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Wednesday, 29 November 2000
Page: 20073

Senator NEWMAN (Minster for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women) (9:46 AM) —May I expedite matters by responding before Senator Bartlett. Madam Temporary Chairman, I draw your attention to the fact that amendments (2) to (5), (15) to (18) and (25) to (27) are the same amendments to three different parts of the act. When I respond to amendments (2) to (5), I am dealing with (2) to (5), (15) to (18) and (25) to (27). I suggest that, rather than go through the issues three times, that is a logical way to proceed. In that context, when I give the chamber an indication of the government's response to amendments (2) to (5), it will have the government's response to the other two sets of amendments.

I make it very clear to the chamber—and I think this is something which Senator Bartlett does not seem to have registered, and I do not quite know why—that people in receipt of a social security payment are not subject to the interest and administrative charge scheme. We are talking about people who have been on payments and who are now out of payments and in the work force. That is a very important matter to be made clear. Secondly, the interest and the administrative charge are only going to apply where a person has failed to make any arrangements to repay the debt—any arrangements at all. So, first of all, we are talking about people who are no longer on payments—they are out of payments and in work—and, secondly, these charges will only apply after they have failed to make any arrangements to repay the debt, despite the best endeavours of Centrelink. Over three months will elapse before these charges may be applied.

The scheme is designed to encourage debtors to contact Centrelink and to enter into or continue with voluntary arrangements to repay the debts. Voluntary arrangements are the preferred method of debt recovery. Repayments are made at a rate which will not put people into hardship. The government proposes to reduce the interest charge from the current punitive 20 per cent—that is the current legislated rate—to the lower deeming rate of 3.5 per cent. I think the government has been very reasonable in all these things. This will not apply to people who are on payments—only to people who are now off payments and who have failed to make any arrangements to repay the debt. Three months will have elapsed before the charges are applied. We would prefer voluntary arrangements. The repayments are not being made at a rate which will put people in hardship. We are reducing the punitive interest rate that currently applies of 20 per cent down to 3.5 per cent. All of those things are reasonable. Therefore, in that context, the government opposes the first amendment.

I turn now to the amendment to section 1229A to increase the notice period from 21 to 28 days. The government is prepared to support the increase in the notice period to 28 days. The social security law does provide for notices to be complied with within 14 days and our bill gives a concession to this usual practice by providing that the debtor enter into an arrangement to pay the debt within 21 days after the date of the notice. However, as I say, the government is prepared to support the increase in the notice period to 28 days.

Amendments (3) to (5) relate to interest on debt—the interest regime is delayed where a debtor lodges a request for a review. The government is not prepared to support the ALP amendments because they would allow a debtor to put off entering into an arrangement by asking for a review. That could lead to an increase in the number of frivolous reviews, which I do not think anybody in this chamber would believe was desirable. It would unnecessarily delay the application of the interest provisions. As I say, again, those provisions relate only to people who are no longer on payments and in the income support system and who have refused, or neglected, over a considerable period to make the repayments for which they are responsible. I cannot believe that the chamber would regard that as being unreasonable. I also believe that the chamber would regard the danger of frivolous reviews to be something that we should take into serious account. It is on those grounds that the government will oppose amendments (3) to (5).