Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I move Greens amendment (2) on sheet 1698:

(2) Schedule 3, page 36 (before line 5), before item 1, insert:

1A Point 1066A-F1 (note 2)

Repeal the note, substitute:

Note 2: The application of the ordinary income test is affected by provisions concerning:

(a) the general concept of ordinary income and the treatment of certain income amounts (Division 1 of Part 3.10);

(b) the work bonus (section 1073AA);

(c) business income (sections 1074 and 1075);

(d) income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 1B of Part 3.10);

(e) income from income streams not covered by Division 1B of Part 3.10 (Division 1C of Part 3.10);

(f) disposal of income (sections 1106 to 1111).

1B Point 1068-G1 (note 3)

Repeal the note, substitute:

Note 3: The application of the ordinary income test is affected by provisions concerning:

(a) the general concept of ordinary income and the treatment of certain income amounts (Division 1 of Part 3.10);

(b) the work bonus (section 1073AA);

(c) business income (sections 1074 and 1075);

(d) income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 1B of Part 3.10);

(e) income from income streams not covered by Division 1B of Part 3.10 (Division 1C of Part 3.10);

(f) disposal of income (sections 1106 to 1111).

1C Subsection 1073AA(1) (including the note)

Repeal the subsection, substitute:

(1) The section applies to a person if the person's rate of social security payment is calculated in accordance with:

(a) Pension Rate Calculator A at the end of section 1064; or

(b) Pension Rate Calculator D at the end of section 1066A; or

(c) Benefit Rate Calculator B at the end of section 1068.

1D Subsection 1073AA(2)

Omit "Module E of that Rate Calculator", substitute "the income test module".

1E Subsection 1073AA(2) (examples 1 and 2)

Omit "pension", substitute "payment".

1F Paragraphs 1073AA(3)(a), (4)(a) and (4A)(a)

Omit "Module E of that Rate Calculator", substitute "the income test module".

1G Paragraphs 1073AA(3)(b) and (4)(b)

Omit "pension", substitute "payment".

1H Subsection 1073AA(4) (example)

Omit "pension", substitute "payment".

1J Paragraph 1073AA(4A)(b)

Omit "pension", substitute "payment".

1K Subsection 1073AA(4A) (example)

Omit "pension", substitute "payment".

1L Paragraph 1073AA(4B)(b)

Omit "pension", substitute "payment".

1M After subsection 1073AA (4C)

Insert:

(4D) For the purposes of this section, the income test module in respect of a person is:

(a) if the person's rate of social security payment is calculated in accordance with Pension Rate Calculator A at the end of section 1064—Module E of that Rate Calculator; or

(b) if the person's rate of social security payment is calculated in accordance with Pension Rate Calculator D at the end of section 1066A—Module F of that Rate Calculator; or

(c) if the person's rate of social security payment is calculated in accordance with Benefit Rate Calculator B at the end of section 1068—Module G of that Rate Calculator.

The amendment will extend the work bonus to other income support recipients. This bill, as we know, creates a work bonus so that age pensioners are able to earn significantly more before their pension gets reduced, which is a good thing; we're supporting this bill. But it really points attention to the fact that you have got people on other income support benefits who aren't getting the same benefit. In fact, they're even more deserving of being able to earn more because their income support is considerably less. Age pensioners get $73 a day, but people on JobSeeker only get $48. This bill will allow age pensioners to earn up to an extra $11,800 in work bonus over a year, but JobSeeker can only earn a work credit of $1,000 before their benefits get slashed. In fact, they face an effective marginal tax rate of somewhere between $60 and $80 for every extra dollar that they earn when they take a few extra available shifts, when they take the opportunity to do the work that's there so they can pay a few bills, so they can get the lawnmower fixed or so they can pay off a loan that somebody has very generously given them.

What this amendment would do is to extend that work bonus that we are now going to put into legislation for age pensioners to other income support recipients to allow them also to get the benefits, to allow people on JobSeeker, people on the disability support pension and people on youth allowance to earn more so that they too don't have to suffer the huge increase in the cost of living. It would mean that they might actually, at least in some weeks, be able to scrape by and afford to put food on the table as well as pay the rent and pay for their medical costs.

