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

I wish to address my remarks initially in relation to the Social Security Amendment (2007 Measures No. 2) Bill 2007. I think this is the third or fourth Howard government welfare bill that we are again debating this year. It was not long ago that the Howard government claimed it had reformed welfare in Australia, yet here we are with another bill. We saw reports yet again in recent weeks of further attempts at welfare reform being cooked up by Minister Hockey. The simple fact is that, when it comes to social security policy, the Howard government has got it wrong for 11 long years and it still cannot figure out how to get it right. That is because, time after time, this government goes for a short-term political fix rather than a plan for Australia’s long-term future. As a result, Australia still has low participation rates when compared with our competitors. We still have two million Australians who are officially unemployed, working part time but wanting more work than they can get or who want to work but do not show up in the monthly unemployment figures.

Also as a result of the Howard government’s failure to plan for Australia’s long-term future, we have a skills crisis in this country. We have businesses desperate for skilled workers, which is a direct result of the Howard government’s failure to plan ahead and failure to train Australians, particularly the jobless Australians, for the available jobs. I want to emphasise that Labor have a different approach. We believe that people who can work should work, and we believe that those who cannot work should be cared for. We believe that work is a foundation of social inclusion. Everybody benefits when more people can participate in the social and economic mainstream. Labor’s approach to workforce participation is to identify the reasons why some people are not participating as much as they could or would like to and to deliver practical solutions.

I want to briefly address the plan recently announced by Labor leader Kevin Rudd to create Skills Australia. This body will play a central role to ensure we lock in a full-employment economy and develop a high-skilled and innovative workforce for the future. It will assess evidence from commissioned research and industry stakeholders to inform Australia’s workforce development needs. It will provide government with recommendations about the future skill needs of the economy and the country. It will identify future skill shortages so that they can be addressed before they negatively impact on economic activity, persistent skill shortages so that current capacity blockages can be overcome, and barriers that prevent skill formation in areas where persistent skill shortages exist. We will also identify industries where retraining and upskilling of workers may be required to prevent unemployment, underemployment and skills obsolescence. In making its recommendations to government, Skills Australia will have regard to a range of factors. These include the objective of achieving full employment, the international competitiveness of the Australian economy, the promotion of innovation through skills acquisition, providing a sufficient number of appropriately qualified workers for industries of critical national importance, and the role of state and regional economies in contributing to the success of the broader Australian economy.

In a survey of more than 760 producers by the Australian Industry Group entitled Australia’s skills gap: costly, wasteful and widespread, it was found that one in two businesses was experiencing difficulties in obtaining skilled labour. Monash University’s Centre for the Economics of Education and Training has estimated that more than four million additional people will need to acquire qualifications from 2006 to 2016. This includes more than two million new entrants and 1.7 million existing workers. Of these, 61.4 per cent will need a vocational education and training qualification and 38.6 per cent will need a higher education qualification. The simple reality is that businesses are desperate for skilled staff, and people only get a job if they have the skills an employer needs.

Yet again, with this bill another opportunity passes to help jobless Australians obtain skills. Beyond this bill, this government has no plan to match current and future needs for skilled workers with the people who could be working. Instead, what we see in this bill is the usual random assortment of measures.

I want to emphasise at the outset that there is one measure here that Labor strongly supports: exempting relatives from participation requirements if they are the primary carers of children. On the basis of this measure, we will be supporting the bill and we consider this exemption long overdue. Under the amendments, the child must be directed to live with the person under either a parenting order made under the Family Law Act, a state child order or an overseas child order which is registered under that act and the person must be complying with that order. Where those relatives are single principal carers, the bill also ensures that they have access to the higher available rate of payment—the parenting payment single. Relatives who have taken responsibility for the care of children are providing invaluable support to their family and their community, and we must support them.

However, it is worth noting that some community advocates, particularly those who made submissions to the Senate inquiry in this matter, have argued that eligibility for these exemptions should be extended further to include other circumstances where a relative of a child may become a principal carer without court orders being made. Indeed, the approach in this bill contradicts the government’s move towards parenting plans and family relationship centres as alternatives to family courts. It would be worth hearing from the minister how the government justifies the narrowness of the exemption which is contained in the bill.

Nevertheless, this aspect of the bill is quite unlike most of the Howard government’s so-called Welfare to Work agenda which, as you know, actually makes it harder for Australians who are struggling to achieve financial independence. There are other aspects of the bill which continue in this vein.

The Howard government appears intent on making life harder for people with a disability. One of the measures contained in the bill removes medical officers from the assessment of a person’s capacity to work. This dramatic change was one of the reasons Labor sought a Senate inquiry into this bill. I want to quote briefly from a couple of the submissions which were made to that inquiry. The Mental Health Council of Australia submitted to the inquiry that replacing a medical officer with a job capacity assessor in the assessment process ‘could have damaging unintended consequences for the person with mental illness’. The Australian Federation of Disability Organisations was similarly concerned with the implications of this bill, saying that even under existing arrangements:

... people whose impairments are not visible have been inappropriately assessed by people with poor knowledge or appreciation of the impact of their condition on their capacity to work, the supports they need to work and the range of work that they can realistically undertake.

