Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Hansard source

I rise to speak on the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Vocational Rehabilitation Services) Bill 2006 on behalf of the Labor Party. This bill is yet another stage in the Howard government’s welfare changes, and the measures in the bill will have a range of impacts. Some measures fix old mistakes and some measures create new mistakes, but one measure that is completely unjustifiable and that has no merit is that which, while fraudulently claiming to be a welfare to work measure, restricts access to the pensioner education supplement.

This is the Howard government’s approach to moving people from welfare to work: to put people on lower payments, stop them from getting the training they need and then tell them to get a job—and then take back most of what they earn. This Howard government has never explained how reducing access to education and training helps jobless Australians get a job.

Let me be very clear about Labor’s approach to welfare reform. We support real welfare reform that helps people move from welfare to work. We are, by definition, a party of work and the party of working Australians. We believe work is in the best interests of the individual and the best interests of the community. Communities are healthier, more cohesive and more prosperous when our members are gainfully employed and socially engaged. Individuals have a greater sense of self-esteem if they are contributing to their community. Work is one of those essential things, like family and friends, which give meaning to our lives.

So Labor would have been very pleased to support an approach to welfare reform that actually tackled the reasons why people were not working and provided practical solutions for increasing participation. Real welfare reform would provide more reward for effort and support training opportunities for the jobless. After all, a person only gets a job if they have the skills an employer needs. Instead, the Howard government’s welfare changes reduced the financial rewards from work and made it harder for people to get the education or training they need to get a job.

There is nothing wrong with applying mutual obligation to people who can work. That is what Australians expect: if you get a benefit, you should do something in return. But why not harness mutual obligation so that it serves more than a philosophical, ideological purpose? Why not help everyone to get more out of mutual obligation? For some people the best form of mutual obligation is the requirement to find a job. There are those who start further behind. Some people have an extremely limited education and correspondingly limited job prospects in today’s economy. For them, mutual obligation should require that, in exchange for income support, they get themselves in a position where they have the skills an employer needs, and then they should be required to get a job. That seems such an obvious policy, and yet this government refuses to implement it.

Labor have made it perfectly clear that we share the Australian expectation that people who can work should work and people who cannot work should be cared for. Some people, because of caring responsibilities or a disability, may not be able to work at all or may be able to work only part time, and it is part of the Australian culture of a fair go that we recognise people’s capacities.

The truth is that many people with a disability want to work but find it extraordinarily hard to find an employer who will take them on, and this government has done very little to change these negative attitudes. The truth is that many parents are not working because they cannot get child care or because child care is so expensive that after they have paid for it they end up worse off or close to worse off than if they were at home looking after their children. The truth is that many people who want to work, particularly mothers whose partners are working, face such high effective marginal tax rates that they are working more to fill John Howard’s coffers than to provide for their own families. The truth is that most people who are not employed have extremely limited education and training and lack the skills employers need, and many jobs nowadays require a postschool qualification. The truth is that despite Australia having a very low rate of official unemployment there are still vast numbers of people—over two million Australians—who want to work or want to work more hours.

With our nation in desperate need of more skilled workers and with people being so much better off working than on welfare, it is economically irresponsible and socially dangerous for the Howard government to stop jobless Australians from getting education and training. The fact is that skilled migration certainly will not be enough. Too many developed economies are competing for skilled migrants as they also tackle the diminishing labour supply resulting from the ageing of their populations.

This bill, particularly the clauses relating to the pensioner education supplement, continues the Howard government’s failed approach to workforce participation and welfare reform. Last November, Labor released a discussion paper entitled ‘Reward for effort’, which contained a comprehensive analysis of Australia’s participation challenge and canvassed a range of options to meet that challenge. It outlined Labor’s commitment to increasing participation and moving people from welfare to sustainable employment.

We on this side of the chamber would welcome this government introducing a bill that delivers real welfare reform. We know that Australia needs to increase participation and we know that people are better off working than on welfare. We would welcome a bill that delivers welfare reform, but this bill is not it. For the reasons I will outline, Labor will oppose this bill.

I want to start with the issue of vocational rehabilitation services. As senators may well be aware, when a person receives Newstart or youth allowance they will generally have to engage in activity in return for the income support. In some cases they may be required to attend a vocational rehabilitation service. Currently this service is provided by Commonwealth Rehabilitation Service Australia, known as the CRS. The Howard government has been working towards making rehabilitation services contestable so that private providers can tender for contracts. As a matter of principle, this has not been strongly justified by the government and Labor is yet to be convinced that increasing competition is, in itself, going to improve rehabilitation services rather than just increase duplication and bureaucracy whilst reducing oversight.

The people who use these services are often very vulnerable, and our priority is to ensure that the people who need services get the best possible services, whether they are provided by the CRS or another provider. However, this bill does not provide that guarantee; quite the opposite: because many private providers are not compliant with the provisions of the Disability Services Act, the Secretary of DEWR may allow services to be provided by some providers who do not have a certificate of compliance. This has caused considerable concern amongst advocates of people with a disability and mental health advocates, who are concerned that providers may not have the necessary expertise to deal with clients with complex mental health issues.

Another, and perhaps greater, concern amongst advocates of people with a disability and mental health advocates is the removal of the requirement that individual rehabilitation programs be approved by the secretary under the Disability Services Act. Currently this approval is delegated to the CRS. Clearly it is inadequate to remove this safeguard in the context of contestability without putting equivalent alternative safeguards in place. Mr John Mendoza, then of the Mental Health Council of Australia, had this to say:

These measures take us in the opposite direction to the international evidence on what works for the employment of people with mental illness.

…            …            …

The Council is concerned that the Government’s proposed changes will impact on the ability of people with mental health problems to gain meaningful employment.

