Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

In rising to speak about the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 I reflect on the comments made by Senator Abetz in his contribution, which I thought was quite outstanding. He mentioned the rushed and flawed legislation that has come to characterise this government. There is no greater exposition of this than with respect to the tough economic times that Australia now finds itself in. It exposes policy weakness and it exposes the weakness of depth in the line-up of the Rudd government. Indeed, this bill goes some way to adding to that infamy that they are already developing quite a reputation for.

There is an old saying in investment markets that when the tide goes out, meaning when the investment markets start to fall, you can always tell who has been swimming naked. I can tell you that the economic tide is going out on this government and on the Australian economy. The tide is going out on the record low levels of unemployment that were achieved under the Howard government and inherited by the Rudd government administration.

This bill exposes the fact that this government has given up on the accountability associated with getting people off unemployment benefits and into actual jobs. But that should come as no surprise. Labor are no virgins in this regard. They have form on this. Previous Labor administrations have always seen unemployment rise and they have delivered economic woe to the Australian people. And, unfortunately, we are seeing more of the same today. This bill, among a number of changes, proposes to change the compliance regime. There are changes for unemployment benefits and job obligations. They are changes that would significantly roll back the mutual obligation requirements that currently exist, that have provided enormous benefits to so many people, enabling them to go out and get a job. In the last 10 years or so, unemployment in this country, under the coalition government, has fallen—from around eight per cent in May 1998 to under four per cent in February this year. But it is now rising. It is rising as the economic tide is going out.

Let me for the benefit of the Senate explain the current system. Currently, job seekers who do not attend a job interview, who miss an appointment with their provider or who fail to participate in their Work for the Dole or mutual obligation activity without a valid reason have what is called a ‘failure to attend’ recorded. If a job seeker has three recorded failures without a valid reason in a 12-month period, they undergo an eight-week non-payment period. This system was introduced to reduce welfare dependency by reiterating the concepts of mutual obligation and personal responsibility. They are concepts that every parent tries to teach their children and that every country in the world that has maintained a modest welfare system has sought to implement, because it goes to the very nature of our human spirit. We understand that we have obligations not only to ourselves but also to our communities and that we also have responsibility for the choices that we make. For any job seekers experiencing severe financial hardship, an opportunity for financial case management was always available. But, under these proposed changes, financial case management will no longer be available. So, whilst the previous system brought down unemployment from eight per cent in May 1998 to 3.97 per cent in February this year, it is now being tossed out by this government—a government with a very poor employment track record.

The proposed changes in this bill weaken mutual obligation quite significantly and allow for an enormous amount of discretion that will, in all probability, fail to encourage job seekers to look for work and get off welfare. There is a system in this bill called ‘no show, no pay’. The new system proposed by the government is based on ‘if you don’t show up you lose a day of pay’. This is a contradictory approach by this government, who has based its entire premise on an ‘all show and no substance’ approach to legislation—and it has succeeded in this regard. So, for each day that a job seeker fails to attend Work for the Dole, a mutual obligation activity or a job interview, they lose one-tenth of their fortnightly welfare payment. It was suggested in the minister’s second reading speech that this was more work-like in its contribution and people would be in a more work-like environment. Let me say for those who have not employed people: when people do not front up to work, you do not just dock their pay; if they do it repeatedly, they actually lose their job—as is appropriate to any fair-minded person. Under this principle in the bill, the Labor government is saying, ‘We’re just going to dock you $44.93’—a day’s pay for an unemployed person—‘because you didn’t front and you didn’t have an excuse.’ How is this a powerful incentive for job seekers to do their bit to find a job?

Further, under this bill, if a job seeker gets six failures within six months, they are referred for what is called a ‘comprehensive compliance assessment’—long words that sound very impressive but unfortunately do not have much substance to them. The comprehensive compliance assessment will result in one of five outcomes. They will have a new job seeker classification instrument, a job capacity assessment, a review of their employment pathway plan or an eight-week non-payment period—or no action at all could be taken. And, once you have been through the comprehensive compliance assessment, no matter what the outcome, the slate is wiped clean—you start again. So, even if no action was taken or if they just made a decision to let you off the hook for absolutely rejecting any notion of personal responsibility, they let you go and you can start again. The financial penalty of $44.93 a day may not actually deter job seekers from not turning up for the job interview that they possibly had a chance of winning. In fact, it may encourage an increase in the number of people who forego this amount of money to undertake other activities that are outside of the regular employment markets.