Given this current predicament, disability advocates are concerned about the impact of removing the limited remaining role of medical officers from this process. Labor believe there is a role for medical opinion in the job capacity assessment process. I indicate that, in the committee stage, we will move amendments to delete the items from the bill which remove medical officers from the assessment of impairment.

The bill also reinforces the role of the job capacity assessment in another way. It replaces the guidelines for making these work capacity assessments from those made by the secretary, with guidelines set out in the legislative instrument by the minister. The secretary will be required to comply with these guidelines, as will the Social Security Appeals Tribunal and the AAT. So, whilst Labor acknowledge and understand the concern that some in the disability community have about the guidelines and, in particular, how detailed and prescriptive they will be, we support the increased ability of parliament to scrutinise the guidelines as a legislative instrument. However, these guidelines have not been released and Labor will watch very closely to ensure they do not make life harder for people with a disability.

This bill, like all the Welfare to Work bills put forward by this government, does not address Australia’s participation challenges. Clearly, the Howard government does not actually understand the scale of the participation challenge. This government simply relies on the mining boom continuing forever. But, as we know, no boom lasts forever and a prudent government would invest in Australia’s people in order to secure our ongoing and future prosperity.

Australia needs a long-term approach to workforce participation and welfare reform. It needs an approach that tackles the reasons that some people are not working and delivers practical solutions. I have indicated that Labor, at the committee stage, will move two amendments to this bill. However, I will flag that, ultimately, Labor will support this bill principally because we support the amendments to participation requirements for relatives who are caring for children.

I want to speak briefly, because we are in a cognate debate, on the Social Security Amendment (2007 Measures No. 1) Bill 2007. This bill makes a number of minor changes to social security law, most of which provide more access to financial assistance. It does provide some additional support to parents who have been adversely affected by the recently implemented welfare changes and, amongst other things, it enables the non-primary carer to access a higher rate of income support than has previously been available.

In addition, there are enhancements to the provision of mobility allowance. It is unfortunate that the government did not include those previously as part of the original Welfare to Work package. There is the enhancement of access to supplementary payments for recipients of parenting payment partnered who have a partial capacity for work and there are a range of changes to participation rules relating to mature age unemployed job seekers. Again, I indicate that Labor will be supporting this legislation primarily because of some of the additional benefits contained in it.

I want to briefly comment on the report into the Social Security Amendment (2007 Measures No. 2) Bill 2007. I want to emphasise that this was a very short inquiry process because obviously, with the government’s restrictive timetabling of this legislation and its desire to get this through in this session of parliament, we were very restricted in the amount of inquiry that could be undertaken. In fact, the committee determined that no public hearings could be undertaken. I indicate our thanks to the 11 community organisations which, at short notice, provided input into this bill. Particularly, given how short the notice was, we were most appreciative of their input and they can be assured, certainly from the opposition’s perspective, that some of the issues that they raised were taken into account in formulating the opposition’s position on this bill. In particular, we note, as I said, the concern that was raised about the removal of the phrase ‘medical officer’ from some aspects of the assessment process. We share the concerns of the organisations which made submissions in relation to that issue.

I want to make a brief comment about one of the concerns raised by submitters to the inquiry in relation to replacing existing administrative guidelines with ministerial guidelines contained in legislative instruments. There was quite a significant amount of concern raised by these community and representative groups about that. I understand the concerns which were raised. They primarily relate to a concern that this would affect appeal rights and review rights and also there was a fear about what would be contained in the guidelines, which obviously may affect people’s rights and be overly proscriptive or unduly harsh. These were some of the concerns raised.

Taking a step back from the opposition’s perspective, we are not opposed in principle to issues being included in ministerial guidelines contained in legislative instruments. We note that, in fact, there is the capacity for greater public scrutiny, because legislative instruments can be disallowed in this chamber or in the other place. In fact, one of our criticisms earlier of the government’s original bill was that there was far too much which had been taken out of the act and placed in the guide. My recollection is that the Senate committee inquiry actually identified some of the concerns with the transparency of that process and the placing within instruments, which were not to be considered by parliament, of issues affecting people’s rights. As a matter of principle, Labor are not opposed to these matters being included in this situation in legislative instruments but we do, as I said at the outset, put the government on notice that we will inspect most closely and consult with community groups in relation to the content of such legislative instruments. I propose to move two second reading amendments, one in relation to the Social Security Amendment (2007 Measures No. 1) Bill 2007 and one in relation to the Social Security Amendment (2007 Measures No. 2) Bill 2007. I understand that they have been circulated in the chamber. I seek leave to move the two amendments together.

Leave granted.

I move the second reading amendment to the Social Security Amendment (2007 Measures No. 1) Bill 2007 standing in my name:

At the end of the motion, add “but the Senate:

(a)   condemns the Government for:

(i)   making it harder for Australians to move from welfare to work,

(ii)   reducing the financial rewards for people who move from welfare to work, and

(iii)   restricting access to training and education for job seekers; and

(b)   calls on the Government to allow people with part-time participation requirements to fulfil those requirements through real training or study”.

I also move the second reading amendment to the Social Security Amendment (2007 Measures No. 2) Bill 2007 on sheet 5405 on behalf of the opposition standing in my name:

At the end of the motion, add “but the Senate:

(a)   notes the additional parliamentary scrutiny of legislative instruments in place of administrative guidelines; and

(b)   calls on the Government to:

(i)   listen to the concerns of the disability community regarding the quality and fairness of their Job Capacity Assessment system, and

(ii)   consult with stakeholders, to ensure that these new guidelines do not make life harder for people with a disability and that they have fair and reasonable opportunity to appeal decisions relating to job capacity assessments”.

