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Wednesday, 9 May 2012
Page: 2881

Senator LUDWIG (QueenslandMinister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (10:24): At the outset I thank those who have made contributions to this second reading debate. The Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012 will give effect to important income support reforms contained in the Building Australia's Future Workforce package, which was announced in the 2011-12 budget. These amendments will provide a greater incentive for young Australians to engage in education, training and employment, and will encourage parents to re-engage in the workforce. It will help to restore equity to the eligibility conditions for parenting payment.

The Australian government's Building Australia's Future Workforce package is designed to ensure that all Australians are able to share in the benefits afforded by our growing economy. This package represents a significant investment in education, skills and employment opportunities that strengthen the future of Australia's workforce. Reforms to income support payments for young people are an integral part of the government's reform agenda and will provide greater incentives and support for young unemployed people to engage in education, training and employment. Education and employment are the key economic and social inclusion points. The government is committed to providing the right balance of support, assistance and incentives to ensure that people are able to take advantage of all of the opportunities that our economy has to offer.

This bill will amend the Social Security Act 1991 to delay access to Newstart allowance. From 1 July 2012, 21-year-olds may receive the same rate of youth allowance whether they are unemployed, in training or a student. This overcomes the financial disincentive for unemployed young people to undertake full-time study. There is a correlation between the completion of year 12, or an equivalent qualification, and the engagement of young people in education, employment or training.

The bill will also extend to 21-year-olds the 'earn or learn' participation requirements for youth allowance recipients who have not achieved year 12, or an equivalent qualification. A more generous income-free area and working credit will reward young people who take up part-time work as a stepping stone to full-time employment. From 1 July 2012, young job seekers receiving youth allowance will be able to earn more and still retain their payment. The income-free area will be increased from $62 to $143 a fortnight and their working credit limit will be increased from $1,000 to $3,500.

To ensure that all young people aged between 16 and 21 years of age under similar circumstances are in receipt of the same rate of income support payment, the bill also amends a number of payments, supplements and payment calculators to align the ages at which a person will cease to be qualified for youth disability supplement, sickness allowance and the long-term income support payment rate for students.

The government believes that these changes are the best way to support young Australians to participate in work or study, and to make the most of the opportunities that are available. It creates conditions that maximise the number of young people who remain in or return to education and training to get the qualifications and skills they need to be competitive in the labour market. It is important that this bill proceed now to ensure that young people are encouraged to learn or earn and are rewarded for part-time work as a stepping stone to more employment.

The Building Australia's Future Workforce package provides greater incentives for parents with school aged children to re-engage in the workforce. The government recognises that the best income support a parent can have is a job. That is why it is important that we provide the best possible incentives for parents to re-engage in work and present a positive working role model for their children. Through this bill the government is phasing out the arrangeĀ­ments for parenting payment recipients who have been on payment since before 1 July 2006. When their youngest child turns 12 years old, those recipients will now be treated the same as other parents, regardless of when they first claimed parenting payment. This measure creates better incentives for parenting payment recipients, including single parents, to return to the workforce by transitioning eligible parents onto Newstart allowance earlier. This recognises that most parents' capacity to undertake work or other activities increases as their children get older and that in the current income support system Newstart allowance is the most appropriate payment for working aged people to seek, find and maintain employment.

From 1 July 2013, a more generous income test will be introduced for all single, principal-care parents on Newstart allowance. This will enable those parents who may qualify for Newstart allowance to around $400 more per fortnight before losing their eligibility for payment. It will allow them to see greater benefits from their participation. As well as these increased benefits, it is important to note that parents caring for a child with a disability will continue to have access to a range of additional support, including carer allowance and participation exemptions for when their caring responsibilities need to come first.

The bill will also simplify the compliance framework and ensure that job seekers are not penalised because a weekend happens to fall before they have the opportunity to re-engage with an employment services provider. Announced as part of the Building Australia's Future Workforce package, daily penalty amounts for job seekers failing to attend an interview with an employment service provider will be aligned with the penalties for failing to attend an activity or a job interview, which is one-tenth of a person's fortnightly rate of participation payment. The department will monitor the implementation of this measure and its impact on the youth allowance recipients.

Finally, this bill will amend the Indigenous Education (Targeted Assistance) Act 2000 to provide the appropriation to fund the 12-month extension of the Student Education Trusts measure, as part of the extension of the Cape York Welfare reform trials, which was announced, as some in the chamber may recall, by the Minister for Families, Community Services and IndigenĀ­ous Affairs, in 2011. Parents and care givers in remote Indigenous communities in Far North Queensland will continue to be supported in saving for the cost of their children's education, which is a key element in achieving the Closing the Gap targets in Indigenous education.

I thank the senators for their contribution to the second reading debate. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.