Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

In speaking on the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009 I would like to make some comments about the bill and indicate that the opposition will not be opposing this bill. This measure would allow someone who is claiming Newstart allowance, youth allowance, sickness allowance or Austudy to have a doubling of the liquid assets previously available. They were $2,500 for singles or $5,000 otherwise. People who did have liquid assets above these maximum reserves, would have gone on a liquid assets waiting period. Doubling the maximum reserve of the liquid assets for a two-year period will have the effect of reducing the length of the liquid assets waiting period. The bill will also amend the Social Security Act 1991 to exclude the surrender value of life insurance policies from the definition of ‘liquid assets’ for social security purposes. This bill overturns a savings measure which the former Howard government introduced in the 1996 budget.

In light of the fact that unemployment has now risen to its highest level in four years, these measures are appropriate and will not be opposed. What is concerning, however, is that this is indicative of a much more general approach which is being taken by the government. Rather than having ambitions to create jobs, this is a government which seems to have given up on that front and is now just preparing people for unemployment. Mr Deputy Speaker Sidebottom, you might remember that 25 years ago Bob Hawke was elected on a promise to create 500,000 jobs. That was a government which actually met that promise. We have a Prime Minister who promised before Christmas to create 75,000 jobs. He has scurried away from that promise. He will not stand by the promise he made prior to Christmas to create 75,000 jobs. His ambitions now for Australian workers, for school leavers and for mothers returning to the workforce are now so slow that he will not stand by his commitment prior to Christmas to create 75,000 jobs.

We should look at the track record so far. Before Christmas, Prime Minister Kevin Rudd promised to create 75,000 jobs. In the month of December, the government created 200 jobs across the whole of Australia. In the month of January, the government created 300 jobs across the whole of Australia. In the month of February, they created 1,700 jobs. So, over a three-month period, the Rudd government created 2,200 jobs. Over 12 years, the Howard government created 2.2 million jobs—1.2 million of them full time—and at the same time saw wages increase in real terms by more than 20 per cent. The Prime Minister promised 75,000 jobs and, in the last three months, the government created 2,000 jobs. We would like to know where the other 73,000 jobs are. He has come up 73,000 short.

When we look at this government’s record on unemployment, it is not a happy one. There are now 157,900 more Australians unemployed than there were 12 months ago. So over the last 12 months we have seen an extra 157,900 Australians receiving unemployment benefits, and the bill that we are debating today will only see those numbers increase further. We have a forecast from the government that there will be 300,000 more Australians out of work by June next year, and yet in January and February alone we saw about 80,000 extra Australians receiving unemployment benefits. So we are already seeing that these forecasts from the government of an unemployment rate of seven per cent by June next year—an extra 300,000 Australians out of work by June next year—may actually turn out to be quite optimistic.

Members may be aware that Anna Bligh has promised to create 100,000 jobs over the next three years. Members should be aware that there are now 19,300 more Queenslanders out of work than there were in November 2007, when the Rudd government came to power. So what we see is a Prime Minister who no longer has any ambitions to create jobs. He has given up on that front and is now just happy to prepare people for unemployment. In question time when we asked about jobs and job creation, the answers that we got were about redundancy payments. Rather than talking about working families, the government is preparing people not to be working families but to be redundancy families.

The ABS labour force figures for February 2009, which were released last Thursday, showed a 0.4 per cent increase in the unemployment rate, pushing the Australian unemployment rate to 5.2 per cent. This is a massive surge in unemployment in the space of just one month. It is the largest increase in the unemployment rate since 1991, and we are now back to where we were in March 2005. When we see these statistics, they are not simply statistics. For every person there is an enormous human cost and an enormous social cost in losing a job or in not being able to get a job to begin with.

Youth unemployment is now the highest it has been since 2001. As we know from the previous recessions, in the early eighties and early nineties, there was an enormous cost for those generations who never became established in the workforce. Many of them still have only a marginal attachment to the workforce. It is absolutely critical that the Rudd government address the issue of youth unemployment. One of the great disappointments is that, with all of the money that has been thrown around, there has been no specific initiative targeted at young Australians.

We have a Treasurer who is unable to state how many jobs the government plans to create in its first term. He is unwilling or too afraid to have Treasury revise the unemployment forecasts. This is the same Treasurer who, in his book Postcode: the Splintering of a Nation, talked about the regional differences in disadvantage in Australia. That makes today’s report by the Centre of Full Employment and Equity very timely because it shows that the impact of these jobless figures will not be uniform. The impact of increasing joblessness will not be uniform; it will hit some suburbs much harder than others. The authors of the report have said that they suspect that suburbs which have a high proportion of people in industries like manufacturing, construction, retail, accommodation and tourism, a high proportion of workers with no post-school qualifications and a high proportion of part-time workers will be the suburbs that will be most affected. You will see an impact on what are historically areas of social disadvantage. They will be hit hard. But you will also see many suburbs which they have described as ones of emerging disadvantage. These are what we would call mortgage belt suburbs, where people have had jobs, have mortgages and are stretched. These people will be hit for a six by rising unemployment and by the lack of any strategy on jobs from this government. In his book the Treasurer stated:

We must not concede defeat; we should not accept a culture of dependency.

And yet this is exactly the approach the government are taking. They are preparing people for unemployment. They are not prepared to create jobs. They are not prepared to even state an ambition to create jobs. They are refusing to address the fundamentals, to promote confidence, to promote growth and to promote employment. Instead of focusing on creating jobs and ensuring job security for Australian workers, they are rolling out plans for redundancy.

It is crucial for all members to remember that history tells us that unemployment can increase rapidly. In the early eighties we saw it go from the low point to the high point in five quarters—just over a year. In the early nineties, unemployment went from around five or six per cent to almost 11 per cent—in just two years. We know that, once people lose their jobs or when people do not get jobs, it takes a long time to get unemployment down. Sadly, it will be a long time before Australia has an unemployment rate with a ‘4’ in front of it again. The problem is: when unemployment rises rapidly, it is significantly harder to effect a reverse.

On every conceivable measure, the government seem to have given up. The government refuse to accept responsibility for the rising unemployment. The Prime Minister does not accept that there is one single job loss in Australia which is due to his government. He does not accept that there is one single extra person unemployed due to his government. The government are preparing people for unemployment. The front page of today’s Australian highlights some of the problems with the government’s very own policies. While their own forecast for an emissions trading scheme does predict a 10.1 per cent decrease in economic growth as a result of the emissions trading scheme, some regional centres will be hit very hard. Areas like Mount Isa, Gladstone and Newcastle will be hit hard on jobs. This scheme will be job destroying, especially in those regional centres. The mayors understand this. They understand that the important thing—and why the government were elected—is to create jobs, support jobs and protect jobs. This indicates that there are a lot of problems with the government’s emissions trading scheme. Their emissions trading scheme has very few friends. It is not a jobs-friendly, jobs-enabling emissions trading scheme; it is a jobs-destroying emissions trading scheme.

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

Mr Deputy Speaker, I rise on a point of order. As passionate as the member opposite may be—

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

What is the point of order?

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

about the emissions trading scheme, I have to say that he is really drifting away from the legislation that we are debating here today.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

There will be latitude in this discussion, and the member for Boothby is ranging around that area of employment. I know he will be coming back more specifically to the legislation in the next 15 minutes.

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

To make it clear: the opposition is not opposing lifting the liquid assets eligibility level for Newstart allowance, but I am concerned that the government are passing the buck by refusing to address the real issue here, which is that of rising unemployment and their responsibility. We have gone from seeing a government promising to create 75,000 jobs as a result of their $10.4 billion stimulus package in December to their supporting only 90,000 jobs with their $42 billion spending announcement. The tone has changed and the government have given up the fight. We have had no indication of what the jobs impact will be of their policies, their emissions trading scheme or their industrial relations legislation, and yet they are able to quantify, down to the last job, 75,000 jobs from the $10.4 billion stimulus package.

Unfortunately, this legislation has become necessary now that we have the highest unemployment rate since March 2005 and now that we have had the largest increase in the unemployment rate since 1991. All you will hear from the government is that they refuse to take any responsibility for any of this. They are not responsible for a single job loss nor are they responsible for a single extra person joining the ranks of the unemployed. Regrettably, there is much worse to come. I fear that the government’s forecast of an extra 300,000 Australians out of work by June next year will turn out to be a very optimistic forecast and that there will be much more to say on this.

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. Under the current social security law, people claiming Newstart allowance, youth allowance, sickness allowance and Austudy who have liquid assets above a maximum reserve amount of $2,500 if single without dependants or $5,000 otherwise must generally serve a waiting period called the liquid assets waiting period before being able to access income support. This bill will amend the Social Security Act 1991 to double the maximum reserve threshold for liquid assets to $5,000 for singles without dependants or $10,000 for others for a two-year period from 1 April 2009. The effect of this will generally be to reduce the length of the liquid assets waiting period. The bill will also amend the Social Security Act 1991 to exclude the surrender value of life insurance policies from the definition of liquid assets for social security purposes. This will mean that life insurance policy surrender values will not be taken into account in calculating any applicable liquid assets waiting period or in determining severe financial hardship for the purposes of eligibility for income support. This amendment will ensure that income support claimants are not unreasonably disadvantaged by having to cash in their life insurance policies before they can access income support. These measures will commence on 1 April 2009. There will also be consequential amendments to other pieces of legislation as a consequence of this bill.

The decision to limit the increase by a two-year period provides an appropriate and measured response, in the government’s view, to the current extraordinary financial circumstances. The government has committed to reviewing these arrangements in a year. The threshold levels and indexation arrangements would be matters considered in the review process. This is an important initiative in these troubling times with the global recession. We have heard much about what is happening overseas in Canada, in the US, in Europe and in the UK, particularly about the rise in unemployment in those countries. Certainly we are seeing a rise in unemployment in this country. That is why it is important in these difficult times to provide what assistance we can, when a person finds that they are unemployed, to ensure that they get access to financial support as soon as possible. That is why I welcome these government initiatives by the Minister for Employment Participation.

But of course that is not the only thing that the Rudd Labor government is doing. Through the $42 billion economic stimulus package, there are new employment services, extra services for redundant workers, investment in training and a fairer compliance system. This bill is not introduced in isolation. There are a raft of initiatives and employment services that have already been introduced by this government to assist those people who find themselves unemployed. This is about supporting Australian jobs by stimulating the economy and investing in the skills we need now and in the future. It is crucial to our capacity to ride out the global financial crisis.

Through our new employment services, we are reforming employment services to improve opportunities for every Australian to participate in the workforce and to help build a more productive and competitive economy. Following intensive consultations last year, the Rudd Labor government is undertaking a complete overhaul of the existing Job Network and will introduce new employment services on 1 July this year. These new services will be demand driven, personalised and focused on addressing the real barriers to employment that each job seeker faces. There will be a much stronger focus on equipping job seekers with the skills and training required to gain a job and meet the labour needs of employers. There will be services for newly redundant workers. In light of the global financial crisis, the Rudd government has acted quickly to reduce the impact on workers and their families by providing intensive employment services for newly redundant workers. This came into effect on 24 February 2009. The government announced a further commitment of $298 million over the next two years so that newly redundant workers would be immediately eligible for intensive employment services.

This is so critical and it has been welcomed by training organisations throughout the electorate of Petrie who know about the difficulties faced by workers. Consider those workers who are made redundant in their forties or in their fifties. They have been in a workplace in a particular occupation for many years and suddenly find themselves redundant. They can have great difficulty in re-entering the workforce after they have found themselves on the unemployment line. We need to provide them with dedicated individual assistance, personalised assistance, not only to assist them to get back into the workplace but also to do it in a way that actually assists that person moving forward with their skills as well. This is not just about saying, ‘What skills do you have? That is great. Here is another job that needs those skills.’ This is about asking, ‘What skills do you have and what can we do to add to those skills so you may go out and actually move ahead in your career?’

