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Wednesday, 26 March 2003
Page: 13531


Mr SWAN (11:49 AM) —About the same time that John Howard gave the order to send our troops into battle, he decided to bring back to this parliament plans to cut the pensions of thousands of people with disabilities by $60 a fortnight. That will hit about 103,000 Australians, creating two classes of disability support pensioners. The Prime Minister was hoping to pass, under the fog of war, a bill that would have a profound effect on the lives of thousands of vulnerable Australians. Every time John Howard steps out of the war room, we see that mean and tricky streak again. The Family and Community Services Legislation Amendment (Disability Reform) Bill (No. 2) 2002 [No. 2] is yet another example of how John Howard is extinguishing the great Australian tradition of a fair go.

Why does a welcoming, forward-looking, self-believing nation such as ours have to have plans like this to punish our vulnerable? Why does a rich country such as ours have to do this? Why, when we are trying to build a nation which offers a way of life second to none in the world, are we deciding to be this mean? Nearly 2½ million people in this country—one in every eight Australians—live below the poverty line. For a family of four, that is just $415 per week. They try to feed themselves and their families and to pay for their housing, their transport, their education and all their other weekly bills on a working wage, when they are in employment, or on benefits of just $415 or less a week. That is the situation for one in eight Australians—just $14 per person per day. I frequently say that the Minister for Family and Community Services, Senator Vanstone, would use more money through her consumption of red wine—


Dr Emerson —And chocolates.


Mr SWAN —and possibly chocolates, and possibly shampoo for her dog, Freddy, than we are providing for these Australians living in poverty. It is quite obvious that this government is completely oblivious to the situation or is so uncaring that it is not capable of understanding how little so many Australians live on in this country.

A sign of that is the growing gap that has opened up between the earnings of the very well off and everybody else. Over the five years to the year 2000, tax figures indicate that the real earnings of the bottom 25 per cent of taxpayers have gone backwards. This is at a time of very strong economic growth. Let us consider that bottom 25 per cent. That is almost 2.5 million Australians who have not been sharing in any way in the benefits of our strong economy. To put that into perspective, that is one in four taxpayers. Contrast that to this figure: the top five per cent have seen their real earnings swell by almost 30 per cent—they are living in clover; they are having a very good time with a very big share of the benefits of the strong economy. If this is not a growing gap, then I do not know what is.

We all want to live in a society where we are all well off, where there is no poverty and there are no weak among us. But we also know that that is not our society, because there are always those among us who find it hard to keep up and who, often through no fault of their own, fall behind and have bad luck, whether it be in health or by accident, and need our care and our help to get back on their feet. What everyone in our society wishes for themselves and for those people is a fair go. And if a fair go is to mean anything, it is that we must always extend a helping hand to those in need—the strugglers in our society. To respect the Australian dream of an egalitarian and fair society, we must offer social justice. That social justice must be sustained and built by the wealth creating powers of our economy. You do not respect that Australian dream by delivering pension cuts. You dishonour that Australian dream by providing pension cuts like those in this bill today.

The current government's policies have tilted the playing field towards the very few who are already doing very well. This government, very deliberately and driven by dogma, has invoked social division in place of social cohesion. It has put confrontation in place of cooperation and it has brought about dislocation in place of unity. This bill sums up that mean, nasty streak that goes to the very core and being of the Howard government. This can be seen at many levels. This government owes its political survival to the policies of social division—remember Tampa and the children overboard—but that is particularly so in areas where well directed assistance will help people work their way back out of the poverty traps that it creates. Instead of coming into this House and getting rid of the poverty traps, the government brings in legislation that further entrenches that poverty and further locks people into welfare dependence.

Nobody disputes the need for welfare reform—nobody. But this government's proposals are not reform; they are a full frontal attack on the social safety net under the fog of war—the net that protects disabled Australians from destitution. There are something like three million Australians with disabilities. There are something like 650,000 Australians on disability pensions. This bill proposes to cut the benefits of 100,000 Australians by $60 a fortnight. In its original form, the bill proposed to cut the pensions of 200,000 Australians by a similar amount. This bill says so much about the character of the Prime Minister and the Howard government by creating a two-tier, two-speed society, where the benefits go predominantly to those at the top, while those at the bottom go backwards and those in the middle get squeezed.

The government's justifications for the cuts are pretty elaborate, but in the end it comes back to its time honoured tactic of blaming the victims. It has used every argument under the sun to justify this mean spirited bill, including an enormous slur cast over the 650,000 Australians who receive disability support pensions with the claim that most of them are malingerers. That is what the Minister for Family and Community Services said when she got into political trouble, and that is what other ministers have said in this House.

