Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Once again, we have the Welfare to Work initiatives that were introduced by this government back before us with the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006. They are not here to be improved and certainly not because there is a flaw in the way that they were announced in the budget that is therefore being addressed; they are here simply because of the government’s rush to get the original piece of legislation through, because of their shoddy draftsmanship and because they are now seeking to correct those problems. That is the basis of this bill before us today.

I have to make it clear from the outset that Labor will not be opposing the measures contained in the bill, not because we support the initiatives but because to oppose them would mean that those who are affected by this bill would be further marginalised by the government’s incompetence. Let me make it clear and take the opportunity to state the position of this side of the House: Labor believes that if people can work they should work. There is absolutely no debate about that. However, unlike the government, Labor also believes that reducing the support to people who are not working will not equip them for a job. It is simply going to make them poorer. That is what it is designed to do.

Changing the nature of the welfare payments so that some people receive less will not address the issues at the heart of why these people are not working in the first place. A lower payment does not of itself improve the employment prospects of the unemployed—or the disabled, for that matter. A lower payment does not equip people with a range of skills, abilities and experiences that an employer seeks when they are looking to put a person on in their particular workplace. Placing people on a lower welfare payment, even in a time of historical low unemployment, does not make them any more employable. It does not give them any more opportunity to get a job. As I said, it simply makes them poorer. To tackle unemployment, to tackle issues of labour market disadvantage and to improve the employment prospects of the unemployed you need to address issues at the core of why people find it difficult to find employment.

Members opposite, as they have in the past, will obviously paint the Labor Party as defending dole bludgers and defending welfare recipients, and this is because the government’s Welfare to Work measures simply do nothing. Our opposition is because they do nothing to improve employment prospects of people who find themselves unemployed and unable to find work. It is not a matter of simply defending welfare recipients; it is a matter of supporting them in their desire to find real and meaningful work.

Labor understands that, quite frankly, people do find it difficult to find reasonable and gainful employment. I know that is true in my own electorate of Werriwa. Unfortunately my electorate has a high rate of youth unemployment. That does not mean we need to take a stick to the kids who cannot find employment; it challenges us to bring in policies to help equip those young people with the necessary skills that are being sought by employers. That is what real welfare to work reform should be about, and that would be the preferred option. If we were serious about Welfare to Work, we would certainly be designing legislation to assist, to support and to encourage the acquisition of skills and to help people become more competitive as they compete for places in the labour market.

Everybody benefits from being part of the economic mainstream, being part of the labour force. It is certainly infinitely better for someone to be gainfully employed, not simply because they are out of the unemployment statistics and not simply because they are no longer a burden to the welfare system. It is better for them for a range of different reasons: they are personally more satisfied and able to see that they can look after their own families, make a contribution to the economy and also participate in the economic mainstream activity that most of us tend to take for granted.

In my electorate thousands of people are dependent on the disability support pension, Newstart allowance and parenting payment single. I recognise the social importance of economic participation and I am a keen supporter of improving their participation in the workforce. But, as I said, it is not a matter of taking a stick to people; it is a matter of applying the proper infrastructure to facilitate the acquisition of skills that will allow people to either rejoin or, in many instances, join the workforce.

However, the government’s Welfare to Work measures that are being cleaned up by this bill will not necessarily lead to an increase in mainstream economic participation. The government has previously conceded that more than 200,000 people will be worse off financially under the Welfare to Work changes. The government has also admitted that it expects only 109,000 people to gain employment. Assuming that those who secure employment receive wages above their level of benefit, the net result will be that 91,000 people will be worse off because of these changes.

This government, with some twisted version of logic, intends to make almost 100,000 people worse off than they were before without assisting them in any way. This has to be the most offensive thing about these changes. While the amendments before us today are welcome insofar as they clean up anomalies in the government’s original, hastily drafted Welfare to Work legislation, it is nevertheless a fact that around 100,000 people will be worse off due to that legislation. They are going to be worse off financially and worse off generally because they will not receive the support they need to seek and secure employment. They will receive less money, no training and no support services and yet they will be expected to find work.

This government has, in effect, thrown these people on the economic scrap heap to survive as best they can. That is not a real form of motivation, particularly when it is often beyond the immediate capacity of people in that situation to do anything to change their position—particularly people on the disability support pension, and let us not forget about those receiving parenting payments.

As I mentioned earlier, when it comes to moving people from welfare to work, it is not about simply replacing their welfare payment with a job, because it just does not happen as easily as that. This is a difficult time for people; it is a time when people need to be supported and encouraged into work where possible. These measures should be about replacing a handout with a hand up, and that is simply not occurring. There is no support whatsoever contained in the government’s measures.

It is absolutely correct to target welfare dependency and to seek ways to move people off welfare and into work. Labor has advocated, and will continue to advocate, for real welfare reform that achieves that objective. Labor will continue to argue that policies that seek to facilitate the transfer from welfare payments to wages can be achieved only through real welfare reform and should be pursued only if the reforms tackle the reasons why people cannot find work and deliver practical solutions to accommodate this transition. But this is not what the government is about. This government is not about these practical solutions, and that was my objection to the original legislation. The government is about handouts, but not, unfortunately, to those who need them the most.

On budget night we saw just how addicted this tax-and-spend government is to delivering handouts as it goes on its big spend. It spent up big on tax cuts, it spent up big on superannuation and it claimed to be making changes to child care. One thing that was conspicuous by its absence was spending on education. The Treasurer did not even mention a word about that in his budget speech. In fact, Tuesday night’s budget actually reduced the overall percentage of federal funds spent on vocational education and training.

The people who will be impacted most by the measures contained in the bill before us are those who need education and training opportunities the most. Australia is experiencing a skills crisis—there is no doubt. In fact, the government is so sure of this that it has increased skilled migration intake and has come up with the new training visa for those coming from overseas to work in Australia. So, on the one hand, the government has acknowledged that there is a skills crisis where businesses are screaming out for skilled employees while, on the other hand, it is doing nothing to increase the pool of those skilled employees available to businesses throughout this country. The government is looking around and saying that there are some people out there on welfare who should probably be in the workforce, but it does not act to support them or to help them acquire the skills that employers are presently looking for.

Real welfare reform needs to give people a chance to get the skills that an employer is looking for. Despite this reasonably logical view as to how best to assist people’s transition from welfare to work, the government seems to be obsessed with the view that people on welfare should be punished because they are not working. For some reason the government has decided that a much better approach to get people to seek employment is to reduce their payments and at the same time reduce their bargaining power through the government’s extreme industrial relations laws. The people we are talking about who are subject to this legislation are the most vulnerable in our society. There is no question that these people do not have a bargaining position, yet we are using a threat to reduce their welfare payment as their motivation for finding employment. And, as they go to find employment, under the new Work Choices law they really find out the level of their bargaining position.

I take a small liberty in connecting the industrial relations laws with the Welfare to Work provisions, but I would contend that these laws must be looked at simultaneously to see how they impact on people on welfare. They need to be considered together because we are going to see in the not-too-distant future people who have been shifted from one welfare payment to a lower one out there looking for a job—desperate to find work because they are struggling on a lower welfare payment. At the same time an employer out there knows that they are desperate for a job. An employer out there knows that they have no bargaining position. An employer out there knows that these are the ultimate pricetakers in our society. So, from the very start, you have an even greater imbalance in the bargaining power of the parties. The employer by far and away has the great advantage, when we look at people at this end of the scale—particularly a person who has a disability, a single mother trying to re-enter the workforce or a person on Newstart.

