Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

Just before the member for Groom leaves, I will just add my remarks to yours, Mr Deputy Speaker. I want to thank him for his incredibly good nature during his time in the parliament. I cannot comment on why he is going now. Ian, I just really wanted to say: all the very best for the future. I think you have made, in your own terms, a contribution that many of us here would be very proud of.

I am speaking on the Social Services Legislation Amendment (Interest Charge) Bill 2016. This bill seeks to apply a new interest charge to former recipients of social security, family assistance, paid parental leave and student assistance who have outstanding debts and who have failed to enter into an acceptable repayment plan.

Just a little bit of history about the application of interest charges on debts in recent decades: under the current arrangements, an interest charge may be applied of up to 20 per cent, but up to 2005 a three per cent interest charge was applied. Since 2005 no interest has been applied to these debts. According to the government, the initial rate of 20 per cent was considered too high and risked plunging people into financial hardship. The three per cent rate was considered too low and did not provide much of an incentive for people to repay their debts. In short, the administrative costs of recovering the debt outweighed the recovery of debt, and the interest charge scheme has not applied since 2005.

If this legislation is passed then an interest charge will be applied to a debt if, by the 28th day after receiving the relevant notice, the debt has not been paid in full or the person has not entered into a repayment arrangement. The new rate of the proposed interest charge, approximately nine per cent, will be based on the 90-day bank accepted bill rate of approximately two per cent plus an additional seven per cent. This charge will be applied across the different payment types. There will be exemptions for debtors who are currently in receipt of relevant payments, including social security payments and family payments, by instalment. This change is expected to commence on 1 July 2016.

The bill is expected to provide savings to the fiscal balance of $24.4 million over four years, with an underlying cash balance saving of $416½ million. As with its companion bill on enhanced welfare payment integrity, this bill has been referred to a Senate committee that will report on 20 June 2016. Labor will not be opposing the bill in the House. We will reserve coming to a final position until we see the findings of the Senate committee inquiry. Just like with the companion bill, we take the view that these changes need to be examined carefully. We know how complex some aspects of the social security system are. We know that with any change there are risks of unintended consequences. We need to guard against such outcomes. We need to carefully consider how these changes may affect some of the most disadvantaged people across the country. So Labor believe the Senate should be given the time to properly scrutinise these bills. We will reserve coming to a final position until we have seen the recommendations of the Senate inquiry.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Social Service Legislation Amendment (Interest Charge) Bill 2016. The measures contained in this bill seek to introduce a new annual interest charge for people with outstanding welfare debts who have not complied with requests to establish an acceptable repayment plan. In this instance, this charge will be applied to former recipients of social security payments, family assistance payments, including for child care, and student assistance payments.

Furthermore, the bill introduces a grace period of 28 days after a notice is given. The grace period will give people the opportunity to avoid paying the interest charge altogether, either if they repay their debt in full within 28 days of being notified or by establishing a repayment plan. Following the 28 days, if no debt repayment plan has been arranged, the interest charge will be applied to the full balance of the debt. This is an important safety measure and will allow us to give people the opportunity to have more time to assess their financial situation and make repayments.

The coalition have made this change because we believe in a sustainable welfare system. We believe in a strong and prosperous economy. We believe in fairness and we believe that the best form of welfare is a job. This new policy incentivises people to pay down their outstanding debts quickly so that we can reinvest that money into those people who desperately need welfare support from the government.

The principle of mutual obligation is at the heart of our welfare system in Australia. In the context of welfare assistance in Australia, this principle of mutual obligation is based on the concept that welfare assistance provided to the unemployed of working age should involve some return responsibilities for the recipient. To date in Australia this has meant unemployed job seekers on Newstart and youth allowance should be actively seeking work, constantly striving to improve their competitiveness in the labour market and giving something back to the community that supports them. This policy supports that general approach to welfare in this country.

