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

I move:

That this bill be now read a second time.

This bill introduces the legislative amendments required for the 2015-16 Mid-Year Economic and Fiscal Outlook Enhanced Welfare Payment Integrity—expand debt recovery measure.

This measure contains two elements that intend to enact legislative amendments which strengthen our capacity to recover debt.

Firstly, the bill contains amendments to allow for the use of departure prohibition orders to prevent targeted social welfare debtors from leaving the country (as currently the system applies to child support debtors).

Secondly, the bill also removes the current six-year limitation on the recovery of social welfare debt that would otherwise be non-recoverable, aligning the treatment of social welfare debt with the recovery arrangements in place for other Commonwealth agencies.

At the end of June 2015, there were over one million debts with a value of $3.04 billion. These debts have, sadly, increased by almost 10 per cent in value since June 2014.

Of this debt base, approximately $870 million worth of debt is held by around 270,000 former recipients of welfare who do not make sufficient or regular repayments.

Departure prohibition orders

The government considers it is not appropriate for an individual to travel overseas, when they have the means to fund that travel but have not set up any appropriate arrangement to repay their outstanding debt to the Commonwealth taxpayer.

This new legislation proposes that the secretary may make a departure prohibition order prohibiting a person from departing Australia for a foreign country if the person has one or more debts to the Commonwealth and there are no arrangements satisfactory to the secretary for one or more of the debts to be wholly repaid. This is consistent with the treatment of people who have child support debts.

The introduction of departure prohibition orders for people with child support debts commenced in 2001 to prevent a child support payer who had persistently failed to meet his or her child support commitments from leaving the country without either discharging all debts or making satisfactory arrangements to discharge them. The departure prohibition order system for child support mirrored the pre-existing system in place under the Taxation Administration Act 1953.

The effectiveness of departure prohibition orders in recovery of outstanding child support debts has been undeniable. Between 2005 and 2015 4,551 new departure prohibition orders were issued, resulting in the collection of $52 million in outstanding child support payments.

Notwithstanding the success of departure prohibition orders in the recovery of debts in other policy areas, the government is of course mindful of reasons why people may be required to travel overseas, and procedures will be put in place to allow for people subject to a departure prohibition order to travel overseas in specified circumstances.

Departure authorisation certificates may also be granted on humanitarian grounds or where the person's travel may be in Australia's best interests.

Limitation of recovery

The government also considers that, where there is a debt owed by a person to the Commonwealth, these debts should be recovered wherever possible, and should not be bound by arbitrary timelines.

The government is therefore introducing an amendment to allow for the pursuit and recovery of debts, similar to the recovery of taxation debts. This will increase the Department of Human Services's capacity to recover outstanding debts.

This measure requires us to remove the current limitation on the recovery of debt where recovery action has not been undertaken in the preceding six years.

Social welfare debtors generally have more than one debt. Given the resources social welfare recipients have to repay debts, debts are generally paid off one at a time over an extended period. It is possible in these circumstances for some of an individual's debts to reach the six-year limitation before recovery can be actioned.

As at the end of 2014-15 there were:

Individual debt to the Commonwealth forms an increasing assets base that poses significant financial costs on the community. These are financial resources that the government can use to support other priorities for the Australian community.

The Enhanced Welfare Payment Integrity—expand debt recovery measure will also better enable the Department of Human Services to recover debts from current and ex-recipients of social security and family assistance payments.

The measures provide additional funds to expand Centrelink's debt recovery operations and capacity to utilise the full extent of powers contained within existing legislation for pursuing the recovery of debts. These include:

The government will continue to focus on protecting the integrity of the welfare system.

The Enhanced Welfare Payment Integrity—expand debt recovery measure is estimated to achieve net underlying cash savings of $157.8 million over the forward estimates.

I am sure that these sensible measures will resonate with the taxpayers of Australia, who know that in everyday life they need to manage their household budget, including the repayment of civil debts.

This bill, in conjunction with the Social Services Legislation Amendment (Interest Charge) Bill 2016, provides a suite of measures that strengthens the government's ability to recover debts from former social welfare and family payment recipients.

I commend the bill to the House.

Debate adjourned.