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Wednesday, 23 October 2002
Page: 5687

Senator CHERRY (11:43 AM) —I rise to speak on the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002. The bill before us is touted by the government as a major step in welfare reform towards building a modern and responsive social support system for people of working age. Reform of the Australian welfare system is overdue and indeed needs to be a continuous process. The Australian Democrats have long called for reform, but true welfare reform is that which assists Australians to participate economically in community and society while at the same time enabling them to live in dignity and with sufficient means to feed, clothe and house themselves and their families. This bill does the opposite. It provides the means to take away the means of support not only of unemployed Australians but now also of sole parents and their children and older Australians. It was never the intention of the McClure report, out of which this bill has allegedly sprung, that people be trapped by rules which do not help them get a job, which cut their benefits and which stigmatise and penalise them because they have lost the support of a partner while raising children. Welfare reform means investment before savings can be achieved. This bill is simply about savings, with little investment by government. In the name of welfare reform, this government is reintroducing the 19th century notion of the undeserving poor, those who in past centuries would be condemned to the workhouse because of unavoidable life events that overtook them.

The government's construction of mutual obligation is that, if you are a sole parent, you are undeserving not only of income support but of the right to parent your own children. If you are a partnered parent, this government's policies encourage you to stay at home and care for your child. You can claim the baby bonus to stay at home for five years following the birth of your child and you can claim family tax benefit B for your child's entire growing period, with no regard to your partner's income. This way, even wealthy families are therefore encouraged to have one parent stay at home and raise the children. But, according to the public policies, if you lose the support of that partner, you no longer deserve to be a parent.

This bill fails to acknowledge that research published in 2000 by Eardley and in 2002 by Gray et al. reports that, of all income support recipients, single parents are already the most active in education, training and employment—even more than Newstart allowance recipients. ABS data shows that half of the population of single parents with dependent children are already active in the work force. Gray's longitudinal data on maternal employment in Australia shows that both single- and couple-family mothers return to employment as their children get older. Given that they already have the highest level of labour force participation and given that the majority of sole parents spend only three years in receipt of parenting payments, the question must be asked: why is compulsion necessary, particularly one with financial penalties attached?

The extension of compulsory activities to parents is a conceptually misguided initiative, drawn from inferences and imagined stereotypes about sole parents, without reference to the demographics or reality. Introducing new compulsory activities devalues the significance of caring for children, even though social indicators such as family homelessness, children in care and youth suicide point to a need to increase support for families' care-giving activities. The absurdity of this bill is that it requires a parenting payment recipient with young children to take time away from work and study to go and tell Centrelink that they are working or studying. Interviewing parents of young children and financially depriving them when they are unable to attend because of an unforeseen family crisis does not help them get a job. Current family policy that rewards mothers in coupled families for withdrawing from the work force but stigmatises them when relationships end is incoherent and inconsistent.

The best protection against unemployment for single parents is to enable all parents, whether coupled or single, to make structured transitions in and out of the work force, as their care-giving needs require, until the child reaches the age of 16. This needs consideration of initiatives such as maternity leave, affordable quality child-care services, retraining packages and subsidy entitlements, and tax breaks for caregivers returning to work. Increasing the economic risks to parents through inventing new methods to reduce and remove their income—as this legislation does—will directly impact on the welfare of their children.

There is no cogent research evidence that compulsion is a better approach than assistance, hence there is no strategy in this element of the bill. It would have been a more efficient use of public funds to increase resources to the JET program, the Jobs, Education and Training Program, which is so successful but which has such enormously long waiting lists. This program has a proven track record of assisting sole parents back into the work force, yet we do not see in this bill—a bill about participation in the work force—any extension of that particular scheme.

Indeed, this government is determined to plan for people who already have plans and to check on people who are already busy trying to meet family and work commitments and who would have to satisfy a range of new paperwork and activities for the Centrelink office in order to avoid losing a subsistence income. In its changes to the sole parent pension and parenting payments, this bill focuses almost exclusively on compelling parents to get into work, to the unfortunate exclusion of their caring roles as parents. Forcing parents to agree to undertake an activity which will have no effect on their chances of gaining employment, which has no regard for their personal circumstances and which threatens to take away the financial support with which they house, feed and educate their children is both regressive and dangerous. It provides no protection for children who will be subjected to the outcomes of decisions imposed on their parents because of this bill.

The penalties on sole parents will be considerable. While the percentage reductions of payments are the same as those currently applying to Newstart recipients, the actual amount of penalty for single parents will be greater. A first activity breach for a sole parent will be $987. The Australian Democrats asked Senator Vanstone earlier this week whether she could give a guarantee that a person who fails to attend a Centrelink interview would only be subject to the administrative test and not the activity test. The minister could not give such a commitment, despite touting the changes to administration made by Centrelink since 1 July 2000.