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

These two bills, the Social Security Amendment (2007 Measures No. 1) Bill 2007 and the Social Security Amendment (2007 Measures No. 2) Bill 2007, represent a mix of measures, some of which are broadly beneficial to specific groups and others that have attracted considerable criticism, particularly from organisations representing people with disabilities. These bills must be considered within the context of the laws that they seek to amend—that is, the government’s Welfare to Work laws which specifically introduced harsher measures for single parents, people with disabilities and other Australians. These are laws which end up punishing the very people whom we believe our welfare system should be helping the most.

The Australian Greens welcome the beneficial aspects of these two bills. These include the amendments to recognise kinship care and extended participation exemptions to principal carers who are relatives but not parents of children to extend the mobility allowance, to extend benefits to partnered parenting payment recipients and to extend the entitlement to dependent child maximum rate of payment where a person provides at least 14 per cent of care. The fact that the government has belatedly recognised these amendments demonstrates the flaws in the government’s approach which are inherent in the Welfare to Work laws.

Having implemented such a punitive regime, and having rushed the laws through parliament without sufficient time to adequately assess their impact or time for community consultation, the government now find themselves in the position of needing to make these sorts of amendments. This seems to have been done on an ad hoc basis. They have realised the depth of concern and the problems with their legislation and that they needed to act to rectify some of the extreme harshness of the impacts of these laws and their knock-on effects on particular groups of people. The Social Security Amendments (2007 Measures No. 1) Bill 2007 is, broadly speaking, beneficial to the extent that it mostly fixes holes in the Welfare to Work laws. The exception to this is the amendments to the Youth Allowance provisions, where once again we believe the government is taking a very punitive approach to welfare. I will be moving amendments to this bill to amend the definition of a family law order to make it consistent with amendments I will be moving to the Social Security Amendments (2007 Measures No. 2) Bill 2007.

The primary focus of my comments today will be the Social Security Amendments (2007 Measures No. 2) Bill and its amendments regarding principal carers, changes to the disability support pension provisions and amendments to section 12 of the Social Security Act. I turn now to the issue of principal carers. As the Senate is very well aware, the issue of the definition of principal carers is one that I have had concerns about from the very beginning—since the introduction of the Welfare to Work laws. As I have said in this place on numerous occasions, I will keep raising this issue until it is fixed by the government. This bill does not fix the problem, although it does make a welcome amendment. It does address one issue which I have been raising since the introduction of these laws; it does not fix some of the more in-depth concerns that we have about principal carers. The bill provides for an extension of participation exemptions to principal carers who are relatives, but not parents, of children where the principal carer is providing care for a child as a result of a family law order as defined in the act. These amendments would allow the person in this new category of a relative who is a principal carer but not a parent to access the higher PPS rate of Newstart or youth allowance.

The Australian Greens are pleased that the government is finally recognising the role of kinship care through these amendments. However, while we welcome the intent of these amendments, we are concerned that they do not go far enough to effectively address the reality of kinship carers’ circumstances. For example, there is a need to recognise less formal arrangements than those that fall under the definition of a family law order. The National Welfare Rights Network commented in their submission to the inquiry:

There exist many circumstances where a relative of a child may become a principal carer without court orders being made. The narrow scope of the definition as detailed in this item undermines the utility and appeal of parenting plans that include non-parents, and stands in direct contrast to the current policy and legislative drive towards parenting plans and family relationship centres as alternatives to the Family Courts.

In many kinship care arrangements family members who care for a child but do not have a family law order—or in circumstances where there are protracted family law processes ongoing—still face exactly the same demands as those with a formal order. Yet they can be subject to the onerous activity requirements under these amendments. There is no justification for this discrepancy, particularly when the government is encouraging less formal arrangements through the establishment of family relationship centres. These informal care arrangements are also particularly important in Aboriginal communities. It is less likely in Aboriginal communities that care arrangements by relatives will be formalised through family court orders or even the less formal parenting plans. It is much more usual for grandparents or other family members to take care of children on an informal yet ongoing basis. These amendments from the government do not address this situation and continue to leave people disadvantaged while caring for children.

With this in mind I will be moving an amendment to the definition of family law order to widen its scope to recognise less formal care arrangements. This, I might add, will mean that they are then consistent with other requirements under FaCSIA for childcare benefits and for family tax benefits. We are very disappointed that the government has not taken this opportunity to fix the broader problems with principal carers. The Australian Greens also believe that the government should use this opportunity to address the broader principal carer inequities—that is, the contradiction between the presumption of equal shared care within the Family Law Act and the definition of a single principal carer within the Social Security Act. While I risk boring the chamber yet again with my argument, obviously I have to repeat it because the government has not got it yet. We have outlined this inequity in the past—ad nauseam, I believe—and will continue to draw it to the attention of the Senate until it is fixed. For the purposes of income support, the government says that there can be only one principal carer and that person is responsible for the care of the child. If you are the nominated principal carer then you receive certain benefits under the Welfare to Work laws whereas if you are the other parent in a shared parenting arrangement then you receive exactly the same entitlements as someone with no parenting responsibilities.

