Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

I rise to speak on the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006, which sets out a range of measures consequent upon the so-called Welfare to Work legislation which was pushed through the Senate by the government late last year. The amendments that are today before the Senate really ought not be necessary. If last December the Howard government had finally, after 10 long years, delivered the real welfare reform that this country does need, this bill would not be before the Senate. However, as history will regretfully record, the Howard government did not deliver real welfare reform, it did not tackle the reasons why people are not working and it did not deliver practical solutions. Instead it used its complete control of the parliament and of this chamber to ram through, in a guillotined debate, extreme and incompetent changes. Some of that incompetence has already come home to roost with the need for additional amendments that the government, in its unseemly haste, failed to make in previous bills.

In the context of the new welfare changes, Labor does not oppose this bill, which largely adds some consistency to the botched changes of last year. In particular, it extends some benefits that are open to single parenting payment recipients, such as the 14-week bereavement period, to principal carers who are on the dole. Of course, it would not be necessary to do this if the government were not dumping people onto the dole in the first place. The bill also applies some more consistency across similar groups receiving different payments, such as providing for a seasonal workers preclusion period for students and new apprentices claiming youth allowance. But the bill does not amend that which needs to be amended most. It does not scrap the incompetent welfare changes imposed by this government which leave people with less incentive to work than they had before. It does not scrap the incompetent changes that make it harder for jobless Australians to prepare for work with training and study.

The government’s changes cut income support for some of our most vulnerable Australians and, perhaps even more importantly, reduce the rewards from work. What this government has consistently ignored, and continues to ignore with this bill, is the impact of putting people on lower welfare payments. It is not just the immediate loss of money but the potentially disastrous effect that this will have on people’s ability to work their way out of poverty, which is what we all want. The basic cut to the money in people’s pockets is bad enough—around $20 a week for sole parent families and about $40 a week for people with a disability. Of course, we know that of family groupings in this country the family type most overrepresented in the poverty statistics is that of sole parents.

From 1 July many people who would have received the disability support pension or the single parenting payment will instead be dumped by this government onto Newstart—what is colloquially known as the dole. By 2008-09, according to the government’s own figures, 60,000 people with a disability who would have received the DSP will instead receive the dole, as will 77,000 single parents who would have received the parenting payment. Think of not only these people but also their dependants, the children who will now have to survive on less money and fewer opportunities, making life far more difficult for them. Not only does the dole provide less money for these vulnerable Australians who have many additional expenses associated with their circumstances; Newstart also has a lower free area, higher withdrawal rates and harsher tax treatment than both the disability support pension and the single parenting payment. This will mean that when these Australians are dumped onto the dole by this government they in fact will get to keep less of every dollar earned—an extraordinary proposition if you were serious about moving people from welfare to work.

Last year the National Centre for Social and Economic Modelling undertook modelling research on the changes. According to this research, which the government has never tried to refute, if a sole parent with one child does the right thing and works 15 hours a week they will keep only $81 of their earnings while the Howard government claws back the other $114 in tax and loss of social security payments. The effect of this is that this parent will be $91 a week worse off by moving into work under these changes than if they moved into work under the previous arrangements. The government dresses up this policy as welfare to work but in fact takes more out of every dollar earned for this group of people than it would under previous arrangements. It has increased the disincentive and reduced the rewards for working. It is hardly a way to try to improve people’s passage from welfare to work.

The Howard government has effectively told sole parents to work for a return of $3.88 an hour, because for their 15 hours work a week they would only be $58 ahead of someone not working. That would be before they pay for the costs of work—things like travel, clothing and so forth. For people with a disability, the situation is even worse because the DSP is not taxable whereas the dole is. According to NATSEM—in the research I referred to earlier—if a person with a disability worked 15 hours a week at the minimum wage they would keep only 25c in every dollar earned while the Howard government would claw back 75c. Such a person would be $122 per week worse off by moving into work under these changes than if they had moved into work under the previous arrangements. Again, this reduces the reward for work and creates greater financial disincentives to move into work. That is this government’s so-called plan. According to the NATSEM research, the Howard government is effectively telling people with a disability to work for a return of $2.27 an hour. Again, that is before the costs of work were taken into account.

Last month, the Minister for Employment and Workplace Relations, Minister Kevin Andrews, announced that the government had—and can I say that this was obviously under some pressure—set a threshold for the return from work that a parent would need to gain in order to be required to accept a job. If you missed this announcement, it is not surprising. The announcement was made on the afternoon when the nation’s attention was squarely focused on the East Timor deployment. But when you see the detail of Minister Andrews’s announcement, his motivation for burying it is patent. He decreed that parents would have to accept jobs that left them just $50 a fortnight better off from work, after the costs of working, such as income tax, loss of income support, clothes, travel costs et cetera, had been taken into account. Minister Andrews can complain about Labor’s response to this all he likes, but the maths of his position are quite simple: $50 a fortnight is $25 a week. If parents are being asked to work for 15 hours for a net gain of $25, they are working for an effective return of $1.66 an hour—$1.66 an hour! That is what this government is telling parents they will have to work for under these extreme welfare changes.

It gets even worse for people with a disability, who have no such threshold. The government has not yet indicated why it is that parents are given a threshold of $25 a week—even if it is manifestly inadequate—but no such safeguard, inadequate as it might be, exists for a person with a disability. Under this government’ policy, a person with a disability will have to accept a job with an even lower return than $25 a week. In fact, a person with a disability could very easily end up paying to work under the government’s changes once you take out the costs of working. What greater symbol of incompetence could there be from this government than promising welfare reform but delivering a policy that makes work less desirable than welfare?

In the recent budget, the Treasurer announced around $37 billion worth of tax cuts and a $10 billion surplus, but he could not find a way to fix this mess. He could not find a way to reverse the damage done to incentive by the government’s welfare changes. It is fair to say that the budget did finally provide some limited financial work incentives, largely as a consequence of the government adopting tax proposals that Labor had outlined over the last year. The new effective tax-free threshold of $10,000 for low-income earners does go some way to improving incentives for those moving from welfare to work and parents returning to work. Despite these changes, however, sole parents and people with a disability will still go backwards when the welfare to work measures are implemented in a few weeks, with their effective marginal tax rates increasing by up to 20c in the dollar.

Since this legislation was rammed through in December, the government has also broken its promise to provide an extra 4,000 places in disability open employment services to help people who are already on the disability support pension to move into work. These places will instead go to people with a disability who are on the dole and are further evidence that the Howard government is not serious about helping people who are currently on the DSP move into work. It does seem extraordinary that the government, after complaining about the burgeoning numbers on the disability support pension, has removed one of the significant measures it pointed to when criticised about the lack of support for existing disability support pensioners. Let us not forget that in last year’s budget this was the group that the Treasurer identified as being problematic—the 700,000-odd people on the disability support pension. For political reasons, those people have been grandfathered. They are not subject to mutual obligations, and now the government is removing one of the aspects in last year’s budget that would have assisted some of those people move from welfare to work.

