians are projected to be on unemployment support by the end of the year, and around two million Australians will be impacted by the government's scheduled cut to the coronavirus supplement next March. This includes people who have lost their job as well as single parents and students. The base rate of unemployment support is too low. Unemployment support can provide a barrier to hardship and poverty. Unemployment support is spent on local businesses, sustaining and creating local jobs. Returning unemployment support to the old base rate places millions of Australians at risk of hardship and jeopardises local jobs.

The government temporarily boosted JobSeeker at the outset of a pandemic, when the number of Australians requiring support doubled overnight. We all saw those lines at Centrelink. The number of Australians requiring support is expected to increase to 1.8 million by the end of this year. How does the government expect it can cut support? The bill strikes out the minister's existing ability to pay the coronavirus supplement indefinitely and replaces it with a time limited power that stops on 31 March 2021. This bill is a missed opportunity to lift people out of poverty, support the economy and protect local jobs. Labor calls on the government to deliver a permanent increase to the base rate of unemployment support and calls on the government to ensure continued beneficial support for people impacted by the coronavirus pandemic and recession.

There are many beneficial elements to this bill, including continuing the coronavirus supplement for the youth allowance, student and apprentice recipients after December as well as the increased income-free areas, taper rates and partner income test that have been introduced as part of the pandemic. But it does include a cut in JobSeeker in March, for a return to the old base rate of Newstart. The government introduced a coronavirus supplement because the number of Australians requiring unemployment support virtually doubled overnight at the outset of the pandemic. Labor welcomed this supplement. Labor had consistently called for an increase to unemployment support long before the pandemic, because it is simply too low and is inadequate to protect Australians from hardship and enable them to live with dignity.

The coronavirus supplement is paid to most people through regulation-making powers the minister has under the Social Security Act 1991. This means the government can extend the coronavirus supplement and set the rate in three-monthly intervals, so long as the impact of the pandemic persists. Of course, the government can choose not to use this power and cut support back to the old Newstart rate. Already, the government has cut support twice—once in September and they have announced another cut around Christmas time. The government has taken the coronavirus supplement from $550 a fortnight to $250 a fortnight and will make it $150 per fortnight from Christmas time. The impact of the pandemic will clearly persist for many years, with the Department of Social Services expecting the number of people to be relying on unemployment support to still be elevated in four years time.

This bill will repeal the minister's power to indefinitely extend the coronavirus supplementation on 1 April 2021. Labor's amendment aims to stop this occurring. Earlier this year, Labor negotiated with the government for a separate power to be included in the Coronavirus Economic Response Package Omnibus Act 2020 to enable the minister to make other changes to the social security system to help people impacted by the pandemic. This power, and the regulations made under it, end on 31 December 2020. This bill proposes to extend this power, but only to 31 March 2021. Labor supports this extension, but we also think this power needs to persist for longer, so the government can continue to flexibly respond to the ongoing economic challenges as they arise from the pandemic.

Because of this power, which Labor advocated for, the government has been able to introduce more generous partner income testing for JobSeeker payment, which Labor negotiated. It tapers at 27c in the dollar and cuts out at a partner income at $80,200 per year. This power has enabled the government to make changes to the JobSeeker and youth allowance personal income tests. It provides an income-free area of $300 per fortnight, up from $106 per fortnight prior to the pandemic, and that was a good thing. It has enabled the government to expand the eligibility criteria to the JobSeeker and youth allowance (other). It now includes sole traders and the self-employed, permanent employees who have been stood down and people self-isolating because they or someone they are caring for has been affected by the pandemic. The power has enabled the government to waive the ordinary waiting period for one week and the seasonal work preclusion period and the newly arrived residents waiting period. The government has been enabled to extend the time people can maintain eligibility for payment and keep concession cards and to make many other beneficial changes relating to the pension mobility allowance and self-declaration for couple assessments.

This current bill removes the minister's ability to make regulations that waive the liquid assets waiting period and the assets period. Labor does not support this, and our detailed amendments will seek to reverse it. The government should not have reinstated the liquid assets waiting period in September, and I have been very vocal about this. They should drop their cruel plan to make people wait 26 weeks to got unemployment support if they have modest savings. This is a false economy. It means people are forced to run down their last dollar, and it makes it is more likely that they will face hardships such as struggling to pay the mortgage or having to take a car off the road. It also means people are more likely to need to rely on other services such as food banks and emergency relief.

