Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Hansard source

I rise to make a contribution on the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022 and indicate the coalition's position in relation to this bill, which is that we will be supporting the bill. But we're also intending to move an amendment to increase the fortnightly work bonus from $300 to $600 a fortnight from 1 January 2024, which is, of course, when the government's temporary work bonus concession balance measure comes to an end.

In making those points, I'll state at the outset that the coalition will always pursue well-designed policy changes to ease the pressures faced in the labour market, be they worker shortages or inflationary pressures, and the pension that so many in our community rely on shouldn't financially punish older Australians who want to continue to work. In June of this year, 78,000 of the 2.6 million age-pension recipients in this country had earnings from employment in the last fortnight; for the DSP, 52,400 recipients had earnings, from a total of 765,000 recipients. For both payments, the majority, 65,500 of the aged pensioners and 37,000 of DSP recipients, had earnings of over $250 in the fortnight. Five thousand five hundred age pensioners and 2,300 DSP recipients were on zero rate payment—that is, they'd had their payment suspended.

In its most recent Business Conditions and Sentiments release, the ABS reported that almost a third of employing businesses were having difficulty finding suitable staff. I think everyone who goes out into their community and talks with small business, with primary producers or with any employer would be well familiar with that fact. Regional areas, as well, are suffering from staff shortages as a result of depressed labour mobility between regions and of course also reduced migration, which is in place for obvious reasons. The challenges in finding employees post-COVID was highlighted by the National Farmers Federation in its submission to the Senate inquiry into this legislation. Before borders closed in February 2020, there were 337,800 people working in agriculture, forestry and fishing. In February 2022, that figure had fallen to 301,800. So that's over 30,000, or nearly 40,000 people fewer in that period of time. A recent survey by the Victorian Chamber of Commerce and Industry showed 75 per cent of its members reported struggling to find suitable staff to hire.

Pensioners who choose to engage in some paid employment during their retirement typically have higher incomes and so of course can support a higher standard of living than those who don't. They also gain significant non-financial benefits, including stronger social connections, something I think we all need to consider as important, staying mentally active and keeping physically fit. In its submission to the Community Affairs Legislation Committee inquiry into Senator Smith's very good Social Services Legislation Amendment (Enhancing Pensioner and Veteran Workforce Participation) Bill 2022, Anglicare noted: 'As well as much needed income, work can give people purpose, reduce social isolation, and foster connection to community.' Pensioners who choose to work during their retirement make a valuable contribution to Australia's economy and to its community. Around 80,000 age pensioners are supplementing their pension income with paid employment.

The coalition had a proven track record of developing sound, sensible and practical policy to address the challenges faced by pensioners. The government has once again endorsed coalition policy by adopting schedules 1 and 2 from a government bill of the last parliament. Those schedules of that bill were introduced by the former coalition government in February to incentivise recipients of the age pension, the disability support pension and certain veterans' entitlements to undertake or increase paid employment. Of course, the coalition's bill didn't progress because of the prorogation of parliament and the election.

Under the current policy settings, pensioners with employment income have their age pension cancelled if their total income exceeds the pension income test limit for more than 12 weeks. They also lose access to their pensioner concession card after 12 weeks. It's quite clear to anyone who examines these settings that they can act as a deterrent for pensioners and those receiving the equivalent Department of Veterans' Affairs payments. Understandably, many pensioners want to work but do not want to lose their pension status and have their pensioner concession card cancelled for earning too much. They also do not want to complete a full application to have their pension or pensioner concession card reinstated.

Both schedules 1 and 2 of this bill, initiatives of the former coalition government, increase flexibility for those people over the pension age who want to work by allowing pensioners to move easily between the pension and periods of work. Pensioners with employment income whose total income exceeds the income limit will have their age pension suspended for a period of up to two years, rather than cancelled after 12 weeks. If at any time during the two-year period their income is at a level that they can return to the age pension, they will benefit from an abridged reapplication process. Acknowledging the importance of the pensioner concession card to pensioners, this bill extends the time a person can keep their pensioner concession card while their payments are suspended. The bill will increase and align the amount of time age pensioners and disability support pensioners are able to retain their concession card to two years.

Relating to the work bonus, schedule 3, both the coalition and stakeholder groups have advocated for an increase to the work bonus. State and territory chambers of commerce as well as the Council on the Ageing, the National Seniors Association, the National Farmers Federation, the Benevolent Society and the Housing Industry Association, amongst others, have voiced their support in providing pensioners with support to re-enter the workforce.