Of course, consistent with their approach to training and their failure to train Australians is the refusal of this government to encourage people who are on welfare to get training so they can get the skills employers need. Once you are on the dole, you cannot satisfy your mutual obligation requirements by studying or training and you cannot access the pensioner education supplement, which is a payment made to try and assist with some of the costs of studying and training.

This is a point that the Minister for Workforce Participation appears to be somewhat embarrassed about, and when this point is raised she protests and suggests that Labor is incorrect in its views. The fact remains that, under her policies, unless you are going to do the most basic entry-level short course via your Job Network provider, you cannot acquit your Newstart obligations by studying or training. The government response is, ‘There’s nothing stopping you from studying or training on top of working 15 hours a week.’ Perhaps this is all you can expect from an out-of-touch government—out of touch after 10 long years in office. But the reality is that if you are a single parent and you are already working 15 hours a week, that will be challenging enough. It will be very difficult for people to find the time and money to study on top of that. Never mind if you want a better job, never mind that this country has a skills crisis—you still cannot study or train. It is an extraordinarily incompetent set of policy measures.

But then the government says, ‘You can acquit your obligations by studying on Austudy.’ Apart from starting off at about $6 a fortnight worse off on Austudy, you have to study full time, meaning no time for private earnings, so in fact you will be even worse off. Under the welfare changes, you cannot substitute an equivalent amount of study for work. You either work part time or study full time. It is disingenuous in the extreme for the government to claim that you can acquit your obligations with study when you would in fact have to do almost twice as much study as work to meet the obligations imposed on you. This is simply an unrealistic choice for sole parents. It is even more dishonest to make the claim that full-time study acquits obligations when it is clear that the financial penalties are so great for somebody participating in full-time study. There is the loss of income through the slightly lower Austudy rate and, more importantly, there is the loss of capacity for additional private earnings. It is a purely theoretical choice, and it is consistent with this government’s failure to make training Australians a priority.

Finally, of course, there is the ridiculously extreme set of changes that the breaching regime imposed by this government will bring. The government’s own figures are that 18,000 Australians under this regime will go without any income support assistance for eight weeks at a time. They will have two months when they receive no income support no matter what they do during that period, even if they remedy whatever breach of obligation they have engaged in. Of the 18,000 people who will be without any income support for two months, only 4,000 to 5,000, on the government’s own figures, will be eligible for what they call ‘financial case management’, that is, emergency payments for food and shelter. The remaining 14,000-odd will have no support whatsoever and will simply have to hope that the community is more charitable than the government. Only those who are classified as ‘exceptionally vulnerable’ or who have ‘vulnerable dependants’ will be eligible for this emergency assistance through financial case management. And perhaps one of the most extraordinary examples of how extreme this government’s approach is on this front is that it does not consider people who are homeless to be vulnerable enough to qualify for this financial case management.

Of course, we do not know exactly how this breaching regime or the financial case management will be implemented because the government has not made the guidelines public. In just under 2½ weeks this regime will come into place. We still have not seen the guidelines in relation to the financial case management nor have we seen final versions of the social security guidelines. Indeed, after the questioning of the department and the minister through the budget estimates process it is hard for anybody to be confident that this policy and these guidelines are well-developed at all. The social security guidelines, as I said, have not been finalised and made public. In less than three weeks we will see the biggest welfare changes this country has seen in over a generation but we are not exactly sure how they will take place. We cannot say for sure how people will be affected or what their entitlements will be because of the government’s decision to place so many of these issues in the guidelines. It is an astonishingly rich blend of arrogance and incompetence from this government.

This bill does nothing to fix these major flaws in last year’s changes. You cannot fix faulty foundations with a thin coat of paint. I want to make it clear: Labor support real welfare reform that goes far beyond moving people from one welfare queue to the dole queue. We believe people who can work should work, and for those who cannot work we should provide care and respect. Instead, this government’s changes make it harder for people on welfare who cannot work and harder still for those who can.

I just want to remind the chamber that when the legislation that this is amending passed through the House in December Judi Moylan MP made a very worthwhile contribution in the House of Representatives. It is a pity that more of the government’s back bench did not take on board some of the changes she was outlining and some of the views she put. She made the point that Labor had been making all along: that there is nothing wrong with imposing obligations on people, obligations that are reasonable and directed to trying to move people from welfare to work. These are things that Labor can support. These are things Labor has argued for. But the core of the government’s changes was a reduction in the income support paid to vulnerable families in Australia. The core of the government’s policy is moving people from one welfare payment to the lower welfare payment. The core of the government’s policy is putting people on the dole.

As Mrs Moylan pointed out, this policy could have been implemented without the reduction in income support. The government could have put in place programs to improve people’s passage from welfare to work. Instead, they went for a cheaper solution: dumping people onto the dole. The most incompetent aspect of this is that, through the effect of tax and welfare withdrawal rates, work will become less financially rewarding under these changes. The government is telling this group of Australians: ‘We are going to pay you less. Worse, we are going to make sure that you keep less of every dollar you earn. But we are still going to call it a Welfare to Work policy.’ What an extraordinary arrogance and what extraordinary incompetence.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

Like Senator Wong, the Democrats do not oppose the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 per se. It does make some improvements here and there to the existing regime. But it must be stated once again that the Democrats strongly oppose the current new regime that goes under the Orwellianly misleading title of ‘Welfare to Work’. It is one of the worst examples in this government’s 10 years in office of the gross abuse of the English language and the deliberately misleading description of government policy and legislation. It is a simplistic slogan of just three words—welfare to work—and that is all the government has used as a fig leaf to try to deflect every single criticism and cover up every single flaw in this highly flawed package. Every single complaint, every single concern that is raised, every single flaw that is pointed out in the Welfare to Work package is simply responded to by government ministers saying, ‘You must be against people getting off welfare and into work,’ and then dismissing the substance of the complaint and the concern. Frankly, I am appalled not only that this government has done that and continues to do it but that to date it has got away with it.

I was extremely disappointed at the end of last year when this legislation was guillotined through the Senate at how little attention was paid to its extremely unjust components by the press gallery and by the wider public. I acknowledge that there were other very serious pieces of legislation also being guillotined at the same time, most notably the workplace relations changes—also going under the Orwellianly misleading title of ‘Work Choices’. And, of course, there was antiterrorism legislation, which at least some of us might suggest could potentially inadvertently increase the risk of terrorism—but I will not go to that separate debate at the moment. There was also the VSU legislation and a range of other bills being guillotined through, so there is perhaps a reason why there was not as much attention to and recognition of what was being done at that time. But as we now move to 1 July, when these changes kick in, there is more awareness of what is involved and there is a recognition that the title ‘welfare to work’ is at best an extremely inadequate description of the legislation and the government’s package or, at worst, a deliberate and flagrant lie.