There are opportunities out there right now. There are people in the workforce, predominantly males, in their late 30s or in their 40s who have been in the construction industry for years but do not have a formal trade qualification. Ask any one of the managers they have worked for and they will say that those workers are as capable as any tradesperson they have had on a job. If that person were to have their skills assessed, to have a recognition of prior learning assessment done, it may be that those individual workers can take up initiatives, engage in a course that requires them to complete a couple of units in a trade qualification and find themselves, within a reasonable period, with the full trade qualification. A group training organisation in my electorate, East Coast Apprenticeships, have been doing this very successfully with TEAs over the last year. In fact, they have had some adult apprentices complete their full trade qualification in less than 12 months by recognising the skills they already have. This is what these services can do—assist people on that path. Workers will receive immediate personalised assistance, career advice, referral to available training places and job search help. A personal employment pathway plan will set out the services and training they need to find and keep a job. Providers will be able to purchase services and training for them through a $550 credit. This assistance has never been provided to redundant workers.

In addition to early access to personalised employment services, the government will invest a further $75 million in 10,000 new training places through the Productivity Places Program. The additional 10,000 places will bring the total number of extra places for workers made redundant as a result of significant economic changes in their industries to 20,000. The $2 billion Productivity Places Program is a major, long-term commitment that will deliver more than 711,000 training places over five years. Already more than 80,000 Australians have enrolled in a training course through the program since it began in April last year.

There will be a fairer and more effective compliance framework. The Rudd government has amended social security laws to introduce a fairer compliance framework for approximately 620,000 people who receive Newstart allowance, youth allowance, parenting payment or special benefit and have participation requirements. The key features of the new compliance framework are a more work-like approach with no show, no pay participation failures, retaining an eight-week non-payment penalty for persistent and wilful noncompliance, a new comprehensive compliance assessment before any eight-week non-payment period is imposed, fair opportunities for payments to be reinstated if job seekers participate in an intensive compliance activity and new hardship provisions to replace financial case management.

That is what we are doing already to assist people who, unfortunately, because of economic pressures, find themselves in trouble due to the global recession. That is what the Rudd Labor government are doing right now. We have heard from the member for Boothby today that he and his colleagues in the opposition will be supporting this bill. We welcome that support because it is an important initiative. Of course, there is always a ‘but’ with support from the opposition. It is unfortunate that the member for Boothby believes that this is somehow indicative of the Rudd Labor government accepting that job losses will occur and that there will be a rise in unemployment. Any developed country will tell you that, as a consequence of the global recession, there is going to be an increase in unemployment. For the member for Boothby to stand here today and say that the government have given up and accept unemployment once again shows how out of touch the opposition are. They have completely not grasped what the government have delivered already through our stimulus package in October last year and through the $42 billion Nation Building and Jobs Plan.

Combined, this is an economic stimulus package that will support jobs across those areas most in need of support—for example, in construction. Again, I take you back to the training organisations in my electorate who say that they have got chippies and carpenters who have been stood down because of the lack of work. They absolutely support the government’s initiative to build infrastructure in our schools and to build social housing. They support our white paper on homelessness and our commitment to build more emergency shelters so that there are fewer homeless people. These initiatives are welcomed by my community.

We heard the member for Boothby, Dr Southcott, refer to Anna Bligh, the Premier of Queensland, and her commitment to jobs. In contrast, the policy of the opposition leader in Queensland, Mr Springborg—come the election on Saturday—is to cut jobs and to cancel infrastructure projects going on around the state. It sounds a bit familiar—for a leader of the opposition in Queensland to have a policy of cutting jobs—when you consider what is happening in the Senate right now, where we have an opposition whose policy is to hold on to Work Choices and to oppose the Fair Work Bill because they want to be able to sack workers more easily. So the opposition’s position, both in Queensland and federally, is quite consistent. They support job cuts and they support the ability to sack workers easily. That is what we see from the opposition. In Queensland, we have seen the largest commitment to nation building and investment in infrastructure building. The Queensland government has committed extensively to roadworks, bridgeworks and infrastructure generally to support the state in the long term.

It is convenient for the opposition to refer to the Howard years and how many jobs were created in the Howard years. But, once again, they fail to acknowledge that the economy has significantly changed since 2007.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

Mr Hawke interjecting

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I hear the interjection, ‘Since you came into government’—once again, completely ignoring that there is a global recession going on. According to the opposition, there is nothing else happening around the world when it comes to the financial circumstances of other countries; it is only happening in Australia. And, if you believe Mr Springborg, it is not happening in Queensland: there is no recession; it is just a beat-up.

As a consequence of the government’s economic stimulus in October last year, we have seen retail sales go up. What does that mean? It means jobs. It means that people in the retail sector have been able to hold onto employees who otherwise would have been made redundant because of loss of sales. Again today in the Courier-Mail we saw reports that retail sales in Queensland have risen and are much higher than they were this time last year. A shopping centre just down the road from me at Stafford is reported in the paper today, saying that sales in Big W’s kids wear have gone up 50 per cent. Those opposite say that people have wasted their stimulus money. I am sorry but, if parents are spending extra money buying their kids new clothes at Big W, I am for it. I think that is a great way to stimulate the economy—to go out and buy clothes for your children. This is what the government is about. Our Nation Building and Jobs Plan is about supporting jobs.

Yes, I support the infrastructure work in schools. I make no apology for supporting schools in getting multipurpose halls, state-of-the-art libraries and permanent school blocks. I have been working with my schools extensively to provide that support, and I will support any school which is seeking to access the government’s BER funding and which complies with the guidelines.

It is my pleasure to support this bill. It is another initiative, amongst a range of initiatives, that the government has put in place not only to support jobs—through its economic stimulus strategy—but also to support those people who find themselves unemployed, being made redundant. This government is stepping up. That is what a strong government does. It delivers not only in the good times but also when times get tough—and this is such a time. The global recession is putting pressure on businesses and it is putting pressure on jobs across this country. This government is stepping up to the job. The opposition’s alternative policy is to wait and see. In Queensland, it is a case of saying, ‘Let’s cut jobs; let’s cut infrastructure projects.’ In the Senate it is a case of saying, ‘Let’s make sure that we can sack people easily.’ I will support the Rudd Labor government’s policies any day over those sorts of initiatives.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. This is an interesting bill. It is most interesting to reflect that what we are doing with this bill—and, indeed, the opposition has no objection to this bill—is overturning a Howard government savings measure and restoring the pre-1997 threshold amounts. So people who are applying for income support and have liquid assets will now be able to claim those benefits at the pre-1997 level thresholds. There is no accident about this. Twelve years ago we had a government which was dedicated to ensuring that all Australians had a job or had access to a job. Now, 12 years down the track, we are returning to the pre-1997 level thresholds because unemployment is on the rise and people are losing their jobs. It is not something that we enjoy—it is not something that I enjoy—but it is happening.

It is a strange and unusual argument that the member for Petrie puts when she talks about these dramatic rises in unemployment and says, ‘There is a global financial crisis; the whole world is going through this. Everybody is doing it; therefore we have to do it.’ My answer to that is: under the former government, Australia was one of the world’s leading economies. We did not follow other economies into the Asian financial crisis. We did not follow them into the risky and unusual financial arrangements that we saw with the subprime lending crisis in the United States. The former Howard government, with the Australian Prudential Regulation Authority and ASIC, regulated to ensure that we had better and proper financial arrangements in place, which prevented many of those things happening in our country. This was not an accident; it was the result of good management and good policy.

What we see with this bill is that we now have to prepare for many more people claiming Newstart allowance, youth allowance, sickness allowance and Austudy. All members in this House would agree that this is far from a good development. Nobody should be trumpeting that this bill is some sort of triumph of government policy. No government should be coming in here today with the sort of divisive rant that we heard from the member for Petrie, suggesting we now have better economic policies, at a time when, clearly, we have people flocking to claim government benefits because they have lost their jobs.

What we did not hear from the member for Petrie—and what I suspect we will not hear from members opposite—is how we address the causes of this problem, not how we address the symptoms. What we are doing here with this legislation, which amends the Social Security Act, is addressing the symptoms of a broader and bigger problem, not the causes. Indeed, every time you hear a member opposite attempting to talk about what has caused this problem, we hear nothing but a blame game. We hear that something or someone else is responsible for what is happening—but not them. They are the government of Australia. It is their responsibility to put in place policies to ensure that people can find a job.

Today we are seeing the highest level of youth unemployment since 2001—a return to the days when we lost whole generations of young people to unemployment. When I left university there simply were not enough jobs for the graduates who left university. You could expect not to get a job and not to get a good salary for some time. We are now seeing a return to that. So it is with great trepidation that we support this measure before us today that says we have to return to a pre-1997 measure of welfare delivery because people are no longer able to access employment.

Within the member for Petrie’s submission, we did not hear about things that would help young people get a job. We did not hear anything about the ‘how’—how we will ensure that better employment conditions and circumstances return to our economy. The member for Petrie spoke of the barriers but then did not outline any barriers. I can tell you some real barriers to employment. A barrier to employment is labour costs. If you do not want to affect the wages of workers, which we do not during this time, then labour costs relate to things like payroll taxes, the cost of putting on extra staff or of keeping extra staff, and the definition of a small business—what level you set it at so that you generate the ability of an employer to employ more people instead of fewer.

They are the kinds of things that the government ought to be talking about and thinking about to prevent what we are doing here today, to prevent a return to the situation of 12 years ago. We should not have a triumphant entry into this place today with this bill and this trumpeting of the Rudd government’s mantra. This bill brings a very sad moment. There is nothing for anybody here to be triumphant about. It is unfortunate that we are now going to be seeing more Newstart allowance recipients, more youth allowance recipients, more sickness allowance recipients, more Austudy allowance recipients and more people seeking unemployment benefits, simply because there are no jobs to be had.

We see the government pressing ahead with their industrial relations changes even though the world economy has changed. If things have changed so dramatically on the employment front that we now have to change the Social Security Act, then why would we stick with a pre-election policy on industrial relations? Clearly the ground has shifted so much. Clearly the employment environment has shifted so much. Of course, we know that they are pursuing an ideological agenda, and we can see in this bill before us today that they really do not have a lot of sympathy for the very people who are going to be the unfortunate victims of this crisis.

I think, Mr Deputy Speaker, you will agree with me that if you do not have a plan to address the causes of this crisis, if you simply say, ‘Everybody’s doing it; the whole world is in a recession and therefore we will just have to go along with them,’ then you really do not have much hope of pulling yourself out of it. We accept that there will be a need for the measures within this bill in the next few years. We reluctantly accept that. It is not an instinct that ought to come to any of us easily. However, we do highlight that the main reason that we are facing this crisis of unemployment—the lack of jobs for young people now—is the fact that employers all around the country are laying off parts of their workforce in anticipation of a further downturn.

These are the things that the government should be addressing. They should be addressing how to get people jobs. The answer is not going to come, as the member for Petrie suggested, from a politician in Queensland suggesting that she will just create jobs. The Premier of Queensland has given a commitment that there will be jobs. Well, why didn’t we think of that! If all a government had to do to create jobs was to say, ‘We’ll create jobs,’ then we would create the jobs. Everyone in this place knows that governments do not create jobs. It is business, the private sector, which generates the employment capacity that drives down unemployment in this country. The member for Petrie says, ‘Why don’t we simply create jobs?’ It is because governments do not create jobs, and the government will not be able to create those jobs to save us from this emerging unemployment crisis.

