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Transcript of interview with Senator John Faulkner, Shadow Minister for social security, and Derry Hinch, Radio 2GB

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E & O E - P R O O F ONLY

HINCH: ... Now the Social Security Minister, Jocelyn Newman, says the Department estimates almost 20,000 people will be caught cheating under the scheme each year, 20,000 a year. They think they can crack down on. She also says - or her

Daprtment says - the diaries will save the government $100 million, and an extra 140 staff will be hired to check the diary entries to make sure they are genuine, people are actually genuinely attempting to get work. There are opponents of the scheme, people who are raising questions on how it will work, if it will work. One of those is the Shadow Minster for Social Security, from the Labor Party, Senator John Faulkner, good morning.

FAULKNER: G'day Derryn. How are you?

HINCH: I'm fine, thank you. Can you see any merit in this system at all?

FAULKNER: Oh yes. I think there’s always merit in ensuring that only those people who should be paid, are paid, and also ensuring that those particular people are paid the right amount of money. Now that is a very important principle that underpins the social security system in this country. So there's certainly merit in

ensuring that we have ... (tape break) very, very doubtful as to whether the jobs diary can add much to the fraud and compliance controls that are in existence at this time.

HINCH: ... diary, depends on what the diary does. If it is just a case of filling in 'yes, I phoned so-and-so to look for a job and there wasn't anything there'. You could get something out of the paper, I suppose, look at the classifieds, find a couple of places every day for a week, scribble it in, and you've done your bit.

FAULKNER: Well, that's one possible approach but in your introduction, Derryn, you talked about the Minister saying, or claiming, that nineteen and a half thousand people would be thrown off payments for a year and - or thrown off payments - and also saying that this is likely to see savings of - according to the Minister's press

release - of $100 million a year to taxpayers. Now look, you just can't be right on both counts. See, the average period of breach for these social security payments is around six weeks and to get payments, to gat savings on $100 million you'd actually have to see around 180,000 to 200,000 breaches on that average of six weeks. And not 19,000 but around 200,000 people breach for the average six weeks payment breach period. Look, I just don't believe that Senator Newman can

be right on both counts. There's something wrong with those figures.


HINCH: And, I suppose, also keeping in mind that, as I understand it, this is only going to be for new dole recipients and not the people ... long term dole receivers and the long term unemployed?

FAULKNER: The Minister has made it clear in her announcement yesterday that it will only be new job seekers who will be asked to fill in this particular diary, and that commences on 29th July. So that is something which is actually clear, I think, in the Minister's announcement.

HINCH: Of course, people have been filling in tedious log books for car mileage used in work as a tax deduction over the years, haven't they?

FAULKNER: Oh, they have. But let's not forget this is a government that was elected on a very clear platform of reducing red tape by some 50% in its first parliamentary term, now that was a very solemn promise that was given by Mr Howard and the Coalition prior to the last election. And we're very worried bout the enormous impost on small business, particularly. It's inevitably going to create more red tape. I think it makes a mockery of that promise to reduce red tape for small business. There could be hundreds of thousands of phone calls every year to check on work efforts of people applying for jobs and I really do believe that this is going to be an administrative nightmare that really is going to add to the burden of red tape for small business.

HINCH: Well, now that is the down side. Small business is so tied up as it is and so busy in trying to keep their heads above water, a lot of them - the over 800,000 small businesses in the country. What worries me is that there'll be yet more phone calls. I mean, sometimes you are so busy you haven't got time to answer your own mail, without having to pick the phone up to the social security department's diary police to tell them - and you may not even remember because you may not have kept record of everybody who's phoned you looking for a job.

FAULKNER: Well, it's going to be complex, it's going to be difficult. I think, particularly, if we're sensitive about this for people who have difficulty reading and writing, people with literacy problems are going to really struggle with these job seeker diaries. Not to mention those who don't have English as their first language.

So this is not only going to be, I think, ad administrative difficulty, a red tape nightmare, for small business, but I'm quite sure for some of those who will be required to fill in the job seeker diary, it is going to be difficult. And the real issue, I think, is can this particular diary, can this announcement really lead to the sorts of savings that the Government has claimed? And I don't believe that that's possible and I think the figures that we've got in front of us simply don't add up.

HINCH: See, one of the points ACOSS were making, I think it was Mr Fitzgerald, saying that the Government is challenging the integrity of the jobless rather than finding them jobs. Well, I think when you've got large long term unemployed and a large unemployment bill you're entitled to question the integrity of some of the jobless. I mean that's not against the law.



FAULKNER: No, I'm not in the business of saying that we don't want a social security system that is above and beyond criticism. There's no doubt about that. And you're not going to find the Labor Party at any stage arguing that we shouldn't have proper fraud control measures, proper compliance mechanisms in place. We've always argued that. We've always been concerned to ensure that only those who should be paid are paid, and that those people are paid the right amount of

money. That is a fundamental principle and you won't find the Labor Party backing away from that.

HINCH: I think you lost sight of it in the early 80s, I say in the last years of the Fraser Government in the early 80s, and the early years of the Hawke government that, I think, the Social Security Department was almost out of control. I suspect that the rip-offs of - 1 know that there was something like $300 million in Victoria alone. I

suspect they're probably close to $800-900 million nationwide. That has tightened considerably and getting tighter. Now you have to look for more than two jobs a fortnight rather than what was happening in the past.

FAULKNER: Well, Derryn, if you go back to the early '80s what, of course, the Labor Government did fairly recently was get some independent reviews of the compliance mechanisms in the Department of Social Security. There was a visiting

Professor at the ANU, Professor Weatherley, who found in 1993 - and I'll use his words - there is no basis for the commonly held belief that fraud is rampant within the social security system. He went on to say that the social security system has been significantly tightened up since the early 1980s and that the compliance measures have been effective in reinforcing voluntary compliance and deterring non-compliance. I think we've certainly made progress since those times that you identify in your question. I'm very doubtful as to whether this particular job seekers diary is going to make the savings that the Minister claims. Although of course, the Minister has indicated this is just one of a package of measures and we wait with

interest to see what the other measures might be. But I'm very dubious about the claim benefits of the diary as announced by the Minister yesterday.

HINCH: One final point. One thing that does worry me - and I've seen it happen before with these sorts of - where they did brochures or diaries or whatever in a variety of departments - when they say it offers hints on how to find work such as reading ads and calling at the CES well boy, that's a breakthrough.

FAULKNER: Oh yes, but look, some of these hints on finding work are frankly just absurd, you know, suggesting you don't go along wearing thongs and this sort of thing. I mean really, let's not get this out of proportion. You know, it says .. let me read from the diary. It says your manner and presentation should be satisfactory for the employer. I mean you should aim to dress neatly. Well, that's fair enough.

Example, no thongs. I mean some of this stuff is, I think, pretty low level advice, I must say. I think that trying to promote the job seeker diary as some sort of manual for job seekers that is really going to give them a lot of hints that are going to mean the chances of getting a job is better. I mean, for example, it says be punctual, don't

be late for an interview as this gives a bad impression. Well, all these things may well be very true, as you and I would both agree. I don't think you or I, Derryn, would describe this as high level advice for the job seeker.