Added to the fact that a number of people seeking employment are likely to be, as I said, disabled or lacking skills and experience, you will find that the government has created a situation where a whole group of people with a limited range of employment options find themselves having to negotiate employment agreements with an employer who is in a massively superior bargaining position. That is not reform. That is certainly not what you would expect in a prosperous country such as Australia. Creating an environment in which employers know that the prospective employee in front of them is faced with the situation of accepting the job, no matter what the terms and conditions are, or losing their benefits hardly creates a reasonable environment to encourage participation. Everyone would know that it is preposterous to seriously believe that this will result in improvements for existing welfare recipients moving to work. Breaking down barriers to participation should be about addressing the starting point to welfare reform.

Earlier today I heard the Treasurer in an interview mention the importance of investment in the promotion of productivity growth and, as a consequence, economic growth. Although that was said in the context of investment in capital, the investment in the skills and education of those in the labour market is also important in the promotion of productivity growth and economic growth. That is why it is a little disappointing that, to encourage people to move from welfare to work, the government has passed up the opportunity to use a carrot and stick approach and has decided to just use the stick.

Most reasonable people would consider that it is appropriate for the unemployed to be assisted with training to improve their skills and employment prospects. Most people would also consider it appropriate to address the root causes of long-term unemployment as a sustainable way of facilitating a transition from welfare into work and increasing participation levels in work. Sadly, it seems that the government is not filled with such an ambition. The impacts of short-sighted and hastily introduced Welfare to Work provisions that have resulted in this bill before us today are not confined to the domain of the disabled and the low skilled. The provisions also impact on single parents—and in the main, as you would appreciate, Mr Deputy Speaker, that really refers to single mothers.

Contrast with the position of this government, which, under family tax benefit B, goes out of its way to encourage mothers to stay at home, the situation in the bill before us which seeks to encourage people off welfare. Mothers returning to work do need to have special support. Great fanfare greeted the child-care measures the government announced in the budget. Those measures may actually assist single mothers re-entering the workforce if more child-care places were created. (Time expired)

Stewart McArthur (Corangamite, Liberal Party) Share this | Link to this | Hansard source

I have listened very carefully to the member for Werriwa and I cannot fully understand the argument that he put forward except that he said that a number of Australians will be worse off. He had no argument against the Welfare to Work legislation that has been put forward by the government. I note his argument is in contradistinction to the former member for Werriwa, who was very strong on these issues and who wrote quite extensively about welfare to work. In fact, I think he would have agreed with the government’s position, unlike the current member for Werriwa. He ought to have a chat to Mr Latham about what the good, long-term future should be on the welfare to work issue.

I also note the presence of my good friend the member for Throsby and I will be interested in her point of view as she argues the case on behalf of the opposition. I am pleased to contribute to the debate on the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006. This is a bill providing consequential changes as a result of the introduction of the federal government’s important Welfare to Work policies that were passed through this parliament last year and which I spoke to on that occasion. The Welfare to Work policies are an important element of the Howard government’s strong plan to assist families and to keep our economy strong and our nation secure. The government’s Welfare to Work policies and our industrial relations reform are all part of a considered long-term plan to build a better Australia and provide enhanced opportunities for working families and for people who have the capacity to work but who are currently out of work.

In general terms, the Welfare to Work measures introduced by the government last year encourage and assist more people of working age to participate actively in the workforce. A couple of principles underline these measures. Firstly, people who have the capacity to work and are able to work should do so. That is different from the member for Werriwa who argued that 100,000 people would be disadvantaged. I think that nobody in Australia could argue with that first principle. Secondly, the best form of family income comes from having a job rather than welfare. I am sure the shadow minister for immigration at the table would agree with that because he has had a bit of first-hand experience of those situations. For people, having a job rather than being on welfare means more than receiving an income. By being meaningfully employed, a person gains an improved sense of self-worth and dignity from making a contribution to our society and undertaking an activity that is valued by an employer. People who are in employment also have greater control and security over their own life and are not reliant on government agencies. During my contribution to the Welfare to Work legislation debate last year I noted some statistics which highlight how vital it is for the government to act to assist people of working age on welfare into employment. Again, this is contrary to the view of the member for Werriwa, who was talking about those who were disadvantaged. We are actually trying to get people back into the workforce rather than letting them stay on welfare.

It is appropriate to reiterate these points. Australia’s welfare state has grown immensely over the last 40 years and without reform is fast approaching an unsustainable position. Even those opposite would agree with that—the member for Throsby would agree with that if she looked at the figures. You cannot continue to have the workers of Australia sustaining the welfare state as in the UK and other welfare nations. In June 2005, if you look at the figures, we had 705,000 working age Australians who were on disability support—I reiterate, 705,000. We had 630,000 working age Australians on parenting payments, of which there were 450,000 single parents and we had 500,000 working age Australians on unemployment benefits. We know that that is a very low figure, about 5.1 per cent of the population. If you look at the actual figures spent on disability, you see in 2004-05 spending on the disability support pension exceeded $10 billion. Governments of all colours and those opposite, when they eventually reach government—Mr Deputy Speaker Hatton, you might eventually be there; maybe when I have left the parliament—will have to look at this issue very carefully.

The total welfare budget for the current year, 2005-06, is $60 billion. The parliament needs to take a very careful look at this figure. The major challenge for our country is the fact that, in these prosperous economic times when unemployment is at the lowest level for a generation—as I mentioned before, a 5.1 per cent unemployment rate in April 2006—one in five people of working age is on welfare. Again, I wonder what the member for Throsby will say about that. A total of 2.6 million people out of 13.7 million Australians aged between 16 and 64 years are welfare dependent. That is a very disturbing figure for everyone in this parliament. It is disturbing that we would encourage this welfare dependency and the government is trying to make a change of attitude and approach to this very difficult problem.

Unless checked, such a high level of welfare dependence will have lasting impacts on future generations. Already it is estimated there are 700,000 children growing up in homes where neither parent is in employment. There is a risk in such families that a culture of not working could be created and handed down from one generation to the next. Members in the parliament are aware of that particular scenario. We do have families of three and four generations who have not had a working person in their living families.

In the interests of equity for all Australians, it is vital that the government acts to break the chain of intergenerational poverty and unemployment and to encourage people back into the workforce. It is in this context that the government has acted positively to assist people who have the capacity to work to move out of welfare and into meaningful employment through our Welfare to Work provisions. In particular, the government’s Welfare to Work legislation will address the situation of people who are on the disability support pension—and there are now more people on the disability support pension than there are people on the unemployment benefit. Once people get on the disability support pension, they could stay on the pension for life, irrespective of their ability to work. The most common problems reported by disability support pension claimants are bad backs, feeling stressed and like problems such as musculoskeletal ailments. If you look at the figures, I think it is 34 per cent of recipients who have these hard to diagnose psychological and psychiatric difficulties.

As an active local member in Corangamite, I have visited the local Centrelink office and have inspected some of the forms that disability support pension claimants must sign. Once the box is ticked for the disability support pension for a sore back or a psychological or psychiatric problem, it is very difficult for the administration of Centrelink to check on those individuals to see whether they might have some remedy for those ailments, such as the musculoskeletal—the technical word for a sore back—and to make a judgment as to whether this person has been restored to reasonable health. I think those opposite looked at those problems when they were in government some time ago. However, in many cases people who are on the DSP, especially at young ages, have a capacity to work and it is appropriate that, where this is the case, these people are encouraged to undertake some work. They are not being disadvantaged; they are just being encouraged both financially and by some of the tests to look for work.

The Welfare to Work measures also help encourage single parents on the parenting payment single and those parents on the parenting payment partnered to seek part-time work once their youngest child turns six years old. This is an important measure to help reintegrate into the workforce, in a considered way, those parents of children who are in schooling. These reforms the government has introduced, which were passed through the parliament last year, are important to help assist working age people back into the workforce, to break the cycle of intergenerational welfare dependence and to ensure the national welfare system remains sustainable going into the future. I emphasise the point to both sides of the parliament that the welfare system should be sustainable over time and that if a government does not address the problems of welfare they become almost impossible to fix. I think we have seen that situation arise in the United Kingdom.

