Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

As I was saying yesterday, the Australian people expect their taxpayer dollars to go towards policy measures that improve our communities and benefit Australia as a whole. In its current form, the Social Security (Administration) Act 1999 fails to meet this expectation and its own objectives to ensure compliance measures are met at all times by those who receive income support. The amendments before the House today will significantly strengthen our employment welfare system and its intention for resources to be used efficiently and effectively. This is part of the Abbott government's overall strategy to build a stronger Australia, and to do this we need a skilled workforce, with everyone who has the ability to work contributing to its growth and prosperity.

In the budget, this government outlined key policy measures relating to job seekers including its new Work for the Dole program. The amendments before us today will go hand-in-hand with these policy measures to help young job seekers in particular move out of the welfare system and into gainful employment. This will benefit not only job seekers in the long term but their community and the nation as a whole. Under recent changes, job seekers aged 18-30 who have been unemployed for 12 months or more and receiving taxpayer-funded assistance from a Job Services Australia provider will be required to participate in work for the dole activities for 15 hours per week for six months, unless they are working part time. From 1 July next year, all job seekers aged 18-30 and in receipt of Newstart allowance and Youth Allowance will be required to undertake work for the dole for 25 hours per week when in receipt of payment. These rules will apply to new income support recipients with a full work capacity and who are not in education or a part-time apprenticeship. Alternative arrangements will apply to job seekers with a partial work capacity, significant barriers to employment or parent carer responsibilities.

These changes are aimed at supporting young people to get a job and deterring them from becoming reliant on welfare. Australians cannot afford to pay for those who abuse the system and take advantage of their hard work. And why should government let them? We are a nation that was built on the notion of the Aussie battler—a hard day's pay for a hard day's work. We are a nation that expects every Australian to contribute to the best of their ability to their individual communities and to the nation as a whole. We must ensure that appropriate rules and regulations are in place that allow government and its relevant service agencies to provide support to those who need it. We must also ensure that those who seek to take advantage and abuse our safety net are prevented from doing so. The amendments before us today will ensure this is achieved by creating stronger penalties for serious failures. They are necessary amendments to stop the waste and improve efficiency. I commend the bill to the House.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

A number of the measures contained in this bill would have to be some of the harshest measures outlined in the government's budget. They attack some of the most vulnerable in our community; they attack our younger people—people whom we should support. From what previous speakers from the other side have said, it seems that the government does not understand the very complex problem of youth unemployment. The reality is that our jobs market and our economy are changing. The previous speaker suggested that Australia was built on the Aussie battler—a hard day's work for a fair day's pay and for a fair go—but the problem is that we no longer have the notion of a job for life.

You cannot leave school at 16, 17 or 18 today and walk into a job. Those jobs do not exist. There has been structural change in the jobs market and in the economy. The reality for a young person is that they will not work one or two jobs in their lifetime; they will work 10 to 30 jobs over their life. The job turnover rate is increasing, and people are working more and more and in different jobs. At 34 I am one of the younger members of parliament and I am coming up to my 20th anniversary in the workforce. In that time I have had 16 jobs; most of those were when I was younger at high school or university—insecure jobs where you work multiple casual jobs to make up a full-time employment to earn a decent living.

This is not just my story; it is the story of young people today in Australia, because those jobs for life do not exist anymore. What I find particularly disappointing about the measures put forward by the government is that they dismiss a very complex problem. I believe government needs to be doing more to create jobs, but what we see in this bill is the government attacking those who are seeking work. Kate from my electorate wrote me a long letter after the budget about how this bill will affect her. She began by describing what it is like to be unemployed and being a young person in Bendigo where there are limited job opportunities.

People don't like it when you are unemployed. They think you are lazy and wasting their tax paying dollars. In the year that I have been unemployed I have applied for one hundred and seventy jobs. Less than ten bothered to reply.

Those 10 Reponses were all '"unsuccessful applicant" emails … sent out in bulk'. She says that by far the hardest thing about being jobless is being on Centrelink payments. The $316 she gets paid each week barely covers the basics: $180 on rent, $20 on petrol, $45 on electricity and gas, $25 on phone, $10 a week on car insurance and $5 for medication. That leaves about $31.50 a week for everything else—for food, rego, vet, mechanics, clothes and anything else she may need.

This is how the other half lives. Just imagine Kate's life when this government kicks her onto nothing. How will she pay her rent? Or put petrol in the car to get to job interviews? How does she apply for those 170 jobs when she has no financial support from Newstart? Kate wrote:

I've put my name down at all the retail places, magazines, newspapers, technical writers, creative writers and scriptwriters as well as at universities and TAFE for teaching roles in Screenwriting and I've had zero luck. The problem remains that to get a job I need experience but to get experience I need a bloody job.

The area of unemployment is complex especially for young people. It is not that young people are not seeking work, but that we as a society, an economy and a government are not creating enough opportunities or strengthening industries to create jobs and opportunities for young people.

The government should be focused on creating for young people and not punishing them with in a way we have not seen for generations. If this bill is passed by the House and the Senate, it will force people into poverty. Through this bill the government seeks to impose the harshest measures on young job seekers. In addition to making them wait six months before becoming eligible for Newstart or the mandatory work-for-the-dole scheme, the government will kick them off support after six months and they start the cycle again. This approach will actually discourage young people from participating in the process of finding work. The measures will do the opposite to what the government is seeking to do—they will discourage people from seeking work—because they have set the bar way too high.

The question remains: who will support these young people and who will pay their rent when they are receiving no benefits? was speaking to a number of the Bendigo welfare agencies at a recent meeting, and this is one of the major issues they face. They can help young people with food hampers and with emergency relief, but they cannot help them with accommodation. One of our local community leaders, Ken Marchingo, who is the CEO of Haven; Home, Safe, has been very vocal about this attack on people under the age of 30, about preventing them from receiving income support. He says of the notion that people under 30 are somehow so well progressed in their lives that they can afford to lose their job but pay their rent, meet the cost of their utilities and feed and clothe themselves whilst looking for work: 'Who on earth is the government kidding?' He says that it will increase the demand on his services as these young people exit the rental system, become homeless and seek help with accommodation. This bill will increase pressure on other areas of our welfare sector, whether it be through people seeking support in paying their bills or seeking emergency accommodation. This bill seeks to punish, not to help, those we should be helping—those most in need. Ken also wonders whether, in his role, he is going to have to look these young people squarely in the eye and say, 'I can give you a blanket and show you where the bridge is.' He says that he simply does not have enough emergency accommodation to help these young people if they find themselves unemployed and without the income to be able to support themselves.

The other thing we need to focus on is the idea that under 30 is young. Most people in their late 20s, if they have a job, are working towards purchasing their first home. My sister Angela has just turned 30. She said to me that if this bill had come in a few years ago, when she bought her home, and she had found herself unemployed for a period, who was going to help pay her mortgage? What would have happened? What will happen to people who may find themselves unemployed? How will they pay their mortgage? How will they get to and from their next job interview?

Since the introduction of mutual obligation by a former Labor government we have had in this country the idea and expectation—a social contract, mutual obligation—that if job seekers go out and actively seek work, if like Kate they apply for 170 jobs, if they do their best to get work then we will support them. We will provide them with a small amount of financial assistance to help them to seek work. The government's attack on these people suggests one thing, that it does not understand the complexity of the search for employment. Yes, there might be some people who are continually on unemployment benefits, the people that the government says are the people who constantly break the rules. But there is something deep and complex about why they break rules. The majority of young people want to find work, and we should be doing everything we can to support them in finding work rather than punishing them and forcing them into poverty. To force someone to receive absolutely no support but expect them to look for work every single day is ridiculous; it is laughable. How do you get yourself to and from job interviews if you do not have the basics of income support to put the petrol in the car? Kate said that it costs about $10 a week for that petrol. How can you put petrol in the car to get to job interviews if you do not have any financial support? Is the government also suggesting that a person under 30 could move home to live with their parents? That simply is not an option for a number of young people. In most cases people under the age of 30 have already left home. They have established their lives. But, just because there has been a change in their work circumstances, the government is ready to dump them on the streets and say to them: 'It's up to you to fend for yourself.'

The government needs to focus on creating jobs, on supporting industry in developing jobs that these people can get and that will last longer than a few months or a few years. However, we have seen from the government not a jobs plan but just more rhetoric, with the Minister for Employment suggesting: 'Let them pick fruit.' This policy idea, of letting them pick fruit, is not good enough; it is not a long-term plan. If we are serious about tackling the youth unemployment problem we need to be serious about creating good, secure work; jobs that people can count on. Our nation is at its best when people are working together for the common good. Self-interest alone does not create a fair and decent society. If we are truly committed to a society in which every person is treated with respect and dignity, we must support people when they need help and support. We are still a social-welfare state. To help people break out of the poverty cycle you support them when they need it. But this bill not only forces people into poverty it crushes their confidence.

On Friday nights, when I get the chance, I pop along to the Eaglehawk Saltworks dinner. It is a free community dinner that brings people together. It started on the basis of wanting people to be able to have a warm meal, so that at least once a week they could have a decent meal and a catch up. It has become more than that. It cuts across the age demographic; there are older people and younger people there. For most of them it is their social outing for the week, because they do not have the income or the means to get out. The community comes together and supports them by providing this meal. Most of the young people I have met them are homeless. Most of them are couch surfing. Most of them are trying their best to get back into the paid workforce, but in regional areas the opportunities for employment, if you are somebody who is down on their luck, are limited. How can you expect somebody to be ready for work if they do not have a permanent shelter over their head, if they do not have a permanent place of residence? When I talk to these young people about what it is like to couch-surf and how they go about applying for jobs, one of the first things they say is: 'Lisa, my first priority is to make sure I've got somewhere to sleep tomorrow night, next week, the month after. Really, I want to make sure I've got somewhere to sleep, and then I'm looking for work.' That is the problem with this measure. If you take away people's income support, which ensures that they have accommodation—that they have a roof over their head, that they can pay their rent—their priority is not to find work; their priority is to find somewhere warm to sleep at night.

In conclusion, I will read a letter to the editor on an issue that a number of people in my community have spoken out against. The letter, titled 'Don't demonise the young unemployed,' was published in my local paper, the Bendigo Advertiser, on Tuesday, 3 June. It reads:

In trying to legitimise proposed structural changes to unemployment benefits for young people under thirty, the minister for Social Services … has attempted to demonise—

young people—

saying, "they can no longer go on living on the couch for the dole". A spokesperson for his office recently said further that, "it is good for young people to work". Both of these statements presuppose that all young people are happy to be living on a paltry sum of money spending their days watching daytime TV … This is simply not the case.

Young people spend months and months looking for work. That has certainly been Kate's experience. That is why I call on the government— (Time expired)

Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

I thank the House for the privilege to speak on the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 which seeks to amend the Social Security (Administration) Act 1999.

Australia is called the lucky country by so many because it is a nation of hope, opportunity and reward. Most Australians believe that through hard work and fortitude they will have the opportunity to succeed in all aspects of life and thus be rewarded. I believe that individuals shape their own destiny by identifying opportunities that can enable them to learn, elevate them at work and prosper for their future.

As a fair society, our governments and policymakers have a responsibility to ensure a system of equal access to opportunity. Similarly, governments and policymakers also recognise that people, despite best efforts and through no fault of their own, may not always achieve equal outcomes. In light of this, Australia has created a welfare system that provides assistance and resources which are available to those who need it most. But this system is built on the concept of mutual benefit. A sense of mutual obligation within our welfare system has long been a feature of society, where job seekers who receive income support through taxpayer funds contribute back through activities such as Work for the Dole, active job seeking and meeting with job service providers. The system was built on the basis of offering individuals necessary interim solutions to help them get back on their feet. It has always been about a hand up and not a handout.

Individuals who may be down on their luck often do the right thing and want to work and contribute. Most individuals do so quickly and discontinue income support once an available job comes through. Others may have genuine and unfortunate circumstances in life which impede their aspirations to traditional forms of employment, but this bill is not designed to target those individuals. This bill is about tightening the rules for job seekers who refuse a job or persistently fail to meet the requirements that are part of the conditions of their income support.

As an active society of lifters, it is important for the integrity of our welfare system that there are strong deterrents in our arrangements for individuals who abuse taxpayer funded support. The coalition firmly believes that anyone in receipt of a taxpayer funded income support payment should be prepared to accept legitimate, suitable work that comes their way. All paid workers in Australia have started somewhere, and it is wrong to turn down legitimate paid employment. Individuals absolutely have a right to accept or refuse work; however, they do not have this right at the expense of the taxpayer unless the work offered is clearly beyond their capabilities. This bill is about safeguarding our welfare system to ensure it is sustainable and that individuals receiving income support are doing so on the merit of actual needs rather than choice.

I would also like to note that there are a multitude of benefits in working, and it is not just about receiving an income. There are studies which highlight the importance of work on the health and wellbeing of the individual and the flow-on effects to society. The Royal Australasian College of Physicians, along with the Australasian Faculty of Occupational and Environmental Medicine, produced in 2011 a detailed report on the effects of work and its subsequent positive impact on wellbeing. It said:

…    …    …

Good outcomes are more likely when individuals understand the health benefits of work, and are empowered to take responsibility for their own situation.

This is absolutely true for all Australians who are able-bodied and can work, especially our youth.

It is unfair to burden the taxpayer and our welfare system with unnecessary support at the indulgence of the few who can choose income support with no desire to reciprocate. The coalition are opposed to this in policy and in practice. As a government, we are responsible for supporting individuals through a system that actively helps and encourages employment and self-reliance rather than welfare dependency. It is by having stringent policy measures in place, without ambiguity or areas for exploitation, that people who are able to work must now do so.

This bill ensures that job seekers who refuse or fail to commence work without a good reason will be penalised in two ways. Firstly, job seekers who incur an eight-week non-payment penalty for refusing suitable work will no longer have the penalty waived. Secondly, those who persistently fail to comply with participation obligations will only be able to have the penalty waived once during each period of continuous receipt of their participation payment.

The current situation did not provide enough of an incentive for individuals to get off welfare, because there were significant areas of weakness in this social policy that allowed those who did not want to work to remain there. Under current job seeker compliance provisions devised by Labor, the non-payment penalty may be waived if the job seeker begins to comply with a serious failure requirement—for example, Work for the Dole, job search training or undertaking increased levels of job searches. The non-payment period may also currently be waived if the job seeker does not have the capacity to comply with any such requirement and would be in serious financial hardship if the non-payment period was not ended.

I stress that this bill encourages participation payment recipients to engage with opportunities to work, with appropriate incentives to do so. By implementing policies that provide incentives, we enable job seekers to experience the benefits of employment—not just monetary ones but, in particular, greater social and economic inclusion, which contributes to their health and wellbeing.

In alignment with the incentive to work is the penalty when actively choosing not to work. A policy which reduces the number of penalty waivers in place when job participation is nonexistent means that job seekers are more likely to be pressured to move off welfare and become a productive participant in the workforce. Having a strong deterrent to this type of behaviour and mentality will foster an attitude in job seekers to accept suitable employment.