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

I indicate that the government will not support this amendment. The purpose of the bill is to provide the relief and the incentive that have been set out at the Jobs and Skills Summit by the proponents of the bill more broadly in the community and by the government to extend that support to age pensioners and categories of people on veterans payments. The effect of adopting the amendment proposed by the Greens party would be a very significant change to the bill. Indeed, it would take it away from its primary purpose and, in our view, would have unintended consequences. I understand that that is not material for the proposes of the amendment because they want to make a political point about the system more broadly. I understand that, and I do appreciate that some of those points have been made and the manner in which they have been made over the course of yesterday. I expect more courtesy today, but the government won't be supporting this amendment. I urge the Senate not to support it either.

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

I briefly indicate the opposition won't be supporting this amendment.

The CHAIR: The question before the committee is that the request for an amendment be agreed to. The request is request (2) on sheet 1698, as moved by Senator Rice.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I now move Greens amendment (4) on sheet 1698:

(4) Page 38 (after line 27), at the end of the Bill, add:

Schedule 5 — Increase rate of income support payments

Social Security Act 1991

1 Subsection 1061JU(1)

Omit "half".

2 Point 1064-B1

Repeal the table, substitute:

3 Point 1065-B1

Repeal the table, substitute:

4 Point 1066A-B1

Repeal the table, substitute:

5 Point 1066B-B1

Repeal the table, substitute:

6 Point 1067G-B2

Repeal the table, substitute:

7 Point 1067G-B3

Repeal the table, substitute:

8 Point 1067G-B4

Repeal the table, substitute:

9 Subpoint 1067L-B2(1)

Repeal the table, substitute:

10 Point 1067L-B3

Repeal the table, substitute:

11 Point 1068-B1

Repeal the table, substitute:

12 Point 1068A-B1

Omit "$21,470.80 per year ($825.80 per fortnight)", substitute "$32,032.00 per year ($1,232.00 per fortnight)".

13 Point 1068B-C2

Repeal the table, substitute:

14 After section 1198B

Insert:

1198BA Adjustment of ABSTUDY payment amount

If:

(a) a person is receiving a payment under the scheme known as the ABSTUDY scheme that includes an amount identified as a living allowance; and

(b) the amount of that living allowance equates to less than $88 per day;

then the amount of that living allowance is to be increased by an amount equal to the shortfall.

15 Application of amendments

The amendments made by this Schedule apply in relation to a payment period that commences on or after the commencement of this item.

This amendment would raise the rate of income support to all income support recipients to $88 a day—to above the poverty line. I know the government is going to say, 'You're just making a political point.' This is not a political point. This is an attempt to improve the lives of millions of Australians who are living in poverty, who are starving, who are suffering from malnutrition, who are suffering from scurvy, who cannot afford to live in a home at the same time as putting food on the table or at the same time as paying their medical bills. We can afford this, and this parliament—this government—should be doing this. While they are not doing this, they are saying, 'We're going to go ahead with the stage 3 tax cuts and give the richest people in our country—the billionaires, the wealthy—$250 billion over the next 10 years.' That's the choice that's being made.

Poverty is a political choice, and the Greens have decided that we will not stand for it any longer. We are going to take every opportunity we can to be advocating, to be pushing and to be working so hard for the people who are mired in poverty at the moment. We need to raise the rate of income support. We need to raise it above the poverty line. We need to raise it above $88 a day. And we need to do it now.

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

The government will not be supporting this amendment—

Hon. Senators:

Honourable senators interjecting—

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

and I thank you for the cheers. I welcome the fact that Senator Rice adopts the position that she advocates. There are many people in the community who live on the Newstart rate and find it very difficult to live on. The government has made it very clear that if we could raise the rate, we would, and that we will consider it in the light of every budget. The government is responsible for managing the fiscal circumstances of the budget. We've made it clear that we will consider it in the light of every budget, in terms of its circumstances as we come on, and we will not be supporting the amendment today.