The measures in this bill will extend eligibility for certain government benefits to persons not currently eligible to ensure that government payments for working age persons and full provisions of the Welfare to Work policy are consistently applied. Again, the administration of this is important. The minor changes introduced in this bill will cost the government a further $4.8 million over four years. The bill will allow parents who receive the parenting payment partnered who have a temporary incapacity exemption to gain access to the pharmaceutical allowance. In recognition of the impact of the death of a child on parents, the bill will also allow single parents who are receiving the Newstart allowance or youth allowance to continue to receive the same rate they were receiving before their child died for another 14 weeks after the death of the child. The government is trying very hard to accommodate some of the human problems that some of the people on these pensions encounter.

Another assistance measure extended in this bill is designed to help people with the costs associated with commencing employment by extending the employment entry payment. Income support recipients who have breached compliance with activity requirements—that is, people who are subject to a non-payment period—under this bill will still be eligible for the employment entry payment if they find and commence employment or increase the number of hours of employment during the non-payment period. This is a sign of the Howard government’s commitment to assisting people to make the transition from welfare to work. It is a relatively small point, but it does show that some of the changes that we have introduced in this bill before the parliament do assist people to make that sometimes difficult move from welfare, where they collect their money every two weeks, back into a job. That is sometimes quite difficult to achieve, and we are trying to make that transition as easy as possible.

Earlier in the week the Treasurer, Peter Costello, handed down the budget, which has been very well received, as all members understand, by commentators and by the community. The budget will help Australian families with the challenges they face in meeting household costs and planning for their future. The budget delivered personal income tax cuts, enhanced family assistance payments and substantial reform and simplification of our superannuation arrangements. The budget also funded important investment in national infrastructure, including roads and rail networks, which are so vitally important to facilitate the movement of freight around Australia. Efficient transport infrastructure helps our industry to be world competitive, encourages investment and jobs growth, and ultimately lowers transport costs and therefore helps to pay for the price of essential goods.

The economy is in good shape. That helps with this bill before the parliament. These reforms, the tough decisions of the past 10 years and the hard, disciplined work of the Howard government have allowed the Treasurer to deliver a budget this week which cuts tax, provides additional assistance to families and invests in infrastructure so that we are better prepared as a nation to meet the future challenges of an ageing population. Just as the government’s past reforms have allowed the delivery of a positive budget, so will the government’s Welfare to Work policies—in conjunction with other elements of the Howard government’s plan, such as our Work Choices industrial relations reforms—be important in helping the economy to continue to grow and to deliver more positive budgets next year and the year after that.

I take the opportunity while speaking on this bill to commend the Minister for Employment and Workplace Relations, my good friend and colleague the Hon. Kevin Andrews, not only for his work in drafting and guiding through this parliament the important reforms—such as Welfare to Work, which we are talking about now, and the Work Choices industrial relations reforms—but also for moving around Australia trying to prepare businesses to implement the reforms in the community to generate job opportunities for unemployed Australians.

Recently, the minister came to Geelong and Corangamite and spoke at the Workforce Tomorrow Industry and Employer breakfast. He was there demonstrating and arguing the case for these transitions for the new industrial relations changes, which I am sure the member for Throsby will embrace in her speech. She is very supportive of these changes. As she sees the light and understands the value and importance of these industrial relations changes, eventually she will understand the merit of the case. If she had been in Geelong, she would have understood the importance of these changes and the advocacy of the minister.

The minister told the meeting that labour market research conducted last year predicts that Australia will face a potential shortfall of 195,000 workers over the next five years. Even the member for Throsby would understand that if we are short of workers that is going to be a problem for industry and the workforce. The ageing population is expected to steadily apply a brake on the potential growth for all major occupational groups forecast to be adversely affected. This will happen even in Corangamite. The minister told the meeting that businesses across the Barwon region would be nearly 3,000 workers short by 2011. That is not far away and businesses will be suffering from not only the shortages of skills but also the actual availability of workers.

In this context Geelong’s employers were told they would face an increasingly limited labour supply and that businesses would need to focus more on the recruitment and retention of workers. Importantly, the point was emphasised that businesses will need to look to recruiting and training people from the Geelong region who would be encouraged to leave welfare and enter the workforce as a result of the government’s Welfare to Work reforms. We see on the ground in Corangamite and in Geelong that these important reforms will assist local businesses and assist people to go back into the workforce because they will be needed and they will be appreciated for their contribution.

The Minister for Employment and Workplace Relations told the meeting that there were 32,000 working age people in the Geelong region in December 2005 who were in receipt of allowances and pensions—more than one-fifth of the civilian working age population. Again, in my own home town, we have this large percentage of working age population who possibly can go back to work and are receiving allowances and pensions. If employers want to remain viable and competitive and want to continue to grow, they will have to look towards recruiting sole parents and disabled people who are on the disability support pension to meet their workforce needs.

I personally have been very supportive of the Karingal organisation. They have done a fantastic job with some of the local employers in the Geelong region in encouraging some of those people with some disability to go back into the workforce and to receive some payment for their activities. I commend Karingal and some of those companies which have done such a good job in encouraging those people to go back to work, although they are suffering some form of disability.

I commend this legislation. I commend the thrust of the Welfare to Work legislation that has been before the parliament, both on this occasion and on previous occasions. I think this measure and the philosophic thrust of the policy behind it is very important for both sides of the parliament. In the longer term for Australia we will be encouraging people who have some disability, who have some perceived difficulty, to do what they can to get back into the workforce, to reduce that welfare bill and to have an attitude of mind that here in Australia we will not have forever a ballooning welfare bill. I commend the bill, I commend the policy and I hope those opposite will support the broad thrust of the elements of this bill and the policy behind it.

Jennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | Link to this | Hansard source

I am not going to answer everything that has been asserted by my good friend the member for Corangamite. I understand his passionate support for the Minister for Employment and Workplace Relations’ so-called Work Choices bill, as he is a known member of the HR Nicholls Society, but I have always found the member for Corangamite to be a rather fair and compassionate person. Yet his analysis today of the Welfare to Work legislation reveals a cold-hearted bean counter approach that I had never detected before. One might be forgiven for thinking that the member might have had a finger in the pie in developing the government’s Welfare to Work legislation. I would be interested to get an answer from him on that matter, because he seemed to be suggesting in his comments that people with disabilities and sole parents actually choose that state of being and that existence.

I can assure you that I for one support the notion of moving people in a supportive framework from welfare into work, as does the Labor Party. It is good for those people and it is good for the economy. It meets a major economic challenge that we face with an ageing population, but neither he nor the minister or the government have ever answered the fundamental question: how do you help people move from welfare to work when the government’s first response is to cut their existing entitlements—in the case of disability pensioners, with the new work test, by $77 a fortnight, and in the case of sole parents, $44 a fortnight—as some kind of precondition for them finding work? That is what I find most objectionable in this legislation: not the principle, but the actual means of implementing that principle.

I awoke the morning after the budget to the screaming headlines. One of the headlines particularly grabbed my attention: ‘Manna from heaven’. I thought: would the people whom I represent in my electorate—the 6,000 people on the disability support pension and the 4,000 mums on the sole parenting payment—think that the budget delivered justice and manna from heaven for them, knowing at the same time that the very wealthy were getting the benefits of the largesse, and that come July they in their very low levels of entitlement will be facing quite severe cuts? You have only to look at the largesse. If you happen to be on $20,000 a year, a $7 tax cut per week; on $100,000, a $52 tax cut per week; on $150,000, a $119 tax cut per week. That is $37 billion in tax cuts over four years. I would have thought that a government with that amount of expenditure—with the amount of money it can put out there to try to assist families deal with the pressures of rising inflation, petrol prices and mortgages; with the $37 billion it can afford on tax cuts—might have rethought the very mean-spirited approach it will be taking to sole parents and people on disability support pensions from July this year.

