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Tuesday, 19 November 2002
Page: 6757

Senator MARK BISHOP (5:07 PM) —The Family and Community Services Legislation Amendment (Disability Reform) Bill (No. 2) 2002 contains minor alterations to a previous piece of legislation that sought to implement the government's budget decision to cut, by $54 per week, the payments of tens of thousands of people with disabilities. The previous piece of legislation, the Family and Community Services Legislation Amendment (Disability Reform) Bill 2002, was withdrawn by the government in the Senate in the face of its certain defeat. As far as the Labor Party is concerned, nothing has changed.

Like the first bill, this bill seeks to give effect to the government's mean-spirited 2002-03 budget measure to alter eligibility requirements for a person to receive the disability support pension. Initially, the changes were portrayed as being about assisting and supporting people with disabilities to find employment. However, as soon as the community saw the inconsistencies between the budget measures and the welfare reforms expressed in the McClure report, the government resorted to the familiar ramped rhetoric of welfare rorts and bad backs. People with bad backs were now the target, according to the Minister for Family and Community Services, Senator Vanstone, and the Prime Minister. Never mind the fact that people with serious disabilities would also be affected by the cuts.

Make no mistake, the changes represent an unprecedented attack and affront to the 3.1 million Australians who have a disability. Contrary to the government's claim that their motivation was to help people with disabilities to find work, they will not assist one person with a disability to gain work. The changes are about removing 12 per cent of the income and a substantial amount of material assistance available to people with disabilities while at the same time asking them to go out and secure a job. The question that no government member from the Prime Minister down has asked is: why do you need to cut someone's income to help him or her find work? The difference between the bill we are debating today and the one that the government withdrew earlier this year is that the government propose to save or grandfather existing recipients of DSP from the new rules. The proposition is that the new rules only apply to those people who apply for the DSP on or after 1 July 2003. As was the case with the first version, this bill seeks to amend the current work test which applies to those applying for DSP and to those having their entitlement reviewed.

Specifically, schedule 1 seeks to alter the definition of `work capacity' from 30 hours a week at award wages or above to 15 hours. It should be noted that the current test is whether a person is capable of working 30 hours a week inside a period of two years and follows a fairly stringent medical determination that a person has a disability. Item 15 of schedule 1 contains the new transitional provisions that protect claims lodged for DSP prior to 1 July 2003. Schedule 1 also seeks to broaden the types of assistance or intervention that can be considered in determining work capacity. This has the effect of giving the Secretary of the Department of Family and Community Services greater flexibility in making a judgment about whether, with appropriate intervention, a person has the capacity to work at the threshold level or above inside two years. The schedule also seeks to remove the ability to consider local labour market conditions for people aged over 55 in determining work capacity. As a result, an individual within 10 years of retirement and living in a community with negligible labour market programs or employment prospects would no longer have their limited employment or training opportunities taken into account and would not qualify for the more generous DSP. Again, claims lodged prior to 1 July 2003 would not be affected by this measure.

The bottom line is that the government's intention to tighten access to DSP and to place people on lower paying benefits has not changed. Figures provided during Senate estimates hearings confirm that the revised measure would result in approximately 103,700 claimants for DSP having their application for the payment rejected over the forward estimates period to 2005-06. Many of these claimants would qualify for the lesser Newstart allowance—a difference of $54.40 per fortnight; some would qualify for other pension payments; and a small proportion of people would qualify for no payment at all.

This would entrench a two-tiered system that would create two classes of disability support recipients depending on when the claim was lodged. We would have a situation where two people with exactly the same disability and barriers to employment would be on different payments. One would receive the higher paying DSP, along with ancillary benefits like the pensioner concession card, the pharmaceutical allowance, access to the pensioner education supplement and greater incentive to work, with an income test that claws back less of any earnings they make. The other person with the same disability would receive the lower paying allowance, Newstart, worth $54.50 less per fortnight. They would not have a pensioner concession card to reduce public transport costs, car registration, rates or utilities. They would also not automatically receive the pharmaceutical allowance, which would see them pay more out of their pocket for medicines that help control their illness or disability. If they try to improve their skills through study, they would not be eligible for the education supplement to help with study related costs. In addition, the disabled person on Newstart would have to actively look for work, line up in the dole queue, fill out a dole diary—and they may also be forced to work for the dole. Same disability—different payments and requirements. To any reasonable person, it should be apparent that this is unfair.

But the government's compromise position, which separates people with disabilities on the basis of the timing of their claim, does not address its own concerns. Those concerns are, firstly, that people with so-called bad backs be separated out from those with genuine disabilities. The fact is that the work test changes will affect people with varying levels and types of disability, including those with severe physical disabilities and chronic psychiatric disabilities. The second concern is that people with disabilities who work in business services—that is, sheltered workshops—be protected. The changes protect only those currently on the DSP, and so people with disabilities who take business service work after 1 July 2003 may do so on Newstart, with a responsibility to look for other jobs.