Therefore, a single parent who is unable, because of family or parenting requirements, to comply with a Centrelink direction to attend just one interview could be fined $987. That is just extraordinary. The sum of $987 is a lot of money in anyone's terms, but it is significantly more so when you are trying to raise children alone on income support, which is already well below the poverty line. It may mean that you will not be able to pay the rent for weeks and hence face being homeless. It may mean you cannot afford school fees, excursion fees or shoes and clothes for your children. It may mean that you will not be able to feed your family adequately for that week. All of this may happen because you could not comply with a request to attend a Centrelink interview, a request that has no regard for your circumstances in the first place.

Reports released this year by the Hanover Foundation, the Brotherhood of St Laurence and the Commonwealth Ombudsman all concur that the current breaches and penalties system applying to Newstart allowance and Youth Allowance customers is harsh and counterproductive and is sending people into homelessness and poverty. The extension of this punishment framework of breaches and penalties to parents will impact most harshly on parents who are least able to challenge Centrelink's decisions. A single parent who has just had $987 stripped from her payments and who cannot see her way straight to rent a house and feed the family over the next few weeks will certainly not have the wherewithal to navigate the complexities of authorised review and social security appeals mechanisms.

Most sole parents live week to week with no reserves, and cutting payment on a day when rent and bills are due is devastating for them. Most likely, the disadvantages of illiteracy, limited education, transitory or uncertain accommodation or family trauma have led to the failure to comply in the first place. Adding financial deprivation to the equation does nothing to assist that person to get a job. The impact of such circumstances is not always easily understood by people who have not experienced them personally, and sole parents will be faced with subjective judgments by Centrelink staff. Sole parents are not immune from the severe and demoralising pressures faced by long-term job seekers, particularly when very few jobs are available which they can realistically hope to secure and when many of those jobs—even if secured—will be part time and casual in nature.

This is not mere surmising on our part. We know that the punitive breaching regime has had a devastating impact on the most vulnerable Newstart and Youth Allowance claimants. The system has operated to identify those who are not coping, remove their income, reduce their capacity to cope still further and then blame them for it. Hanover welfare services, which provides services to people who find themselves homeless, found that almost one-third of their clients have been breached in the last 12 months. The Salvation Army found that around one-quarter of its emergency relief clients had been breached. Of even more concern is that it found that 11 per cent of clients said they had to turn to crime to survive.

The report of the Independent Review of Breaches and Penalties in the Social Security System—the Pearce report—made strong recommendations to the government. It found that, notwithstanding the existence of phrases such as `reasonable steps', `reasonable excuse', `without sufficient reason' and `special circumstances' in the relevant legislation, in practice insufficient investigation and consideration of reasons and surrounding circumstances have often prevented the achievement of this intention.

I would draw the relevant provisions of that report to the Labor Party's attention if indeed they wish to go down the route of adding more special circumstances and reasonable steps as possible exemptions to breaching, because the evidence is that it does not work. The evidence is that it does not reduce unfairness. The evidence is that departmental officers are overstressed, have too many clients and simply do not have the time, the effort or even the inclination to implement things effectively. For this reason the Australian Democrats are not satisfied that the presence of such exemptions or even new exemptions will provide any guard against arbitrary or unfair impositions of penalties, despite the parliament's clear intention.

For many Newstart and Youth Allowance recipients, the breaching regime has been a sickening and frightening experience. Extending it to new groups, including single parents, means more crisis and suffering for the most disadvantaged people in Australia. The extension of breaching to sole parents raises the prospect of an even worse impact on children, since there is no other income source available to those parents or children. In a climate where welfare agencies are reeling from the impact of Newstart clients who encounter breaching and where they are overloaded with requests for food and shelter, and in the light of the independent review and the Ombudsman's inquiry, it is simply outrageous to contemplate extending this regime to sole parents.

Research in US welfare reform also provides some unsettling findings relating to children. A considerable body of that research suggests that forcing parents away from caring for their children may have detrimental effects on teenage children but little effect on rates of poverty. The Australian Democrats have always believed that parents are best placed to make decisions about the relative importance of employment and parenting and to determine when their own parenting responsibilities enable them to participate.

This bill provides for exemptions from compulsory activities for children with profound disabilities or recognised disabilities linked to the carer allowance. The term `profound disabilities' is extremely misleading. Cystic fibrosis, which is a terminal condition, is considered to be neither profound nor a recognised disability, according to this legislation. The actions of this government in 1998 saw the parents of children with this condition denied carer allowance. Juvenile diabetes is not recognised as a profound disability, despite being a potentially life-threatening condition in children that requires significant parental intervention to ensure a safe medication regime. The notion of a single parent being compelled to leave a child with a potentially fatal condition unsupervised in order to participate in training or volunteer activities is contrary to the notion of parenting.

