Mr SWAN (12:33 PM) —On the face of it, the Youth Allowance Consolidation Bill 1999 is a housekeeping exercise to tidy up the new youth allowance and Austudy schemes. I cannot help feeling a sense of irony about this. It is like sweeping up the dust and polishing the floors in a house when the very structure of the house itself is crumbling down. During the months following the introduction of the youth allowance, all members, including I am sure those opposite, were inundated by phone calls and letters from youth in the community and their families who had been affected very badly by the introduction of the new system—a system that for many cut off their financial independence, placed extra burdens on their families and put up new barriers to undertaking study or finding a job.

The government, through its implementation of the youth allowance, showed callous disregard to the aspirations of Australia's youth and the wellbeing of their loved ones. Far from making things simpler, the new system caused confusion and frustration for those who were affected. The introduction and administration of the new system by the government and Centrelink were a disgrace. Rarely have we seen in this country the implementation of a public policy which has been so badly handled. It could have come right out of an episode of Yes, Minister, and if it were not for the hurt, confusion and frustration that was perpetrated on our youth and their families it may well have been as humorous.

As I said earlier, I doubt whether those opposite were accurately aware of it even in their own communities. It was a farce. We had the situation where on one day Centrelink received something like a million phone calls. Of those, only something like 90,000 were answered, and we have no idea how many were successfully resolved. People would call me and say that they had just received a letter from Centrelink telling them that their social security entitlement would be drastically reduced or cut off altogether in a few days time because of the changes. Some time later they would get a call back, and Centrelink would say that they had made a mistake and their payment was not being reduced. This occurred to many people. I will talk about some of those cases in a moment.

For most people who were badly affected, there had been no mistake. It was the unfairness and inequity of what the government was doing that was the cause of so much hurt. Many of them had commitments they were unable to meet, such as rent or loan payments. In some cases young adults had moved away from home to improve their employment prospects and had to return home to regional areas where they had no prospect of finding work. To make things worse, some remained liable for rent payments under fixed term leases. I can well remember receiving a call from a person who was in precisely that predicament. In her case, she had borrowed money to buy a car so she could look for work further afield. She had also entered into a lease. When her youth allowance was cut, she could no longer meet her loan repayments for the car and was ultimately in breach of rental agreements.

There were many, many stories like these but all with a common theme: motivated young adults trying to establish themselves in mainstream society finding accommodation, entering financial arrangements and doing all they could to get a job but requiring financial assistance from the government until they could get regular work. And then what happened? The government pulled the rug right out from underneath them. Once again, the government have welshed on their end of their much touted mutual obligation bargain. This is yet another classic example of the government's actions not living up to their rhetoric. Rather than assisting young adults to get a job, they set up barriers. They make it more difficult to get into work or to undertake study that would assist people in obtaining long-term unemployment.

I believe that this is part and parcel of what has become the corrupted ideology pedalled by the government on a daily basis. Contrary to everything the government says, it promotes dependency rather than fighting it; it makes it more difficult for people to stand on their own two feet.

The pretender behind most of this is not the minister opposite; it is the minister for employment. His secret plan was revealed in this House some weeks ago when he let the cat out of the bag about what the real game was. The real game is not about making people independent. The real game is about slashing wages, slashing benefits and, through that process, creating in the end far greater dependency. He admitted in his secret paper that, between 1990 and 1998, the number of people on allowances for longer than six months had risen from 357,000 to 546,000; that is an increase of 200 per cent.

The scale of the escalation of welfare dependency is also borne out by the latest long-term unemployment figures. One in three of all unemployed have been out of work for longer than 12 months. The figures also show that this group is becoming less skilled by the month. Young adults in Australia, especially those affected by this bill, are therefore being sold short.

On average, under this government the unemployed spend seven weeks longer on benefits. As that goes right to the heart of the government's credibility with getting people off welfare and into work, let me say it again: with the government having completed its first term in office, the unemployed are spending an average of seven weeks longer on benefits. Our young unemployed currently on the youth allowance—languishing on benefits, their hands tied—lose skills and become further disillusioned.

