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Tuesday, 28 October 2014
Page: 12308

Ms COLLINS (Franklin) (18:15): The Social Security Legislation Amendment Strengthening the Job Seeker Compliance Framework) Bill 2014 seeks to amend the Social Security Administration Act 1999 in two stages with the first set of amendments coming into effect from 1 January 2015 and the second set of amendments coming into effect from 1 July 2015. Under current job seeker compliance provisions contained within the act, the secretary may determine that job seekers in receipt of a participation payment—that is, Newstart and, for some people, youth allowance, parenting payment or special benefit—may incur a payment suspension for certain participation failures such as the failure to attend an appointment with the payment being reinstated when the job seeker notifies the secretary of their intention to comply with a reconnection requirement. In practice, this would be a requirement to attend an appointment with their job service provider.

The government is seeking to make amendments which would mean that from 1 January 2015 a payment suspension for a participation failure would not be reinstated until the job seeker had actually attended an appointment with their employment provider rather than just notifying the secretary of their intention to do so. The suspension could end earlier where the person subsequently provided a reasonable excuse for not attending the first appointment or where the job seeker could not be given an opportunity to attend another appointment promptly—according to the bill, typically within one to two days.

The government is also seeking amendments which would mean that from 1 July 2015, if the job seeker did not have a reasonable excuse for missing the first appointment or did not give notice of a reasonable excuse when it was reasonable for them to do so, the job seeker would not be back paid for the period of their noncompliance. Currently, once the period of suspension ends the person receives back pay for that period regardless of whether or not their excuse was reasonable for missing an appointment in the first place.

Let me be clear at the outset that Labor has and does support the concept of mutual obligation—that is, that job seekers have an obligation to actively seek work and that the government has an obligation to support them and provide them with the resources to assist them into the labour force. Indeed, as the assistant minister quoted Labor in his second reading speech:

All Australians on income support should have the opportunity of work—but with the opportunity comes responsibility.

It was, as the assistant minister pointed out in his second reading speech, Labor that moved to encourage job seekers to attend their appointments with their employment service provider because we believe that this increases the likelihood of them gaining work. Labor is not opposed to measures designed to assist people into work. On the contrary, we introduced policy and reforms which were very effective at doing just that.

Labor recognises the need for government policy which assists people to find work. But the key word here is 'assist'. We need to assist job seekers to obtain employment by supporting them, understanding their individual circumstances, understanding any barriers they may have to employment, their talents and their strengths. Government must also play a role in job creation and ensure that the conditions are right for the labour market to expand.

However, Labor does not and will not support punitive measures which put at risk vulnerable people. We will draw a line when and where we believe the current government goes too far. We did this when we opposed this government's Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, which sought changes that could have seen the most vulnerable and disadvantaged people left without income and without options for up to eight weeks for each penalty.

Labor is also opposing the government's proposal for job seekers who are under the age of 30 and on Newstart going without any payment for six months of each year that they are unemployed—that is, no money at all for six months that they are unemployed. Labor has been clear: we will not support measures that impact on vulnerable people or that will make people vulnerable. It is totally unreasonable to expect people to survive with no money at all for six months, let alone also being required to meet activity tests such as the government's original proposal for job seekers to apply for 40 jobs per month. We were pleased to see the government recently backed down on the 40 jobs per month in the current request for tender for job services. But this Newstart under-30 measure will leave more than 120,000 young Australians without income support for six months of each and every year that they are unemployed. The government has admitted this and it knows that this will have adverse outcomes. It is at odds with the government's own McClure welfare interim report, a report that said:

The system of sanctions should be progressive, with timely, lighter measures first.

Denying people with no income for the first six months of their unemployment is not a lighter measure first.

We saw the government resort to punitive measures again when it sought to tighten the definition of a 'reasonable excuse'. Social Security (Reasonable Excuse-Participation Payment Obligations) (Employment) Determination 2014 (No. 1) sought to change what matters the secretary must take into account when determining whether a job seeker has a reasonable excuse for participation failures.

This measure attempts to strip away protections for people with mental illness, people who do not have a safe place to live, people with literacy and language issues, people requiring treatment for illnesses, people with drug or alcohol dependency, and people who are victims of domestic violence and/or sexual assault. These people are our most vulnerable job seekers, and this government wanted to disadvantage them further. It is no wonder that Labor finds it hard to trust this government when it comes to supporting people into jobs and not applying harsh, punitive measures.

Through this bill, the government is seeking to treat non-attendance failures in the same way as other failures for the purposes of 'reasonable excuse', under section 42UA of the act introduced by Labor, meaning that an excuse for a non-attendance failure will not be reasonable unless the person gave prior notice of the failure to attend, or unless the secretary is satisfied that it was not reasonable to expect the person to give advance notice. Indeed, with this bill, it appears that, in determining reasonable excuse, the Social Security (Reasonable Excuse—Participation Payment Obligations) (DEEWR) Determination 2009 (No. 1), enacted by Labor whilst we were in government, will remain the legislative instrument used to decide whether or not an excuse is reasonable, due to the fact that the government's tightened version was defeated in the Senate by a disallowance in August.