On 26 June this year, just weeks after the election, the coalition announced that a Dutton government would support older Australians who choose to work more by doubling the amount of work bonus from $300 to $600 a fortnight that could be earned without reducing pension payments. This coalition policy makes it further worthwhile for older Australians to pick up an extra shift or work extra hours and help businesses across Australia with labour shortages. Back then, the coalition called on the Albanese government to implement the policy immediately, to help relieve pressure on a very tight labour market. Of course, sadly, as we know, there was no response.

In August, the coalition introduced legislation to double the amount pensioners can earn before their pension payments are impacted and also remove barriers for working pensioners deterred by the risk of losing their pension or pensioner concession card or the requirement to complete a full application every time they become eligible for the pension. Again, there was no response forthcoming from the government when this legislation was introduced. It took the Jobs and Skills Summit for the government to belatedly wander into this policy space.

While we welcome the government's long overdue announcement of an increase in the work bonus income, we said this temporary measure was too little, too late. The government has continued to drag its feet on incentivising pensioners to take up some employment without penalty. Pensioners could have had their work bonus already increased, but the coalition's amendment to increase work bonus payments to $600 a fortnight, which had been passed in the Senate, were voted down by the government in the House only a matter of weeks ago.

The government's temporary alternative, to provide a $4,000 increase to their work bonus concession balance, was originally due the terminate on 30 June 2023. The government finally listened to the coalition—and to stakeholders, importantly—and extended this increase to the end of 2023. However, with this extension of time, more can still be done. Increasing the amount pensioners can earn every fortnight will make a meaningful difference to household finances, and this increase should continue beyond 30 December 2023.

That's why the coalition is calling on the government to increase this work bonus from $300 to $600 per fortnight from 1 January 2024, to further incentivise eligible pensioners to undertake additional hours of paid employment. This increase would commence on 1 January 2024 when the government's temporary measure ends and would be ongoing, subject to an annual review to ensure that these measures remain appropriate.

With regard to the amendment I have already referred to, currently under subsection 1073A(a) of the Social Security Act, pensioners can earn income concessions of up to $300 over an instalment period of 14 days. The coalition's amendment will enable eligible pensioners and relevant veteran entitlement recipients to earn up to $600 work bonus a fortnight and still receive the maximum pension payment. Pensioners will continue to accrue an unused concession balance up to a maximum of $7,800, which can exempt future earnings from the pension income test.

The amendments will encourage and support eligible pensioners wishing to re-enter the workforce or increase their work hours, enabling them to contribute to relieving the skill and labour shortages Australia is so badly suffering. The added income received by working pensioners and veterans means they are better able to support themselves and their dependants, considering the economic climate of increasing inflation and the growing costs of living.

In June, recognising the challenges businesses face in hiring and retaining staff, the coalition announced that a Dutton government would support older Australians by, as I have already stated, doubling the amount of income pensioners and veteran service pensioners can earn without reducing pension payments. The amendments follow through on the policy that was announced and will take, as I have already said, effect from 1 January 2024. It includes an annual review mechanism. It requires a ministerial review to be tabled in parliament on the operation of the amendments.

It's important to make the point that the pension should not financially punish older Australians who want to continue to work. The Australian Chamber of Commerce and Industry, in its prebudget submission made last December, noted:

There is an army of older workers with the skills Australia needs who would still like to work, but don't participate in the workforce as it reduces their pension.

In its submission to the Senate inquiry into this bill, ACCI also noted:

Considering the deeply rooted labour market conditions, faltering productivity rates, and downgrades to domestic and international economic growth forecasts, these amendments will end long before the challenges facing businesses and the economy are solved.

I think it's important to take note of those points from an organisation that is well connected with the business community and employers and the pressures they are facing. If they're saying that these measures already in place are going to come to an end too soon, it is a good reason to look to the coalition's amendments.

The amendments are sensible policy that will provide long-term certainty for both businesses and pensioners. They build on other measures of the bill originally and proudly introduced by the coalition before the last election. Again, the amendments will incentivise pensioners to remain engaged in the workplace or to get those few extra shifts or extra hours without any penalty being applied, will provide businesses with an additional source of experienced staff and will provide all the other benefits that flow from being able to remain connected to society and to remain physically fit. All of those are positives. I will commend those amendments when we get to them.