We know what the record of the government has been. Abolition of labour market programs in particular have left these people with very few options. The government's answer to date has been little more than plastic populism with its promotion of Work for the Dole—cosmetic programs rather than programs of substance. To have something like 6,700 working for the dole means bandaid help for just one in 27 of the 180,000 young unemployed.

The Prime Minister announced that there were to be literacy courses for the long-term unemployed. So what is the government's record? We have had 108 takers for the 12,000 literacy places available. That reveals the extent of the government's failure to get Centrelink and the Job Network doing their job properly—and I will say a bit more about Centrelink's role in this later on.

While the measures contained in this bill can only add to the barriers and disincentives to find work, I suspect they will pale into insignificance if the pretender to the throne, the shadow successor Prime Minister, gets his way. At the heart of his insidious plan is a proposal to introduce widespread cut-price wages for the unemployed. I suspect that the minister has not thought this particular proposal through fully.

Let me pose this question: what incentive is there for a young unemployed person to leave their social security benefits for a job that will not give them enough to live on? What incentive is there for them to work if they are not clearly better off? Then again, perhaps the minister has thought it through because a sparkle of reasoning can be found on page 13 of his secret plan. It states:

Discounting wages would also likely require complementary action on the social security entitlements for this group if adequate work incentives were to be provided . . .

What is that code for? We know what it is code for. We know what those opposite are up to. This is the classic conservative approach to welfare reform: lower wages and lower social security.

This is supposed to deliver jobs but, in reality, it delivers rising poverty, crime and social breakdown. For those on youth allowance, particularly those looking for work, the government's approach is just a one-way street. Let me give an example. If the government really believes in helping young people get into jobs, why is it currently trying to abolish the employment entry payment? That is one of the last real incentives left to help people into the work force, providing a bit of incentive. Before the youth allowance was introduced, Labor understood that it would hurt many young adults and their families, and we opposed it.

Senator Harradine understood this as well. Senator Harradine also believed that the scheme should not be introduced unless some compensation for families was to be provided through the tax system. He decided not to block the youth allowance legislation after receiving the personal assurance from the Prime Minister that the tax system would be restructured to benefit families.

What has the government done to live up to that promise? It has sought to introduce a GST that will hurt families. It has promised compensation for the GST by way of pension increases and tax cuts that are manifestly inadequate for those at the lower end of the income scale. But where are the tax concessions to relieve the extra burden on families caused by the youth allowance? They are not there.

There are tax cuts for families in the highest income brackets which will more than compensate those people for the impact of the GST. But the government will not compensate the great bulk of families. Half the tax cuts go to the top 20 per cent of income earners, while the other half go to the remaining 80 per cent. This remaining 80 per cent are the people whom Labor and Senator Harradine have identified; these being the people who have been adversely affected by the youth allowance, they are the ones the government promised Senator Harradine it would do something about. But, of course, nothing happened.

It appears that Senator Harradine simply forgot to ask which families would benefit from the restructure of the tax system. In fact, it appears that the government never intended to honour its commitment to Senator Harradine; it never intended to make any special adjustment to the tax system to meet its commitment at all.

David Tune, senior official in the Department of Family and Community Services, was seconded to the Treasury to work on the GST compensation. He told the Senate Community Affairs References Committee inquiring into the GST that he was never made aware of the commitment by the government to Senator Harradine that the tax package would provide relief to families affected by the youth allowance. In his evidence before the committee, Professor Peter McDonald of the Australian National University said, `There is absolutely no compensation for the cost to parents of children aged over 17.'

So the implementation of the new scheme was just utter chaos. Many families, as Senator Harradine and Labor have identified, were simply sold short. But so too was the administration of the scheme.

Many applications for or transfers to the new payments were not processed in time. People who suffered allowance cuts under the new scheme were given inadequate notice and little or no explanation. Payments were delayed. Some people were overpaid; others were underpaid. Many people were given misleading or incorrect advice about how the scheme would affect them. Guidelines were issued to Centrelink staff advising them of how to deal with customers distressed by the new scheme but telling them not to talk to the local MP.

