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Wednesday, 16 October 2002
Page: 5264


Senator CHERRY (1:07 PM) —I rise today to speak on systemic problems with income support for young Australians. In 1997 this government introduced the youth allowance bill to create youth allowance, a new social security payment covering unemployed people aged 16 to 20 and students until they attain the age of 25 years. They abolished Austudy and youth training allowance, a sickness allowance and a Newstart allowance for those under 21 years and created new social security payments to take their place, including youth allowance and Austudy payment. At the time, the Australian Democrats recorded their concern at the impact of these changes which, by their introduction in July 1998, resulted in thousands of young Australians losing income support and many others being forced to live on reduced allowances or being unable to continue to study.

Four years later, we have young people living 40 per cent below the poverty line. We have them homeless, hungry, unable to pay bus or train fares, unable to continue studying or even to look for work because of the government's youth allowance policies. In particular, there is a lack of attention to ensure that youth allowance is set at the level, at least, of the poverty line or a reasonable standard of living.

The report Runaway youth debt: no allowance for youth released today by the Welfare Rights Centre on the poverty and perils of young Australians subject to the government's policies confirms the fears we raised in this place four years ago. The notion that social security recipients have an obligation to participate in return for benefits has long been part of the Australian social security system from its very early days when a person could be denied assistance for `character not deserving'. Through the early 1990s, the idea of reciprocal obligation meant that government would do more to create employment and assist unemployed people to get jobs—for example, by expanding labour market programs and introducing wage subsidies. The argument was that greater efforts and obligations could therefore be expected of young people. Regrettably, it seems, we have come full circle—the government offers nothing to younger Australians and instead pays them inadequate rates of payment and places them under severe financial duress through breaching. Indeed, the government denotes them as being `characters undeserving' of adequate financial assistance.

The number and scope of requirements that have been expanded under this government are such that young people must now actively look for suitable paid work. They must register with at least one Job Network provider; accept suitable work offers; attend all job interviews; attend Centrelink offices when requested to do so; agree to undertake approved training courses or programs; not leave a job, training course or program without sufficient reason; correctly advise Centrelink of any income earned; enter into and comply with a preparing for work statement; lodge fortnightly forms; apply for up to 10 jobs per fortnight; participate in a `mutual obligation' activity after a certain amount of time on benefits; have certificates signed by employers approached about jobs, if required; and complete a job seeker's diary with details of job search efforts.

Given that there are seven unemployed people for every vacancy, it means that young people must do all of the above but be told, `No,' over and over again to their application for a job. If they are breached, they are expected to do all of the above but on $30 less per week. When they again fail because they did not have the money for the bus fare, they then lose $40 a week. When this punishing regime finally leaves them homeless and they cannot receive Centrelink letters or Job Network notices of an appointment to go to an old address or the notices are received late, their allowance is cut off completely for eight weeks.

Recent research reports that the number of breaches has escalated dramatically since 1997 and that breaches are falling most heavily on the most disadvantaged job seekers—the young, the homeless and those with substance abuse and mental health problems. The Australian Council of Social Services recently reported that an estimated $200 million in social security penalties were levied in the last financial year. This has pushed unemployed people and students deeply into poverty. The harsh penalties continue to be imposed on young Australians for infringements of social security rules, such as being late for an interview or failing to respond to a letter, despite the minister's assertion that this rarely happens.

Breach fines are out of all proportion with income received. An equivalent penalty for the Prime Minister, if he were to miss an interview, would be a fine of $40,000 from his salary. The first activity test penalty for a breached unemployed adult puts them at 34 per cent below the poverty line while the second penalty pushes young job seekers to an incredible 47 per cent below the poverty line. This is made more devastating for young people whose incomes may be less than $150 per week to start with. Breaching them will leave them with less than $15 a day to live on for rent, food, bus fares and clothing.

Young Australians are disproportionately represented in breaching statistics. People under the age of 25 incur 53 per cent of all breaches. It is also this age group that is the least likely to lodge appeals because, unfortunately, young people rarely question bureaucracy and are often left with inappropriate breaches against their name. Disadvantaged young people utilising supported assistance programs and other emergency services throughout Australia are not fully aware of their rights and obligations in relation to Centrelink payments. Despite their best efforts, community workers or support agencies do not always have sufficient knowledge of the full Centrelink entitlements of their service users or know how to assist them to correct any problems in relation to these entitlements.

As a consequence, the number of homeless people, particularly homeless young people, who receive income support breaches continues to grow. The situation is worse for Indigenous young people. Research studies report that Indigenous young people are more likely to be breached, with those living away from home being particularly affected by breach penalties. For Indigenous job seekers aged less than 21 years the breach rate is 23.7 per cent compared with the non-Indigenous rate of 19.7 per cent. Breach rates for Indigenous and non-Indigenous young people are slightly higher for those who live away from home compared with those who live at home. Breach rates are around four percentage points higher for Indigenous young people across all age groups.

A further disturbing aspect of the breaching of young people is the continuing high level of penalties that are applied for a third breach of the rules. These penalties result in the entire withdrawal of a social security payment for eight weeks. Charities and community organisations around Australia tell us that the most disadvantaged and vulnerable in our community are coming to them for crisis help when their payments are reduced or stopped. This includes people with low literacy skills, Indigenous Australians, young people, people with mental illness or brain injuries, and those with alcohol or drug problems. Additionally, young people incur travel fines as a result of `jumping' trains when they have insufficient funds to afford a ticket but must attend Centrelink or education. Consequently, many incur outstanding debts that they have no capacity to repay. These accumulated fines will have flow-on effects such as the cancellation of drivers licences, and many do not have the skills to negotiate repayments over time.

The recent report by the Independent Review of Breaches and Penalties in the Social Security System recommended that, amongst other reforms, the rate and duration of breaches should be decreased to reduce the overall level of financial penalty, particularly on young people, and this call has been echoed by the Welfare Rights Centre's research. In response, this government, while promising to review its procedures in relation to breaches, has consistently baulked at reducing penalties and, indeed, is seeking to expand its breaching regime to other disadvantaged Australians such as sole parents, older unemployed and temporary protection visa holders. Only last week the breaching regime was further criticised by the Commonwealth Ombudsman in a report which showed that in a whole range of areas inappropriate and inadequate processes are being undertaken by Centrelink to the detriment and financial duress of their clients.

The Australian Democrats call on the government to address the fundamental flaws in the legislation providing the income support of young people. We can no longer endorse the financial and personal devastation imposed on young people by the legislation introduced in 1998. The present system is counterproductive to its intentions. It is sending young people deeper into debt, homelessness, hunger, desperation and poverty. Young people are not `character undeserving'; they are the adults of tomorrow and a promising human resource. They can make a great contribution to the community, society and the world. We need to ensure that the youth allowance is brought up to a level that allows a reasonable level of living—not something which is excessive, generous or extreme but something which is reasonable. To actually push people 30 to 50 per cent below the poverty line because of a breaching regime that has been criticised by the Ombudsman, by independent panels and by all those who look at it in an objective sense is, to the Democrats, simply not a reasonable action by a government. It is not a reasonable social security safety net and it is not a reasonable leg-up for the most vulnerable and disadvantaged in our society who too often are our young people.