So Labor is pleased that we moved this disallowance in the Senate. It makes us just that little bit more comfortable, knowing that if these changes are implemented we will ensure that vulnerable people are still protected. But there are no guarantees that if Labor agrees to the passage of this bill the government will not try again to change the determination of reasonable excuse. Labor is somewhat assured by the assistant minister's second reading speech, where he said:

The bill will not impact those whose failure to attend is beyond their control, for instance, where they were taken ill or had an unexpected caring commitment and gave prior notice.

And it will not impact the majority of job seekers who attend their appointments or those who let their provider know in advance if they genuinely cannot attend.

And further that:

… employment providers will remain able to exercise discretion in when they report a failure to the Department of Human Services.

So, whilst Labor is agreeing in principle to the no-show, no-pay appointments contained in this bill, we do have some concerns regarding the practical implementation of this measure. We know that the government has form when it comes to trying to go too far in penalising job seekers, as I have outlined. We want to make sure that they do not with this measure.

The bill's explanatory memorandum states:

In practice job seekers would generally have the opportunity to attend a reconnection appointment with their employment provider within a short period of time and thereby have their payment reinstated quickly. Typically this would occur within one to two days of them contacting their provider as prompted through payment suspension. Employment providers will also be able to offer telephone appointments for job seekers in these circumstances. If the job seeker could not be given an opportunity to attend such an appointment promptly it is intended that their payment would otherwise be reinstated.

Our concern in relation to this measure centres on: 'typically, this would occur within one to two days of them contacting their provider as prompted through payment suspension'. We are concerned about how, in practice, job seekers will be notified of their payment suspension, and we are concerned that this is done within a timely manner so that the job seeker has the ability to make contact as quickly as possible.

I have been informed anecdotally by job seekers and providers that some job seekers are currently unaware of breaches of penalty until they try to access their bank accounts on the usual payment day and find no funds. That is when they make contact. So, my question to the minister would be: how will job seekers be notified when they have missed an appointment under this measure, and how quickly? If job seekers are immediately suspended upon missing an appointment, and are not notified until some days later, or until they go to get funds, it is foreseeable that some job seekers may go some time with their payment suspended and not be able to get back-pay. It may be much longer than two days before they know. Therefore, notice of a payment suspension needs to be provided as soon as the suspension is implemented, to give job seekers the opportunity to contact their employment service provider for a reconnection interview as soon as possible.

So Labor support in-principle the no-show, no-pay measures but we will not support job seekers going extended periods without any income support because they were not aware that they had breached their obligations. This potential for extended periods of payment suspension could account for the large amount of savings the government is anticipating as a result of the changes contained in this bill. We seek assurances that job seekers will be notified immediately and sufficiently of any suspension and that they will have the opportunity for a reconnection interview within two days or else they will be reinstated with their payment immediately.

Labor is also concerned that the bill seeks to remove the right to a review of a decision to suspend payments. We are concerned that this sets a dangerous precedent in which people are denied their right to natural justice. We are also concerned that it will be used to stop job seekers requesting a review of a decision not to back pay where they had a reasonable excuse for missing their appointment and their reasonable excuse had not been taken into account. Labor does not and will not agree to the removal of a job seeker's right to seek a review of decisions which have a financial impact on their lives. Whenever a government seeks to financially penalise people for noncompliance, it is only right and fair that those government decision-making processes are subject to review. This is particularly the case where job seekers could be going without payment for some time, as I just outlined.

As the payment of back pay from 1 July 2015 is contingent upon job seekers being determined to have had a reasonable excuse, it is paramount that the decision is subject to review. Otherwise, an anomaly could present where a job seeker who had a reasonable excuse was determined not to have such an excuse and therefore not entitled to back pay. The job seeker would then be prevented from seeking a review of the original decision in order to receive the back pay to which they would otherwise have been entitled. Therefore, Labor does have an issue with this removal of a right of appeal when people are having their payments reduced, because we believe the government should be focused on positive measures to get people into work and not on financial penalties which disproportionately affect vulnerable people.

Currently, job seekers at the age of 55 or over on Newstart or on special benefit are taken to have satisfied an activity test where they are engaged in at least 30 hours per fortnight of approved voluntary work, paid work or a combination of both, unless the secretary considers that they should not be exempt from an activity test due to the employment opportunities available to that person. There are also currently similar provisions regarding parenting payment recipients at the age of 55 and over, which would mean that they cannot be made subject to requirement to undertake suitable work if they are engaged in at least 30 hours per fortnight of voluntary or paid work, or a combination of both, unless the secretary considers that they should not be exempt from the requirement to do suitable paid work due to the opportunities for employment available to the person.

The government is seeking to amend the act so that the above concessions would not apply to a class of persons specified in a new disallowable instrument. So the government is saying that job seekers over the age of 55 and up to 59 will have the same mutual obligations as 54-year-olds. We have nothing against the concept of treating job seekers the same but we do have serious concerns with this measure, given the recent reports regarding age discrimination in the labour force. Labor is concerned that older Australians, who would be required to meet these activity tests and attend appointments may find the task more difficult, given that the discrimination they are subjected to is real and can impact on their wellbeing.