In one case a young woman received a letter from Centrelink telling her that her entitlement had been drastically reduced. She was due to receive her next payment in two days time and her rent was due the day after that. If the letter was correct, she would not be able to pay her rent. She had tried getting through to Centrelink by the phone all morning but to no avail. She went to her local Centrelink office only to find it had been closed. That is a story which was repeated time after time during the introduction of the youth allowance and is repeated time and time again now across every Centrelink office in this country. Eighty-one per cent of all phone calls to Centrelink receive an engaged signal. In 43 per cent of the offices surveyed by Centrelink in January people had to wait five days or more for an appointment. Centrelink figures show that there has been a 160 per cent increase in incidents of aggression in Centrelink offices.

In this very town we were told by the minister in this House on Monday that people who rang up for an appointment at the Tuggeranong Centrelink office could receive one immediately. But anyone in this town who rings Centrelink today will find at one office no appointments are available—none. In others, there is a waiting period of up to two weeks. This is disgraceful. At the opening of the Tuggeranong Centrelink office on Monday the minister created a fairytale film set to con the media into believing that there was some happy paradise of workers and clients sitting there in the brightly painted office all receiving prompt service. How did he achieve that? They bussed in five addition al counter staff to reduce the queues. The reality out there today where I have been is that there are queues and that people cannot get through on the phone. How can you deliver any program if you cut 5,000 staff and $150 million from this budget in an environment where major policy changes are taking place?

At the height of the introduction of the scheme, on one day one million calls were made and only 90,000 were answered. We do not know how many of those 90,000 that were answered actually produced successful results. Such is the decline in the level of service. These are cases which members opposite know are occurring on a daily basis and they will continue to occur, not only in youth allowance but across the board in all of the benefits that are provided, until this government comes clean and recognises that there is a crisis within Centrelink.

How has the government come to respond to all of the problems of the youth allowance and the crisis in service delivery? Have they apologised to those who fell victim to the introduction and inept handling of the scheme? Have they even admitted that there is a problem? Let me quote from a press release issued by Senator Newman on 2 July. The release is headed:

The fallacies being pedalled about youth allowance.

In that, the senator says:

The implementation is being bungled, not true. Implementation is going according to plan.

It is certainly going according to plan. The plan is to knock as many people off benefits as possible, to provide as little money as possible, as little incentive as possible, as little service as possible to people because this government has an innate hatred of the notion of public service and the employment of skilled people in that service to help people with human problems. That is some plan.

Just to deal with some of the detail of the bills, the first three of the five schedules contained in the bill we are dealing with today move provisions currently contained in disallowable instruments into the Social Security Act itself. We urge the government to do this during the debate on the youth allowance legislation. The current instruments contain the substantive provisions dealing with certain entitlements and means testing arrangements. Now that they are all within the social security system they belong within the Social Security Act. That act and the system it governs are far too complex. At least by putting as many of the provisions as possible into the act anyone hoping to understand the system can find all the basic rules in one place. That is something that is sensible. At least there is one thing we can say that has some logic to it.

Schedule 1 of the bill amends the Social Society (Fares Allowance) Rules 1998 and replaces them with similar provisions in the Social Security Act. A fares allowance is currently payable under the rules to certain tertiary students who are living away from home to study and are receiving youth allowance. The provisions contained in the bill largely reflect the current rules. Most of the differences are minor and technical and there are even some improvements. For example, under the fares allowance rules, payment can only be made as reimbursement for the cost of travel undertaken unless the student is in financial hardship, in which case an advance payment can be made to the commercial operator providing the student's travel. The bill proposes to abolish the hardship test and allow easier access to the advance payment.

The bill also seeks to add provisions under which a claim for fares allowance may be treated as having been received when the person first contacts Centrelink about the claim by telephone or fax. Well, that is handy, given that nobody can get through. That is particularly timely and it is perhaps an acknowledgment of the crisis and gridlock that I was talking about earlier.

In theory, this is a good idea and it follows similar initiatives in respect of other entitlements. The main problem in practice is that people cannot get through to Centrelink by phone to talk to them about a claim. They need an appointment to discuss their claim before lodging it. They may well have to wait weeks and weeks, irrespective of how often the minister misleads this House about that fact. The truth is out there.