It was not just the tax cut. On top of that there was the reduction in the top marginal tax rates and of course the very generous superannuation concessions. One thing you can be assured of is that sole parents and disability pensioners will never see the generous superannuation concessions that flow, because they are finding it hard to eke out an existence to look after their children. It is no wonder that a growing number of them are among the working poor. It is a mean-spirited approach that really upsets me in a country as wealthy as ours. It upsets me that, with the largesse that flowed to the top end of town, the government in all conscience thinks it is fair to proceed to place an estimated 171,000 Australians at the lowest end of the income scale on lower payments than those under current arrangements. I wonder, again, how those 10,000 people in my electorate feel about this government’s budget.

The other thing that concerns me most about the Welfare to Work changes is the obvious hypocrisy of the government’s position about which families it supports and which it does not, and which families get support to look after their children at home and which families will miss out on that support. As the member for Corangamite well knows, the Labor Party has been pursuing the issue of the very generous concessions for wives of very wealthy people who make the choice to stay at home and look after children in a system that has no means test attached to it. If you happen to be the wife of one of the 76 millionaire families that receive from our welfare system $3,300 in benefits each year, or one of the wives of the 350 men who earn over half a million dollars a year, you are okay: you can stay at home with your child and Australia’s generous welfare support will provide over $3,000 for you to exercise that choice. But if you happen to be a sole parent, when your child turns eight, you will go onto a lesser benefit and your entitlement will in fact be cut by $1,144 from 1 July this year. Is that fair? Is that an incentive to help move people from welfare to work?

I ask why it is that this government, with the means that it has, continues to pursue the stick approach to sole parents, most of whom are there not through any choice of theirs but because of marriage failure. Why is the government going to punish them by reducing their benefits, all in the supposed theory that somehow this will provide them with work, while at the same time extending largesse to people who can well afford alternatives?

The third reason I find inconsistencies in the government’s approach is that it has not, despite all the money that was available, despite the huge surpluses in the last year and in the next couple of financial years—we are talking about $10 billion, $11 billion; huge of amounts of money that have been raised from the community, from working families—addressed the obvious inequity that exists in the very high effective marginal tax rates that women face. Women in two-income families tell me, ‘Look, Jennie, there’s no point looking for work.’ These are people who would voluntarily go back to work but for the huge disincentive with marginal tax rates of 50 per cent or more. Women in households where there is another income earner tell me that that presents a huge disincentive. By the time they go back to work, pay their transport and petrol costs and find child care—if they are lucky enough to find it—they bring home 50c or 40c in the dollar.

That is exactly the same problem that the sole parent will face. I looked this morning at the headline: ‘Slaving for $2.66 an hour’. I thought: ‘This is a great government. If you happen to be very wealthy and earn $100,000 a year you will have a $52 tax cut but, if you happen to be a sole mum with children, you will be forced to work and you will be getting $2.66 an hour.’ If you do not believe me, let me just quote from where that analysis came:

A budget analysis by the Brotherhood of St Lawrence found a sole parent of two school-age children who takes a 30-hour-a-week job at the minimum wage of $13 an hour would lose about 64 per cent of their extra earnings.

“This parent will also have to pay around $60 a week for child care,” the Brotherhood’s executive director Tony Nicholson said.

“This leaves him or her—

usually her, as we know—

approximately only $80 a week better off by working. They are effectively working for an hourly rate of $2.66. The government has squibbed. People want to move from welfare to work but the budget doesn’t encourage it.

Our shadow Treasurer, in his earlier portfolio and in his current one, has consistently said to the government that effective marginal tax rates on second-income earners, in terms of the interaction of the tax and welfare system, are really very punishing to people who want to re-engage in paid employment. If you do not believe me, member for Corangamite, I suggest that you look at a very authoritative study recently released by Professor Apps from Sydney University, an expert in this area, who concludes that second earners in Australia face an average tax rate of around 50 per cent, the second-highest in the developed world. She says that the tax and family benefits system is a very unfair system and that it also has very negative impacts on the labour supply or the hours worked by mums.

These effective marginal tax rates are the main reason why we have had a fall in the labour force participation rates for mothers in the 25- to 49-year age group. The participation rate has actually fallen between 1990 and 2003, because women make the judgment that there is no economic incentive as a second-income earner wanting to do some part-time work to actually go to work. They exercise some choice but, for sole parents with children aged eight, from July onwards there will be no choice. The only choice will be that you go, you take the job on offer—and I will come to that in a minute—and, if you do not like the job or if you give it away, even though you might effectively be earning $2.66 an hour, you will lose your benefit for eight weeks at a time. Is this something the government could be proud of?

I shake my head in despair sometimes, thinking about the growing inequity in income distribution, growing inequality, growing levels of poverty among the working poor. When I read and listen to all the fanfare about the wonders and virtues of the budget, when I see the Treasurer smirking and taking great delight in how the top end of town has been so well catered for, and then I think about all those people who, come July, will be hit so hard, I think surely we can do better as a nation than to take the stick to the most disadvantaged and the poorest people in our community.

Nothing that the member for Corangamite said today in his speech answered the fundamental question: how does the slashing of entitlements of people eligible for the DSP or the sole parent payment help them find work? Until he answers that question in a rational way, he cannot expect that this side of the House will just accept the kind of economic parroting arguments that we constantly hear. Yes, of course it is important that people move from welfare to work, of course we need to increase the participation of women—particularly married women, because in Australia the participation rate of married women with children is much lower than the rate in comparable OECD countries. But you cannot do it by taking a stick. You have to do it by looking at the disincentives in returning to work and you also have to put in a supportive framework.

The member for Corangamite mentioned disability providers in his electorate. I have wonderful providers in my electorate too. The Greenacres Association do a wonderful job. I visit them regularly. They do provide assistance to enable disabled people to return to work where they can. But it is not as easy as the member for Corangamite suggests. If it is that easy, can he explain to me why the rate of employment for people with disabilities in the government’s own purview—in its employment—has dropped from 5.6 per cent to 3.8 per cent? If it were that easy, surely governments would lead the way.

I think it is rather simplistic to say that we have to move all these people—implying that they are making the choice to stay—into jobs that often do not exist. For example, if you look at the people on the disability pension in my electorate, the majority of them are mature-age people. Try finding a job in the Illawarra if you are 50 or over. It is not that people are not looking for work. In January this year, in my electorate the full-time teenage unemployment rate was 35 per cent. Those young people are desperate to find employment, and we have some good pilot projects that are working at placing them into apprenticeships. So you also have to have the jobs that will take up the people who are on disability pensions, who are unemployed or who are sole parents. I think you have a very simplistic view of how this operates, with due respect.

I cannot fail to respond to the comments the member made about how the government sees the Welfare to Work program working in harmony with its Work Choices legislation. Of course, the two do intersect and that is another great cause for concern. We know the changes in the Work Choices legislation will drive down wages and conditions. We know there will only be a handful of minimum conditions. We know that things like penalty rates, overtime and shift allowances will no longer be guaranteed. We know that people who do not have much industrial bargaining power will find it very hard to retain their current entitlements. But when the government forces sole parents and people on the disability pension into work, with all the power in the hands of the employers, I know where they will end up: they will end up on the bottom of the negotiating scale. I know there are a few extra places in the JET program for retraining, but what ability will a sole parent who has been out of work for a long time have to negotiate a reasonable job offer? It will be the job on offer. As the member for Corangamite knows, if a sole parent does not take that job she will be in a situation of having her entitlements cut for eight weeks. Just imagine it: if you are offered a job on the most miserable of conditions, and you decline that job, you will be without any income support for eight weeks. So the eight-week non-payment period will apply to sole parents for refusing a reasonable job offer—‘reasonable’, I guess, means a job that provides the legislated minimum conditions—or, if you decide to leave the job because you think you are being ripped off, you will find that your entitlements will be cut for eight weeks. So it is an issue of how women in that situation are going to put food on the family table.

