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Friday, 15 November 2002
Page: 6494

Senator DENMAN (10:34 AM) —I rise to speak to the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002. I have a deep interest in welfare issues. Over the years I have done a lot of voluntary work in the welfare area. Indeed, it is one of the issues most raised by my constituents. The greatest number of people that we get through our office are concerned about issues of welfare. The Chair of the Senate Community Affairs References Committee, Senator Hutchins, is also concerned about the direction welfare is taking in this country. I have had a number of discussions with him, as I am also a member of the community affairs committee, about the potential impact of this bill if it were passed by the Senate.

The community affairs report tabled on 25 September 2002 considered the recommendations of a number of community groups as a result of the committee's comprehensive consultations in Sydney and Melbourne. The overwhelming opinion of groups as diverse as ACOSS, the Brotherhood of St Laurence, the Sole Parents Union, Uniting Care and the Salvation Army was that the proposed changes to the provision of benefits to groups such as single parents and the mature age unemployed could be counterproductive. The Brotherhood of St Laurence provided evidence of a survey which found that the vast majority of Australians support lower penalties for breaching participation agreements. The vast majority of Australians agree with that view, but the way it is done and how it is applied is the issue. More importantly, the proposed changes demand additional commitments from recipients without covering the costs of honouring those commitments. While the bill provides for a language, literacy and numeracy supplement of $20.80 per fortnight, numerous witnesses at the committee inquiry suggested that the additional costs incurred would be twice that amount.

The system of breaching and participation requirements must be finely balanced to be effective. On the one hand, it must provide significant incentives for welfare recipients to take part in training or work, but it must also ensure that penalties and breaches do not prevent recipients from continuing their efforts to find appropriate work and to live decently. The committee's inquiry was required to address the Pearce review and its recommendations. The Pearce review presented a balanced and sensible approach to the issues of participation requirements and breaching. The Senate Community Affairs References Committee determined that the Pearce approach represented a way forward both in terms of this legislation and the reform of the penalties regime more broadly.

I note that in the last sitting week the Senate passed a recommendation of the Pearce review in the form of a motion. The result of that is that the Commonwealth Ombudsman should report to the Senate Community Affairs References Committee on an annual basis regarding the system of breaching and penalties. The government tried to oppose the motion, saying that the department would be a more appropriate body to deal with such a report. My suspicion is that their argument had more to do with the politics than the effectiveness of the breaches and penalties system. Having said that, I take note of the bill itself.

The legislation, as it stands, does not accurately reflect the reciprocal nature of the principles of mutual obligation. The bill proposes to enforce a series of requirements for single parents which are determined by the age of their youngest child. The penalties which are proposed for a single parent's breach of their participation agreement are based on the amount for Newstart recipients, but because single parents are paid a benefit not only for themselves but to support their whole family, any breach would have a significant impact upon the standard of living of single parents and their children.

The first breach would mean a cut of $987 for a single parent and their children, but the debate surrounding welfare reform has focused on the need to prevent the intergenerational dependency on welfare. Penalties of this order are bound to affect the life chances of any child of a single parent. If a parent were punished for not attending an interview or training, the inevitable consequence would be that the children would suffer the financial impact. The last thing our welfare system should be doing is punishing children for the choices or mistakes their parents have made. By the third breach, the parent and their children would be liable for a $3,990 decrease in their standard of living over 14 months. Such a drop in income necessitates the prioritisation of expenses. If that means a choice between food and schoolbooks, I know which one I would choose. I am sure we all know single parents in this position. As I said, we get a lot of these people through our office. They do struggle and they really do try. One matter is absolutely clear, and that is that the penalties as high as those proposed by this bill would affect the quality of life and the opportunities for the children concerned.

There are provisions for the care of children with special needs and disabilities, but the definition of `disability' is limited to disabilities of a physical nature. In this respect, the bill is sloppy and does not address well-recognised issues regarding the care of children. I have a friend who has a daughter with two different mental disabilities, and my friend's time is spent with her daughter. She is a very demanding child who can no longer fit into the school system. This legislation does not take account of her.

There are, however, elements of this bill which do make very good sense. The bill provides for the reintroduction of the working credit scheme, which allows recipients to build on income credits at times when they receive little or no income so that they are not overly disadvantaged but they do engage in paid work. It is a great idea that was in operation under the Labor government, which the current government repealed but has now decided to reintroduce. The same system is currently in place for youth allowance recipients and has significantly prevented young people from experiencing financial disadvantage as a result of short periods of employment. Any system that punishes individuals for working is a strange one indeed. It is good to see that the government has learned from its mistakes and has decided to implement effective and proven Labor policy. It is clear to almost all of us that there has been a significant shift in the academic and political debate surrounding welfare.

