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Thursday, 12 December 2002
Page: 7974


Senator BUCKLAND (7:32 PM) —I seek leave to have Senator Hutchins's speech on the third reading incorporated in Hansard.

Leave granted.

The speech read as follows—

I rise to speak to the Family and Community Services Legislation Amendment (Australians Working Together and Other Budget Measures) Bill 2002.

As the Chair of the Senate Community Affairs References Committee, I was instructed to inquire into the potential impact of this Bill if it were to be passed by the Senate.

The Committee's report, tabled in the Senate on 25 September 2002, considered the recommendations of a number of community groups as a result of comprehensive consultation in Sydney and Melbourne.

The overwhelming opinion of groups as diverse as ACOSS, The Brotherhood of St Laurence, the Sole Parents' Union, UnitingCare 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 counter-productive.

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.

More importantly, the proposed changes demand additional commitments from recipients, without financially 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's 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.

In the course of the Committee's inquiry, we were required to address the Pearce Review and its recommendations.

The Pearce Review presents a balanced and sensible approach to the issues of participation requirements and breaching.

The Senate Community Affairs References Committee determined that the Pearce approach represents a way forward both in terms of this legislation and the reform of the penalties regime more broadly.

I would like to note that last sitting week, the Senate passed a recommendation of the Pearce Review in the form of a motion. The result of that will now be that the Commonwealth Ombudsman should report to the Senate Community Affairs References Committee on an annual basis regarding the system of breaches and penalties.

The Government tried to oppose the motion, saying that the Department would be a more appropriate body to deal with such reporting. My suspicion is that their argument had more to do with politics than the effectiveness of the breaches and penalties system.

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 mother'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 the single parent's children.

The first breach would mean a cut of $987 for a single parent and their children. Much of the debate surrounding welfare reform has focussed upon the need to prevent inter-generational dependency on welfare. Penalties of this order are bound to affect the life chances of any child of a single parent.

If a parent is punished for not attending an interview or for not attending 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, a parent and their children would be liable for a $3990 decrease in their standard of living over 14 months. Such a drop in income necessitates the prioritisation of expenses. If that meant a choice between food and school books, I know which one I would make.

One matter is absolutely clear, and that is that penalties as high as those proposed by this Bill would affect the quality of life and opportunities of 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 caring for children.

There are, however, elements of this bill which do make very good sense. The Bill provides for the re-introduction of the Working Credit scheme, which allows recipients to build up income credits at times when they receive little or no income, so that they are not overly disadvantaged when they do engage in paid work.

It's a great idea which was in operation under Labor Governments, which the current Government then repealed, but has now decided to re-introduce. The same system is currently in place for Youth Allowance recipients and has significantly prevented young people from 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 learnt 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 last two decades, welfare has moved from being an entitlement for the individual to an obligation for both the individual and the Government.

Writers such as Lawrance 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 Poor Laws.

While I hardly think that we will ever again see the unemployed breaking rocks as punishment for their misfortune, we must guard against any scape-goating of welfare recipients. More often than not, their disadvantage is the result of misfortune and systemic 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, nor does it 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 workforce, 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's 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 to the order of $1.7 billion. Of that, only $22 million is to be spent on community engagement, or Community Capacity Building. $22 million, across the entire nation, will do little to implement one of the major recommendations of the McClure Report. And the spending is in an existing program, the main aim of which is to promote awareness of the program.

If the Government was 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 well-being.

Instead of acting on an ideological basis, as this Bill would, we need to legislate according to common sense. 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.

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 aged unemployed.

It is quite simply illogical not to take advantage of very practical recommendations from a report which was commissioned by the Government, and instead to 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 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 ten dollars 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, but it must have the objective of alleviating the need for welfare at its core. This Bill is a half-hearted attempt at reform, many elements of which will do little or no good for the people it affects the most.

Question put:

That this bill be now read a third time.