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Wednesday, 25 September 2002
Page: 4920

Senator CHERRY (7:14 PM) —A couple of weeks ago, I had the pleasure of meeting someone who is making a difference in the town of Beaudesert. Jim Daynes from Beaudesert Rail told the Senate inquiry into small business what he reckons is needed to get mature age people back into jobs, and I would like to relate his experience to the chamber. Jim made his comments after several businesspeople complained that they could not get qualified tradespeople. Jim pointed out that he has been overwhelmed with them, but his are of the mature age variety.

Beaudesert Rail has completed three Community Jobs Plan projects, and two more are currently under way. Thirty people took part in the first three programs, and 28 of those people now have full-time jobs. That is an extraordinary figure: 93 per cent of participants getting real full-time jobs. Another 22 people who have been long-term unemployed are now taking part in the CJP projects with Beaudesert Rail, and two of them already have been offered full-time jobs.

At a time when employers are complaining that they cannot get skilled tradespeople, Beaudesert Rail got 80 applications from unemployed mature age tradespeople for just 12 positions. When these people get a break, when they get a 19-week paid job with the Community Jobs Plan, their work, as Jim Daynes describes it, is magnificent. He reckons that what people really need is a chance to do some meaningful work and to feel involved in their community, and that is what we reckon too.

Compare this with the Work for the Dole program. Even the name has that stigma about it: it is for `dole bludgers'. It does not even imply that the participants will move beyond benefits. It is a penalty that is applied for being guilty of unemployment, in a policy environment that has become completely devoid of imagination or empathy. Participants in CJP programs do not work for the dole; they work for a living.

While the federal government has been focused on finding new ways to breach unemployed people, the Queensland government has negotiated a training and entitlements conditions order for the Community Jobs Plan. The CJP puts together a practical balance of paid work and on-the-job training, and, unlike Work for the Dole, the CJP participants get the dignity and self-respect that comes from taking home a pay cheque each fortnight as well as from contributing to their local community.

Work for the Dole is based on a harsh philosophy: a belief that people are unemployed because they have some personal defect, that there is something wrong with them as individuals. Because the current government's policy is based on this behavioural model, its solutions are all about individual behaviour as well. That is one reason that the Work for the Dole program only has a 34 per cent outcome rate.

The current government has lost sight of the need to create jobs. It is all very well to take a big stick to job seekers, but the reality is that long-term unemployment is just as high now as it was when this government came to office in 1996. Despite a booming economy, this government has no idea of how to deal with long-term unemployment. Just last week, the Productivity Commission found that the Job Network does not help people find work. The outcomes for people who participated in Intensive Assistance were the same as for people who did not. What greater indictment could there be of an employment program than that it does not actually help people to get jobs?

Programs like the Community Jobs Plan work because they meet people's needs. They give people an opportunity to get back into the work force, to earn real wages and to prove their abilities; and they do it without the stigma of a compulsory program and a derogatory label like Work for the Dole. The Community Jobs Plan treats job seekers like real people who have real aspirations and helps them to build a real future.

The Australian Democrats call on the government to replace the failed Work for the Dole with community based jobs on approved projects at award training wages. There is plenty of useful real work to be done in the community. By reallocating funding from Work for the Dole to real community jobs at award training wages on approved projects, we can create 15,000 new jobs at a net cost of $106 million. That is less than half the amount that the government ceded to tobacco companies earlier this week.

Beaudesert Rail's Community Jobs Plan shows on a small scale what could be achieved with a wider program. People can get real jobs that lead to long-term employment. What is needed is a step back from the ideology of the big stick, and the adoption of a commonsense policy that respects job seekers. People do not want to work for the dole; they want to work for a living.

Tonight I also want to touch on the Senate Community Affairs Committee report tabled earlier today on the Australians Working Together package. The notion that social security recipients have an obligation to seek work in return for benefits has long been part of the Australian social security system, but there have been major changes to social security policy over the last 10 years. In the early 1990s, the obligation to seek work was expanded under the Working Nation program to include activities which would increase people's chances of gaining employment, with a focus on job skills, training and vocational training. The idea of reciprocal obligation meant that the government would do more to create employment and assist unemployed people to get jobs—for example, by expanding labour market programs and introducing wage subsidies—with the argument that greater efforts and obligations could therefore be expected of unemployed people.

One feature of this system was the revamping of penalties to be applied to those in receipt of unemployment benefits if they did not meet or if they breached their obligations. At the same time as this government abolished many of the pre-1996 Intensive Assistance employment programs, it expanded the number and scope of requirements, such as the introduction of mutual obligation activities, Work for the Dole, job seeker diaries and preparing for work agreements.

In 1997, the breach system was again revised, with penalties being applied at a lower rate but for a longer duration. In order to receive unemployment payments, Newstart job seekers must comply with the activity test. Currently, this means that someone must actively look for suitable paid work; register with at least one Job Network member; accept suitable work offers; attend all job interviews; attend Centrelink offices when requested to do so; agree to attend approved training courses or programs; not leave a job, training course or program without sufficient reason; correctly advise Centrelink of any income earned; enter into and comply with a preparing for work agreement; lodge fortnightly forms; apply for up to 10 jobs per fortnight; participate in a mutual obligation activity after a certain amount of time on benefits; have certificates signed by employers approached about jobs, if required; and complete a job seeker's diary with details of job search efforts.

People who fail to comply with any activity test requirement without a reasonable excuse are penalised by having their benefits reduced. In June 2002, for an unemployed single adult receiving $185 per week, these amounted to reductions of $863 for the first breach, $1,151 for the second breach and $1,476 for the third. There are also separate breach penalties for administrative breaches such as failing to attend an interview at Centrelink. These entail a reduction in payments of 16 per cent for 13 weeks, equivalent to $383.