Labor is concerned about the Morrison government's plan to return JobSeeker to the old base rate of $40 per day on 31 March. By the end of the year, 1.8 million Australians are expected to be on unemployment support. The number of Australians on unemployment support is not expected to return to prepandemic levels for four years, as I have already stated. With more jobseekers than each job vacancy, there are simply not enough jobs for everyone who needs one. It is even more difficult to find a job in our regions, the result of the government's failure to deliver a jobs program for our regions.

Australians who are struggling to find work are struggling to find more hours, and they face an anxious new year. Many Australians will be wondering what level of support will be available to them after 31 March 2021. Many are worried about how they will afford essentials, cover rent and pay bills. Unemployment support should provide a barrier to hardship and poverty and enable vulnerable Australians to live with dignity. Cutting it will see many Australians placed at risk of falling into poverty.

Australians receiving unemployment support spend at local and small businesses. We know that for a fact. They play a vital role in helping to create local jobs, especially at times like these. When JobSeeker is cut in December and March, Australians on social security will have less to spend on local and small businesses. Anyone can see that. Local and small business will have less to spend on wages and on jobs in turn. How many jobs will be jeopardised or placed at risk when the government cuts JobSeeker in December and March? Many leading economists have articulated this in just the last few days.

The government continues to demonise the millions of Australians who have lost their jobs through no fault of their own. The government continues to demonise the millions of Australians who for some reason or other find themselves on social security. The government continues to cynically insinuate that Australians who have lost their jobs have chosen to do so. It is cynical, cruel and wrong. It continues its ideological obsession with the cashless debit card, which it has failed to demonstrate actually works. It continues to pursue drug testing of welfare recipients, yet it has no plan for jobs. The government continues to gloss over the grim reality facing too many Australians at the moment. As I said, 1.8 million of them will require unemployment support by the end of the year. And many Australians are not receiving the hours they want or need to survive. Many Australians are anxious about job security.

I want to briefly take a moment to reflect on the testimony to the Senate committee that led an inquiry into this bill last week—in particular the testimony from economist professors Jeff Borland and Peter Whiteford. They said the temporary boost to unemployment support has not created a disincentive to work. Professor Whiteford told the committee: 'While there are always some employers who say applicants are refusing jobs, the reality was that the average number of applicants per job could be as high as 20.' I have heard just recently of friends of mine who have advertised for jobs where there have been hundreds of applications. Professor Borland told the committee that it was difficult to see how, with unemployment support below the minimum wage, it could present a disincentive for people to work. Professor Borland conducted a study which looked into the time taken to fill vacancies and the flow of workers into jobs. He went on to say that, if the rate of unemployment support presented a disincentive to work, we would have seen an appreciable effect on the entry to employment, but this has not been the case. Professor Borland summed up his work as follows:

That research has a couple of main findings. One is that you could have a substantial increase in JobSeeker without adversely affecting incentives to take up paid work. Secondly, with the COVID-19 supplement to JobSeeker, we have had, in 2020, an experiment, if you like, on what the effect on incentives to find work would be of a higher rate of JobSeeker, and my evaluation of the evidence is that there is no evidence that the higher level of JobSeeker during 2020, with the COVID-19 supplement, has had any appreciable effect on incentives to take up paid work for the people who are receiving JobSeeker.

Yet the government continues to contradict the evidence of the experts by perpetrating a myth about the rate of JobSeeker. In fact, this government has made an art of contradicting evidence in many fields. The Senate inquiry also heard evidence about the disproportionate impact that the government's scheduled March JobSeeker cut will have on Australians in their mid-50s and 60. This is really important.

