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Tuesday, 13 June 2006
Page: 226


Senator Chris Evans asked the Minister representing the Minister for Employment and Workplace Relations, upon notice, on 5 December 2005:

(1)   In relation to the funding provided for the Welfare to Work package, shown on pages 133-134 of Budget Paper No 2: (a) how do those figures relate to the figures provided by the Department in response to written questions W156, W157, W158 and W159 provided to the Employment, Workplace Relations and Education Legislation Committee during estimates hearings in June 2005; and (b) how do the program and payment cost figures provided in the answers relate to the Department of Employment and Workplace Relations funding figures in the budget paper for the following initiatives: (i) increasing participation of parents, (ii) increasing participation of people with a disability, (iii) increasing participation of the very long term unemployed, and (iv) increasing participation of the mature aged.

(2)   Can the Minister confirm that the response to W156, relating to the initiative entitled, ‘Increasing participation of people with a disability’, the department has provided figures showing net additional estimated program costs that total $302 million over the 3 financial years to 2008-09.

(3)   Can the Minister confirm that in response to W156, the department has provided figures showing net estimated payment savings that total $590.5 million over the 3 financial years to 2008-09.

(4)   Can the Minister confirm that the budget paper shows a net additional cost of $481.9 million over the 4 financial years to 2008-09, or $449.3 million over the 3 financial years to 2008-09.

(5)   Can the Minister explain the discrepancy between the figures provided in W156, which show a net saving of $288.5 million (total of (2) and (3) above) in relation to the initiative entitled, “Increasing participation of people with a disability’ for the 3 financial years to 2008-09 and the $449.3 million net additional cost as provided in the budget paper over the same period.

(6)   Do the funding figures in the budget paper include other funding items beyond those identified in W156; if so, can these be identified, along with the value of each of these items for each financial year from 2005-06 to 2008-09.

(7)   Can the Minister confirm that in response to W157, relating to the initiative, ‘Increasing participation of parents’ the department has provided figures showing net additional estimated program costs that total $386.3 million over the 3 financial years to 2008-09.

(8)   Can the Minister confirm that in response to W157, the department has provided figures showing estimated net payment savings that total $424.5 million over the 3 financial years to 2008-09.

(9)   Can the Minister confirm that the budget paper shows a net additional cost of $282.4 million over the 4 financial years to 2008-09, or $255.9 million over the 3 financial years to 2008-09.

(10)   Can the Minister explain the discrepancy in the figures provided in W157, which show a net saving of $38.2 million (total of (6) and (7) above) in relation to the initiative entitled ‘Increasing participation of parents’ for the 3 financial years to 2008-09 and the $255.9 million net additional cost as provided in the budget paper over the same period.

(11)   Do the funding figures in the budget paper include other funding items beyond those identified in W157; if so: (a) can these figures be identified; and (b) what is the value of each of these items for each financial year from 2005-06 to 2008-09.

(12)   Can the Minister explain why the funding for the initiative entitled, ‘Increasing participation of parents’ increases each financial year to $163 million in 2007-08 and then falls to just 2.2 million in 2008-09; and (b) what are the reasons for such a dramatic drop in funding for this initiative in 2008-09.

(13)   Can the Minister confirm that in response to W158, relating to the initiative entitled, ‘Increasing participation of the mature aged’, the department had provided figures showing net additional estimated program costs that total $71.3 million over the three financial years to 2008-09.

(14)   Can the Minister confirm that in response to W158, the department has provided figures showing estimated net payment savings that total $18.6 million over the 3 financial years to 2008-09.

(15)   Can the Minister confirm that the budget paper shows a net additional saving of $5.6 million over the 4 financial years to 2008-09, or a saving of $1.5 million over the 3 financial years to 2008-09.

(16)   Can the Minister explain the discrepancy between the figures provided in W158, which show a net cost of $52.7 million (total of (13) and (14) above) in relation to the initiative entitled, ‘Increasing the participation of the mature aged’ for the 3 financial years to 2008-09 and the net savings of $1.5 million as provided in the budget paper over the same period.

(17)   Do the funding figures in the budget paper include other funding items beyond those identified in W158; if so (a) can these be identified; and (b) what is the value of each of these items in each financial year from 2005-06 to 2008-09.

(18)   Can the Minister confirm that in response to W159, relating to the initiative, “Increasing the participation of the very long term unemployed” the department has provided figures showing net additional estimated program costs that total $310.6 million over the 3 financial years to 2008-09.