I would like to take you back through a bit of history. Since 1945, when the unemployment benefit was introduced, firm compliance measures have always been a part of it. The Chifley government introduced sanctions for not taking reasonable steps to find employment—you lost between two and 12 weeks of benefit. The Keating government penalised people for not attending a job interview by withholding their payment for a period of between two and six weeks. What we are looking at here is such a watering down of the existing obligations that one could say that they are the softest sanctions since the unemployment benefit was introduced in 1945. The measures that have served us so well—most expressly demonstrated in the 11 years of the Howard government—are now being watered down to unprecedented levels.

Let me touch again on the matter of mutual obligation. People out in the community accept that, when the taxpayers are supporting you, you have an obligation to the taxpayers. In the case of receiving welfare or unemployment benefits, one of the obligations is that you actually need to go out there and actively seek work. This is about breaking the cycle of welfare dependency. The government’s proposed changes water down this mutual obligation to such an extent that they provide very little incentive for people to do their part and actively look for work. This may indeed herald a return of and a reuse of that old phrase—and I say ‘old phrase’ because it has not been necessary to use it for so many years in this country—the ‘dole bludger’. Do we really want to see a return of the dole bludger, where people are actively opting in for unemployment because the penalties are so slight?

It is also worth noting that this bill offers a contradictory approach by the Rudd Labor government to that of another bill that will be under consideration later on. Whilst on one hand the Rudd Labor government are weakening mutual obligations for job seekers, they are actually planning a tougher regime for parents who are in receipt of welfare payments when their children miss school. There are a number of flaws in that legislation, but I will not touch on them now. It just goes to show that there is an inconsistency in the approach by this government.

Another concern about this bill is that it allows the minister or the secretary to use legislative instruments to classify job seekers and determine whether a job seeker is actually in breach of their mutual obligations. This includes what is a ‘reasonable excuse’ for a serious breach and penalty amounts—and there can be some interpretation as to what the penalty should be for the ‘no show, no pay’ failures. The coalition, quite rightly, believes that these parameters should not be determined by the minister or the secretary but should be set out within the legislation. This provides a consistency to legislation.

I understand that the government may say that the coalition has supported legislative instruments. Indeed, we have when times have demanded it, such as the time before the introduction of a bill and the final detail can be completed, if it was necessary. This is not such a case, quite frankly. The people of Australia like to know that there is a definitive approach and what the sanctions are going to be, rather than leaving it up to ministerial discretion. Allowing so much discretion to reside with the minister or the secretary through legislative instruments may result in job seekers believing that there is no need for them to engage in mutual obligation—and this of course could have a detrimental impact on unemployment levels.

The coalition also notes the concerns raised by Jobs Australia chief executive David Thompson about this new model—concerns that were shared by the minister in the other place, albeit he expressed them in slightly different terms, but the concern is exactly the same. The concern is that this new model only works when unemployment is low and lots of jobs are available. I regret to say that unemployment is now rising in this country. The economic stewardship of the Rudd government has been extraordinarily poor. As unemployment rises and the economic environment sours, there are not that many jobs available. We need to make sure that every job is being hunted down and filled by those who are looking for a job.

It is also interesting to note that in the second reading speech on this bill the Labor Party talked about statistics. There are many phrases about the use of statistics, but there are a couple of things that we need to get very, very clear. I think the government has been toying with statistics regarding the long-term unemployed. The simple fact is that there was a 30 per cent decrease in long-term unemployment between June 2006 and June 2008. There are fewer long-term unemployed because more people have been getting jobs, and part of that has been due to the mutual obligation responsibilities.

It will come as no surprise that the coalition has a number of amendments to this bill because, in its current form, this bill will only see unemployment rise—and that is something we do not want to inflict upon the people of Australia. We want to help develop a culture where people want to, and should be required to, actively seek a job. I am mindful that the Greens have also foreshadowed many amendments, and I understand that the Independent senators also have some concerns. This is an important piece of legislation that has been rushed and it is currently flawed. Quite frankly, a number of people in this place want to work for the betterment of Australia, and we want to get this legislation right. My concern is that we will not be able to have a considered view of this bill because of the lack of time that has been afforded to the Independent senators and others to consider what is wrong with it and how it can be best fixed—if at all. Currently, it is the opposition’s position that, unless our amendments are carried, we will not be able to support the bill. We would like to amend it to see these watered down mutual obligation commitments removed.