It is with great trepidation that I say that we will accept the need for this measure, but we do not accept that governments should simply be spending dollars on things such as social infrastructure when we have an economic crisis. That is another fact that the member for Petrie overlooked. She trumpeted the Rudd government’s spending on schools. Independently of this debate, spending on schools is a worthy exercise. But when you are trumpeting it as a response to the greatest economic challenge that this country has faced, it does not stack up. You can spend dollars in a way that generates more than a dollar of economic return for every dollar spent. It does not mean that you should not spend money on education. But if you are saying that that is your prime response to the greatest economic challenge of our age, you will find that all the spending in the world on things that do not produce a dollar for dollar return or a dollar for better return will not produce the desired effect. And it will not produce the jobs that they are talking about. That is why the government are hesitant to state the number of jobs that this measure will create. We know that governments will not create the jobs that we need. Indeed, that is why we are seeing the emergence of bills such as the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009.

Here is the Rudd government saying, ‘Let us return to a pre-Howard era policy; let’s go back 12 years; let’s go back to the thresholds of 12 years ago.’ Why are we going back? Why have the government suddenly become conservative in their policy? The conservatism is because we are going back to a situation in which we will have a million Australians out of work. That is where we are going back to. That is why we have to make these preparations. That is why we are having to take these measures in this place today. Nobody here enjoys that; nobody here would seek that situation. But it is coming and the government, instead of focusing on measures that will create employment, generate jobs and produce a real impact in the economy, are seeking to spend money on political and social measures in their own interests.

It is with great trepidation that we will not be opposing this bill. But we would seek from the government a better answer in terms of what they are going to do about jobs and, in particular, how they are going to reduce the highest levels of youth unemployment we have seen since 2001—which will unfortunately rise if nothing is done.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Never have I heard an individual member in this House in the last few weeks talk this economy down so much as the member for Mitchell. What worries me about his feigned unctuousness about the comments that he made is that he is half pleased that we are in a crisis. He shares that with all of those opposite. He talked about a crisis of unemployment. He talked about the greatest economic challenge of our age. Yet he never talked about the global financial and economic crisis. He made it sound as though the crisis that we are experiencing is ours and ours alone and generated by us alone—as if we were globally isolated. That is the story that we have heard from the other side continually for the last few months.

I will make this point very clearly: we are experiencing a global financial and economic crisis. Australia is not isolated from it. We are being buffeted by it. We are doing everything in our power to try and combat that. We do not deny that there will be growing unemployment—nobody can deny that. But to almost gleefully wish it on with unctuousness like some of those on the other side is an insult both to this House and to the Australian public.

The claim that the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009and I quote the member for Mitchell—is ‘unsympathetic towards unemployed people’ is the absolute opposite of the intention of this bill. This bill recognises that we have people in difficult situations and seeks to assist them. It is complemented by our new employment services system, which is designed to both now and in the future not only support people in a financial sense but also prepare them for future employment and to develop their skills. I will return to that a little bit later.

The member for Boothby, who spoke earlier in this House, essentially blamed this government for the economic circumstances that exist now—no mention of the global crisis at all. I remind the member for Boothby and others opposite who may gleefully try to present this type of argument that we have unemployment under an industrial relations system that was introduced by them. He then spent most of his time trying to blame our industrial relations system for causing this unemployment. It was the most specious, illogical argument that I can remember.

It also reminded me that in past times the member for Boothby and the Howard government were very happy to take all the credit for employment growth but never gave any credit to the states for employment growth. Did the states not have anything to do with economic activity in the last 12 years? I think they did. I think they played a pretty significant part, but you would not believe it from the member for Boothby’s statements. But of course under that assessment anything that went wrong under the Howard government was the states’ fault. So why aren’t we, by the same argument, standing up and blaming the states for unemployment in Australia today? That is how silly and illogical these arguments are. And to have spent nearly 20 minutes meandering on with that, no wonder others attempted to intervene on him.

Let us get the facts right: we are in a global financial crisis that is affecting Australia. We are doing everything we can. If the $42 billion economic stimulus is not an attempt to try to sustain employment in this country then I will fly. And prior to that it was $10 billion of economic stimulus to try to maintain and sustain employment in this country. If that is not trying to stimulate this economy I will fly again. That of course should be coupled with the early budgetary fiscal constraint in our last budget, lower interest rates and our other policies in housing which are having positive effects on employment. Turning to the school’s policy for a moment, and to the infrastructure developments for both primary and secondary schools—if that is not about economic stimulus to maintain, sustain and enhance jobs then nothing is. I find it quite extraordinary that arguments like those of the member for Mitchell can be put in this place to say that we are doing nothing about trying to sustain our economy. It is quite extraordinary in its illogicality.

Back to the bill: this bill is sympathetic towards the unemployed. It tries to restore balance. Most of our legislation in this place tries to restore the balance lost in the Howard years, when funding and programs were ripped away from individuals and institutions when they most needed them. This bill will amend the Social Security Act 1991, reducing the liquid assets waiting period for people who, unfortunately, do lose their jobs. This change will enable such people quicker access to income payments such as Newstart allowance. The liquid assets waiting period is a key factor used by Centrelink to assess the financial position of people applying for various income payments. These liquid assets that are available to the person, such as savings in the bank or investments, are assessed to determine when people can start to receive payments. Depending on the level of liquid assets held by a person they can serve a maximum waiting period of up to 13 weeks before they may be able to start to receive income support payments. The current thresholds, which were established in the 1996-97 budget, used for the liquid assets waiting period are $2,500 for a single person and $5,000 for couples or people with dependants. Currently, above these amounts, single income support customers seeking to access Newstart allowance, youth allowance, sickness allowance or Austudy are required to serve a waiting period of one week for every $500 of liquid assets available to them up to that maximum period of 13 weeks. Members of a couple or people with dependant children are required to serve one week for every $1,000 above the threshold.

So what will our amendment mean? Simply, it will mean that single people with liquid assets of less than $5,000 and members of couples or people with children with liquid assets of less than $10,000 will not have to serve any liquid assets waiting period. This would mean, for example, that a single person with $5,000 in the bank or a couple with $10,000 in the bank would wait a week to access income support instead of waiting for five weeks. In recognition of the extraordinary nature of the current economic circumstances, we are reversing a decision by the Howard government taken in 1996-97. This amendment will double the relevant threshold amounts for the period 1 April 2009 to 31 March 2011. This measure will be retained for two years and will be reviewed for the 2010-11 budget. We believe that to be right, we believe that to be necessary and we believe that to be responsible.

Arrangements have been put in place to ensure that people who have an existing liquid assets waiting period as at 1 April 2009 will have their waiting period reassessed under this amendment. This is very important. People serving a liquid assets waiting period on the higher thresholds as at 31 March 2011 will continue to do so until their liquid assets waiting period expires. That of course is only fair.

In addition, and most importantly, the bill will also exclude the surrender value of life insurance policies from the definition of liquid assets for social security purposes. This will be a permanent change. This will mean that life insurance policy surrender values are not taken into account for the purpose of calculating any applicable liquid assets waiting period or determining severe financial hardship. Under current legislation, the surrender value of a life insurance policy is deemed a liquid asset for the purposes of social security law, which means that in order to support themselves people are expected to cash in their life insurance policy before being able to access income support. This amendment will ensure that income support claimants are not disadvantaged.

I would like to put on the record—because I know that this is being broadcast and may be listened to by the public and because it is important that they understand it—what will happen from 1 April 2009 to a person serving a liquid assets waiting period under the old rules. People who have an existing liquid assets waiting period as at 1 April 2009 will have their waiting period reassessed under the new rules. There are potentially three outcomes for people whose liquid assets waiting period is reassessed under the new rules, and I would like to also put these on the record. Any residual liquid assets waiting period may be waived from 1 April 2009; the length of any residual liquid assets waiting period may be reduced; or there may be no change to the length of the liquid assets waiting period.

What about the case of a waiver? The waiver of a liquid assets waiting period will occur when the liquid assets waiting period under the new rules would have ceased on or before 31 March 2009. For example, a person with $5,000 in savings under the current arrangements would serve a five-week liquid assets waiting period but will have this period waived from 1 April 2009 under the new arrangements. What about a reduction of a liquid assets waiting period? This will occur for cases where the person would qualify for a reduced period but the end date under the new rules is still on or after 1 April 2009. For example, a single person with $9,000 in savings under the current arrangements would have served a 13-week liquid assets waiting period but under these new regulations will have this reduced to eight weeks.

Finally, what about no change? No changes will be made in cases where people have significant liquid assets above the increased maximum reserves, as they would still need to serve a liquid asset waiting period up to the maximum 13-week period. For example, a single person with $20,000 in the bank would serve a 13-week liquid assets waiting period under the current arrangements and will still be subject to a 13-week liquid asset waiting period under these new arrangements.

In winding up so that my colleagues can also go on to support this important piece of legislation that supports individuals and families in difficult circumstances, I reiterate that this government has a raft of measures to support people who are unfortunate enough to be in unemployment or who are transitioning to future employment. I point out that we are revamping employment services and undertaking a complete overhaul of the existing Job Network. We will introduce new employment services on 1 July 2009. These new services will be demand driven; that is, they will be necessary and they will be personalised so that people are almost—if I can use the term—case managed on their individual needs. They will be focused on driving through real barriers to employment and will seek to find a way through for every individual who is affected.

This measure makes sense. It is right, and we should do it. I would be absolutely aghast if this legislation were not supported by all those on the opposite side. They should support this legislation. There will be a much stronger focus on equipping job seekers with the skills and training required for them to gain a job and meet the labour needs of employers. At the heart of this measure will be intensive assistance programs. We are working very hard to make those available to people who are unfortunately made redundant through these very difficult times caused by the global financial crisis.

In conclusion, there will be many more productivity places made available to people so that they can gain the training and the skills required for future employment and, hopefully, employment now. We are increasing those productivity places by many hundreds of positions. We are also introducing a fairer, more efficient compliance framework to assist people to achieve their aims through these programs.

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

The Social Security Amendment (Liquid Assets Waiting Period) Bill 2009 will amend the Social Security Act 1991 to relax the liquid assets waiting period threshold for access to income support by doubling the maximum reserve amount for the liquid assets waiting period from 1 April 2009 to 31 March 2011. This measure will also exclude the surrender value of life insurance policies from the definition of liquid assets for social security purposes.

Before I talk a little more on the legislation, I need to correct some of the misinformation that has been put forward in this chamber today. It really brings home the message that we on this side of the House get each and every day: the opposition says one thing but means something else. When the member for Boothby and the member for Mitchell stood up to speak on this bill, the first thing they said was that it overturned a savings measure introduced by the Howard government in 1996-97.

They talk about trepidation and their great concerns about this type of legislation. They go through, point by point, arguing against the legislation. They say they will vote for the legislation, but then argue against it—and all the time reiterating and emphasising the fact that the Howard government introduced it as a saving measure and how important it was at that particular time and fantasising about what it was like in the good old days when they were on the government benches.

The member for Boothby talked about giving up on jobs and just preparing people for unemployment. I know he voted against the stimulus package that went through the House—the $42 billion stimulus package that will create jobs in just about every sector in Australia. I know he voted against the $14.7 billion going to the schools in Australia—schools in his electorate. I know he did not want those construction jobs to take place within his schools. I certainly know that the member for Mitchell was opposed to those building plans for schools. He said as much here in the chamber today. He reinforced the fact that he was opposed to investment in schools, the building in schools—which creates real jobs in an industry where jobs have shrunk. He is also opposed to spending money on our children—in education. It shows that he has a very, very narrow approach to looking at creating jobs.