(19)   Can the Minister confirm that in response to W159, the department has provided figures showing estimated net additional costs that total $34.7 million over the 3 financial years to 2008-09.

(20)   Can the Minister confirm that the budget paper shows a net additional saving of $359.9 million over the 4 financial years to 2008-09, or a saving of $355.2 million over the 3 financial years to 2008-09.

(21)   Can the Minister explain the discrepancy between the figures provided in W159, which show a net cost of $345.3 million (total of (18) and (19) above) in relation to the initiative entitled, ‘Increasing the participation of the very long term unemployed’ for the 3 financial years to 2008-09 and the net savings of $355.2 million as provided in the budget paper over the same period.

(22)   Do the funding figures in the budget paper include other funding items beyond those identified inW159; if so: (a) can these be identified; and (b) what is the value of each of the items for each financial year from 2005-06 to 2008-09.


Senator Abetz (Minister for Fisheries, Forestry and Conservation) —The Minister for Employment and Workplace Relations has provided the following answer to the honourable senator’s question:

(1)  

(a)   Budget Paper 2 provides the total net financial impact of the Welfare to Work measures, comprising annual administered services, administered income support payments and departmental expenses. The response to W156 separately identified each of these elements of the measure. However, the responses to W157, W158 and W159 only identified the impact on the administered services and income support payments (in answer to the questions asked).

(b)   The Department annual administered services and administered income support costs identified in the responses to W156, W157, W158 and W159 relate to the funding figures in Budget paper 2 as follows:

(i)   for the initiative ‘Increasing participation of parents’, the response included the impact on administered payments across the three years to 2008-09 for the measure, and the administered costs for the parents component of the employment preparation measure (which was reported under the Employment Preparation measure in Budget Paper 2). The response did not include the departmental costs of the measure.

(ii)   for the initiative ‘Increasing participation of people with a disability’  the response separately identified all components of the measure as reported in Budget Paper 2.

(iii)   for the initiative ‘Increasing participation of the very long term unemployed’, the response included only the administered services and administered income support costs. It did not include the departmental costs of the measure.

(iv)   for the initiative ‘Increasing participation of the mature aged’, the response included the impact on administered payments across the three years to 2008-09 for the measure, and the administered costs for the mature aged component of the employment preparation measure (which was reported under the Employment Preparation measure in Budget Paper 2). The response did not include the departmental costs of the measure.

(2)   In the response in W156 relating to the initiative entitled ‘Increasing participation of people with a disability’ there is an additional cost of $302.3 million over the three financial years to 2008-09 for annual administered employment services for the Department of Employment and Workplace Relations.

(3)   In the response in W156 relating to the initiative entitled‘Increasing participation of people with a disability’, there is a net saving of $590.5 million over the three financial years to 2008-09 for the administered income support payments that fall within the responsibility of the Department of Employment and Workplace Relations.

The income support savings are due to fewer people receiving the Disability Support Pension as people will instead be claiming Newstart or Youth Allowance due to their assessed capacity to undertake part-time work, and some people will be coming off income support reflecting the greater emphasis on employment focussed participation for people with disabilities.

(4)   Yes.

(5)   The net administered savings of $288.5 million referred to by Senator Evans reflects the impact of the Welfare to Work disability measure on administered payments across the three years to 2008-09. The amount is actually $288.2 million.

However, the total net additional cost for the measure referred to in Budget Paper 2 for the same period ($449.3 million) also includes both the increase in departmental expenses related to the disability measure ($76.9 million) and the overall impact of the reversal of the previously announced DSP Reform Bill measure (a reversal of savings of $660.6 million). Details of these expenses were provided in the previous response to W156.

(6)   There are no other expense items in Budget Paper 2 other than those referred to in response W156 (refer to response to Q.5 above). The total net costs of the ‘Increasing participation of people with a disability’ measure, which make up the numbers presented in Budget Paper 2, are summarised below:

Increasing participation of people with a disability

2006-07

$m

2007-08

$m

2008-09

$m

Total

$m

Annual administered services

107.0

102.7

92.6

302.3

Income support payments (administered)

-84.8

-197.3

-308.4

-590.5

Departmental expenses

34.6

17.7

24.6

76.9

Reversal of DSP Reform Bill (administered)

114.2

258.2

409.8

782.2

Reversal of DSP Reform Bill (departmental)

-30.8

-45.4

-45.4

-121.6

Total

140.2

135.9

173.2

449.3

Note: The departmental expenses referred to in Budget Paper 2 and the above table are presented on a fiscal balance basis (which excludes depreciation). For details of total expenses (including depreciation) please refer to page 22 of the Employment and Workplace Relations 2005-06 Portfolio Budget Statements.