As a responsible government, we must ensure the integrity of our policies, that our social security system is not haemorrhaging finite resources and that support is appropriately channelled to those who genuinely need it. Further, the coalition have to make these decisions and reforms, given the bleak economic landscape we find ourselves in. Given there are no funds left, after Labor's record six consecutive deficits, these important changes will save $20.5 million by 2017-18. Our commitment to restoring the budget and building a stronger economy goes hand in hand with individuals working and contributing to society.

I am certain that both sides of government believe in everyone being a part of our workforce, but the difference in how the coalition and the opposition has approached this is telling. Previously under Labor, individuals have been able to exploit the welfare system due to the weakening of the rules regarding the application of penalties for serious failures. This ultimately encouraged and manifested poor behaviour and a mentality of social dependence. Individuals could have their penalties waived by simply doing additional activities, such as intensive job searches.

Between 2012-13, there were 1,718 instances of serious breaches for refusing a job, of which 68 per cent of the cases had penalties waived. In these instances, 550 people experienced a financial penalty as a consequence of refusing a job. This is in stark contrast to the record in the year 2008-09 under former Prime Minister Howard, where 664 penalties were applied to instances where a reasonable job was refused. Similarly, there were also 25,286 serious failures for repeated noncompliance, such as failing to attend three appointments with their employment services provider in six months, where 73 per cent of cases were waived.

Labor's policies and systematic weakening of our welfare system meant there were no real meaningful consequences for repeat offenders and more job seekers were able to exploit the system and misuse taxpayer funds. Furthermore, Labor's record on employment has not been encouraging. Under their governance, unemployment went from 4.4 per cent in 2007 to 5.7 per cent in September 2013. By the time Labor left office, there were 200,000 more unemployed Australians than in November 2007, when the coalition were in office.

It is crucial that the now opposition supports this amendment, which will benefit all constituents in Australia. That is why the coalition is committed to helping people move from welfare to constructive employment through a number of key initiatives, including the Job Commitment Bonus for job seekers aged between 18 to 30, relocation assistance to help people move for work, the Tasmanian Jobs Programme and the restart wage subsidy for mature age workers.

Whilst most job seekers do the right thing, there are those who deliberately do not. It is not satisfactory to be content to remain on welfare at the expense of hardworking Australians. This bill will ensure that those on support may have their benefits withheld if they do not comply with their job search and income support requirements. This is pivotal to ensuring we have a sustainable welfare system that actively helps place people in employment rather than keep them in welfare due to convenience or complacency.

As mentioned previously, this bill will not impact on job seekers who cannot get work despite their best efforts, but rather targets those who refuse a reasonable and suitable job offer. It will reinforce the message that those who deliberately flout the rules will be appropriately penalised. Consequences of this bill will see a support system assume one of strict compliance, devoid of weaknesses created under the previous government. This bill will limit the number of times a job seeker may have the penalty for persistent noncompliance waived. This is for the good of job seekers and society as a whole.

The government knows that there is little tolerance in the community for those who do not fulfil their mutual obligations as part of income support. It is an unfair and unjust expectation on the hardworking Australian taxpayers to support those who have no desire to accept suitable work and repeatedly abuse the system. There are simply not enough resources to allow the unnecessary diversion of taxpayer funds for those unwilling or unprepared to help themselves. This bill will reinvigorate taxpayer expectations of mutual obligations and the government's commitment to restoring this accordingly. The previously identified savings of $20.5 million is money better spent elsewhere in society. Our society can only prosper when all participants contribute as self-reliant individuals. Finding and accepting suitable employment opportunities alleviates poverty and aids in the overall health and wellbeing of Australians. I commend the bill to the House.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I rise to speak on the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014. Last night the member for Barton actually gave a one-hit punch to his constituents by voting to make it much harder for them to get good health outcomes in relation to the PBS—a $1.3 billion extra cost on Australian families and individuals. Here he is today in the chamber, representing his marginal seat in New South Wales, giving a speech on this bill—I think Sir Humphrey Appleby would call it 'political courage' to make such a speech—in which he is demonising young people and having a go at them.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

It's extraordinary.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Yes, it is extraordinary. One time he crossed the floor and sat with us. He probably should do it again; but, after listening to that speech, I do not think he will do it. I wonder whether he has ever heard of the GFC—the global financial crisis—and its impact on government revenue, businesses, banks, Australian households, individuals and small businesses. He must never have heard of that!

I will quote the Queensland executive director of the Brotherhood of St Laurence, Tony Nicholson, who I think represents an organisation which shows tremendous compassion towards young Australian people—and I commend them for the work they do. We have seen an 88 per cent rise in youth unemployment in my home state of Queensland, and this is what Tony Nicholson had to say about it. He said:

Queensland is facing a generational crisis.... For young people caught up in this jobless spiral this can be a road to long-term poverty and reliance on welfare.

…   …   …

We know youth unemployment has a profoundly scarring effect on young people that will hurt their life chances, including the prospect of even holding down a job further down the track.

This is also bad news for the Australian economy. Future growth and productivity critically depends on the ability of our young people to develop their potential and aspirations. The current job market is a tough environment for all young people, especially those who are disadvantaged.

If you listen to the previous speaker, you would think that there is a job nirvana out there and a bunch of loafers and bludgers who are not looking for employment.

But the truth is that we have an unemployment problem in this country. In my home state of Queensland, we actually have 11,000 fewer jobs now than we had when Campbell Newman and his LNP government came into power. This is a mob that said they would reduce unemployment to four per cent. Let me tell you: it was 4.7 per cent in my home city of Ipswich when the coalition government came to power in Queensland. It is now, at the end-of-year term, 8.9 per cent, and youth unemployment in the last few months has gone up to exceed 18 per cent. So, we have seen a crisis in youth unemployment.

You would think that the government would therefore put a big emphasis on job training and programs. For example, when Labor was in power, since 2010 we invested over $700 million in Youth Connections, Partnership Brokers, national career advice—across the board, in terms of skills and training, $19.5 billion. But this mob, this government—who are demonising young people and never let an opportunity go by to demonise those on disability support pensions, or young people who are facing the challenge of unemployment—actually cut funding massively in the budget with respect to youth in training.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

Why?

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Extraordinary. Sunshine, you could go back to your constituents and tell them how you vote in this place. We saw massive cuts in funding programs. They have cut the following in the budget: the Accelerated Australian Apprenticeships program, the National Partnership Agreement on Training Places for Single Parents, the Alternative Pathways program, apprenticeships to business owners, the Productive Ageing through Community Education program, and STEP—the Skilling Through Enterprise Program. They even cut the trade training centre program—$950 million. One of their senators came to my electorate and said how great this program is—announced it and opened the Ipswich Region Trade Training Centre, which will allow 5,000 young people, the people who are likely to be hurt by this bill before the chamber, to get access to trade training in Ipswich. Senator Barry O'Sullivan said, 'It's great; we should continue the funding.' That was about an hour or so before he said, 'There's no budget crisis', when he spoke before the Ipswich Chamber of Commerce in debating me.

The legislation before this chamber is about hurting young people; that is what it is about. The speech we just heard from the member for Barton was dripping with sarcasm and scorn on young people—dripping with it. And that is exactly what we hear. This government will not listen to the experts. I wish they would listen to the Brotherhood of St Laurence from time to time. The Prime Minister and these ministers never miss an opportunity to be tough on young people. And Senator Abetz, the Leader of the Government in the Senate and a minister in this government, is permanently perplexed as to why young people are not picking fruit on farms as the avenue for getting full-time employment. He obviously considers that seasonal work in rural areas is a panacea for youth unemployment. But the government's most startling impact, of course, was in the budget, and I have announced a number of things that they have done. We would not have to have legislation like this if they kept all these programs to keep people in employment—get training and skills and opportunity for young people, so that their hopes, their dreams and their aspirations could be fulfilled, as Mr Nicholson said in his comments in March 2014.

Many young people will need to wait six months before they are able to access income support through Newstart or Youth Allowance. If you are under 25, after a six-month wait you will be entitled to Youth Allowance, not Newstart. They think this is somehow convincing people to learn or earn. ACOSS says that this will force many of the same young people into poverty. And we see that today with the bill that is before the chamber. They can barely restrain themselves from boasting about their toughness.

At 28 March this year there were 5,532 people in my electorate of Blair, many of them under 30 years of age, receiving Newstart, and 1,397 receiving Youth Allowance. This is one example, in one electorate, and it will be replicated around the country, of the people who are at risk from the bill before the chamber. This is the consequence in one electorate of the number of people who might be at risk. On 16 May this year the Australian reported that the nation's biggest business groups were critical of the government's harsh measures in relation to job seekers under 30 years of age:

Australian Chamber of Commerce and Industry policy director Jenny Lambert told The Australian the welfare plan lacked the investment needed in training and job support.

"The carrot's not good enough," she said.

"They've changed the welfare system, but we need to also change what influences the job market and that is by making the kids more work-ready and creating apprenticeships and traineeship opportunities."

Amen to that; I agree entirely with what she said. But the budget got rid of so much training. It got rid of the job support carrot and reduced it to basically a twig—it julienned it off. And what we have here is the stick, the legislation before the chamber.

And then they cut $2 billion in skills programs in the budget. What they need to do is have a really good look at the consequences of this type of bill. We see more of the stick in the bill before the chamber. It is not fair; it is just tough. We took steps when we were in government in relation to this issue. For job seekers in receipt of participation payments—Newstart, Youth Allowance, parenting payments or special benefits—there may be an eight-week non-payment period for serious failures, consisting of either refusal of suitable work or persistent noncompliance with participation obligations. However, we recognised that there could be some reasons for that, and the goal was to encourage non-compliant job seekers to re-engage with the participation process, which would more than likely lead them to employment opportunities. So we provided that a non-payment penalty may be waived if the job seeker begins to comply with a serious-failure requirement for eight weeks in lieu of serving a non-payment period—for example, work for the dole, job search training or undertaking more intensive job searches or if the job seeker does not have the capacity to comply with such a requirement and would be in serious financial hardship if the non-payment period was not ended.

These provisions successfully encouraged re-engagement as young job seekers continued to look for work. They encouraged people to accept suitable job offers, penalised them if they refused and allowed some discretion for waiver in circumstances of serious financial hardship. But this bill here before the chamber is the big stick. The government proposes to remove Centrelink's capacity to consider the individual circumstances of job seekers who have incurred a potential eight-week nonpayment penalty period for serious failures, preventing Centrelink from waiving the penalty, or allowing Centrelink to waive the eight-week nonpayment penalty for persistent failure to comply with participation requirements only once during each period of continuous receipt of their participation payment. This will only be granted if the job seeker complies with serious failure requirements or is unable to comply with such requirements and would be in severe financial hardship if the nonpayment period was not ended. So the government's measures are very harsh. They will discourage participation of job seekers during a nonpayment period. We must remember, as I said before when I quoted those figures, they will affect some of the most vulnerable job seekers.

In 2010 the Commonwealth Ombudsman produced the Falling through the cracks report, which considered how Australian government social security agencies responded to customers with a mental illness. The Ombudsman reported that Centrelink deals with about six million customers every year. It was difficult to quantify how many people had a mental health issue. Centrelink advised the Ombudsman that mental health was recorded as a primary or secondary health condition for a large number of its customers. The Ombudsman reported that the experience of Centrelink staff indicated that many of its customers were suffering from undiagnosed mental health conditions, and that should not shock anyone in this place. We know mental health is an important issue in this country and mental illness is very common in Australia.

The 2007 national survey of mental health and wellbeing indicated that 45 per cent of Australians aged between 18 and 85 would suffer a mental disorder at some stage in their lives. One in five Australians has had a mental disorder in the last year or so. So these are the kinds of customers that are likely to be in the firing line with this particular bill. Centrelink recognises this and their staff record a vulnerability indicator on the customer's file if they are identified as vulnerable due to mental illness. Vulnerability indicators are taken into consideration in relation to these issues currently, and we can see the types of vulnerable job seekers who this bill will affect in the breakdown of job seekers Centrelink applied nonparticipation penalties to in the last year, and that is the case.

I will just quote a couple of figures on the vulnerability indicators. There were 4,019 job seekers with psychiatric problems or other mental illness, 2,443 were flagged as homeless, 393 had been released from prison, 286 had experienced traumatic relationship breakdown and 276 job seekers had cognitive or neurological impairment. So we are talking about the most vulnerable people in our economy and our community. Under this bill, a great many of these types of job seekers will automatically lose income support for eight weeks. We understand this bill will prevent Centrelink from considering the vulnerability indicators when deciding on the enforcement of the eight-week nonpayment period.

In my area, as shadow minister for Indigenous affairs and ageing, Indigenous job seekers are overrepresented in those penalised by Centrelink. In 2012-13, 11,915 no show, no pay penalties were imposed on Indigenous job seekers compared to 34,409 non-Indigenous job seekers, and 6,895 eight-week nonpayment penalties were applied to Indigenous job seekers compared to 29,563 for non-Indigenous job seekers. So Indigenous job seekers had one-quarter of the no show, no pay penalties and about 19 per cent of the eight-week nonpayment penalties, in the context of Indigenous people being about three per cent of the Australian population.

The government has not considered the impact on Indigenous Australians, nor on the homeless, nor on the aged. It simply does not care, and this will have a disproportionate impact on those people who are vulnerable. It is a government led by a Prime Minister who said that he is the 'Prime Minister for Indigenous affairs'. It is just hollow talk and this bill is indicative of that.

Older Australians want to work. More and more Australians want to work and this government wants to make them work until they are 70 years of age. This type of bill will impact adversely on those people who need the kind of help and assistance a job will provide for them. At a time when the government is making every effort to make it harder for Australians to meet the cost of living and the cost of health care by in effect cutting their pensions in real terms in the years ahead and by freezing the thresholds, this legislation makes it harder for Australians to get by.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

The truth is, Member for Blair, that under Labor you failed young people. In fact, after six years of Labor government in Australia 200,000 more Australians were unemployed as a result of six years of Labor administration. The youth unemployment crisis that you described occurred under Labor. Labor members failed to mention the range of positive initiatives that this government has undertaken to address what is a blight on the landscape for young people in our country.

Australia is a proud country because we understand fundamentally what our culture is, what it means to be Australian—to have a go. These are things that most Australians, from whatever background, understand. They also need to know that their government understands and measures against a test of fairness. Indeed, this bill meets that test of fairness. Among Australians, in that context of fairness, in that context of having a go, there is an absolute rejection of what we might colloquially call the bludgers. We understand that actions do have consequences—or in this case the lack of action.

Most reasonable people can see that the changes proposed under this legislation, the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, are reasonable and fair. This is not a draconian or over-the-top measure. It is a reasonable expectation in line with the Australian welfare system, which is based rightly on a principle of mutual obligation. It is not a 'shoot first, ask questions later' measure. It is about providing support wherever we can to help young people to find employment, to do the things that are good for them—for their families, for their future—to do things that deliver better health outcomes and better community outcomes but also to help themselves. Indeed, there are exemptions within the bill for those people with special circumstances. I acknowledge the member for Blair's interest in mental health and his commitment to supporting and looking at better policy in this area. But those are not the people this bill is targeting at all.