Debt only arises where a person receives a payment to which they are not entitled. The main reasons for overpayment, which this bill targets, are the following. Firstly is welfare recipients who have not lodged a tax return. Indeed, until their tax return is lodged, the entire family tax benefit payment is raised as debt. This cohort represents 20 per cent of debts and 39 per cent of the value of total debt. Secondly is former recipients who received an advance payment and, before it could be recovered through withholdings, ceased to be a payment recipient. This cohort represents 15 per cent of debts and 1.5 per cent of the value of the total debt.

Thirdly is undeclared earnings and wrongly declared earnings—former recipients who have, either accidentally or deliberately, failed to declare earnings or accurately declare earnings. This cohort represents 16 per cent of debts and 20 per cent of the total debt value. Fourthly is reconciliation. Family tax benefit and childcare assistance payments through the year are based on a recipient's income estimate, which is then reconciled at the end of a financial year. Debts are raised when a recipient has been overpaid due to underestimating their income. This is not a fraudulent activity in the main and is often the result of the fact that some families have inconsistent income, fringe benefits and other sources of tax offsets, including negative gearing, that can only be finally determined at the end of financial year. This cohort represents 13 per cent of debts and 10 per cent of the debt value.

Understandably, this measure will put pressure on and incentivise debtors to take responsibility for paying their debts in a timely manner where they have the financial capacity to do so. Currently, former recipients have no incentive to enter into a repayment arrangement as they are no longer dependent on the social security system and may actively avoid repayment. This coalition government is committed to a stronger, fairer and more sustainable welfare system. This measure is a step in the right direction. It is time that those people who have rorted the system pay back their fair share so that the welfare payments can go into the pockets of those people who need them most.

At the end of June 2015, there were over one million debts, with a total value of just over $3 billion. We cannot afford to support people who freeload off our government, and it is disturbing that individuals have, in some cases, deliberately cheated taxpayers out of hundreds of thousands of dollars and have done virtually nothing to recover the debt or to pay down the debt. But even worse than that is that there are people out there who do need welfare who are missing out as a result of this fraudulent activity. We all know there is no such thing as free money. When people avoid repaying debts the government incurs unnecessary fees, such as the administrative costs associated with the debt recovery process. Ultimately, at the heart of this, there is also the need to recover the state of our public finances. Currently the Australian government debt to GDP sits at 35 per cent, and we need to pay that down so that future generations of Australians are not left with a debt to pay down that would no doubt affect their standard of living and their economic freedom into the future.

There are many things that we could reinvest the money from these debts into, once we have recovered them. I am going to talk a bit about my electorate. Job creation in Canning is the first thing. With my electorate's population growing exponentially—between 2004 and 2014 approximately 40,000 people moved into the seat of Canning—we need to meet this rapid growth by providing jobs to sustain the community. Unemployment is one of the biggest challenges for the Peel region, with overall unemployment in Mandurah, which sits at the heart of Canning, at 8.6 per cent in December last year. Youth unemployment sits just a little over 20 per cent. The federal government has already initiated a number of successful Green Army programs across Canning, including the Harvey River restoration team, the Len Howard Conservation Park, Peel Inlet reserves, and the Birriga Brook and Darling Downs Equestrian Estate. This is a great start to what will become a fruitful, prosperous and self-sufficient Canning, but there is more that can be done.

The Peel Development Commission has identified a number of opportunities where federal government money, if invested, could actually create a lot of jobs for the local community. Regarding the Nambeelup business park, the innovation vision that this government has been arguing for the last six months or so will be at its heart. I have a lot of agriculture, beef, fruit growing and other agricultural businesses in my electorate. Nambeelup park is a location where we can bring them all together, in the heart of Canning, and make the most of the opportunities afforded by the South Korean, Japanese and Chinese free trade agreements.