No-one has explained to me the rationale behind the punitive suspension regime. I cannot believe that, with the largesse that extends to the top end of town, this government could in all conscience support legislation which would leave children and their mothers with no income support for eight weeks—that we would go back to the days of charity where they go to Centrelink and Centrelink says, ‘Well, go to St Vinnies and see whether you can get money to pay your bills.’ I think that is absolutely unconscionable.

Let me quote the words of St Vincent de Paul who raised this matter in their submissions to the Senate inquiry that investigated this legislation. They said:

Our concern lies primarily with the way in which the combination of these two reform agendas—

that is Work Choices, the industrial relations legislation, and Welfare to Work—

will result in some of the most vulnerable members of the community being pushed off social security and into low paid jobs that will be offered on the proviso that an Australian Workplace Agreement be accepted, even if that agreement results in the lowering of real income and a loss of conditions such as penalty rates. The potential for those AWAs to wreak havoc on the lives of Australian families, especially the precarious positions of single parent families, is very real and profoundly disturbing.

I conclude by saying this to the member for Corangamite. I understand your rationale and your longstanding view about the supposed benefits of industrial relations reform—interestingly, the HR Nicholls Society does not embrace the changes with great gusto; I think it was someone from the HR Nicholls Society that said all the overly prescriptive regulation reminds them almost of a Soviet style command and control economy in terms of what can and cannot be in agreements—but I do not understand how, in the context of a budget that some describe as manna from heaven, the member for Corangamite, whom I always considered to be a fair and reasonable person, can look so well after the interests of the top end of town—the people who do not need a hand-up, the people who are relatively privileged and fortunate and who will benefit not only benefit from tax cuts but from a reduction in the top marginal tax rates and extremely generous superannuation contributions. How in all conscience can you live with yourselves while at the same time punishing and taking a stick to the most vulnerable in our community—people with disabilities and sole parents who are not there by choice—and saying to them, ‘The way you find work is by this government cutting your entitlements,’ in the case of disability pensioners by $77 a fortnight and for single mums by $44 a fortnight, and then telling them to go to the local charity if they refuse to accept a job that should not be on offer and that is exploitative. I do not think in all conscience the government should proceed. (Time expired)

Stuart Henry (Hasluck, Liberal Party) Share this | Link to this | Hansard source

The Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Bill 2005 was recently passed by this parliament. Several additional amendments to social security law are required to ensure that the policy intention of the Welfare to Work changes is achieved. These amendments are contained in the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006, which I am speaking to today. Terminology and provisions in social security law will be replaced, amended or repealed to clarify the policy intention in relation to particular Welfare to Work measures.

It has certainly been interesting sitting here and listening to the contribution by the member for Throsby on this legislation. She started out by talking about the mean-spirited approach of the Australian government and the impact of this and other legislation on those who are disadvantaged in our communities. But let us just look at the record. Let us look at what previous Labor governments have done to the Australian workforce and community. Under the Labor government’s administration we have had the highest levels of unemployment and interest rates at 18 per cent plus. Compare that with what has been achieved by the Howard government—the lowest rates of unemployment in over 30 years and low interest rates that enable many more people to get into homes, to the point where we have long waiting lists for houses. It is an incredible suggestion that we are mean-spirited. We are providing employment for all—that is, everyone who wants to work—with employment levels at about 5.1 per cent. Talk about mean-spirited!

Let us just look at the net wage increases over the last 10 years. Wages have increased by something like 18 per cent under the Howard government, but during the term of the previous Labor government they increased by just over one per cent. So who is the better government to provide the best advantage, the best opportunity and the best employment outcomes for all Australians? I think the electorate out there have been voting with their feet in the last four elections, because they know who is doing the right thing by them.

This bill contains a number of provisions which effect minor changes in some areas of social security law, such as amendments to allow parenting payment partnered recipients who have a temporary incapacity exemption to have access to the pharmaceutical allowance. The bill will also allow single principal carer parents who are bereaving the death of a child and are receiving Newstart allowance or youth allowance to continue to receive the same rate they were receiving before their child died for another 14 weeks after the death of the child.

This bill also recognises the special circumstances of partnered parents receiving parenting payment who have a partial work capacity due to an illness or disability. It will give them access to various benefits and concessions on the same basis as Newstart and youth allowance recipients who have a partial capacity to work, including the pension concession card. These and other measures in the bill build on the announced Welfare to Work policy and ensure consistency across working age payments.

The Welfare to Work legislation is built on three main principles. The Howard government believes that people who have the capacity and are available to work should do so. There is nothing better than a job. The best form of family income comes from a job rather than from welfare. Services provided to people who have an obligation to seek work should focus on getting them into work as soon as possible. I would have thought that these principles were basic commonsense, but it seems that the Labor Party have a problem with this, although they seem to have no alternative policy. In fact, Labor are a policy-free zone when it comes to addressing welfare dependency and increasing workforce participation. Anyone in our society who cannot work should be provided with a pension, but I would think that the number of people who cannot work is very low.

The Howard government introduced the policy of mutual obligation in relation to welfare payments, and I am proud to support that policy. It is a policy designed to encourage people to work if they can, to ensure that people do not come to rely on government handouts and to ensure that people who are receiving assistance from the community contribute to the community where they can. The Labor Party is opposed to this policy—a policy which rightly has the support of the vast majority of Australians.

Part of the Welfare to Work package is a change to the parenting payment, requiring single parents who receive it to return to work for at least 15 hours per week once their youngest child reaches school age. I am sure that most Australians would wish they had the luxury of waiting until their youngest child went to school before returning to work, but the Labor Party thinks this is unfair, that it is punishing the parents. In a second reading debate on 30 November last year, the member for Jagajaga said:

This is not the Australian way. Australians look out for each other when they are down on their luck. We give people a hand so that they can get back on their feet.

There is no doubt about that. Australians do look after each other and give a hand to get people back on their feet. However, the member for Jagajaga thinks the best helping hand for single parents is to leave them out in the cold, on welfare, until their youngest child turns 16, offering them no encouragement to enter the workforce earlier to maintain or develop their skills. Welfare to Work gives parents a 10-year head start, helping them to build their work skills, to gain work experience and confidence and, most importantly, to move away from reliance on welfare.

With the skill shortages that we are experiencing across Australia today, we do not have the luxury of allowing people who are capable of working and who are willing to work to sit on the welfare fence. Australia’s unemployment rate is at a 29-year low at 5.1 per cent. There is now a shortage of workers, not a shortage of jobs as we experienced under the previous Labor government with an extreme level of unemployment. The shortage of jobs will only accelerate with the ageing of the Australian population. The potential shortfall of Australian workers over the next five years could be as high as 195,000, according to research by the Centre of Policy Studies at Monash University.

Currently, Australia’s participation rate for working-age people is 73.6 per cent. This is well behind other OECD countries such as Canada, Denmark, Switzerland, the United Kingdom and the United States. In order to meet the skill and labour shortages we will experience in the future, we need to ensure that as many Australians as possible are able to participate in the workforce to their highest level of capacity and availability. The Howard government has introduced Welfare to Work as one part of a comprehensive approach, along with a focus on vocational and technical education and training to safeguard Australia against these future problems. It works in harmony with Work Choices for a caring Australia that puts opportunity and employment in the reach of everyone.

