Tim Storer (SA, Independent) Share this | Hansard source

I move:

That this bill be now read a second time.

I table and explanatory memorandum and I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

SOCIAL SECURITY COMMISSION BILL 2018

As independents it is our job to put forward solutions to problems impacting our communities, to give an independent voice to the issues that are ignored by the major parties and to suggest effective solutions to these problems.

At the outset, I must acknowledge the considerable effort of my fellow independent, Cathy McGowan MP, who is responsible for drafting this Bill and introducing it into the House of Representatives in August 2018.

The parliament should be provided with independent advice on the minimum level for social security payments that meet an acceptable contemporary minimum standard of living to ensure that recipients can live with dignity. These payments should be seen as a long-term investment in those that require them, particularly for our younger people.

Specifically with regard to one of the payments that has not increased in 25 years in real-terms, and which has a number of other payments tied to its level, the Newstart Allowance, the time has well come to have a standalone expert body provide independent, reasoned and publically available analysis on its adequacy.

Calls have consistently been made for Newstart to be increased to an amount that would not leave many of the unemployed living in poverty and arguably with financial support so low that it actually reduces their chances of getting a job.

In August 2017, the University of New South Wales's Social Policy Research Centre found that the single rate of Newstart and Rent Assistance fell $96 short of the absolute minimum required to cover the basic cost of living.

In 2012, and repeated in years since then, including in 2018, the Business Council of Australia argued that Newstart 'may now be so low as to represent a barrier to employment', when getting people into the workforce is surely its principal purpose.

"The best form of welfare is a job" has been a declaration from a number of our political leaders, but there has been a failure in matching that catchphrase with results and the level of Newstart is a primary reason. Nearly half of all Newstart recipients are without a job after two years or more, and more than 15% for at least five years.

A recent report by Deloitte Access Economics on the economic and equity case for raising a range of allowance payments, notably Newstart for unemployment benefits, by $75 a week calculated a cost of $3.3 billion a year. However, in nominal dollars the "prosperity dividend" would see the Australian economy grow by $4 billion dollars as a result of increased spending, creating 12 thousand extra jobs as well as lifting wages and leading to increased Federal and state taxes.

The report further found it would create a "fairness dividend" with a tightly targeted impact, with the bulk of the impact on the lowest income quintile, a focused relative boost to disposable incomes for the lowest quintile, and a regional focus due to unemployment levels in regional areas, and a tight correlation to the least well-off districts in Australia.

If Australia is to live up to its reputation for equity and fairness, social security payments need to be adjusted to a level which (in the case of Newstart and related payments) actually ensures the employability of recipients.

Letting it fall further and further behind national living standards for so long has just not worked. Successive governments of both political persuasions have failed to address this issue.

For this reason, and more, the major issue of the level of social security payments should have an independent expert body which can provide independent advice to parliament on what is fair and adequate.

Summary of the Bill

This Bill will establish a Social Security Commission to provide the parliament with independent advice on the minimum level for social security payments that meet an acceptable contemporary minimum standard of living.

The primary function of the commission is to conduct social security payment reviews. As part of a review, the commission would determine:

(a) the acceptable standard of living for recipients of the payment;

(b) whether the current level of the payment provides adequate support; and

(c) a recommended increase to the payment level or rate of indexation.

The commission will consider all social security payments made under the Social Security Act 1991, including pensions, Newstart and Youth Allowance.

This Bill will bring compassion and fairness to a critically important system. It will provide independent, expert and evidence based advice on what is fair and adequate.

I call on the Senate to consider this Bill.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.