There is also the Murray equestrian centre, which would basically position Peel, in Canning, as the leader in equine industry in the Indian Ocean rim. In future bushfires, it would also provide a housing facility for the cattle that need to be evacuated in those circumstances. In January we saw the fires in Waroona and the Harvey region, and a lot of livestock needed to be evacuated. The Murray equestrian centre, if we invest in it, would be a good location to evacuate livestock to.

With infrastructure, the continued population growth will increase our demand for facilities. We need more roads, and I think of the Tonkin Highway extension south, which will open up opportunities into Canning. There is also rail. There is a lot of scope for further rail into Canning, which would open up economic and social mobility for a lot of the young people in Canning—I am thinking specifically of a rail line between Mandurah and Pinjarra. It would be great if we could see that sometime in the next decade or so.

Ultimately, this policy is not about hurting people; it is about recovering debt and reinvesting that elsewhere—into either the welfare system or the economy itself. The proposed interest rate charge of about nine per cent will replace the current rate of 20 per cent per year. This is a generous reduction, which the government hopes will ease the burden of repayments for debtors and people currently experiencing financial hardship. It is a compassionate way to make savings, and it does allow for flexibility in personal circumstances. This charge, along with the two other measures contained in the social services bill, provides a comprehensive government strategy that strengthens our ability to rightfully recover debts from former social welfare and family payment recipients. The first measure will abolish the current six-year statute of limitations on the recovery of social welfare debt that would otherwise be non-recoverable. The second measure is the departure prohibition order, which will prevent people from leaving the country in an attempt to avoid making repayments to their welfare debt. This is a progressive initiative from the coalition government, which will bring us one step closer to repairing our budget so that we can continue to build a strong and prosperous Australia in a post-mining economic environment. This will not be possible if we do not keep debtors accountable and reliable in making their repayments in a timely manner.

This bill represents a significant step forward for the constituents of Canning. There are currently 111,000 welfare payments made in Canning, most of which go to age pensioners. To give you a breakdown of how the government is supporting people through our welfare system, I currently have close to 20,000 age pensioners receiving the pension; 3,700 receiving carer allowance; over 5,000 receiving the disability support pension; 22,400 receiving family tax benefits; just over 6,000 receiving Newstart allowance; and we have approximately 31,000 people with a pensioner concession card. This is all good welfare support, and this measure, intended to be implemented from July this year, will greatly benefit the pensioners, parents and students of Canning by ensuring financial assistance is only going to those who are doing the right thing and those who are in the most need of it.

I recognise that there are many people in Canning who rely on government support and welfare payments to support themselves and their families. I want to assure these people that I and my colleagues are working to ensure that their livelihoods will not be compromised because of a fragile welfare system. This bill ensures that we recover money and we reinvest it back into the welfare system. However, I note that there are a number of people who are exempt from this change and are not liable to pay an interest charge. They are people already receiving reductions from their payments in order to pay off their debts, and those with special individual circumstances deemed valid by the minister.

This bill gives me great confidence that the government is taking proactive steps towards a fair and, most importantly, sustainable welfare system for Australia. In a potentially economically austere environment, this is a very sensible, practical and prudent policy, and I commend the Minister for Social Services for initiating it. The measures contained in this bill are just one part of the Turnbull government's commitment to a strong and prosperous economy driven by jobs growth and innovation. With that, I commend the bill to the House.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

I do enjoy hearing contributions like that. The prospect fills my heart with joy that, if we have reform to this system, a coalition government would plough the savings back into social security. If only that were believable. I have constituents—20,000 or so—who, as a result of your family tax payment changes, will be getting less family tax benefit. There are people who were targeted by this government in terms of Newstart by withholding payments to them. A whole stack of people, as a result of the government's attacks on the payment system, are going to be worse off. Family tax benefit A and B still sit there. There is the notion advanced by the member for Canning that, in some way, the changes will be used to help people. I will wait to see whether that holds true in the test of time. Like the member for Canning, I share the view that, if you are not receiving a benefit that you are entitled to, you should have recovery initiated against you—absolutely. Let's not for a moment think that those opposite, if they tighten up the system, are going to plough that back into Centrelink payments. That is hardly possible, based on their track record.