(7)   The $386.3 million referred to in the response to W157 reflected all additional administered employment services to provide assistance for parents to increase their participation. However, the net annual administered services cost for the ‘Increasing participation of parents’ measure is $343.2 million over the three years to 2008-09. The difference is due to the fact that the previous response also included $43.2 million for employment preparation services, which was reported under the ‘Employment Preparation’ measure in Budget Paper 2.

(8)   In the response in W157 relating to the initiative entitled ‘Increasing participation of parents’, there is a net saving of $424.5 million over the three financial years to 2008-09 for the administered income support payments that fall within the responsibility of the Department of Employment and Workplace Relations. However, there will be additional expenditure on services to assist parents into the workforce, resulting in net expenditure for the measure.

(9)   Yes.

(10)   The net savings of $38.2 million referred to by Senator Evans reflects the impact on administered payments across the three years to 2008-09 for the ‘Increasing participation of parents’ measure, and the administered costs for the parents component of the employment preparation measure. The net additional cost referred to in Budget Paper 2 for the same period ($255.9 million) comprises a net saving for the administered services and income support payments ($81.3 million) offset by increased departmental outlays ($337.2 million).

(11)   The other expense items in Budget Paper 2 other than those referred to in response W157 are the departmental costs. The total net costs of the ‘Increasing participation of parents’ measure, which make up the numbers presented in Budget Paper 2, are summarised below:

Increasing participation of parents

2006-07

$m

2007-08

$m

2008-09

$m

Total

$m

Annual administered services

73.6

156.5

113.1

343.2

Income support payments (administered)

-36.8

-129.6

-258.1

-424.5

Departmental Expenses

53.9

136.1

147.2

337.2

Total

90.7

163.0

2.2

255.9

Note: The departmental expenses referred to in Budget Paper 2 and the above table are presented on a fiscal balance basis (which excludes depreciation). For details of total expenses (including depreciation) please refer to page 22 of the Employment and Workplace Relations 2005-06 Portfolio Budget Statements.

(12)   Funding for the initiative increases each financial year to 2007-08 due to the expected additional demand for employment related services from parents claiming income support payments who become subject to work requirements from 1 July 2006. From 2008-09 the overall cost of this measure drops due to a combination of demand for extra services by this group stabilising and expenditure on income support payments reducing as some parents become eligible for Newstart Allowance rather than a pension-type payment (Parenting Payment Single), Nonetheless funding for employment services for parents is expected to remain considerably higher than before the measure was introduced. Access to these services are expected to improve parents’ skills and work readiness and better enable them to take advantage of opportunities to gain or increase their prospects of paid work and higher levels of overall income while reducing their reliance on income support.

(13)   The $71.3 million referred to in the response to W158 reflected all additional administered employment services to provide assistance for the mature aged. However, the net annual administered services cost for the ‘Increasing participation of mature aged’ measure is $66.8 million over the three years to 2008-09. The difference is due to the fact that the previous response also included $4.6 million for employment preparation services, which was reported under the ‘Employment Preparation’ measure in Budget Paper 2.

(14)   In the response in W158 relating to the initiative entitled ‘Increasing participation of mature aged’, there is a net saving of $18.6 million over the three financial years to 2008-09 for the administered income support payments that fall within the responsibility of the Department of Employment and Workplace Relations.

(15)   There will be a total net decrease in outlays for the ‘Increasing participation of mature aged’ measure of $1.5 million over three years to 2008-09. However, despite there being a net decrease in outlays, an additional $71.3 million is being spent on employment assistance. The net decrease in outlays is due to the increased expenditure on employment assistance being offset by savings in income support payments and Departmental outlays. The estimated reduction in income support outlays reflects the greater emphasis on employment focussed participation for people of mature age, including the provision of substantially more employment related assistance. Enhanced access to employment services is expected to improve the employment prospects of the mature aged and better enable them to take advantage of opportunities to retain, gain or increase their attachment to paid work while reducing their reliance on income support. Savings in Departmental outlays are primarily savings from changed Centrelink servicing arrangements and reduced number of customers (see response to Question 16 below).