We understand that the taxpayers of Australian, who support those people looking for work, reasonably expect those people to do as much as possible within reason to seek paid employment if they are receiving benefits from other taxpayers. To improve their chances of being offered employment and where appropriate accept suitable offers of employment, activities that are expected of a job seeker include: appointments, naturally enough, with employment service providers to discuss progress; feedback from interviews; and strategies to enhance opportunities to get into paid employment.

Logically, they must undertake a job search process, be that knocking on doors—indeed, over the last few years there are a lot of doors that I have knocked on as a result of my campaigning and it is a great way to talk to people and businesses and understand what their needs are, and opportunities do present themselves; it is the same for job seekers—or reading newspapers and online services to look for suitable employment opportunities. Where appropriate, with the full and clear intention of trying to deliver more opportunities to be better prepared for paid employment, this government will make it obligatory for young people to participate in activities and programs such as the revised Work for the Dole program. Most Australians understand that these programs are designed to better equip people to get into the workforce.

Programs like Work For The Dole have shown their effectiveness over many years, particularly under the Howard government. This is probably one area that statistics do not always do justice; but most people in this place—and, more importantly, outside this place—would believe that, if we can have any success in encouraging and supporting young into paid employment, such programs are overwhelming justifiable. That is particularly so for those kids of families who have challenges around long-term welfare dependence.

In pockets of my state, there is 30 per cent youth unemployment. The Social Security Act sets out penalties in the event that job seekers do not comply with the requirements as outlined. What is designated as a 'serious failure' includes refusing a suitable job offer and persistent noncompliance in respect of appointments with employment service providers. The act provides for a non-payment penalty of eight weeks in the event of serious failures.

But at the heart of the issue are the amendments introduced in 2009 by the previous government that allowed for such penalties to be waived provided there is 'intensive activity' in job searching. Effectively, it meant in practice that job seekers who persistently refuse employment or are persistently noncompliant can avoid any financial recourse or penalty. By way of comparison, in 2008-09, as a legacy of the Howard government's initiatives, there were 644 penalties applied for refusing positions that were offered. In 2012-13, as a result of the changes made by the previous government, there were 1,718 serious failures, but in 68 per cent of these cases the penalty was waived. Even though there were three times as many serious failures, there were only 550 financial penalties applied compared to 644 in 2009. It does not meet the reasonableness test. In the instance of serious failures for repeated serious noncompliance in 2012-13, there were 25,268 instances but in 73 per cent of these cases the penalty was waived. In essence, the whole integrity of the system was undermined. The notion of mutual obligation with the taxpayers of Australia was compromised.

As a coalition, we are doing everything we can to support young people to get a job or, in the case of our trade support loans scheme, to provide appropriate financial assistance for those who choose to do an apprenticeship. The extension of the higher education reforms to sub-bachelor and diploma courses is truly a reform that will benefit my state of Tasmania. In many areas of regional Australia these are the courses that young people go to university for the first time to do. They may then go on to do a degree course—it is true—but these are the courses that are predominately used in universities around regional Australia, such as the University of Tasmania in my home state. There is the trade support loans scheme, as I mentioned, and the extension of the Higher Education Loan Program to diplomas and sub-bachelor degrees.

Incentives for employees include the job commitment bonus for job seekers aged between 18 and 30 and relocation assistance to support those needing to move more than 90 minutes away from home to take up work. My first job when I left school was 200 kilometres away from my home on a farm. Let me tell you, it was the longest eight months of my life. It was hard. It made me realise that I did not want to do that for the rest of my life. But I got a start, and I was really grateful for that. In my home state, the Tasmanian Jobs Programme offers employers $3,250 to take up someone who has been unemployed for six months. Additionally, under the Restart subsidy, employers may be eligible for a further $10,000 over two years on top of this $3,250 figure if the employee is over 50 years of age.

Most people do the right thing. Most people understand, value and appreciate the contribution being made to support them by Australian taxpayers when they are seeking employment. I do not want to be misunderstood: we are talking about the exception, not the rule. Most people want to get into work and this government is doing everything we possibly can to get more young people into paid employment, because a job is absolutely the best form of welfare.

Labor have a dismal record on employment. While they were in office, unemployment went from 4.4 per cent in November 2007 to 5.7 per cent in September 2013. When Labor were voted out of office last year, there were 200,000 more unemployed Australians than in November 2007, when the coalition were last in government.

Indeed there are nearly 18,000 people in my home state of Tasmania currently unemployed, looking for either part-time or full-time work. The latest Australian Bureau of Statistics figures, for May, reveal that Tasmania's unemployment rate is 7.8 per cent, still substantially higher than the national rate of 5.9 per cent. The youth unemployment rate for Tasmanians aged between 15 and 19 remains the worst in the country, with more than 4,400 looking for part-time or full-time work. The youth unemployment rate in some parts of the state is as high as 30 per cent. It is bad for the individual, it is bad for their family, it is bad for the community, it is bad for the nation, it is bad for health outcomes and it is bad for educational outcomes. It is just bad, and we must do and are doing everything we possibly can to change that—because employment is the best form of welfare.

We know most people aged 35 who are on Newstart—not all of them, but an overwhelming number of them—were on Newstart at 18 years of age. It is simply unacceptable that, as a nation, we expect, allow or condone young people leaving school and going immediately onto benefits. It is not good for them, it is not good for their families and it is not good for the community. We need as many people as possible to participate in this country's workforce to the extent that they can—to help turn Australia's economy around.

As a nation we absolutely need to have a serious conversation about the demographic challenges we face. In 1960, there were 10 working-age Australians for every person over the age of 65. Today—I sound like Prime Minister Abe, don't I?—there are five working-age people for every person over the age of 65. It is predicted that, by 2050, there will be 2.8 working-age Australians for every Australian over the age of 65. We need to have this conversation as a nation. We need to have this conversation about the demographic challenges for all of our systems: the health system, the education system and the welfare system more broadly—and we welcome the review of the welfare system being conducted Minister Andrews over the next few months and encourage submissions in this area. We know these things and we are up for the challenge.

This bill ultimately aims to stop the serious failures, those people who consistently fail to comply with the requirement to look for work. These regulations are tough because they have been developed to deal with one of the most difficult groups of unemployed Australians—those who have every opportunity to take up paid employment but ignore those opportunities. The rules will be tightened on the waiver of penalties for job seekers who fail to accept or start a suitable job. They will incur a mandatory eight-week non-payment period. Job seekers who are persistently noncompliant will be given one opportunity to become compliant, but any further episodes of noncompliance will mean an eight-week non-payment penalty. It is reasonable and it is what Australians would expect.

I know that in your electorate of Braddon, Deputy Speaker Whiteley, just on the boundary of my electorate of Lyons, there are many opportunities in the fruit-picking sector. There are also opportunities in that sector in Cressy and Longford in my electorate. In the member for Bass's electorate, at Hillwood, there are opportunities in, for example, strawberry picking. Strawberry picking in Tasmania extends over seven months. At the moment, most of those jobs are taken by backpackers. For seven months of the year they are employing backpackers from China, Taiwan and Korea. Why? It is not because they do not want to employ young Tasmanians. It is because young Tasmanians will not put up their hands. They come along and they get a start, but, after three or four days or after a week or after two weeks, they leave. I want to know why that is and I am having a conversation with the Minister for Employment about putting in place an exit survey for these people—to understand why it is that they are not prepared to keep those jobs, jobs which are available to give young people a start. I started at the bottom. I have not gone much further up the pole, but that is what we need. We need young people to take that chance and grab that opportunity. We need them to seek the opportunities that come from having paid employment.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

My first comment to the member for Lyons is: if you want to find out why people are not staying, take the time to go out and try it and see for yourself. Rather than stand here and ask questions, go and try doing the manual work. If you do that, you will see why. You will also see why, in fruit picking across this nation, people are not taking up the jobs. It is because this government has loosened the rules for 457 visas. Before, if you had a company and wanted to bring in 10 people on 457 visas, you had to apply and you got permits for 10. Now this government has loosened the rules. Now you can apply for 10 457-visa workers, but you can then bring in 50—and that is okay! That is a huge difference. People are able to come in, get a job for a certain period of time and then, as soon as it is finished—bang, lock the door and send them home. That is why a lot of these jobs are being taken by 457-visa workers. Companies that do not want to employ Australians and are happy to employ 457-visa workers now have an extra opportunity to do so.

Through the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, the Abbott Government is cruelly and heartlessly targeting vulnerable members of our community. Enforcing these stricter measures and harsher penalties for those receiving Centrelink payments is an action typical of this government. This is a government which subjects jobless people to punitive measures rather than helping them to address and improve their situations—and therefore their future prospects for financial independence. These amendments demonstrate very clearly the contempt this government has for the jobless. The Abbott government is obviously stuck in a time warp where it views absolutely everyone without a job as a dole bludger. Those opposite have no idea what it is like for people to be without a job. They have no idea what it is like for young people trying for the first time to enter a highly competitive workforce; for people with psychiatric problems or mental illness trying their hardest just to survive; for homeless people trying to break out of the cycle of poverty; for Indigenous people, who face a wide range of long-term employment barriers; or for sole parents, who are trying to make ends meet and at the same time juggle their family commitments. For some people, gaining employment does not happen quickly, especially with this government's systematic attacks on manufacturing jobs across this nation.

These vicious penalties for persons on Centrelink typify the hypocrisy of the Abbott government. They will slash and burn legitimate and essential payments for those who most need it, but, at the same time that they talk about how they will save $20 million in the budget by getting rid of the leaners and helping the lifters, this government is going to give people on high incomes $50,000 to have a baby. That is $1,923 a week, or $50 an hour to sit at home and have a baby, while those you can least afford it are the ones being hit. So the real lifters are the people at the bottom—the people on fixed incomes, the people on pensions, the people on low incomes—who cover those at the top end, who really can afford it. No matter whether you earn $200,000 a year or $30,000 a year, the cost of essentials is the same. The cost of electricity is the same, the cost of food is the same and the cost of petrol is the same, but of course now it is going to go up 1.7 cents a litre, despite the fact that this government said before the election that there will be no increases in taxes. In fact the foreign minister stood here and said, 'We are not doing it. It is all scurrilous. It is not going to happen.' What did they do in the budget? Just like everything else, they sneaked it in. People are now paying more for petrol than what they were promised by this government before and after the election.

On 14 November last year, the Abbott government admitted:

The data reveals the majority of job seekers do meet their participation requirements.

That was from someone whom you think would know—it was from the Assistant Minister for Employment, Luke Harsuyker.

Despite acknowledging this fact, this government still feels the need to make these cruel sledgehammer changes that will impact severely on the four per cent of job seekers who do not, for whatever reason, meet their obligations. And it is not always just as simple as not turning up. Out of the 2,687 non-compliance penalties last year, only 752 were concerned with job offers. The National Welfare Rights Network puts it eloquently in its submission on Indigenous jobs and training review:

A small number of people wilfully flout the rules and their behaviour potentially stigmatises all other job seekers. However, it is costly and unwise to build an entire compliance framework on the basis of incorrect assumptions that unemployed people are individually and generally 'malingerers'.

This out-of-touch government does not understand the difficulties for people living in areas such as my electorate of McEwen who are already doing it tough and are likely do it a lot tougher because of the cruel and heartless measures in this budget, including the fuel tax increase, which makes it more expensive for people to travel from A to B. The walk-away by this government from the automotive industry, from SPC, from Qantas and from other manufacturing in this country, in particular in regional and suburban areas, limits the opportunity to gain or regain employment.

Just last week, my office was trying to assist a couple who for health reasons and for other circumstances outside their control find themselves in their 50s and dependent on Centrelink payments. To fulfil their obligations, which for one of them is a five-minute face-to-face meeting with staff, twice a month they have to drive from Kilmore to the Centrelink office in Seymour, a round trip of about 100 kilometres. It is a hefty expense on top of other added costs they now face, such as the $7 GP tax, and the costs for some diagnostic services and medicines, all thanks to this government's budget of broken promises—and, of course, the fuel tax.

Through this bill the government is seeking to impose harsher measures on job seekers. This is on top of the six-month waiting period of no income support whatsoever before they become eligible for Newstart and the mandatory Work for the Dole program. Under the former Labor government, the non-compliance measures introduced allowed job seekers the opportunity to re-engage in the participation process. We were successful in helping job seekers re-engage with their job service providers, and in the process of participation, while they looked for work.

These provisions also encouraged job seekers to accept suitable offers of employment, penalising them if they refused such work, while still allowing discretion to waive the non-payment period if there were mitigating circumstances. That is the key point here. Under Labor there was still some flexibility to give those who, for legitimate reasons, were unable to fulfil their requirements—it might have been something out of their control—an opportunity to state their case and continue to receive these payments. Under this Liberal government, these people will now be without money and will not have the means to pay bills, put food on the table, or go to the doctor.

The Abbott government is turning its back on vulnerable Australians. The Prime Minister is refusing to help those who need it most. Labor believes the measures proposed by the government are unnecessarily harsh and actually discourage participation by job seekers serving non-payment periods.

In McEwen, there are about 25,000 young people in the 18 -29 year age bracket. According to the Brotherhood of St Laurence's 'Our chance, my future' report, youth unemployment is as high as 17 per cent in some areas, particularly in the regional areas. This is the fifth highest in Australia.

These amendments are going to directly affect people living in my community. There are so many ways in which the Abbott government is making life difficult for our young people. It is stopping welfare assistance and it is cutting services like Youth Connections, which helps young people find jobs.

These amendments also ignore the reality for people with mental illness, and indeed add to their problems. The job searching requirements for Newstart payments are onerous for people referred to mental health support services, and those who are struggling with organising daily routines in their life. The consequences of these amendments will cause a serious downward spiral for these people. Take, for example, a gentleman we have been dealing with in my electorate. He is aged 24 and must submit to regular work testing. The young man suffers from anxiety, depression and borderline personality disorder. This young man is demeaned and what little confidence he has is further undermined by work testing.

Rather than feeling like he is getting help and more confidence to try gain employment, he feels disempowered by the continual tests and feels locked into a cycle of hopelessness. This young man is doing what he can to address his mental health issues, but he knows they are long-term issues that he has to learn to manage. He worries that he may never be well enough to work and he struggles to get by on a basic income. The proposed amendments will undoubtedly forever lock this young man into that cycle of hopelessness, as the penalties will knock him down hard, both financially and emotionally.

The government's amendments will also have a heavy impact on women fleeing domestic violence. Take for instance a lady who is a sole parent with three children, working part-time. She was in receipt of parenting payment single. She was subject to violence in the home and so did not return Centrelink compliance forms on time. Her payments were terminated. She rang the call centre to attempt to have payments reinstated but ultimately had to attend Centrelink to sort it out. This meant she had to take time off work. Her employment was already compromised because of these escalating family violence issues, and her employer began to lose patience. She had to seek food vouchers to feed her children until her payments were re-instated.

Overall, these harsh amendments are going to be detrimental to all those receiving essential payments through Centrelink. It is categorically unfair to target and punish all because of the apparent dishonesty of the few. I refuse to let this government ruin the lives of the vulnerable and disadvantaged in our community. I will stand up for people in my community who need support. If you truly believe in a valued society, then your values should be to support the weakest and the vulnerable in their times of need.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to have the opportunity to speak on the Social Security Legislation Amendment (Stronger Penalties For Serious Failures) Bill 2014, because it goes to the question of how the government manages people's money and how we as a society place requirements on people who receive welfare benefits to do the right thing by society, who is paying the cost. It is a really important issue.

