Mr JENKINS(6.06 p.m.) —In the run-up to the election the Prime Minister (Mr Howard) made much of the statement that he would lead a government that would promise to govern for all of us. This is a promise that has been echoed since the election. But I think that analysis of the budget proves that nothing could be further from the truth.

There are many losers in the first Howard-Costello budget, amongst whom are those that receive assistance under the social security system. In fact, one might observe that there are no greater losers than those that receive assistance under the social security system. The debate on the Social Security Legislation Amendment (Budget and Other Measures) Bill 1996 is about the sort of Australia that we want to see and that we want to live in.

This bill is the first ideologically driven step in an assault on the social safety net that underpins our society. The ideology that underpins that assault is no different from that implemented by Margaret Thatcher in Great Britain or by Ronald Reagan and the Republican Right in America. As time goes by in those two countries we see the unravelling of the effect of those measures and a return to values that give a community benefit to people that are in need.

So this is a measure that is about dismantling the welfare state. It is about changing the sort of Australia in which we live, and I do not believe this is an exaggerated claim. As a result of this budget, no longer do the unemployed have guaranteed access to labour market assistance services. The Commonwealth Employment Service and its historic mission have been abolished. Due to the impact of savage cuts, hundreds of thousands of Australians will simply miss out, or rather they will be screened out by a mean-spirited instrument known as a capacity to benefit. In the area of social security, there are over 30 changes which, as ACOSS has concluded:

. . . will impact harshly on social security clients. The impact is particularly strong when combined with measures announced in other portfolios such as the cuts to labour market programs, abolition of the dental health scheme and increased pharmaceutical costs.

Many of these 30 changes are pernicious, some are just simply bad policy. Take, for example, the abolition of the earnings credit scheme. The earnings credit scheme was introduced in 1991 to assist people with fluctuating incomes from casual or short-term work. The scheme allowed people to accrue earnings credits up to approximately $1,100 for individuals and $2,200 for couples during periods when they were not exceeding the income free zone.

They could then use that earnings credit during a time when they had an opportunity for some short-term or casual work. The account credit was reduced every time the person exceeded the income free zone without affecting that person's entitlement to benefit. In other words, the scheme provided a mechanism for people to spread the income from short-term paid work over a longer period and thereby not immediately affect their pension entitlement.

This was good policy because it acted as an incentive for people to take casual or short-term work. As ACOSS concludes:

Abolition of this scheme is an illogical and counterproductive move. It will act as a disincentive to unemployed people seeking casual or temporary work. It may also lead to people being reluctant to declare income.

All the trends indicate that part-time and casual labour will become an increasing feature of the Australian economy into the next century. The policy and, from time to time, utterances of the government assume the reverse. In assuming the reverse, much of the policy decisions being made by the government are bad because they have to understand the reality of the developing labour market, the reality that people will be more inclined to go into part-time and casual labour. In fact, the notion of full-time employment as we knew it, as people of our age when they left education knew it, is ever changing. It is the nature of the labour market.

Another example of bad policy—an attack on unemployed people seeking to return to work or to go on to education—is the abolition of entry payments. These payments were introduced in recognition of the fact that starting a job or commencing a course involves up-front costs. They could be tools, clothes, books, fares and many other things. The fact is that, when a decision was made to introduce the entry payments, it was in recognition that there were disincentives because people had to pay up-front costs to go into employment. This move was to ease that burden. The employment entry payment is paid to people on newstart and jobstart who have been registered with the CES for 12 months.

The most significant example of bad policy, and of policy which is driven by crude political ideology, is the so-called tightening of compliance. A defining feature of many modern conservatives is the practice of blaming the victims. This ability to regard welfare recipients as potential frauds was at the base of the Fraser government's concerted and callous attacks on what were called dole bludgers. The bad old days are back.

This social security budget is based on a fiction that an overwhelming majority of people who are in receipt of pensions and benefits are frauds. This is the sort of frightening populism that might make good copy for some television current affairs; it might go down well at Liberal and National Party branch meetings, but it is a myth. The government proposes to save $345 million over the next four years by tightening compliance—in other words, by eliminating fraud.

It is worth pointing out that this is only slightly more modest than its outrageous claims made during the election campaign that it would save $180 million from eliminating fraud and $331 million from better compliance over three years. This means the government is claiming that one in every seven unemployed persons is guilty of fraud and will have their benefits cut off.

In the electorate of Scullin the government's actions will force about 800 people off unemployment benefit. Overwhelmingly, these will be people who deserve and need income support, but they will be branded dole cheats. These people will pay the price of the government's ideology. They will pay it because the government has ignored the fact that since the early 1980s the Labor governments progressively tightened eligibility and compliance measures. The government has ignored the fact that in 1993 a major study of the social security system by a visiting fellow at the Australian National University, Professor Richard Weatherby, found:

There is no basis for the commonly held belief that fraud is rampant within the system.