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

I will briefly indicate that—

David Shoebridge (NSW, Australian Greens) Share this | Link to this | Hansard source

The coalition doesn't support poor people.

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

Pardon? That's an outrageous thing to say, but we won't be supporting this amendment.

The CHAIR: The question is that request for amendment (4) on sheet 1698 be agreed to.

The CHAIR (18:58): Senator Rice, I understand that the further amendment request (1) on sheet 1698 is contingent. Would you like to seek leave to withdraw it?

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

by leave—I withdraw amendment request (1) on sheet 1698.

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

by leave—I move requests (1) and (2) on sheet 1681 together:

(1) Clause 2, page 2 (at the end of the table), add:

(2) Page 38 (after line 27), at the end of the Bill, add:

Schedule 4 — Pensioner work bonus increase from 1 January 2024

Social Security Act 1991

1 Subsection 1073AA(2) (examples 1 and 2)

Repeal the examples, substitute:

Example 1: David has $2,600 of work bonus income in an instalment period of 14 days. David's rate of social security pension for that period is greater than nil.

David's work bonus income for that period is reduced by $600, leaving David $2,000 of work bonus income for that period.

Example 2: Amy has $1,300 of work bonus income in an instalment period of 14 days. Amy's rate of social security pension for that period is greater than nil.

Amy's work bonus income for that period is reduced by $600, leaving Amy $700 of work bonus income for that period.

2 Subsection 1073AA(4) (example)

Repeal the example, substitute:

Example: Bill has $1,600 of work bonus income in an instalment period of 14 days. Bill's rate of social security pension for that period is greater than nil.

Under subsection (2), Bill's work bonus income for that period is reduced by $600, leaving Bill $1,000 of work bonus income for that period.

Assume Bill's unused concession balance is $800.

Under subsection (4), Bill's work bonus income for that period is further reduced by $800 leaving Bill $200 of work bonus income for that period.

Bill's unused concession balance is now nil.

3 Subsection 1073AA(4A) (example)

Omit "$200", substitute "$500".

4 Paragraph 1073AA(4C)(a)

Omit "$300", substitute "$600".

5 Paragraph 1073AA(4C)(b) (formula)

Omit "$300", substitute "$600".

6 Subsection 1073AB(2) (example)

Omit "$7,900", substitute "$8,200".

7 Application provision

The amendments of the Social Security Act 1991 made by this Schedule apply in relation to an instalment period that starts on or after 1 January 2024.

Veterans' Entitlements Act 1986

8 Subsection 46AA(2) (examples 1 and 2)

Repeal the examples, substitute:

Example 1: David has $2,600 of work bonus income in a pension period. David's rate of service pension or income support supplement for that period is greater than nil.

David's work bonus income for that period is reduced by $600, leaving David $2,000 of work bonus income for that period.

Example 2: Amy has $1,300 of work bonus income in a pension period. Amy's rate of service pension or income support supplement for that period is greater than nil.

Amy's work bonus income for that period is reduced by $600, leaving Amy $700 of work bonus income for that period.

9 Subsection 46AA(4) (example)

Repeal the example, substitute:

Example: Bill has $1,600 of work bonus income in a pension period. Bill's rate of service pension or income support supplement for that period is greater than nil.

Under subsection (2), Bill's work bonus income for that period is reduced by $600, leaving Bill $1,000 of work bonus income for that period.

Assume Bill's unused concession balance is $800.

Under subsection (4), Bill's work bonus income for that period is further reduced by $800 leaving Bill $200 of work bonus income for that period.

Bill's unused concession balance is now nil.

10 Subsection 46AA(4A) (example)

Omit "$200", substitute "$500".

11 Subsection 46AA(4C)

Omit "$300", substitute "$600".

12 Subsection 46AC(2) (example)

Omit "$7,900", substitute "$8,200".

13 Subsection 46AD(3) (example)

Omit "$200", substitute "$500".

14 Application provision

The amendments of the Veterans' Entitlements Act 1986 made by this Schedule apply in relation to a pension period that starts on or after 1 January 2024.