There is widespread support for helping people in genuine need, and I certainly support that, as do the government and the vast majority of Australians. But there is an equally important principle, which is that if you are getting benefits from the taxpayer you should be doing the right thing by the taxpayer. The Australian people will not support a system where people who are abusing the system or not taking their obligations seriously are putting their hand out and accepting a cheque without actually doing the right thing and trying their absolute best to get a job. That is entirely understandable, and that is why we are making these changes.

Social security is an enormous part of the federal budget. It is by far the largest expenditure item. In the 2014-15 budget it is estimated that there will be about $415 billion of Commonwealth spending. Of that, about $55 billion in GST payments flow straight through to the states. So the amount that the Commonwealth effectively allocates is $360 billion. Social security and welfare make up $146 billion of that $360 billion. That is about 41 per cent of the discretionary $360 billion that the Commonwealth has to spend. So it is an enormous amount of federal expenditure. There are many important programs in the social security area, but those numbers really underscore how important it is that we manage this area very effectively.

As a government, we spend more than twice as much on social security as we do on health; we spend five times as much on social security as we do on education; and we spend about six times as much on social security as we do on defence. So it is an enormous area of expenditure and therefore it is very important that we administer these programs in a sensible way. We spend about $10 billion a year on job seeker income support, in its various forms. That works out at roughly $1,000 per household per year, spread across about nine million households. So it is a lot of money. We absolutely owe it to the people of Australia to manage this area effectively.

This bill ensures that people who are not complying with the rules under which they receive benefits suffer a consequence. That sounds pretty obvious. If you do not face a consequence for inappropriate actions then there is not much incentive to stop those actions. But, under the previous government, that is what happened. An extraordinary amount of people were in breach of the rules as they existed, but the penalty that they should have suffered was waived time and time again.    In 2012-13, 68 per cent of people in that category had their penalty waived. That does not make any sense at all. Why have a system of mutual obligation when in fact the obligation is only on one side? There were over 25,000 failures for non-compliance with the job seeker rules. Most of those failures relate to not engaging with employment service providers, as required under the act, and basically not working hard enough at getting a job. But 73 per cent of the time—almost three out of four times—the penalty was waived. What sort of message does it send to a young person in particular who suffers no consequence when they receive benefits but consistently do not show up for interviews or to see their job service provider?

That just does not make any sense at all, and that is why we are making these changes.

Under the bill, job seekers who fail to accept or commence a suitable job will incur a mandatory eight-week non-payment period. Again, it is a very simple principle—if there is a job for you and you do not accept it then it is absolutely right that there should be a consequence. If you are consistently noncompliant with the rules under which you receive your benefit then, similarly, you will face that eight-week suspension of your payment. There is still the capacity for one waiver if there are exceptional circumstances, but as a general principle you will meet your obligations or you will face that eight-week non-payment period. That is a very, very powerful incentive for job seekers to do the right thing by the taxpayer and to do everything they can to try to get a job.

Those measures will save about $20 million over five years—a significant amount. But as important as the amount of money involved is the principle of mutual obligation—the fact that, if you are going to accept welfare, you have to do your bit. You have to put your hand up and get out there and try to find a job. As I mentioned before, the problem in this area was the previous lack of enforcement. That created a scenario where people would just flout the rules, frankly—and that is what we will be putting an end to through this legislation.

The legislation is part of a broader package of measures which the government has introduced in this whole area of encouraging people to go from welfare into work, because we all benefit when that happens. Obviously the benefit primarily goes to the person who gets the job, but it is also good for the economy to have people in jobs and it is good for our society to have people with the dignity and focus that work brings. Getting people out of a welfare situation and into work is absolutely critical.

There are three important areas where the government has taken measures in this space. One is the job commitment bonus—a payment of $2,500 for young people aged between 18 and 30 after 12 months of continuous employment and being off welfare and a further $4,000 if they remain in continuous employment for another 12 months. This is a really powerful incentive. On the one hand, we want to make sure that people do the right thing, which includes the difficult measure of removing their assistance for eight weeks to encourage that. On the other hand, we offer some bonuses and incentives to further encourage people to get into work.

Relocation assistance is also important as, particularly in rural and regional Australia, jobs are not always nearby and the cost of moving away from friends and family to take a job is a very significant impost. So the government has moved to assist people who are relocating to take up a job, with up to $6,000 available for people who relocate to a regional area, $3,000 for people who go from a metropolitan area to a regional area and an additional $3,000 in the case of people with families with children—so up to $6,000. These are really positive measures to encourage people to get back into the workforce.

Another similar program is the Restart program, which will provide employers with a payment of $10,000 for taking on people who are over the age of 50. I was recently at the Peakhurst fruit market in my own electorate for a meeting with the owner. He is very enthusiastic about this particular program because older workers have so much experience, so much expertise and tend to be very reliable. This $10,000 incentive for hiring workers aged over 50 is going to be a real godsend for small and large businesses all around the country.

There are two sides to the coin. On the one hand, we need to be very clear with people who are accepting social security benefits that they have to put their hand up and do the hard work and that, if they consistently fail to comply with the rules, there will be a consequence. On the other hand, we want to provide incentives to individuals and businesses that are assisting in getting people from welfare into work.

All of this is a huge contrast with the efforts of the previous government, or lack thereof, where we saw a failure to enforce the rules and a record on employment generally that was really quite appalling. We talk so much in this place about the economy, big numbers—billions of dollars—and so on. At the end of the day, though, why does all of that matter? Why do we care about the economic measures of the country? The basic reason we care is that it means jobs—economic growth means jobs. But, under the previous government, unemployment rose substantially from 4.4 per cent in November 2007, when they came to office, up to 5.7 per cent in September 2013—a very significant increase. Those opposite so proudly claim to be the friend of manufacturing workers, but we actually lost one in every 10 manufacturing jobs in the country under Labor. In that six-year period, 10 per cent of all manufacturing jobs were lost. There were 200,000 more people unemployed at the end of Labor's reign than at the beginning, which obviously is very poor testament to the Labor government.

Our welfare initiatives will give people an incentive to get in and work. They will require people to play by the rules. We will also drive employment through good economic management, because there is no greater indicator of employment than economic growth. How do you grow the economy? You manage the budget sensibly so that people know they can have confidence in the financial future of the nation. You get free trade agreements, as we have with Korea and Japan, and we are working on one with China at the moment. You get silly red tape out of the way, and you build things like the WestConnex extension in my electorate and other fantastic infrastructure projects right around the nation. You also get the environmental approval process working effectively, as we are doing with the one-stop shop. Prior to Christmas last year projects worth some $400 billion of economic activity were approved. You have to undertake a wide range of measures to grow the economy and develop a culture where the people of Australia know that their tax dollars are being used wisely. About 41 per cent of all of the discretionary spending of the government is in social security and welfare—that money needs to be managed effectively, and that is what this legislation is about.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

The member for Banks, in the last sentences of his speech, made part of a very good point—one of the things that government does in order to build the economy in a country is build infrastructure. That is certainly true. But you also build people. You reach down for people who cannot find a way through the problems they have and who need to be lifted, and you become a government of lifters that reaches down and helps those who are most in need. Unfortunately this government that wants everybody else to be lifters is not one itself.

I remember when John Howard was first elected in 1996. For me it was a very sad day because I saw in John Howard, in the first years, a person who I thought quite cynically reached down inside people and brought out in them some of the least generous characteristics—characteristics of envy and of fear of the rest of the world and things that were different. I remember watching John Howard in those first years, from 1996 to about 2000, and thinking what a dreadful characteristic that was in a person. Towards the end of the John Howard years, though, I became more forgiving of him because I realised that he was not deliberately doing that—that was just what he saw in people; he saw fear and he saw envy and he responded to what he thought people were. This government are perhaps an extraordinary extension of this—when they see an unemployed person they do not see a person who perhaps cannot find a way through, who has perhaps lost hope or who perhaps does not have the skills needed. They may have mental health problems; they may have social inabilities to hold down relationships of all kinds. They may have issues that have prevented them finding a path to a better life. Rather than seeing someone who we need to reach down and help, those opposite see people who are deliberately rorting the system. The response is not to help but to punish. They are not a government of lifters—they are a government of punishers of people who quite often need help.

At first glance you might think the changes in the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill are minor, but they are incredibly significant changes. The current Social Security (Administration) Act already contains job seeker compliance provisions. If you are receiving assistance from the taxpayer because you are unemployed, there are requirements that you have to meet. If you do not meet those requirements, there are penalties for serious noncompliance which may include an eight-week nonpayment period for serious failures, which consist of either refusal of suitable work or persistent noncompliance with participation obligations. The current act provides that a nonpayment penalty may be waived if the job seeker begins to comply with the serious failure requirement. In other words, if a person who has not been applying for jobs—who has not been participating in training or has not been doing the things that the taxpayer requires of them in order for them to receive this payment—starts to meet those requirements the nonpayment period can be waived.

The purpose of that system is to allow Centrelink to identify people who are not meeting the requirements and encourage them to reply by removing the payment and then reinstating it when they begin to comply. There is no question that a person who does not comply does not receive a payment, but under the current system once they start to comply the payment is re-established. That has been working quite well. According to the second reading speech, in 2012-13 the Department of Human Services waived 68 per cent of the refusing a job cases and 73 per cent of cases of repeated noncompliance, because job seekers undertook the intensive activities that were required. In other words, 68 per cent of people who refused a job and 73 per cent of serious noncompliance cases improved activity and met the requirements to receive Newstart.

The rules as they currently stand have been working. The reason you need to give people the opportunity to improve their circumstances is that many of the people who do not meet those obligations have reasons in their life for that. I am not making excuses for these people, but often there are reasons why a person is not able to meet their obligations. For example, last year Centrelink applied 13,296 smaller daily no-show pay penalties to job seekers with known vulnerability indicators. This included 4,019 with psychiatric problems or mental illness, 2,443 with a homelessness flag on their file, 393 who had been released from prison, 286 who had experienced a recent traumatic relationship breakdown and 276 job seekers with a cognitive or neurological impairment. There were 5263 eight-week non-payment penalties incurred by unemployed people with a Centrelink vulnerability indicator, including 1483 with psychiatric problems or mental illness, 1149 with a homelessness flag, 131 released from prison, 107 who had experienced a recent traumatic relationship breakdown and 102 with a cognitive or neurological impairment. Many of the people who were failing to meet those obligations without the incentive of having their payment re-instated are people who have issues in their life or in their health that make it very difficult for them to meet the obligations.

It may surprise you, Deputy Speaker, and it certainly surprised me that I received a noncompliance notice once. I received a letter at my home telling me that I was in serious breach of my obligations to Centrelink as a job seeker and that, if I did not report to Centrelink the next day, my dole would be suspended for an eight-week period. The difficulty was that I was not on the dole; I was actually a member of parliament at the time. I obviously shared a name with someone else who had failed to meet the obligations. I received the penalty notice, I contacted Centrelink and said it was not me. I assume that the Julie Owens they were seeking continued to be non-compliant. That Julie Owens may have been one of those homeless people; this person may have been a person living in a home where the mail did not reach them for some reason; this may have been a person who was illiterate. There were all sorts of reasons why this person might not have met their obligations, but on that day she did not meet her obligations, because they sent the letter to me. If this person, this other Julie Owens, lives a life of great instability—she moves from home to home or she has no home—how easy would it be for her to fail to meet the obligations more than once? Yet the changes that the Liberal Party are making here would mean that even if that Julie Owens managed to explain that in this case it was because she did not live there, the next time it happened she would not have her payment reinstated because the changes only allow for the reinstatement of a payment once—once only.

The other thing we need to consider is that the vast majority of people who are given noncompliance penalties are under the age of 30. In fact, over 70 per cent of people who receive noncompliance notices are under the age of 30. Combine this new punitive measure with the other changes that the government is making for unemployed people under the age of 30 and you have a recipe for an absolute disaster. We have a situation where people under the age of 30 will have to wait six months before receiving Newstart or youth allowance and the moving of people from Newstart onto youth allowance when they are under the age of 24—which means a reduction in their payments. We already have a circumstance where people who find themselves out of work under the age of 30 are going to be put under the incredible pressure of having to live effectively for up to six months without any income at all. Some of those will be able to rely on their parents; many will not be able to rely on this their parents and they will find themselves without any funding at all for up to 6 months.

Add that to the cuts that this government has made to the programs that help people under 30 to get jobs. In my electorate we have Youth Connections, an extraordinary organisation which helps thousands of young people who have lost their way back into work or training. Youth Connections cannot force anybody to participate in their program; young people find their way there through referrals or through contact with Youth Connections staff out in the community. They join programs—sometimes for one year, sometimes for two years—that assist them to find their way through whatever issues that have caused them to lose their way. By that stage, they may be into drugs, or they may be hanging around with gangs, or they may be into petty crime, or they may just be people who have completely lost hope and are living a life of despair, or they may be fleeing family violence.

Youth Connections is incredibly effective. In fact of the people who participate in their program, 80 per cent are still in work or training two years after they leave the program. That is a success story, yet this is one of the many programs which support young people finding their way into work that this government has cut. When this government looks at them, they do not see people who are struggling to build a better life; they see people who are deliberately and maliciously rorting the taxpayer and having a bit of a break. That is not who these people are; that is not the people I know; and that is not what the evidence says these young people are.

The evidence says that these young people will do well if the government of the day is a lifter and reaches down to provide the assistance they need to find a path to a better life. We have also seen the axing of AUSSIP, the industry partnerships program in my electorate. It will finish up at the end of this year along with Newstart. Again, it is an incredibly successful program that builds relationships with schools in some of the most disadvantaged areas of my community and local business, so that, when young people leave school, the pathway to employment is already there. It is an incredibly effective program, particularly for small to medium businesses that can find it incredibly difficult to work their way through the job network to find low-skilled or semi-skilled workers.

The government has also abolished the employment coordinator position in Parramatta, which is an area of high youth unemployment. Narelle Nelson finished up on 30 June, and, in the last days of Narelle's work, I was able to use her services and I became aware that in two days time that service would cease. One of my very good local manufacturers came to me, almost in despair. It is an incredibly good manufacturer of a very high quality product. It uses all-Australian inputs. You name it, Australian steel—all of its components are Australian. It needed a machinist but had not been able to find one. It was starting to consider using a 457 visa. This is a company with an absolute commitment to Australian products that was in despair at being unable to find a machinist, was having regular difficulty in doing that and was considering going offshore. I phoned the employment coordinator, who told me of a company that had made 300 machinists redundant in the last few months. She told me which Job Network provider they were working with. Fortunately, the company found a person who it believed it could work with and train. That person is now gone. Again, in that circumstance, there is a young person who probably would not have had that connection with a firm, who had a job and who lost it through no fault of their own. They had been doing good work. They had been working for a company that they thought was secure. They had a full-time job. They were under the age of 30. A company retrenched 300 of them and so they found themselves with a rather long wait for unemployment benefits and with all of the programs that would help them find their way back into work cut by this government.