(16)   The net cost of $52.7 million referred to by Senator Evans reflects the impact of the mature aged measure on administered payments across the three years to 2008-09, and the administered costs for the employment preparation measure. The net saving (over three years to 2008-09) for the ‘Increasing participation of mature aged’ measure referred to in Budget Paper 2 for the same period ($1.5 million) comprises additional costs for the administered services ($66.8 million), offset by net savings in income support payments ($18.6 million) and departmental outlays ($49.7 million). The additional administered services comprise increased employment services provided to mature age job seekers, principally in Job Network.

(17)   The other expense items in Budget Paper 2 other than those referred to in response W158 are the departmental costs. The total net costs of the ‘Increasing participation of mature aged’ measure, which make up the numbers presented in Budget Paper 2, are summarised below:

Increasing participation of mature aged

2006-07

$m

2007-08

$m

2008-09

$m

Total

$m

Annual administered services

20.5

25.2

21.1

66.8

Income support payments (administered)

-3.7

-6.3

-8.6

-18.6

Departmental Expenses

-14.7

-17.0

-18.0

-49.7

Total

2.1

1.9

-5.5

-1.5

Note: The departmental expenses referred to in Budget Paper 2 and the above table are presented on a fiscal balance basis (which excludes depreciation). For details of total expenses (including depreciation) please refer to page 22 of the Employment and Workplace Relations 2005-06 Portfolio Budget Statements.

(18)   In the response in W159 relating to the initiative entitled ‘Increasing participation of very long term unemployed’, the figure $310.6 million over the three financial years to 2008-09 is the additional costs for annual administered employment services for the Department of Employment and Workplace Relations, excluding WageAssist.

(19)   In the response in W159 relating to the initiative entitled ‘Increasing participation of the very long term unemployed’, the figures provided in the second table showed a net cost of $34.7 million over the three financial years to 2008-09 for the administered income support payments that fall within the responsibility of the Department of Employment and Workplace Relations. However, the second table provided in response to W159 included WageAssist which is not an income support payment but a separate administered item that will be delivered through the Job Network. The expenditure estimates provided in response to W159 reflected the position at Budget. However, since Budget the cost of WageAssist over the three financial years to 2008-09 has been revised downward to $34.5 million while the income support savings estimates have been revised upward to $5.8m, correcting the original estimate. These corrections are included in the revised expenditure figures provided in the Portfolio Additional Estimates Statements.

(20)   No. Budget Paper 2 shows net additional cost (not saving) of $359.9 over the four financial years to 2008-09, or a cost of $355.2 over the three financial years to 2008-09

(21)   The net administered cost of $345.3 million referred to by Senator Evans reflects the impact of the measure on administered payments, across the three years to 2008-09. The total net additional cost for the very long term unemployed measure referred to in Budget Paper 2 for the same period ($355.2 million) includes administered services costs ($310.6 million), income support savings (estimated at Budget as $60.1 million), WageAssist (estimated at Budget as $94.8 million), and departmental costs of $9.8 million.

(22)   The other expense items in Budget Paper 2, other than those referred to in response W159, are the departmental costs. The total net costs of the ‘Increasing participation of the very long term unemployed’ measure, which made up the numbers presented in Budget Paper 2, are summarised below:

Increasing participation of the very long term unemployed

2006-07

$m

2007-08

$m

2008-09

$m

Total

$m

Annual administered services

90.9

103.3

116.4

310.6

Wage Assist*

7.4

27.8

59.6

94.8

Income support payments (DEWR)*

-2.1

-17.0

-41.0

-60.1

Departmental Expenses

3.7

3.0

3.1

9.8

Total

100.0

117.1

138.1

355.2

Note: The departmental expenses referred to in Budget Paper 2 and the above table are presented on a fiscal balance basis (which excludes depreciation). For details of total expenses (including depreciation) please refer to page 22 of the Employment and Workplace Relations 2005-06 Portfolio Budget Statements. Slight discrepancies may occur between the sum of the three years and the total figure due to rounding. * The estimated cost of WageAssist over the three financial years to 2008-09 at Budget has been revised down to $34.5 million while the income support savings estimates have been revised upward to $5.8m, correcting the original estimate. These variations are included in the revised expenditure figures provided in the Portfolio Additional Estimates Statements.