He was talking about solutions. One solution that the Rudd government has put forward is the stimulus package and creating jobs in retail. We only have to look at the retail sales figures in Australia for December and January in comparison to other countries to know how successful the first stimulus package was. The member for Mitchell was calling for solutions. The Rudd government has put in place those solutions. What was his solution? It was: ‘Get rid of payroll tax; it’s a state tax.’ He is calling on the Rudd government to get rid of state taxes. I would like to suggest that the member for Mitchell become a little bit better informed before he comes in this House to debate legislation. When he calls for action from the government in relation to having strategies in place to address unemployment, he needs to sit back, look what has happened and maybe have a look at the legislation that has been through the parliament—legislation that I suspect he was told he had to oppose, and which he did oppose.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

And did it enthusiastically.

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

Yes, he did very enthusiastically—you just have to look in the Hansard to see his contribution to the debate. I am sure all the people he represents in this parliament will be looking very carefully to see his solutions—which are none. The solutions of the opposition are simple: oppose, oppose, oppose; do nothing; carp, complain, and criticise; and ‘Let’s not act. Let’s just sit back and hopefully, by doing nothing, we can just complain and criticise.’

The members on the other side talk about the increase in unemployment as if it were an Australian phenomenon. If it were, some of the criticism that they have directed towards the Rudd government would be reasonable. If Australia were an entity that actually existed in isolation from the rest of the world, then some of the criticisms may, just may, be reasonable.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

They always wanted to put a fence around it.

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

As the member for Banks said, ‘put a fence around it’—and you could actually question that in some of the policies that the previous government put forward.

The comparison is the Rudd government knows that Australia is a country that operates in a global economy. We are part of the rest of the world. Our banking system, our manufacturing industry and all of the commercial markets within Australia are impacted on by what is happening throughout the world. That is what the opposition do not seem to get. They do not get the simple fact that the problems that are leading to increased unemployment are not caused by the Rudd government; it is a phenomenon happening worldwide. They need only to look at the US and the UK to see that the situation there is much worse. In the US, President Obama has cited the response by Australia as a response that is worthy of following. In other words: our approach, the measures that we have put in place, is a model for the rest of the world.

It just shows that the member for Boothby, who I think is the shadow spokesman, has such a narrow approach, has such a lack of understanding of the issues, that he seemed to miss this. I was extremely disappointed by the contributions from the other side. The other thing that came across very clearly to me is that they are still the slaves of Work Choices. They are still out there promoting Work Choices as the solution to the problem of unemployment. As long as they have that approach, we are going nowhere. Unemployment is increasing at the moment under the opposition’s legislation. They are very good at attributing blame, but they will not take any responsibility. And they think that if they sit back and complain that maybe, just maybe, they might be able to protect their own jobs and not have to be accountable to the people they represent in this parliament.

As I have mentioned, they have opposed just about everything. They opposed the last stimulus package, which was about creating jobs and building infrastructure—something that they chose to ignore during their term of government. Not only did they ignore the fact that a time of prosperity is when you prepare the nation for times when things are not quite so good by building infrastructure and ensuring that your workforce has the skills that it needs for the future, they also sat back and were too lazy to do anything to ensure that Australia did not end up in a bad position. As one of the other speakers in the debate, I think it was the member for Braddon, said, the opposition are very good at blaming the states. I have often been in this chamber and speaker after speaker has stood up and talked about legislation, made an adjournment speech or a three-minute statement, and they have blamed the states. I do not suppose anything different has happened in the lead-up to the Queensland election. I would be forgiven for believing that we were debating in the Queensland parliament, so please forgive me for that. The members that have spoken in a number of debates today have really missed the point of what this is all about.

When we are talking about increasing unemployment, the state that had the greatest increase in unemployment was Western Australia and Western Australia had a Liberal government. I am not seeking to attribute blame to that Liberal government because I know how dependent the economy of Western Australia is on the export of minerals and its relationship to the rest of the world. So I accept that fact and I am not going to say it is because of the Western Australian Liberal government. But I would like to guarantee this House today that if I were a member of the opposition and I was referring to a state Labor government then I would be up here blaming that increase in unemployment on that Labor government.

It seems that those on the other side of this House are only any good at carping, blaming anyone else and coming up with no solutions other than recommending the Commonwealth take responsibility for an area that the states control. I remember back in 1996-97 when this legislation was introduced and, at that time, I thought it was a little harsh.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

Mr Melham interjecting

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

The member for Banks says ‘a lot’. At the time, I know that a lot of people were caused considerable hardship, particularly if you were a worker who was 54 or 55 years of age and forced to cash in your insurance policy, use all your assets and every bit of savings that you had for your retirement before you would be eligible for any assistance from Centrelink.

I think the changes that have been introduced recognise the fact that we are in a changing environment. It is not about accepting the fact that redundancies should be welcomed and embraced but, rather, it is accepting the reality that we are in the middle of a global financial crisis and it is recognising that those people who are affected by it and who lose their jobs will, hopefully, be able to move forward and have something behind them. They will not have to spend every last cent. They will be able to keep their insurance policy so that they can look towards the future and prepare for their future retirement. They will not be forced into a situation of abject poverty at a time of such hardship.

As I have already mentioned, the current laws require a single unemployed person to have less than $2,500 in liquid assets and that includes cash, shares and term deposits. Once they reach that level, they can receive Centrelink benefits. For every $500 they have over that amount, they must wait a week—up to a maximum of 13 weeks—before they receive any benefits. Couples and those with children are ineligible for income support until they have less than $5,000 in liquid assets and they must wait an extra week for every $1,000 they receive over the amount.

This legislation doubles that amount from $5,000 to $10,000 and the proposed changes will affect people who receive Newstart, Youth Allowance, Austudy and sickness benefit. These changes are changes that are designed for these times and recognise the fact that people are experiencing real hardship. If that was the only approach to addressing the issue of rising unemployment caused, as I have already indicated, very much by the global financial crisis, then maybe some of the criticisms could be justified. But as well as that there has been the stimulus package, which I have spoken about at great length, and there have also been moves to reform the employment service and intensive consultation between all parties involved.

There has been a complete overhaul of the coalition’s failed Job Network, a system that in many cases actually worked against the people that were seeking employment. It will move from being the model that was introduced under the Howard government to being a very workable, vibrant model when it comes into effect in July this year. There will be a stronger focus on equipping jobseekers with the skills and training required to gain a job. The other thing that I think is very important at this period in time is that the families of workers that have just become unemployed will be eligible for intensive employment services. That will be good for families because newly redundant workers will be able to access those services and upgrade their skills very quickly. Also, there will be immediate personalised help.

There have been great improvements in the area of matching apprentices to employers and there has been an increase in the number of apprenticeships that are available. The Rudd government’s approach is a very holistic one. It looks at every aspect of the situation of a person who has lost their job and is seeking to re-enter the workforce, providing them with immediate support at the time and not creating hardship while realising that in the future they will need some financial security. However, to achieve real financial security they will need a job, and every step will be taken to ensure that they get adequate access to training and support to obtain that job.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. In speaking to this bill, one has to look at the approach to the global financial crisis that the government has taken, as opposed to that of the opposition. The government has taken a position that we need to be there to try to cushion the Australian economy from the worst aspects of the global financial crisis. Compare that position with that of those opposite us, who think we should sit and do nothing and we should wait and see what happens and hope that we can muddle our way through it.

Clearly, you have a distinction between a government that wants to act and an opposition that is absent. It should not come as a surprise when we look at the last 12 years during which they were asleep at the wheel of an economy that was booming and they were not investing at all in relation to infrastructure issues, not investing in relation to any of the nation-building issues that needed to be addressed and not making sure that the capacity constraints that were stopping the economy from developing further were addressed, even though the Governor of the Reserve Bank of Australia said on 20 occasions that they needed to do something about all this. So it is not a surprise that in opposition their position is as it was in government—do nothing.

When you look at the contribution from the member for Mitchell today, it absolutely highlights the opposition’s position on this particular issue. What he has told us is that we should break a promise in relation to industrial relations. It might be something that members on the other side of the House are very happy to do, to walk away from election promises, but I can assure you that government members certainly do not walk away from election promises, particularly those in relation to making people at work more secure in their employment, making sure that they have some security. This was such a major issue at the last election that for the member for Mitchell to say we should just walk away from this key election promise really shows not just how out of touch he is with what happened in the last election but also how out of touch he is with ordinary Australians. This was a major issue in my electorate and in electorates right across this country.

That was one of his propositions. Another proposition was that, as he was trying to tell this House, spending money on schools might have had some social benefit but it did not have any economic benefit. How does he come up with this type of hypothesis? I have been speaking to builders in my electorate and their great concern is making sure they have enough tradesmen to do the work at the schools. Dobell has a higher proportion of tradespeople than most electorates around this country. This economic stimulus in building schools is tailor made for the electorate of Dobell. I submit it is also tailor made for the Australian economy across the board. For the member for Mitchell not to see any connection between building and jobs again highlights just how out of touch he is on these issues.

The other area worth mentioning concerning my electorate and the economic effects of the stimulus package is the effect on retail jobs that the cash handouts have had. In Dobell, the retail sector is the largest employer of any area of work. There are more people employed on the Central Coast who work in retail than in any other area. While that is probably a little unusual, it is not uncommon with 1½ million people employed in retail for retail to be a significant component of every electorate around Australia. Quite clearly, the stimulus package helped cushion job losses that may occur in the retail area—it certainly did in my electorate of Dobell. We are already getting calls following the second stimulus package saying that the shopping malls at Tuggerah, Erina Fair and Bay Village are busier than they have been in a long time. This is a direct result of the stimulus. What does that do? It creates jobs and jobs are retained because people are being employed.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

Multiplied by four.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Exactly—multiplied by four. You do not need to have gone to university to know that particular fact. One would expect someone who has gone to high school to know that particular fact, but unfortunately the opposition do not know that fact, in particular the member for Mitchell. The opposition leader does not know that fact either. Even though he started by supporting the position originally, we are now clearly in the situation where the opposition leader has totally walked away from initial support of the stimulus package. So the opposition are walking away from jobs. They have said, ‘Too hard, we can’t deal with this issue. We’re leaving the field completely.’ The Rudd government is committed to jobs. It is committed to doing as much as it can to cushion this economy from the global financial crisis.

I turn specifically to the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009 to look at what this legislation is about. We need to understand what the liquid assets waiting period is. It is period a person must wait before they can be paid income support if they have liquid assets above threshold amounts. Liquid assets can include cash on hand, shares and debentures, term deposits and other money available at short notice. Liquid assets do not include superannuation and termination payments which have been rolled over or are going to be rolled over directly from the person’s employer or proceeds from the sale of person’s principal home in some circumstances. The liquid assets waiting period, LAWP, may be waived in full or part where a person is in severe financial hardship.

There are key changes in this bill. It will double the maximum reserve of the LAWP to help people who have low levels of liquid assets and become unemployed. In my electorate, unfortunately we are all too familiar with unemployment. We already have double the national average of unemployed and have had that consistently, so these issues are very important to the people of Dobell. The liquid assets threshold for single people will be increased from $2,500 to $5,000 and the threshold for couples and people with dependants will be increased from $5,000 to $10,000. The maximum duration of a LAWP will remain, however, at 13 weeks.

We need to look at the reasons the government is making this change. The changes will allow many people to access income support more quickly and reduce the extent to which they must expend or draw down their liquid assets such as savings before getting income support. These families will not be expected to cash in life insurance to surrender values in order to support themselves before being able to access income support. This is an important and permanent change.