I know that the Greens have circulated a number of amendments. We would like a little more time to consider them and to see if we can come to an appropriate arrangement. Most importantly, the coalition recognise the incredible workload that has been placed upon the Independent senators. I say that because, for quite some time in this parliamentary session, there has been a lot of filibustering going on by the Labor Party to eat up time, as they have been disorganised and a bit of a rabble. Now they are trying to push through as much legislation as they possibly can in the last week or so. This puts an enormous amount of pressure on key people in the chamber who do not have the resources available to them. I would like to let the Senate know that—because we are a compassionate party and a party that wants to get this right—we are not interested in rushed and flawed legislation. We will be opposing the move into the committee stage and we will be voting no at the second reading stage, because we want to make sure that the Australian public and the Australian community do not suffer unnecessarily due to this rushed and flawed legislation.

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

The Welfare to Work regime introduced by the previous government was unfair, punitive and ineffective in providing an adequate safety net and genuinely engaging job seekers in securing appropriate work. The Australian Greens opposed that legislation vehemently, and we continue to oppose that punitive approach. The Australian Greens believe that, for the majority of those on welfare, the best outcome is for them to find meaningful employment. It is the best outcome for their families, their self-esteem and their standard of living, and it is the best outcome for our society and the productivity of our economy. We do not believe the Welfare to Work approach was the right way of achieving these outcomes.

As I said at the time of the debate on the Welfare to Work legislation:

We are concerned that the measures contained in the Welfare to Work proposals are unnecessarily harsh, badly targeted and ultimately ineffective. They focus on reducing income support and rely on coercive measures and unduly harsh penalties to force people into the work force, rather than providing incentives and support. There are no carrots, only sticks. The proposals do not address the very real barriers people face in finding employment, including lack of education, skills, experience and confidence.

The biggest stick—and that has proved right, by the way—and the most harmful aspect of Welfare to Work is the arbitrary and mandatory eight-week non-payment penalty. As many in this chamber know, I have taken a particular interest in looking at the number of eight-week non-payment penalties and the affect of these penalties on some of the most vulnerable members of our community. In April this year, I discovered shocking data through Senate estimates that between July 2007 and February 2008 there were more than double the number of eight-week non-payment penalties applied in the 2006-07 financial year.

The data also revealed that the eight-week non-payment penalties were hitting the Aboriginal community hard, with 29 per cent of those breached in Western Australia and 68 per cent of those breached in Northern Australia being Indigenous job seekers. The data I received in April also showed an appalling rate of financial case management, with only 3,012 people out of the 31,789 people breached receiving financial case management. The government’s own data on the impact of non-payment periods reinforces our position.

The government’s survey of people who had received an eight-week non-payment penalty found that 64.6 per cent had borrowed money from someone else; over half had failed to pay rent or board on time; around 15 per cent of those who had failed to pay rent were evicted, putting them at high risk of homelessness; 37.6 per cent could not pay their electricity, gas or phone bills on time; 31.8 per cent had reduced expenditure on food; and 12.4 per cent went without medication they would normally take. There are also the social impacts of non-payment penalties with marriages and relationships coming under stress and people being unable to take their children on outings.

Of particular significance is the finding that the eight-week non-payment penalty actually makes it harder for people to find work because of a lack of money for job search activities—for example, transport is more difficult and making telephone calls is more difficult. This is completely contrary to the stated objective of the legislation—to assist people into work. These figures demonstrate that the system is not working and that it is completely contrary to the government’s social inclusion agenda.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 goes some way to addressing the harmful affects of the current system. But, in our opinion, it does not go far enough. In particular, the Australian Greens are dismayed that the ALP government has decided to keep the eight-week non-payment penalty. We appreciate the provisions in the bill that are designed to minimise the number of these penalties, particularly in relation to participation failures. But we see no place in the welfare system for such punitive penalties. We note that around half of the eight-week non-payment penalties are for ‘serious failures’, not participation failures. Serious failures under the bill will still attract an eight-week non-payment penalty for a first offence. We believe that the bill is not going far enough in assisting these people.

We have particular concern about the ‘preclusion period’ of eight weeks for people who become unemployed from a voluntary act or misconduct. There is no provision in the bill for people on this eight-week penalty to mitigate the penalty through re-engagement. This is inconsistent with the stated objective of the government to focus on re-engagement. We note the call from Mission Australia before the Senate inquiry:

... that the legislation be amended to allow all job seekers that have an eight-week non-payment period applied to them have the opportunity to engage in a ‘serious failure requirement’ in order to access income support payments irrespective of the reason for unemployment—

A willingness by job seekers to engage in periods of intensive activity, even when due to the application of a serious failure requirement, we believe, is to be encouraged and recognised. It serves to maintain continuity of engagement with an employment services provider and of participation in activities that are intended to support the achievement of sustainable employment outcomes.