Under these changes a large number of people will not be assisted from welfare into work. They will be assisted from one form of welfare to a worse form of welfare. In some cases, they will be assisted—as it is called—from welfare to no income at all. That is a negative outcome. There undoubtedly will be people assisted into work through various aspects of this government’s package, but those changes and those areas of assistance are quite able to be provided without the accompanying components that cut the income of many sole parents and many people with disabilities. There is nothing about reducing people’s income that assists them into work. It is quite clear from the overall package that, in total, this was a savings measure for the government under the guise of the feel-good Orwellian title of ‘Welfare to Work’. We actually had a savings measure for government to try to reduce the number of people on the disability pension and parenting payment single and move them onto the lower payment of Newstart.

It is particularly galling now that the federal budget has appeared because, as all senators would know, there was a significant community debate about the need to change our taxation system. We have had some debate on that with the Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Bill 2006. There were a lot of people across the community contributing to that debate on the need for wide-ranging structural tax reform. About the only people who did not contribute to the debate were the senior ministers of the government—even a lot of government backbenchers constructively contributed to it. The Treasurer and the Prime Minister did not contribute to the debate. The Treasurer’s response was to try to squash that debate with a farcical comparative study that was supposedly independently done but basically was written by Treasury anyway to divert attention from the real issues of the need for structural tax reform.

There were a lot of issues and a lot of views put forward across the community. That is understandable and as it should be. It was also interesting how much common ground there was across the community—across the different sections and philosophical viewpoints of the community. There were some key areas of common ground, and one very common area that was mentioned was the need to reduce the tax burden on the lowest income earners through measures such as raising the bottom tax threshold, on which we have just had a debate, so I will not repeat it. Also, almost all comments talked about the need to fix the growing and serious problem of the very high effective marginal tax rates that people pay, particularly low- to middle-income earners.

The Treasurer’s response to this was to say, ‘They call it an effective marginal tax rate but it is not really tax; it is a withholdings test.’ It is like Wayne Swan and Mark Latham’s notorious claim that the family payment was not real. The Treasurer’s income withdrawal supposedly is not real either, according to him. I can assure him that it is very real and it is effectively a tax, which is why people call it ‘an effective marginal tax rate’ when they are calculating its impact.

One aspect of this government’s changes that has not been acknowledged, that needs much greater attention and that categorically is a major disincentive for people to take up work is the fact that, under these laws, many people will have their effective marginal tax rate increased. By pushing them off the disability support pension and parenting payment single and pushing them onto Newstart, you change their income test so that, if they earn small amounts of income, the withdrawal rate is significantly higher. Therefore their effective tax rate is much higher.

These people, who are amongst the lower income earners in our community, are paying tax rates much higher than people who are earning $150,000 a year or more. That is completely unjust; it is also gross inefficiency by people who are talking about the need to make our economy as productive at possible, to get people into the workforce and to meet some of our workforce shortages. This is a massive disincentive. It is a grotesque distortion and it is clearly impacting on the ability of the employment market to fill available jobs. To do all that under the label of ‘Welfare to Work’ is a disgrace. It is appalling that this government is getting away with it. The Democrats will continue to do all we can to make sure that the government does not get away with it in the long term.

We all know that people who have been on welfare for a prolonged period—particularly people who have personal issues such as being the sole parent caring for a child or children or having disabilities, even if they are termed ‘mild’ by a bureaucratic formula—are far more likely to take up part-time work than get into full-time work. That is good. The more people who can be assisted to do that, the better. Of course, it is precisely people taking up part-time or casual work who are most hit by high effective marginal tax rates because they will have those sorts of income levels—a couple of hundred dollars a week—from paid employment and they will have very significant reductions in their overall take-home income as a result of working, particularly when you add the costs of transportation and other costs involved in getting, holding down and performing a job.

The farcical formula that the government is applying in deciding whether or not people will have to take up a job on the basis of how much better off they are each week would be a joke if how it impacts on people’s lives were not so serious. But it is a very serious matter. One of the other very disturbing aspects of this debate and the misleading language that the government has used is the way that it has completely turned the notion of welfare reform on its head. These sorts of changes that the government made have again been excused and promoted under the label of ‘welfare reform’. It is a phrase the government has been using for a while but the agenda has been very different to what the phrase implies and, indeed, what was initially proposed.

Going back quite a number of years—at least five—if you look at what is known colloquially as the McClure report into welfare reform, you see that it is a fairly simple and quite readable report, which is not necessarily the case with many of these sorts of reports. It clearly demonstrated that a major aspect of trying to assist people into work is not just looking at it as a narrow, linear line from one position to another but also recognising that there is a range of barriers to people getting into the workforce and to people basically being able to have opportunity—and that means ‘opportunity’ in the widest sense of the word. Some of those key barriers are housing costs, transportation, access to training and particularly the ability of work to meet the needs of people, whether they are family needs because of being a sole parent or personal needs because of a disability. They were all recognised as key factors.

Another key component that was highlighted is the need to reduce the gap between the pension payment and what is colloquially known as the dole—the Newstart payment. The two payments have been getting steadily further apart over time because they have different indexing measures attached to them. The other aspect, which is less recognised but equally important, as I flagged before, is that different income tests apply. There is a much more generous income test for pensions than for Newstart, a more generous assets test and other concessions such as health care cards and the like. All of those things are lost to those people that are now not eligible for those payments; they will now be put on Newstart. That will mean, undoubtedly, significantly lower incomes and levels of assistance for many Australians who are already amongst the most disadvantaged. It is a contemptible approach that the government is taking and it is disgraceful that it is still pursuing it. This is one area where there needs to be a lot more attention paid to the impacts on families—on human beings—and on individual people around Australia who are affected as a result of the legislation that was passed in this place. The legislation, I might say, is supported by the Family First senator, which I find quite extraordinary, given how negatively it is going to impact on so many families around the country. That is something that needs to be monitored and followed much more closely, and the Democrats commit to doing that, as I am sure many other senators in this place will.

Finally, I want to indicate the wider problem with the approach that has been taken in the government’s welfare legislation. Whilst the changes, as far as they go, are welcome, there are still changes being made within the broader context that are going to cause major hardship to a significant number of people. We need to remember that we are talking about people’s incomes. One area of the public debate that is very misleading—and I do not blame the government alone for this one, at least—is the common assumption amongst the community and the media about what the average income of Australians is. The assumption, which is often quoted, is that the average income is $50,000 or $55,000 per annum. People hear that and assume that most people earn that amount or over. That is completely incorrect. That figure is the mean income. The median income, which is the midpoint, is much lower down—around the $30,000 mark. If you count those people who are not in the workforce and who have no income at all then the figure moves down into the $20,000 to $30,000 range, depending on which statistics you read. And so the average Australian actually earns less than $50,000 per year—around $30,000 per year. They are the sorts of people who are impacted significantly by any sort of increase in the effective marginal tax rate. That is another reason that these sorts of measures are so negative. It is about time, when we are talking about the income of people in the community, that we recognise that the majority of Australians do not earn $50,000 or $55,000 a year; the majority of Australians earn $30,000-odd or less. That is not a lot of money; obviously, that is a key reason that many families need to have two incomes. Even the average household income median, or midpoint, is only in the $50,000 to $60,000 per year range.

