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Friday, 15 November 2002
Page: 6505

Senator MARK BISHOP (11:37 AM) —Pursuant to my contingent notice of motion on page 34 of the Notice Paper, I move:

That it be an instruction to the committee of the whole that:

(a) the committee divide the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002 (the original bill) into two bills as follows:

(i) a bill dealing with participation requirements and penalties, comprising clauses 1 to 3 (with appro-p-riate amendments) and Schedules 1, 4 and 5 of the original bill, and

(ii) a bill dealing with additional funding for welfare measures, comprising Schedules 2, 3, 6 and 7 of the original bill; and

(b) the committee add enacting words and provisions for titles and commencement to the second bill.

The opposition is greatly disappointed that we have had to come to this point. Ideally, we would prefer to keep the bill intact. The unwillingness of the government to negotiate in good faith to achieve a fair and reasonable outcome is the only reason that we are moving to split this bill. There are elements in the government's bill that would be of benefit to a number of welfare recipients. To mention a few: the working credit, the numeracy and literacy supplement and the personal support program. We fully support those measures and the intent behind them. However, in our view, other measures in the bill—for instance, the participation requirements for parents and mature age people—do require additional safeguards.

In addition, it is Labor's view that it is not appropriate to proceed with these measures without the government taking a good, hard look at the operation of the existing breach regime for job seekers. We assert most strongly that it is seriously in need of repair. However, despite substantial efforts by the opposition to find a path through these issues, the government has refused point blank to consider a set of reasonable propositions put by the opposition to the government. We are now in the position—and the Minister for Family and Community Services outlined it in her response to the second reading debate—where the government simply wants to ram through its legislation in the Senate.

Let me talk about consultation in recent weeks and months with the government, because this bill has been on the table for some time—the minister was correct when she said that; it has been around the place. From day one, Labor has been engaged in a constructive debate over welfare reform. Labor has been clear on its position on the bill and has attempted to engage the government over the weeks prior to today's debate. On 23 October, a brief outlining our intentions and proposed amendments was forwarded to the minister's office. In this brief, Labor signalled to the government its willingness to work through the detailed drafting of any amendments. In the initial meeting shortly afterwards, the government said it was very prepared to work through individual amendments and viewed many of them positively.

In addition to Labor's detailed second reading amendments circulated on 23 October, the first batch of detailed amendments were forwarded to the minister's office on 24 October—over three weeks ago. These comprised the bulk of Labor's amendments to the bill. After some drafting issues, the second batch of residual amendments were sent to the minister's office on 12 November, three days ago; and the final batch on 13 November, two days ago. Labor has been willing to meet with the government and departmental officials at any time to discuss detailed drafting issues. However, the government indicated that it did not want to proceed with the detailed drafting until all amendments were received.

There was initial agreement to meet to consider these detailed issues yesterday morning. However, the government, for reasons of its own, chose to delay that meeting until 6.30 last evening. Despite having agreement before the meeting that issues would be considered in detail, the government refused to deal with specific details of any amendments and indicated it would not enter into any discussions on any alterations to the bill whatsoever. Mr Acting Deputy President, you can imagine that that took Labor completely by surprise. We had provided the essential thrust of our amendments. We had provided detailed sets of amendments for the government to consider and to have reviewed by its departmental officials and to take legal advice if further technical changes were needed for drafting that was not appropriate.

For two days we waited for the call. We were put off yesterday, and at 6.30 last night—the eleventh minute of the eleventh hour—the government's position was: `We don't want to negotiate with you. We don't want to have any discussions with you. We don't want to talk about either the substance or the form of the amendments that you have had on the table for so long. We will take our chances in the chamber.' So what has occurred is a direct result of the government's intransigence and the government's unwillingness to engage in serious negotiations that seek to improve the changes to the breaching regime and provide necessary, fair, just and appropriate protection for those who are in receipt of a range of welfare payments and for whom, in this country, it is appropriate they receive some protection of fundamental and basic rights.