The other point I will make—and I will expand on this further in my contribution to this debate—is that sometimes people are given a debt notice by Centrelink as result of an IT system that needs to be replaced and processes that operate in Centrelink that put an enormous amount of stress on people if they follow up a claim that they owe money to the government, when in fact it turns out to be in error. I will go through that and demonstrate in most vivid terms the impact on one particular constituent who was forced to go through an unbearable process. Regardless of your politics, you would say it is a completely unacceptable process to clear up problems with Centrelink payments as a result of processes and systems that the government has not addressed in the time that it has been in office. Mind you, I have been critical of my side of politics when we were in government, but I will get to that.

We have said that we do not intend to oppose the bill itself, but we will be reserving our position on it based on the outcomes of a Senate committee inquiry that is set to report back in June. A system like this, with the complexity that exists, will require a degree of investigation to determine whether the bill's intended effect can be expected to take effect. We understand, based on what the government has publicly declared, that the bill itself seeks to apply a new interest charge to former recipients of social security, family assistance, paid parental leave and student assistance who have outstanding debts and have failed to enter into an acceptable repayment plan. By way of background of the application of interest charges on debts in recent decades, under the current arrangements an interest charge may be applied of up to 20 per cent. Until 2005, a three per cent interest charge was applied, but since then no interest has been applied to the debts. According to the government, the initial rate of 20 per cent was considered too high and risked plunging people into financial hardship. The three per cent rate was considered too low by not providing enough incentive to repay, which is understandable. In short, the administrative costs were outweighing recovery. Clearly something had to give. We understand that is the motivation for this bill.

If the bill is passed, an interest charge will be applied to a debt if, by the 28th day after receiving a relevant notice, the debt has not been paid in full or the person has not entered into a repayment arrangement. The new rate of the proposed interest charge—approximately nine per cent—is going to be based on the 90-day bank accepted bill rate, which is about two per cent plus an additional seven per cent. This charge will be applied across the different payment types and there will be exemptions for debtors who are currently in receipt of relevant payments, including social security payments and family payments by instalment. This is expected to commence on 1 July this year. It should provide savings to the fiscal balance of roughly over $24 million over four years, with underlying cash balance savings of about $416 million. We will see, as I said before, whether that is redirected back into the portfolio, but I somehow think it will not be. As with the companion bill on enhanced welfare payment integrity, this has been referred for inquiry within the Senate and we will be reporting in a couple of months. We will examine those changes carefully.

In my opening remarks, I indicated to the member for Canning and the House that sometimes people are believed to be in debt as a result of system determinations that may or may not be accurate. There will be a degree of challenge to that process. This bill does not necessarily mean those processes will change, but we should be mindful of it. We believe that the Human Services portfolio has lurched from one disaster to another. We now have the third Minister for Human Services in six months. The new minister still has not released the details of a $484 million IT contract that was signed with IBM last week. The government cannot seriously expect us to accept that a one-page media release is enough to explain where half a billion dollars is being spent on the system. It is a five-year deal worth nearly half a billion dollars. The previous contract was $128 million. It would be interesting to hear the minister explain the reason for this massive jump. Will it reduce call waiting times for Centrelink? Will it speed up youth allowance processing times? Will it help prevent Australians being defrauded of Medicare rebates? These are all valid questions I would put to the House. But, in particular, if you are calling Centrelink to challenge something that you believe is in error with your payment and that may trigger a debt of the type this bill is seeking to address, what types of waiting times do you think are acceptable?

I have had constituents in my office expressing their concern at the length of time it has taken them to access help from Centrelink. I have said previously that the waiting times in Centrelink offices, the times that people are made to wait just to get an inquiry managed, is unacceptable. I do not believe I am Robinson Crusoe on this; I believe on either side of this chamber there are people who get complaints from constituents about accessing a face-to-face form of assistance to manage their concerns. One of my constituents from Hassall Grove recently came to my office. She told me she does not have access to the internet, so whenever she has an issue with her pension she has to make a call to Centrelink. She said she is often left waiting on the phone for hours—I am using that word advisedly—to speak to someone.