We need to keep those facts in mind when we are looking at measures that can affect people’s incomes, whether they are taxation or welfare changes or some of the interconnects between them. In that respect, the government is clearly putting in place changes that will mean a significant group in the community will become less well off. There has been a lot of talk from the government in recent times suggesting that there has not been greater inequality in Australia. The government denies the common phrase ‘the rich are getting richer and the poor are getting poorer’ and says, ‘Everybody is getting richer.’ It has even suggested that the gap between the so-called rich and the so-called poor is not increasing. Inasmuch as there is truth in that, the government should acknowledge that that is in large part because of the Democrats—particularly during the period when we had the balance of power in the Senate. The Democrats prevented some of the more extremely draconian and unjust welfare and tax measures that the government was going to put in place and that would have undoubtedly increased inequality. The government once again refuses to acknowledge that, in the same way that it refuses to acknowledge the significant role the Democrats have played in producing the positive workplace environments and workplace statistics that the government continues to gloat about.

But of course the key thing now is that the government have control of the Senate. In the period of time since gaining that control, they have destroyed the workplace relations system that they themselves continually say has produced such good economic outcomes. They are introducing draconian measures—like the one before that Senate today—which never in a million years would have got through the Senate before. As the government well know, measures that were far less draconian than today’s were not passed previously, because they were unjust and increased inequality. Even inasmuch as there is some truth in saying that inequality has not increased as much as some people might think, that has not been the government’s doing. It has been the Senate and the Democrats in particular that have protected that equality. Whatever might happen to the Democrats in the future, that is certainly a legacy that I will remain proud of.

It also needs to be emphasised that, despite the best efforts of the Senate and the Democrats and others, there has clearly been a growing inequality in Australia. It is not just measured, and you cannot just measure it, on straightforward income through employment. But if you measure it on overall income, unearned as well as earned, and particularly if you measure it in terms of wealth, there has been a massive increase in the gap between the haves and the have-nots in this community. This is particularly between those who have housing assets and those who do not. Those who do not are less and less able to get into the housing market and have housing based assets. Measures such as the government’s Welfare to Work package will increase the number of people who have little prospect of getting into that area. It will therefore increase the number of have-nots, who are being left behind.

As that wealth gap grows bigger, particularly the component of it that is based around those who can purchase their own the house and housing investments, people’s ability to cross that gap will become less and less. It will become, eventually, an unbridgeable gap. Once it is an unbridgeable gap we have a permanently divided society, and that is not in the interests of those of us who are on the ‘haves’ side of that chasm—let alone those who are the have-nots. That is a path this country should not be going down, and we need to reverse it urgently. The changes in the legislation are okay, but the Welfare to Work changes need to be monitored. The disadvantages and injustices not only need to be highlighted but need to be reversed, and they need to be reversed as soon as possible.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

The Greens share the concerns articulated today by Senator Wong and Senator Bartlett. But today I want to focus on one particular area of the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006. I have circulated an amendment to this legislation to deal with an issue that I have been raising repeatedly about this legislation whenever I can. That is the issue of family carers.

Before I go into some of the broader issues as they relate to family carers, I want to go through a short history of this legislation and a few of the changes that were, thankfully, made to it. When this legislation was first talked about, only biological parents of young children under the school age of six were to be exempted from it and from the requirements under Welfare to Work. When there was community outrage about the fact that this would unfairly affect carers, and in particular foster carers—and the Greens were very outspoken about this as well—the government, thankfully, saw that the changes did disadvantage foster carers and it made changes to exempt foster carers from this legislation. Unfortunately, at the time family carers were left out.

Family carers carry out the same responsibilities as foster carers, and therefore are subject to the same disadvantages or pressures that this legislation places on foster carers. In fact, many would argue that family carers face even more trauma than foster carers, because often they are caring for children who have been subjected to extremely traumatic circumstances. Not only are they looking after the children but they are dealing with family crises and with other family members. So I believe that the arguments for foster carers being exempt from this legislation apply just as much, if not more, to family carers.

Some people in this chamber may be aware that I have raised this issue here in this place and repeatedly in estimates, asking questions about how family carers are being looked after. When I raised this question during the debate in the Committee of the Whole on the legislation in the first place, I was assured that few children would be affected by this legislation—the children that are being cared for by family carers. I quote Hansard, in which the Special Minister of State, Senator Abetz, said:

Hopefully—and I think we would all be in agreement on this—the number of children involved in this situation would be small.

Unfortunately he got it wrong. In January this year the Australian Institute of Health and Welfare released its report, Child protection in Australia 2004-05. It did a survey of children placed in out-of-home care; in other words, children not living at home, whether they be in foster care, family or kinship care, or residential care. The report found that 40 per cent, or almost half, of children placed in out-of-home care—I emphasise ‘placed in out-of-home care’, and I will come back to that—are placed in family or kinship care. That is 9,435 kids. Twelve thousand, six hundred and eighty kids are placed in foster care and 939 kids are placed in residential care. Almost half of all kids who are placed in out-of-home care are placed with family carers. So much for the small number placed with family carers; it is almost as many as are placed with foster carers. So the argument that only a small number of children are placed in family care so we do not need to worry about them because the vast majority is in foster care is blown out of the water. If you are just relying on numbers, it is almost the same. On numbers alone the argument should be that the same exemption should apply to family carers as applies to foster carers.

But the report also found that the number of children being placed in out-of-home care is going up yearly. On 30 June 1996 there were 13,979 children in out-of-home care. On 30 June 2005 there were 23,695. That is an increase from three per thousand to 4.9 per thousand. Further, the figures show that this is a yearly increase. So we can expect that there will be more and more children placed in out-of-home care, whether it be foster care or family care. That is a 70 per cent increase over that nine-year period. I would argue that is a significant increase.

Unfortunately, the figures also point out that, proportionally, more Aboriginal children are going into out-of-home care. There were 5,678 Aboriginal and Torres Strait Islander kids in out-of-home care in June 2005. This is an increase of 619 since June 2004. About 26 Aboriginal and Torres Strait Islander children per 1,000 are in out-of-home care versus about four non-Aboriginal children per 1,000. Aboriginal children are six times more likely to be in out-of-home care. The point here is that Aboriginal families are much more likely to be affected by these changes than non-Aboriginal families. There are also greater impacts for large urban Aboriginal populations. Nearly nine children per 1,000 in the Northern Territory, nearly 21 children per 1,000 in Queensland and nearly 23 children per 1,000 in Western Australia are in out-of-home care, whereas in Victoria it is nearly 41 per 1,000 and in New South Wales it is nearly 40 per 1,000. In other words, it is Aboriginal urban populations that are being more strongly affected by these changes.