We heard from the Council on the Ageing, who told a Senate committee that Australians over 55 experienced the greatest difficulty re-entering the workforce and were unlikely to find another job. COTA spoke of age discrimination facing Australians over the age of 55 in the workplace and the jobs market. COTA warn that a return of unemployment payments to the old base rate of Newstart could see Australians in their 50s and 60s driven further into poverty. In the past 18 years, the proportion of people on unemployment payments who are over 55 has gone from 8.8 per cent to 26.6 per cent. It has more than trebled. There are currently more than 307,000 people over 55 on unemployment support, and they are having the most trouble getting off the payment. Last month, almost one million Australians were excluded from the government's job hiring wage subsidy.

The Senate committee also heard from the Australian Retailers Association, who warned that scheduled cuts to unemployment support would jeopardise thousands of retail jobs. The ARA told the committee that an estimated 58 per cent of unemployment support payments were spent in retail. In light of this, the ARA said the full COVID-19 supplement represented $8.5 billion per year to the Australian retail sector—the equivalent of 130,000 retail jobs. The ARA told the committee that, with one in 10 Australian employees working in retail, the sector was the bellwether of the Australian economy. It described the boosted JobSeeker rate as the quiet achiever of the pandemic. The ARA said that members reported a reduction in spending on essentials after unemployment support was reduced in September. It called for a permanent increase to unemployment support, as this would provide certainty for social security recipients and the broader economy. The ARA's chief executive, Paul Zahra, told the inquiry:

… certainty drives confidence , and confidence drives spending.

He said that, without certainty, there will be no spending. He warned that the lack of certainty beyond March could affect Christmas spending. Small businesses and retail businesses are asking this government how many jobs will be lost when unemployment support returns to the old base rate. A permanent increase to JobSeeker will not only provide a barrier to hardship but also sustain local businesses and jobs.

Finally, I want to say that Labor is very concerned about the resumption of the current liquid assets waiting period. With almost 1.8 million Australians expected to require unemployment support by the end of the year, it really is unrealistic and inconceivable that the government would want to resume this waiting period. It is bloody-minded. We are also calling on the government to withdraw its cruel and unnecessary plan to double this waiting period to 26 weeks, or six months. The Morrison government wants people to eat through their savings, their only financial buffer against hardship, before they can access support. Australians who have lost work or lost hours should not be forced into hardship or poverty before they can access help.

This bill is a missed opportunity for the government to deliver permanent increases to unemployment payments. It absolutely lays bare the government's plans for unemployment payments and other payments to go back to the pre-pandemic rate on 31 March 2021. That is why Labor will move amendments. We are calling on the government to stop its Christmas cut to unemployment payments and to announce a permanent increase.

It seems everyone except this Prime Minister understands that returning to the old Newstart rate isn't good for individuals, isn't good for jobs and is certainly not good for the economy. The RBA, the BCA and the Retailers Association, as well as community groups and economists, support an increase to the base rate of unemployment payments. Even many on the government's side support it, including the member for New England and the member for Cowper, who recently said the idea of going back to $40 a day was 'fairly cruel and unusual punishment'. An increase would be good for local jobs and local economies, particularly in regional areas. Regional representatives in this chamber should take great note of that. It would lift people out of poverty. The old rate was so low that it was preventing people from being able to afford the basics and look for work. That is the reality.

I have moved a second reading amendment and, as I said, other amendments are being circulated in my name. I really urge the government to take note of what's being proposed here and to realise that a permanent increase to Newstart is what's absolutely needed. Labor negotiated in good faith that the minister, through regulation, would have power after 31 March to adjust the rates of the coronavirus supplement. The explanations I've been given for that being removed certainly are not credible.

I think that people right across this chamber in their heart of hearts know the base rate of Newstart is too low. The idea and the message that is being sent to those people on Newstart now is, 'This is your lot in life, and you will be returned to making decisions between paying the rent, getting the kids school shoes, getting medicine and having a meal.' That's the cold, hard reality. It is hard to think what poverty looks like for many people in this country, but let me assure you that it is real for tens of thousands, hundreds of thousands, of people. I ask people, in looking at these amendments, to think about the long-term effects that this poverty has on the children of those homes. The effects will be with them for life, and the idea that somehow or other you can just pull your socks up, strap your shoes on and get on with life is not the reality for many people living in this country. We in this place, elected representatives, have a duty to those people. We have a duty to care, and we have the capacity to make their lives ones of dignity. I urge people to consider that in considering the amendments to this bill.

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