The National Employment Services Association also makes a very important point in relation to people losing their job through misconduct:

... lots of job seekers we see have been sacked because of misconduct, but it becomes fairly evident that the misconduct was a result of mental health issues or other personal circumstances that interfered, not that they were intentionally sabotaging work to go back to welfare. The ability to distinguish between some of those factors and better protect the people who are in those positions would be welcomed.

The Greens will be moving amendments to address these concerns. We also repudiate the idea that this level of punishment is somehow necessary as a deterrent. We agree with Catholic Social Services Australia when they argue:

It is not acceptable to use financial hardship, or the threat of financial hardship, as a tool to promote compliance. Nor is it acceptable to place already vulnerable individuals and their families under severe added stress. Individuals who are unable to support themselves through paid work should be entitled to an adequate level of support and to lives where dignity is maintained.

We are moving into a period of time when unemployment is expected to rise. We need an income support system that respects the dignity of individuals who need to rely on income support. While the Australian Greens acknowledge this bill as a step in the right direction, we do have a number of concerns about it and suggestions for its improvement.

I would like to address the issue of complexity in this legislation. A key issue to emerge from the committee inquiry into this bill relates to the complexity of the new system. The complexity comes from having five different types of ‘failures’ each with its own particular criteria, different levels of discretion, different consequences and different access to hardship provisions. We acknowledge that the intention of the structure of the new system is to provide penalties that more appropriately reflect the relevant breach and to shift from the current one size fits all approach. We support this intention but suggest that greater consistency between the categories of failure in relation to matters such as when discretion is allowed, when hardship provisions will apply and when penalties are to be ‘worked off’ would result in a simpler system which would be easier to understand and implement. National Welfare Rights Network has indicated that it is:

… concerned that job seekers will struggle to understand just how the new system will work, their obligations under it and, second, how they can avoid penalties and if an error occurs how it can be remedied. This is of great concern, given NWRN members’ current experience that jobseekers’ lack of understanding of how the existing compliance regime operates in practice has led to the imposition of penalties.

The Australian Greens will be moving amendments to create greater consistency in the application of reasonable excuse and hardship provisions and the ability of job seekers to ‘work off’ their penalties.

I would now like to touch on the issue of discretion. An important area where the Greens believe there should be greater consistency is the ability of Centrelink to exercise discretion in applying a penalty. Centrelink has discretion in applying an eight-week penalty for wilful or persistent noncompliance but, as the bill stands, it does not have discretion for the other penalties, apart from whether a reasonable excuse exists. We understand that the intention is for employment service providers to have discretion in reporting participation breaches. But we note that, in evidence to the Senate inquiry, Mr Carters from the department made the point that Centrelink are the final determiner. As the final determiner, we strongly believe Centrelink should have the discretion to evaluate the report from the service providers and make their own judgement on whether a penalty should be applied. We will be moving amendments to provide Centrelink with this discretion. We also believe that the discretion employment service providers are to have in reporting participation failures should be in the legislation and not left to contractual arrangements, as is currently the case. This is an important aspect of the new regime and, we believe, should be reflected in the bill. We also understand that it is there because of the way the former government chose to make some of its decisions and implement Welfare to Work.

No show, no pay and connection and reconnection breaches are part of a new process under this bill—no show, no pay in particular. One of the key elements of the reforms introduced by the bill is the no show, no pay regime for certain activity related breaches. We appreciate that the government is intending to create penalties for noncompliance that more accurately reflect the breach. We believe this approach is a better approach than the current system, although we still have concerns about how it in fact may operate in practice. We are worried that even a one- or two-day deduction may make it more difficult for people to comply, leading to people breaching more often. We believe that to address this problem the bill should be amended to include hardship provisions for no show, no pay and reconnection failure penalties. This would allow the penalty to not be applied where a person is in severe financial hardship. We can not see the purpose of causing people in severe financial hardship even more difficulties.