The Australian Democrats do not support rorting of the welfare system, but sole parents struggling to raise their children are not rorters. They are vulnerable people who have encountered difficult life circumstances and who, as statistics report, will move into economic participation relatively quickly as their circumstances permit. The Australian Democrats propose that sole parents should be encouraged to participate and we particularly welcome the inclusion in this particular bill of participation payments, albeit at such a low level. But we want to do this in a constructive way. We want to offer access to affordable and accessible child-care support; access to out of school hours recreation programs for adolescent children; better access to stable, low-cost public housing; accessible transport; and, importantly, access to job creation schemes that will provide them with employment instead of compelling them to add to the ranks of the seven unemployed Australians for every job vacancy already out there in the labour market.

At the very least, we should take long-term measurements of the impact of these changes on Australian families, before implementation. We do not want to hold up the implementation of the Working Credit scheme, although we do wish that it were more in keeping with current earnings patterns. But it is an un-Australian thing to do to link it with legislation that vilifies and penalises people who have lost the support of a partner, as this government has done in the bill before us. The Australian Democrats will sit down with the government and nut out welfare reform but, where that reform reflects a commitment by government to address the real economic and social barriers to participation, we will do what the government has failed to do—that is, act on the recommendations of the independent review by Pearce et al. and amend the breaching provisions of the social security legislation so that it reflects the original will of parliament.

I should note in passing that the bill does contain a number of other provisions, as indicated earlier. The Working Credit scheme will be supported by the Australian Democrats. We opposed the repeal of the former working credit scheme in 1996, as it was a measure that did in fact assist unemployed people in accessing casual and part-time work. It is only a very small, token start and, as Senator Bishop pointed out, it certainly has been delayed as an obvious budget savings measure this year. But it is a scheme that we support, and we would encourage the government to extend it to ensure that it actually does provide much better encouragement to unemployed people to pick up casual and part-time work.

The Personal Support Program included in this bill is also a measure that we will be supporting, but, again, our concern is access to the number of places. The problem right across the welfare reform system and in this notion of mutual obligation is so often that the government is not providing sufficient resources for its side of mutual obligation, whether it be the JET program for sole parents, the PSP or the personal service advisers that are being put into Centrelink offices. The resources are simply not there to ensure that people are given every encouragement and every assistance to participate in the labour market.

The Democrats have deep concerns about the closing-off of the mature age and partner allowances. This will impose JobSearch activities on groups of Australians who, frankly, really have the probably the lowest chance of actually finding employment. So often, for those in mature age and partner categories who have been out of the work force for a very long-time, if they want work they will look for work. There is plenty of evidence to show that people in those categories want to work rather than not participate in the labour force. As the ABS showed in its statistics on labour force participation earlier this week, it is quite clear that so many people drop out of the work force because they have been told time and time again that they are too old for the job. It has been quite clearly shown through the Job Network and the Productivity Commission that the government is not providing sufficient assistance to the mature aged to get back into work. Whilst there have been some attempts to improve this in recent months, the situation for mature age workers is simply not good enough in terms of ensuring that there are jobs available for them.

I should note in passing that in Queensland the Beattie government has initiated a community jobs program directed at the mature aged in particular. That scheme has a very high success rate of easing the mature aged back into employment by at least giving them a real job for a period of time. It works far better than Work for the Dole, with a 90 per cent placement rate as opposed to about a 35 per cent placement rate on Work for the Dole. It highlights that if you offer real work opportunities doing real community work and real training opportunities then it will be recognised by employers in a way that participation in Work for the Dole clearly is not being recognised.

The changes to the breaching regime in this bill are obviously providing different rules for parents and mature age workers. The Democrats believe that this is the first acknowledgment that we have seen from the government that the breaching regime that is in place is simply not satisfactory in terms of the unfairness that it is causing. I particularly welcome the second reading amendment moved by Senator Bishop, which draws attention to the failings and unfairness of the government's breaching regime and its failure to ensure that the full recommendations of the Pearce inquiry have been implemented. I would encourage the Labor Party to turn that second reading amendment into formal amendments at the committee stage. Certainly, the Democrats would support amendments reflecting the Pearce inquiry being moved and becoming part of the act, because we believe that that provides a better basis on which the breaching regime can finally be reformed.

In conclusion, this bill contains some things which are good and welcome and a lot of things which simply are very harsh and unfair. It is picking the eyes out of McClure and leaving so much of what is important in McClure and the regional welfare reform blueprint in the too-hard basket. Most of what McClure recommended in terms of the government's side of mutual obligation has not been delivered. The programs and support which are needed to ensure that people can participate effectively in the work force have not been delivered or have been delivered only partially or ineffectively. These things need to be reviewed by this government if welfare reform is to proceed in a form that delivers social inclusion and better economic opportunities.