The measures contained in the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 will cost $6.5 million over four years. These measures will ensure the proper delivery of the Howard government’s Welfare to Work legislation, and I commend the bill to the House.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

Labor strongly supports improving the incentives for people to move from welfare to work. Labor believes that those who can work should work and should be encouraged to work, and that involves removing obstacles—disincentives—for people to move from welfare to work. The member for Hasluck has just said that the coalition introduced the concept of mutual obligation, but it was during the Hawke-Keating years—the member for Hasluck was not in the parliament at the time—that the concept of mutual obligation was introduced, most particularly in relation to unemployment benefits. Activity testing of unemployment benefits was introduced back in the 1980s. It was a controversial move, but it was the right thing to do. So the mantle of mutual obligation belongs to the Labor Party. Labor has always believed that it must be a two-way street—that you need to assist and encourage people to move from welfare to work rather than getting out a great big stick and whacking them on the head, which ultimately is not very effective and is certainly not consistent with a compassionate society.

The amendments before the parliament today in the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 are minor and technical in nature and reflect the inadequate and poor drafting of previous legislation. Of course, where we can clean up poor drafting, we will endeavour to assist. For that reason, Labor does not oppose this legislation. But Labor did strongly oppose the legislation that was put through the parliament last year, and budget measures have been introduced since that time. I want to take the opportunity to comment on those budget measures and to provide an evaluation as to whether those budget measures have fundamentally changed the position that was contained in that legislation.

The Welfare to Work legislation introduced into the parliament and passed by the government last year is a disgrace; it is a brutal piece of public policy making. About five years before the passage of that legislation, the McClure report was brought down. That report analysed and described a number of ways in which the incentive to move from welfare to work could be improved. After five years of deliberation the government produced this legislation. If you wanted to design a piece of legislation heavily calculated to weaken the incentive to move from welfare to work and keep people on welfare, it would be the perfect legislation. You could not conceive a more damaging piece of legislation which so greatly weakens the incentive to move from welfare to work. Indeed, the legislation strongly encourages sole parents to move from welfare to welfare. Let me explain. The legislation obliges sole parents to move from sole parent pension to Newstart allowance when their youngest child turns eight. In so doing, sole parents lose $29 a week.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

What happens in Europe, Craig?

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

The member for Bowman will get his turn.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

They are required to move to a second form of welfare, Newstart—a transition from welfare to welfare—and that involves a loss of $29 a week. We heard from the member for Hasluck—and I am sure we will be hearing from the member for Bowman—that we have a great and compassionate government. But sole parents, immediately upon their youngest child turning eight, lose $29 a week. Let us understand who sole parents are. Overwhelmingly, sole parents are women who are struggling to bring up their children. They have been deserted—and, in many cases, physically and sexually abused—by a male. They deserve our support and they deserve our encouragement to move from welfare to work when that is feasible. But they do not deserve the brutality of the legislation that was introduced and passed by this government in this parliament last year—and that is what they get.

In addition to losing $29 a week as they move from sole parent pension to Newstart, when sole parents look for work—and they are obliged to—the income-free area for Newstart is narrower than the income-free area for the sole parent pension, which means they start paying tax and losing benefits at a lower level of earned income. In the transition from sole parent pension to Newstart, and then into work, there is an increased disincentive to move from welfare to work. In addition, the rate at which Newstart is phased out is harsher than the rate at which sole parent pension is phased out—a second strong disincentive to move from Newstart into work. Rather than encouraging sole parents to move from welfare to work, the legislation obliges them to move to a lower level of welfare and, in the process, erects heavier and more punitive barriers to moving from there—Newstart—to work. That is why I say it would be very difficult to come up with a scheme that is more calculated to weaken the incentive to move from welfare to work than this government has managed to come up with after five years consideration.

The government announced a review because it knew there were problems with this legislation. We on this side of the House felt that perhaps the government had listened to the pleas by welfare organisations, other representative groups and the Australian Labor Party to provide genuine incentives—a carrot to move from welfare to work—rather than a very big stick. But the government made no such amendments in that direction. And so, as a result of this legislation passed last year, the stick got bigger and the carrot got smaller—and member after member of this government has stood up and said, ‘Aren’t we a great and compassionate government helping people in this way?’

The truth is that, even given the budget measures announced on Tuesday night, those disincentives for single mothers to move from welfare to work remain very heavy. Calculations performed by NATSEM and some calculations that I did myself confirm that female sole parents in this situation who move off the Newstart allowance and into work lose so much through the loss of benefits, income tax paid, child-care costs and work and travel costs that they are effectively working for between $2 and $3 an hour. The government did do something positive in the budget on Tuesday night by increasing the low-income tax offset from $235 to $600 a week. I am especially happy to acknowledge that, as a number of my colleagues have, because I proposed it in the prebudget submission that I sent to Treasury. In fact, I proposed that the low-income tax offset be lifted from $235 to $625. The government lifted it to $600, but I acknowledge that provides some benefit because there is effectively a tax-free threshold for sole parents of around $10,000 compared with the smaller threshold before that.

But, even after taking account of that effective lift in the tax-free threshold for low-income earners to around $10,000, according to the Brotherhood of St Laurence, who have had the time to do this work, a sole parent of two schoolchildren aged over eight years who is on the minimum wage and is taking up a 30 hour a week paid job will still lose around 64 per cent of their additional earnings, such that they are effectively working for an hourly rate of $2.66. So the figure is still in the same range that I and NATSEM calculated: that is, poor single mothers are required by this government to work for between $2 and $3 an hour.

But let us have a look at the story for high-income mothers who are in millionaire families. They are paid $3,300 a year to stay at home while poor single mothers are required by this government to go out and work when their youngest child turns eight for as little as $2.66 an hour. That is this government’s idea of fairness. It is a brutal piece of legislation.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Mr Laming interjecting

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

The member for Bowman should know better. The member for Bowman, who has got a medical degree, would have seen plenty of poor people. He would have treated plenty of poor people, yet he is going to stand up in this parliament and say it is all right for poor single mothers to be required by this brutal government to go out and work for $2.66 an hour while wealthy mothers in millionaire families are paid $3,300 a year to stay at home. This piece of legislation is an absolute disgrace, yet one after another government MPs stand up and say, ‘Aren’t we terrific; aren’t we fair; aren’t we compassionate.’ This legislation should have been thrown out. I would have much preferred to see these amendments today contain a line that repealed the legislation that was introduced and passed through this parliament last year.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Mr Laming interjecting

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

Order! The honourable member for Bowman will get his chance to contribute very soon.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

Before I go on to describe measures that would genuinely provide incentives for single mothers to move from welfare to work, put yourself in the situation—if some of the government MPs could do this—of poor single mothers, many of whom have been brutalised by their partner, who are trying to bring up children. They are told by this government that from 1 July and from when their youngest child turns eight they will go from the sole parent pension, losing $29 a week as they go to the Newstart allowance, get activity tested every week and then have large disincentives, big obstacles, to move from welfare to work put in their way. Put yourself in their situation and say: ‘How can I get out of this horrible situation that the government is putting me in? I know: have another baby. That will put the whole issue off for another eight years.’ So let us understand that this government’s legislation specifically has the effect of strongly encouraging poor single mothers to have more children.

If that is the government’s social policy agenda, fine—stand up in this place and say the government’s response to the problem of the ageing population is to encourage poor single mothers to have more children, to perpetuate the cycle of dependency in order to stop the situation where those women are effectively punished for moving from welfare to work. In addition to the disincentives for those mothers to move from welfare to work, if they have a baby not only do they put the problem off for another eight years but also they pick up a $4,000 baby bonus. That is why I say you could not conceive of a set of measures more calculated to keep poor single mothers on welfare all through their baby-bearing lives, continuing to have babies and then creating and perpetuating the cycle of dependency and the cycle of despair. What the government should have done is give poor single mothers some genuine incentive to move from welfare to work and a capacity to do so by offering them proper education support.