The government is absolutely on the wrong track. You cannot punish into finding work a person who is in despair or without hope or who has a mental illness or a cognitive disability. If, when they fail to meet the obligations, you remove their payment and refuse to reinstate it even if they re-engage you provide no incentive for such a person in that situation to do what is required of them to meet their obligations. (Time expired)

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

There is surely no more important mission for a government than to provide opportunity. If you could distil the job of everyone of us in this chamber down to a single word, that word 'opportunity' is the task that we devote our energies to. It is a disappointment to this side of the chamber that most of the debate focuses on punishment and punitive measures, because that is not what the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 is about at all.

Let us look at the broader picture. We are a leading economy and our job is to maximise workforce participation in a nation that has a small population, with a relatively large capital to labour ratio. It is extremely hard to fill the high-skill jobs with our own population, but that presents us with a challenge—a lack of low-skill jobs for many of those who are entering the workforce for the first time. It is that skills mishmash that we as a wealthy economy with a high minimum wage and excellent working conditions grapple with. We are in the company of great economies around the world that are grappling with the same question: how do we make sure that everyone can have a chance of better future? Our job is not to take money from people; our job is not to pick winners. But our job as a government surely is to give every citizen opportunity. If we can do that we are doing our job well.

In the Job Network framework we rely on highly skilled, professional people who work on the task of matching need with expertise, finding opportunity and giving it to those who are best capable of filling it. In the merit based employment arrangement that we have—I cannot ask a boss to take the second-best employee, nor can I ask any job seeker to take a job for which they are not suitable—we are in a race to identify and guide people to the best possible professional path. All of this is underpinned by a debate going back centuries, which has identified that being in work is far better for one's health, far better for one's social circumstances and far better for families. We know that families without an individual engaged in real work genuinely struggle, that the odds are stacked against them. Unfortunately, when you rank countries identifying those that have the highest proportion of households without a single person working you see that Australia keeps popping up on the top. It is Australia, New Zealand, the UK, Malta. The light flashes; they hit the screen. These are the economies that continue to cultivate and support large proportions of our working population having no work at all. Families that have no-one working and creating generations of future families where nobody works. We cannot rest until this problem is sorted. We cannot rest until we have done our very best to make sure that every person in these particular households has had a crack at a job. I cannot put it much more simply them that.

We identified that of the hundreds of thousands of matches made by professionals in our RTOs and our Job Service providers every year in most cases these are bilaterally beneficial and welcomed arrangements, where both the boss and job seeker are fulfilling mutually satisfying and encouraging arrangements. In many cases they have had a tough period to find a job but once they have it they are set for life. Government's only task should be in that period of highest need. Government should not be getting involved in an arrangement between employees and employers, because that should be the domain for those to make the rules and make sure that there are productive arrangements without interference from unions or government.

Let us focus on the difficult time that is unemployment. I have had a time when I did not have a job and life looked pretty precarious. I cannot even pretend to know what it is like to be a long-term unemployed person. But I know that, short of losing your family home, short of losing a first-degree-family member, not having a job is probably one of the most precarious phases in one's life. I think that the job of government is to make sure that that period is as short as possible. The opposition makes a fair point when it says that the government should be doing all it can to make that a supported period rather than one where a person feels picked on, rather than one where someone feels that there is futile activity that is not actually leading to employment at all.

We as publicly funded officials might feel that we know what the job environment is like. But let me tell you that young people on the ground know a very different picture—a picture where it is incredibly hard to find suitable work. It does not matter what part of Australia you are in. I could cherry pick some areas where there is very, very high youth unemployment, but even in my fairly average outer metropolitan area that very much represents middle Australia it is extremely hard for young people to find a job at the right time. Next week they might well find the opportunity that sets them on a trajectory for life, but nothing can really help them in that one period where they are looking for work except the best possible and most responsive government services. That is what we are debating today.

Today we are focusing really on what we call the hard end of the spectrum, where it is proving most difficult to get people a suitable job. The system can do only so much. It can only put a prospective job seeker in front of an employer. There is nothing we can really do to make that relationship work. We cannot really ensure that both parties are acting in good faith, although I hope they do. Ultimately, all we can do is match that range of opportunities with the job seekers that are chasing them.

We want to hope that if someone goes as far as turning up for a job interview they will take it seriously. If someone does not even turn up for those meetings then there has to be a very good reason why. As a former GP, I know that often health issues undermine attendance at those meetings. That is why both sides of politics recognise that over a six-month period you should have a couple of shots at it. We give you three chances to meet your obligation to attend those meetings and seek a job. If there is suitable work identified, you get one shot to take it. If there is an utterly suitable job for you then there really are no excuses not to take it. Government should not spend its time intensively case-managing people that have given up on a perfectly suitable job.

It is worth responding to the previous speaker, the member for Parramatta, who almost exclusively devoted her 15 minutes of parliamentary time on this debate to what I would call stories of grief and inability to meet basic requirements. I say to the member of Parramatta: I am not sure you have actually gone to your local Centrelink office, as I have, sat with the workers, talked to them about case management and watched what is required of someone attending intensive case management with a job-seeking provider working for them and on their behalf. She provided a list of exceptional circumstances faced by job seekers, all of which I accept, such as recently having left prison, having an extremely traumatic family event in the time you are looking for work, having a major medical condition and—one that we all tend to forget—having major mental health issues that make it difficult to make a sustained commitment to seeking work. I concede that this is one of the greatest challenges that Centrelink and our job service providers face, but we have a disability support pension arrangement specifically for people who cannot do four hours of work a fortnight. That is what the DSP is for.

If I am going to take up parliamentary time today, I want to confine my comments to areas where I can add some benefit to the debate in this chamber—and those are the health reasons and parenting reasons why someone cannot hold down a long-term job. Before going to those issues, I want to note that we are, at the moment, working in the context of what other major economies are doing. The UK is making significant advances in this area of maximising everyone's attempt to find a job. New Zealand has brought in extraordinary reforms; information on them is available on their Beehive website. They operate in a single-government environment where they can share job-seeking payment information more easily than we can. Their extraordinary reforms mean they can pick up the people who are persistently evading opportunity, and evading work is clearly contrary to our basic expectations of a citizen.

The intellectual corollary of this debate comes from ACOSS, whose view is that government should not in engage in any form of social engineering—that is, using a welfare payment to in some way change someone's behaviour. There is a simple response to ACOSS, isn't there? The paying of welfare is in and of itself social engineering. Paying welfare is trying to obtain a different social outcome using a payment. It is utterly reasonable to strike an agreement with recipients that there are certain social norms that we expect of people in receipt of a payment. I tell those on the other side of the chamber: that is the way it is going. Get used to it, because all other OECD economies are moving that way. We having now a conversation that we could not have 20 years ago—that is, if you are in receipt of a public payment, it is not acceptable to beat up your wife; if you are destroying your tenancy, it is not acceptable to just keep taking your public payment; and, if you are not sending your kids to school, I do not see why any level of government should continue paying you welfare payments. These are basic rules that operate right around the world. It is utterly reasonable that they are enforced here, and I am glad to see that they are. They were not always enforced, but they are now.

There are still more challenges ahead. These are not policies of any one major party but, ultimately, we need to look at parenting orders that are flagrantly and persistently abused. If you are not adhering to court ordered sharing of your children with another partner, I do not see why you should then be receiving public payments unfettered. I do not see why you should then capture all of the parenting payments because you are refusing to share custody of the child with the other parent, who loses their payments. But that is how it works at the moment. It is just not right. If you thumb your nose at state authorities and are on the run with an arrest warrant out for you, I do not see why on earth you should keep getting public payments. In New Zealand when they changed this law they had people turning up to the police station saying, 'I have just had my payments stopped.' The police asked, 'Why are you here?' and they responded, 'It's an arrest warrant. I'm on the run. Can I sort it out?' Why on earth in this country do we pay people on the run to stay on the run? Why wasn't this ever picked up in six years of Labor government? They were quite happy to keep paying people who were on the run with an outstanding arrest warrant. I concede that we should give people on the run 14 days to get to Centrelink, but why should we pay those people who are on the run for months and months?

Lastly, I want to pick up the issue of not looking after vulnerable children. At some point the state has to take the fearful step into a home and say, 'If you cannot support your children in a safe environment, we have to ask you for some mutual activity in return.' That may well be ensuring that kids are immunised. That is noncontroversial and we do it already. But what about the other health care measures that I think a completely dependent child should be able to trust the state will deliver? I do not see that children's health should be compromised or that welfare should be paid without some concern to the fact that at a child at the age of five should be able to turn up at school healthy enough to cope, able to hold a pencil, knowing which side of a book to open and able to sit in the class with 20 other kids and not throw chairs through a window. Basic emotional self-regulation is something we should be picking up with our Medicare system, making sure that every child has a chance. Education is a train. If you cannot make that back carriage when you are five, it is bloody hard to get back on again. These will be challenges for future governments. They are challenges for all governments.

It is time in the context of stronger penalties for persistent evaders of what we regard as reasonable behaviour—caring for a child, preventing all forms of domestic violence, not damaging a public tenancy and not running up massive debts to a state government while having the federal government still paying you—that we looked at these areas. I am glad that we now have a government that will do that.

Most of the state entities are not recognised under the act and cannot activate a mandatory deduction from Centrelink payments. At the moment, it is optional through Centrepay. I concede that that works in a number of cases and fails in others. That is a debate for the future, but it is not very far off.

I return to persistent evaders of work. I say to these people: if there are genuine reasons, they will be picked up in compulsory conferencing. This trigger is activated the minute three activity requirements have been breached in a six-month period. Anyone on that side of the chamber who says that our highly expert Centrelink staff and their associated specialists—and I am talking about social service specialists—cannot identify when someone has a genuine illness, when someone genuinely needs to be streamed out of this kind of activity, completely underestimates the capacity of our officials to do that.

I have a slightly different concern: just how many people can Centrelink be expected to intensively case manage? We have a number of people in the gallery today listening to this debate. I ask: realistically, how many people can we conference for hours on end at taxpayers' expense? In the end, we need a system that finds those who can be easily directed back to work and gets them there. There is nothing more effective than saying: 'You face a significant penalty if you don't show up. If you've got a problem, you have to let us know.' It is not that hard to get a Centrelink office in the country and to make it clear that you cannot make it. It is a basic tenet to say to someone: if you cannot meet an obligation, let them know in advance. We can make excuses about people's social inability to do that sort of thing, but that is taken care of by doctors. Doctors are quite able to diagnose that kind of inability: where someone is continually unable to look for or turn up to work. If you have got a problem, go and see a doctor. If your family doctor cannot do that then Centrelink doctors should also be able to make the decision in a case where a person persistently uses medical certificates to evade work.

If someone has a medical condition that only flares up on the day they are meant to show up to work, let it be determined by a Centrelink doctor. I anticipate that there will be a tightening up in this area, too. We have the obvious improvement where you can no longer use a family doctor to get your DSP—'thank you' to the opposition for introducing that piece of legislation. Why shouldn't it apply in this situation as well? I do not expect to see a Labor Party opposing the important measure of independent medical advice where there is frequent use of medical certificates by a person to avoid finding work. All of this happens on a platform of trying to get young people back into work using the Job Commitment Bonus, a platform of trying to get people to move for work— (Time expired)

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I follow my neighbour from South-East Queensland and rise today to speak on the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014. As the House now knows from earlier speakers, the bill does legislate some of the harsher measures designed to attack job seekers that were introduced in the government's budget of broken promises and twisted priorities. I think it does show that the government are more interested in ideological hits on vulnerable people than they are in helping people to get jobs. They are so quick—and we heard it from the previous speaker—to demonise people; they are so quick to tear them down; they are so quick to think the least of them. We heard the member for Bowman refer to welfare recipients as criminals, that all welfare recipients are people who do the wrong thing, rather than think about them as job seekers—the people who we need to tool up, the people who we need to get the skills to succeed in the modern market economy. We get from those opposite this sort of sneering and snobby dismissal of people who are doing it tough in this community, which encapsulates their whole budget and their whole inability to put themselves in the shoes of other people who are doing it tough.

By contrast, of course, the Labor Party believes in giving people the skills to maintain their own prosperity through the right training, work experience and incentives, as well as with the appropriate support from the government. That is why Labor cannot support the ideological attacks on job seekers that were introduced during the budget, and that is why we are opposing the bill before the House today.

It is an important time to be discussing our social safety net, given the state of the Australian labour market today and the substantial uncertainty that is central to that labour market. We had some unemployment figures released last week, which showed that the unemployment rate had ticked up again to six per cent—that is the equal highest, I think, at any point in the last decade and higher indeed than during the global financial crisis. Youth unemployment—as I hope people on both sides of the House would recognise—has hit a 12-year high of 13.1 per cent. In my own electorate of Rankin, it is even higher than that—probably something like 16.5 per cent in some areas. That figure is a 12-year figure; so the member opposite probably does not have a good grasp of what he is talking about. These headline numbers conceal some of the even more concerning aspects of the current labour market. We have a whole range of job losses that have been announced and not yet factored into the figures. So there is a bit of uncertainty in the workforce. The reality is that some of the full-time jobs that have been lost from some of our industries will not be coming back in a hurry, and that means supporting displaced workers into new jobs and supporting young people into careers in modern growth industries will be crucial in the years ahead.

One of the key differences between the members on this side of the House and the members on that side of the House is that we believe that a strong and fair social safety net is part of the solution and not always part of the problem. We believe in a social security system which can help build people up, while this government chooses to operate a social security system which will tear people down. I think the Minister for Social Services is a repeat offender when it comes to demonising people who need government support. We hear all this stuff about the blowing out of the welfare rolls and all that sort of stuff, when, in reality—and the people at the Melbourne institute have shown it—the welfare rolls are not blowing out. We do not have a substantial problem in terms of growth in payments outside, of course, the age pension, which is a function of our ageing society. So I think that sort of data and that sort of analysis really shines a light on the political strategy that is being operated by those opposite in terms of demonising people who are looking for work or doing it tough. The legislation before the House today is a clear example of that philosophy from the government when it comes to social security.

Currently, under the act, job seekers in receipt of a participation payment may incur an eight-week non-payment period penalty for serious failures, consisting either of refusal of suitable work or of persistent noncompliance with their participation obligations. Labor introduced that non-compliance measure, but we did it with an important additional consideration, which is that the job seeker could apply for the non-payment period to be waived if they agreed to participate in intensive job seeking activities and if the job seeker would be in serious financial hardship if the non-payment period were not ended. The result was that job seekers were incentivised to accept suitable offers of employment, with penalties if they refused such work but still allowing discretion to waive the non-payment period in certain circumstances.