We also support the ability of job seekers who have a no show, no pay penalty or reconnection failure penalty applied to be able to ‘work off’ the penalty, similar to the provisions for eight-week non-payment penalties. We are particularly concerned about the impact this system may have on Indigenous income support recipients. Under the current system we have seen a very significant increase in breaching, with a disproportionate increase in breaching in Aboriginal communities. There is also anecdotal evidence of significant rolling breaches in Aboriginal communities resulting in complete disengagement from the system. We believe there are real risks that the no show, no pay system could result in disengagement for particularly vulnerable job seekers. The Greens will be moving amendments to introduce hardship and reconnection provisions into the no show, no pay regime. We will also be moving amendments to ensure that penalties can only be applied to the instalment period after the first instalment period following notification of the failure. This will allow people to prepare to have less money and also provide time for Centrelink to ensure that correct decisions are being made.

Similarly, we strongly believe that the bill should provide for comprehensive compliance assessment. This process is an integral part of making the compliance regime fairer and more responsive to individual circumstances. We understand that the intention is that before a serious failure is determined and an eight-week non-payment penalty applied a person must undertake a comprehensive compliance assessment which will consider whether the person’s employment pathway plan is appropriate, and what barriers a person may face to employment. The government has also indicated that the trigger for a comprehensive compliance assessment will be three connection failures and six no show, no pay failures. As this is such an important part of the new process, we believe it must be contained in the legislation, and we will be moving amendments to that effect.

Strong arguments were made during the Senate committee inquiry by Homelessness Australia about the need for the compliance system to take into account the particular vulnerabilities of homeless job seekers and also the potential for the compliance system to place people at risk of homelessness. Homelessness Australia argued that a consistent definition of homelessness based on the ABS census definition should be used in the social security legislation and legislative instruments. They noted that the definition of homelessness currently used in the reasonable excuse legislative instrument is very narrow and only applies when an individual is sleeping in a non-permanent location on the streets or in a refuge. This is a completely inadequate definition of homelessness and we support Homelessness Australia’s recommendation that the government define homelessness to reflect the cultural definition of homelessness used in the census.

We believe that this legislation will have positive impacts, particularly if it is amended along the lines the Greens are proposing. We think it is important that there should be a review and we want to see a review conducted after 12 months of the new system. In particular we would like to see the government pay specific attention to the impacts of the new system on Indigenous job seekers. It is vital that the new system meets the needs of Indigenous communities and that breaching rates are minimised. Welfare to Work had a disproportionate impact on Indigenous Australians and we must ensure that that disproportionate impact is not continued.

The reform of the compliance regime is an important measure, but there are other measures of Welfare to Work that we believe the government also needs to reform. One of the most contentious aspects of Welfare to Work reform was the change directed at single parents. The majority of parents on income support are single mothers. We urge the government to revisit the policy of putting single parents onto Newstart, with all the attached participation requirements, including in particular the downgraded educational opportunities provided to single parents.

This new legislation does provide a fairer approach to helping people find work, particularly by working with them to meet their individual needs through the employment pathway plan. I believe it will provide a much better approach, particularly for those people with mental illness and for others who also face great barriers to employment.

The Greens note that there is broad support from stakeholders in the community services sector for this legislation. I was a little dismayed, I must admit, to hear Senator Bernardi use David Thompson’s evidence to try to justify the coalition’s position. That is certainly not the impression that Mr Thompson gave to the committee of inquiry. I understood him to be supportive of this legislation, although he had some concerns about some of the provisions and he recommended a number of amendments. But, as I said, I understand that the community services sector broadly supports this legislation but does want some amendments.

The bill goes some way to removing some of the harshest impacts of the Welfare to Work regime. We do not wholeheartedly support the bill and I have outlined our concerns. As I mentioned at the beginning of this contribution, we believe Australia’s welfare system should be focused on assisting people in need, including through encouraging and supporting people back into work and then acknowledging people’s individual circumstances and difficulties. This bill does go some way to recognising those individual difficulties and circumstances. As I said, we do not believe it goes far enough but it does go a substantial way and we look forward to seeing the government bringing in another bill that addresses the other punitive approaches of Welfare to Work, and then Australia can finally celebrate the death of Welfare to Work.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I will be brief. I can indicate that I will not be supporting the second reading of the Social Security Legislation Amendment (Employment Services Reform) Bill 2008, not because I am not sympathetic to a number of the measures that the government is proposing but because it is not reasonable for me to consider amendments at this stage for several reasons. Firstly, I think it is well known that all of my staff have been working around the clock on other legislation. We simply have not had the time to consult with the stakeholders—both with the welfare groups and employment services organisations that want to speak to us about their concerns and with a number of constituents who have expressed concerns about the current legislation or the existing regime in respect of Welfare to Work.

