Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I rise to speak on the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012. This bill seeks to implement a range of income support measures as set out by the government's Building Australia's Future Workforce package. The government is seeking to change the age requirements for social security payments and to propose an increase in the maximum age for youth allowance non-student recipients from 21 to 22 years of age. This would seek to cover any person who is at least 22 years old and who is not a full-time student or a new apprentice or someone who is undertaking less than 12 months study following a period on the Newstart allowance. Schedule 1 of the bill proposes that the same minimum age qualification of 22 years of age be reflected for Newstart allowance recipients.

Schedule 1 of this bill will also seek to amend and increase (1) the age of qualification for youth disability supplement; (2) minimum qualification age for sickness allowance; and (3) the minimum qualifi­cation age for the long-term income support rate. All three are currently set at 21 years of age and will increase to 22 years of age, with transitional arrangements provided for. This is set to apply from 1 July.

In the opposition's view, this package is rather piecemeal, with not much courage and not much innovation. This bill proposes changes to the eligibility rules for 'grand­fathered' parenting payment recipients—parents who have been continuously receiv­ing parenting payments since before 1 July 2006. Currently, grandfathered recipients are eligible for the parenting payment until their youngest child turns 16 years of age, provided that that child was in their care before 1 July 2011. From 1 July 2011 onwards, any new child born to or cared for by a grandfathered recipient will not extend that recipient's grandfathered status.

As such, this bill seeks to change the age of eligibility so that, from 1 January 2013, grandfathered recipients will no longer be eligible for parenting payment when the youngest eligible child in their care before 1 July 2011 turns 16 years if the child was born before 1 January 2000; 13 years if the child was born between 1 January 2000 and 31 December 2000; or 12 years if the child was born on or after 1 January 2001—except now, instead of supporting their own legislation, the government appear to be backsliding. They are slashing the age of eligibility for parenting payments from 12 to eight years of age, claiming a $700 million saving—another fiddle on the road to surplus, I guess.

The opposition do not view this bill as serious social security reform. The bill does contain a number of other minor measures. But with those few observations, and despite them, I indicate that the opposition will not be opposing the bill.

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

This is yet another attempt by the government to extend the Howard government's Welfare to Work policy. As Senator Fifield pointed out, it has already been superseded by the government's new approach, which completely removes the grandfathering provisions of the Welfare to Work bills of 2005. If adopted, the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 will cease income support payments for many, many single parents who will be affected over the next four years. Of course, we are not just talking about single parents or sole parents in this instance. We are also talking about their children—the very children that the government talks about needing to support, which is why we need to be rushing through the changes to the education receipts process. The government says it knows that parents will be spending money on their children. The government says it knows that, if parents receive money, they will be spending it on their children. Why doesn't the same apply to this? Why does the government think that it is acceptable to cut the income support payments for single parents, who by their very definition have children? Any cut the government makes to single parents' payments affects their children. In other words, money they do not get will not be spent on supporting the welfare of their children. This proposal cuts income support to single parents and their children. It puts them on a lower level of payment. It is money directly out of their pockets and their children's support. So all this rhetoric about supporting the families of Australia and low-income Australians is nonsense when the approach the government is taking is demonising single parents.

There is a double whammy because they are not only cutting payments to single parents—which, as I have said, the next budget makes even worse. When you go onto Newstart you have different cut-offs for part-time work. So, rather than being able to earn $174 a fortnight without your support payments being affected, as you can currently, you can only earn around $62 a fortnight. Again, who do the government think this is hurting? It is hurting the most vulnerable Australians. I repeat that: it is hurting the most vulnerable Australians in this country, who are already living in poverty. This further entrenches them in poverty. We know that living in poverty is yet another barrier to employment.

We are debating this bill and subsequently down the line we are going to be debating another bill that takes the cut-off from 12 to eight years of age—in effect, ending the grandfathered provisions. I also feel it is my duty to remind the chamber that the government when in opposition in 2005 voted against the Welfare to Work measures. And, when the legislation came before the community affairs committee, ALP senators in fact joined with the Democrats and the Greens in saying: 'We are concerned about the transitional arrangements and the grandfathering provisions for the parenting payment given the significant difference between the payment levels for people who get to stay on the parenting payment (single) and those who end up on the Newstart allowance as primary carers. The legislation does not adequately provide appropriate safeguards to ensure that people currently on parenting payments will retain the payment until their youngest child turns 16.' That was said by the government when in opposition in 2005. They now seem to think that Welfare to Work is an acceptable way to treat the most vulnerable Australians. Of course, they were right: the provisions did not adequately protect those who were grandfathered, because they are presently doing the very thing that they were talking about, which is cutting those protections for those most vulnerable Australians.

