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

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I move:

That this bill be now read a second time.

Today I introduce the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015.

This bill will create a simpler and more effective compliance framework to ensure that job seekers are meeting their mutual obligation requirements at every point throughout the job seeking process.

The bill builds on the successful reforms made last year by the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014. That bill applied the 'no show no pay' principle to provide a stronger incentive for job seekers to attend their appointments with their employment service providers.

These reforms have proven highly effective in ensuring job seekers are meeting their mutual obligation requirements. For instance, in 2013-14—before the changes were introduced—only 65 per cent of job seekers who missed an initial appointment actually turned up for their second rescheduled appointment. By comparison, in June 2015 over 90 per cent of job seekers are now attending these rescheduled appointments.

This is a very positive outcome for both job seekers and employment service providers.

It means more job seekers are doing the right thing and taking advantage of the help on offer and receiving their income support as intended.

It also means less red tape and costs for providers. Instead of having to spend time trying to contact the job seeker—and then more time filling in forms to report the noncompliance and book rescheduled appointments—providers can use their time to actually help job seekers with practical tasks like looking for work.

The changes introduced last year have also had another positive impact on job seeker behaviour.

We now see that job seekers who have missed an appointment are re-engaging more quickly with their provider. There has been a reduction in the length of payment suspensions by 40 per cent. Between September 2014 and March 2015 the average payment suspension duration fell from 5.2 to 3.1 business days.

The faster engagement is good news for both job seekers and providers.

The no show no pay changes introduced last year work because they do two things.

Firstly, in the event of non-compliance they allow a person's income support payment to be immediately suspended until the person actually does what is asked of them, such as attend an appointment. This provides a highly effective prompt for people to reconnect quickly with their provider.

And secondly, the changes provide a stronger and more immediate link for the job seeker between the non-compliant action and any financial penalties.

Given the very positive impact these changes have had on job seeker behaviour to date, the government is seeking to apply the same principles to other mutual obligation requirements.

It has long been a feature of our social security system that unemployed people in receipt of certain income support payments—such as Newstart allowance—are asked to do certain activities in return for that taxpayer funded benefit.

One of the first things job seekers are required to do is to enter into a job plan.

A job plan—which is referred to as an employment pathway plan in the legislation—lists the activities that a job seeker must do in return for their income support such as looking for work, attending appointments and participating in activities like training or Work for the Dole.

The job plan must take into account the job seeker's individual circumstances and their ability to comply with its requirements.

Unfortunately, some job seekers are failing to meet this fundamental requirement by refusing to enter into a job plan. These job seekers are essentially saying to the taxpayer, 'I will take your money but don't expect anything in return from me.'

No worker would be able to demand that of an employer—so why should a job seeker be able to demand that of the taxpayer?

This behaviour flies in the face of the principle of mutual obligation—which is a principle that has long enjoyed bipartisan support in this place. As a matter of principle, the same standards of behaviour that are expected of employees in the workplace should be expected of job seekers in receipt of taxpayer funded benefits such as income support.

At present, there are no financial consequences for an initial refusal to enter into a job plan.

The bill will reinforce the importance of the job plan by introducing a payment suspension that will apply until the job seeker accepts their plan. If the person does not have a good reason for refusing to enter into a job plan they may incur a financial penalty each day until they accept their plan.

As we have seen with the no show no pay changes introduced last year, payment suspension at the point of non-compliance sends an effective early signal to the job seeker that something is not right.

It allows the job seeker to quickly respond and rectify the situation through positive action.

And the application of possible financial penalties for those people who do not have a reasonable excuse for their failure helps to maintain public confidence and trust in our social security system.

The existing current safeguards in the system will ensure that no-one is penalised for refusing to enter a job plan if they have a genuine excuse for their failure to comply or it is unreasonable in terms of what is required within the plan.

After a job plan is agreed, as well as attending regular appointments with their employment services provider, job seekers are often required to attend appointments with organisations such as training providers or a Work for the Dole host organisation.

The services provided at these appointments are funded by the taxpayers to help job seekers improve their prospects of moving from welfare into paid work.

Unfortunately, some job seekers are treating these service providers with contempt by not behaving appropriately at relevant appointments. This would not be acceptable behaviour in the workplace. An employee who misbehaves at work and fails to participate would not be paid by their employer.

So why should a job seeker who misbehaves and fails to participate at an appointment receive a taxpayer funded income support payment for their actions?

This bill provides that if a job seeker acts in an inappropriate manner during an appointment—such that the purpose of the appointment is not achieved—a job seeker's participation payment may not be payable until the job seeker attends a new appointment and participates appropriately.

In addition, if the job seeker does not have a reasonable excuse for acting in an inappropriate manner during the appointment, a penalty amount would be able to be deducted from the job seeker's participation payment.

Again, these changes mirror the successful no show no pay principles introduced last year and would bring the treatment of inappropriate behaviour at an appointment in line with the existing treatment of inappropriate behaviour at an activity.

As mentioned, job seekers are required to attend appointments with organisations other than their employment service provider such as training providers or Work for the Dole host organisations. These missed appointments cost these organisations time and money. It therefore makes sense to apply the same successful process used for employment provider appointments for all appointment types.

Accordingly, as a matter of practice, from 1 July 2016 job seekers who deliberately miss appointments with specialist service providers without good reason may also incur a financial penalty for each day until they re-engage with their employment service provider.

This will create a stronger incentive for job seekers to attend these appointments and ensure job seekers are getting the support that they need.