In one particular case, a constituent was trying to call Centrelink's carers line on behalf of her 93-year-old grandmother. I was told she had to call twice and finally got through on the third attempt and waited for—wait for this!—over three hours on the phone. She actually took a screen shot of her phone. I have it here. She waited for three hours, four minutes and four seconds for someone to get on the line to help her manage this request on behalf of her 93-year-old grandmother. It was just a simple request. What is concerning is the fact that this lady was calling for an elderly relative who, without this person's help, would have difficulty contacting Centrelink herself.

I understand that Centrelink, both under our former government and under the current government of the minister at the table, has gone through the process of trying to enable people with smartphones to access services. This is a good thing, but not everyone is going to be able to do that. There is a generational gap where people will not be able to access that and they will rely on others to help, and that is simply unacceptable. It is unacceptable that I have a constituent waiting for three hours for the management of a simple request. Other constituents have echoed similar stories of having trouble getting through to the call centres and, once they are successful, having a long wait ahead of them. For many people who use prepaid mobile services because they cannot afford a contract for a mobile phone, that waiting time means they cannot stay on hold and run down the amount of credit they have on their phones. Again, this is unacceptable.

If long waiting periods are being used as a technique to get people off the line, that is not acceptable, because the use of phones was supposed to get people out of Centrelink offices, get them on the phones and better manage those services. Clearly, something is not working. It is simply unacceptable that people would be forced to endure that type of waiting time. I will be interested in whether the new IT system will help manage and triage those types of complaints. But, on the face of it, given the contract has gone from just over $128 million to nearly half a billion dollars, there is something that is seriously amiss with the current system if it requires that kind of support, an increased amount, to fix that now.

We are told that there is a new organisation, which we have not previously criticised, the Digital Transformation Office, which the Prime Minister says will speed up the way in which services like this are managed. The DTO, the Digital Transformation Office, is based on the UK model, one of whose aims is that it will enable citizens to get a better service. This is what the Prime Minister told a group of people back in October when talking about how this would make the government more efficient and how, through an open data agenda, they looked to make services efficient. I note in a Financial Review interview the head of the DTO, Paul Shetler, said that what this is aiming to do is provide for simpler, clearer, faster and more humane services by the government and that they had effectively established a digital service standard. I would be interested to see whether their digital service standard will be able to weed out people who are sitting on a phone for three hours waiting for assistance from Centrelink. This is what the DTO is supposed to be doing.

Those people who think that the Digital Transformation Office may be applying a new approach to improving the way in which services are delivered, mainly on a digital platform, may think, 'Okay, they might reach some success.' Back in October they apparently gave themselves 20 weeks to demonstrate significant changes in some places to improve government services. I have a constituent who waited for three hours for service from Centrelink. I have long lines of constituents in my electorate waiting for help through Centrelink. What is one of the jobs of the DTO? Is it to aid in that? No. They are actually looking to help the ACT government restructure the way in which, for instance, they manage public patients through the appointment booking system in the territory's seven community health services.

I have no problem with their working with other levels of government to improve service. But you have pressing needs at a federal level to address the types of things I have put on the table here today which I think are unacceptable and which I think those opposite would think are unacceptable too, because their constituents cop it. Why aren't we prioritising the work of the DTO to ensure that you make meaningful inroads into the quality of service being experienced by people in electorates like mine? Why isn't this being done? Yet, by all accounts, we have more money being poured into an IT system to fix that. You clearly have got a failure to provide service through the mobile phone system, and yet the DTO is working on the problems of other levels of government. How is that agile or nimble?

How is the DTO helping the citizens the Prime Minister says he wants to help? What is the DTO doing?