As Senator Siewert indicated, this is a complex piece of legislation. It is quite nuanced in parts and I note that the Greens will be moving a number of amendments, as will the coalition. I do not think it is satisfactory to be dealing with such an important piece of legislation on what is meant to be the last day—or second- or third-last day—of this sitting session before the Christmas break.

I need to emphasise that the minister’s office has been extraordinarily cooperative and has provided us with briefings and information in relation to this bill. I had a meeting with the minister last week and that was useful. But it does not deal with the issue of consulting with a number of key stakeholders—and I can assure you that it is not reasonable for my staff to spend any more time, because they are doing 16 to 18 hours a day. We have been working around the clock on a number of bills and I believe that in order to do justice to this legislation I cannot in good conscience support this matter going into committee at this stage. I hope honourable senators can understand my position in relation to this. But if this matter does not proceed further tonight, I look forward to this bill being dealt with comprehensively in the first sitting week in the new year.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

The aim of Welfare to Work laws like this one is twofold: to find jobs for unemployed people and to save taxpayers’ hard earned money. While someone is receiving income support from the government it is fair enough that the public be satisfied that they are doing their best to find a job. But I think we should be clear about one thing: this law should not be just about improving work participation rates so that we can help the economy. This law should also be about helping people improve their lives. This is about steering them to a better life, helping them avoid poverty, giving them the satisfaction of decent employment and giving their kids a chance to have a good life.

The bill sets out a new compliance framework for job seekers on income support to try to keep them focused on searching for work. It introduces a new one-day pay penalty and keeps the current eight-week non-payment period as a penalty for people who persistently refuse to seek or stay at work. Ultimately, Family First thinks that employment services should concentrate on ensuring that at least one parent in every family is in paid work so that the children have a role model and are less likely to be living in poverty.

Part of helping people lead better lives is to focus on what is important to them, and what is important to most people is relationships. We are defined by our relationships with other people, such as husbands and wives, mums and dads, brothers and sisters and sons and daughters. So parliament’s actions should be focused on strengthening families, not weakening them. We must promote stable families that are focused on the needs and best interests of their children. Giving kids the best opportunity means making sure that at least one parent is employed, but it also means keeping marriages and relationships intact.

Catholic Social Service Australia, in their submission on this bill, pointed to a report from the Social Policy Research Centre which said that the current Welfare to Work system increased the risk of family breakdown. The report said that the system of penalties for breaching the rules meant that 26.2 per cent of respondents reported that their ‘marriage or relationship came under stress’ and 21.3 per cent reported that they were ‘involved in a serious household argument’. The report said breaching put further strain on already difficult family relationships.

When I spoke to the Australian Institute of Family Studies earlier this year, Professor Hayes nominated:

... communication, family conflict and violence, financial management, differences in values and differences in expectation of and satisfaction with relationships

as the top five drivers of relationship breakdown. A survey by the department also found that:

Over 50 per cent of job seekers serving eight week penalties had failed to pay rent or board on time during the penalty period and around 15 per cent of this group were evicted.

So we should be careful to make sure there are sufficient safeguards so that such rules do not cause homelessness or marriage and relationship breakdown. That is particularly important because we know that relationship breakdown can lead to further risk of joblessness and poverty.

OECD figures show that the number of jobless families in Australia is at 13 per cent, which is relatively high among the OECD countries. The reason Australia continues to have a relatively high number of jobless families is that there has been an increase in the number of single parent families which are less likely to have an employed parent than couple families. In 2007, Australia had a low rate of employment for single parents of 50 per cent compared to the 70 per cent OECD average.

The Australian Institute of Family Studies has identified key risk factors that restrict the life chances of children, including parents being unemployed and a child’s dad not being around. Family breakdown causes great hurt and suffering on an emotional level, but it also can lead to poverty and a lifetime of disadvantage for children. So family breakdown is a very important factor in Welfare to Work laws because, when families break down, it increases the number of families without employment and it puts children at risk of living in poverty.

So are the current arrangements successful in getting people into work? The department told the Senate Standing Committee on Education, Employment and Workplace Relations during its inquiry into this bill that ‘job seekers are less likely to meet their requirements than they were five years ago’. That is despite the department reporting that, in 2007-08, there were 32,000 eight-week non-payment penalties, which had doubled from the previous year. The department also gave evidence that the proportion of the job seeker population who are very long-term unemployment benefit recipients or who are disadvantaged has increased significantly.