However, the difference between administrative and activity breaches has become blurred due to the practice at some Centrelink offices of including administrative requirements in preparing for work agreements, which effectively turns administrative breaches into activity test breaches, as was recently highlighted by ACOSS. Research by ACOSS and the National Welfare Rights Network has shown that the number of breaches has risen dramatically over the last few years. For the full year 2000-01, there were 386,946 breaches—294,747 activity test breaches and 92,199 administrative breaches—as presented to the Senate Community Affairs Committee.

Studies by ACOSS and other agencies report that the impact of breaching is falling most heavily on the most disadvantaged job seekers. Hanover Welfare Services, a welfare agency which works with homeless people in Melbourne, found that almost one-third of its clients had been breached in the previous 12 months. Similarly, the Salvation Army found that around one-quarter of its emergency relief clients had been breached. Even more concerning, it found that 11 per cent, or one in nine people, said that they had to turn to crime to survive.

The Independent Review of Breaches and Penalties in the Social Security System, the Pearce review, reported in March 2002, finding:

While the current system often functions in an appropriate manner, there are many occasions on which its operation in relation to particular job seekers can be reasonably described as arbitrary, unfair or excessively harsh. There are also many occasions when it diminishes people's capacity and opportunity to continue seeking work and become less dependent on social security.

The Pearce report also concluded that breaches were imposed too frequently and that penalties for breaches were often too severe and caused unnecessary and unjustifiable hardship. The review team made 36 recommendations aimed at improving the penalty and breach provisions. Recommendation 25 proposed three broad measures to reduce the level of financial penalties associated with breaching. First, all penalties should be fully recoverable if the job seeker takes reasonable steps to comply with the obligation in question not later than four weeks after the imposition of the breach. Second, the duration of penalties should not exceed eight weeks and the rate of reduction in allowance should not exceed 25 per cent, except in the case of persistent serious breaches. Third, if penalties are not made fully recoverable as recommended above, the duration of penalties should not exceed eight weeks and the rate of reduction should not exceed 15 per cent, except in the case of persistent serious breaches. The last proposal would set an upper limit of $221 on the penalty for an activity test breach for a single adult.

The government responded to the report indicating that it had already agreed to, or was planning to implement, many of the recommendations, such as suspension of allowance in the first instance to encourage the recipient to attend Centrelink. However, the Minister for Family and Community Services rejected other recommendations, including those suggesting that the level of penalties be reduced. Her rationale for rejecting these was that a softening of the penalty regime does not reflect the wider community's expectations. The minister fails to acknowledge that the penalty levels operate to place many people in undue hardship. (Time expired) I seek leave to have the rest of my speech incorporated in Hansard.

Leave granted.

The document read as follows—

Nor can the Minister continue to assert that the present harsh punitive breaching regime is one that is expected by the community. Research by the Brotherhood of St Lawrence entitled “The community expects” conducted in June 2002 clearly dispels that notion.

The Brotherhood of St Laurence study clearly showed that a majority of those surveyed did not think the current penalties for activity test breaches were fair. The survey found:

· Almost two-thirds of people believed that the current penalties for a first breach were unfair.

· The median total penalties proposed by the community were a total of $20 for first breach, $50 for a second breach and $75 for a third;

· One in four people thought there should be no penalty whatsoever for a first breach;

· Six out of ten people believed the total penalty for a second breach should be $50 or less;

· Six out of ten people believed the total penalty for a third breach should be $100 or less;

· Around ninety-five per cent of respondents proposed a level for breach penalties lower than the current level for first, second and third breaches.

The Brotherhood of St Laurence survey results suggest that a majority of the Australian community believes that, while people receiving unemployment payments should incur some financial penalty for not complying with their requirements, the current levels of penalties are unfair.

The Australian Democrats referred this matter to committee because we know only too well the devastating social and economic outcome of breaching. We are alarmed at the determined effort by this Government to place vulnerable and disadvantaged sole parents directly in the firing line of breaching.

Sole Parents already participate in employment and training more than any other group of income support recipients, including Newstart allowance recipients. The average sole parent is a woman in her thirties who, having lost the support of a partner, receives parenting payment for less than 3 years.

Sole Parents already play a valuable role in society as parents, and are best placed to determine when their parenting responsibilities will allow them to enter or return to the workforce. The legislation proposed by the Government does not exempt parents of children with cystic fibrosis or juvenile diabetes since these are not `profound disabilities' specified by the legislation.

The Government wants to force parents of children such as these to leave their children unattended, abandon their parental responsibilities and travel for periods of up to 1½ hours to undertake specified activities. When these parents decide that their parenting responsibilities prevent them from doing so, they will be breached.

The Salvation Army, Hanover and other agencies know, as we do, that in imposing punitive financial breaching on this group, the Government will be placing their children into greater poverty, and forcing many into homelessness.

The Democrats accept that for unemployed Australians there is a tension between obliging a person to participate in employment, training or an activity that will facilitate their re-entry to the workforce, and a financial disincentive for failing to do so.

We submit that the present regime, as reported by the Pearce Report and this committee, is inappropriate, unjust and unduly harsh. Denying people accommodation, food and financial assistance does not help them get a job.

We call on the Government to implement in full the recommendations of this committee and in particular those of the Independent Review of Breaches in the Social Security System to unemployed Australians, before any further attempt is made to extend the current regime to other income support recipients.