This will mean that life insurance policy surrender values are not taken into account for the purposes of calculating any applicable liquid asset waiting period or determining severe financial hardship. Under current legislation the surrender value of a life insurance policy is a liquid asset for the purpose of social security law, which means that people are expected to cash in their life insurance policy in order to support themselves before being able to access income support. Cashing in the surrender value of a life insurance policy disadvantages the policy owner as the surrender value is generally well below the amount paid in premiums. The person’s family or other estate beneficiaries may be further disadvantaged in the future by no longer having life insurance cover in the event of the person’s death. This amendment will ensure that income support recipients are not unreasonably disadvantaged by having to cash out their life insurance policies before they can access assistance.

Supporting Australian jobs by stimulating the economy and investing in skills we need now and in the future is crucial to our capacity to ride out this global financial crisis. That is the reason the government has spent $42 billion on the Nation Building and Jobs Plan. This plan is a critical down payment on our path to recovery and to building a competitive advantage in the emerging postwar world recession. We are reforming employment services to improve opportunities for every Australian to participate in the workforce and to help build a more productive and competitive economy. As I said earlier, even as we speak today we are having tradespeople on the Central Coast telling us that the economic stimulus package is working and that jobs are there. The problem they have on the Central Coast will be making sure there are enough tradesmen to build the schools that are going to be built in my electorate—as will probably be the case in electorates right around Australia.

It was clear today in question time that the only hope for the citizens who live in the opposition seats is that they get a visit from a government member who might be able to go out and advocate on behalf of their citizens to make sure that schools are built in that area, that someone is out there looking after the economy and the schools in those electorates. It is quite clear from question time today that the opposition have absolutely no interest in that whatsoever. We on this side of the parliament take this responsibility very seriously. The government stimulus package is out there. It is working in terms of jobs in my electorate. I would say that it will work throughout the Australian economy.

Following extensive consultations last year, the Rudd government is undertaking a complete overhaul of the existing Job Network and will introduce new employment services on 1 July this year. These services will be demand driven, personalised and focused on addressing the real barriers to employment that each job seeker faces. There will be a much stronger focus on equipping job seekers with the skills and training required to gain a job and meet the labour needs of employers. In light of the global financial crisis, the Rudd government has acted quickly to reduce the impact on workers and their families by providing intensive employment services to newly redundant workers. On 24 February 2009 the government announced a further commitment of $298 million over the next two years so that newly redundant workers will be immediately eligible for intensive employment services. Compare that to the opposition’s approach. The opposition still want to have Work Choices, where workers were not even entitled to redundancy payments. Again, the contrast between this side of the parliament and those opposite is absolutely stark.

These workers will receive immediate personalised assistance, career advice, referral to available training places and job search help. A personalised employment pathway plan will set out the services and training that they need to find a job. Providers will be able to purchase services and training for them through a $550 credit. In addition to providing early access to a personalised employment service, the government will invest a further $75 million in 10,000 new training places through the Productivity Places Program. The additional 10,000 places will bring the total number of extra places for workers made redundant as a result of significant economic changes in their industry to 20,000 people. The $2 billion Productivity Places Program is a major long-term commitment that will deliver more than 711,000 training places over five years. Already more than 80,000 Australians have enrolled in a training course through the program since April of last year.

The Rudd government has amended social security laws to introduce a fairer compliance framework for approximately 620,000 people who receive Newstart allowance, youth allowance, parenting payments or special benefits and to introduce participation requirements. The key features of the new compliance framework are a more work-like approach with no show no pay participation failures, retaining an eight-week non-payment penalty for persistent and wilful non-compliance, a new comprehensive compliance assessment before any eight-week non-payment period is imposed, fair opportunities for payments to be reinstated if job seekers participate in an intensive compliance activity and new hardship provisions to replace financial case management.

This is an important piece of legislation which amends the social security liquid assets waiting period. It is part of a package of programs that has the Rudd government addressing the financial global crisis—making sure that we are putting jobs front and centre of our response, making sure that the Rudd government are there to protect and cushion communities around Australia as much as we possibly can from the global financial crisis. This important piece of legislation should be supported. I commend the bill to the House.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. Like the member for Dobell, I voted for the stimulus package and I am very proud of the fact that it is one of the most important votes I have undertaken since I was elected in November 2007. This particular legislation that is before the Main Committee today is allied with it and is an attempt by the Rudd government to cushion the impact of the global financial crisis upon people of my electorate and electorates throughout Australia. The bill will amend the Social Security Act 1991 to relax the liquid assets waiting period threshold for access to income support by doubling the maximum reserve amount for the liquid assets waiting period from 1 April 2009 to 31 March 2011, and excluding the surrender value of life insurance policies from the definition of liquid assets for social security purposes.

We are seeing people tragically lose jobs with the impact of the global financial crisis upon our shores. The amendments in this legislation will enable people to get ready access to income payments, such as Newstart, in these circumstances. The liquid assets waiting period is a key factor used by Centrelink in assessing the financial position of people applying for Centrelink payments. Liquid assets are things such as savings in the bank, cash on hand, debentures, term deposits and other money available at short notice. This amendment will allow people to get access to support more readily and more quickly in the event that they lose their job. That is a good thing for my constituents. What we are doing here is ensuring that people who have faced the travails and troubles of losing employment can access Newstart, youth allowance, sickness allowance or Austudy—and, in the circumstances, that is a good thing.

With respect to the surrender of a life insurance policy, that is a permanent change, unlike the previous aspect. I do not think people would believe it unreasonable in the circumstances. I think people would think it is unreasonable to expect a person to realise the surrender value of their life insurance policy in order to access Newstart. I think most people in my constituency would believe that to be unfair and unreasonable. The permanent change regarding the surrender of the value of life insurance is a good and equitable thing in the circumstances. I think it would have broad community support. Cashing in a life insurance policy really disadvantages the policy owner and also impacts on the party’s family and other persons who may be beneficiaries of the estate. I think that disadvantaging them is really unfair, so I warmly applaud the changes in this regard.

We are doing much, as the member for Dobell said, to ensure that people have as much support as possible. The recent $298 million employment services strategy announced by the minister was a good initiative. The personalised job assistance—the $550 credit—is also something that has been warmly received in my electorate, which has seen 400 new people become unemployed in the last month.

With respect to the impact on the people of my area, I have received a number of phone calls to my office saying how much people appreciated the change to the deeming rate. Recently, the Minister for Veterans’ Affairs said the deeming rate would drop from three per cent to two per cent for the first $41,000 for a single pensioner and $68,200 for a couple. This would also reduce from four per cent to three per cent for the balance of financial investments over these amounts. The lower deeming rate will also assist veterans during these difficult financial times. The changes are effective from 20 March and include payments made from 26 March this year. This is the third reduction in the deeming rate since November 2008. Lowering the deeming rate has an impact in that part-rate pensioners paid under the income test with financial investments mainly in term deposits, shares, managed investments and other accounts will receive an increase in their pension payments to reflect the reduction in their assessable income. That is an important reform which will assist my constituents, particularly the veterans. I have a large veteran community in my electorate, which takes in RAAF Base Amberley. They have warmly received the change to the deeming rate, and it has been widely publicised in the local media.

About 290,000 older Australians will benefit from the government’s $42 billion Nation Building and Jobs Plan. Self-funded retirees who paid tax in 2007-08 through investments or other forms of income earned, or part pensioners—even if they paid one dollar in net tax—will receive a tax bonus of up to $900. In total, excluding normal indexation, the Rudd Labor government has provided an additional $2,337 of assistance to single pensioners and approximately $3,537 for pensioner couples since coming to office on 24 November 2007. We have already said that we are committed to long-term reform of the pension system, and I look forward to seeing what the budget has in store in that regard. We are very committed to ensuring our senior citizens, who have contributed so much to the Australian community and the economy, should have dignity and respect and financial security in their old age. That is why the Rudd Labor government has committed so much across four years to helping our senior citizens—approximately $41 billion in HACC funding as well as nursing home funding. That is a big investment that the Rudd Labor government has made to our senior citizens, many of whom are also doing it very tough in the circumstances.

I want to focus briefly on what the Rudd Labor government is doing for my electorate and the impact that will have. As I say, approximately 400 people have been added to the job queue in the last month in my electorate, so the nation-building package will play a big role in affecting my electorate. Recently we announced that the Ipswich basketball stadium will receive $660,000, inclusive of GST, for a new roof, to replace the court flooring, to install air conditioning, to provide a safety net between the courts, and to build a new canteen and other sorts of infrastructure, which will help with local jobs. I had a meeting with Ipswich Basketball Association recently in relation to this matter. That is another local initiative that will bring jobs into the local economy.

We have 63 primary schools in my electorate and 15 high schools, all of which will also benefit from the Nation Building and Jobs Plan, through capital funding, essential upgrades, and essential new businesses—all of which will help those people who are currently experiencing unemployment and are waiting for assistance. I have 12,553 families in my electorate who will get the Back to School Bonus. There are 119 farmers in my electorate. Some 3,870 students looking for work will receive the Training and Learning Bonus to support their study costs. We have also seen 133 houses committed by the Defence Housing Authority—a $36.3 million injection creating housing in the Ipswich area.

We have also seen a lot of money put into the aged-care sector in the Ipswich area, creating local jobs. The supervising manager of the RSL Care redevelopment project in Ipswich, Milford Grange, to which we are giving $5 million in funding and interest-free loans, is an Ipswichian. When I was out there recently with the Minister for Ageing, he was telling me how many local tradesmen, builders and other workers are on the job at the Milford Grange project. We have also given $1.5 million to Cabanda Aged Care as part of their $9 million redevelopment, which provides major employment in the local area. These are real and practical ways to support jobs in the local economy. There are nearly 70 workers in the Cabanda aged-care facility—a wonderful community project that will make a big difference.

We are also supporting jobs locally because we do not want young people who leave our schools to be in the position where they have to rely on Centrelink and Newstart. There are changes such as the trade training centres we are seeing in Ipswich—a $3 million commitment. We recently announced the $1.5 million Lockyer Valley trade training centre. Training in the wet trades, in carpentry, in engineering and in the automotive trades will also make a big impact in the local economy. But the thing that really strikes me about what we are doing in the local economy in conversations I have had with local businesspeople is how very happy they are that we are providing small businesses with an additional 30 per cent tax deduction for eligible assets costing $1,000 or more which are acquired between 13 December 2008 and 30 June 2009. They are very excited about that. They are very pleased with that sort of investment in the local economy.

We do not want to rely on people going onto Newstart, youth allowance or other sorts of allowances. That is why we are helping to make it easier for people to access social security. This, along with the kinds of investment we are talking about—nation building; small business advice and support through the Ipswich business enterprise centre; establishing an Australian business investment partnership with the major banks; the on-time payment guarantee that we have talked about previously; the first home owners boost; our far-reaching program to slash red tape; the delivery of 711,000 new training places; and the investment in infrastructure—form the matrix of our Nation Building and Jobs Plan to support jobs, to create jobs and to build enterprise locally in our constituencies as well as in the constituencies of those opposite, who voted against the package.

I want to commend the government for this legislation. It will cushion the blow for those people in my area who, sadly, will lose their jobs—and I have met many of them in my mobile offices around the constituency. I want to commend the government for their initiative in the Nation Building and Jobs Plan and also for the heart they have shown with this legislation. The Nation Building and Jobs Plan is full of cerebral economic development—the head. But the legislation we are talking about here is about the heart—helping those in need, helping those who are disadvantaged, helping those who are suffering. This legislation is a good thing and I commend it to the House.