Australia has had some success with getting people into work, halving the number of people in long-term unemployment from 128,000 just five years ago to 66,000 today. Over that time, the general unemployment rate has fallen from 5.9 per cent to 4.2 per cent or by just over 120,000 people. But the task will get more difficult with the world financial crisis and with people who are more easily employed coming off the unemployment lists first. The people on income support are already characterised in many cases by very difficult lives. The department noted:

… 32 per cent of job seekers on Newstart and Youth Allowance have a reported mental illness. Other barriers to participation include drug and alcohol problems (18 per cent) and unstable accommodation (five per cent). Almost 13 per cent of job seekers are ex-offenders.

So the task of helping people get jobs in an economic downturn will be difficult, but it is crucial for the futures of so many people and so many children. Work is vital for the physical and mental health and wellbeing of people. The government’s proposal has a strong focus on employment, but it should also have a focus on supporting people after they get a job and not just before. First jobs can be menial and uninteresting and may not last, so employment services need to help people stay in employment and move on to the next step up the ladder. In 2005, speaking about the Welfare to Work bills, I said the issue was about:

... trying to get the balance between personal responsibility and community obligations right.

That still remains the case.

I also stated that I can only imagine how difficult it must be to be a sole parent. For sole parents, there is often no-one to help on those long nights with a sick child or with just trying to get through the daily routine of keeping children bathed, dressed, read to and settled to sleep. I was pleased then, when speaking with the minister this week, to be assured that single mums and dads have done relatively well under the system and, to date, only about 20 single parents have been breached.

Family First has had some concerns about the eight-week non-payment period as a way of changing behaviour but has been assured by the government that this penalty is a last resort for people who persistently refuse to look for work. The minister told me that concerns over the risk of homelessness and the risk of punishing people with a mental illness or parents who have children to support should be taken care of by what the department calls, in bureaucratic language, a ‘comprehensive compliance assessment’. The assessment is designed to find the particular problems of job seekers so they get the help they need rather than an unnecessary punishment. Family First believes that, on balance, the government’s changes appear to be a reasonable response to the skyrocketing rate of eight-week non-payment periods, the fall in the number of job seekers meeting requirements and the increase in very long-term unemployment.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank all senators who contributed to the second reading debate on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008. The bill proposes compliance arrangements that provide a two-way nexus between participation and payment that is a genuine mutual obligation, not the ham-fisted mutual obligation of those opposite. The new compliance system does not seek to punish job seekers unnecessarily. Rather, it is a tool to maximise job seekers’ participation in activities that will assist them to obtain employment. This bill introduces a more work-like no show, no pay penalty that will apply when a job seeker fails to comply with training or work experience without a reasonable excuse. It retains, as a deterrent, eight-week non-payment penalties for persistent and wilful noncompliance. It predicates payment on the job seeker’s participation. In short, it will be a more effective compliance system than which it is replacing. Submissions and representations to the Senate committee strongly supported the move to the new compliance system. This is to be compared with the level of public approbation reflected in the 62 submissions made in respect of the current compliance system, with most strongly rejecting it.

The current compliance system has not improved compliance. If the current system were working, it would result in declining breaches because it encouraged job seekers to meet their requirements and ultimately supported them in getting them off income support and into employment. Yet the number of eight-week non-payment penalties applied has doubled over the course of just one year: from around 16,000 in 2006-07 to around 32,000 in 2007-08. An effective compliance system should result in improved participation. However, since the introduction of the present compliance system there has been no improvement in attendance at Job Search training, no improvement in attendance at Job Network interviews and no improvement in attendance at Customised Assistance. An effective compliance system should clearly link the receipt of income support and the obligation to look for work. Again, the current compliance system falls well short. The job seeker can miss up to two weeks of Work for the Dole before any action is taken. The job seeker then has a chance to reconnect and, if they do so, they incur no penalty at all. An effective compliance system should provide a timely and proportionate response. Presently there is no real or immediate consequence for deliberately failing to attend activities or for failing to attend initial job interviews.

Under the new system, job seekers will receive a clear message that their actions are unacceptable approximate to when the breach occurs, resulting in more work-like conduct in the future. The eight-week non-payment penalty will continue to deter a persistent and wilful noncompliance. In addition, job seekers who fail to comply with activity requirements will incur a no show, no pay penalty. To discourage job seekers from leaving employment voluntarily without finding another job, the government will also retain an eight-week preclusion period. The current compliance system makes it harder for people to find employment. A departmental survey of job seekers who received eight-week non-payment penalties found that around three-quarters of job seekers reported that having no income support made it harder to look for work. Some 75 per cent of job seekers who received an eight-week non-payment penalty were back on to benefits within a fortnight—in most cases—of finishing their non-payment period.

