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Wednesday, 29 November 2000
Page: 20080


Senator CHRIS EVANS (10:17 AM) —I feel a bit churlish today because Senator Bartlett has been very cooperative and the minister has been very cooperative and I have been insisting on my amendments. I think the minister has answered some of Senator Bartlett's criticisms. Labor's view is that we cannot support the Democrat proposition to knock these measures out altogether. Those are measures that have to be looked at as part of a package, and the minister, I think rightly, makes the point that the reduction in the interest rate is an important measure in terms of reducing the harshness of the penalty on some of the people who may be affected, and that is a very big part of Labor's thinking on its approach to this bill.

It is also the case that we do support the government's intention and the need to encourage individuals to enter into repayment agreements and stick to them. We have sought to put other protections in. We have carried the amendments that seek to differentiate administrative debts brought about through no fault of the clients themselves and we have dealt with questions about financial hardship and appeal rights. I think the government is trying to put in a different system with reduced interest rates, and this administrative charge is part of that approach.

We are not prepared to go down the Democrat path of abolishing that altogether because, as the minister says, the charge is for people who are back off benefits who have had a lengthy period of time to respond, and it is a question of making sure there is some inducement for them to actually stick to arrangements to repay the debts. It is a balancing act again, but we think it is not unreasonable to adopt this sort of approach. Where we differ with the government is that we take the view—these things are always a bit arbitrary—that the $100 is too steep. Those affected will only just be re-entering employment and will obviously have a lot of financial pressures. Many people find it difficult to repay debts quickly, and we think that a $50 limit on the admin charge would be less onerous. It would still have a penalty and still have an inducement effect but without being quite as severe. These are subjective judgments, but I am foreshadowing that, if the decision to oppose the sections is not supported, then we will be moving those amendments to effectively reduce the administrative charge from $100 to $50. As I say, that is done in the light of the other changes the government has made and the changes which, with the support of the Democrats, we have been able to achieve in terms of treatment of administrative debts incurred through no fault of the individual.

We think our approach is a better balance. Obviously the minister prefers the $100 charge. We think that is a bit steep and we are not prepared to support that level at this stage, but we do support the intent of making sure there is some inducement for people to stick to repayment agreements. I know that under the current arrangements it is hard to have people not continually seek to renegotiate. While this is for a small number of people, at the end of the process you do have to have some means by which you force that to occur.

I make the point to Senator Bartlett that it is about those people who, at the end of a quite lengthy process, with all the protections which the government had and which we have strengthened today, were not prepared to stick to repayment agreements. We think the administrative charge is then reasonable, so we support the principle. We are not prepared to be quite as expensive as the government in its approach. I thought we would have this debate now rather than do it twice, but we will be supporting the retention of the sections and not supporting the Democrat motion to remove them. I foreshadow that then I will move my amendments which seek to change the charge from $100 to $50. I apologise to Senator Bartlett, who has been most cooperative, but I am not supporting his changes today—maybe next time around.