Senator LUDWIG (Minister for Human Services) (9:50 AM) —It is pleasing to see that the opposition are now constructively dealing with this legislation and that it appears they are moving towards supporting the legislation. In terms of responding to Senator Xenophon, it may be worth while putting down a range of issues now. If I could say it this way: the new compliance system recognises that job seekers are not always solely responsible for their circumstances. It does not seek to punish job seekers unnecessarily—rather, it will maximise job seekers’ participation in activities that will help them get a job. While these changes to the compliance regime were drafted well before the onset of the global economic recession, it is more important now than ever to keep job seekers actively engaged in activities that will help them find and keep sustainable employment.

The bill does introduce a more work-like no show, no pay penalty that will apply when a job seeker fails to comply with training or work experience without a reasonable excuse. It does retain as a deterrent eight-week non-payment penalties for persistent and wilful noncompliance. The current system has not improved compliance. It does not provide a timely and proportionate response; it makes it harder for people to find employment. And the lack of discretion in the current system means inevitably harsh outcomes.

If I can put it in this framework: the compliance system proposed by the bill allows us to distinguish between someone who does not want to meet their obligations and someone who cannot meet their obligations. Unlike the present automatic three-strike rule, a job seeker—and this I think goes to the heart of what Senator Xenophon was referring to—will trigger a comprehensive compliance assessment when they miss three appointments or three days of activities in a rolling six-month period. An eight-week non-payment penalty will apply only if the prior failures were intentional, reckless or negligent. This of course means that a serious failure will not apply based on a prior incident of noncompliance for which the job seeker had a reasonable excuse.

Centrelink and employment providers—and I think this also goes to what Senator Xenophon was seeking clarification on—will have discretion in how to respond to job seekers’ behaviour. A provider can report noncompliance but can also use alternative means of maintaining participation—ultimately it is about ensuring people get a job and stay in it—and of course that applies if they reasonably believe that there is a better way to ensure a particular job seeker is moving towards employment.

No failure will apply if the job seeker has a reasonable excuse for their noncompliance. The impact of the job seeker’s personal circumstances on their capacity to comply will be considered in determining whether the job seeker has a reasonable excuse. This would of course include homelessness, as defined by the Australian Bureau of Statistics, mental illness or caring responsibilities. In particular, in response to the Senate committee’s recommendations, the government will review the effectiveness of vulnerability indicators and associated guidelines to ensure that they protect the most troubled job seekers. The government appreciates the work of the Senate committee and has examined the report in detail. The government thanks both the chair and the committee for the work they have done.

The Senate committee also emphasised the importance of job seekers understanding their obligations under the new compliance system. The government will ensure appropriate levels of training for Centrelink and employment service providers and adopt a strategy targeted at communicating changes to all job seekers. The government does believe strongly in an evidence based approach to policy and therefore will collect comprehensive data to monitor and report on the effectiveness of the new compliance system. The government also appreciates the broad community interest in the effects of the compliance policy. For those reasons we will conduct a review of the impact of the new compliance system after it has been in operation for 12 months. On that point, it would be helpful—and forgive me for putting it this way—if the Greens and Senator Xenophon could agree on a set of words. If that is possible it would then avoid the government, and also the opposition, being placed in the position of trying to choose. We have outlined that we do accept the 12-month review; it is the detail that may go into it. We do prefer the Greens proposal, but I did not really want to say that at this point because I do not want to disappoint Senator Xenophon in respect of that. It may be worth making it plain what the government’s view is so that there is no confusion.

In wrapping up, the new employment services will provide job seekers with the right mix of training, work experience and the other support they need to find and keep work. The new compliance arrangements and other measures proposed in this bill will of course form an important part of the new system. It is a key component of the government’s employment participation agenda. I know that we are going to deal with a range of amendments at this point and I hope that, as a way of at least opening the committee stage of the bill and providing direction, my comments will provide some outline of the government’s position in respect of the broader number of amendments that we will deal with in committee and our response to those.