I would like to reiterate that we are talking about 9½ thousand children. This is a large percentage of children who are being affected. The trend is increasing. It impacts most significantly on Aboriginal families, particularly urban ones. These figures are for children who are placed in family care. It is likely to underestimate the number of kids in family care, because many children are placed in family care informally—in other words, the families step in and take care of the children before it comes to the attention of the department. They are struggling to deal with the trauma of children in family care and take it upon themselves, without intervention.

During various opportunities in estimates I asked a number of questions on this issue because I am deeply concerned about the adverse impact this is going to have on the families that provide family and kinship care and, of course, the impact that that necessarily has on the children in their care. I have been told that this is a policy decision of government. The agency, it seems, is not able to deal with it very well. In fact, I have had very unsatisfactory answers to my questions about it. I have been mainly told that this is about foster carers. It was a political decision, a policy decision, taken by government to look after foster carers. It is one I very strongly support, but it is also one I am very greatly disappointed about, in that it is not picking up a large cohort of carers and the children they care for.

I also understand that there are going to be some guidelines on this issue, but it is not regulation and it is not in the legislation. They are not being given the same protection, support and exemption that foster carers and the children in that foster care receive. I believe it is much better to acknowledge and to protect the large contribution made by family and kinship carers and their rights. It is in the best interests of the children to protect them under the law and to protect them under the same exemption that the foster carers have. I believe the place to do this is in a provision under the act.

We need to understand the situation of family carers. Often, as I said before, they take over the care of children in extremely difficult and traumatic circumstances. I suggest to you that there are no circumstances under which children move out of parental care into either foster care or family care where there are not difficult and traumatic circumstances. In many circumstances, the children who go into family care have suffered and, unfortunately, have been subject to abuse. They need extra support and extra counselling, which means, for example, taking children out of school during the day to counselling sessions, often a number of times a week. This applies not only to children under the age of six but, in many cases, to children of all school ages, and they all need support. Sometimes it is very sudden; other times it is a gradual thing where, over a period of time, as circumstances become more difficult, family and kinship carers find that they have been handed over the care of children. Often this is informal, and they do not approach agencies, so they are not registered as foster carers are registered—and I will come back to that point in a minute. Often they do not want to be washing their so-called dirty linen in public. They do not want to be telling an agency what is going on in their family. They are just doing it.

The process can be messy. Sometimes it is only temporary and sometimes it is a long time before the process is finalised. People have to go to court, and it can take up to 18 months or longer to have the formal responsibility and care of the children in your family. Sometimes there is a source of conflict within families over what is in the best interests of the child, whether the child should stay with the parents or whether aunts, uncles or grandparents should step in and provide care for children. Sometimes there is a death or disability, and this can be drawn out. So formal custody is not taken over straightaway. Sometimes they go into family care over a protracted period of time as a person, for example, gradually becomes sicker or goes in and out of hospital.

As I said, it is often under tragic circumstances, where the trauma of loss can be overwhelming. Families go into denial and they have an attitude of: ‘We can cope.’ It is not until they reach a point of financial crisis that they reach out for help. But they still need that help, whether or not they have formally registered for it and formally registered for income support for the children. They should still be supported and they should not be required to undertake all the strenuous activity that is associated with the new Welfare to Work process. The other complicating factor here is that different states and territories have different rules about the register for foster carers and whether they register family or kinship carers and what that register means. It is not standard across Australia. Some states have registers for family carers—for example, I understand the ACT does—and some do not, and it is very hard to find that information.

The other thing is that family carers are much less likely to know their rights and have access to formal channels of support than foster carers. There are foster carers’ associations and registers of foster carers. Various government agencies have foster carers registers. You have to go through a process to become a foster carer. So foster carers know their rights, but it is more than likely that very often family carers do not know theirs. They do not know where they can get information from. They do not know what support they can get from Centrelink, for example, or from other government agencies in their states. Therefore, communication and education is critical, but it is very difficult for this group. There is no obligation, as far as I am aware, for carers and family carers to be told of any support that they could receive.

Under estimates questioning, DEWR has acknowledged that the legislation is inconsistent for foster carers and family carers, that there is a significant number of family carers—and that has been pointed out in the report, so it could hardly deny it—and that the work they do is the same as that of foster carers. DEWR also acknowledged that most states and territories do not register or authorise family care in a way that fits into the act. But it states that the exemption of the family carers—I come back to it—was a government policy decision. It is a government policy decision that I believe is badly flawed. The legislation is inconsistent for these groups of children and for these carers. One set of children is advantaged because they have the exemption and their carers are covered by the exemption. Another set of children—an equal number, almost; and, in fact, if you include informal care, more children are covered—does not have the advantage of this exemption. How is that fair? How is that just?

These are our future generations. These are the children who are most disadvantaged in our society. It can be easily dealt with. Accept the amendment that the Greens will move to support family carers and give them equality with foster carers. You have done the right thing in acknowledging the hard work of foster carers. It was supported by the community. It was supported by everybody. There was acknowledgment of the work that foster carers do. Family carers do the same amount of work. Why are they not subject to and given the support of this exemption? There are problems that need to be sorted out at the state level—there is no doubt about that. There are problems about legitimisation and registration of family and kinship carers. But the Commonwealth need to provide the lead on this. They need to change the legislation to include family carers.

The other thing is that you need to make sure that it is for children over six, because children over six are traumatised by the terrible circumstances which lead to them being in care. The fundamental issue here is the welfare of children in extremely difficult circumstances. The point is to give them a chance to lead worthwhile, meaningful and productive lives in spite of the many and deep crises and extra challenges they face. This is through no fault of their own. Through no fault of their own they are starting a step back from everybody else in the first place. What matters is their welfare and that we as legislators are prepared to provide support to the people who love and care for them. We are talking about people who sacrifice a great deal to look after these children in often tragic circumstances and in circumstances where they are often dealing with their own sense of loss and grief. They are prepared to take on the extra responsibilities. We should be prepared to support and help them and not add to their burden. I will be moving the amendment to this legislation during the committee stage. I really hope the government can find it in their hearts to support this small amendment that would mean so much to so many children.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006 and to indicate that there is a very important need for Australia to restructure the nature of participation in the workforce in light of the dynamics of our society today.