Following on from the release of the exposure draft for Purchasing Arrangements for Employment Services 2015-2020, stakeholders have been increasingly concerned at the prospect of their supporting role becoming one of a disciplinary decision maker. The exposure draft stated on page 41:

The Employment Provider will also determine whether the Job Seeker had a reasonable excuse for non-attendance at their initial appointment in accordance with legislation and guidelines.

I note from the minister's press release on the request for tender going public that the government has now backed down on this, which I am very pleased to hear and I am sure that employment service providers will appreciate that. However, we are still concerned that in schedule 2 of this bill the government is seeking to extend the secretary's powers of delegation under social security law to include regulations and other legislative instruments.

We are concerned that attempts to delegate government decisions to providers and away from government departments sets another dangerous precedent. We do not trust that the government will not again attempt to delegate its decision-making responsibilities onto non-government organisations into the future. There is no evidence or valid reasons provided by the government to show that there is any need to delegate decision-making responsibilities away from government departments, or that doing so is a good idea. The department and the government do not detail what specific disallowable instruments it is seeking to delegate or why. Job seekers who are affected by this bill are receiving some type of government payment from the Department of Human Services. It is proper, then, that decisions relating to whether or not a person receives such a payment also continue to rest with the department and not with a non-government organisation.

Labor believes the government needs to refocus its attention away from increasing penalties and making it harder for job seekers, to looking at its role in creating jobs. When in government, Labor moved to improve the accessibility of training and employment services; we announced changes to Job Services Australia; we introduced a system of flexibility to better match individual job seekers with jobs available; and we prioritised resources for those job seekers who were most in need.

Indeed, we helped more than 1.6 million people secure jobs across the employment services portfolio when we were in government. We supported the economy during the global financial crisis, saving an estimated 200,000 jobs. We did not simply revert to punitive measures which fail to address the fundamental problem—a lack of jobs. There are currently 800,000 job seekers in Australia on Job Services Australia's books and only 147,200 vacancies in this country at present. Clearly, there are not enough jobs to go around. So what is the solution?

Work for the Dole will only work for a certain cohort of job seekers. And we know that the government will not be able to place all the job seekers it will require to participate in their Work for the Dole expanded program, with an estimated 150,000 job seekers being required to participate in Work for the Dole in its first year. Rather than create jobs, which the government promised they would do, we are seeing more companies sending their businesses offshore. The government still has no plans for job creation; even members of the government acknowledge this, with the member for Eden-Monaro saying that the government 'desperately needs a jobs plan'. And it does.

It is clear that the government's first budget has been bad for the economy and it has been hurting business and consumer confidence. The government has made massive cuts to industry investment, to innovation, to science and research, and to education and training that will have a lasting impact. The government really does need to turn its attention to job creation, because if they believe, like Labor, that everyone deserves the opportunity of work and the dignity that goes with work, then they need to do more.

The fact is that there will always be some people who do the wrong thing. But it is also a fact that the people who do the wrong thing make up a very small percentage, and they are immensely outnumbered by the vast majority of people who do the right thing. The problem with continually attempting to target a small minority of wrongdoers with blanket legislation is that you also penalise and cause grief for the people who are trying their best to do the right thing.

It is clear that the government needs certain measures contained within this bill to become law for its Request for Tender for Employment Services 2015-2020 Purchasing Arrangements. The government's record in employment services for this term of government so far can only be described as a debacle. The government only introduced this bill on Thursday, 25 September 2014. By its own deadline the request for tender was due in late September. The government was not able to meet its own deadline for this with the request for tender for employment services, worth more than $5 billion, announced on 7 October.

It could not keep its own deadline in relation to the appointment of the Work for the Dole coordinators in time for the commencement of mandatory Work for the Dole on 1 July this year in the expanded sites. The Work for the Dole coordinators were appointed on 19 August this year—more than six weeks late. The government has known for over 12 months that the new contracts need to commence on 1 July 2015 and the steps that need to be taken before that commencement, including the tender process. The request for tender, which closes mid-November, still has many sections within it (subject to legislation) because it has not been able to organise itself and get it together.

In conclusion, Labor does support the 'no show, no pay' provisions in this bill provided that the government is able to give the assurances that we have requested, namely in relation to job seekers being immediately notified of any breach. Labor has concerns about including the 55- to 59 year-olds in an activity test without further analysis. Labor will not support job seekers having no right of appeal to decisions that impact on their payments. Labor will not support the extending of delegations for the secretary to include regulations.

Given all of the above, it is my intention to move amendments that I hope the government will consider supporting. Labor has also moved to have this bill referred to a committee in the Senate for further examination of the issues that I have outlined and any further unintended consequences. The amendments I will move will have the effect of opposing the government's attempts to remove review rights in respect of the payment suspension decisions; opposing the government's attempts to remove the concessions on activity tests currently applying to job seekers aged 55 and over; and opposing the government's attempts to extend the secretary's powers of delegation to regulations or other instruments. Thank you.