So I would certainly be calling on the government to (1) give us details about this new contract for the IT system there, (2) tell us whether or not the DTO has actually been appointed to aid in the implementation of this new system and oversee it, and (3) tell us what the DTO is doing to help people in Centrelink offices who are being forced to wait for long periods of time on their feet for some sort of human contact and, if they use a phone, are being told they have to wait up to three hours to get assistance. Let's see some of that applied because, frankly, if you are ringing up to deal with a debt, which is at the heart of this bill, and you are waiting for that period of time, that is unacceptable and should not be tolerated by anyone in this chamber. (Time expired)

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

It is a great pleasure to rise this afternoon to speak on the Social Services Legislation Amendment (Interest Charge) Bill 2016. When considering the specific details of this bill, you really have to start at the point of considering the broader background, the financial context that we inherited from the Labor government in 2013, which requires us to make some of these hard and tough decisions. With that, I was pleased to see it announced by the Australian Bureau of Statistics today that our unemployment rate has tumbled down to 5.8 per cent. That is very welcome news. It is a sign that the policies of this coalition government are working.

Put that in the context of what we inherited. In the full calendar year to the end of 2014, when Labor policies dominated the employment scene, the total employment growth was only 7,200 people. It was actually worse than that, because what that number of 7,200 extra jobs in the economy did not show is there was a big decrease in full-time jobs and a shift to part-time jobs. So, when we inherited the unemployment situation, employment growth had simply ground to a screaming halt under the policies of the Labor government. It was actually going backwards.

It is pleasing to see how well we have turned that around in such a short period of time. In the 12 months since January of last year, there were 300,000 new jobs created in this economy. Do the comparison: in Labor's last year of government there were a mere 7,200; in the last calendar year there were 300,000, as opposed to a mere 7,000.

Why did that happen? Because the coalition government has introduced policies that have given the job creators of this country the confidence to have a go—the small business entrepreneurs who will go out and risk their capital to test a new idea in the marketplace. That is why we are seeing job creation and that is why, time after time, we see failure from the Labor Party, because they mistakenly believe it is government that creates jobs. That is why we see that Labor has such an appalling record on job creation. Every time they think that the government creates a job, they tax the private sector and make it harder for them to invest and create jobs.

Also on those figures, not only did the unemployment rate tumble down to 5.8 per cent but we saw a big shift over the last month from part-time jobs to full-time jobs. We saw the number of part-time jobs fall by 15,600, but full-time jobs increased by 15,900. So although the actual job growth for those 12 months was nothing spectacular by itself—and the numbers bounce around—what was spectacular was the transfer of people from part-time employment to full-time employment. On the ABS numbers, there are over 15,000 extra people previously in part-time employment who are now in full-time employment, under the policies of this coalition government that have allowed our entrepreneurs to get out there and create new jobs.

We have seen how the Labor Party had employment growth grinding to a halt. That was despite their record deficit spending. Because they thought they could borrow and spend their way out—those old, failed Keynesian policies that so many in the Labor Party think continue to work—they ran up debt after debt after debt. Because of what we as the coalition government inherited, every single year we have to find $13 billion just to pay the interest on the debt that they created. That is over $1 billion a month. It is something like $35 million every single day in this country that we cannot put to good use—that we cannot use for social welfare, that we cannot use to improve our health system, that we cannot use for carers and kids with disabilities, that we cannot pump into our education system. It is $13 billion a year that we are hamstrung, just paying the interest on Labor's debt. That is the lead that we carry in our saddlebags because of the six years of waste and reckless spending and the incompetence of the previous Labor government.

Compare that to what they inherited. They inherited a budget in surplus, money in the bank. They were actually receiving interest. Imagine it as a handicap race. We as the coalition have lead in our saddlebags because we have to pay that debt, but when the Labor Party were in government they had interest coming in from the money that the Howard government had saved and put away to help with their expenses. Yet, despite that, you have seen how we have turned the unemployment growth around in this country. You have seen how new jobs are being created. We have seen the GDP numbers in this country at three per cent GDP growth, which is higher than any of the G7 nations in the world.

