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Friday, 15 November 2002
Page: 6509

Senator CHERRY (11:57 AM) —The Australian Democrats will be supporting the motion moved by Senator Bishop. Like the Labor Party, we support many aspects of the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002 but we have great difficulty with other aspects of it. We think that whether the government accept the motion is an important test of the government's seriousness about welfare reform and about ensuring that there is a genuine fair go for low-income earners. If they allow the provisions to proceed through the Senate today, this will set up the non-controversial parts of the package and allow the other parts to be discussed further.

I should also note that the Labor Party signalled their difficulties in negotiating on the bill and I want the Senate to note that the Democrats have also had some difficulty negotiating on the bill. I wrote to the minister on 21 October outlining some proposals dealing with the issue of forgiveness of breach penalties and we are still awaiting a response, even though the bill has been brought on today. It certainly makes it difficult from our point of view to believe that the minister was ever serious about negotiating on the bill, either with the Labor Party or with the Democrats.

I also want to note that I suspect that part of that lack of seriousness is because the government needs to save the money. The $913 million that the bill represents is something that Peter Costello already has his paws on. I would be interested to hear from the minister whether the government is prepared to discuss any amendments to these bills. The minister would be well aware that, when you deal with the schedules that deal particularly with sole parents, both the Labor Party and the Democrats are on the record as saying that they have serious concerns about those provisions. The Labor Party has indicated that it has serious concerns about the breaching provisions and the protection of family responsibilities, and the Democrats have serious concerns about the whole thing, including the notion of compulsion. The Democrats obviously favour the voluntary involvement of sole parents in labour market programs and we note for the record that they have the highest participation rate in the labour market of any recipient group. However, we have certainly had concerns about the elements of compulsion in that schedule.

It would be unfortunate, and a very sad statement on the government's priorities, if the majority of the Senate's concerns with the provisions dealing with sole parents, penalties and breaching allowed the rest of the bill's non-contentious provisions to fail. As I said, how the government deals with this motion will be a very important test of the government's commitment to deal with some of these issues.

I also note that the Democrats will move a number of amendments dealing with the breaching regime when the second part of the split bill is discussed. I do not want to deal with those in any great detail today because we will have a long debate on them. But I do want to note that the breaching regime is not just a concern dreamed up overnight by the Labor Party or by the Democrats or by the welfare sector; it is also a concern shared very emphatically by the Ombudsman. His annual report this week is worth reading, and I will summarise some of the things he had to say. The Ombudsman noted that his report last year dealt with breaching and in the annual report this year he states:

... an analysis of a sample of breach penalty complaints by my specialist Social Support team indicated that the problems identified in last year's report have persisted, despite Centrelink's implementation of specific training and procedural initiatives.

He went on to say:

... there did not appear to have been any attempt to contact the person prior to arriving at a breach penalty decision ... where a person did receive an opportunity to explain their actions they were sometimes presented with an unreasonable burden of proof to verify the explanation offered

ยท to establish an activity test breach it is necessary to investigate and decide on a range of issues that vary according to the requirement that is alleged to have been breached. In many cases these additional issues were not investigated or considered before imposing the breach penalty.

He continues:

The practices we identified raise concerns about basic issues of procedural fairness and proper application of legislated provisions. These practices were found in the majority of the breach complaints we investigated.

The amendments we will move to the second part of that bill are very serious and ones which I believe the government needs to take on board. The Pearce recommendations deal with the issues identified not just by Pearce or by the welfare sector but by the Ombudsman himself in terms of how the breaching regime should be applied. I accept that the government may need some time to work through those amendments, given we tabled our amendments only yesterday, although our position on Pearce would have been well known to the government before that. The Labor Party have been trying to have these amendments discussed over the course of the week. Hopefully, that delay in dealing with those amendments will be important and will result in the Senate coming to a consensus view on how it deals with the issues of social security law which have been reported to it by the statutory office bearer responsible— the Office of the Commonwealth Ombudsman—for ensuring that the law is applied properly.

I want to place on the record our very strong support for the three schedules the Labor Party proposes we deal with today. They are the provisions dealing with the language, literacy and numeracy supplement, the working credit and the personal support program. The Australian Democrats strongly support the language, literacy and numeracy supplement of $20.85 per fortnight, although we believe the amount is woefully inadequate. Having poor or absent reading, writing and numeracy skills makes it harder to get a job. When you are one of seven unemployed people competing for every job vacancy in Australia at present, it also makes it impossible. It also makes it impossible for you to decipher Centrelink correspondence, access the self-help facilities of the Job Network or even use a Centrelink touch screen. It is interesting to note that, while the government clearly places emphasis on the value of language, literacy and numeracy training in this bill, it does not seem so ready to extend that essential training to holders of temporary protection visas who are not permitted to access the full-time English language courses. But that is a matter for discussion in another bill.

There is a compelling argument for the reimbursement of fares and travel costs so as to remove disincentives to job search. The amount of $20.80 is not a lot of money; it will barely buy you three days of public transport in larger metropolitan areas. For those travelling for 90 minutes in each direction to undertake literacy training, $20.80 will certainly not cover their fare there and back in a day. But the Democrats will support any assistance given to people to overcome their disadvantage, as inadequate as this measure is. It is therefore imperative that the supplement is indexed, in line with changes to the average male total weekly earnings; otherwise, it will become increasingly irrelevant in achieving its aim of helping people to participate in training programs.