The problem is that at virtually the same time as introducing the Welfare to Work laws the government made changes to family law which moved to a model of equal shared care as the preferred social model. This is resulting in an increasing number of parents with fifty-fifty shared caring arrangements within an income support system under which only one parent in a fifty-fifty shared care agreement can be determined to be the principal carer. This is manifestly unjust—and the biggest losers are the children, who are caught in the middle. We are now seeing an increasing number of people coming forward who nominally have fifty-fifty shared care arrangements but who in reality are shouldering an unequal part of the parental care burden because their shared care has not been recognised through the principal carer provisions of Welfare to Work. They are suffering and their children are suffering as a result of the government not recognising that the move to a presumption of shared care within the family law system must also be properly recognised within the income support system.

The current situation is leading to disadvantage in the lives of many Australian children. I will once again be moving amendments to the definition of principal carer so that it is aligned with the intent of the family law changes and so that it reflects the concept of shared parenting such that, where parents who are sharing the care of children each receive income support and the difference in percentage of shared caring responsibility is 12 per cent or less, both parents are deemed to be principal carers. I will keep bringing forward this amendment until this inequity is fixed.

I would like to move on to the changes to the disability support pension. There are two key issues with the proposed changes to the disability support pension: firstly, the power given to the minister to make guidelines by legislative instrument relating to the determination of a person’s continuing inability to work, the application of impairment ratings, partial capacity to work and incapacity exemptions; and, secondly, the changes to allow impairment ratings to be made by non-medically qualified assessors. The Senate inquiry received a number of submissions from disability groups expressing concern over both of these changes. First I would like to address the ministerial guidelines.

The main concern expressed by disability groups on the issue of the minister setting guidelines by legislative instrument is the fear that such a change will restrict the discretion of the initial job capacity assessments and the Social Security Appeals Tribunal, or SSAT, and Administrative Appeals Tribunal, or AAT, in reviewing the merits of assessments. The Australian Greens share these concerns. Given that the proposed amendments provide that the secretary must comply with the guidelines determined by the minister, we believe and are concerned that the ability of the secretary or a job capacity assessor to take particular individual circumstances into account may be reduced. Discretion would necessarily be circumscribed by the fact of a legislative instrument setting out the guidelines.

The issues to be addressed in capacity assessments are highly complex, and accurate assessments require a high degree of discretion. Job capacity assessors are required to make distinctions between a person’s ability to work less than eight, 15 or 30 hours per week. The discretion to take into account individual circumstances outside prescriptive legislative guidelines is vital for accurate and credible assessments. The Australian Greens are opposed to the idea of the minister unilaterally creating guidelines for work capacity assessments. We believe that the creation of guidelines of this nature needs to involve a public consultation process to ensure that any such guidelines are both credible and transparent.

Given the great variation in individual circumstances and the corresponding complexities of the impacts and interactions of various disabilities on an individual’s capacity to work, we believe it is important that capacity assessment guidelines recognise that the experience and expertise of the assessor are crucial factors, that they do not seek to be too prescriptive and that they recognise the importance of expert discretion in capacity assessment. The Greens will be moving amendments to oppose these provisions of the bill.

I now move to the second main issue, with respect to the changes to the disability support program, which relates to the replacement of ‘medical officers’ with ‘assessors’ in the context of the impairment tables. The key concern with this amendment is that it will make it even less likely that the job capacity assessment process will result in accurate assessments. This is likely to have significant consequences for persons accessing DSP. The Greens are very concerned about the consequences of these amendments. We do not believe it is appropriate to remove the presumption that medical officers should conduct certain assessments of a person’s impairment rating.

The Australian Council of Social Services submission to the, as previously noted, short Senate inquiry provides examples of where there should still be a presumption of a medical officer undertaking the assessments, because non-medically qualified professionals would be unlikely to make the expert assessments required. These examples include assessing the likely effects of medical treatment and assessing pain or fatigue in terms of the underlying medical condition which causes the pain or fatigue. These amendments are particularly likely to have a detrimental impact on people with mental illness. Professionally trained medical officers are best placed to make a decision about the impact of mental illness on a person’s capacity to work. This is particularly the case because many people with a mental illness may have a fluctuating capacity to work.

The Mental Health Council of Australia commented to the Senate inquiry:

Determining the ability of a person with mental illness to work can be a very complex process, and is not as simple as referring to a table and applying points. A person may present well on the day of the assessment but then experience a relapse in their condition. This will not be picked up in the assessment if the assessor does not have the necessary medical information or an understanding of the mental illness.

The Australian Greens are not suggesting that there is no role for non-medical job capacity assessors and we recognise that job capacity assessors come from a wide range of allied health professions. However, we believe that there is no good reason for these amendments and we are concerned about their direct consequences on the quality and consistency of impairment assessments. We will be moving amendments to oppose the provisions replacing the term ‘medical officer’ with ‘assessor’.

I now turn to amendments to section 12. Section 12 allows the secretary to deem a person to have made a claim for a different income support payment when a person becomes qualified for it. The amendments to section 12 provide that there can be no claims resulting from that section more than 13 weeks prior to a determination under that section. The Greens can see no good reason why the 13-week restriction is necessary. We agree with the National Welfare Rights Network that the application of section 12 as a means of relieving debt is reasonable, particularly given the unfairness of many Centrelink debts and the limitations on their waiver. We will be moving an amendment to omit the 13-week restriction on the application of section 12.