A division having been called in the House of Representatives—

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. I follow the member for Blair, whose speech I watched with interest. I sit opposite the member for Gippsland. As I look at the two of them, I fear that the in-house hairdressing salon may have recruited a barber from the United States Marine Corps. I am pleased that the member for Canberra, the member for Deakin and I am here—

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Making up for it.

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

Making up for it. In all seriousness, let me give the member for Gippsland a plug. I am told that he lost his locks in a very good cause, raising $1,500 in support of cancer sufferers. I commend him for that.

I speak in support of this bill, which seeks to amend the Social Security Act 1991 to improve access to income support for those who have lost their job as a result of the global economic recession. It will improve access to income support by altering the operation of the liquid assets waiting period. The liquid assets waiting period is a period of time which needs to elapse before a person who has lost their employment and who has liquid assets above a certain threshold can receive income support.

As it currently operates, for a single, that threshold is $2,500. For every $500 above that threshold, a person needs to wait a week before they can receive income support. For couples and people with dependants, that threshold is $5,000, and they need to wait a week for every $1,000 of liquid assets that they have above that threshold.

The rationale for such a waiting period is that people who have some substantial liquid assets ought to in part rely on them before receiving income support. We do not seek to alter that general rationale which currently exists in the long term. But we are seeking a temporary amendment to double these thresholds, and that will improve access to income support. For singles, the threshold will be $5,000. For couples and people with dependants, it will be $10,000. That means that, if you are a single with $5,000 in liquid assets or you are part of a family which has $10,000 worth of liquid assets, you will be able to receive income support after a week, whereas under the current provisions, prior to this amendment, it would take five weeks before income support would come on board. The amendment to those thresholds is sought to be put in place temporarily, for what is intended to be a two-year period, to deal with the current global economic crisis, and this will be reviewed in next year’s budget—that is, the 2010-11 budget—to see whether that period of two years is appropriate.

There is also another amendment in this bill which is sought to be made on a permanent basis, and that is to change the definition of a liquid asset to remove the cash-in value of a life insurance policy. Liquid assets currently include money, deposits, term deposits or even shares—any asset which is easily turned into money pretty rapidly, and of course the cash-in value of a life insurance policy may fall within that category. But to include that in the definition of a liquid asset unfairly penalises people who have been maintaining life insurance policies whilst they have been working. Obviously, it particularly impacts upon those who might ultimately be the beneficiaries of a life insurance policy—the family of the person who is working. So this amendment will remove that from the definition so that there is no drawing down of that value or any pressure to cash in a life insurance policy. Of course, the cash-in value of a life insurance policy is normally far less than the accumulated total of the premiums which have been paid up until the point where the cash-in occurs.

These provisions seek to target people who have lost their jobs as a result of the global economic crisis and, as I have said, it will provide for much quicker access to income support. We are going through a very difficult time, and it is a time which is being experienced across Australia and certainly in my electorate of Geelong. For example, Centrelink in Geelong has reported a 30 per cent rise in weekly claims for the Newstart allowance since Christmas. The Geelong Centrelink office has increased its staff by 20 per cent to deal with the influx in new applications for support, and the Corio office, which operates in the northern suburbs of Geelong, has boosted its staff numbers by a similar amount in anticipation of an increase in requests for support.

In dealing with this measure, we are perhaps talking about the people who are most severely affected by the global economic crisis, and many of those who are losing their jobs through this time are losing their jobs for the first time—that is to say that they are entering the income support system for the first time. Many of these people do have modest liquid assets and this bill is being put in place so that they are able to access income support more quickly but also so that, in years to come when they return to employment, they are not in a position where they look back at the global economic recession of 2009 and say that this was the time when they lost their life’s savings, that this was the time that gave rise to a legacy which will last for years and years. By increasing the thresholds, what we do in effect is ensure that $10,000 or more for a family, or $5,000 for an individual, remains as a nest egg. If it has been built up over a period of time, it cannot be touched as a result of this global economic crisis.

These provisions are sought to be made effective from 1 April and, as I said, it is intended that they are put in place for two years, with a review in next year’s budget. For any person who is currently serving a waiting period prior to receiving their income support on 1 April this year, the provisions contained in this amendment bill will operate upon them. That is to say that, if on 1 April they have met a waiting period sufficient for this bill, any further waiting period would be expunged. If this bill would seek to reduce the waiting period which they would need to serve, then it would be so reduced. Similarly, if the provisions cease to operate two years from now, on 31 March 2011, anybody who is in the middle of a waiting period at that point will only serve the waiting period in accordance with the provisions in this bill.

This does not affect the way in which redundancy payments and leave entitlements, which are paid out at the termination of a person’s employment, operate in relation to the income support system. Those payments will still be subject to an income maintenance period. The rationale is that a redundancy payment is paid in order to tide people over during a period when they are unemployed. So those provisions will not be disturbed. But this will significantly reduce the liquid assets waiting period.

I am very proud to be a part of a government which, during this global economic crisis, has acted swiftly and decisively to deal with the single biggest economic shock which has been experienced by the globe since the Second World War. Immediately on this shock being crystallised, in a sense, we acted to provide a bank guarantee, which has stabilised the Australian financial system. In October, we put in place a $10.4 billion stimulus package, which has helped keep the economy going over the Christmas period and beyond. In February of this year, we put in place the Nation Building and Jobs Plan, which, in turn, provided a stimulus to the economy which will keep the economy going but which gave significant expenditure to much-needed infrastructure in the areas of schools, insulating our homes and putting more solar hot-water systems around houses in this country. All of that will not only give rise to a fantastic legacy from the stimulus package in years to come but will also drive employment during the period of the global economic crisis. In addition to that suite of measures, we have this bill, which is directed at those hit perhaps most harshly by the global economic crisis—those who lose their job through no fault of their own. This will ensure that the savings they have built up through years of employment will not be unduly whittled away by virtue of their having lost their job as a result of the global economic crisis. This is a very important measure and a very compassionate measure, and I commend it to the House.

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. At a time when the global financial crisis and the global recession are starting to impact on unemployment queues around Australia, this bill will help workers who have been retrenched by making it easier for them to access financial assistance from the federal government. We know that unemployment has now risen to 5.2 per cent, and national job agencies, such as Employment Services Holdings, are now reporting that, in the last six months, their services have gone from dealing largely with the long-term unemployed to dealing with those whose jobs have been entirely wiped out by the financial crisis. That was noted in the Financial Review only a couple of weeks ago. As much as we had hoped Australia would remain immune from the effects of the global recession, inevitably we are going to see even more job losses over the next 18 months. This is something about which we, as a government, have been very upfront with the Australian public.

In my electorate—and this came quite recently and was certainly a big shock—we saw Pacific Brands scale back their manufacturing operations in Australia: 1,850 jobs overall. Two hundred and fifty-five of those jobs were at the Holeproof factory in Nunawading, which is right in the middle of my electorate of Deakin. A lot of those workers at Holeproof had worked there for most of their working lives, or for many years. Although they have skills that are particularly suited to the textiles industry, they are not necessarily suited to other industries and a lot of them, unfortunately, are going to have quite a hard time finding alternative employment, especially in the current employment market.

It is a terrible thing to be suddenly thrown into unemployment and financial uncertainty, especially in current conditions where local businesses, panicked by a sudden drop in demand, can shed jobs in the blink of an eye. It is certainly true, as in the case of the Holeproof workers and everyone else in this situation, that losing your job does not mean that the bills stop coming in or that the mortgage goes away; it certainly does not mean that you do not need to find the money to put food on the table, send your kids to school or meet all of life’s other day-to-day necessities. People who are thrown into this situation very quickly find themselves under a lot of financial pressure, and it is very easy for them to quickly erode what money they have in their family savings accounts.

Under the current Social Security Act, liquid assets can affect your payment if you receive youth allowance, Newstart Allowance, sickness allowance or Austudy. If your liquid assets are above $2,500 for a single or $5,000 for a couple or a single with dependants, there is a waiting period before you can receive any of the payments that I have just mentioned. At times that waiting period can be as short as a week but it can go right out to 13 weeks, and it also depends very much on the financial circumstances of the individual. Under the act, liquid assets are defined as things like cash on hand, shares, term deposits or other money available at short notice. Importantly, in the current climate, liquid assets can include payments made or due to be made by a person’s last employer—that is, redundancy payments or accrued entitlements. This means that a worker could find themselves in a situation where they are laid off by their employer and cannot receive any assistance from the government for as long as 13 weeks, potentially resulting in any savings that they may have being reduced to very low levels, if not wiped out completely. I can certainly tell you how it feels to wait that period of time before you can access benefits.

Before I came to this place, most of my years were spent in the construction industry. Certainly good times and bad times occur in the construction industry. In the good times, the money is good and there are jobs aplenty; in the bad times, you find that you cannot get a job as a skilled tradesperson anywhere in a major city. It is like someone switching off a light. I have been through that. I have saved a bit when I was in a good paying job and I have been thrown into unemployment with no idea of when the next job was coming up. When that happens, it is all very well to think, ‘Okay, I will get a job soon’—and I hope that is the case for many people—but it is not always the case. We need to have certainty in the process, and we also need to have certainty that you do not have to run your savings down to a tiny amount before you can get some help from the government.

Currently, we may also face the silly scenario where people who have become unemployed  and who have recently received a bonus payment in some form from the federal government may not be able to spend that bonus over a longer period of time in the way that they might want to while they are unemployed. They might literally be forced to go out and spend it all in one lump sum. This is, of course, good for the economy; but, if people have just lost their jobs, I do not think too many of them would be going out and spending every last cent in their bank account. Michael Raper, the President of the National Welfare Rights Network group, stated back in 2005, following the then Howard government lump sum family payment, that it would be completely wrong for the government to claw it back with the other hand. We must not forget that, in the situation where a job is lost, some of the most financially vulnerable people—single parents, the disabled and the ill—are subject to the same requirements.

The changes to the liquid assets waiting period contained in this bill will double the maximum thresholds for liquid assets to $5,000 for singles without dependants or $10,000 for others, for a two-year period, starting on 1 April 2009. In practical terms, this means that the length of the liquid assets waiting period for most people will be reduced and they will have some much needed breathing space as they consider their move back into employment. The current threshold levels were set by the Howard government in the 1996-97 budget. It was one of a number of measures that they took during their time in office to try and restrict income support to people. The level set by the previous government in their first budget has remained unchanged ever since, despite the obvious fact that $2,500 buys a lot less now than it did in 1997. When the 1997 changes were announced, the then government was criticised by welfare groups and other representative bodies as being overly harsh and arbitrary—two key qualifications for Howard government policy, it seemed.

The Australian Council of Social Service, the country’s peak council of community services and the welfare sector, has pointed out what the effect of these thresholds can be:

… unemployed people are forced to spend almost all of their (often meagre) reserves before becoming eligible for income support. In doing this, they have very little left to meet expenses such as car registration or repairs, replacement of whitegoods, or expenses associated with illness. In many cases they are forced to rely on advance payments and other forms of credit to meet lump sum expenditures, thus reducing their already small weekly incomes. The liquid assets test can also act as a disincentive for people to save during periods of employment.

Under the existing thresholds, a couple with $18,000 saved would be forced to wait 13 weeks before they could receive support. When no income is coming in, it does not take long for that amount of money to evaporate.

The changes made to the liquid assets test are typical of the former Howard government’s brutal approach to the unemployed seeking assistance from their government. Indeed, they should not be viewed in isolation but as part of an 11-year pattern of targeting the most vulnerable people in society. The Howard government destroyed people’s job security with Work Choices and made it easier for bosses to cut their workers’ pay, with AWAs. They made it harder for people to receive income support, with their changes to the social security system, and consistently attacked those groups in society, such as trade unions and non-government organisations, who stand up for those people who have the most trouble getting their voice heard. While we are focused on fairness and acting to protect the Australian economy and jobs, those that sit opposite, as usual, prefer to remain ideological and nasty.