Schedule 2 of the bill repeals the Social Security Student Financial Supplement Scheme 1998—

Mr Abbott —I raise a point of order, Mr Speaker. I have listened very tolerantly to the points made by the shadow minister. Now he is saying that the minister has misled the House often. I do not believe that is in accordance with the standing orders and I think he should rephrase his comments.

Mr Allan Morris —Mr Deputy Speaker, on the point of order: I think the minister will find that, for it to be considered unparliamentary, it must be `deliberately misleading' the House, not just `misleading'. The word `deliberately' is required, but it was not used. The minister should know better than to take a point of order. He is a minister, after all. If he is so ignorant of the parliamentary processes, perhaps he should reconsider his position.

Mr DEPUTY SPEAKER (Hon. D.H. Adams) —I thank the honourable member for Newcastle for his point of order. I think you made the right point, and I do not believe the shadow minister has breached the procedures of the House. I ask him to stay on the bill before us.

Mr SWAN —Indeed, I was very careful with my words, because the minister did come into this House on Monday and say that there was no waiting time at the Tuggeranong office, that anyone who wanted to call could get an appointment almost immediately. The reality around this town today, and right around this country across the 400 Centrelink offices, is that people are waiting and waiting and waiting. At Tuggeranong people were advised yesterday that they could not even get an appointment or a time for an appointment. So when I say that the minister misled the House there are objective facts to prove it and there are people wandering around this country desperately in need who cannot get an appointment, and that is shameful.

Schedule 2 of the bill repeals the Social Security Student Financial Supplement Scheme 1998, a disallowable instrument, and replaces it with similar provisions in the Social Security Act. The Student Financial Supplement Scheme allows tertiary students who receive youth allowance, Austudy pay ment or the pensioner education supplement to trade in some of their entitlement for a loan of twice the amount traded in. The supplement loan is also available to some students who would receive one of these payments but for the parental means test. In such cases, the amount of supplement loan is determined under a formula taking the level of their parents' income into account.

Prior to the introduction of the youth allowance and Austudy payment, the student financial supplement was also available under the Austudy regulations. Although the provisions contained in schedule 2 are structured differently from those in the disallowable instrument, they are of similar effect. There are, however, some differences. Overall, these changes made by the schedule that are not purely technical appear to be relatively minor and beneficial.

Schedule 3 of the bill repeals the Social Security (Family Actual Means Test) Regulations 1998 and replaces them with similar provisions in the Social Security Act. Youth allowance recipients who are not regarded as independent under certain criteria are subject to parental means testing. In most cases, the income taken into account is the parents' taxable income in the tax year that ended before the calendar year in question. This is called the base year. Assessment may be based on the subsequent tax year where there has been a significant change in income.

In certain cases, such as where a parent has an interest in a company or is self-employed, where taxable income may not reflect the family's true means, the actual means test may apply. The actual means test looks at total savings and expenditure of the family rather than at taxable income.

Although schedule 3 does not seek to make many substantial changes to the operation of the actual means test, there is one that deserves a mention here. The effect of the change would be that the question of whether the actual means test should apply is to be determined by reference to the base tax year, regardless of whether that is the year during which the actual means are to be assessed.

Although this proposal reflects the old Austudy regulations, it could be unfair in practice. For example, the parents of a youth allowance applicant might have owned a company until January 1998, when they sold that interest. Under the proposal, they would be subject to the actual means test in 1999 on the basis of an interest in a company they have not had for 12 months, even if they are being assessed on their income and expenditure during the 1998-99 tax year. At this stage we are opposed to this change. However, if the government can show us why the change is necessary or appropriate, we might change our view on this issue.

Schedule 4 of the bill amends the Social Security Act to address issues identified during the implementation of the youth allowance and Austudy payment. Many of the proposed changes in the schedule are technical in nature. However, some will have a significant effect upon income support recipients. Some of these changes are beneficial and we welcome them. For example, the criterion of independence based on work force attachment will be relaxed so that a youth allowance recipient may be regarded as independent if they have worked for 30 hours a week for at least 18 months in any two-year period. This ground of independence will be further relaxed by removing the requirement that the work in question must have been undertaken in Australia. We also welcome the extension of the concept of long-term income support students to partnered students, allowing them to be paid at a higher rate consistent with single students in the same circumstances.

