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Thursday, 7 December 2017
Page: 10060


Senator WATT (Queensland) (13:42): I rise to make a contribution to this debate on the Social Services Legislation Amendment (Welfare Reform) Bill 2017. It's very unfortunate that yet again we see an attempt by this government to get its budget under control by targeting some of the most vulnerable people in our community. Even in the short time that I've been in this place we've seen this over and over again, with reforms and changes introduced designed to cut pensions and to cut social security payments to the unemployed. It's always people at the more vulnerable end of the spectrum who seem to suffer from this government and its need to find budget savings.

I don't think that there would be anyone in this house who disagrees with the idea that governments do have to live within their means and do have to run a budget responsibly. Of course, that doesn't always mean running a surplus. There are some on the government side who think that everything must be sacrificed in order to get to a budget surplus. In coming up with budget policy and economic policy it's very important that governments do pay attention to the economic conditions that are in place at any one time. That's why after the GFC it was entirely appropriate for the then Rudd and Gillard governments to run an expansionary fiscal policy, which did allow for deficits, so the government was filling the gap in the economy that was created with the private sector contracting so much.

Many years after the GFC this government remains incapable of coming up with a responsible budget policy. Rather than actually doing the hard yards and finding where the savings can be made within the government's budget without doing damage to the economy and without doing damage to the most vulnerable in our community, the government always take the easy way out—they always come after those who are the most poor in our community and least able to defend themselves. I say to vulnerable Australians in that situation: you will always have a friend in the Labor Party and you will always be defended by the Labor Party. That is why yet again we rise to oppose various aspects of this bill.

As I say, everyone acknowledges that it's important to run a budget responsibly. Even though we are in opposition, Labor have put forward a number of savings measures that would actually create billions of dollars in savings for this government and get its budget back into shape without actually hurting the most vulnerable in our community. I will give you one example. The changes to negative gearing and capital gains tax that we took to the last election would, if the government adopted those changes, save billions of dollars in the budget that could be used either to pay back debt or to deliver services, or for whatever other priority the government decided it was necessary to meet. Even beyond the budget savings that would be realised through those changes, if the government adopted them, they would also have the effect of putting some brakes on skyrocketing housing prices that we see in many parts of the country that are shutting particularly younger and poorer people out of the housing market. Adopting those changes would generate billions of dollars in savings and play an important role in moderating skyrocketing house prices.

Again, rather than doing those kinds of things, rather than making changes to the taxes paid by big business and large mining companies, rather than cracking down on multinationals who are avoiding paying their fair share of tax, the government always decides to go after the poorest in our community. It knows the poorest in our community are easily picked on and not very capable of defending themselves due to their lack of power in our democracy.

The other extremely frustrating aspect of this debate every time we have it is that ministers and government speakers continue to make out that we have a massive problem in terms of rorting in our social security system and that good, hardworking Aussies are being ripped off because of the huge numbers of people rorting the system. Again, no-one denies that there are people out there who do the wrong thing. Even when we were in government, Labor made sure that people did not get more than they were entitled to, and we deployed a lot of resources to recoup overpayments made to people who were not entitled to them.

If you listen to government speakers and government ministers, they would have you believe that our social security system is out of control and that it's particularly the fault of those who are unemployed or on disability benefits. In fact, any objective observer will tell you that Australia has the most targeted social security system in the world and one of the least rorted systems in the world. Our social security system is not being rorted on a grand scale. Money is not being handed to people who are undeserving of that money on a grand scale. In fact, our social security system is highly targeted at people who are most in need of income support to keep them out of poverty.

If we want to be honest about our social security system and where the real growth is, it's in the age pension. Labor does not support some of the changes that have been put forward by this government to grossly cut back age pension supports. But the government tries to pretend that our ballooning social security costs are the fault of bludgers who are unemployed or rorting disability benefits, and it is just not true. The government's figures actually prove that.

In preparing for this debate, I noticed a very interesting article by the highly respected Australian economic commentator Ross Gittins in yesterday's Fairfax press. I might just read a little from that column because it really captures my views and those of many Labor speakers about why this government is getting it so wrong with the social security system, particularly in this bill. Mr Gittins says he has:

… nothing but contempt for comfortably-off people who try to solve their problems by picking on the down-and-out.

That is what we see time and time again from this government. The fact is all of us who are elected here are in a highly privileged position. We are very well paid. Surely we can come up with better ideas to come up with budget savings than picking on the down-and-out, as Mr Gittins puts it. As he says:

If Australians can't do better than that, what hope is there for us?

He goes on to say:

The expected savings (which may or may not eventuate) of $478 million over four years are minor in a budget of almost $2 trillion over the same period.

We recognise that there will be times when governments need to make savings to their budget but, when you think about the immense pain that some of our most vulnerable people will be put through in losing benefits under this bill, all for the sake of raising $478 million, at best, over four years, any cost-benefit analysis would show that these changes are not worth pursuing. Mr Gittins makes the point that while those savings are relatively 'minor in a budget of almost $2 trillion', those savings will:

… be coming out of the hides of those most in need, those whose first lack of moral discipline was failing to pick the right parents, those whose luck has been worse than ours, those who've failed to deny themselves and their children the slightest treat at any time, the way we undoubtedly would had we been in their shoes.

And then there's the kicker—this is where Mr Gittins really nails what this bill is about and how this government approaches the job of finding savings. Mr Gittins says the cuts in this bill are:

… the cuts a government makes when it wants to be seen to be acting to reduce the budget deficit, but lacks the courage to take on a fight with the medical specialists, drug companies, chemists, mining companies or other powerful interest groups guarding their own, much bigger slice of budget pie.