The delivery measures cut approximately $58 per week from sole parents, and on top of that you have the impact on people's capacity to work part time. We know that single parents who are trying to survive on income support are amongst the poorest in this country. If you are living on parenting payment (single) you are basically living in poverty, as are your children. This bill will deepen that impoverishment without improving job prospects.

This is about budget savings. Let's be really clear about this. This is about budget savings. It is not about genuinely helping single parents into work. It is purely about the bottom line so that the government can claim it has a surplus. It is a budget cutback—there are no two ways about it.

One-third of single parents who are receiving the parenting payment are already in some form of paid work. This bill provides no changes to activity requirements or support. These parents have already been required to seek part-time employment since 2007. The only change being made is to the amount of money they will receive for their families. As I said, it is a significant cut in their income support. This does not provide an incentive to work because, as I said, one-third of single parents are already working part time. Moving people onto Newstart is going to make that work valued even less because the amount of money they can earn working part time is significantly less on Newstart—a double whammy.

Plunging families deeper into poverty will not help them find paid work. Research indicates that poverty is, in fact, a barrier to getting work. There is the stress around affordable housing. There was a report that came out just two weeks ago that highlighted the problems around finding affordable accommodation. Food related stress also impinges on people's capacity to find work, as does an inability to find the extra income for transport, clothing and all those other things that you need to survive.

We also have to bear in mind that single parents are desperately trying to find that balance between part-time work and supporting their families. Just because a child has turned 12 does not mean that it does not need the support and care of its parent. It is absolutely essential that we have flexibility in the system to enable people to work but also look after their families. Somebody rang me about this just the other day. She is a single parent and she lives in a regional area where the majority of work is shift work. There are no childcare services in that regional area that cover shift work. She asked me, 'How can I find work in this town when all the work is shift work based but child care starts at seven and finishes at five?' Where is she going to find child care? It is all very well for the government to say, 'We are going to provide cheaper child care.' If the child care is nonexistent it does not matter if it is cheaper. So what does that mother do when she is transferred onto Newstart and is then trying to exist on less money and cannot find part-time work because there is no part-time work that will also allow her to look after her children? If she left her kids alone to go and do shift work overnight she would be accused of neglecting her kids and then she would have DCP onto her. So much for a caring government that is really about trying to support people into employment!

As you can tell, the Greens do not support this particular amendment and, just for the record, we do not support the one that is also coming down at us, which we will be debating later, to drop the age of eligibility from 12 to eight. That will completely get rid of the grandfathered provisions and will plunge all single parents into this poverty trap. This bill also brings in cuts of $42 per week for young unemployed people aged 21 years. Unemployed 21-year-old people will lose access to Newstart allowance from July this year and will remain on the lower youth allowance for the year after their 21st birthday. Youth allowance for a single young person living away from home is $201 per week; the Newstart allowance is $243, nearly $244, per week. That is essentially a cut of $42 for young people living away from home and independent of their parents. As I have articulated and will articulate at some length later in this place, $244 is a minuscule amount of money to try to survive on—or not survive on—but it is getting cut by 20 per cent for those people who will be on youth allowance. You cannot live on that. Young people, again, will be living in poverty. As I have said and will continue to say at length in this place, poverty is yet another barrier to employment. How can you expect young people and students to live on less than people trying to survive on Newstart? At that time of their life young people are building the foundations of the rest of their life. We are condemning young people to poverty. That is an insecure foundation for young people to start their lives and build from. Where a young person is living at home a youth allowance rate of $133 per week applies. Where that person has not demonstrated financial independence from their parents a parental income test will apply to this group. This will of course further reduce payments for these young people.