The then Labor opposition opposed these changes. We believed they were regressive and unfair and we are now acting to solve that situation. These changes will, in many cases, ensure that this is not the case. It is a small but potentially significant change that the government can make to help working Australian families. And I believe it is an appropriate and responsible change in the current climate. While the opposition are in the habit of arguing against the government doing anything in the face of the global recession, we on this side of the House understand the necessity, indeed the urgency, of acting to help cushion the impact of the crisis on the Australian people. In light of the current extraordinary economic circumstances, the new thresholds will apply for a two-year period, until 31 March 2011. In a year’s time, a review will take place that will examine the effectiveness of these changes, including consultation with stakeholders—something the previous government did not bother with. Had they done so, the thresholds may have been appropriately adjusted over time.

The bill also amends the Social Security Act to exclude the surrender value of life insurance policies from the definition of ‘liquid assets’. As it currently stands, people who hold a life insurance policy are expected to cash in their policy in order to support themselves before they are able to access income support. I can tell the House that I once had a life insurance policy—many years ago, before super was in—and I put money aside month after month and year after year. I did one day cash it in for its surrender value. The surrender value was not much and, of course, my life insurance cover was gone from that day on. If I had just put the money in the bank, I would have been a lot better off. But I needed the money at the time, so I took the surrender value.

The unfairness of a policy like this should be apparent—people should not be penalised for taking responsibility for their family’s future. It is unreasonable to expect people to do this, and the proposed amendments will remove this anomaly. Under the bill, the value of surrendering a life insurance policy will not be taken into account in determining either a liquid assets waiting period or severe financial hardship.

This is another step in the range of measures taken by the government to lend a hand to those who need it during these tough economic times. They should be contrasted with the opposition, who oppose us every step of the way. Whilst they are busy playing politics and working out what their position is on any given issue from day to day, the government will keep working for the Australian people. This bill is but one part of our commitment to them, and I commend it to the House.

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

I rise today to support the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009 in recognition of the extraordinary nature of the economic circumstances that we now live in. I invite all members of the House to turn their minds back to a little over six months ago. Go back to a week or two before Lehman Brothers fell over, back in September last year. Up to that point in time, we had rising interest rates. Interest rates were rising at that stage fundamentally to slow down what was considered then as an overheating economy. Within this six-month period, we have seen the direct opposite occur here. We are very much in uncharted waters.

This is very much a time when we are trying to put our shoulders to the wheel with a view to doing what is necessary and making those decisions that are necessary to accommodate these changed circumstances. We have seen only in the last couple of weeks the $42 billion infrastructure package, the building and schools package, as it was developed. There was $14.7 billion to go into schools and $28.2 billion to go into our local councils. Every member in this place—and I know the member for Gippsland is one of those members working hard in his electorate—has sought to use that money for doing infrastructure projects. It is only right that we not be hypocritical about this and that we do go and pursue these projects with a view to generating jobs in our electorates. This is a critical time for this to occur.

There was also a $2.7 billion project announced in relation to taxation benefits for small business people. I know from visiting chambers of commerce in my own local community that that is very significant for small businesses in my area. Indeed, it is significant for every small business operator out there to have financial relief on their purchases of assets. The package also incorporated $12.7 billion, paid out this week, for low- to middle-income earners. This is about keeping our retail industries going. It is about keeping those people who work in the shops and also those drivers who drive the product to shops. As a matter of fact, I have only just left a meeting with Tony Sheldon and Daniel Kicuroski, from the TWU. They are certainly concerned about a range of things and about making sure that this stimulus package actually hits areas that affect logistics and transport throughout this country—and it is only right that they are.

This bill is another in a set of steps. It is critical, but this is also something that delivers fairness for those who are going to be less fortunate, those who will physically lose their jobs. Let us make no bones about it in this place: we know that is going to occur. This is not about finger-pointing; this is just a matter of looking at the economics of it. I, like everybody else, systematically call our job placement organisations to see what the trends are. Let us face it: we all do that. We all know that it is getting difficult out there. This is why this bill has come to pass. We are going to see redundancies coming out there. We are taking these steps to try and reduce the impact that this global financial crisis will have on Australian jobs. That is why we are injecting this $42 billion to stimulate employment. But we know that there are going to be casualties out there, and we have to try to do something for those people.

This bill will help those who lose their jobs by enabling people to have quicker access to income support payments by lifting the liquid assets waiting period. It will reduce the extent to which these people, many unemployed for the first time, must expend and draw down on their liquid assets, such as their savings, before being entitled to income support. The liquid assets waiting period, as it is known, is a key factor used by Centrelink to assess the financial position of people applying for various income payments, whether it be Newstart, youth allowance, sickness allowance or Austudy. Liquid assets, according to Centrelink, include such assets as cash in hand, shares, debentures, term deposits and other available moneys that can be called upon at short notice. Under the existing rules, income payments will not be affected by the liquid assets if they are less than $2,500 for singles and $5,000 for couples.

As I said, we are going to see people experiencing unemployment for the first time. Certainly it is going to be an extraordinary situation for generation Y, once they start seeing the reality of that. It is because of that that we need to do something about this liquid assets waiting period. If we do not then people will have to wait for somewhere between one and 13 weeks before they can draw down on income support. This means that many people who lose their jobs will have to expire all of their savings and possibly wait up to 13 weeks for support. Having been unemployed myself for a period of time, I know what it is like looking for work and doing everything to secure a job while supporting a family. There are difficulties. These difficulties are hopefully going to be confined to these times. We cannot say that emphatically, but we are, let us face it, trying to be positive. We are trying to stimulate the economy, we are trying to move on, but we have to do something for those people who will be caught through this process.

The thresholds that were introduced by the previous government back in 1996-97 came in as a budgetary measure. They were criticised by the then Labor opposition. It was decided to reduce those thresholds. Through this bill, we are taking those thresholds back to where they were at the time the Howard government was elected in 1996. This government is trying to undo the harm that occurred there. This is not seen as a budgetary measure, this is not just a measure where we can spend money; this is doing something genuine for those people who are going to fall through the cracks and find themselves—probably for the first time in their lives—unemployed, worried and wondering what the future is going to be. This is a time that they are going to need support. We criticised what John Howard did back then. There is a litany of Labor speeches that were given to that effect. But let us not dwell on the past. What we have to do is get back to the pre-1997 thresholds and establish some fairness and some decency in the way we treat people who unfortunately find themselves redundant due to this economic position that we now find ourselves in.

Not only is this measure fair, but it is also necessary to provide additional support to job seekers because of these extraordinary circumstances. It is not surprising that those on the other side of the House have various views in relation to this. I know they have taken a very clear view when it comes to the stimulus package itself. This is a time when we should be putting politics aside. We are not walking to an election in the next five minutes—it is not like Queensland here. Quite frankly, the economic position that we have, which has been thrust on the world within six months, and the severity that this economic impact has had globally, require all people in all parties to work together to help resolve this situation. This notion that one side can disengage and blame the other side for pursuing a debt strategy is like fiddling while Rome burns. This is the time when we want people in public office to muscle up, to be counted, to do something for their electorates. As I said, I do not want to embarrass the fellow, the member for Gippsland. I know the minister for infrastructure and local government has cited a number of his letters, but I only put it in this debate to show that the reality is that, despite the way he chose to vote with his party, he really knows in his heart of hearts that this is a good strategy, this is something that is beneficial for his people over there and he is to be commended for that. He can wear the embarrassment: he has shaved his head, so I imagine he can wear any embarrassment.

I will wrap up quickly on this matter. One of the other really perverse aspects of the legacy of the Howard regime is that we formerly included the insurance policies of people in assessing their liquid assets. Like the former speaker, the member for Deakin, at one time I too had to cash in my insurance policies to do something that was necessary for a family commitment. That is not something that people take on lightly. Fortunately, a lot of people have superannuation these days and choose to take out income support or some life insurance through their superannuation, but not everyone does. To have a situation where we would include life insurance in an assessment of their assets to determine how long they need to wait for financial support is absolutely ridiculous. Firstly, the cash-in rate is very low. Once you do that, the likelihood of again taking out life insurance, particularly if you have aged in the process—which most people do—is going to be very hard and very costly. We should not single out for special treatment those people who take out life insurance to protect their families, as is the case in the current legislation. This piece of legislation seeks to remedy that. I will not take any more of the chamber’s time. I do support this legislation. I think this is something that is overdue, and it was an election commitment. If those on the other side are genuine, they would be supporting this piece of legislation.

Julie Collins (Franklin, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to support the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. As many speakers have said before me, this is a time of global financial uncertainty and Australians really need to know that their government is acting. We are making amendments where necessary so that many people who face unforeseen circumstances—people who may never have been unemployed before, as has been pointed out—and actually need some assistance from government get some financial support without having to spend all their savings—their cash in the bank, their shares—or clean out their term deposits just to make ends meet. We on this side of the House are really quite concerned about that, because in times of global uncertainty it is really important that the government do what governments are expected to do and take care of those people, particularly those people, as I have said, who have never been unemployed before. The government want to reverse the decision made by those opposite in the 1996-97 federal budget, because we think it is a fair thing to do. On this side of the House we do not want to put any extra burdens on those people who are already doing it tough, who have found themselves out of a job, possibly for the first time in their lives.

Let us have a look at what these amendments will actually change. The proposed changes will affect people applying for Newstart allowance, youth allowance, Austudy and sickness allowance. Those with limited liquid assets will now access income support more readily due to these amendments to lift the liquid assets waiting period thresholds. Liquid assets include cash, shares, term deposits, moneys due and able to be paid by the person’s former employer, and any other readily available assets. Under the existing rules introduced by those opposite, people seeking income support who have liquid assets above the threshold amount of $2,500 for singles without dependants or $5,000 otherwise would generally serve a waiting period known as the liquid assets waiting period. As we have heard, this could be from one week up to 13 weeks. During times of financial uncertainty, we think it is a fair and reasonable thing to relax liquid asset waiting periods—to loosen the restrictive nature of that which was put in place by the former government.

This amendment proposes to double the threshold of liquid assets to $5,000 for singles without dependants and to $10,000 for others for a two-year period from 1 April 2009 to 31 March 2011. We are doubling it. We are taking it back to what it was in September 1997 when these changes came into effect. But what we have also done is important. We have said that this measure will be reviewed after one year. The former government had no method of review when they chopped it in half, no adjustment to the CPI and no other form of review—and, as we all know, things have changed dramatically since 1997.

Currently, people who are single cannot receive income support payments unless they have less than $2,500 in assets—sources of money available to them. When your income stream ceases, your payments and expenses do not. We need to change these rules to help people, because I do not think that that is okay. Imagine the pressure felt by someone when they get the call from Centrelink to tell them they have to wait for help—that they have to wait for financial support from their government in this time of global uncertainty. This currently applies to a single person facing difficult times, but this unfair rule also applies to couples and people with dependants. They are not eligible to receive income support until they have less than $5,000 in liquid assets. They must wait one week for every $1,000 they have over $5,000 up to a maximum of 13 weeks. These people need to be supported financially, particularly when, in the global uncertainty, there is a great deal of fear, anxiety and worry. We have to do what we can to help them, because they still have to pay their rent, their mortgages, their rates, their insurance policies and their school fees and put food on the table.

Doubling the liquid asset thresholds, going back to the pre-1997 levels, is fair and reasonable and is really an appropriate response when we face such challenging financial times. It makes it really easy for me to stand here today to support this bill. If I have helped people in my electorate, that is a good thing to do at this particular time. This amendment will provide quicker access to payments and, equally importantly, will allow claimants to retain some of their savings in this time of global uncertainty.