I would have more respect for this government if they did the hard yards and identified where the real rorts are happening in this system. It may be that that involves sometimes taking on their powerful corporate donors or the big business groups who tend to back their side of politics. But that's where you will get the large savings that are necessary to get the budget back into shape without inflicting harm on those who are most vulnerable in our community. It might even be possible to do it in a way that doesn't damage the economy.

Again, any objective observer or economic analyst will tell you that it is the poorest in our community who spend the biggest proportion of their income on consumption, on simply staying alive. If you are on jobseeker payments, which are already very meagre, you are not building up lots of savings, you are not putting money away that isn't spent in the economy; you are spending every single dollar on food, on accommodation, on clothing and on transport. All of that money that is spent is good for the economy. It's not being offshored or put in Cayman Island tax havens; it's actually going back into the economy. Targeting people who can afford to pay more and getting more money out of them wouldn't damage the economy anywhere near to the same degree as it would to target the vulnerable, as this bill proposes to do.

Much of the debate around this bill focused on the proposal to drug test social security recipients. I have had a bit to say about that already, so I won't go into a great amount of detail here. Labor have consistently opposed that measure, and we're pleased to see that the government finally accepted the evidence—well, I'd like to think that they accepted the evidence—that was presented by every single health and drug and alcohol expert to the Senate inquiry that was conducted into this bill. I sat on that inquiry, and heard expert after expert—people who were actually in the field or have studied these issues for many years—say, without exception, that drug testing social security recipients would not serve the benefit that the government was saying it would; that it wouldn't get people off drugs; that it wouldn't get them back into work; and that, instead, other types of support are necessary in order to do that.

In any other jurisdiction that has tried this kind of drug testing, it has been shown to fail. Very expensive programs that were set up in other jurisdictions to drug test welfare recipients, didn't get people off drugs and alcohol to the degree that the government was claiming. So the money that was being spent did not achieve the desired outcome and did not help the welfare recipients to move into work. The evidence at the Senate inquiry showed what is necessary is some proper investment by this government in drug and alcohol rehabilitation services—rather than the cuts which have been made—and much better employment and training supports, than what currently exist, to get people into work. That's what would work and that's what would get people who are suffering from drug and alcohol addictions back into work, rather than the punitive testing being put forward by the government. It's like their approach to these budget savings; they didn't have the ingenuity to come up with programs that would work. They went for the quick, headline-grabbing stunt of imposing drug tests on welfare recipients with no regard, whatsoever, to the evidence that was put forward.

Senator Williams: Because you're an expert on budget savings of course!

Senator WATT: If you were here for the earlier part of my speech, Senator Williams, you would have heard me talk about the fact that Labor has already put forward a number of savings measures, most particularly around negative gearing and capital gains tax, which this government continues to ignore. That's because the government always takes the easy option. Rather than taking on the powerful interests of property investors, some of whom are in your own ranks owning multiple properties and getting tax concessions to make those investments, it's always easier to come in and kick the unemployed and the disability-pension recipients, all to save, as Ross Gittins says, $478 million over four years. If the government actually tried hard, there are much better ways to find budget savings that don't hurt vulnerable people and that deliver bigger savings with less economic fallout than what's being proposed here.

In the evidence received in the Senate inquiry, it was very clear that what was really necessary, if the government was sincere about trying to get people who are addicted to drugs and alcohol off those substances and into work, was real investment in drug and alcohol rehabilitation and much better investment and programs around employment and training. Not only did the evidence that we received in the inquiry show that everywhere else in the world where this had been tried had failed but, in actual fact, even if the government had managed to get this proposal around drug testing through, there was not enough trained drug and alcohol counsellors in Australia to be able to provide those services. From memory, the original proposal was that this trial would run from 1 January next year—whatever date it actually was. We ran the very real risk that, had this program got up, welfare recipients would be required to be drug tested without drug and alcohol counsellors there to help them get off the drugs and alcohol.

Regardless, the government charged on. It's only at the 11th hour, when they've realised they haven't got the numbers to get that aspect of this bill through, that they've backed off. I hope that they have backed off in a permanent sense. I hope that they really do have a good look at the evidence in that inquiry and that they apply themselves to some genuine measures that would really help people who are drug and alcohol addicted to get back into work and off those substances.

There have been a number of other measures that have been put up in this bill that haven't attracted the degree of attention that the drug testing proposal did. Again, I will use Ross Gittins' article to say what some of the other aspects in this bill include. He says they include:

… freezing benefit rates to wives and widowed pensioners until they're no greater than the "jobseeker payment"—

and—

getting rid of the 14-week bereavement allowance.

What kind of government does that? What kind of government decides to target people who have lost their spouse and are entitled to a 14-week bereavement allowance? They're going to rip it off them as a way of generating savings. They're not going to go after big mining companies and they're not going to go after big banks—in fact, they want to give them tax cuts. Instead of that, they'll pick on people who've lost their spouse and they'll rip away their 14-week bereavement allowance. The other proposals include tightening the job search requirement for those aged 55 to 59, who already find it incredibly difficult to find work, and making it easier to suspend people's dole payments, even if they haven't done the wrong thing.

I can't put it any better than Ross Gittins does on the types of cuts this bill contains. He says:

They're the cuts a government makes when it wants to be seen to be acting to reduce the budget deficit, but lacks the courage to take on a fight—

with the big end of town—

with medical specialists, drug companies, chemists, mining companies or other powerful interest groups guarding their own, much bigger slice of budget pie.

If this government was actually serious about getting its budget back in order, it would be targeting the real rorts in the system, rather than the rorts they make up in this area.

The PRESIDENT: Senator Watt, you will be in continuation upon the resumption of debate. It being 2.00 pm, we move to questions without notice.