Having outlined the background to the contingent notice of motion, let me address three issues that follow from that. Firstly, why split the bill? Secondly, what are the third party comments, interest or support for the proposal of the opposition to support the bill? And, thirdly, what would happen with the passage of the bills? Firstly, splitting the bill is a simple and straightforward method of handling the contentious aspects of the bill. Splitting would allow the government to proceed with the beneficial measures that are contained in the bill. I think there is indeed agreement around this chamber that there are beneficial measures in the bill that should be supported and should go through as a matter of urgency. Secondly, it allows the government to rethink the contentious measures to ensure its proposed changes are worked through fairly and with integrity. It will allow the government to consider the merit of the current breaching arrangement for job seekers. The government says it has had wide-ranging consultation with the community sector. We would submit that it is the height of arrogance to run this argument when there are numerous complaints anecdotally but, more importantly, from a range of peak community and welfare organisations to electorate offices. There have been numerous complaints in writing about the operation of the breaching system and the imposition of unfair penalties.

We should look at some of the comments of the Pearce review and the Ombudsman's report. It is not beyond contest that our system of breaching is flawed and unfair; a litany of reports have drawn attention to these deficiencies. The St Vincent de Paul Society have drawn attention to the large increase in the number of people coming to them for emergency assistance as a result of breaching. The Salvation Army have emphasised that breaching activity leads to people committing crime. The Salvation Army's Stepping into the breach report had this to say:

... breaching is compounding the already impoverished status of the unemployed, and for significant numbers, is a contributing factor ... in homelessness and crime.

Hanover Welfare Services have done research for the Department of Family and Community Services that shows that a majority of homeless clients have experienced breaches. Remember that these people are some of the most vulnerable in our community. Hanover found that 76 per cent of their homeless clients have been breached. Clearly, that is not what social security compliance systems should be about. Welfare Rights have done several reports that show arbitrary breaching practices and a concentration of breaching of young people. The department also knows from its own investigations that Indigenous people experience far higher rates of breaching than the general public. But the most telling statistic is the government's own: 259,000 unemployed people were hit with breaches last financial year. Those people lost at least $800, and they lost it for six months, regardless of their actions in following that breach. As St Vincent de Paul have noted, the penalty for failing to lodge a tax return is just $110 but for those who breach the social security system it can be $800 and rising. Of those who appealed those penalties, around 43 per cent— approaching half—had the breach overturned. So there is clear evidence of arbitrary penalties that in many cases have been misapplied.

Last year a number of churches and charities asked an independent committee to investigate the breaching regime. That independent review was established following a trebling in the number of penalties imposed over the three years since 1998. Despite some reforms by the government since the review was established, the number of penalties remains at least twice as high as in 1998. Individual penalties can often exceed $1,000. That committee, which included Professor Pearce, Ms Ridout from the Australian Industry Group and Julian Disney, looked carefully at the regime. The product of their inquiry, a substantial report, found that failings in the design and implementation of the system caused `many unemployed people to suffer arbitrary, unfair or excessively harsh penalties'. It also found:

There are also many occasions when it diminishes people's capacity ... to continue seeking work and become less dependent on social security.

Dennis Pearce, who is dean of the law faculty at the Australian National University, said that the review `found that the breaching system concentrates excessively on achieving high breach rates and penalties rather than encouraging active efforts to find work'. He argued—and who can argue with this— that it should be `fairer, more cost-effective and strongly supportive of attempts to escape welfare dependency'.

The review proposed a package of reforms to improve job search efforts and increase successful employment outcomes, thereby reducing social security expenditure. The package would improve help for genuine job seekers while also pursuing and punishing the small proportion of people who seek to abuse the system. The Pearce review recognises that some errors are inevitable in administering such a large and complex system, especially with severe constraints on staff resources and time. But the review found that the scale of current problems requires substantial improvements to be made. In Professor Pearce's view, many of the problems arise when Centrelink or Job Network members fail to communicate effectively or to investigate job seekers' circumstances thoroughly. Other problems arise through Centrelink failing to observe due process and to apply the relevant legal criteria before deciding to impose penalties.

