George Campbell (NSW, Australian Labor Party) Share this | Hansard source

Senator Barnett, because we do not vote for your legislation or your hardline ideological agenda does not mean that we do not support welfare reform. We have a different view from yours as to what is meant by the words ‘welfare reform’ and it is not about beating up on people to force them into sets of circumstances for which they are poorly equipped and do not have the ability to actually deal with. It is about providing them with those resources before you force them into a set of circumstances where they have to use them. We do not support these so-called reforms because they do not encourage those on welfare to find work. Instead, they actually punish those attempting to undertake further training and undermine safeguards that have been put in place to protect vulnerable people attempting to re-enter the workforce.

One of the purposes of the bill is to introduce contestability for vocational rehabilitation services. Vocational rehabilitation services assist people with a disability, injury or health condition to get and keep a job. These services are crucial in assisting people from welfare to work. In fact, this bill and its approach to vocational rehabilitation is less about good help for people who need it than about ideology. What we see in this bill is the ideology of the market holding sway in spite of the obvious problems that it will create.

The government is planning to rely on the market to provide in circumstances where that cannot work. A market may be able to operate in some circumstances but not in others. The government cannot explain how they will get around the basic flaws that are in this approach in this bill. What happens for example in small markets where there is only one provider? What is going to happen where the market will not create contestability? Who is going to provide the circumstances in those instances? We know what the result of that is going to be. How is there a competitive force driving the vocational rehabilitation services to provide a good service to the clients? Worse, what about markets where the vocational rehabilitation services do not make any money—what is going to happen in those circumstances? Will the Commonwealth be left to pick up the scraps after the lucrative contracts are filled?

We are offering an opportunity to private providers to set themselves up in good little markets, some of which will be monopoly markets. We will leave the Commonwealth to pick up the slack. That is what is proposed by this bill. That is the structure that this bill will create in respect of these rehabilitation services. We know that there will be small towns where there is simply no way of making a private vocational rehabilitation service turn over enough money to be a viable operation. We are still going to have the Commonwealth in those circumstances doing the work in those areas. What we will be doing is subsidising the lumpy cases while the private sector makes off with the cream, or as our colleagues from the National Party would say, ‘We are socialising the losses and privatising the gains.’ I am not too sure just how good an idea that is.

I do not know whether that type of structure is going to provide better rehabilitation services than those currently provided by the Commonwealth. I suspect neither does the government. I do not think they have thought through this legislation with any degree of detail or looked at all of the circumstances within which it will apply. We have seen the Job Network and the problems that have come from that. It could be that we are going to have exactly the same problems created in respect of the rehabilitation services. There is nothing in here to show how tough cases and tough markets will be best served by letting the market do it. In fact, what is going to occur here is not letting the market do the work but letting the market cherry-pick the locations and clients while the hard cases and those areas that will not make money will simply be left behind.

There is concern from the National Association of Community Based Children’s Services and the CPSU that the lack of safeguards in the new system may lead to reduction of service, poorer rehabilitation outcomes and fewer specialist services. Where it is not an easy or cheap fix, the service may in fact not be provided. The profit motive in these circumstances will simply override the motive to service the needs of the people who need those services. Where money is tight, the otherwise essential elements of the service will be trimmed. Hours of service, staffing numbers and quality of service will be squeezed in the process. The essential problem of for-profit service providers is that, when the squeeze is on, services can suffer. This could be especially problematic in regional areas. The market may not provide sufficient demand to sustain economically viable services. There is the unavoidable potential for market failure.

Lynne Wannan from the National Association of Community Based Children’s Services told the inquiry, when responding to a question from Senator Barnett, that:

In most human services areas it is very difficult to get sufficient demand in rural and remote areas for service providers to be there, basically. Unless they are subsidised by government in one way or another, you are very unlikely to get much. That is certainly the history in children’s services, with the very small numbers of children.

In fact, that raises a very serious question about the equality of the services that will be provided. For example, will the services in Kyogle match the services in Kogarah? Will the same money be available to perform necessary upgrades to facilities for accessibility in Lismore as will be provided in Liverpool? I am concerned that where it is not worth it for the for-profit operation, services may not be up to scratch. Particularly concerning is how this will affect those in rural and regional areas, as many are already marginalised due to lack of available services.

There are also potential issues with the vocational rehabilitation services for clients with a disability. Many private vocational rehabilitation service providers are not compliant with the Disability Services Act. Nevertheless, in order to get the system rolling, the secretary of DEWR may allow services to be provided by providers who do not have a compliance certificate. I simply do not think that is good enough in this day and age. The current compliance guidelines are there for a reason. They ensure that organisations responsible for providing the rehabilitation services understand the needs of their clients.