First of all, the government argued that the changes were all about assisting and supporting people with disabilities to find employment. That got blown away when we could not find the resources to justify the claim. Worse still, as I said before, they ramped up the welfare rorter rhetoric: everybody on a DSP was really a rorter with a `bad back', and they became the targets. Never mind the fact that people with serious disabilities would also be affected by the cuts. Of course, now we will get the next line of defence. The excuse for cutting pensions will be the cost of war. Can I say that security is about more than just protecting our borders—important as that is. It is about more than war. If we cannot protect our most vulnerable citizens from poverty, what sort of society are we? What sort of society are we to bring in with this bill? It does not have as its heart the objective of reform or justice. It is simply picking on a very small number of vulnerable people.

The government constantly says that we have a strong economy. Then what is it doing? The government should be putting the economy to work for the Australian people, including those with disabilities who want to work. But there are no such proposals contained in this bill. The Treasurer says we have to face tough decisions on welfare, health and aged care. He finds it very easy to pony up the funds for the war. What about ponying up funds for some of these key social objectives? The government is not doing that. It is creating distractions. Our Prime Minister is a great dealer in distraction, along with the Minister for Employment Services, who has just joined us in the chamber and who engaged in the attack upon those disability support pensioners as being malingerers. That is a particularly lamentable approach.

What John Howard needs to do is to distract the community to focus exclusively on war, because the things that make us strong as a nation, the things that give us real security—secure access to work, education and health care—are not the things that this government is providing anymore. The Prime Minister is a modern day Solomon, distracting the public while he picks some of their pockets—particularly those who are the most vulnerable. So the priorities of the government are all wrong. It is prepared to go to any length to prosecute the war. Why won't it go the extra mile for Australians who are living with a disability?

The government wanted to push this bill through both houses of parliament this week. It has tried this on because it wants another double dissolution trigger in case the Australian Democrats do not support this bill in the Senate. If the government wants to fight an election campaign on the proposal to rip a gaping hole in the social safety net, I say bring it on. We ought to have that debate. I am sure the millions of people with disabilities in this country and their families will be happy to turn out to make it clear how offensive this government's plans are. The Prime Minister promised before the election that he would cut no-one's pension. It was a very clear comment. At the ACOSS conference on 25 October 2001, during the 2001 election campaign, he said:

Nobody's benefit will be cut as a result of changes to the social security system.

The architect of the government's welfare reform proposals, Patrick McClure, received the same undertaking at a Mission Australia conference a few months earlier. Howard told McClure and Mission Australia staff:

The following principles will underpin all future work:

our commitment to making up front investments that will deliver returns to taxpayers later on as people move from welfare dependence to economic and social participation ...

... ... ...

our undertaking that nobody's benefit will be cut as a result of changes in the benefit system.

This bill breaks that promise. We hear one story before the election and another story after the election. It is no wonder that Patrick McClure slammed the government over the weekend about the state of the welfare reform program that has been put forward. McClure said the government's welfare reform program is `unbalanced' and `uneven'. He says the government is placing too great an emphasis on the individual's obligations and not enough on business and the community.

For almost four years this government has talked the language of welfare reform, but all it has delivered are more and more cuts to the social safety net. The changes in this bill are not about welfare reform; they are about removing the income and material assistance available to people with disabilities and asking them to go out and get a job. The government takes this away but it says, `Go out there and do it.' The question no government member, from the Prime Minister down, will answer is: why do you need to cut someone's income to help them get a job? In response to the public outcry about the original bill, the government offered to protect existing disability pension recipients. In other words, it set out—in the face of public revulsion—to create a two-tiered payment.

The bill seeks to amend the current work test for people applying for the disability support pension. Specifically, schedule 1 seeks to alter the definition of `work capacity' from 30 hours a week at award wages or above to 15 hours. It should be noted that the current test is whether a person is capable of working 30 hours a week inside a period of two years and follows a medical determination that a person has a disability. Item 15 of schedule 1 contains the new transitional provisions that protect claims lodged for the disability support pension prior to 1 July 2003.

Schedule 1 also seeks to broaden the type of assistance or intervention that can be considered in determining work capacity. This has the effect of giving the secretary of the department greater flexibility in making a judgment about whether, with appropriate intervention, a person has the capacity to work at the threshold level or above inside two years. The schedule also seeks to remove the ability to consider local labour market conditions for people aged over 55 in determining work capacity. As a result, an individual within 10 years of retirement and living in a community with negligible labour market programs or employment prospects would no longer have their limited employment or training opportunities taken into account and would not qualify for the more generous disability support payment. Again, claims lodged prior to 1 July 2003 would not be affected by this measure.