The Greens remain steadfastly opposed to the government’s Welfare to Work legislation. We believe it is unnecessarily harsh, is badly targeted and will ultimately prove ineffective in helping people move from welfare into the workforce. The laws focus on reducing income support and rely on coercive measures and unduly harsh penalties to force people into the workforce rather than providing incentives, training and support. The majority of people affected by these measures face substantial barriers to work that are not being addressed. Many lack the skills necessary to meet current job market demands and there are not sufficient training programs to help them. There are not enough employment assistance programs to support them, or they are poorly targeted, and there are definitely not enough accessible childcare places available to look after their kids.

I have repeatedly raised examples—in this place, for instance—of the impact of the changes to the JET system to single mothers accessing training and education and the fact that that has now been limited to a 12-month period. Women are now dropping out of university because they cannot afford to keep their kids in child care. We believe that fixing these things should be the priority. The measures in these two bills are an acknowledgement that the government recognises there are holes in these laws that people are falling through—the very people who should be supported to help them to find work and to cope. We believe that these laws unfairly penalise those who the community and society should be helping the most.

We know there are many more problems with this legislation and gaps in the safety net and we will continue to work to establish an income support system that is based on empowerment rather than coercion as part of the whole-of-government approach that we believe needs to be taken to invest in the future of the people of our community.

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

The Senate is debating two pieces of social security amendment legislation together. There is an amendment to the legislation, to be moved by the Democrats, regarding the removal of discrimination against same-sex couples, which I have circulated. I will speak to that in the committee stage of the debate.

There are a range of measures in the Social Security Amendment (2007 Measures No. 1) Bill 2007 and the Social Security Amendment (2007 Measures No. 2) Bill 2007. The previous two speakers have gone through them in a fair bit of detail. I do not want to revisit them all extensively. I think that, particularly at this juncture, as we are moving into an election, it is important to emphasise some of the areas where flaws remain in our social security safety net and areas where I believe the safety net has been weakened and things have got worse in recent times.

The Democrats remain of the view that a core component of the so-called Welfare to Work changes was flawed and unfair and remains so. Of course we support shifting people from welfare into work and we support extra resources going into making people more work-ready. Indeed, I do not believe the government does enough of that. There is too much of the punitive approach, and the aspect of the so-called Welfare to Work package that has ended up in a range of people receiving lower income support payments than they otherwise would is not a way of assisting them into work. It has shifted some of them from one form of welfare onto a harsher form of welfare. It highlights one of the continuing and more entrenched problems in our social security system.

It really is disappointing that, to date, there has been no real sign of a commitment on the part of the Labor Party to address this entrenched problem—that is, the growing gap between the pension type payments and the allowances. Basically, the motivation behind a key part of the government’s so-called Welfare to Work package was to shift a whole group of people onto that lower payment. Part of the issue with that is not just the payment level but also the effective marginal tax rate that is attached to it, or the withdrawal rate—the low free-income areas that are contained in those payments that have inbuilt disincentives for people to shift into the workforce. So changes have been made that have increased the disincentives for people to try to start moving into the workforce. For many people, particularly those who have been on welfare for a prolonged period of time, it is not just a matter of one day waking up and having a full-time, well-paid job that you can shoot straight into. In many cases, part of making people work-ready is adjusting to the nature of the labour market and a steady job. That means temporary work, casual work and part-time work. When you have withdrawal rates and high effective marginal tax rates, they are a real disincentive.

There have been improvements in that area in some respects, and I do not dispute that, but the core problem remains. Even the so-called Welfare to Work provisions were meant to be one of the positive components, but the payment rates and income test provisions for sole parents and people with a partial capacity to work were changed and a new income test was introduced for allowance-level payments which retained the old, initial free area but increased the next threshold. So, while the withdrawal rate was reduced from 70c in the dollar to 60c in the dollar, which is an improvement because their basic free area was reduced by being shifted onto the lower payment, many people, depending on total amounts worked and total income earned, ended up with a bigger disincentive.

The whole area really needs an overhaul. It is a real shame that we have moved too far away from some of the core principles that were outlined in the McClure report, when the term ‘welfare reform’ actually did have some meaning. That is many years ago now. Some of those key issues with regard to the built-in inequalities in the welfare system and the gaps between different types of payment have now become so entrenched—and they are getting worse with each indexation—that I am not sure they can ever be reversed without a very comprehensive overhaul. Currently, I do not see any political will in that area.

The Democrats support many of the measures contained in these two pieces of legislation, but it is an opportune time to point to some of the areas where there need to be some significant shifts. That is a message we send to both the major parties. As I said, there is no particular sign of monumental differences here. As I understand it, despite Labor’s appropriate position of opposing some key aspects of the so-called Welfare to Work changes, they are now going to keep them. It is a bit hard to get too enthused about their opposition if they are now going to keep the things they were opposed to.

That is a reminder of one of the core lessons that can be seen when you look at the reality of how the legislative process works. Once something is put into law, it is quite hard to reverse. It gets built into the system; it gets built into the finances; it gets built into the budgetary process; it gets built into the administrative process; it gets built into people’s expectations and operations. It is pretty hard to wind back. That has been part of the problem with some of the things that have been done over a prolonged period of time but particularly in the last few years.

