Claire Chandler (Tasmania, Liberal Party) Share this | Hansard source

I rise this evening to speak on the Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020. We've heard a lot tonight about why this is a sound policy for the government to be pursuing. It appears our colleagues on the other side, despite having a running commentary that they wanted to provide to the chamber this evening, will be supporting this bill as well, and I'm certainly very glad to see that. But I wanted to come at this bill from a slightly different approach this evening. It might be a little nerdy of me, but I'm just going to go with it and we'll see where we go.

Before I found myself in this place, I used to work at Deloitte, an accounting firm. At Deloitte, we talked a lot about data driven government and the role that data has to play in government decision-making and the provision of government services. And know this: if we talk about it in these terms, it's probably not something that is particularly interesting for everyday Australians. They might say, 'Data driven government—what does that mean?' But, certainly in my previous career at a consulting firm, the idea of data and the role that it can play in informing government decisions and helping government go about its work better was something that we found really exciting. I did a lot of work in the public sector back in Tasmania working in our risk advisory practice in the Hobart office around this and many other issues. Data and the role that data has to play in government is something that we talked about a lot with our clients.

The policy we are discussing here this evening in the bill that's before the Senate is something that touches on how exciting these changes are for government and how data can be utilised by government to make the provision and delivery of government services so much easier and so much more straightforward for everyday Australians. In that way—like I said, it's a little bit nerdy—it really does align with the good principles of commonsense government that this government, the Morrison coalition government, stands for—reducing the administrative burden on government and business. We know that this government is all about doing that, all about reducing red tape and, most importantly, all about ensuring that we have accountability for the expenditure of taxpayers' money. I will be talking in my contribution this evening about how the measures that are proposed in this legislation—the simplifying income reporting and other measures bill—will facilitate that. This is a very exciting change. It's obviously something that we couldn't have done 20 or 30 years ago, and it's really interesting to see how the development of technology has enabled government to change the way that it delivers services for, I think, the better and to create better outcomes for Australians.

The Morrison government is committed to an accurate, fair and simple welfare system. Fundamentally, what we are doing with this legislation before the chamber this evening is taking the guesswork out of social security. We're trying to remove the margin for error. That's what, I believe, data-driven government services are all about. As part of this commitment, the government has introduced this legislation which will make it simpler for welfare recipients who report their income to do so and will improve the accuracy of our payment system.

This bill will improve the process of reporting employment income to Centrelink. From 1 July 2020, social security recipients will report their employment income to Centrelink when it is paid by their employer instead of when it is earned. I will identify, in just a moment, why the latter of those options—declaring when income is earned—is slightly more complex. Assessing employment income when paid will make it easier to report income correctly. This will better support people receiving the right amount of income support each time it's paid—no more and no less than what they are eligible for—which reduces the likelihood of overpayments. I fundamentally see this as a win-win from the perspective of those people on welfare who will utilise the system in this way. It minimises the risk that, at the end of a financial year, they will find out that their Centrelink payment has been overpaid and that they then have to pay that back. It also ensures that from the government's perspective and, I guess, the social contract we have with taxpayers to spend their money responsibly, taxpayers can be assured that the government is doing everything within its power to make sure that payments for government services like Centrelink are as accurate as possible. It will also pave the way for the future prefilling of employment income using Single Touch Payroll information, which will support easier reporting arrangements for recipients. Again, this is data-driven government service delivery. It's very exciting. I said I was going to be a bit nerdy, and later I will touch on the benefits of Single Touch Payroll and why I think that this has been such an exciting development for government services.

Under the changes, more than 1.2 million welfare recipients each year who also earn an income will able to report their earnings simply as it appears on their pay slip. That's up to 550,000 people in any given fortnight. From 1 July 2020 the bill will improve and simplify how employment income is reported and assessed. Currently —I said I was going to speak about this earlier—recipients must undertake a calculation to report their or their partner's earnings, depending on the situation, based on the number and value of shifts they have worked, not what they've actually been paid. Reporting earned amounts can require recipients to undertake multiple calculations. I think it goes without saying that that often includes a fair bit of guesswork. Over the course of 2017 there were over 15 million corrections to recently reported earnings, where people discovered when they had been paid that they had incorrectly reported their earned income for the previous fortnight.

When you think about it practically, that could arise in so many different situations. First of all, different employers have different pay dates that don't always align with the Centrelink reporting period. Further, people might work longer shifts than they originally predicted. They might pick up a penalty rate that they didn't originally think that they were going to. It really does result in an awful lot of careful calculations. That is time-consuming on behalf of the person declaring the earned income, and there may be a lot of guesswork and a lot of anticipation of hours worked that may not necessarily end up being accurate. As a result of that, these 15 million corrections just over the course of 2017 have occurred.

With this change, people are going to be able to refer to their pay slip. When they have undertaken the work, they can just utilise the information on their pay slip to declare that information to Centrelink. In a moment I will touch on the role of Single Touch Payroll and what new development that means. Changing the way employment income is reported simplifies requirements for social security recipients and will ensure that they are paid the correct rate. They are declaring only the information relevant to what they have been paid, not to what they anticipated being paid. Fundamentally, we are taking the guesswork out of this process. That's really important, both in terms of the people who are declaring any income that they might have earned. Also, as I was saying earlier, the role that government has to play in making sure that taxpayers' money is responsibly expended and ensuring that there isn't guesswork when we are trying to spend taxpayers' money is really important.

While this measure that we're discussing here tonight changes the way employment income is assessed, it also aligns with Single Touch Payroll data, which is based on what an employee has made to make reporting even simpler. Single Touch Payroll has been really transformative in the way that government services are delivered, and also in the superannuation space. Single Touch Payroll, for those listening at home—and I'm sure countless are—works by sending taxation and superannuation information from a business's payroll or accounting software to the ATO as the payroll is run. So, on a fortnightly, monthly, quarterly or whatever basis an employer is running the payroll, that information is provided to the ATO, effectively in real time. Employers are just required to run the payroll, give the employees their pay slip as normal and obviously pay their employees. The pay cycle doesn't need to change, but the information on the salaries and wages that have been paid to the employees, any pay-as-you-go tax withheld plus any super paid—all of that data—then goes to the ATO.

We've spoken in this chamber before, particularly in the superannuation space, around the role that this plays in ensuring that the information that the ATO gets is accurate. Anyone in this chamber, in this country, that has moved from filling out a paper tax return back in the day—I am just old enough that I still remember how to do that—to now using an online platform to lodge a tax return will know how much easier it is when the ATO has this information, so that when you're filing your tax return each year you just log into the system and sign off on it. I think it is important to reflect for a moment on the sign-off point. Obviously, with the legislation we're discussing here tonight, we're not giving any welfare recipient the ability to just accept, carte blanche, that the information must be correct. Welfare recipients are still required to log onto the system and look at the information and make sure that it aligns with their pay slips. I think that's a really important part of the process. There has to be an element of accountability in any of these service offerings, and enabling social security recipients to log into the system and check that is really important. We know that sometimes we can get it wrong, so it's good to be able to check.

In conclusion, this government believes strongly in the dignity of work, and the legislation that we're debating here tonight will provide even more support to people who are transitioning from social security into work by ensuring that they aren't financially disadvantaged by getting a job. In closing, I really want to reflect on that point. The importance of helping people who are on welfare transition into work is really important. If we make it easier for them to work and if we make it easier for them to declare income, like through the measures that we're discussing here tonight, then I'm confident that we will see more people transition from welfare into work. At the end of the day, that's what this government is all about.