With the policies of this coalition government—despite the lead in our saddlebag and despite the obstruction of the Senate across the hall—we are getting on with the job of seeing jobs created and growth in this economy. However, there is still a lot more work to do. We are still borrowing far too much money. We are still borrowing, in this nation, close to $100 million every single day. And what does that mean? It means that future generations of Australians will have to pay higher taxes and will have less government services because they will be burdened with that added interest payment on the money that we are still borrowing. Therefore, we have to do everything we can to wind back excessive government spending.

As Paul Keating said, 'We need to look at every line of expenditure,' because we cannot, in this nation, continue to borrow money from our children and our grandchildren. There are a lot of kids up there in the gallery today watching on. They will be the generation who, when they start work, will have to face higher taxes because of the money the governments are borrowing today and because we are spending more than we are raising. That is an unfair burden on them. That is why measures like this have to be undertaken.

To give you some idea of the context of the problem: at the end of June 2015, there were over one million social security debts totalling a value of $3 billion. These debts have increased by 10 per cent since June 2014. Of that total debt base, approximately $870 million is held by around 270 former recipients who do not make sufficient or regular payments. It is only fair that if someone has received an overpayment from the Commonwealth then there is some interest charge component to it. If there is no interest charge then what is the incentive for someone to enter into any repayment arrangement? If they are no longer dependent on the social security system then they can just let that debt sit there without an interest charge. It is actually decreasing in real terms as inflation goes up. We need to make sure that the interest charge is fair and that it does not put those people at an unfair disadvantage from what is, in effect, an interest-free loan.

Debtors will receive a letter seeking payment of the debt in full with no interest charge applied. Where the debtor cannot pay the debt in full, the letter will encourage the debtor to make contact with Centrelink within 28 days to negotiate an acceptable repayment arrangement in accordance with acceptable repayment guidelines. When a customer is unable to meet the minimum requirements then a financial assessment is undertaken. If no arrangement is made within 28 days then the interest charge will be applied to the full balance of the debt, accruing on a daily basis until an acceptable debt repayment arrangement has been entered into.

This measure, along with two other measures contained within the Social Services Legislation Amendment (Enhanced Welfare Payment Integrity) Bill 2016, provides a suite of measures that will strengthen the government's ability to recover debts from former social welfare and family payment recipients. We need to make sure that the interest charge that is being applied is fair. We need to make sure that the current seven per cent above the standard bank rate is kept. At times, in percentage terms, it could be deemed slightly excessive. That is something we need keep on eye on to ensure that it does not become an interest-free loan and it does not become a benefit to someone, but that it is an adequate incentive for someone to repay.

This is going to be a hard measure for some people. At times, this government has to do some tough things. It really gets under my skin when I hear members of the Labor Party continually whining and whinging about government cuts. Unless they are going to come up with some alternative way of bringing our budget back to surplus, or back to balance, then we have the long, hard road of winding back and paying back that money that we have borrowed.

One thing that we always need to remember is that the borrowings that we are undertaking are raised through the sale of government bonds. More than half of those government bonds are sold to foreigners. I am sure a lot of us have concerns in this nation about foreign companies buying up Australian land, especially agricultural land. And we are rightfully concerned. But what our real concern should be is the money that we are borrowing from overseas to finance government spending. Where that $100 million is borrowed every day, more than 50 per cent of it is borrowed from overseas. So, we are actually mortgaging parts of this country to borrow that money. Of that $13 billion in interest payments—let us put it at $1 billion a month in interest payments—about $600 million flows out of this country because the money that we have borrowed has been borrowed from overseas. This cannot continue. That is why measures like this, although tough, are important. We owe it to the future generations—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. Are there any statements from honourable members?