Similarly there is a concern that there is no guarantee that vocational rehabilitation services will be accessible to clients with a range of disabilities. There are also concerns over whether people who have to participate in rehabilitation in order to meet the requirements of their activity agreement have adequate appeal mechanisms if they believe the rehabilitation program is not appropriate for their needs.

I want to turn now to the issue of financial case management, which has previously been announced by the government and in relation to which there are some provisions contained in this bill. I say at the outset: the principle that overpayments should be recovered is a sensible one that Labor supports. If someone gets a payment to which they are not entitled, it is unfair on others and harms the integrity of our social security system. Across the spectrum of government payments, there are provisions for the government to recover overpayments that are made, so Labor supports this aspect of the bill and the principles in relation to overpayment.

However, Labor does want to emphasise this point: there is a major difference between other government payments and financial case management. Other payments tend to exist in legislation. They exist as entitlements for people in particular circumstances. Financial case management, on the other hand, is entirely discretionary. Financial case management is a by-product of the Howard government’s extreme compliance regime. It is a regime under which people who commit certain breaches will lose all their income support for eight weeks. In some cases, this can be for three breaches, even if minor. In other cases, this penalty applies for just one breach—if you turn down what the government considers a reasonable job offer, which under the government’s extreme Work Choices laws may be a job that does not have to pay award wages, or if you are sacked for what your employer calls misconduct. Under the government’s unfair industrial relations laws, it is extremely hard to demonstrate that you were sacked unfairly if your employer claims it was for misconduct. In short, you can get sacked unfairly and not be able to get income support for eight weeks. This is what happens when the Howard government’s industrial relations laws crash into the welfare changes in their race to the bottom.

If this penalty has been applied to you and you have lost your income support for eight weeks, you may be eligible for assistance through financial case management. If the Howard government considers you to be exceptionally vulnerable, which essentially boils down to whether or not you require medication, or if you have vulnerable dependants, you may be able to get some or all of your essential expenses covered. Centrelink may cover these costs, such as food, rent and utilities, or the government has suggested that a charity may do this on Centrelink’s behalf. In general these payments would be lower than the income support would have been and are capped in total at the level of income support that would otherwise have been received.

But, despite the fact that there are people who lose their payments for eight weeks under these laws, there is no provision in law for financial case management. It is entirely discretionary. And, whilst it is entirely reasonable to recover an overpayment—for example, if there was undeclared income or the income support is restored—there is a serious lack of transparency as to what the entitlement actually was and therefore the extent of any overpayment. This lack of transparency is potentially as bad for taxpayers as it is for income support recipients. There seems to be no real reason why financial case management could not exist in legislation and its entitlements and payments be subject to review and appeal. So we say the Howard government should improve the transparency and fairness of its financial case management system so that all concerned—income support recipients, taxpayers and the administrators of the system—know where they stand.

I turn to the pensioner education supplement. Pensioners who study or train in an approved course can access the pensioner education supplement, or PES; recipients of allowances such as Newstart or youth allowance cannot. Under the Welfare to Work changes, people who moved from the disability support pension or parenting payment to Newstart or youth allowance were supposed to be able to retain their PES until they completed their current course of study. This bill breaks that promise. The explanatory memorandum of the original Welfare to Work bill says:

This Schedule gives effect to this by providing that people who receive Newstart Allowance or Youth Allowance and who have been undertaking a course whilst receiving a disability support pension ... will continue to receive the same study assistance ... until they complete their course.

The Minister for Workforce Participation, Dr Stone, claims that this bill is a clarification, but clearly the minister either is not telling the truth or is not across her brief. This bill is not a clarification; it is a broken promise. The bill changes the arrangements that were previously outlined for the ‘transitional group’ of DSP recipients—that is, those who were granted the disability support pension after the May 2005 announcements and the July 2006 implementation date. If they are transferred from the disability support pension to Newstart or youth allowance after a second or subsequent post-1 July 2006 review, they will lose their eligibility for the pensioner education supplement and they will effectively no longer be considered part of the transitional group. That is, they will only be able to continue to access the PES if they no longer qualified for DSP as a result of their first DSP review after 1 July 2006.

Why is the government doing this? We are yet to understand why the government is changing its position. Part of the rationale for a compliance system, which I discussed a moment ago, is to limit welfare fraud. But what limits are there on the fraud of the Howard government, which talks of the need to move people from welfare to work and then lays roadblocks along that very path?

Labor has consistently argued that restricting the pensioner education supplement to stop welfare to work candidates from getting it is short-sighted and, frankly, is against the national interest of meeting skills shortages and building the capacity of people on social security to create a more secure life and career for themselves and their families. The minister tried to criticise Labor, stating in the other place, when debate of this bill was on foot, that Labor has:

... a focus on putting people into mickey mouse courses—certificates II, III and IV ...

Once again it seems that the minister is not across her brief. First, her own government’s Skills for the Future package puts a big emphasis on supporting people into certificate II courses. Perhaps the minister does not support the Howard government’s policy, or perhaps she sees it as mickey mouse. Second, Labor are not about churning people through courses; we believe that, if a course will help someone get a job, they should do the course. That course must have a work focus. Unlike the Howard government, which is obsessed with headlines and stale ideology, we are practical in our approach and focused on long-term solutions.

We take a different approach to the government. We believe that those who are jobless and lack skills should be encouraged and supported to gain the skills they need to get a job. I will be moving an amendment in relation to this aspect of the bill that highlights our opposition to this absurd measure. As the Leader of the Opposition has said, Australia needs an education revolution. We need to increase participation, and all the evidence shows that if you invest in education and training you build increased participation. It is with these concerns and with a genuine commitment to increasing workforce participation that Labor oppose this bill.