The bill before the House today removes many of these important considerations from the legislation. Job seekers who turn down suitable work will in no circumstance be able to have that eight-week penalty waived, while job seekers who fail to abide by participation obligations will be able to have the penalty waived only once. There will be two effects of this. The first one is that job seekers will lose any incentive to go back into serious job-seeking activities if they make a mistake and are penalised with that eight-week no-payment period. The original Labor non-compliance measures were designed to encourage people to get serious about job seeking after a serious failure. This government is seeking to remove that encouragement and will in fact be effectively prohibiting job seekers from re-engaging with their participation obligations during that non-payment period. That shows again, as I was saying before, that this is really about punishing people rather than helping people back to work. Secondly, job seekers who turn down suitable work will entirely lose access to their means of subsistence, even in cases of severe financial hardship, which seems to me to be counterproductive. Labor believes in encouraging people back into work after serious failures, but forcing people into eight weeks of possible starvation, homelessness or even petty theft to get by is not going to help in this endeavour.

These are draconian measures. They will do nothing to encourage people back into job-seeking activities. They will serve only to punish the most vulnerable job seekers in our community. For example, of the almost 27,000 'serious non-compliance' penalties applied last year, almost one in five were applied to unemployed people with a 'vulnerability indicator' on their file. That includes something like 1,500 people with mental illnesses, almost 1,200 people with homelessness flagged on their file and others who had been released from prison or had experienced a recent traumatic breakdown. That gives you a sense of the types of people we are talking about. And almost 19 per cent of the eight-week non-payment penalties were levied on Indigenous job seekers. This legislation will remove any capacity for social workers to waive the non-payment period in these cases, even if the job seekers realise their errors and seek to re-engage in intensive job search activities. These measures will hurt real people and make it almost impossible for some of them to survive day-to-day. No failure is serious enough to warrant that kind of punishment.

It is worth reflecting on why we have a social safety net in the first place, why we have unemployment benefits, why we have the Newstart allowance in Australia. First of all, it goes to the very principles of justice that we value as a society. As humans, we naturally feel uncomfortable and unhappy when we see others in society doing it tough—at least, most of us do—living below the poverty line, without a job or without a place to live. It is part of a natural altruistic urge that we have—or should have—as members of the human race. The philosopher John Rawls describes this phenomenon with reference to a 'veil of ignorance': that if we were judging the world without knowledge of our own personal circumstances—our place in society, our class position or our social status—it would be possible for any one of us to fall into a situation of poverty or joblessness. In simpler terms, as humans we know 'There but for the grace of God, go I.'    The result is that our natural sense of justice should urge us to fight for a minimum safety net for all people.

The second reason we support a social safety net in Australia is that it is good economic thinking. Supporting people through periods of unemployment and back into the workforce has many important benefits for the economy at large. First of all, international evidence has shown definitively the association between long-term unemployment and heightened levels of crime, homelessness and health problems. The evidence is indisputable that countries like Australia, with targeted and effective social security spending—what the experts in this field say is the most targeted welfare system in the developed world—are less likely to suffer from these problems that have effects for everyone in our society.

The other substantial impact of long-term unemployment is what economists call the hysteresis effect of unemployment. In essence, unemployment today causes heightened levels of unemployment tomorrow. The intuition behind this is simple: the longer people spend out of the workforce, not developing their skills or work experiences, the less likely they are to be able to re-enter the workforce in the future. It is one of the key reasons Labor's record of job creation during the global financial crisis is so remarkable. It is something I am personally proud of, having played a small part in some of those policies during the GFC, because we helped keep people in jobs, working with business, for a whole range of reasons, including government policy—working with people to keep them in jobs during the peak of the GFC and still keeping people in jobs today. Avoiding unemployment hysteresis is also a key reason a social security system, with a strong employment services program, is so vital for our economic success today and into the future.

The legislation before the House today will lessen the effectiveness of our social security system to achieve these two goals of welfare—the social one and the economic one. It will deprive people of any means of subsistence for eight-week periods after serious failures, even if they commit to re-engaging in intensive job-seeking activities. It also degrades the economic power of the welfare safety net itself, removing an important incentive for people to engage in those intensive job-seeking activities. So, Labor cannot support this measure that will lessen the effectiveness of the social safety net in Australia, one of the most effective social safety nets in the developed world. Nor will we be supporting some of the other cuts to the safety net that the Abbott government has discussed and implemented since coming into office. The changes in this bill come on top of the $1.2 billion cut to Newstart that was proposed in the recent budget, where young people under 30 who do not have a job and cannot find a job will have their Newstart payments cut off for six months. If we think about that for a moment—no income, no support for half a year—it is not only a bad idea; it is a bad idea based on cruel and mean-spirited ideology. How does the government think young people will be able to support themselves and survive after six months without any income or without any support at all? I think that when one of my colleagues the other day called out that he considered this policy to be 'earn, learn or starve', and a couple of the Liberal backbenchers nodded and said, 'Too right', it really did shine a light on the alternative approaches—this side of the House and that side of the House.

All these attacks to unemployment benefits come at the same time as this government will make it harder for young people to get the skills they need to get jobs. In less than a year they have cut $128 million from Youth Connections, Partnership Brokers and the National Career Development Strategy. They have cut $1 billion from apprenticeships. They have cut $1 billion from trade training centres, which were doing such a good job to prepare our young people for a career in the trades. They have cut $800,000 from local employment coordinators. The cumulative effect of these cuts will be fewer avenues to work for our young people.

And the punitive measures introduced in this legislation, alongside the cuts to young people that I have just outlined, are entirely indicative of the government's philosophy when it comes to jobs: their lack of a long-term plans; their willingness to blame job seekers for their inability to find employment; the way that they demonise people, the way they run them down, the way they think the least of people in our community. Our side of the House, the Labor opposition, is more interested in supporting people to support themselves, to give them the tools of success that they need to prosper in a modern market economy. It is for this reason that Labor will not be supporting this bill: because these attacks on our social safety net are not only cruel and cold-hearted, they will also hurt our economic prosperity in the long term.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I also rise to speak on the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014. I would like to talk first about the opportunities available for job seekers in my electorate of Solomon. As I have said many times before in this chamber, northern Australia is the undiscovered jewel of the country, a wonderful resource bursting with potential and opportunity for anyone who is prepared to make an effort to go there. For me, I had good fortune on my side: my parents settled in the Northern Territory, Alice Springs to be precise, before I was born and as a result I have lived in the Territory all of my life. After I left secondary school, I had the choice of commencing my tertiary studies in Darwin or Adelaide. I chose Darwin because I believed there was a need for local people to stay in the Territory, to help build the place going forward. Twenty-five years later I can honestly say that I have not regretted that decision even for a moment.

My specialty area was is information technology and project management. I was fortunate to work with some fantastic people and for some wonderful organisations in both the public and the private sectors in the years before I entered politics. But my story is just one of countless numbers of people who have made the most of the opportunities that the Territory, Darwin and the Top End have offered up to them. It is a story that, with the passing of time, has become something of a cliche: the traveller who popped into Darwin en route to Brisbane or Broome or some other far flung spot or the southerner who moved to Darwin to work for six months and who have stayed there forever. What is surprising is that more people do not do it.

The coalition government's northern Australia strategy in many ways is about identifying ways to unlock the potential that I spoke of earlier. Economic growth brings with it challenges, such as the need for housing and infrastructure, but they are far preferable to the alternatives of stagnation and recession. A look at the recent Australian Bureau of Statistics unemployment data shows the extent to which Darwin and the Northern Territory are prospering at the moment. Our jobless rate of 3.9 per cent is the second lowest in the country, only just behind the ACT. More importantly in some respects though is the participation rate of 75.7 per cent—by far and away the highest in the country. In the big three states of New South Wales, Victoria and Queensland the participation rate is 63 per cent, 64.1 per cent and 66.3 per cent respectively. In Western Australia it is 68.4 per cent, Tasmania 61 per cent and in the ACT it is 70.8 per cent. Put simply: our unemployment figure is low even though the highest percentage of the population in the country is actively looking for work.

While it might be overstating things to say anyone actively looking for a job in Darwin will find one, it may also not be far short of the mark. A look at the 2013 skills shortage list gives just a taste of the opportunities in the Northern Territory for those with the wherewithal to pack their bags, kiss their loved ones goodbye and head up north. Employers report they have difficulty recruiting: teachers, physiotherapists, midwives, occupational therapists, nurses, motor mechanics, sheetmetal workers, metal fabricators, welders, panel beaters, painters, bricklayers, carpenters, joiners, air conditioning and refrigeration mechanics, cabinetmakers, childcare workers, geologists, geophysicists, optometrists, locksmiths, stonemasons, floor finishers, glaziers, plasterers, tilers, lines workers, bakers, pastry cooks, butchers, chefs, arborists, gardeners, hairdressers—just to name a few. Unskilled workers can tap into jobs in hospitality, fishing, horticulture, agriculture, construction and the mines.

I am not sure of the number of workers in the Territory on 457 visas, but at a guess I reckon it would run into the hundreds. Big projects like the Inpex    development currently underway in Darwin rely heavily on fly-in fly-out workers because Darwin's relatively small population base is unable to meet the demands of major construction projects on that scale. But with the real prospect of ongoing gas developments on the back of Timor Sea exploration in coming years and decades, more significant energy projects are expected to emerge, which will require skilled and unskilled workers. The picture I am trying to paint here is of the opportunities available in Darwin and the Northern Territory for those who are struggling to find work. On that basis, I say to anybody on unemployment benefits, faced with sporadic employment or retrenchment: please give thought to starting afresh in the Northern Territory. Not only will you be helping yourself but you will also be helping northern Australia, and for that matter the entire country. It is where the future is—northern Australia.

And while I am on the subject of the Territory, it really is a truly fantastic place to live. Certainly in Darwin it is rarely cold. Even at this time of year when everyone down here is shivering, it is 20 degrees overnight in Darwin and 30 degrees during the day. There are no traffic jams, no toll roads, great things to do at the weekends, a range of sporting options for kids and adults, educational options, magnificent natural beauty and Asia is a couple of hours to the north if you are in the mood for a break. If you want to catch up with the family, it is a few hours' flight home. So I absolutely recommend the Territory as a work/lifestyle option to anybody. Even the member for Lingiari, who is not in here at the moment, would have to agree with me on this one, I am sure.

To turn to the bill at hand, for those who are unable to find work, Australia has a welfare system designed to provide income support until the recipient is able to find a job. Our welfare system is based on the principle of mutual obligation—that is, people who receive taxpayer funded income support are asked to actively seek work, undertake activities such as training to improve their chances of being offered a job, and accept any suitable job offer. While it is a hand-up during tough times it is not intended to be a lifestyle choice. It is not meant to be a handout. There are a number of safety nets which underpinned the coalition's commitment to helping move people from welfare to work. There is the Job Commitment Bonus for job seekers aged between 18 and 30; relocation assistance to take up a job to help people move for work, which is very much available to anybody who takes my advice to move to the Territory; and then Restart Wage Subsidy for mature age workers.

The Social Security (Administration) Act 1999 sets out the penalties that apply in the event that a job seeker does not comply with these requirements. Under this act, serious failures include refusing a suitable job offer and persistent noncompliance. The definition of 'persistent noncompliance' is when a job seeker fails to attend three appointments with their employment service provider in a six-month period or incurs three no show, no pay failures in a six-month period. The existing act provides for an eight-week non-payment penalty in the event of such serious failure.

The bill before parliament today introduces two changes to strengthen the job seeker compliance framework by tightening the rules regarding the waiver of penalties for serious failures. One of those is that for a job seeker who fails to accept all commence a suitable job will incur a mandatory eight-week non-payment period. Why, you may ask, are we apparently replicating a provision that is already in the act. The answer is simple. Labor were soft on people who broke the rules. Under Labor, amendments were introduced in 2009 to the act that allowed the non-payment penalty to be waived by engaging in intensive activity, such as an increased level of job search. That meant that job seekers who refused a job or were persistently non-compliant could repeatedly avoid a financial penalty. In 2012-13, for example, after Labor's changes were introduced, there were 1,718 serious failures for refusing a job, of which the penalty was waived in 68 per cent of the cases. So in almost two-thirds of the cases where a job seeker receiving taxpayer funded benefit refused a job penalties were waived. Of the 1,718 serious failures for refusing a job, only 550 people copped a financial penalty.

The second change contained in this bill applies to job seekers who are persistently non-compliant. For them there will be a provision of a once-off waiver of the non-payment period. All subsequent episodes of noncompliance will incur the eight-week non-payment penalty. Again, when it comes to enforcing penalties for noncompliance, Labor went to jelly. In 2012-13 there were 25,268 serious failures for repeated noncompliance, and of those the penalty was waived in 73 per cent of the cases.

The government understands that most job seekers in receipt of income support do the right thing by the taxpayer and make a concerted effort to look for work and accept a job. In no way does this legislation target the vast bulk of benefit recipients. But, unlike Labor, this government is not prepared to tolerate the actions of those who take a flippant view of their requirements as a job seeker. This bill sees a return to a more substantial job seeker compliance regime and addresses weaknesses in the system. This bill will ensure that job seekers may have their benefits withheld if they do not comply with their job search and activity test requirements.

These amendments are targeted, fair and necessary. They are not a savings measures—over five years they will only save about $4 million a year. What they are about is ensuring that everybody who receives a job seeker benefit does the right thing by themselves and by the broader community. I will just repeat that: these are about ensuring that everybody who receives a job seeker benefit does the right thing by themselves and by the broader community. I commend the bill to the House.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

The cruelty of the Abbott government's budget knows no bounds. This legislation is just another example of how out of touch those opposite are with what goes on in the real world. I have just come from a meeting with the Leader of the Opposition and a couple of constituents from the ACT, Michaela and Lauren and, between them, their three children. In that meeting we discussed the impact of the budget on their day-to-day lives—on their cost of living, on their futures, on their education. Those women expressed considerable concern about a range of measures that are in this budget.

First up, was the deregulation of higher education and also the costs that are going to be imposed to those seeking to improve their lives, who aspire to higher education. Lauren talked about the fact that she is really concerned about this. She can cope with a $50,000-HECS debt, but what she is really concerned about is the prospect of a $100,000- or $200,000-higher education cost where the interest goes up. She is very, very concerned about what that is going to mean. She is a single mum. She is aspiring for a better future for her son and herself. She is doing all the right things. She has a part-time job and is seeking a degree through the higher education system—she is starting a law degree. She is fearful and terrified about the prospect of her HECS debt being in the range of $100,000-$200,000.

Just recently—last week, actually—I held two community forums. One was in Griffith; the other was in Woden. One of the messages that came from those community forums was concern by one woman whose daughter is aspiring to study medicine. She is incredibly concerned about the fact that her daughter's degree is not going to cost the $50,000 that Lauren mentioned but in the vicinity of $400,000. She is really concerned about the fact that a $400,000 debt means that her daughter will be incapable of ever aspiring to own a home. With a debt of that magnitude hanging over your head, how can young Australians—those who are undertaking higher education—expect to save up for a home with a debt like that? This is the concern that this woman has expressed about her daughter's future—not just because of the fact that she has a huge debt hanging over her head but also that she could potentially not aspire, like most Australians, to own her home. Also, this woman is concerned about the fact that this debt is probably going to be dogging her daughter until she is in her 50s.

The women I met today also expressed great concern about the fact that the fuel tax is going to have a huge hit on their cost-of-living expenses each week. As Michaela said, 'It is not just the fact that I use the car to go to and from work—and that is going to have a hit on my day-to-day, or weekly, budget—but also the fact that I do a lot of running around, dropping the kids off at child care and running around town dropping kids off at the doctor.' It is going to have a huge hit on her cost-of-living expenses.