Here is yet another chapter in the saga. When they do move and when they are required to move from the sole parent pension to Newstart, eligibility for the education and training support programs is less. It is weakened, not strengthened. So the government is effectively saying it does not want, and will not support, the training of poor single mothers to improve their workforce skills and to create not only an incentive to move from welfare to work but a capacity to do so. OECD analysis shows that one obstacle that can be removed for mothers moving from welfare to work, which would produce greater participation and help them and help us combat the problem of the ageing population, is to improve child-care benefits. The government did announce some measures on Tuesday night which slightly improve for a limited period of time—

Joe Hockey (North Sydney, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

Mr Hockey interjecting

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

It does slightly reduce the cost of child care for a limited period of time. But then the mothers are back in the situation of earning $2.66 an hour. The Minister for Human Services at the table says, ‘Oh come on, be generous, be fair.’ What is fair about $2.66 an hour, Minister? You live on the North Shore of Sydney. Do you know anyone on the North Shore of Sydney who would work for $2.66 an hour? Do you expect your wife to work for $2.66 an hour? Do you expect poor people generally to work for $2.66 an hour? That is why I say this legislation is so brutal.

What should happen is that the child-care benefit, which is a good measure, should be increased for people on low incomes. You will then, according to OECD analysis, get some genuine incentive and genuine responses from people to move from welfare to work. But, instead of increasing child-care benefits, the government introduced as a result of the last election the child-care rebate. The child-care rebate is specifically targeted towards higher income earners. Why do I say that? Because it is 30 per cent of the out-of-pocket child-care expenses after taking account of the child-care benefit. The child-care benefit is a properly means-tested benefit. Obviously the government said, ‘We’ve got all these people on high incomes who are saying, “I want help with my child care; this child-care benefit does not give me that help.” Good idea, we’ll come up with a child-care rebate.’

You will not get the increase in participation through the child-care rebate that would have been obtained by increasing the child-care benefit. But, no, the government does not want to do that, because it would be a fair measure to increase the child-care benefit rather than to introduce the child-care rebate, which is absolutely riddled with anomalies and administrative problems. It has been a disaster from day one and an embarrassment to everyone except this government, which is very difficult indeed to embarrass.

If we want genuine incentive to encourage women to move from welfare to work, we would lift the child-care benefit. We would make sure that those mothers get a reasonable take-home hourly rate of pay rather than making the stick bigger and the carrot smaller. I hope I have been able to demonstrate here this evening how unfair and how brutal this legislation is. The government in Tuesday’s budget will spend $20 billion extra over four years and found savings of $2 billion. If you are going to spend an extra $20 billion out of all of the largesse that has been flowing into the government’s coffers through the resources boom, surely you would try to make some extra effort to improve the incentives for sole parents and people on disability support pensions to move from welfare to work.

But this miserable government has not improved those incentives, and the Brotherhood of St Laurence confirms that. Those poor single mothers are still expected to work for $2.66 an hour. The legislation is a disgrace. It just shows that the Liberal Party of Australia is a brutal administration that believes it can punish poor single mothers for being single mothers and is trying to make their lives evermore a misery. We should be taking the opportunity to repeal this disgraceful legislation instead of debating nitty-gritty points about minor amendments.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

My neighbour the member for Rankin is probably the only person on the other side of the chamber who does take an active interest in OECD comparisons. Quite commonly they are quite unflattering for the opposition in their time in government, so I appreciate that he took the time to even acknowledge them today. Unfortunately for the argument that omitted so many OECD comparisons that were convenient to the member for Rankin, in the very situation he described in great detail throughout most of his contribution, pertaining to single parents who have children turning six and turning eight and being required to attempt to return to the workforce where possible, the simple fact is that throughout most of Europe they are compelled to do so. In fact, there is barely another economy in the OECD that has a system as generous as Australia’s. For that reason I think Australia is completely vindicated in this last 10 years of working to address the very skills shortage we have heard articulated so commonly on the other side by moving towards an active workplace participation model.

It is worthy to just cast our minds back through the range of improvements that have been made over 10 years, which were utterly required as Australia attempted to become a nation that could keep up with its international competitors in what is a very competitive race to preserve quality of lifestyle and to preserve a GDP that makes us competitive internationally, that ensures that our exports are strong and that our population are adequately trained and have an opportunity to enjoy their own endowments and participate in this strong economy that only yesterday was acknowledged by the OECD to be the second most competitive and the second best performing of the economies with a population over 20 million.

Before going into a response to the many speeches we have heard from the other side, it is important to acknowledge that the changes being proposed in the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 today are in fact very good ones. They pertain to partnered parents who are receiving payments. They extend the right to access a pharmaceutical allowance and, for those who have a partial work capacity, the right to access Newstart and youth allowance and, most importantly, where relevant, the right to access the pension concession card. That is an important change. For single carer parents who do lose a child, this also allows them to access for 14 weeks Newstart or the youth allowance. These are commonsense amendments, and I know there is probably universal support for those changes on both sides of the chamber.

I want to go back to 1998, because the debate that is heard today may seem novel to new members like me. In fact these debates have been held by our predecessors since 1998, when the first proposal was made to end the Commonwealth Employment Service and move to a new and revitalised model. I do not need to read out the quotes that were spoken in parliament at that time, when the end was forecast by the opposition. The belief was that with the end of the CES would come burgeoning unemployment and a collapse in the Australian economy. The same thing was predicted again in 2002 when, following the McClure report, Participation support for a more equitable society, we responded and developed Australians Working Together.

We heard that same echo as things continued to improve on virtually every economic marker, with the active participation model in July 2003, which was that very revolutionary model to individually link up those who were receiving support and looking for work with a job provider. I will just make the remark on the side that, as long as unemployment was over 10 per cent of Australia’s population, how could you ever hope to have a personalised approach to engaging people and helping them back to the workforce?

Obviously, we know that there is no better way of ensuring someone’s wellbeing than providing them with a job. It is a very simple premise. We know that simply providing income support without any sense of reciprocity does not work. This goes right back to someone who I am quite sure is quoted often by the other side of the chamber: Beveridge, the English father of welfare economics, who noted even then that passive welfare support without any sense of responsibility or obligation is eventually eroded by its own middle class, who cease to have faith in a pension system if there is no reciprocity but simply passive income provision. That is a fairly simple model. That observation was made over a century ago, but it is still just as accurate today.

Of course, what has changed in the last five or 10 years is not so much the proportion of people in part-time employment. Australia has been increasing its part-time proportion of employment. It still falls behind one or two European nations, but in the end what we have is a more flexible workforce, an easier workforce to access. I want to give a personal anecdote, because there are certainly plenty of them articulated here. My view, as a person who grew up with a mother who worked part time but did not want to—and there were plenty of mothers out there who could not work part time but wanted to—is that, if there has been one change in the last 10 years, it is that people are no longer forced back to the workforce because they cannot afford horrendous interest rates. There are no longer people sitting outside the economic engine of this country because there are no options to engage in further training and there are no options in the form of jobs in the classified sections of the back end of our cities’ newspapers. The number of jobs being reported each month is extraordinarily high, and I do not need to repeat that unemployment sits at record low levels.

