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Thursday, 29 November 2012
Page: 10210

Senator BACK (Western AustraliaDeputy Opposition Whip in the Senate) (12:07): Pursuant to order, I present the report of the Education, Employment and Workplace Relations References Committee, The adequacy of the allowance payment system for jobseekers and others, the appropriateness of the allowance payment system as a support into work and the impact of the changing nature of the labour market, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator BACK: I move:

That the Senate take note of the report.

I do wish to speak to the report, but I seek your guidance—I want to make sure that there is adequate time for others to contribute.

The PRESIDENT: We have got until 12:45, so there is time.

Senator BACK: Thank you, Mr President. I thank the secretariat, those who participated in the series of hearings that we did have and those who made submissions, of which there were 78. We heard from witnesses in Melbourne, Canberra and Sydney, and we considered a number of reports prepared by charities and the not-for-profit sector, academics, government, professional bodies and, most importantly, those who are deeply affected by the legislation.

The committee made seven recommendations that I commend to the Senate. If implemented by government, they would improve the allowance payment system, not least by further encouraging those on Newstart to get work if and when they can even if it is temporary work as a first step to longer-term employment. The recommendations relate firstly to increasing the resources available to jobseekers during the first few weeks and months of unemployment. The committee heard evidence of many instances where the length of time from a person losing their employment to when they get back into meaningful employment or its opportunity is critical to their own wellbeing, to the maintenance of their skills and, most importantly, in their presentation to potential employers of their capacity to get back into the workplace.

The second recommendation relates to improving the cooperation between government agencies to appropriately target training and support for mature aged workers. Whilst time does not permit me to go into all of the elements, I do commend the report. I particularly commend the secretariat for the work they have done in preparing a wealth of background information which is well worth reading. There are summaries of reviews that have been undertaken, including the Henry review into this area. I would commend people to read this in some detail. Mature aged workers at the moment fall into a void because very often at the time they lose a job, whether it is due to redundancy or whatever, they actually have sufficient cash and assets, as an older person, to put them above the limit that would immediately allow them access to the sources and resources available. All of us would know that, when an older person does lose their employment, the days, weeks and months between them losing employment and becoming re-employed will dictate their capacity and their ability to get back into the meaningful workplace.

The third recommendation is to develop programs to assist former carers back into the workforce. I particularly commend a witness here in Canberra—a person who was trade skilled and a great contributor to his community—who ceased work to care for aged relatives. Some years later, when his mother passed away, he found great difficulty in getting back into meaningful employment through the processes. The committee actually asked him whether he would go away and give us a template for the best mechanism and process by which a person finding themselves as a carer whose relative or the person for whom they were caring has now passed away, can find their way meaningfully back through the system and towards employment. I recommend that to those who are interested.

The fourth recommendation relates to increasing the income-free threshold for long-term Newstart allowance recipients to enhance incentives to work, and I know there are others who may speak to that. I do nevertheless commend that there needs to be an increase in the income-free threshold to encourage people to actually get back into work.

The next recommendation relates to increasing the working credit for Newstart recipients to the equivalent of three months work at the minimum wage to again create the incentive for those who have lost employment or who are not in employment to actually move in that direction.

Next is reforming governmental processes to enable departing Newstart recipients to remain on departmental systems for one year after they cease receiving payment. We found instances where a person would be receiving payments, they would be in the system and they would then have the offer of employment, but a fear of them falling out of the system may have led them to a decision to not seek that employment, however short term; however temporary. We recommend that the circumstance should be there that a person could actually remain on the books, in a sense, without being a recipient, so that, in the event of them losing that source of employment, they can get back into the system without an unnecessary delay.

The last recommendation is assessing the viability of creating an online calculator to enable allowance recipients to calculate the costs and benefits of work and the impact of work on allowances. I want to acknowledge the effort made by the combined departments in evidence presented to us in Sydney. I thought it was a very collaborative and collegial approach to the questions that we put to them. What came out of it for the committee was an absolute plethora of entitlements that might be due to some people but not to others; of circumstances in which there may be an opportunity which is either denied to them or they do not know about. Of course, I am sure there is also a movement in the staff of Centrelink and in the other agencies, and I think it lends itself to some form of database with online access so that people can participate.

The predominant theme in the evidence to the committee went to the adequacy of allowance payments and, in particular, the Newstart allowance. We received information from those who put in written submissions and from other witnesses about how difficult it was for them to eke out an existence and to gain secure paid employment whilst living on Newstart. We certainly could relate to that. But I would say from my position that there are all sorts of reasons for increases in the cost of living—the carbon tax being one and other expenses which are not brought into account in the consumer price index. I would make the point that the CPI itself is not an adequate indicator in determining the adequacy of these payments for these people. The committee agreed on the whole with the argument that the Newstart allowance does not allow people to live at an acceptable level in the long term. But, of course, it is important to remember that the allowance is not intended to be a long-term solution to unemployment. We hope that Newstart will be a prop so that people who have lost employment or who have not yet gained it will be able to use it on their way back into gainful employment.

We do know that there has been waste and there has been a lack of spending, and that has now come home to roost. We now know that the interest burden alone on the debt in Australia is some $20 million a day, or $600 million a month. It was interesting that an earlier hearing considered the question of moving people from the parental leave back to Newstart, and that was to save the government $700 million over four years. In fact, that $700 million is the equivalent of about one month's interest on the national debt at the moment. It is when we do run up debts of this level that we see the end result.

The committee was concerned to learn that 42 per cent of recipients who commenced Newstart each year do not transition quickly back into the workforce. We believe that the allowance payment system could better encourage a rapid return to employment. The committee focused on how policy makers might make best use of the resources available for job seekers to speed up their movement from Newstart back into employment. The committee also made recommendations that resources be boosted to assist job-seeking for those in what is known as stream 1—most of whom are likely to be relatively newly unemployed people—so that their term of unemployment can be minimised.

This has not been an easy hearing for the committee. I commend my colleagues and I commend the secretariat. I also commend the report and its recommendations both to the Senate and to the wider community as being a bipartisan attempt to come to a resolution on this very difficult and long-term issue in Australia.