Ann Sudmalis (Gilmore, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Social Services. Will the minister update the House on reforms recently announced to achieve fairness and sustainability in Australia's welfare system? Is the minister aware of any alternative approaches?

Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I thank the member for Gilmore for her question and recognise her ongoing interest in the sustainability of the welfare system. The member for Gilmore recognises that making savings inside the welfare system is the way we pay for new expenditure on items like the NDIS and how we manage to work our way back to surplus. Perhaps a useful place to start in answering the member's question is to note a really quite remarkable fact that I am not certain most Australians would be aware of, and that is that as a government we inherited a situation in which there is, unhappily, a very substantial debt owed to the Commonwealth from inside the welfare system.

At the end of June 2015, there were over one million individual debts, with a collective value of $3.04 billion, owed to the taxpayers of Australia. And, I might say, that figure of in excess of $3 billion does not take into account debts that we have yet to identify. The Minister for Human Services is at the moment going through a very stringent process of identifying previously unknown debts that are owed to the taxpayer. Of course, that debt exists in the context of the fact that, as Mr Keating said recently, we cannot pretend that we can go on spending as though nothing has happened.

As part of the midyear economic review, we announced $2 billion worth of savings initiatives over four years that revolve around recouping this debt in a fair and reasonable way. As I noted, some of those sit within the responsibility of the Minister for Human Services, and they relate to data matching—the data that is given to Centrelink with the data about pay-as-you-go income that is provided to the ATO. Indeed, we are now going to extend that program to information given to the ATO about non-pay-as-you-go income. That will recoup very substantial savings for the taxpayer.

There is also a very important decision to apply to a general interest charge to ex-recipients of social security. These are individuals who were at one time inside the welfare system and have gone out and become employed but have taken with them a debt. At the moment, whilst we have compulsory mechanisms to claw back debt from people who are inside the social security system, these debts for ex-recipients have largely gone unpaid. They represent $870 million held by 270,000 ex-recipients. We are going to apply an interest charge, which will be applied only to those debtors, if they do not enter into time-to-pay arrangements. We anticipate that over four years that will recoup $461 million for the taxpayer. We think this is fair, because if you are inside the welfare system, there are compulsory mechanisms to exact payment; we think it is fair because you do not have to pay the interest if you enter into a time-to-pay arrangement; and we think it is fair because it is money that should not have been paid in the first place.

The catch is that it will require legislation. We have heard how the Labor Party voted against a bill that would recoup moneys owed by multinationals. The question is: will they vote in favour of a bill to recoup this money owed to the taxpayer? (Time expired)