Members of the Senate will be aware of the previous debates on this question. They will be aware of the inquiry by the Senate Community Affairs Legislation Committee late last year. That inquiry laid out a variety of issues being addressed in the transition of the Australian social security system from one which supported, and perhaps in some senses even encouraged, a very significant proportion of Australians of working age to receive benefits and not participate in the workforce to a system where the onus is placed on people who are capable of participating in the workforce to do so. By doing so, they help to address the serious imbalance emerging in the Australian economy between the number of positions being advertised and the number of jobs being thrown up in business and the economy generally, and the number of people available to fill them.

The Senate would be aware that we have seen in only the last few days wonderful news about the unemployment rate falling below five per cent. It is extremely important that we acknowledge the evidence that this represents for the change in the nature of the Australian workforce. There is now no longer a shortage of jobs so much as a shortage of workers. We should perhaps be focusing on other indicators of the health of our economy rather than on unemployment figures. We should be looking at ways that we can address that situation as it stands today. That situation is going to worsen in light of the ageing of our population. There will be an increasing vacation of the working population by those who get older and a lack of replacement of those people by others of working age who are available to contribute to manpower shortages in our economy. The Workforce Tomorrow study by the Centre of Policy Studies at Monash University illustrated that point extremely well. It described the phenomenon of the disparity between available positions and people available to fill those positions as being in the order of 195,000 within five years.

I particularly feel an urgency to ensure that this issue is pursued, because the ACT was identified as the jurisdiction which would have, after South Australia, the worst disparity of all. Indeed, in the ACT there are already serious manpower shortages in a range of areas. It is simply going to get worse unless measures are taken to encourage as many people as possible to participate in the workforce. There cannot be any doubt that that process represents a huge cultural change in the nature of Australia’s welfare system and its policies on participation in the workforce. It is an absolutely huge change.

In today’s debate, I have heard criticism by other senators across the chamber about the changes that the federal government is engineering with these bills, but I say to them that, in addressing the so-called shortcomings in these arrangements, they need to seriously ask themselves what they would do differently if they were on the government benches. What would they do to address the looming crisis in Australia’s capacity to be a productive economy that delivers a worthwhile standard of living to all of its citizens?

We know that providing a job is the best form of welfare that we can furnish to our citizens. We know that those who have the capacity to work ought to be encouraged to work. We know that services provided to people who have an obligation to seek work should focus on getting those people into the workforce at the first available opportunity, given other constraints and their particular conditions—such as their need to care for children or the problems that some sorts of disabilities may bring to a work environment.

We acknowledge those factors. However, having done that, you cannot then avoid the question of what you actually do to effect that change. It is a significant change. With respect to supporting Australians who for a variety of reasons choose not to be in the workforce, it is a change which represents, in some senses, the repudiation of policy of many decades duration. But it would be irresponsible to fail to address those issues. I hope that this debate goes beyond simply highlighting what are, apparently, in the eyes of some people, inadequacies or shortcomings in the government’s proposal.

I move to the question of what can be done to make those changes happen and to make that outcome actually occur for the sake of the standard of living of future Australians. Currently, Australia’s participation rate of working people is 73.6 per cent—at least that was the figure available from the OECD last year. It needs to be noted that that rate is significantly behind other major OECD countries, such as Canada, Denmark, Switzerland, the United Kingdom and the United States. Comparisons are perhaps odious, but they illustrate that we are not leaping into the unknown and we are not engineering some kind of unacceptable change in the nature of the workforce by taking measures that stimulate people’s involvement in the workforce. Frankly, in order to meet the skill and labour shortages that the Australian economy will experience in the next few years, we have to ensure that we get that participation rate up as high as possible.

At present, the net growth in the Australian workforce is 170,000 people each year. Access Economics has estimated that, over the decade from 2020 to 2030, the workforce will grow by just 125,000 people—that is, a growth in the size of the workforce of about 12½ thousand people each year. The side effects of the disparity between the size of the workforce and the size of the required workforce, if you like, will lead to an ever-diminishing tax base and revenue base for governments at all levels, not simply for the federal government. It will impact seriously on the ability to provide a range of government services, including pensions, income support payments, health services and education services—all sorts of services to the Australian community. So it is obvious that we will engineer an intergenerational inequity if we cannot provide the next generation of Australian taxpayers with the opportunity to pay taxes at a reasonable level and to get reasonable access to services of the kinds that are enjoyed by the taxpayers of today.

Of course, that was the issue that the Treasurer, just a few years ago, very clearly placed on the table with his Intergenerational report, in which he warned:

Although the ageing of the Australian population is not expected to have a major impact on the Commonwealth’s budget for at least another 15 years, forward planning for these developments is important to ensure that governments will be well placed to meet emerging policy challenges in both a timely and effective manner.

Having said that we have an insufficiently high participation rate of working people in our economy, we have to acknowledge that the nature of the Australian welfare system has led to a higher degree of welfare dependency than is appropriate in order to reverse the trend towards a deficit in the number of people available to fill positions.

There are currently 2.6 million working age Australians—that is, people between the ages of 15 and 64—who are on income support. I acknowledge that the retirement age is now a moveable feast—and so it should be—but, if we take that to be the age at which people might be expected, in all circumstances, to work, there are 2.6 million Australians who are on income support, of which only 15 per cent are required to be actively searching for a job. In other words, a relatively small minority of that 2.6 million is actually required to go out into the workforce. There is a variety of issues confronting those approximately two million people who are not required to seek employment and who are on income support. Of course, there are some who will never be in a position to participate in the workforce, but it cannot be denied that we have, at the present time, a system in which far too many are capable of participating but are simply not appropriately encouraged by the nature of the system to take that decision and to seek employment.

With the present unemployment rate, there has never been a better time to seek those positions. Some people may have been discouraged by a lack of available positions on the basis of, for example, having a disability, being a mature age worker or having a low skills set, and they may have had a long history of rejection and inability to obtain employment. But what is different about the environment today, particularly with the measures that have been announced in the Welfare to Work package, is that active steps are being taken by government to engineer people through the difficulty of having a problem which perhaps makes them, in the eyes of some, less attractive employees than otherwise might be available. We acknowledge that there are many factors that can contribute to a person not obtaining employment, but we should not allow a situation to remain whereby one of those factors is their unwillingness to participate despite a capacity to do so.

In the 12 months prior to June 2004, 55 per cent of people transferred to the disability support payment from another payment in Australia. That was in reaction to changes in government policy which tightened up access to other forms of payment. In the seven years prior to June 2004, the DSP had grown to 26 per cent and the parenting payment single by 33 per cent. It needs to be recorded that there are now more working age Australians on the DSP than there are on the Newstart allowance.

There may have been factors which contributed to an increase in the number of Australians with disabilities—there may have been factors related to definitional changes which led to people having an eligibility for that payment which they did not previously have—but I think we also need to be up front and sincere enough to acknowledge that some people have taken advantage of the system to make that transition and that in some cases the disabilities complained of are not in effect a barrier to participation in the workforce, particularly given that systems are now being put in place to allow people’s particular conditions to be much more readily taken into account in their role in the workplace than has ever been the case in the past.