They are incredibly concerned about the GP tax and also the increase in the costs of scripts. Like any parent with young children, they are at the doctor quite frequently. Each time they go to the doctor, there is going to be an extra slug on the cost of those expenses. They are very concerned about what is going to happen to them. They understand that the budget that the Abbott government has imposed or wants for the Australian people and wants for the people of Canberra is completely out of touch with reality. It is completely out of touch with the real lives of Australians and of Canberrans.

The bill we are debating today is a bill that seeks to punish people for being unemployed rather than support them back into the workforce. This bill—Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014—amends changes that Labor made in government to ensure that job seekers who suffered a penalty for not actively seeking work or training were encouraged to re-engage in their search for a job and to seek employment and training. Under the current job seeker compliance provisions, job seekers receiving a payment such as Newstart may incur an eight-week non-payment penalty for serious failures consisting of either their refusal of suitable work or persistent non-compliance with their participation obligations. However, these non-payment penalties may be waived if the job seeker then begins to comply with the serious failure requirement, such as by working for the dole, doing job search training or undertaking more intensive job searches. The non-payment period may also be waived if the job seeker did not have the capacity to comply with the serious failure requirement and would be in serious financial hardship if the non-payment period was not ended.

These provisions are important as they encourage job seekers to re-engage in the process after non-compliance by allowing the non-payment period to be ended if the job seeker re-engages with their participation obligations. The decision on when to waive his penalty is at the discretion of the Department of Human Services. It is not a one-size-fits-all model. And the department makes a decision on the individual circumstances of each job seeker. This bill provides that job seekers who incur an eight-week non-payment penalty for refusing suitable work will no longer be able to have the penalty waived at all. Job seekers who persistently fail to comply with participation obligations will only be allowed to have the penalty waived once using the same criteria during each period of continuous receipt of their participation payments.

In other words, these changes discourage job seekers from re-engaging in their search for work. In fact, as the government has confirmed, job seekers will actually not be able to re-engage at all during the eight-week non-payment period, and their participation obligations will cease during this period. Even if a job seeker wanted to re-engage during the non-payment period, this government has effectively prohibited them from doing so.

The Abbott government, despite all of its rhetoric about earn or learn, is essentially giving up on these people and on these job seekers. Who are these changes going to affect? In the true form of the Abbott government's budget, these changes, like so many others, will have the biggest impact on those who can least afford it. Many of these job seekers who are likely to have a penalty applied will already have been identified by Centrelink as having some vulnerability indicators—that is, they are likely to have a mental illness, be at risk of homelessness, have experienced a recent traumatic that relationship or have some other vulnerability. These are some of the most vulnerable people in our society and these are the people whom this government wants to punish for being unemployed rather than encourage to re-engage in the search for work.

We should be helping and providing more support, not less, to our most vulnerable job seekers. It should be noted that the numbers we are talking about here are very small: 1,718 out of more than 600,000 people on Newstart and other payments have been deemed to have refused a suitable job. This is not some sort of chronic problem plaguing our welfare system, as those opposite would have you believe. It is very small number of job seekers. Labor believes we should be working to re-engage these people, not encouraging them to sit back and do nothing for eight weeks.

This bill must be taken in the broader context of the Abbott government's attack on job seekers and the unemployed, the worst aspect of which is, in my opinion, the Abbott government's proposed draconian measures preventing young people from accessing Newstart for six months. Those opposite believe unemployed people under the age of 30 should survive for six months with no income, while applying for 40 jobs a month. How they can do that I do not know. How do those opposite think someone can apply for 40 jobs a month when they do not have enough money to feed themselves, let alone pay for their internet connection or the local paper, or pay for the petrol or bus fare to get to the interview. I just do not know how they expect that to happen. This government also proposes to push young people under 24 from Newstart onto the youth allowance. This is a cut of $48 a week or almost $2,500 a year and is yet another attack on young people. For those people shifted from Newstart to youth allowance, this represents an almost 20 per cent cut in support.

Last week I held two community forums, as I mentioned earlier in my speech. One was in Griffith, the other was in Narrabundah. At both forums there was real concern about these two measures, which are seen as an attack on our youth and on the fabric of Australian society. Australians, Canberrans, understand the fact that the support mechanisms we have established in the system are designed to help those in need. Australians understand that we need to reach out and provide support to those people who are doing it tough. It is part of the Australian DNA. It is part of our social democratic system, part of our values, part of who we are as Australians. Those opposite do not understand that at all. You can see that from the attacks they have made on the quality of life and the cost of living of the women I met today. The Newstart proposals we are debating today underscore those attacks. There is no concern for the vulnerable. There is no concern for those most in need. There is no concern for those who are disadvantaged. There is no concern for the youth of our country who are our future.

At my community forums, my mobile offices and the doorknocking I have been doing since the budget was released but also prior to the budget, the two major issues raised apart from jobs are the attack that this government has made on the Public Service and the attack that this government has made on Canberra, our nation's capital. The government has a complete disdain for the nation's capital and wants to move jobs out of Canberra.

The nation's capital was set up as the seat of government and the seat of parliament. It was set up specifically for the purpose of having government agencies here to advise government as part of our nation's capital. This government has complete disdain for Canberra. Apart from under Sir Robert Menzies, conservative governments in recent years have always had a complete disdain for Canberra. We see it in the fact that they want to get rid of 16½-thousand public servants. In 1996 the Howard government got rid of 15,000 public servants here in Canberra and 30,000 public servants right across the nation. Do you know what that did to Canberra, Deputy Speaker? What it did to Canberra was send us into an economic slump for five years. It saw house prices plummeting. It sent bankruptcies, both personal and business, skyrocketing. People left town. It had a huge impact on the region. It had a significant effect on businesses—businesses went under, local shops closed down. That is the future that this government wants for Canberra, for our nation's capital.

At my community forums, real concern was expressed about this government attacking the notion of Canberra as the nation's capital and also, through that, attacking public servants. They are the servants of democracy. They choose a career in the Public Service, they have an altruistic purpose in their life, they want to make a difference to this nation, and all this government does is attack and attack and attack their home town as well as their jobs by cutting, cutting, cutting. At the community forums and the doorknocking, the job cuts were very much front of mind for the community.

I also found through my doorknocking and mobile offices and my community forums that Canberrans have expressed significant concern about the fact that higher education for their children could cost between $100,000 and $200,000. As I said, one woman mentioned that her daughter is potentially facing a $400,000 debt. People are particularly concerned about the cuts to Newstart. This is a cut to the social fabric of Australia. We have a society that allows people to have aspirations, to reach out for opportunities and reach their full potential, but our society is also one where we have a safety net to support those who are facing tough times. This government is attacking all of that. People are very concerned about the higher education changes. They are very concerned about the Newstart changes. They are very concerned that this government wants to impose a GP tax every time they go to the doctor. They are very concerned about the increases in the fuel tax. They are very concerned about the changes that will increase the cost of scripts. The key message that came from my community forums, my doorknocking and mobile offices is that Canberrans are not happy with this government. They are very unhappy, in fact, with the attacks that this government has made on Australia's social fabric and on Canberra's social fabric. They are also very unhappy about the complete disdain the government has for this nation's great capital.

Unemployed people should not be punished for being unemployed. They should be supported into work, training and education for future work. Unemployment is a serious issue, but this government's policy seems to be to punish the unemployed, without any focus on actually creating any jobs. Programs by government should be focused on job creation, on ensuring people have the right skills, the right training and the right education for jobs now and for the jobs of the future. Governments should be continuing programs that worked, like Youth Connections and the partnership brokers program, both of which have been cut in this budget. Labor does not support this bill, because we recognise that punitive measures designed to force people into employment will not work where there are no jobs available. It is simply punishment for punishment's sake. (Time expired)

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The member for Canberra's time has expired and it was nice of her to touch on the bill a couple of times. I call the member for Shortland, from whom I am expecting a similar contribution.

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

Thank you very much, Mr Deputy Speaker. Yes, I do strongly hold the same views as the member for Canberra. I would like to congratulate her on an excellent contribution to the debate and for highlighting all those issues that I intend to highlight, maybe in a different way but, nevertheless, it is very much the same in the Shortland electorate as in the Canberra electorate. It is probably a little bit worse because it is probably a little bit harder for people who are unemployed in the Shortland electorate and looking for work.

I have been a long-term advocate of helping people move from unemployment to work. I actually worked in that space in a former life. I know how difficult it is to bring about that change. It might seem a very simple answer to the problem—if you cut people's money off they have to work—but there are a few other things that come into play. There need to be jobs, and people need to have skills to work in the jobs that are available.

Unfortunately, the legislation before us today is all stick and no carrot. It is all about punishing people. It is not about facilitating their movement from unemployment into work. This legislation tightens the rules for job seekers who refuse a job. In an area like Shortland, if a person who lives in Swansea is asked to work in Maitland the impost is very great. It would mean catching a number of buses and a train, and many hours travelling. If a person without a car and living on the Central Coast were to seek employment in another area of the Central Coast or even Sydney or Newcastle it would mean a minimum of 1½ hours to travel a very short distance, because transport is very spasmodic and not of a very high standard. There is basically one bus in and one bus out in the morning, and one bus in and one bus out in the evening. People have to get to the hub and then travel some distance. So for somebody living in a place like Gwandalan it might take an hour and a half to get to a railway station.

There needs to be an understanding that people who are unemployed need support in a number of areas so that they are able to obtain a job and maintain a job. This legislation punishes people who are unemployed. This legislation makes it harder because there is no longer an opportunity for Centrelink to waive a preclusion period for non-compliance. Currently, Centrelink can do that. And there are many reasons why a person may not have attended a job interview or missed an appointment. I will give you one example. A woman came to me back when the Howard government was in power. She worked part time and received part Newstart payments. An appointment was arranged for her but it coincided with a day that she worked. She was faced with the prospect of either refusing to go to work or attending the appointment. So she contacted the agency and said, 'I can't come to the appointment today. I have a job; I'm working.' That was fine. They next time the agency called her in the same thing happened. That resulted in her Newstart payments being cut. We were able to talk to Centrelink and negotiate. Centrelink understood that there was a sound reason for her not having attended the appointment. They were able to waive her preclusion from Newstart. That cannot happen now. This punitive piece of legislation is going to make it impossible for people that are unemployed to manage their work commitments as well as meet the requirements that this government is putting in place.

For those people who do not have any work and who are looking at going from full-time unemployment to part-time or full-time work, it is even worse. As I mentioned at the beginning of my contribution to this debate, this legislation is all about penalties; it is not about facilitating a move to employment. There is nothing in the legislation about helping people develop the skills they need to get a job. The answer that this government has is either work for the dole or work for the Green Army. Where is the training component in that? How will a mutual obligation put in place by this Abbott government do anything towards helping a person get a job? If you are unemployed the one thing that you need is a job. To get a job you need skills. To get skills you need assistance along the way. This government is saying, 'You either work—you jump through our hoops—or you get no financial assistance at all.' To be quite frank with you, that is not good enough.

Coupled with this harsh approach to Newstart and compliance is the lack of support for people. The government are getting rid of Youth Connections and all the pre-employment programs that have helped people to become work ready. They are even getting rid of simple things like the Job Guide—which people used to research jobs—and other resources that people can use to obtain employment and information about work. That is all gone.

As well, this government is looking at putting a GP tax in place. What alternatives does a person, who is unemployed and precluded from receiving any sort of Newstart payment, have if they become ill?

They are getting no money. If they want to go to the doctor they have to come up with $7—'Not much,' I hear the members on the other side of this parliament saying, but it is a heck of a lot if you have no money at all. Those on the other side of this House stand condemned for the harsh nature of their budget, for the cuts they are putting in place and for their attack on unemployed Australians as well as their attack on pensioners, the sick, families and every section of our society in Australia that looks to government for support.

To be quite honest, the one thing this government has done is increase the number of people who contact my office complaining about government. This budget was supposed to be the answer to everything. I say: people are coming into my office regularly to complain about the government's budget. They are emailing me regularly to complain about the government's budget. They are coming up and talking to me when I have my regular mobile offices, complaining about the government's budget. Along with complaining about the government's budget, they are complaining about the harsh treatment of people who look to government for support.

I know there are some good people on the other side of this parliament. I know there are people in the government who must really be upset about this attack on the most vulnerable people in our society. I know that they must feel the pain that their constituents are feeling. I know that my electorate office is no different to the electorate offices of government members. I am sure that they are being contacted by their constituents complaining about the harsh nature of the budget as well about the harsh nature of changes contained in this legislation and similar legislation.

This legislation is unconscionable. It is cruel, it is hard, it is harsh and it attacks those people who are most vulnerable. There are a number of reasons that a person may not meet the compliance rules or fail to meet an appointment. I gave the example earlier of the woman who was working, but there are many, many others. They could have a family member who is ill. They could have other commitments. People, for a number of reasons—

Mr Zappia interjecting—

Yes, family commitments, as the member for Makin mentions. There can also be deaths in the family. One constituent came to see me—the member for Makin reminds me of this—who missed an appointment because they had to attend their father's funeral. Centrelink waived the preclusion period but will no longer be able do that under this legislation.

Also, a major problem that exists is the fact that a number of people who miss appointments miss them because they have problems with literacy and numeracy. I do not see this government moving to address that issue in any shape or form in the legislation before us. It will increase the reliance that people have on charities. Local welfare agencies such as the Smith Family, St Vincent de Paul and the Salvation Army are all organisations that give 100 per cent in Shortland electorate. They are all organisations that constantly struggle for donations to be able to support the growing number of people—the army of people—visiting them. That army will increase in size once this legislation becomes law.

Along with that, you have the churches. A number of churches within Shortland electorate are now running kitchens where they provide meals, groceries and support to families that just cannot make ends meet. This is already a problem and will become bigger and bigger. These measures are arbitrary and unfair. In an area like Shortland, there have been slowdowns in the mining industry and major construction, with the assault that this government has made on the manufacturing industry and the shipbuilding industry. A number of people living within the Shortland electorate work in those areas. This says to me that, with this draconian legislation, this government is forcing more people into a situation where they will need to rely on charities for support.

What should happen? The government should be trying to facilitate every means possible for people who are unemployed to re-engage. They should be working with job service providers to ensure that people who are unemployed get the skills they need. They should do everything they can to help them develop their skills, rather than just punishing them. There needs to be much more of a carrot approach than a stick approach. There needs to be an approach where the government take people with them—where they actually identify the reason they are unemployed and then try to work to resolve the problem, rather than punishing them and being cruel and harsh in the way that they are in this legislation.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Can I commend the member for Shortland for her contribution to this, because I believe in her comments she touched on some real issues that affect families when they are dealing with matters relating to the welfare system of this country. I endorse the comments of those speakers from this side of the House who have already spoken on this legislation. It is my view that this legislation is simply another example of a consistent theme that we see from members of the government, a theme which would have you attack those who are the most vulnerable in our community—the young people of the country, the elderly, the Indigenous people, the people with disabilities, the homeless and, in this case, the unemployed.