The amendments proposed in this bill also seek to change a particular issue we have heard other members talk about, and that is the surrender value of life insurance policies. We on this side of the House once again fall back to the default position of delivering fair legislation—fair to the people of Australia, for those falling on challenging times. As it stands today, there is an expectation that people who hold life insurance policies will have to cash in their policy in order to support themselves and/or their families before being able to access income support. This bill seeks to change this unfair act. As many of my parliamentary colleagues have already argued today, it is completely unreasonable to expect a person to cancel their policy voluntarily. To use the equity value in their policy is a big disadvantage for that person, but there is also a snowball effect. Not only is the policyholder disadvantaged; so, too, is the future of their family or other beneficiaries who might have benefited from that protection. It puts a weight around the shoulders of that family and that individual, a weight they do not need in globally uncertain times.

As I keep saying, we are all aware of the global financial recession and the effects it will have on all Australians, young and old. During these extraordinary financial times, the government has a responsibility to assist Australians who need support, whether that is through responsible policy to help support jobs and small businesses or sound social policy that makes it a little easier for those people who need it and find themselves in difficult circumstances. The Rudd government continues to act quickly and decisively through a number of economic measures such as the $10.4 billion of support payments to carers, pensioners, veterans and people requiring assistance, provided in December last year, and the $42 billion second stimulus package which got through parliament just recently. These measures have been designed to cushion the Australian economy against growing global recession. Unfortunately, we know that unemployment will rise during the global recession and Australia cannot be immune from this. So we have to do what we can to help those who find themselves in difficult circumstances.

What has truly astounded me is the reaction of those opposite during this global financial crisis. I am astounded that to date they do not have a plan to do anything; their plan is to wait and see. We on this side of the House have not really seen that as an appropriate way to act in a time of global recession. As I said, we have had our two stimulus packages. We are trying to provide direct support to individuals but we are also building community infrastructure. Two-thirds of the $42 billion is for infrastructure in local communities, supporting local families and local jobs. That is very important during a global financial crisis. People would have seen recent media reports of the Treasurer overseas at the G20 meeting. Many G20 countries have provided support packages to stimulate their economies. That is what is needed in this time of global financial uncertainty. To do nothing, to sit by, to wait and see what happens or to let the market correct itself is really not an appropriate response.

I was pleased to hear those opposite say that they would support this bill, albeit with a but. It is a very good bill and I am really pleased and proud to be part of a government introducing this measure. We are providing some support to those who need it. I am really pleased we are doing this, but this is not all we are doing. As well as the stimulus packages, we are also changing some of the employment services so that, rather than having to wait at least three months to receive intensive personalised assistance, any Australian worker who is made redundant will now receive immediate and personalised assistance to help get them back into the workforce—another important measure the government has introduced. We have also committed $75 million for an extra 10,000 productivity places, to assist newly retrenched workers needing training and education. The government are acting decisively to assist people in this time of great financial uncertainty. I commend the bill to the House.

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to rise tonight in support of the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009 and I am extremely pleased to see the changes in this bill occurring. As we all know, the liquid assets waiting period has been a provision in the Social Security Act for some time and its threshold figure was substantially reduced back in 1996-97. In my view, that has placed a burden on many individuals and on the families of many individuals who, through no fault of their own, have been made redundant. The specific changes in this legislation will ensure that the maximum reserve for the liquid assets waiting period will be doubled for single people. It will be increased from $2,500 to $5,000. The threshold for couples and people with dependants will be increased from $5,000 to $10,000. The maximum duration of any period of time in which people will be waiting for benefits as a result of the situation of their liquid assets will remain at 13 weeks.

It is important to cover a few of the reasons why the government is making these changes. Naturally, the primary reason is to allow many people to access income support more quickly and to reduce the extent to which they must expend or draw down their liquid assets, such as savings, before getting the relevant income support. This is consistent with the government’s general actions to try to cushion Australians from the full impact of the global recession. As the member for Franklin, who spoke before me, indicated, the government is proud of the fact that it has taken early and decisive action to stimulate our economy. That includes things like the economic stimulus packages. We saw the Economic Security Strategy last year, with $10.4 billion to strengthen the economy and support Australian households. We saw the Nation Building and Jobs Plan introduced this year. We hope that will provide further support for many thousands of Australian jobs. Having given all of that support, we know that growth will be slow and unemployment will rise. Australian cannot be immune from the global financial crisis, and behind those rising unemployment figures there will be many Australian households and breadwinners who will be finding themselves without an income. In terms of the government’s response to the global financial crisis, we have taken steps to secure the financial system through guaranteeing bank loans. We have taken steps, as I have already said, to stimulate the economy. Also, we are now taking steps to introduce a number of measures to support people who do lose their jobs through no fault of their own as a result of the global recession.

The liquid assets waiting period has been in the past part of a qualifying test for access to social security payments for the unemployed. The way that it has operated has seen individuals with more than $2½ thousand in liquid assets, such as savings, being required to wait an additional week for every $500 they held over that $2½ thousand before they could access social security payments such as Newstart. The threshold for couples was $5,000. This bill will see those amounts doubled and it will also remove the surrender value of life insurance policies from the liquid assets qualifying test. In addition to this small step, we have also seen substantial reforms of the employment services stream which will take effect from 1 July 2009. For these I congratulate the Minister for Employment Participation, Brendan O’Connor, on this fine St Patrick’s Day, a day which I know is important to him and to my colleague the member for Eden-Monaro.

We also saw the Prime Minister, along with the Deputy Prime Minister and Minister O’Connor, announce a further $300 million to ensure immediate access to employment services for retrenched workers, such as intensive assistance with Job Network members. This is an extremely important measure because evidence demonstrates that, after retrenchment, the quicker a worker is assisted into further employment, the better. So I am particularly pleased to see this measure take effect. Unfortunately, I understand it will be 1 April before people will be able to access that entitlement, but it will certainly apply to anyone made redundant post 24 February.

Last night I spoke about the extra funding that has been put into GEERS, the scheme which assists employees who have been made redundant where the company through bankruptcy or liquidation is unable to pay basic employee entitlements. We have seen an extra $70 million put into the GEERS fund. I cannot forget that as part of the Nation Building and Jobs Plan there is an additional $950 training and learning bonus available to someone on income assistance who is enrolled in a structured training course. As I say, there are a number of measures to try to assist those people made redundant through no fault of their own.

In addition to that we have seen the Australian government invest $30.2 million to expand the Australian Apprenticeship Access Program, which provides at-risk job seekers with the support they need to pursue an apprenticeship or training and to move into skilled employment, and $155 million in new incentives for employers and group training providers to take on out-of-trade apprentices and trainees. There are also additional productivity training places to be used in a number of critical industries. Hopefully, we will be seeing the passage through the Senate and the parliament this week of the Fair Work Bill, which will restore balance to Australian workplaces.

I have a couple of examples of impacts that this particular bill may have on constituents in my electorate. I had a man from Gosnells in my electorate made newly redundant. He is 60 years of age. He has been unable to get his Centrelink benefits for a month because he has $5,000 sitting in a special savings account, which he has had for some considerable time. He keeps this account to pay for his funeral. Unfortunately, this gentleman lost his wife a few years back and did not want to burden his children with the cost of his funeral. He was hanging onto that $5,000 come what may. As a result of wanting to support his family in that way he was going to have to wait five weeks before he could access unemployment benefits. I am pleased to see that the legislation does have a phasing-in arrangement so people like my constituent can access some waiver for the remaining period.

It is not only that—$2,500 or $500 in today’s terms is not a huge amount of savings. For example, the average rents in my Perth electorate sit around $350 per week for an average three-bedroom home. You can imagine that for a single person $2,500 is not going to last them long in a period of sustained unemployment. All we need is for the car to break down or require repairs and that sort of money disappears very quickly. I am really pleased to see this measure put in place. I am also very glad to see that the surrendering value of life insurance policies has been exempted. We all know that when these sorts of life insurance policies are cashed out their value is less than the premiums that have been paid. That can be a very stressful situation for those who have no form of death or disability insurance other than that life insurance policy.

I also say that this is becoming increasingly relevant because the statistics on unemployment show that, whilst in many respects in Western Australia and in Hasluck employment remains quite strong, we have seen an increase in unemployment from 2.8 per cent in September 2008—for someone who has reached my age, a 2.8 per cent unemployment rate is not a bad outcome—to 3.8 per cent in the south-east metropolitan area of my electorate. Indeed, recent newspaper reports indicate that the south-east metropolitan area, and in particular the suburb of Gosnells, had experienced a 17.3 per cent increase in job seekers receiving Newstart and associated payments between December and January. In real people terms, that 17.3 per cent increase was only 138 more people. Nevertheless, 138 more people is a lot, and that also includes school leavers.

Whilst we still enjoy a relatively strong labour market in Western Australia, that situation is beginning to change. As the Prime Minister and the Treasurer have said, there will be no easy solutions or quick fixes to this global crisis. There are no silver bullets. There is no one thing that the government can do to make the crisis go away. But the Rudd government stands ready to do whatever it takes to reduce and cushion the impact of the crisis on Australians. I think there is nothing more you can ask of a government but to be responsive in a situation such as this. I am pleased to see the actions the government has taken. This small measure will assist constituents in my electorate, and on that basis I commend the bill to the House.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

Sure and it’s a great pleasure to stand in on behalf of the minister, Brendan O’Connor, on this special day!

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

Wearing your fine green tie, too.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

I would like to thank all those members who have taken part in the debate on the Social Security Amendment (Liquid Assets Waiting Period) Bill 2009. This bill will assist people who lose their job and who have modest levels of liquid assets to access income support more readily. It is an appropriate and fair measure and in the context of the current global financial crisis it is right to ease the pressure on job seekers resulting from current thresholds. The bill gives effect to the government’s 11 February 2009 commitment to double the relevant liquid assets threshold amounts for social security purposes for the period 1 April 2009 to 31 March 2011. This is a targeted and responsible measure in the current extraordinary economic circumstances.

This amendment will mean that single people with liquid assets of less than $5,000 and members of couples or people with children with liquid assets of less than $10,000 will not have to serve a liquid assets waiting period. The bill also excludes the surrender value of life insurance policies from the definition of liquid assets for social security purposes. This will mean that life insurance policy surrender values will not be taken into account in calculating any applicable liquid assets waiting period or determining severe financial hardship for the purposes of eligibility for income support. These measures will mean that people seeking income support will not have to exhaust nearly all of their liquid assets or to cash in their life insurance before payments such as Newstart allowance become available to them.

Measures in this bill will help people with everyday financial pressures and commitments, often incurred when they were working and earning a wage, who find that they need income support in hard times. The bill provides for the changes to the liquid assets waiting period thresholds to be for a two-year period. The bill also provides a mechanism to extend the period that the changes to the liquid assets test waiting period thresholds will operate if required. The government has also committed to undertake a review to consider the effectiveness of the thresholds proposed by this bill in consultation with key stakeholder groups.

The measures in this bill, together with the government’s $42 billion economic stimulus package, support for apprenticeships, training investments, particularly through the Productivity Places Program, and additional employment services providing immediate access for newly redundant workers announced in February by the Prime Minister and the Minister for Employment Participation—all of these measures—demonstrate that the government is responding to the impact of the global financial crisis on working families and the most vulnerable in our society. That is why the government has acted decisively in responding to the social and economic challenges we face through measures such as those included in this bill. I commend the bill to the House.

Cead mile failte.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that the bill be reported to the House without amendment.