The bottom line is that the government's intention to tighten access to DSP and place people on lower-paying benefits is not changed at all in this bill. Figures provided during the Senate estimates hearings confirmed that the revised measure would result in approximately 103,700 claimants for the disability support pension having their applications for the payment rejected over the forward estimates period 2005-06. Many of these people will qualify for the lesser Newstart allowance—a difference of $60.20 per fortnight. Some will qualify for other pension payments, and a small proportion of people will qualify for no payment at all. This will entrench a two-tiered system that will create two classes of disability support recipient depending on when their claim was lodged.

We will have a situation where two people with exactly the same disability and barriers to employment will be on two different payments. One will receive the higher-paying disability support pension along with ancillary benefits like the pensioner concession card, pharmaceutical allowance, access to the pension education supplement and a greater incentive to work, with an income test that claws back less of any earnings they make. The other person with the very same disability will receive the lower-paying allowance, worth $60 per fortnight less. They will not have a pensioner concession card to reduce public transport costs, car registration, rates or utilities. They will also not automatically receive the pharmaceutical allowance, which will see them pay more of their out-of-pocket expenses for medicines that help control their illness or disability. If they try and improve their skills through study, they will not be eligible for the education supplement to help with study costs. In addition, the disabled person on Newstart will have to actively look for work, line up in the dole queue and fill out a dole diary and may also be forced to work for the dole. They have the same disability but there will be different payments and requirements for them.

To any reasonable person it should be apparent that this is unfair, but the government's compromised position, which separates people with disabilities on the basis of the timing of their claim, does not address its own concerns. It has said that people with so-called bad backs should be separated from those with genuine disabilities. The fact is that the work test changes will affect people with varying levels and types of disabilities, including those with severe physical disabilities and chronic psychiatric disabilities. It has claimed that people with disabilities who work in business services—that is, sheltered workshops—will be protected. But the changes protect only those currently on the disability support pension, so people with disabilities who take up business service work after 1 July 2003 may do so on Newstart with a responsibility to look for a job. The government's instrument for separating out so-called malingers is therefore a very blunt one indeed. May I suggest that, if the government is serious about malingerers who are not genuine, it should step up its compliance efforts—not cut them back, as it has done, through the disbanding of front-line fraud detecting staff in Centrelink.

Today, we are particularly concerned about those people who have serious disabilities who will be caught by the changes—in particular, those suffering from mental illness. Many may look like you and me, but their disability can be just as severe as someone with an obvious physical condition. Many of these conditions may be episodic, making it impossible for them to live normally for any sustained period. But there will also be those who have obvious disabilities who will be caught by the new test if it is assessed that they have a work capacity of 15 hours a week or more. These changes will open the door for people with significant disabilities to be forced on to the dole queue.

Eligibility for a disability support pension no longer includes a defined list of manifest conditions that automatically entitle people with a disability to benefit. People must meet a minimum level of impairment and undergo the work test. The two cannot be traded off. If a person has a serious and significant disability but slips in under the new work test, too bad. This will become a very significant issue if this bill were ever to pass. The only specific and defined exception is for those with permanent blindness. The changes put forward will see people with paraplegia, acquired brain injury, profound deafness, rheumatoid arthritis and other terrible disabilities and illnesses forced onto the dole queue. That is what will happen. The Labor Party says that we should not have people on crutches or sitting in wheelchairs in our nation's dole queues. That is the fundamental difference between us and this mean mob opposite.

There are other pitfalls in this bill before us today. The government's compromised position will also mean that an individual who moves off the payment to work, or for another reason, but returns later will also lose benefits. This will create a disincentive for those already on a disability support pension to take on work or other opportunities, which is at odds with the government's stated aim of increasing participation. Labor also has very good policy reasons for opposing these changes. Put simply, the 15-hour test is too low, entrenching people in poverty. What do I mean by that? By definition, people forced onto Newstart or another allowance may only have a capacity to work 15 or 16 hours, but no more than that. At minimum wages, this is just $340 per fortnight before tax. These people will be trapped on an allowance-level payment, earning a paltry income, with no ability or prospect to increase their income to a reasonable level—because of their disability. They, by definition, cannot move off the payment, unlike existing allowance recipients who have no disability and who, given their skills and a willing employer, may increase their earnings and move off the payment and even into full-time work. This is patently unfair.