15 Annual reviews of income concession amount

(1) The Social Services Minister must cause to be commenced, at least once in each calendar year beginning on or after 1 January 2024, a review of the suitability of:

(a) the income concession amount in subsection 1073AA(4C) of the Social Security Act 1991, as amended by this Schedule; and

(b) the income concession amount in subsection 46AA(4C) of the Veterans' Entitlements Act 1986, as amended by this Schedule.

(2) The persons who conduct the review must give the Social Services Minister a written report of the review within 6 months of the commencement of the review.

(3) The Social Services Minister must table a copy of the report in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.

(4) In this item:

Social Services Minister means the Minister administering the Social Security (International Agreements) Act 1991.

Statement pursuant to the order of the Senate of 26 June 2000

Amendment (2)

Amendment (2) is framed as a request because it amends the bill to increase the income concession amount under the work bonus scheme. The income concession amount contributes to the amount that certain recipients of a social security pension, a service pension or income support supplement can earn before their payment begins to decrease. This means that increasing the income concession amount would result in recipients receiving a higher payment.

The effect of the amendments would therefore increase the amount of expenditure under the standing appropriations in section 242 of the Social Security (Administration) Act 1999 and section 199 of the Veterans' Entitlements Act 1986.

Amendment (1)

Amendment (1) is consequential to amendment (2).

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendment (2)

If the effect of the amendment is to increase expenditure under the standing appropriations in section 242 of the Social Security (Administration) Act 1999 and section 199 of the Veterans' Entitlements Act 1986 then it is in accordance with the precedents of the Senate that the amendment be moved as a request.

Amendment (1)

This amendment is consequential on the request. It is the practice of the Senate that an amendment that is consequential on an amendment framed as a request may also be framed as a request.

I outlined the coalition's rationale for these requests in the second reading debate, but I will quickly recap. There has been a lot said about our desire to improve the capacity for pensioners and other recipients of income support to contribute to the economy and receive income without it penalising them. Currently, under subsection 1073AA of the Social Security Act 1991, pensioners are limited to earning income concessions of up to 300 bucks over an instalment period of 14 days. The amendment request we're making here is in relation to doubling that amount to $600 and enabling those recipients of the pension payment to continue to receive that without the penalty that they would otherwise be exposed to.

Noting all of the benefits that flow from that, given the worker shortages we have across Australia, particularly in regional communities, a couple of points have been made by organisations like the Australian Chamber of Commerce and Industry. They said in their prebudget submission of last December:

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

The same organisation, in its submission to the Senate inquiry on the bill we are debating now, stated:

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

That relates to the provisions the government have contained in their legislation without the further changes that the coalition is proposing now.

On that basis, I would commend the proposals before the chair to senators and seek their support.

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

I'm grateful to the opposition for dealing with them cognately, but they don't really stack up singly or together. They aren't affordable. They won't incentivise older Australians to take up work in the immediate term where the workplace shortages they claim to be concerned about are. After a decade of mismanagement in this area, with a trillion dollars in debt and very little to show for it, these guys want to double the incentive. That is not a serious proposition. It's not supported by anybody serious out there in industry. We can't sustain it as we go about a focused approach on sustainable budget repair.

The former government used social services as a political football and had a new minister in social services about every 12 months. They didn't take social services seriously, either. The idea that the new opposition can claim to have an interest in labour shortages, after a decade of policy failure in this area—of falling productivity, falling wages, falling capital expenditure and the remarkable achievement of an enormous reduction in temporary labour—and the idea that they'd come here today proposing to double the incentive, are pretty extraordinary. The government urges the Senate to oppose the amendments.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

The Greens won't be supporting these amendments. We negotiated with the government to get an amendment in the House to extend the time period of this scheme until December next year. We think that that's a good period of time to have this workplace bonus in place. We're happy with a date towards the end of next year, potentially, to see whether it should be continued. But at this stage we are not supportive of moving the amendments that would extend it now.

The CHAIR: The question before the chair is that the request for amendments be agreed to. The amendments are requests (1) and (2) on sheet 1681 moved by Senator Duniam.