In addition to attendance at appointments, it has been a longstanding feature of our social security system that job seekers are asked to participate in certain activities—like training or Work for the Dole. Currently, it can take up to five weeks for a financial penalty to be applied after a job seeker misses an activity or job interview. This is too long and makes the penalty less effective.

This bill will remedy this by providing that job seekers who do not attend activities—and do not have a reasonable excuse for their failure to attend—will have their penalties deducted from their next fortnightly payment.

Again, this change applies the same principles as in the bill last year to establish a more immediate link between a non-compliant action and its financial consequences.

Looking for work is the most important part of a job seeker's mutual obligation requirements, and gives the job seeker the best chance of getting off income support.

Despite this, job seekers who currently do not make an adequate effort to look for work rarely face penalties because the current system is too slow and ineffective. Currently, it takes months of inadequate job search efforts before a job seeker faces any real payment consequence.

This bill will change that process so that job seekers who do not undertake adequate job search efforts without good reason will have their payment immediately suspended until they demonstrate adequate job search efforts. The longer the job seeker delays completing their job search, the longer their payment is delayed, whereas meeting the requirement will result in immediate and full back payment.

In addition to mutual obligation requirements outlined so far, it is a fundamental requirement of our social security system that job seekers must accept the offer of a suitable job when it is made.

It is an important principle that a person in receipt of benefits—and receiving help through employment services—has an absolute obligation to accept suitable work when it is available.

This principle reflects the fact that Australia's income support system is there as a safety net for people who genuinely cannot find a job, as opposed to an option for those who simply refuse to work.

There is a justifiable concern in the community that some people in receipt of benefits are able to refuse a suitable job with impunity.

Under the current compliance arrangements an eight-week non-payment penalty can be applied to job seekers who refuse work without good reason, or who fail to start a job as planned. Unfortunately, amendments introduced by the previous government mean that job seekers can have this penalty completely waived just by agreeing to undertake some extra activity.

The data indicates that job seekers are increasingly taking advantage of the waiver provisions to remain on income support rather than accepting a suitable job. In 2009-10, when the waiver provisions were introduced, only 45 per cent of penalties for refusing a suitable job were waived and 55 per cent were served by the job seeker. By comparison, in 2013-14, 78 per cent of penalties for refusing a suitable job were waived.

It is clear that these penalties no longer provide an adequate deterrent to refusing work, because job seekers know they are able to return to payment with virtually no consequences.

Remember—these people are turning down jobs that they are capable of doing—not jobs beyond their skill set or jobs which would pose a risk to their health and safety.

The reasons given by job seekers for these refusals are not acceptable. They include reasons such as that the job interfered with their holiday plans, or that the work was beneath them, or that it would take too much effort, or that they would rather stay on unemployment benefits. It is unacceptable that job seekers who are clearly able to work can turn down a genuine work offer without experiencing an actual penalty.

As the examples I have just given show, some job seekers are unfortunately only too ready to exploit these provisions.

The bill will remove the waivers so that all job seekers who refuse an offer of suitable work without an acceptable excuse will serve an eight-week non-payment period. This change will ensure that job seekers face immediate and real consequences for turning down the offer of work.

This is what taxpayers expect. They expect the government to maintain the integrity of the social security system and ensure it remains as a safety net for people in genuine need. It is not fair to ask those people who make the effort to go to work and pay their taxes to support those who could clearly work but prefer to collect welfare instead.

Often when there are changes proposed to the job seeker compliance system there is a justifiable concern about the potential impact on certain groups of job seekers.

I would like to assure the House that this bill will retain all current safeguards that are designed to ensure that vulnerable job seekers do not incur any financial penalties inappropriately.

Job seekers with identified vulnerabilities will continue to be flagged on the IT systems used by the Department of Human Services and employment service providers. And as is now the case, job seekers who give prior notice of a reasonable excuse will not have the payment suspension or penalties applied. This means the penalties will not impact on those whose failure to meet a requirement is beyond their control—for instance, where they have taken ill or had an unexpected caring commitment and, where reasonable, gave prior notice of this.

In addition, employment service providers will still have the discretion not to report a failure to Human Services but to use other servicing strategies to re-engage job seekers instead. All decisions involving financial penalties will continue to be made by the Department of Human Services, and if a job seeker is not happy with the outcome they have the option of appealing the decision.

The Australian government is committed to building a more efficient and effective employment services system that helps more job seekers into work.

I note there has been complaint from some quarters about the funding provided by the government for the changes in this bill. Let me put this in context: the government is spending $6.8 billion over four years to help job seekers into work through jobactive.

The $24.5 million provided for the measures in this bill is a very small but important investment to maintain the overall integrity of the social security and employment services systems.

It is very important to remember that noncompliance by job seekers does come at a cost. It costs the provider organisations in terms of red tape and down time, it costs the job seeker in terms of lost opportunities and benefits and it costs the taxpayer in terms of the overall welfare bill.

The Australian government is committed to ensuring the integrity of our income support system so that it is affordable and sustainable over the long term.

In order to do this we need a stronger, more streamlined job seeker compliance framework that includes appropriate incentives and sanctions for job seekers who fail to meet their mutual obligation requirements.

This bill builds on the successful changes made in 2014-15 by further strengthening the compliance framework to drive a more widespread change in job seeker behaviour.

I acknowledge the support of those opposite for these reforms last year. These changes were built on their reforms of 2011, which we also supported at that time.

I look forward to further support from those opposite to complete this process to create a more effective job seeker compliance framework, and I commend the bill to the House.

Debate adjourned.