Over the past two decades, welfare has moved from being an entitlement for the individual to being an obligation for both the individual and the government. I have no problems with that. Writers such as Lawrence Mead identified the need for the shift from entitlement to obligation, and he and others of his ilk won the intellectual and moral debate. Our job is to ensure that Australia's implementation of mutual obligation is fair and that it serves a purpose. Obligation for the sake of it is quite simply demeaning. Some would consider overly punitive measures for the disadvantaged a revocation of the laws for the poor. While I hardly think that we would ever again see the unemployed breaking rocks as punishment for their misdemeanours, we must guard against any scapegoating of welfare recipients. We often overlook their disadvantage, which is the result of misfortune and systematic barriers to achieving their potential.

The principle of mutual obligation, and its practical application of participation requirements, should have the aim of improving the skills of welfare recipients and providing appropriate encouragement to take up those skills. Breaches are an essential element of that encouragement, but they must be carefully and fairly implemented to ensure that the most vulnerable members of our society do not suffer.

The bill does not take into account its impact upon children. I know I keep coming back to this but it is a real issue and, as I have said before, it is the issue that most frequently comes through my office. Nor does the bill consider the many and varied reasons why children require additional care from their parents. Mutual obligation can deliver great advantages to welfare recipients. Instead of being a tool for training and a means of increasing the employability of our work force, the government uses participation agreements as a way of deceiving the electorate and cutting costs to the tune of tens of millions of dollars. As a result, some of the measures contained in this bill reflect a serious misunderstanding of the needs of Australians.

The government must keep up its end of the bargain and allow Australians to flourish instead of punishing them and their families. The McClure report, which was commissioned by the government, recommended that `community capacity building' should be a key element of welfare reform. Community capacity building is a concept where individuals, government and business work together to achieve mutually beneficial outcomes. It is a great idea which should be necessarily facilitated by the federal government. The problem is that the government's legislative response to community capacity building has been to provide a token amount of funding for what should be a major program.

The Australians Working Together package contains spending in the order of $1.7 billion. Of that, only $22 million is to be spent on community engagement or community capacity building. Spending $22 million across the entire nation will do little to implement one of the major recommendations of the McClure report, and the spending will be on an existing program, the main aim of which is to promote awareness of the program. If the government were serious about helping the unemployed, the disabled and single parents it would act on the advice given to it by the authors of the McClure report.

Instead, we have seen government ministers suggest that charities and the non-government sector should do more for disadvantaged members of our society. That will quite simply not happen unless the government gets serious about building community capacity and steering welfare recipients in the right direction rather than merely denying responsibility for their wellbeing. We had a hearing of the Senate community affairs committee yesterday and some of the charities came and gave evidence. Those people are absolutely stretched to the limit. There is nothing that they can do that they are not already doing in the community.

Instead of acting on an ideological basis, as this bill does, we need to legislate according to commonsense. Any change to the welfare system should have as its most basic aim an increase in the employability of all recipients. Sending single parents to pointless meetings does no-one any good. If anything, it will place a significant strain on Centrelink, which is already grossly under-resourced. There is absolutely no point in sending single parents to pointless meetings that do not have a goal. The community affairs committee was told by witnesses that single parents are already very likely to be employed or to take part in training. Instead of encouraging existing motivation, the government is proposing to impose arbitrary requirements on single parents and the mature age unemployed. That is the other group that we get through the office—the mature age unemployed who are getting very vocal about their lack of opportunities.

It is quite simply illogical not to take advantage of very practical recommendations from a report which was commissioned by the government, and instead attempt to impose a system which punishes people for not doing what may well be entirely pointless. While there are elements of the bill which provide for positive welfare reform, such as the re-introduction of Labor's working credit scheme, many of the changes will miss the target. One gets the sense that this is change for change's sake so that the government is seen to be reforming the welfare system.

But the government's application of mutual obligation fails in two key areas. Firstly, while the legislation increases the burden placed upon recipients, it only offers them $10 a week in return. Reform must be fair and must take recipients' existing responsibilities and financial circumstances into account. Secondly, the reforms will achieve very little in real terms, because the government itself will not commit to helping these people. The government is not willing to invest in people and fulfil its side of the mutual obligation bargain. Welfare reform is needed. This bill is a half-hearted attempt to reform many elements and will do little or no good for the people it affects the most.