That independent review made 36 recommendations aimed at achieving better processing for interviewing, assessing and communicating with job seekers; better decision making when imposing obligations on individual job seekers and referring them for assistance; stricter procedures for investigating potential breaches and ensuring that breaches are not imposed unlawfully; more help for job seekers who are trying to comply with their obligations; removal of excessive pressure and incentives to impose breaches and penalties; and fairer and more effective penalties.

The Pearce report is a reasonable blueprint for reform, which the community affairs committee report on this bill has endorsed. This past week we have been overwhelmed by organisations working on the front line who agree, as do we, that reform is needed and that Pearce is a fair model. I refer to Burnside, which works with vulnerable families and children; the Salvation Army; St Vincent de Paul; ACOSS; and the Brotherhood of St Laurence, who I might add engaged Newspoll to test community support for the current regime of breach penalties. Interestingly, this poll found that a majority of people do not support the current level of penalties. Those organisations have been joined by the Australian Federation of Homelessness Organisations, the Australian Association of Social Workers and People with Disabilities (NSW) in calling for the government to adopt the Pearce report. The Pearce report is not a blueprint for a weaker social security system; it is a blueprint for a stronger regime focused on getting compliance. If the government turned its attention to the totality of the recommendations, as it has been unable to do so far, it would be able to achieve that thorough reform.

Let me refer in passing to some of the comments that the opposition has received this week from the St Vincent de Paul Society, the Salvation Army, the Uniting Church and others. The St Vincent de Paul Society says:

The breaching of welfare recipients can result in the loss of from $800 to $1,500. The initial breach begins with an “18%” reduction in payments for 26 weeks. The inevitable result of a welfare recipient being breached is that they can't pay the rent and power bills so find themselves deeper in debt and out on the streets. We know this because our volunteers see examples of this every day.

The Salvation Army says:

The Salvation Army also believes that these penalties are excessive, unfair and out of line with penalties meted out in other forums.

The UnitingCare Burnside says:

Burnside's work with vulnerable families leads us to the view that the AWT bill—

the current bill under discussion as it stands—

will impact negatively on many children, young people and families who are already vulnerable.

It concludes:

I look forward to reassurances that your government is committed to the creation of stronger families and communities by arguing for amendments to the bill that create a fair and equitable social security system.

The Australian Association of Social Workers comments in passing:

The facts are that this bill fails to address the problems inherent in the breaching system that cannot be overlooked.

It is clear that the Pearce report found a whole range of complaints going to communication, processing and contact or lack of contact. It had numerous complaints about large penalty payments being imposed on welfare recipients. It had continuing complaints about processes of communication, whether by phone, text message or other means. It had numerous complaints about people who did not receive notices that they were required to attend meetings or who did not attend meetings, pursuant to agreements, held with the department. The minister herself alluded to some of those problems: people with domestic violence problems and people with alcohol problems—people who are not able to look after themselves. However, as they fall through the cracks in the floor, the reaction of this government is to breach them and to impose a penalty for events that are essentially physically or mentally dependent or related.

We say that future progress can be relatively simple concerning the totality of the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002. If the contingent notice of motion receives majority support in this chamber and the motion goes through in the committee stage to split the bill, we say that the No. 2 bill should be expedited and the government should support it if it wants to progress welfare reform. It should report on that bill at the earliest convenience. The No. 1 bill, with the contentious measures, proceeds with a wide range of amendments. The government needs to honour its prior commitment to consider those amendments seriously. The government also needs to give consideration to drafting amendments of a technical nature to take account of drafting due to the split of the bill.

In summary, the opposition are greatly disappointed by the government's approach to this bill in refusing over the last two or three months—and particularly over the last two days—to negotiate in good faith. The opposition fully support the beneficial measures in the bill, namely the working credit, numeracy and literacy support programs and the PSP. They are supported. However, we believe and argue that the other more contentious measures in the bill, for example, the bill's participation requirements, require further consideration. We say that consultation with the government has been poor. We have had nothing but government delays. Finally, we comment that the split allows the passage of beneficial measures and allows further consultation to occur by the government, the opposition and the minor parties with the community sector. For those reasons, I have moved the motion on the notice paper that stands in my name.