There are further reasonable beneficial measures in the schedule and I will not go through them here. However, some of the changes contained in schedule 4 are not so positive. For example, it proposes to align the basic rate of disability support pension for people under the age of 21 with the youth allowance. Currently, the rate of disability support pension for under-21s is aligned with the old Newstart allowance rate for this age group. These pensioners receive the rate of Newstart allowance applicable in their circumstances plus a youth disability supplement of $75.60 per fortnight. Under this schedule, the rates for these pensioners would be aligned with the current youth allowance rates and a supplement will continue to apply. The effect of the changes varies depending on the pensioner's circumstances. Some will get more and some will get less. We will be looking at this in the Senate, probably with the aim of moving some amendments where those affected are going to have current entitlements reduced.

Another change that we will not support concerns the family allowance income test. Under the current provisions, the rate of family allowance is reduced where income exceeds $23,550 plus $624 for each additional family allowance child. Among other things, a family allowance child can be a child receiving youth allowance. The schedule seeks to amend this so that a child receiving youth allowance is a family allowance child only if they are under 18 years of age.

It seems to me that this proposal is a perfect example of the government trying to have it both ways. Really what they are saying is, `We will now regard your unemployed son or daughter as dependent on you until they turn 21 and we will reduce their youth allowance accordingly but, for the purposes of the family allowance, we will regard them as independent when they turn 18.' It is another vicious measure which is going to hit battling families. So when they turn 18, it will effectively reduce the amount of family payment they get for their other children.

Mr Hardgrave interjecting—

Mr SWAN —It is something that the member for Moreton should be very ashamed of. Schedule 5 of the bill seeks to amend legislation other than the Social Security Act to reflect other changes made by the bill and to address issues arising during the implementation of the youth allowance and new Austudy payment. Again, many of the changes proposed by this schedule are technical. One, however, is worthy of mention. Part 2 of the schedule seeks to amend the Farm Household Support Act 1992 to change the rates of exceptional circumstances relief payment and restart income support payment payable under that act in certain circumstances. Under that act, as it currently stands, the rate of these payments may be the rate of Newstart allowance that the person in question would be entitled to if they qualified for the Newstart allowance.

Part 2 of the schedule seeks to provide that, if the person is of youth allowance age, the rate of exceptional circumstances relief payment and restart income support payment is to be the rate at which the person would be paid youth allowance if they were qualified for that allowance. We will not support these changes to the extent that they will result in a reduction of entitlement.

But, as I said at the outset, this bill is mainly concerned with tidying up the youth allowance legislation. Many of the changes are neutral, while some are good. But the problem is that they are introduced into an overall framework which has attacked the living standards of battling families and eroded their capacity to support their families and which has worked against the professed mutual obligation principle that the government constantly prattles on about. It does not matter what particular aspect of this government's approach to family and community services or industrial relations or education you look to, there is one agenda that drives through the whole lot—lower wages and lower social security support. We in this country have to be about building up independence of people, not pushing them down; giving them a hand up, giving them some incentive to achieve. It does not matter where you look, particularly in this bill or particularly in the tax package, this government is building road blocks that are stopping people from moving from welfare to work, because at the end of the day the most fundamental form of welfare you can give anyone is a job.

But what do we see in the House in recent times? We have seen the government introduce a bill to abolish the employment entry payment, one very tangible incentive and measure which can assist people to move from welfare to work. We have seen provisions in the ANTS package that the Treasurer was talking about in the House the other day where if you are a single parent you are better off stopping on welfare than you are work ing—another substantial disincentive to stop people moving from welfare to work.

Then we saw the secret agenda of the shadow prime ministerial successor, the member for Flinders, Mr Reith. What he was fundamentally on about, and what he let the cat out of the bag on, was the government's agenda—lower wages. If you are going to lower wages, you lower support for people, and that is the core of the Youth Allowance scheme. It has had a dramatic effect on many battling families out there. To assist their children to become independent, to assist their children to move into the work force, they need a helping hand from the government—some incentive—not the sort of punishing measures that are contained in this scheme which have only one objective in the end, which is to drive people down, to cut their wages and to cut their living standards. That is the agenda of this government, and that is why we have opposed this scheme so vehemently. (Time expired)