The Social Security Amendment (2007 Measures No. 1) Bill 2007 includes some amendments that are positive. They are amendments that really do go to fixing up some of the problems that were brought in with the initial so-called Welfare to Work changes. I note that in the second reading speech the minister, in introducing this bill, said that these reforms will ensure ‘even greater fairness’. In some respects, it would not be terribly hard to get greater fairness because the situation is not very fair to start with. So even greater fairness, I would suggest, is a bit of hyperbole from the government. But anything that moves things forward and makes things fairer is welcome. The government has also described these changes as ensuring greater equity between groups with similar needs. Again, that is welcome, but I would suggest that there is still an enormous amount of inequity entrenched in our social security laws.

The Social Security Amendment (2007 Measures No. 1) Bill 2007 also includes changes to the youth allowance, ensuring fast connection with employment assistance and greater engagement with the labour market. I would suggest that reducing some of the disincentives for people to undertake work in the first place, whether younger people or others, would be a desirable action. That gives me cause to mention some of the issues of debt and payment problems that exist specifically for young people. Firstly, there is a ‘youth allowance student’ and a ‘youth allowance other’, a Job Search type payment. Because they are just called ‘youth allowance’ there is a lot of confusion amongst younger people who do not realise they have to shift from youth allowance study to youth allowance other when they change study, particularly if they shift between part-time study and full-time study or between different levels of work and those sorts of things. That is something that happens more and more these days. It happened back in my day. Indeed, in the 1980s I shifted between full-time work and part-time work. A payment with a single name of youth allowance could lead to a greater probability of confusion. It is a problem that has been identified by the National Welfare Rights Network, who I would suggest have a better idea than any of us here about the real consequences of all these social security laws that we pass. They deal with all the problems that occur when people fall through the cracks or hit the hurdles.

There remains a continuing problem with the ridiculously high age of independence for youth allowance and the unrealistically low parental income test free area and taper rate. I welcome the separate measure that was passed, I think, earlier today, from memory, which finally introduces rent assistance for people on Austudy. That is a campaign the Democrats have pushed for many years and we welcome the measure. But there is still very unfair treatment of many young people in regard to youth allowance. The Democrats have pushed for many years for the age of independence to be reduced from the current high age of 25 years. The parental income test is also far too low. There is widespread evidence of very high levels of poverty and financial stress amongst students. If we are trying to encourage people to increase their skills to undertake study or further training then we need to be removing some of the barriers and impediments—and some of them are still in place. Of course, doing things like lowering the age of independence or making the parental income test fairer would appear as a cost in the budget in the short term. I suggest it would pay off in the longer term—and the parliament and the Treasury do not always think longer term—because there would be wider benefits to the community by more people being able to afford to study and expand and develop their skills.

There are also real continuing problems with the indexation of payments like youth allowance, Austudy and Abstudy. They are only indexed once a year and they are only indexed to the consumer price index. The income-free areas for these payments have not been indexed for almost 30 years. Their value has obviously declined dramatically. This compares to pension payments, which increase twice a year in real terms according to movements in average weekly earnings or in the CPI, if it is higher. That, I might say, is an indexation measure that the Democrats are responsible for implementing. So I am certainly not criticising that. I point that out because we were not able to get it tied to all income support payments, so it means the gap gets greater and greater, and the real value of payments such as youth allowance and the like becomes less and less. That compounds some of the other problems I have mentioned with regard to the cuts and the age of independence.

The Social Security Amendment (2007 Measures No. 1) Bill 2007 also addresses issues to do with partner parenting payment recipients and people who share the care of a child. The Social Security Amendment (2007 Measures No. 2) Bill 2007 also relates to issues to do with the care of a child. Senator Siewert outlined a lot of those issues in great detail. I commend her efforts in raising those issues. They will be raised in the committee stage, and the amendments in that regard have been circulated. A clear example I would note is that, under the changes in the second bill, single principal carers receiving Newstart or youth allowance who are eligible for this new exemption will access a higher rate of payment for the duration of the exemption. That higher rate is equivalent to the parenting payment single. That is a clear example of the benefit of having access to that higher rate—the parenting payment single rate as opposed to the Newstart rate. Again, I think that that gap between those two rates is a problem.

The Social Security Amendment (2007 Measures No. 2) Bill 2007 also deals with trying to improve the efficiency of people transferring between one income support payment and another. If that works in such a fashion then it is welcome. The new guidelines regarding assessments of partial capacity to work, as with the development of any of these sorts of guidelines, need to be monitored very closely. There is an inbuilt incentive for guidelines to be developed and finalised, and also administered and implemented, in a way that minimises expenditure, to put it politely. We should not forget that, whilst budgetary expenditure is important and effective, fair and efficient use of public resources is also important; we are dealing with human beings, not dollars and cents, and withdrawals of payments or cuts in payments can have very dramatic impacts on people, particularly those who are already amongst the poorest in our society.