Money was made available, under the package announced last year, for workplaces to be modified to allow those issues to be addressed and for advice and support to be given to employers who choose to employ a worker with a disability of a level that we have not previously seen in this country. We are at last serious about getting people with disabilities a role in the workforce. Admittedly, circumstances may have forced that on us, rather than a philosophical change of viewpoint, but the fact is that those changes are taking place now. It is important that we indicate to people, particularly those with disabilities, that the system we are putting in place is now about accommodating those requirements, working through those needs and treating those with disabilities who want to participate in the workforce as citizens who have a greater capacity to do that than ever before.

I hope that, as with last year’s legislation, the changes in this legislation that are being discussed will be sympathetically considered by senators. We realise that none of these decisions is necessarily very easy. It is certainly possible for people to be miscategorised by a system which places a greater emphasis on participation. It is certainly possible for people who do not have a capacity to work to be required to work in a way which causes them some disadvantage or some loss of income support. But I am convinced that the best measure to overcome that potential is goodwill and an accepted willingness on the part of Centrelink and other agencies of the federal government that deal with people in these circumstances to address people on the basis of their individual circumstances, and to not use inflexible rules to apply to people irrespective of those individual circumstances—not, in short, to attempt to force a square peg into a round hole.

We owe it to future generations of Australians to ensure that we do this sensitively and with regard to those individual circumstances. I believe that the flexibility exists in the legislation and in the approach being taken by agencies of the federal government to engineer that outcome. I do not, of course, preclude the possibility of stories of people being mistreated by the system—and I have no doubt at all that, when those cases occur, the media will hungrily lap them up and there will be headlines. However, at the end of the day, as long as we are fair minded, we are prepared to approach this on the basis of providing for an acceptable and appropriate transition to a different kind of welfare operation in Australia, and we accept that a measure of flexibility can be applied and should be applied, I think we will be on the right track. I hope that that is the outcome of the exercise.

The Senate Community Affairs Legislation Committee recommended last year that the system be overviewed and monitored, and I believe that that is important. I understand that the Minister for Employment and Workplace Relations has accepted the recommendations for a mechanism that reports to parliament on the way in which these changes operate. Personally, I think we need to see the system in operation in order to be able to gauge just how well that transition has been made. I know that some would prefer to front-end load this so that no problems can possibly occur. With respect, I think that is naive. We are not going to be able to do that. What we need, however, is a capacity to acknowledge when things do not work and to make changes when that is appropriate.

That is my sense of the response that the minister gave to the report. I certainly will take that approach as a representative of this territory in my discussions with the minister in identifying what issues arise for my constituents in facing that transition. I hope that that will be a phenomenon repeated across other parts of Australia. We certainly owe it to our constituents to give them as much opportunity to bring those issues to our attention as we possibly can so we can help fix them. I support this legislation. It is important to provide this outcome for the people of Australia. This is about the future living standards of our community and, as such, it deserves to be supported.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

The bill before us is a ‘consequential amendments’ bill and, in that sense, the Labor Party position is that we will be supporting the technical provisions in the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Bill 2006. But I ask this question: consequential to what? The Welfare to Work and other measures legislation came into this place before the end of last year and was very quickly debated. It was legislation that, as Senator Humphries has just described, was going to make an overwhelmingly significant change to the way in which these issues were going to be looked at in this country. I believe that, as Senator Bartlett mentioned, it was guillotined in this place because it was agreed by the government that this had to be imposed on the citizens of Australia with effect from next month. In fact, many of the provisions of the Welfare to Work legislation will be taking effect from 1 July this year for the first round of people who are making claims, but some people on the disability support payment are already in the process of having their ongoing review activities picked up by elements of the Welfare to Work changes.

As a community, we should be able to expect, as Senator Humphries has just outlined, the participation of as many people as possible in our economy. No-one disagrees with that. What I find most offensive in the debates that we have had up until now is that from the government point of view any questions or issues that are raised about how this particular legislation will operate in practice, and any concerns raised by those people who have genuine questions about the impact of the legislation and about how families will continue to operate with reduced income, are dismissed as opposition. The people asking those questions are dismissed as people who do not understand the system. And the Labor Party are dismissed as though we do not share a commitment to encourage Australians to take an active role in the economy, to fulfil their need to work, to effectively communicate more widely in the community and to be part of an Australia that we should all share.

We have been told in this place that the best form of welfare is a job. I dismiss the term ‘welfare’; I find that overwhelmingly patronising in many ways—except when it is used specifically in legislation. Of course we want people to have the opportunity to work. Senator Humphries has just outlined extremely effectively the need for the people of our country to have greater participation in the workforce. We agree. But what we do not agree with is the particular methodology of this legislation.

We do not disagree with the consequential amendments. With all legislation, the ability to go back and look at things and impose new processes to make it better is a good one. If all legislation had a series of consequential amendments, we would be effectively working together to make the legislation better, so we welcome consequential amendments—even the very technical ones that we have before us today, which I do not think that many people who are not working in the system would truly understand the operation of. These amendments are all responding to particular issues to make sure that the thing works better.

However, what has not been picked up in these consequential amendments is the key question which we have been debating for several months and, in fact, in a way, for many generations: how do you effectively work with people to ensure that they can all share the largesse of our country? What we on this side of the chamber have from the start objected to in the Welfare to Work legislation is that there is no way that the best way to support people is to cut the amount of money they have to live on. The only element of the way in which this particular process is worked through that we object to specifically is that a key part of the Welfare to Work changes means that people are forced onto a lower living income.

We do not object to the fact that there needs to be training, support and acknowledgment to encourage people into the workplace. We do not object to the fact that there need to be closer working arrangements between the Job Network and the Centrelink systems so that people have access to the range of support mechanisms which everyone should have access to if they are seeking work. People who are now sole parents or who are now on the disability support payment should not have some special label on them when they are seeking work that says, ‘Danger, danger: needs special help.’ We are saying that the type of support in the Job Network should be available to all Australians seeking work under any provisions in our system.

The government has announced that extensive new support networks—we have not seen them working yet—will be put in place to work through the Welfare to Work processes. These special arrangements are in fact doing no more than acknowledging the need for these Australians to have some special support in their efforts to seek work. Of course we support that. We want to be actively involved in developing these programs and in ensuring that they are the most effective possible. We want to ensure that they meet the needs of the people working through the process of changing their way of living and their expectations for their daily routines—and, in the case of sole parents, balancing the particular issues involved in raising kids by themselves.