The main argument in favour of this measure is that the gap between lower student payments—youth allowance and Austudy payments—and higher unemploy­ment allowance discourages participation in education. This is the same flawed argument that says that keeping Newstart payments low will magically encourage people into work. It is so low now and is not working; what makes the government think that dropping it even further will make it work? It is ridiculous for the government to think that a difference of $42 per week will act as a disincentive, particularly considering that even at the higher rate people are living in poverty. Living in poverty is not an incentive to work. People on Newstart do not have an incentive to work. Newstart is already below the poverty line of $130 per week. We know that setting it even lower will not magically encourage people to find work, because there are many barriers to people being able to find work. When is the government going to get this? It simply is not understanding the mechanics around barriers to employment. By putting young people further into poverty you entrench the poverty cycle.

This bill would cut the maximum rate of income support to unemployed 21-year-olds, regardless of their parents' income. We believe that, overall, we need to be increas­ing our income support payments, not cutting them. In fact, we need to overhaul the income support system in this country. It is complex, inadequate and confusing for people, does not meet current employment trends in this country, does not meet the insecure work situation/patterns that a large number of people are engaged in, does not meet the people's part-time work requirements and does not meet the temporary nature of the employment process that we have now. Of course, there is also the glaring problem that you are considered to be employed if you work even one hour a week. This antiquated income support system is trying to address all of those things. Each time the government cuts payments it makes it more difficult for people to survive and, I believe, makes it more difficult for them to be able to cope with this complex system.

Last year, even Ian Harper, the economist hand-picked by John Howard to set the minimum wage case, declared that Newstart is too low. He warned that giving people so little to survive on is causing desperation and depression. Many people now have said this. This bill puts single parents onto the lower Newstart rates and cuts youth allowance to below even the Newstart rate. It is not a good way to start people off in their working life. It drops people further into depression and hopelessness. Single parents' being dropped onto Newstart drops their income support, drops their ability to get ahead when they are working part time and develops a strong sense of hopelessness. What sort of scene is that setting for the children who are growing up in that environment, who are growing up in that intense poverty? We know that it affects their early childhood development. We know that we will have a better economy if we address those early childhood indicators.

Just last week I was at a seminar that was held to celebrate the work of the great Professor Fiona Stanley. Dr Clyde Hertzman, a Canadian who has been doing work with Professor Stanley, spoke to us about vulnerability indicators and the EDI, or early childhood development indicators. He was working with Stanford University. He pointed out that for every one per cent drop in vulnerability indicators for early development there is in fact a one per cent increase in GDP. Yet here is the government deliberately bringing in strategies to drop single parents further into poverty, and single parents are ipso facto looking after children. Instead of investing in those families the government is taking money away from them, making it harder for them to address the necessities of life and leading to their further vulnerability. A wise government would be investing in those families, not dropping them into poverty, making it harder and subjecting those children to poverty and increased vulnerability. A wise government would be very specifically investing in those families, investing in our most vulnerable Australians. Ignoring the social compact that we in this country should be developing with our vulnerable families and looking just at the economic development process of this country, would it not be a wise investment for us to address every degree of vulnerability if for no other reason than to increase GDP by one per cent? We would get that return. However, this government has chosen the coalition's approach of Welfare to Work that penalises and demonises people. In fact it has gone even further than the Howard government ever dared to go by dropping single parents and their families into poverty. That is what this bill does: it drops our most vulnerable young people into poverty by reducing their access, by making it even harder for them to struggle to survive.

Kids want an education; they want to gain access to an education. Keeping people in poverty and dropping their income support and thinking that they will automatically find work or education is a fallacy and an absolute nonsense. We do not support the provisions in this bill. We think it is the wrong approach and the government needs to reconsider how it allocates its money and how it makes its budget savings and at whose expense. This measure is at the expense of the most vulnerable Australians: our single parents and their children, the people we should be making our number one priority. We oppose these amendments.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

At the outset I thank those who have made contributions to this second reading debate. The Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 will give effect to important income support reforms contained in the Building Australia's Future Workforce package, which was announced in the 2011-12 budget. These amendments will provide a greater incentive for young Australians to engage in education, training and employment, and will encourage parents to re-engage in the workforce. It will help to restore equity to the eligibility conditions for parenting payment.