The Australian Democrats welcome the working credit, although it is a case of deja vu. The concept of an earnings credit is not new; it used to exist, albeit as the earnings concession scheme and the earnings credit, until the government abolished it in the 1996 budget. I should note for the record that the Democrats strenuously opposed the abolition of the earnings credit scheme in 1996, and we are very pleased to see that the government has reintroduced it. In fact, some form of earnings concession or working credits first started in the social services in Australia post World War II, I am informed, in order to encourage widows' pension recipients to undertake work in the industrial boom occurring at the time. This government saw fit to discard the scheme in 1996. Regrettably, it did not replace it with tax credits or other programs to address the disincentives offered by the combination of initial costs of participation in work and tax thresholds. It was with expectation that we learned of this measure in the government's budget of 2000-01, only to be dismayed subsequently when we learned that its implementation was to be delayed until 2003. Again, that whole notion of saving money seems to be the underlying discussion that we are not really having today.

One does not have to be cynical to believe that the government are not serious in progressing the working credit initiative. It will cost $420 million; they have already delayed it by nine months and now they are facing a budget deficit. A government serious about assisting Australians to take up paid employment would not have linked it to disadvantageous measures of extending punitive breaching to sole parents and older Australians and to the abolition of the mature age allowance. We really cannot see how this is a package, as I am sure the minister has argued, because these measures are not interrelated; they are not linked. The tying of one to the other is purely a political ruse to try to bludgeon the Senate into submission.

The government's opposition to splitting this bill so as to enable this measure to proceed more quickly is reflective of one that does not have the interests of unemployed Australians at heart. Whilst the measure is inadequate, the $1,000 maximum working credits will soon be used up in casual work such as a couple of weeks grape-picking. It does not reflect economic reality. However, we accept it is a step in the right direction and we will support it as a very good step on which we can build subsequent schemes. The working credit will act as a significant inducement to people to take up part-time and casual work opportunities and will allow them to offset the initial costs of participation such as fares, parking and clothing by keeping more of their payment. It will make it easier to resume payment when a short-term job ends, and it will help to put a hole in what is one of the most significant poverty traps in the Australian social security system.

The Australian Democrats welcome efforts to improve the level of people's economic participation, as they bring benefits to the individual and the community. It would be better, however, if the `income free area' were set at $62 a fortnight, the same as the current level for adult Newstart recipients. Setting the rate at $48 a fortnight, as this bill proposes, will add unnecessary complexity for income support recipients who might undertake casual employment and is likely to cause them considerable confusion.

The personal support program is welcomed but, again, it is incongruous when, at the same time, this government continues to impose breaches on young, vulnerable and disadvantaged Australians, including those with a mental illness or drug and alcohol problems. Interestingly, this government includes homeless youth in this category, at the same time as the Independent Inquiry into Breaching, the Commonwealth Ombudsman, the Hanover Foundation and the Salvation Army have all identified homelessness arising as a direct consequence of inappropriate breaching.

So it seems that this government, through punitive breaching, has created a group of homeless youth and now attempts to offer them personal support because of that homelessness. The present punitive breaching must be amended, as recommended by the Pearce report, the Ombudsman and countless other reports, and the Democrats will move to do so in the committee stage of the second bill; otherwise, the 45,000 places allocated by this program will all be taken up by those who have fallen victim to the government's misdirected breaching program, leaving inadequate resources to identify those at risk in the first instance.

Over the last 25 years in Australia, there appears to have been constant and sometimes radical changes in the names, processes and emphasis of labour market programs that have been operated in Australia. This has been accompanied by the tendency of governments to forget or discard knowledge about what works best and for whom. We see programs come and go, and reappear again. For a government to assist individuals to find secure and sustained employment, it must sustain the elements of good practice. These are: the careful, iterative and cumulative assessment of the needs and circumstances of the individuals being assisted; the development and articulation of realistic pathways which people can follow to gain employment; the positive and constructive engagement of all the people being assisted, with individual and consistent personal contact provided by a counsellor or adviser; ensuring that people have a clear understanding of what is expected of them and what they have a right to expect in terms of the nature of the assistance to be provided; gaining people's commitment to, and implementing and coordinating, a sequence of assistance tailored to meet their particular needs and to overcome their barriers to work force participation; monitoring people's progress through sequences of assistance, and also monitoring the extent to which they are meeting their own side of the bargain in terms of effort and participation; and appropriate challenging of people who fail to reasonably meet their agreed obligations, assuming those obligations are fair and reasonable in the light of their personal circumstances and only after full consideration has been given to the reasons behind that failure.

Piecemeal approaches to policies and legislation that are being delayed or held to ransom by punitive measures, such as in the original bill that the Labor Party is seeking to split, or which have not been accompanied by job creation programs, reflect a government which is not serious about addressing the devastating social and economic impact of long-term unemployment. We support the splitting of this bill and would welcome the opportunity to impart a degree of fairness on the participation provisions for sole parents and older Australians in the deferred elements.