. . . . . . . . .

Since the mid-1980s, a series of administrative and policy measures have been implemented, subjected applicants and recipients to far greater scrutiny than ever before.

. . . . . . . . .

These measures have effectively solved the compliance problem.

You cannot get any clearer than that, but the government has pressed on regardless. It is the unemployed who are going to pay for this mismatch between ideology and reality.

The hardships and absurdities created by the introduction of the dole diary have been highlighted by a social worker in my electorate. These comments from a public letter are worth quoting at length. In this letter, the local youth worker says:

If one accepts that it is a right for everyone to have an opportunity to work and receive remuneration for services and skills rendered, then it is a reasonable expectation that financial support is provided to the nation's workforce when full employment cannot be provided.

Most members of the House would agree with that statement. But, having made that statement, the way in which those benefits are administered and implemented is very important. The youth worker goes on to say:

The effects of unemployment on the morale and self confidence of the country is well documented and it is right that employment generation by the government and businesses be a top priority.

As we continue to say as an opposition, the most important policy direction that is required at the moment is employment creation. The youth worker continues:

However the activity test which has been recently introduced as a condition of recipients of jobsearch, newstart or the youth training allowance is an exercise in absurdity. The test consists of unemployed people providing details of attempts to gain employment in each fortnight period, through the use of a diary to record up to eight employment inquiries. This will be in order for recipients to continue to receive benefits.

The youth worker goes on to say that the absurdity lies in a number of different directions. There is the effort that the unemployed person will have to put in for compliance. There is the increased administrative effort required by DSS, CES or whatever body will be put in place to administer this. There is also the expectation that people, as part of fulfilling the conditions and getting the eight contacts, will continue to cold canvass. That is not to say that some unemployed people do not have success from cold canvassing, but it has to have some rhyme or reason behind it. It cannot simply be done just to clock up one of these eight contacts—to give a name, to give a company. It will end up demoralising the unemployed and being a pain in the neck for those who are being canvassed.

For a government that is suggesting that, especially for small business, they want to reduce red tape and small business involvement in compliance with a number of government measures, this step is contrary to those notions. There will be costs to a number of people just for getting the contacts and just to have them in the diary. The youth worker from my electorate says:

Structural unemployment occurs because our present standard of living requires a pool of permanently unemployed people.

I acknowledge that some people might dismiss that as being a notion put up on an ideological basis. The perception of the people that youth workers and social workers are working with daily is that we have an economy that has an underlying pool of unemployed people who have to be churned through the system. This government has a lack of decisive leadership. It should say, `As a government this is what we aim to do with employment; this is a target that we have set; this is a target that we will endeavour to achieve.' Those who are unemployed continue to live in despair.

I acknowledge that members of the government say that there is nothing magical in setting a target: they may not be able to achieve the target; it is an artificial level to aim for. The important thing is that much of what drives economies and employment creation is on the basis of perception and confidence. The remarks that the Treasurer (Mr Costello) made in the US about the markets illustrates the sensitivity. When the Australian Treasurer, after talking to the head of the American Reserve Bank, comes out and makes a statement, bleeps go everywhere.

When former Prime Minister Keating was Treasurer, an AAP wire statement said that he was about to resign as Treasurer. I forget now which way the bleep went—it went either up or down. Minister Reith will probably remember that it had a very positive effect. The point was that it illustrated that those people who sat behind the VDUs in different agencies, who made decisions about whether things were to be bought and sold in markets, often did it without really looking at what was actually happening.

If the people at that end of the economy make decisions in that way, we can understand that unemployed people—who in the overwhelming majority legitimately want to achieve paid employment and who are getting a better understanding that paid employment may not necessarily be full-time employment, that it can be casual or part-time—will have greater confidence if there is a degree of leadership shown that we are not seeing at the moment. A degree of leadership will talk up the confidence not only for the employed but also for potential employers so that employment can be created: to get on with the job. Then there will be less need for people to conjure up this atmosphere that the predominant numbers of people on social security are there fraudulently.

If people know of those who are on the social security benefit who do not deserve it, I have no qualms in saying that they should take action to inform the proper authorities. On any occasion that this is put to me, that is simply what I say. If they know of a case, they should do the proper reporting, because it can be dealt with under measures that have already been put in place. The stricter compliance measures contained in this budget and this legislation are not required. Proper levels of compliance can be achieved without beating up what, as I have described, is the myth of overwhelming dole cheats. I will be supporting the range of amendments that the opposition will be putting forward later on in the consideration of this legislation in an attempt to try to improve this bill and its intent.

Debate (on motion by Mr Reith) adjourned.