The Social Security Amendment (2007 Measures No. 2) Bill 2007 also makes a technical amendment to clarify that the waiver of a social security debt recovery due to special circumstances is not available to a person who knowingly fails or omits to comply with social security law. To me, this raises another issue. I am not opposing that part of the legislation per se, but it does highlight another continuing trend: despite all of the talk about mutual obligation—a great catchphrase that is almost impossible to argue against on face value—the reality does not match the talk. It implies an equal partnership, equal levels of responsibility, and the simple fact is that the balance is right out of kilter. The level of obligation and responsibility on income support recipients is enormous. The level of responsibility on Centrelink and the government is minimal. So there is a continual tightening, time after time, on the recipients and very little accountability when Centrelink makes mistakes. This is a key area that the Welfare Rights Network have identified, including in the area of waivers of debts.

In the matter of social security debts, Centrelink can be 99 per cent responsible for the cause of a debt but will not waive it because of a one per cent contributory error of the customer. This encourages a no care, no responsibility attitude. That is not only unfair; it facilitates against good public administration. I think there is the need to make Centrelink at least partially responsible for some of their own errors. The Welfare Rights Network have produced any number of case studies of people in terrible hardship where clearly the predominant fault has been on the part of Centrelink and yet there has been a refusal to waive any debts. Even with this amendment, the Social Security Amendment (2007 Measures No. 2) Bill 2007, we have a further tightening there with regard to any prospect of waiving a debt. With regard to the continuing problem of family tax benefits debts, even when Centrelink’s sole administrative error is proven, that is still not enough to have the debt waived. There must also be severe financial hardship demonstrated. I suggest that is simply unfair.

There is also concern about the so-called good faith debt waiver provision. For a debt to be waived, it is also necessary, among other things, for any overpayment to have been ‘received in good faith’. The way that is being interpreted is such that it is being unnecessarily harsh on people who have not done anything wrong and who are basically the victim of Centrelink stuff-ups. Given the complexity of the legislation, it is inevitable that there will be Centrelink stuff-ups. As I have mentioned a number of times in this place, I was previously employed by Centrelink’s predecessor, the Department of Social Security. I was a social worker in that department, and you tended to get a lot of the cases where people did not fit into the boxes neatly or where there had been stuff-ups—the hard cases that get pushed aside to the social worker. That is still the role that social workers play to some extent. Not just that, but that is part of their role today in that income support arena.

I would suggest that the law since then has become even more complex and the scope for people to ensure that their rights are fulfilled in this area is even more diminished. I certainly support calls for much greater support for independent advice services, such as the Welfare Rights Network, and through community legal centres, because even when people have been wronged it is very hard for them to get access to the support they need to get a fair go to get recompense. And when you are dealing with people who are on income support payments, even small amounts of money can make a massive difference. Let us not forget that we are talking in the context of the biggest housing affordability crisis in Australia in modern history. We have many people who are really, really on the edge with regard to being able to maintain a roof over their heads with rent payments and the like. Even a small amount of money can make a difference between making that rent payment or not. If they fall behind, get into that spiral, get the eviction notice, it can be the start of a very big fall. Apart from anything else, that can be catastrophic for that person and their family—particularly when there are children involved—and it creates more public cost.

There is also a need for additional funding for authorised review officers within Centrelink to deal with appeals there properly. My understanding is that concerns have regularly been raised not just by the Welfare Rights Network, but by the Ombudsman and the National Audit Office. A model of ensuring decisions or reviews by authorised review officers was agreed to but still has not been properly implemented because of financial problems. Those are things that also need to be addressed. So there are some measures in these bills that go some way forward. Some of them are just fixing up problems or excessive harshness that were introduced in the past, but, as I have outlined in this contribution, there are many more gaps to be plugged. I hope both major parties give serious consideration to doing so in their policy announcements in the election period.

Nigel Scullion (NT, Country Liberal Party, Minister for Community Services) Share this | Link to this | Hansard source

I thank the senators for their contributions to this debate. The Social Security Amendment (2007 Measures No. 1) Bill 2007 builds on the Howard government’s Welfare to Work reforms by extending eligibility for the mobility allowance and making it easier for people with disability to find work in the open labour market. The amendments also improve the labour market potential of people claiming youth allowance by ensuring the move for young people from full-time study into the labour market is supported by prompt assistance from Centrelink. Welfare to Work measures supporting parents are extended so that people receiving partnered parenting payment can access more support if they have a partial work capacity due to disability. This additional support is consistent with that received by people on Newstart allowance with partial capacity to work.

The Social Security Amendment (2007 Measures No. 2) Bill 2007 gives effect to announcements made in the budget. As with the first bill, this bill also builds on the Howard government’s Welfare to Work reforms. It does so by ensuring better arrangements for principal carers, improved consistency and efficiency in income support decisions and greater clarity in the application of social security law. These amendments recognise the contribution made by grandparents and other relatives when they take on formal caring responsibilities for a child, often preventing the need for foster care arrangements. The amendments extend access to automatic exemptions from participation requirements already in place for some principal carers. In addition, some principal carers will have access to a higher rate of payment while they take on care of a child to whom they are related.

The bill also updates the terminology used in the impairment tables on schedule 1B of the Social Security Act 1991. The updated terminology reflects the broader range of health professionals who are now able to determine impairment ratings against the impairment tables. I would like to make it very clear that these changes do not prohibit the involvement of medical officers and do not reduce the importance of medical information in relation to assigning impairment ratings. In fact, a job capacity assessor is instructed by the Department of Human Services’ guidelines to take into account all relevant supporting material, including the treating doctor’s report, when making these sorts of assessments.