The Australian government's Building Australia's Future Workforce package is designed to ensure that all Australians are able to share in the benefits afforded by our growing economy. This package represents a significant investment in education, skills and employment opportunities that strengthen the future of Australia's workforce. Reforms to income support payments for young people are an integral part of the government's reform agenda and will provide greater incentives and support for young unemployed people to engage in education, training and employment. Education and employment are the key economic and social inclusion points. The government is committed to providing the right balance of support, assistance and incentives to ensure that people are able to take advantage of all of the opportunities that our economy has to offer.

This bill will amend the Social Security Act 1991 to delay access to Newstart allowance. From 1 July 2012, 21-year-olds may receive the same rate of youth allowance whether they are unemployed, in training or a student. This overcomes the financial disincentive for unemployed young people to undertake full-time study. There is a correlation between the completion of year 12, or an equivalent qualification, and the engagement of young people in education, employment or training.

The bill will also extend to 21-year-olds the 'earn or learn' participation requirements for youth allowance recipients who have not achieved year 12, or an equivalent qualification. A more generous income-free area and working credit will reward young people who take up part-time work as a stepping stone to full-time employment. From 1 July 2012, young job seekers receiving youth allowance will be able to earn more and still retain their payment. The income-free area will be increased from $62 to $143 a fortnight and their working credit limit will be increased from $1,000 to $3,500.

To ensure that all young people aged between 16 and 21 years of age under similar circumstances are in receipt of the same rate of income support payment, the bill also amends a number of payments, supplements and payment calculators to align the ages at which a person will cease to be qualified for youth disability supplement, sickness allowance and the long-term income support payment rate for students.

The government believes that these changes are the best way to support young Australians to participate in work or study, and to make the most of the opportunities that are available. It creates conditions that maximise the number of young people who remain in or return to education and training to get the qualifications and skills they need to be competitive in the labour market. It is important that this bill proceed now to ensure that young people are encouraged to learn or earn and are rewarded for part-time work as a stepping stone to more employment.

The Building Australia's Future Workforce package provides greater incentives for parents with school aged children to re-engage in the workforce. The government recognises that the best income support a parent can have is a job. That is why it is important that we provide the best possible incentives for parents to re-engage in work and present a positive working role model for their children. Through this bill the government is phasing out the arrange­ments for parenting payment recipients who have been on payment since before 1 July 2006. When their youngest child turns 12 years old, those recipients will now be treated the same as other parents, regardless of when they first claimed parenting payment. This measure creates better incentives for parenting payment recipients, including single parents, to return to the workforce by transitioning eligible parents onto Newstart allowance earlier. This recognises that most parents' capacity to undertake work or other activities increases as their children get older and that in the current income support system Newstart allowance is the most appropriate payment for working aged people to seek, find and maintain employment.

From 1 July 2013, a more generous income test will be introduced for all single, principal-care parents on Newstart allowance. This will enable those parents who may qualify for Newstart allowance to around $400 more per fortnight before losing their eligibility for payment. It will allow them to see greater benefits from their participation. As well as these increased benefits, it is important to note that parents caring for a child with a disability will continue to have access to a range of additional support, including carer allowance and participation exemptions for when their caring responsibilities need to come first.

The bill will also simplify the compliance framework and ensure that job seekers are not penalised because a weekend happens to fall before they have the opportunity to re-engage with an employment services provider. Announced as part of the Building Australia's Future Workforce package, daily penalty amounts for job seekers failing to attend an interview with an employment service provider will be aligned with the penalties for failing to attend an activity or a job interview, which is one-tenth of a person's fortnightly rate of participation payment. The department will monitor the implementation of this measure and its impact on the youth allowance recipients.

Finally, this bill will amend the Indigenous Education (Targeted Assistance) Act 2000 to provide the appropriation to fund the 12-month extension of the Student Education Trusts measure, as part of the extension of the Cape York Welfare reform trials, which was announced, as some in the chamber may recall, by the Minister for Families, Community Services and Indigen­ous Affairs, in 2011. Parents and care givers in remote Indigenous communities in Far North Queensland will continue to be supported in saving for the cost of their children's education, which is a key element in achieving the Closing the Gap targets in Indigenous education.

I thank the senators for their contribution to the second reading debate. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.