We are replacing a limited financial case management scheme with financial hardship provisions. The new provisions apply to all job seekers who incur serious failures but who do not have the capacity to participate in compliance activity, and to vulnerable job seekers who are subject to the eight-week preclusion period. The new financial hardship provisions of the bill will oblige job seekers to continue to look for work or to engage in activities that will improve their prospects of finding employment. A job seeker who received an eight-week non-payment penalty for persistent and wilful noncompliance will have the opportunity to demonstrate a renewed commitment to finding employment by participating in intensive compliance activity. A job seeker who agrees to participate in an intensive compliance activity will continue to receive income support while they work off their penalty through full-time Work for the Dole, or a similar activity for 25 hours per week.

This bill is designed to instil the job seeker with greater personal responsibility. Therefore the job seeker may suspend a no show, no pay, or reconnection penalty at any time by resuming their activity requirements or attending their reconnection appointments. Mental illness, drug and alcohol problems and unstable accommodation are among the vulnerabilities to which a substantial number of job seekers are subject. Even with the supposed protections in the current system, the lack of discretion available means inevitably harsh outcomes. More than one in 10 job seekers who have received an irreversible eight-week non-payment penalty had a reported mental illness. This figure is likely to understate the scale of the problem because of the difficult issue of job seekers not wanting to disclose personal issues. The current compliance system takes vulnerable people and makes them more so. The departmental survey of eight-week non-payment penalty recipients found that over half of those job seekers had failed to pay rent or board on time and around 15 per cent of this group were evicted as a result. It is difficult to see how anyone could think that this tackles poverty, let alone helps people find work.

The compliance system proposed by this bill allows us to distinguish between someone who does not want to meet their obligations and someone who cannot meet their obligations. Unlike the present automatic three-strikes rule, a job seeker will trigger a comprehensive compliance assessment when they miss three appointments or six days of activity in a rolling six-month period. An eight-week non-payment penalty will apply only if the prior failures were not beyond the control of the jobseeker and were committed intentionally, recklessly or negligently. This, of course, means that a serious failure will not apply based on a prior incident of noncompliance for which the job seeker had a reasonable excuse. Centrelink will use the comprehensive compliance assessment to consider a job seeker’s circumstance in order to determine whether there is a reason for noncompliance, such as episodic mental illness, before applying any penalty.

Providers will be able to exercise their professional judgement about whether to report behaviour as a no show, no pay or reconnection penalty. A provider can use alternative means of maintaining participation if they reasonably believe that there is a better way to ensure a particular job seeker is moving towards employment. Furthermore, no failure will apply if the job seeker has a reasonable excuse for their noncompliance. The impact of the job seeker’s personal circumstances on their capacity to comply will be considered in determining whether the job seeker had a reasonable excuse. This would, of course, include homelessness—as defined by the Australian Bureau of Statistics—mental illness or caring responsibilities. In response to the Senate committee’s recommendations, the government will review the effectiveness of vulnerability indicators and associated guidelines to ensure that they protect the most troubled job seekers.

The Senate committee also emphasised the importance of job seekers understanding their obligations under the new compliance system. The government will ensure appropriate levels of training for Centrelink and employment services providers and adopt a strategy targeted at communicating changes to all job seekers. The government believes strongly in an evidence based approach to policy and agrees with the Senate committee recommendation that we collect comprehensive data to monitor and report on the effectiveness of the new compliance system. The government also appreciates the broad community interest in the effects of the compliance policy. For these reasons we will conduct a review of the impact of the new compliance system after 12 months of operation, particularly in relation to how the system improves job seekers’ participation in employment services. The review will pay particular attention to vulnerable and Indigenous job seekers.

In conclusion, the new employment services will provide job seekers with the right mix of training, work experience and other support they need to find and keep work. The new compliance arrangements and other measures proposed by this bill will form an important part of the new system. This bill is a key component of the government’s employment participation agenda. To retain the status quo is not a benign alternative. To retain the status quo is to condemn a large number of vulnerable Australians to harsh, irreversible penalties. I ask senators to support the bill.

Question put:

That this bill be now read a second time.