Assertions by the opposition that this measure weakens the role of medical officers and their supporting reports in this process are simply untrue and misleading. Welfare to Work measures are not an attempt to save money. In fact, they will cost around $3.6 billion over four years. They are part of a genuine attempt to move people from welfare to work for the long-term benefit of Australia. The Welfare to Work measures seek to increase workforce participation through a balance of improved services, increased financial incentives and appropriate obligations. The measures include changes to income support payments, increases in employment services, changes to the participation requirements and a new compliance system. Both bills provide even further support for people assisted under the government’s Welfare to Work reforms. I commend these bills to the Senate, and I seek leave to incorporate other parts of the summing-up speech in Hansard.

Leave granted.

The incorporated speech read as follows—

The 2007 Measures Bill Number 1 builds on the Howard Government’s Welfare to Work reforms by extending eligibility for Mobility Allowance and making it easier for people with disability to find work in the open labour market.

The amendments also improve the labour market potential of people claiming Youth Allowance, by ensuring the move for young people from full-time study into the labour market is supported by prompt assistance from Centrelink.

Welfare to Work measures supporting parents are extended, so that people receiving partnered parenting payment can access more support if they have a partial work capacity due to disability. This additional support is consistent with that received by people with partial capacity to work on Newstart Allowance.

Access to a higher rate of payment is extended to people with shared care of a child. This recognises the costs incurred by parents who share the care of a child, and reflects the important recommendations of the 2006 Ministerial taskforce report on child support.

This Bill also ensures that mature age job seekers can combine self-employment, as well as other types of employment, with voluntary work in order to meet their activity test requirements.

The 2007 Measures Bill Number 2 gives effect to announcements made in the Budget. As with the first Bill, this Bill also builds on the Howard Government’s Welfare to Work reforms. It does so by ensuring better arrangements for principal carers, improved consistency and efficiency in income support decisions and greater clarity in the application of social security law.

These amendments recognise the contribution made by grandparents and other relatives when they take on formal caring responsibilities for a child, often preventing the need for foster care arrangements. The amendments extend access to automatic exemptions from participation requirements already in place for some principal carers. In addition, some principal carers will have access to a higher rate of payment while they take on care of a child to whom they are related.

The amendments also streamline the administration of transfers between one income support payment and another. Restrictions will operate on the time frame in which a payments transfer can be made, and transfers to the closed payments of Mature Age and Partner Allowance, will no longer be possible.

The second Bill also provides for legislative guidelines to be made regarding the review of income support determinations in relation to partial capacity to work, current or continuing inability to work, impairment ratings and incapacity exemptions from the activity test. The guidelines will ensure continued consistency across income support decisions, and will be contained in Legislative Instruments, increasing the ability of the Parliament to scrutinize the arrangements as they are implemented.

The Bill also updates the terminology used in the Impairment Tables in Schedule lB of the Social Security Act 7991. The updated terminology reflects the broader range of health professionals who are now also able to determine impairment ratings against the Impairment Tables.

I would like to make it very clear that these changes do not prohibit the involvement of medical officers and do not reduce the importance of medical information in relation to assigning impairment ratings.

In fact, a Job Capacity Assessor is instructed by the Department of Human Services guidelines that they must take into account all relevant supporting material, including the treating doctor’s report when making these sorts of assessments.

Assertions by the Opposition that this measure weakens the role of medical officers and their supporting reports in this process are simply untrue and misleading.

These two Bills provide even further support to people assisted under the Government’s Welfare to Work reforms. These reforms are helping people with the right supports and incentives to make the transition from welfare to work –and we all know that in most instances, a paid job is always better than a life on welfare which feeds further generational welfare.

Australia’s welfare system is designed to provide a safety net for those who genuinely need it. Ours is a generous and well-targeted system by world standards.

With an ageing population, Australia will confront the challenge of a diminishing supply of workers and an increased number of aged dependents. Through a greater emphasis on moving people from welfare to work, we can meet this challenge, sustain our prosperity and ensure those working age people who are able to contribute have the opportunity of doing so.

Our Welfare to Work measures aren’t an attempt to save money. In fact, they will cost around $3.6 billion over four years. They are part of a genuine attempt to move people from welfare to the work, for the long-term benefit of Australia.

The Welfare to Work measures seeks to increase workforce participation through a balance of improved services, increased financial incentives, and appropriate obligations. The measures include changes to income support payments, increases in employment services, changes to participation requirements, and a new compliance system.

The Welfare to Work package includes a number measures aimed at addressing the specific employment needs of a number of income support recipients. Groups targeted by the measures are mature age people, parents, people with a disability and the very long term unemployed.

Both Bills provide even further support to people assisted under the Government’s Welfare to Work reforms.

I commend these Bills to the Senate.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The question is that Senator Wong’s second reading amendment in relation to the Social Security Amendment (2007 Measures No. 1) Bill 2007 be agreed to.

Question negatived.

The question now is that Senator Wong’s second reading amendment in relation to the Social Security Amendment (2007 Measures No. 2) Bill 2007 be agreed to.

Question negatived.

Original question agreed to.

Bills read a second time.