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Thursday, 12 December 2002
Page: 7972


Senator VANSTONE (Minister for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women) (7:18 PM) —I think it is important to put a couple of things on the record. The government by its actions over the last 18 months or two years has made it very clear that it does share the concern of other people in the community about the potential impact of breaching on vulnerable job seekers. But there are a few other things that need to be put on record too. When Labor was in government and Working Nation was in operation, the breach penalties—in equivalent 2002 dollars, not in nominal dollars—started at around $340 for the first administrative or activity test breach. The penalty was $2,355 for the third activity test breach. Subsequent penalty periods within three years just kept going up by six weeks at a time. For the long-term unemployed—that is 18 months and over, many of them arguably the most vulnerable job seekers—the first activity test breach penalty was over $1,000 and the third was an incredible $3,030.

New breaching penalties were introduced in 1997 with the full support of the then and current opposition. Our maximum administrative breach penalty is usually less than $390, with the average, I am told, at $360. Our activity test breaches reach a maximum of $1,500 for the third breach of a person's obligations, with the average less than $1,350. Let me go back to that point: for the long-term unemployed under Working Nation, the first activity test breach was $1,000 and the third was $3,000. The penalty for others was $2,355. What we are now looking at are maximum penalties of half of those which were applied to long-term unemployed, and significantly less than $2,355— and if it were not 7.20 p.m. I would give you the percentage. We have shifted from $2,355 down to $1,500, with the agreement of the opposition. Just in case anyone was under the impression that the Liberal-National Party came to government and increased penalties, I thought I would correct that misunderstanding for them.

It is my view that Labor and the Democrats would quite clearly like us to go even softer on compliance, having agreed, as the Democrats did, to the compliance regime that is now in place. I hear no mention of that. There is no mention of, `Well, we agreed to this but we now think we're wrong.' But that is okay. We stand by the proposition that I put last time. We have done a tremendous amount over the last 18 months and we believe that that should be given the opportunity to have more time in place and that we should have a proper evaluation before we go even further. To name a couple of the things we have done, we introduced the third breach alert in June 2001; we had an internal review at Centrelink in October 2001 resulting in better training and tighter procedures; we have got new decision making tools; we have got multipurpose contacts; and we have introduced personal advisers, who started in September this year. That work was acknowledged by the Ombudsman in his report. Again, I did not hear much mention of that from the opposition or the Democrats. It is that work that has resulted in breach numbers falling by 30 per cent in 2001-02 compared with the previous year. About 13 per cent of job seekers now would be breached in one year compared to 18 per cent in the previous year.

We have already implemented most of the Pearce recommendations as they relate to my portfolio. Nineteen have been implemented from 26 recommendations that are relevant to this portfolio. I do have some concern when people say, `Pearce has been ignored; no-one has done what Pearce wanted.' The plain facts are that we announced most of those changes before the Pearce report was put out. I know that has put out of joint the noses of some of the people who were involved in the Pearce report. It was not done to put their noses out of joint; we just did not see any reason why we should wait for other people to tell us what to do if we were already prepared to do it.

We have significantly reduced penalties. In July this year we more than halved the penalty for many breaches. Most people will now get an administrative breach if they fail to attend a Centrelink interview. The July changes also allow Centrelink to suspend payment rather than impose a breach if a job seeker cannot be contacted. That means that Centrelink talks to every job seeker before a breach is imposed and before payment is restored. That provides much better protection for vulnerable job seekers and indeed— this is a happy accident—it provides a deterrent for non-genuine job seekers. There are broader waiver provisions for recipients of Newstart. They can have a breach waived by going to the Personal Support Program or some forms of training. That is in addition to the clean slate provisions if Newstart customers start on Work for the Dole.

The July changes introduced a whole new approach to breaching. The early evidence is very positive and shows that it is working. I have previously mentioned a small sample which indicated that over 25 per cent of job seekers had not been breached four weeks after being suspended and that around 25 per cent had their payments cancelled. We believe that needs more analysis before we can draw any firm conclusions, but it certainly very positively suggests that the policy is doing what we want it to do.

Centrelink has now provided new data on breach numbers since the July changes, indicating that total breaches fell by more than 35 per cent during the July-September 2002 quarter compared with the March-June 2002 quarter. I draw attention to those remarks specifically because I might have, in earlier remarks in this debate, indicated that it was a quarter to quarter comparison whereas there are different quarters being compared there. If I did make that mistake, I correct it now. They are now down by more than half compared with the July-September 2001 quarter. Clearly, we have to make a full assessment of the impact of these changes before any further changes are made. That is why the government will strenuously oppose and in the end—I need to make this clear—will not accept these amendments.