Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Hansard source

I thank all senators who contributed to the second reading debate on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. The bill proposes compliance arrangements that provide a two-way nexus between participation and payment that is a genuine mutual obligation, not the ham-fisted mutual obligation of those opposite. The new compliance system does not seek to punish job seekers unnecessarily. Rather, it is a tool to maximise job seekers’ participation in activities that will assist them to obtain employment. This bill introduces a more work-like no show, no pay penalty that will apply when a job seeker fails to comply with training or work experience without a reasonable excuse. It retains, as a deterrent, eight-week non-payment penalties for persistent and wilful noncompliance. It predicates payment on the job seeker’s participation. In short, it will be a more effective compliance system than which it is replacing. Submissions and representations to the Senate committee strongly supported the move to the new compliance system. This is to be compared with the level of public approbation reflected in the 62 submissions made in respect of the current compliance system, with most strongly rejecting it.

The current compliance system has not improved compliance. If the current system were working, it would result in declining breaches because it encouraged job seekers to meet their requirements and ultimately supported them in getting them off income support and into employment. Yet the number of eight-week non-payment penalties applied has doubled over the course of just one year: from around 16,000 in 2006-07 to around 32,000 in 2007-08. An effective compliance system should result in improved participation. However, since the introduction of the present compliance system there has been no improvement in attendance at Job Search training, no improvement in attendance at Job Network interviews and no improvement in attendance at Customised Assistance. An effective compliance system should clearly link the receipt of income support and the obligation to look for work. Again, the current compliance system falls well short. The job seeker can miss up to two weeks of Work for the Dole before any action is taken. The job seeker then has a chance to reconnect and, if they do so, they incur no penalty at all. An effective compliance system should provide a timely and proportionate response. Presently there is no real or immediate consequence for deliberately failing to attend activities or for failing to attend initial job interviews.

Under the new system, job seekers will receive a clear message that their actions are unacceptable approximate to when the breach occurs, resulting in more work-like conduct in the future. The eight-week non-payment penalty will continue to deter a persistent and wilful noncompliance. In addition, job seekers who fail to comply with activity requirements will incur a no show, no pay penalty. To discourage job seekers from leaving employment voluntarily without finding another job, the government will also retain an eight-week preclusion period. The current compliance system makes it harder for people to find employment. A departmental survey of job seekers who received eight-week non-payment penalties found that around three-quarters of job seekers reported that having no income support made it harder to look for work. Some 75 per cent of job seekers who received an eight-week non-payment penalty were back on to benefits within a fortnight—in most cases—of finishing their non-payment period.

We are replacing a limited financial case management scheme with financial hardship provisions. The new provisions apply to all job seekers who incur serious failures but who do not have the capacity to participate in compliance activity, and to vulnerable job seekers who are subject to the eight-week preclusion period. The new financial hardship provisions of the bill will oblige job seekers to continue to look for work or to engage in activities that will improve their prospects of finding employment. A job seeker who received an eight-week non-payment penalty for persistent and wilful noncompliance will have the opportunity to demonstrate a renewed commitment to finding employment by participating in intensive compliance activity. A job seeker who agrees to participate in an intensive compliance activity will continue to receive income support while they work off their penalty through full-time Work for the Dole, or a similar activity for 25 hours per week.

This bill is designed to instil the job seeker with greater personal responsibility. Therefore the job seeker may suspend a no show, no pay, or reconnection penalty at any time by resuming their activity requirements or attending their reconnection appointments. Mental illness, drug and alcohol problems and unstable accommodation are among the vulnerabilities to which a substantial number of job seekers are subject. Even with the supposed protections in the current system, the lack of discretion available means inevitably harsh outcomes. More than one in 10 job seekers who have received an irreversible eight-week non-payment penalty had a reported mental illness. This figure is likely to understate the scale of the problem because of the difficult issue of job seekers not wanting to disclose personal issues. The current compliance system takes vulnerable people and makes them more so. The departmental survey of eight-week non-payment penalty recipients found that over half of those job seekers had failed to pay rent or board on time and around 15 per cent of this group were evicted as a result. It is difficult to see how anyone could think that this tackles poverty, let alone helps people find work.

The compliance system proposed by this bill allows us to distinguish between someone who does not want to meet their obligations and someone who cannot meet their obligations. Unlike the present automatic three-strikes rule, a job seeker will trigger a comprehensive compliance assessment when they miss three appointments or six days of activity in a rolling six-month period. An eight-week non-payment penalty will apply only if the prior failures were not beyond the control of the jobseeker and were committed intentionally, recklessly or negligently. This, of course, means that a serious failure will not apply based on a prior incident of noncompliance for which the job seeker had a reasonable excuse. Centrelink will use the comprehensive compliance assessment to consider a job seeker’s circumstance in order to determine whether there is a reason for noncompliance, such as episodic mental illness, before applying any penalty.

Providers will be able to exercise their professional judgement about whether to report behaviour as a no show, no pay or reconnection penalty. A provider can use alternative means of maintaining participation if they reasonably believe that there is a better way to ensure a particular job seeker is moving towards employment. Furthermore, no failure will apply if the job seeker has a reasonable excuse for their noncompliance. The impact of the job seeker’s personal circumstances on their capacity to comply will be considered in determining whether the job seeker had a reasonable excuse. This would, of course, include homelessness—as defined by the Australian Bureau of Statistics—mental illness or caring responsibilities. In response to the Senate committee’s recommendations, the government will review the effectiveness of vulnerability indicators and associated guidelines to ensure that they protect the most troubled job seekers.

The Senate committee also emphasised the importance of job seekers understanding their obligations under the new compliance system. The government will ensure appropriate levels of training for Centrelink and employment services providers and adopt a strategy targeted at communicating changes to all job seekers. The government believes strongly in an evidence based approach to policy and agrees with the Senate committee recommendation that we collect comprehensive data to monitor and report on the effectiveness of the new compliance system. The government also appreciates the broad community interest in the effects of the compliance policy. For these reasons we will conduct a review of the impact of the new compliance system after 12 months of operation, particularly in relation to how the system improves job seekers’ participation in employment services. The review will pay particular attention to vulnerable and Indigenous job seekers.

In conclusion, the new employment services will provide job seekers with the right mix of training, work experience and other support they need to find and keep work. The new compliance arrangements and other measures proposed by this bill will form an important part of the new system. This bill is a key component of the government’s employment participation agenda. To retain the status quo is not a benign alternative. To retain the status quo is to condemn a large number of vulnerable Australians to harsh, irreversible penalties. I ask senators to support the bill.

Question put:

That this bill be now read a second time.