Those who work in health and community services will be able to tell you that it is responsible and necessary for both the staff and the organisation to understand the needs of the people they are working with—for example, those who suffer from a mental illness. The Mental Health Council of Australia argued in their submission to the inquiry that this will not ensure: an initial high standard of service; an appropriate consideration for people with mental health conditions; and confidence in the accessibility of the site for people with disabilities. Ignoring the concerns of a peak body such as the Mental Health Council will no doubt have significant ramifications.

The ALP understands that there is a priority on getting new providers into the marketplace. However, there is no point putting the cart before the horse. But this, in our view, is exactly what these amendments do. They prioritise service delivery above care and responsibility for those who will be using the service, discounting the safeguards, such as those which are there to ensure that organisations understand the needs of a variety of people and can provide access to people experiencing disabilities, that are vital. If the needs of people cannot be met, the effectiveness of the rehabilitation that is being provided will be substantially diminished.

Changes to the pensioner education supplement are also cause for concern. The pensioner education supplement is currently worth $31 per week for the duration of a course. That is around $4,000 per year. It is paid to people who are undertaking studies while in receipt of either Newstart or the disability support pension. Disability support pension recipients were reviewed after July 2006 as part of the Welfare to Work scheme. If at this review Centrelink found that they were not eligible for a disability support pension anymore, they still kept the pensioner education supplement. If a recipient keeps the disability support pension at the first review but they are reviewed again and lose it, they lose the pensioner education supplement as well. This is in spite of a commitment to allow people currently undertaking a course to complete their course with a pensioner education supplement. There will now be some people who lose their pensioner education supplement part of the way through a course.

It does not seem to make a lot of sense in terms of the way in which this system should be working. Does the person who loses the disability support pension at the second or later review not need the pensioner education supplement anymore? I would suggest it is the opposite. Do they somehow need it less than the people who are still grandfathered? It seems to not make a lot of sense and, although it is a small group, for the individuals concerned this could pose a serious problem. It seems less prudent than mean. It makes even less sense when the department states that it expects to make no savings from the measure.

Many workers who are on the margins of the disability support pension and who are being shifted back into the workplace need to update their skills. The reality is that they will not get back into the workforce unless they do have the capacity to update their skills. They need to undertake education and freshen up their skills before they can even think about being employed back in the workforce. I for one am concerned that this measure will remove the incentives for many of those workers to undertake to update their skills base. This proposal, in my view, in fact takes away support. It removes the help for those individuals. It actually makes it harder for people to study and improve their skills. It makes it harder for them to move from welfare to work.

Labor does support the changes proposed to allow Centrelink to recover financial case management overpayments. The proposed system will permit the recovery of financial case management payments made to people whose payments have been restored. It is basically to recover what is essentially a double payment. These changes need to occur, as the current provisions around financial case management payments are inadequate. There is no clear process and no guidelines, and mistakes happen.

We note the inconsistency, however, in that a process to recover overpayments is being codified while the payments themselves are not. There is no legislative basis for the financial case management system—it is a process that is essentially discretionary. In determining overpayments, this can lead to some undesirable outcomes, as we heard from the National Welfare Rights Network. Michael Raper told the inquiry that his objections revolved around:

… the lack of clarity and the lack of a legislative base for this system, which means that it is virtually impossible to correctly determine what is an overpayment …

People might have payments clawed back when there is no legislatively based reason to—not declaring income while receiving payments under the financial case management system, for example. Because there are no rules written into the act, there is no clarity as to the basis upon which this recovery can take place. Also, people might have payments clawed back after their initial penalty has been overturned, and the case management money may have been spent on urgent medical expenses. As we were asked in the hearings, what if it were to cover pharmacy bills that had been mounting up? What if it were to cover psychiatry costs?

There needs to be a better way of codifying how this system should work. And those who face having their private finances scrutinised deserve to know what criteria need to be met in order to receive money for ‘essentials’. Consequently, Labor urges the government to put the whole financial case management system into law. There should be clear black-and-white rules that apply to the financial case management system. It is a scheme that has its uses, but it makes no sense to have it operating without any legislative backing.

In conclusion, let me say that Labor have always been sceptical of the government’s Welfare to Work package, and I think with justifiable reason. We do not agree with the government’s carrot-and-stick approach. We do not agree that the best way of helping people to work is with a ‘Welfare to Less Welfare’ scheme. Labor believe in building proper incentives into the system. We think that there should be efforts made to address the causes of long-term unemployment. We should be looking at helping people develop skills and putting a greater focus on resources in that area. We should be offering real training opportunities to people with disabilities. We should be helping people who want to study, not taking their benefits away. Only with a constructive approach, based on investing in people and helping people, can we really get people from welfare into work.