What is the alternative? Are there problems with the disability support pension? Of course there are. Let us look at the total numbers. They have increased substantially over the last decade in particular. Disturbingly, under this government the annual increase has not slowed, despite a stronger economy. It is easy to be alarmist about the increase, but it is not as dire as some coalition people claim and it is not because of an influx of rorters or malingerers. Firstly, we have seen a loss of full-time work and an increase in part-time work. In particular, the losers have been mature aged people who have worked in traditional industries and who, in many instances, have worn and broken bodies after a lifetime of work—something that that minister opposite knows absolutely nothing about. He is one of the meanest and most insensitive ministers in this government and he will go to any end to vilify the victims of the government's economic policy. These mature aged people also have no skills to re-enter employment in other areas—nor are many employers giving them the chance that they require. But the largest growth areas of late have been with older women, resulting from the progressive increase in the female age pension age and the phasing out of widows pensions and allowances.

Additionally, under the coalition growth has flowed from the liberalisation of the income and assets test for pensions, seeing people with disabilities but with higher levels of private incomes from savings and investments become eligible. Also responsible to a small degree is an increase in the level of disability in the community, mainly driven by advancements in medical treatment and technology. So this is not simply a case of malingerers. The causes for the increase in disability pension numbers are many and varied. To suggest otherwise is simplistic and does no service to foster intelligent and rational debate—something that is impossible to get from this government. Labor's approach is to increase the number of people on disability pension who work. Labor agrees that too few people with disabilities are working when they can and are indeed willing to do so. The problem is that the government does very little to encourage and facilitate people on the disability support pension to work.

Labor's approach in government was very different. Labor's disability reforms of the early 1990s, which activated the social security system and focused on the assessment of the capacity of people receiving a disability support pension, would have assisted many people to move off the pension and into work if they had not been brought undone and vandalised by this government. While the coalition has said that there needs to be a focus on people's ability, not disability, it is somewhat ironic that it is the same government that abolished Labor's disability support panels—expert panels equipped to provide a thorough assessment of people's capacity. The government has also axed $90 million per year in financial incentives for people with disabilities and other job seekers who find work via the earnings credit scheme. There are a litany of short-sighted cuts, presided over by that vandalising minister opposite, that have left us with an increasingly unsustainable system because it is trapping people on pensions. I mentioned many of them in my original speech on this bill, and I will summarise some now.

In 1998-99, the last time a count was taken, just 10,855 people left the disability support pension for the work force. A figure of 10,000 people out of 650,000 people moving into work is a deplorably low number of transitions, driven by the absence of assistance to people to make the transition. Look at the supported wage system, a program begun under Labor but neglected by this government. In the financial year 2000-01, just 986 placements occurred, assisting just 0.15 per cent of the disability support pension population. Look at the Commonwealth Rehabilitation Service, an organisation set up to assist people to make the transition back to work. As at 30th June last year, the organisation had provided rehabilitation to just 18,000 clients in a 12-month period. It achieved durable employment outcomes for just 6,730 people with disabilities. Clearly, we are offering rehabilitation to just a fraction of those on the disability support pension who could benefit from it and then make the transition from welfare to work.

Added to all this, for most of the time the Howard government has been in office, it has been taking an annual efficiency dividend of one per cent of disability employment services—that is, one per cent of their budgets each year, every year. The essential issue here is the unwillingness of the Howard government to recognise the importance of investing in assistance—in training, rehabilitation and support—if we are to increase people's access to work. In its heart of hearts, if it had one, the government would know its attempt to force people with disabilities off the pension and onto the dole is not supported by the community; nor is it desirable policy. The community knows this is all about forcing people with disabilities to pay for John Howard and Peter Costello's spending spree prior to the last election. That is why it has been so quick to resort to the rorting allegations and the very big smear. And that is why I intend to move a second reading amendment. I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House declines to give the Bill a second reading, and

(1) condemns the Howard Government's attempt to deny Disability Support Pensions to more than 100,000 Australians living with a disability over the next three years;

(2) condemns the Government's attempt to create two classes of people with disabilities by seeking to pay many of those who apply for a Disability Support Pension after 1 July 2003, $60.20 a fortnight less than people currently receiving the payment;

(3) endorses the view of the ALP supporting the need for welfare reforms that offer the opportunity for people with disabilities to participate fully in the community, including to work;

(4) refuses to support Government cost cutting that will discourage people with a disability from seeking employment; and

(5) calls on the Government to work with the ALP on a bipartisan basis to achieve real welfare reform”.

Real welfare reform in this country would be to the long and lasting benefit of this nation.


The DEPUTY SPEAKER (Mr Wilkie)—Is the amendment seconded?


Ms Ellis —I second the amendment and reserve my right to speak.