In the very short inquiry that the Community Affairs Legislation Committee held around this legislation, we received a number of submissions. They were not one-off submissions; they did not come from nowhere. The people who actually made submissions to this committee work on a daily basis with the welfare system—working with the Centrelink processes or acting as support networks for people who are sole parents or have a form of disability. The submissions were from organisations with enormous amounts of effective and practical corporate knowledge of this area. Their choice to come forward—and no-one is forced to give evidence to a Senate committee, or at least to the Community Affairs Committee—was based on two major elements: firstly, they wanted the voices of the people who are to be affected by the legislation heard in the development of the legislation and, secondly, they wanted to be a part with their knowledge and experience in whatever was happening—I think Senator Humphries used the term ‘the engineering of the process’—in regard to the government looking at the needs of people in the process of seeking work.

The department gave evidence to the inquiry and subsequently at a range of Senate estimates processes—and I think that will continue as the legislation is implemented—about their need to consult with the community and with the various agencies. That is a necessary mechanism of our system. But I want to know what the response to the consultation is when the consultation happens.

The kinds of issues that were being raised in the Community Affairs Legislation Committee inquiry were to do with concerns about the methodology of a punishment model, which is the only way you can describe a change of entitlement which reduces people’s living money: how they survive, how they feed their kids, how they pay their rent—how they actually do all those things that every person in Australia does. If you are reliant on a Centrelink payment, you know to the last dollar exactly what your fortnightly budget is—and this came out in evidence heard by the committee—because you have to work through the numerous demands that you have on your time and your budget. It was clearly put to the legislation committee that single parents actually work on a fortnightly basis to see exactly how they can dish out the money for their families. And it is the same for people with disabilities.

Within this process, of course, any incentive or support to get a higher wage and to be reintegrated into a workforce was seen as a positive element. There is no doubt about that. In reviewing the committee report today and looking at the submissions received, I found that there was not one person who came before the committee who rejected the value of a job. Not one piece of evidence said that it would be better not to work. It is a dismissive response from the government to say that any questions of objection indicate that there is no support for the issue of giving people the opportunity to have a job and a career. Getting a job in itself may be a result, but it is certainly not an incentive for people to develop, train and earn and have access to career progression. It has always been a balance. Just getting a job in itself may provide a step away from welfare dependency, but we should be encouraging people to enjoy the genuine values of a workplace and have the opportunity to enhance their income, training and skills so the job has genuine value beyond just the wage.

We need to widen our concept beyond just getting employment. We need to look at the value of employment so that we are not restating a whole range of cheap casual jobs and letting people be used in the job market in a dismissive and not particularly well valued way. That particular issue came out in the inquiry. Whilst people had no opposition to a chance of employment, they certainly did not think that the Centrelink and Job Network system that pushed them into jobs that provided no fulfilment and actually did not fit their other life needs, particularly child-care needs, was in itself the most effective way to work with the community and ensure that people who were identified by this legislation had the enhanced opportunities that we all seek.

However, the report said that there has been significant consultation with welfare and community groups on the impact of the changes. That is true. There has been consultation. The St Vincent de Paul Society, a group that consistently gives evidence at these inquiries with credentials that are beyond question, I believe, in working with people across our community who need immediate support, said: ‘I think’—and they refer in particular to people with disabilities and sole parents, who are the focus of this legislation—‘we will just find life harder than it was before. I do not think there is any doubt about that. They will come to us more seeking help and we will do our best to help them—we and the others who are there.’ Where is the government in that equation?

What we find so often in these debates is that the expectation of compassion and open communication and the expectation of what Senator Humphries defined as ‘goodwill’ are not always fulfilled in the system. The very people who are the focus of the Welfare to Work changes—and I am not convinced that that is going to be the automatic outcome of the legislation—are those who often have had the most negative experiences of the system as it currently exists. We are imposing further change on that group. Despite all the rhetoric about encouragement and support and giving people a chance to remove themselves from the welfare trap—rhetoric which we have all heard so often—the core element and the immediate impact of the Welfare to Work changes for people who are sole parents who have children of a certain age and for people currently on the disability support pension or those who will be claiming that pension after 1 July will be a cut in their fortnightly allowance.

That is a tough step to encourage continuation of goodwill because goodwill is not always enhanced by having less money to go through your daily expectations of living. What we seek as people who want to be part of the future development of our changing system is genuine communication, genuine consultation and the acceptance that there needs to be continued evaluation of these processes. In our legislative committee reform recommendations we said that this needs to be constantly reviewed and discussed, but it also needs to involve the people who are living the expectations of the legislation, the people who are currently using the system and the people who are providing the support for the people St Vincent de Paul identified.

A statement made consistently during the previous Senate inquiry on poverty in this country was that there are so many welfare agencies in this country who are picking up the immediate needs not just economically—although economically is so important—but also in terms of personal support, emergency housing, emergency support for family breakdown; all those areas where the people who are focused on in this legislation often need extra support that is provided by a range of community organisations. These organisations have the immediate knowledge and can best work with the government to enhance the program of encouraging people from a dependent model to some option to earn and be further involved in their community.

We seek the evidence that shows that punishment gets the best result. We reject that it is the best way to encourage people from welfare to a work model. There cannot be goodwill if you lead with punishment. There needs to be an understanding that there will be support, encouragement and a fall-back if things do not work out. We have found that leading closer to the date of 1 July there has been fear amongst areas of the community about their ability to succeed within this model. It also makes it a little more difficult to get goodwill clicking in if there is fear and worry about what is going to happen because of the punitive nature of the model. When Senator Humphries talked about what would be an alternate process, the best way would seem to be to have a cooperative process. Effective encouragement and effective training would be provided without necessarily punishing people at the first step, by removing immediate funding, and they would be given some security about the issues they will be facing and about what the results of the further changes will be.

In terms of where we go next, I expect there will be a series of further consequential amendments as we find out how the legislation kicks in and we see how the different layers work with each other in terms of payments, support networks and so on. It seems confronting that the marginal tax rates, which were mentioned a lot in our committee work, at this stage still seem to actively work against those people who are seeking to get back into the work force. It would seem to be an automatic challenge to those who are working in the development of further policy to enhance the encouragement financially. So not only do you lose your money as your immediate payment element but any attempt to move into the workforce is further punished by the marginal tax system so that you are working seemingly because you have to. The system is forcing you in but you are not receiving the monetary benefit that you should receive. That cuts across the enhancement of the process.

The people in this place have a genuine responsibility to the Australian community. There is an expectation that there will be change. There is an expectation also that the economic largesse that we are experiencing in many areas in this country could be shared effectively by all Australians. The way that the Welfare to Work changes have been implemented has already alienated groups of people who should be able to expect support the most from their government. If we are genuinely going to encourage people from welfare into work as opposed to one form of welfare into another, there must continue to be consequential changes to the legislation in front of us. As it stands, I do not think the work elements will be attractive or supportive for the people who are being targeted by the legislation. I do not think that we, as a government, have effectively done our job.

Debate interrupted.