The government says people working for or below award wages are protected. With respect, the test is not what people are doing now but what they are judged to be capable of doing within a two-year time frame. The government's instrument for separating out so-called malingerers is a very blunt one indeed. I suggest that if the government is serious about malingerers who are not genuine it should step up compliance efforts, not cut them back as it has through the disbanding of front-line fraud-detecting staff in Centrelink. In the changes being proposed in today's legislation, we are particularly concerned about those people who have serious disabilities who will be caught up. In terms of disability type, the three largest groups of recipients of DSP are people with musculoskeletal or connective tissue impairments, those with psychological or psychiatric impairments, and those with an intellectual or learning disability. The changes would affect people from each of these main disability groupings. This gives the lie to the government's claimed concern to stop people with bad backs rorting the system.

In particular, the changes will hurt those with episodic disabilities such as mental illness. Many of this substantial group of people receiving DSP find it impossible to live normally for any sustained period. Placing people with these disabilities on a payment that has strict daily and weekly obligations would be extremely detrimental to their welfare. They are unlikely to be able to consistently comply with mutual obligation requirements and would, therefore, be likely to lose further income through the breaching regime. There will also be those who will be caught by the new test who do have obvious physical difficulties if it is assessed that they have a work capacity of 15 hours a week or more. These changes will open the door for people with significant physical and intellectual disabilities to be forced onto the dole queue.

I urge government senators to listen closely. People must meet a minimum level of impairment and the work test. The two cannot be traded off. If a person has a serious and significant disability but slips in under the new work test—too bad. The only specific and defined exception is for those with permanent blindness. The changes put forward will see people with paraplegia, acquired brain injury, profound deafness, rheumatoid arthritis and other manifest disabilities and illnesses forced onto the dole queue. There are other pitfalls in the bill before us today. The compromise position will also mean that an individual who moves off payment to work or for another reason but returns later on will lose benefits. This, of course, will create a disincentive for those already on the DSP to take work or other opportunities, which is at odds with the government's stated aim of increasing participation.

Labor also has very good policy reasons for opposing these changes. Put simply, the 15-hour test is too low, entrenching people in poverty. What do I mean by that? By definition, people forced onto Newstart or another allowance may only have a capacity to work 15 or 16 hours but no more. At minimum wages, this is just $340 per fortnight before tax. These people will be trapped on an allowance-level payment intended as a short-term benefit and earning a paltry income with no ability or prospect to increase their income to a reasonable level. They, by definition, cannot move off the payment, unlike existing allowance recipients who have no disability and who, given the skills and a willing employer, may increase their earnings by moving off the payment, even into full-time work. This is patently unfair.

So what is the alternative? Are there problems with the disability support pension? In short, yes. Let us have a look at the total numbers. They have increased substantially over the last decade in particular. Disturbingly, under the coalition the annual increase has not slowed, despite a strong economy. It is easy to be alarmist about the increase, but it is not as dire as the coalition claims and it is not because of an influx of rorters and malingerers. Firstly, we have seen a loss of full-time work and an increase in part-time work. The losers have particularly been mature age people who have worked in traditional industries and who, in many instances, have worn and broken bodies after a lifetime of work. They may also have few skills with which to re-enter employment in other areas. They are often also subject to discrimination from employers. But the largest growth areas of late have come from older women, resulting from the progressive increase in the female aged pension age and the phasing out of widows pensions and allowances. Additionally, under the coalition, growth has flowed from the liberalisation of the income and assets tests for pensions, which has seen people with disabilities but with higher levels of private incomes from savings and investments become eligible.

Also responsible is an increase in the level of disability in the community. The incidence of disability within the community increases with age. So as our population ages the disability support pension take-up increases. The ABS measures the level of disability in the community at regular intervals. The most recent survey, conducted in 1998, showed an increase from 15 per cent in 1981 to almost 19 per cent. So this is not simply a case of malingerers. The causes for the increase in disability pension numbers are many and varied. To suggest otherwise is simplistic and does no service to foster intelligent and rational debate.

Labor's approach is to address the increase in the number of people on disability pensions who would like to participate, either by working or through other means, but who are not given the opportunity. Labor agrees that too few people with disabilities are working where they can or, indeed, are willing to do so. The problem is that the government does very little to encourage and facilitate people with DSP to work. In its heart of hearts, the government knows that its attempt to force people with disabilities off the pension and onto the dole is not supported in the wider community. The community knows this is about forcing people with disabilities to pay for John Howard's and Peter Costello's spending spree prior to the last election. That is why the government has been so quick to resort to the rorting allegations and to smearing Australians who have a disability. The problems in the system need to be addressed, but they are largely of the government's making. There have been six years of neglect of active strategies which would ensure those who can participate are assisted to do so.

To conclude, the Labor Party have no problem with welfare reform. We have been active reformers in this area in the recent past. We do have a problem with cuts to the social safety net that have no other aim but to save money. That is what this bill seeks to do and that is why Labor will not support it. We need positive reforms. We need heightened public awareness of the unmet need for disability services so that people get the support they so desperately require. We need to have as our goal helping people with disabilities to participate. We need to encourage and prepare people with disabilities for participation. We do not need to cut their pensions. Labor will not support pension cuts, nor should the Prime Minister who promised before the election that they would not occur. The government must recognise that there are considerable up-front costs attached to real reform of the DSP. In fact, there is a large up-front investment needed. But, in the longer run, such an investment for some will save the equivalent of a whole pension— $429 a fortnight, rather then just $54 a fortnight—and improve someone's life. Labor are not going to negotiate on any aspect of this legislation. When 100,000 people are going to pay the price, it is not the time for negotiation. Labor oppose this bill.