We need to remember that that is a significant change to just 10 years ago, when so many people may well have been working, with just as many part time, but when so many of them found themselves not maximising the very endowments that they had. They did not have the opportunities to study, train or be at home because the very people who wanted to be at home with their children could not afford to and the very people who found themselves working part time could not afford to leave. But what we have now is a completely different situation, with a workforce which is far easier to engage. You only have to walk through a shopping centre and talk to small business proprietors who cannot find people to employ. We have a completely different situation. As has been expressed here before, far better it is to have a shortage of skills than a surplus of labour and people completely disengaged from our own economy.

In 2002 the focus was on increased self-reliance, and that means giving people searching for a job an opportunity for a one-to-one relationship with a Job Network provider. For parenting payment recipients, those obligations really are very minor. I know that the case was made—and it is an almost preposterous proposition—that every single parent who is on a payment, or at least a large proportion of them, are abused. I do not for a moment wish to dismiss anyone who has ever been in that situation, but to make a ridiculous claim, as the educated member for Rankin did previously, that we need to take our hands off single parents because they are in some way subject to enormous levels of personal and family abuse is just ridiculous. It then suggests that we have to have Centrelink making decisions every day on whether to engage people back into the workforce and whether violence within the home becomes some reason for opting out of the economy.

That is a preposterous claim, as is that it is a heartless proposition to have a form of mutual obligation. If there is one thing we have learnt from the last 10 years, it is the electorate’s willingness to take on the principles of Work for the Dole. Just 10 years ago one would not have dared stand up in a coffee shop and propose Work for the Dole, and now the notion of reciprocity is so accepted in the community. It has been fought tooth and nail from this side of the chamber—and even I, having not been here, acknowledge that that has been the case.

For every change that is made to the workforce and to workforce policy, I acknowledge there will be a battle with the other side of the chamber. And, while I am sure that in your own hearts you believe you are right and that you are often confronted with individuals who come to you with cases of hardship, I put to you that Centrelink does an extraordinary job of dealing with those very exceptions and, where it can within the rules, being as responsive as it can to a community that often has many and varying needs.

One thing you do not hear too much from members of the opposition is that pensions are too low. They themselves have an appalling record of not linking pensions to MTAWE, and there was enormous hardship until that was done by this government. But the proposal that people are then working for $2.60 an hour, as we heard from the member for Rankin, who has a PhD in economics, simply misses the point that this is a subtraction of a currently very strong welfare payment from average wages. That is where he gets the figure of $2.60 per hour. Prefaced upon that figure, of course, is his belief that every single person is entitled to a pension and that, if you go back to work, there has to be $200 a week to make it worth while for you. Once again, that is a preposterous way to treat the welfare system.

I am proud of the very strong welfare platform that this country can boast. If it is only an extra $200 a week one might earn to go back to work, that is a decision that every individual is free to make. But to say the marginal tax rates are unfair—and, sure, they are higher than they are in a number of other economies—only reflects that other countries have a lower pension system and that other countries may choose to taper out at a different rate. That is where a marginal tax rate is calculated from. A high marginal tax rate for those returning to the workforce is simply a product of a very high welfare payment and a tapering that does not extend all the way up to people earning $50,000 per annum. Were we to do that, I am sure we would be criticised by the other side for having middle-class welfare.

The Treasurer made the decision to increase family tax benefits to those earning $40,000 a year. That was an important decision—not criticised by the other side—which addressed those marginal tax rates, making it easier for people to return to the workforce. It is also important to note that the changes to participation requirements are not as onerous as has been proposed by speakers from the other side. There is already a range of automatic exemptions available for some parents and applied case by case. I think we too easily tend to criticise Centrelink in their efforts to apply those case-by-case exemptions, but I know personally from having observed the work of the Centrelink offices in Cleveland and Capalaba that they are doing that and doing it every day.

For very long term job seekers a system called Wage Assist is valuable. There are full-time work for the dole activities for the very long term unemployed, particularly those who have made a genuine attempt to look for work—and that is what is asked for. It is never noted by the other side that there is not an obligation to go back and work for a certain hourly rate; an option as part of the obligation is to participate in voluntary engagement. There is always the option to do voluntary work as well, and it should be noted that that does not affect payments. In addition, people with disabilities will have access not just to vocational rehabilitation through Job Network, which we well know, but to the disability open employment services as well.

The supporting employer strategy promotes involvement by employers in these partnerships, which is important. Principal carer parents do not have to accept work if there is no appropriate child care or supervision available in the hours during which the parent is working. These sorts of details are often glossed over, papered over, by the opposition when they attempt to portray an effort to do what is only responsible for a government—to return our participation rates to somewhere near OECD and developed economy averages. They attempt to paper over these very important exemptions, including those for single parents of large families, and portray them as being unnecessarily heartless.

When we make these comparisons, it is worth noting that the number of jobless families in this country is the third highest in the OECD. We also have the lowest employment rate of people receiving disability support benefits of the major OECD economies, which means that once a person is on a disability payment in this country they stay on it for an average of 10 years, and the number of people who earn additional money on top of their disability payment is around 10 per cent. For seniors who are receiving a seniors payment, that figure is around 38 per cent. We know by comparison that these figures are extraordinarily low. I think it is a responsible government that engages that proportion and asks, ‘Why is there not an incentive for this proportion of our population to return to work?’

We just need to look at the basic numerator that we are talking about here: there are 2.6 million Australians receiving these payments out of 13.7 million people of working age. That is 20 per cent. In very few countries in the OECD is it more than 10 per cent. It does not take a great deal of maths to ask, ‘Why are there 20 per cent of disability payment recipients in Australia and around 10 per cent or fewer in other OECD economies?’ I am not for a moment saying that one person is or is not disabled, but there needs to be a very good case made by the other side of this chamber for why 3.7 million Australians are receiving disability payments when we are not seeing that reflected overseas. I think a responsible government would look closely at those figures.

Of course, we know that, when you are without a job and are receiving income support in isolation, that is correlated with—not a direct cause of but correlated with—lower wellbeing, and with that comes all of the socioeconomic ailments that we are aware of, including engagement with schools and outcomes for children. These are the reasons why we are working very hard to see families re-engage with the economy. That is the underlying drive—that is why these three small but worthy amendments are being proposed today and why I support in here and in Bowman the changes being made both today and through an ongoing process to give every Australian, regardless of their background, an opportunity to engage with the economy. It is all starting with local Centrelink offices and it is a campaign that I support strongly.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

In the very short time that I have to contribute to this debate on the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 tonight, I would like to pick up on some of the points raised by the member for Bowman. I start by saying very strongly that I support the right of people to work. I appreciate the fact that people, where they are able to work, should be able to work. Prior to entering parliament, I had a lengthy career of fighting for people with disabilities to have the opportunity to enter the workforce. It is because of my background in working with people with disabilities, assessing their suitability for work and looking for suitable employment for them that I have been so opposed to the Welfare to Work legislation—not because it is about moving people from disability support pensions into employment but rather because I have always believed the legislation is quite flawed. I believe that, when drawing up this legislation, the government have disregarded a lot of professional advice that they have been given.

One of the most important things for a person with a disability is to feel that they can move from the disability support pension to work. The role of government in that is to minimise the risk and to empower them to feel that they can succeed. The moving of a person from welfare to work should not be about moving them from one benefit to another, which is what I believe has happened with this legislation. The government has decided, in its wisdom, that people on disability support pensions should be moved to Newstart allowance. That will make it even harder for a disabled person to return to the workforce.

People with musculoskeletal disabilities have been targeted by this government as having insignificant disability. Anybody who has had any experience working with disabled people can attest to the fact that these people are just as disabled as those who suffer from other injuries. The government has shown its lack of understanding and direction, and this has been reflected by punitive legislation. The original Welfare to Work legislation, which we debated in December, was flawed, and it is because of its flawed nature that we are here today debating this amendment. I seek leave to continue my remarks when the debate is resumed.

Leave granted; debate adjourned.