Mitch Fifield (Victoria, Liberal Party, Assistant Minister for Social Services) Share this | Hansard source

I was indicating to colleagues before the interruption that, under the Growing Jobs and Small Business package, there will be additional support options for young people with a mental illness, as well as young refugees and other vulnerable young migrants. There will also be a number of trials to provide intensive support to disadvantaged job seekers who have multiple barriers to work. These additional supports will be complemented by services through jobactive, which include work experience and better access to wage subsidies. But, most importantly, this measure will only apply to stream A job-ready individuals—that is, someone who resides in a labour market region, with good employment opportunities, and who has reasonable language, literacy and numeracy skills and recent work experience.

A further 2015 budget measure in the bill will cease the Low Income Supplement from 1 July 2017. The measure will cease a supplement that has a very low take-up rate and is administratively highly complex. Indeed, service delivery costs in administering this payment far exceed the financial benefit accrued by the eligible individual. Many of those who qualify for the payment will continue to receive the energy supplement, with their family tax benefit payment.

The bill also takes the opportunity to reintroduce some amendments relating to indexation that are currently before the Senate. The first of these indexation amendments will maintain at level for three years the income-free areas for all working-age allowances, other than student payments and parenting payment single. The start date for this was to have been 1 July 2015. The second amendment will maintain at level for three years the income-free areas and other means test thresholds for student payments, including the student income bank limits, with a new start date of 1 January 2016. By not indexing thresholds, some customers will not receive increases to payments that would otherwise have occurred. Payments will not be reduced unless a customer's circumstances change, such as their income increasing in value. These measures will slow growth in social security expenditure.

I want to touch on a couple of matters which were canvassed in the contributions of some colleagues, particularly having cited experience in New Zealand, where in that context pre-benefit activities are employment related activities that a client may be required to attend and participate in as part of their application for benefit for the purpose of helping the client find and retain paid employment. These are: attending and participating in a work-for-youth seminar, creating a job seeker profile called Recruitme, reporting on progress of job search activities and producing an up-to-date CV and providing it to work and income. The client applying for benefit is in these arrangements obliged to complete the activity, once it has been assigned to them, in order for their application for the benefit to be progressed. Otherwise, the application would lapse after 20 working days.

We have on this side of the chamber spoken a bit of late about our proposed investment approach. Australia's welfare bill, as I think colleagues would be aware, sits at $154 billion a year. It is forecast to balloon by $38 billion over the forward estimates. Given it already takes eight out of 10 income taxpayers to go to work each day to fund this, the case for action to address its challenges is, I think, clear. This is one of the reasons the coalition is investing $20.7 million to introduce an investment approach to welfare in Australia. As colleagues would be aware, Patrick McClure recommended this in his review of our welfare system. It is all about directing funding where it will do the most good, particularly in reducing long-term welfare dependency. This is working in New Zealand, where it will do the most good, particularly in reducing long-term welfare dependency. It is indeed helping many people get into work and stay in work.

The New Zealand analysis shows that young parents and single parents have the highest lifetime costs compared with other groups on welfare. That is because they do find themselves stranded on welfare for the long term. New Zealand has concentrated funding and efforts on getting these young people trained and into work. They, like this government, understand that the best form of welfare is indeed a job. The Deputy Prime Minister and Minister of Finance in New Zealand, Bill English, has credited the investment approach with incredible changes. There are now 43,000 fewer children in New Zealand living in households that rely on benefits compared with three years ago, and the number of sole parents on benefits is the lowest in more than 25 years. These are very encouraging figures that demonstrate the value of innovative thinking and private investment to address social needs. Indeed, the NDIS does itself take an investment approach. It does take an actuarial approach in looking at the long-term costs both financial and personal of someone's disability and does look to see how early investment, using actuarial advice, can reduce the cost for an individual. So, it is something that already the government is very keen about.

Obviously, welfare for the entity that is making this investment needs to be a good proposition. Under an investment approach, we start by assessing the risk factors that drive long-term welfare dependency and which groups will most likely benefit from early intervention. This gives us a better picture of how we can make lifetime changes for people in the welfare system—changes that help not only individuals and communities but also the economy. Based on this analysis, the government can invest in evidence based programs tailored to make the most difference to those groups whose pathways can be changed. Each year expert actuaries will consider which policies are working for which groups of payment recipients and which groups would benefit from a different approach. With robust and ongoing evaluation, policies can be refined to have the most impact and funding can be directed to where it will do the most good. Right now, the government is selecting the actuarial service provider who will do an initial baseline evaluation of the government's social security liabilities

Then, they will do another three evaluations over the following three years. I think the investment approach, which was first flagged in the budget, is extremely promising.

I very much commend my portfolio colleague, Minister Morrison, for looking at New Zealand to see how we can learn from their experience and get better outcomes for Australians who are supported by our social security system. I thought that information on the New Zealand approach and also how we are trying to learn from it in Australia might be useful for the consideration of colleagues. With those remarks, I commend this bill to the Senate.