It is a theme that resonates not only in respect of this legislation but in what the government has done with respect to a whole range of other pieces of legislation, where we have seen health cuts, cuts to housing which affect the homeless, cuts to education and cuts to other social programs. It is always those people who are in the worst financial situation—the people on low incomes, the people who are already doing it hard—who are hit even more so. It is a theme that I believe is also consistent with the policies of this government, which are driven by those within the Abbott government who have an extreme right-wing ideology when it comes to implementing policies on behalf of the Abbott government. These measures are in addition to a whole range of other measures that are already making it difficult for people who are unemployed, on parenting payment, on special benefits and the like.

I note that not too many members from the government side were prepared to come into the chamber and speak in support of their legislation, but those that did did two things. They stuck to the scripted lines that were obviously given to them by their party office, by their minister's office. They also tried to paint this as a measure that was good for the unemployed because it was about mutual obligations, it was going to get them back into the workforce and it would assist them to get back into mainstream life within Australia.

There is nothing further from the truth than those remarks, because this is not necessarily good for the unemployed at all. It is essentially another measure aimed at trying to make it tougher for anyone who has not got a job to get any kind of welfare support from this government. We have already seen other changes making it tougher for them. We already know that, if you are under 25, you will be taken off Newstart and put onto youth allowance. You will have your benefit cut by $48 a week. If you are under 25, the cost of living is no different than if you are just over 25, and yet you will be entitled to $48 a week less.

I will come back to that, because the argument there is that you should be earning or learning and if you cannot get a job then you should perhaps go back to education. There are a number of young people in this country who have already had their education. They have the qualifications. They have done the studies they need to but they simply cannot get a job. Yet, because they are under 25, they are not even entitled to the Newstart allowance. But it goes further than that. It goes to the heart of one of the other policies of this government, to make education more expensive for young people, and I will come back to that if time permits.

The other serious change to the provision of unemployment support to people in this country is that anyone who is between 25 and 30 years of age will only get Newstart allowance after they have been unemployed for six months. Then, if they are entitled to it, after another six-month period it will be reviewed again and they will be taken off the benefits and allowances for another six-month period, after which they can then reapply to go back on it—in other words, six months on, six months off. So, even though they might be getting a little more than the youth allowance, the reality is that over a period of 12 months they are getting half the amount of the Newstart payment that they would otherwise be getting.

I do not know how anyone in this House can seriously suggest that someone can live off Newstart allowance for six months of the year and have it carry them through for the full 12 months. In terms of how they will manage to survive, it is bad enough for the six months when they are not getting anything. But, when you consider that you really only get a six-month payment for a 12-month period, the real question is: who on the government side has done the costings to work out how these people are meant to survive? I would challenge any member of the government who is supporting this policy to come into the chamber and say that they could do it, because with today's cost of living I personally do not believe it is possible. It simply highlights just how cruel and how callous some of these policies are.

Government members have come to the chamber and tried to create an impression that the unemployed of Australia are unemployed because they want to be, that they are simply rorting the system and if they really wanted to they could go out there and get a job. I do not think anyone from either side of the House will deny that there might be some people who fit that category, but there would be very few by comparison to the broad number of people across this country.

I want to quote some statistics. Currently we have unemployment across Australia running at around six per cent, and youth unemployment sits at around 13.5 per cent. So youth unemployment—and this is the group that is going to be primarily the target of these laws—is already running at more than double the normal unemployment rate. In my own region, where I come from, the north-east and northern suburbs of Adelaide, unemployment is sitting at just over eight per cent and youth unemployment is almost 19 per cent. The actual figure is 18.9 per cent. So almost one in five young people are looking for a job. Across Australia right now, I understand that there are some 740,000 people who are looking for work, and around 280,000 of those—in other words, a third of them—are 15- to 24-year-olds.

The reality is that the jobs are simply not out there. According to the Australian Bureau of Statistics, for every vacant job in Australia there are five unemployed people. So even if they all tried to get that job, even if they were forced to do so because they had to get a job or be taken off their unemployment benefits, the jobs are simply not there. There are five unemployed to every job going. In South Australia the figures are even worse because there are seven unemployed for every job going. I understand in Tasmania—and I see my colleague Julie Collins, the member for Franklin, in the chamber right now—the figure is 22 per cent. I can recall a young person on Q&A being asked this very question and coming back with the response, 'I am educated. I am looking for a job. The jobs are simply not there.'

I will quote statistics on some of the examples that have occurred in only the last year or so about people trying to get work. I understand that there were 25 police officer positions available in Tasmania, and there were 800 applicants for those 25 positions. There were some 40 warehouse positions available in Davenport, and I understand that hundreds of people applied for those jobs. Acting Deputy Speaker Mitchell, in your own state of Queensland, there were about 70 positions going for an IGA store in Bli Bli and hundreds of people lined up to try and get that work. These are only some of the examples that I have heard of in recent months where people have genuinely and desperately been trying to get work, but the jobs are simply not there.

I also turn to a comment made by one of the coalition members—in fact, he is the Leader of the Government in the Senate—Senator Abetz. He said something to the effect of, 'These people can go out and pick fruit if they really want a job.'

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

What is wrong with picking fruit?

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

There is nothing wrong with picking fruit, if it is practical and possible for you to do so. The reality is that it not always is. The member for Shortland touched on this. There are often family circumstances where people cannot leave home or should not leave home because they are in some way contributing to the household from which they come. A good example of that is a young person living at home who partially cares for one or both of the parents in that home. The young person does not get paid for it but without that care that household could not continue. I have spoken to people who fit that very category.

I have another example and I say it to the member opposite who interjected: if you had a young daughter and you were living in South Australia and there was a fruit-picking job going in Western Australia or Queensland, would you suggest to her, 'Look, just leave home, get your backpack and go there to pick fruit.' I certainly would not ask my daughter to do that if she did not feel comfortable doing so, yet my daughter may well be one of these people who is genuinely looking for a job. It is not always possible or practical for these people to simply go and pick fruit or do those kinds of jobs. Quite frankly, that kind of heartless comment is based on nothing but ignorance and arrogance.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

You are just making excuses.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I will take that interjection from the member opposite, who says that we are just making excuses. What I say to the member opposite, who I believe should know better, is that he should go and speak to some of these families and he should go and speak to some of these people who are genuinely wanting to get a job but who are not prepared to leave their family home for very good reasons. Quite frankly, I believe he is totally out of touch with some of the communities that I have gone through when he says that young people, and in particular vulnerable young people, should simply leave home if that is what they need to do to get a job. The better answer is to try and help those people to get a job within their own homes by providing additional kinds of support and job opportunities in the industries that there are there.

We know that, as a result of these kinds of policies, the people who are going to be hit the hardest are those who already have some kind of problem within their lives, whether it is a mental health issue, whether it is homelessness or whether they are Indigenous people living out in rural and outback Australia. These are the people who are most likely going to be in a situation where they find themselves having breached their Centrelink requirements. These are the people who are most likely going to be hit the hardest.

I note that over 13,000 notices were issued last year to these very people who had known vulnerabilities. My concern is that it is these people who are going to be hit the hardest under this legislation. If you are homeless or have a mental health problem, it is not always possible or practical for you to respond to the obligations that are put upon you by Centrelink. If you are homeless, you may not have access to an IT system to be able to respond and get your forms back. You may not have even received the very notices from Centrelink that will be sent to you because you do not live in any particular location. All of this makes it very, very difficult for someone who does not live in and does not fit into what I call normal society. It is all well and good for those who do; but, for those who do not, it makes it very, very difficult. Certainly, it can be very, very difficult to always get rational thinking from someone with mental health problems such that they comply with the responsibilities that are put upon them.

I want to quickly talk about one more matter in the time that I have—and that is that this all comes down to people having to go to Centrelink and comply with all of the requirements. In recent weeks, I have had numerous people contact my office about the difficulty they are having contacting Centrelink. They have been asked to telephone Centrelink and, when they do, it rings out or they get no answer at the other end. If they do manage to get through, they are kept on hold for hours on end. I have been told by some that it is for hours on end. How can they comply when, on the other hand, the government, I suspect, is cutting staffing levels in Centrelink and making it almost impossible for people to get through to them? That is the clear message that is coming back to my office—that people are finding it almost impossible to get through to Centrelink.

If they go to Centrelink, as the member for Bowman suggested earlier on, they are told, 'We will not deal with you at the front counter. There is a telephone over there. Here is a telephone number: ring it.' When they ring it, they are kept waiting for hours—if they can get through. We are asking them to comply but then making the office that they have to comply with impossible to get through to. This legislation, as I said from the outset, hurts the most vulnerable in the community and is another example of this government attacking those who can least afford to be attacked by the government.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I thank those members who have spoken on the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014. The government is committed to enhancing the integrity of our social security system so that it is fair and sustainable into the future. The government understands that most job seekers do the right thing and meet their participation requirements. However, there are some job seekers who flout the rules and are not serious about moving from welfare to work. This bill will ensure that there are appropriate consequences in place for those job seekers who do not do the right thing by the taxpayer.

The changes in this bill apply only to what are called 'serious failures'. For someone to have committed a serious failure, they would have had to have refused a suitable job without a reasonable excuse or to have been persistently and wilfully noncompliant. These are not the behaviours of someone who is genuine about moving from welfare to work. These are people who, by their actions, are saying, 'I am not prepared to do my bit in return for income support.' These are people who deliberately do not meet their mutual obligations, not because of a disability or a vulnerability but because they choose to flout the requirements that are placed upon them. These are the people that Labor wants to let off the hook—those who deliberately do not meet their mutual obligations.

The bill introduces changes to ensure that the existing eight-week non-payment period is actually applied in these cases. The protections for vulnerable job seekers remain in place. I will repeat that because there has been a lot of misinformation circulated by members opposite: the protections for vulnerable job seekers remain in place. If a person had a reasonable excuse or was a vulnerable job seeker—for instance, a person with a mental illness or an intellectual disability— these factors will continue to be assessed before a decision is made to apply a penalty. That is a very important point.

It is not surprising, however, that Labor oppose the bill and are seeking to confuse the debate—because the need for these amendments arises because of the actions of those opposite. The previous government watered down the job seeker compliance framework by allowing those job seekers who do the wrong thing to avoid a financial penalty. Those opposite were happy to allow taxpayer funds to continue to go to those job seekers who had no respect for the rules. The government does not think it is reasonable that a job seeker on income support can keep on promising to do the right thing 'next time' but never actually deliver on that promise. That is what Labor's waiver provisions allowed. They allowed those job seekers who were intent on doing the wrong thing to keep on getting a benefit at the taxpayers' expense simply by agreeing to do some additional activities. Labor's waiver provisions allowed them to make promises time and time again—without an appropriate sanction for breaking those promises.

Ms Collins interjecting—

The member for Franklin claimed that there was no evidence for the measures in this bill. I must say to the House that it just goes to show how out of touch the member really is. To the contrary, there is clear evidence of the need for the measures in this bill—clear evidence indeed. Labor's approach was an unmitigated failure. In 2008-09, under the Job Network approach, there were 644 penalties applied for refusing a suitable job. In 2012-13, after Labor's new waiver provisions were introduced, there were 1,718 serious failures for refusing a suitable job. That is a trebling in the number of people refusing a suitable job under Labor's watch and, because of Labor's lax approach, the penalties were waived in 68 per cent of these cases. Over the same time frame there were 25,286 serious failures for repeated noncompliance—repeated noncompliance, not just noncompliance—and the penalties were waived in 73 per cent of these cases. This is simply not acceptable.

Labor needs to explain why they think it is reasonable that a job seeker can elect to stay on welfare rather than take a job. Why should a person who refuses a suitable job—and a suitable job is a job for which they have the skills and ability—be allowed to turn it down and continue to ask the taxpayer to fund their lifestyle? Why should they be able to turn down a job and still expect the taxpayer to pay them benefits? Those taxpayers who get up every morning, who have a long commute to work and who juggle the demands of family should not have to pay their taxes so other people can be picky about the jobs they choose—or simply choose not to work at all. If people turn down a suitable job or are persistently noncompliant, it is reasonable that they should lose access to taxpayer funded income support for a period of time.

Most people understand that there comes a point when people who do the wrong thing should pay a financial penalty. The job seekers who are the subject of this legislation have already had plenty of opportunities to engage with the system and receive support from employment services. These job seekers are making a decision that says, 'I prefer welfare over work.' The coalition, unlike those opposite, does not think that is legitimate choice. Last night and today we have had members opposite saying that the government should be focusing on job creation. The coalition, unlike those opposite, can do both—we can focus on job creation and we can ensure compliance with the requirements of the job services system.

It is this side of the House that has a plan to grow the economy in order to grow more jobs. To build a stronger economy, we need to get taxes down and cut red tape. That is why we scrapped the carbon tax—no help from you, Member for Franklin.

Ms Collins interjecting—

We scrapped the carbon tax this morning—you voted against it—and we are scrapping the mining tax. We are cutting company tax, we are slashing red tape and we are making the employment services system more efficient.

To build a stronger economy, we also need to get the budget under control. That is why the government introduced a range of important structural changes in the May budget. What has happened? Labor of course is standing in the way. Labor is standing in the way of these very important reforms. To illustrate the hypocrisy of those opposite, you need look no further than the bill introduced by the Treasurer yesterday, a bill that included the budget savings announced by Labor before they were kicked out of office by the Australian people. Not only is Labor standing in the way of the savings measures introduced by the government; they are also blocking their own savings measures. We have a Labor Party that does not even agree with itself, so confused is the Australian Labor Party. Labor says they support job creation, but everything they did in government made it difficult for Australian businesses to grow and employ people. On their watch unemployment increased by more than 200,000. On their watch youth unemployment increased by 55,000. On their watch the rate of youth unemployment increased by almost three per cent.

Labor left Australia on a path to $667 billion in debt and left us with $123 billion in cumulative deficits. After being thrown out by the Australian people you would think members opposite would allow the government to get on with the job it was elected to do. Instead, Labor is standing in the way of the very reforms that will free up Australian business to grow, to employ people and to create the opportunities that are so much needed around the country.

Labor liked to claim that they support mutual obligation and clear rules for job seekers, but their actions suggest otherwise. In a media release on 13 June 2014, the member for Gorton said:

In return for receiving support, of course young people should complete certain duties and look for work.

But Labor is opposing this bill, which would reinforce the importance of mutual obligation. This is clearly another backflip by Labor.

The coalition government is not afraid of providing strong deterrence so that more job seekers will do the right thing first time around. This bill will ensure that the existing penalties for serious failures are applied more rigorously, in keeping with taxpayer expectations. Regrettably, those on the other side of the chamber are happy to let the minority of job seekers continue to rort the system. The coalition government stands firm in our expectation that people in receipt of income support are asked to undertake certain reasonable activities in return for that support, and that, where they do not, appropriate penalties should be applied.

This bill will only affect job seekers who refuse a suitable job without a reasonable excuse or are persistently and wilfully noncompliant. Safeguards will remain in place to ensure that where a person has a reasonable excuse, or a particular vulnerability, such as a medical condition, these factors are appropriately considered before the penalty is applied. These amendments will help restore the integrity of our social security system so that it is fair and sustainable. I commend the bill to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The question is that the bill be now read a second time.