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Tuesday, 26 May 1987
Page: 3353

Mr BLUNT(9.18) —I am glad I was in the House to hear the speech of the honourable member for Eden-Monaro (Mr Snow). I make the suggestion that he obtain a departmental briefing before he speaks on a social security Bill again. I was absolutely astounded to hear what he considers to be the effective integration of the tax and the social security systems. The Minister for Social Security (Mr Howe) is trying to interject. Let me tell the Minister what the honourable member for Eden-Monaro thinks that the integration of the tax and the social security systems is. He thinks it is the ID card. I suggest that if the Minister wants to get his back benchers into the chamber to support the legislation-and I note from the speakers list tonight that they are not too keen to speak-he might at least tell them what social security policy is all about; that is, if he has some knowledge of a coherent policy himself. Integration of tax and social security is not the ID card, as he well knows. It is the interface of the withdrawal of benefits and the imposition of the marginal income tax rates. It would be a good idea if the Minister had his back bench briefed.

The National Party of Australia does not oppose the Social Security and Veterans' Entitlements Amendment Bill 1987. We believe that some of the measures contained within it are long overdue. Some of the measures are ill-considered. We earnestly hope that some of the measures contained within it will work. We are quite sceptical about whether some of them will work. We are concerned once again that this Government still does not have a consistent, coherent, comprehensive social security policy. After over four years in office we are still seeing piecemeal legislation, ad hoc amendments and bit-by-bit changes to the regulations and rules affecting social security in Australia. There is an ingrained reluctance on the part of this Government to address the problem of overpayment and fraud. Time and again the Government has attempted to convince the Australian people that it is fair dinkum about doing something about social security rip-offs. But again, when we examine what it proposes to do, we find it wanting. We find that it is more concerned with the public relations aspects than it is with effectively introducing a policy which will make it tougher for the cheats, the rip-off merchants and the thieves who are preying on the honest taxpayer in Australia at present.

Let me highlight one issue about which the Government has made great play in its mini-Budget changes. It said that it will implement a postponement of eligibility for unemployment benefit for people who voluntarily leave employment. The paper circulated by the Minister for Social Security following the mini-Budget states:

The minimum postponement period for voluntary job leavers to be increased-from July 1987, people who leave a job voluntarily, who are dismissed for misconduct or who fail the work test will have their unemployment benefit payments postponed by two weeks, increasing by a further two weeks for each subsequent occurrence in any three-year period to a maximum of 12 weeks. Thus, for example, three such occurrences within three years would mean a wait on the third occasion of six weeks for benefit payments.

That sounds quite reasonable, but some people would say that is not tough enough. I note that my colleague the honourable member for Barker (Mr Porter) highlighted that the waiting period for people who for some reason are forced to leave employment is longer than the period for people who voluntarily give up a job. I do not understand the inconsistency of that. Perhaps more importantly, it is appropriate to look at what the Social Security Act says in terms of eligibility for people who leave employment voluntarily or who are dismissed for misconduct. Section 120 says that the unemployment benefit is not payable in certain cases. It states that it is not payable if:

(a) a person's unemployment is due, either directly or indirectly, to a voluntary act of the person which was without sufficient reason;

that is, someone quits the job because he does not like it. The section continues:

(b) a person's unemployment is due to his misconduct as a worker;

It further states:

(2) In the case to which paragraph (1) (a), (b), (c)-

the ones to which I referred-

applies, the period in respect of which an unemployment benefit is not payable shall be not less than 2 weeks and shall not be more than 12 weeks.

That is what the Act says. The Government, in an attempt to convince the Australian people that it will do something about cheats and rip-off merchants, with great fanfare, waltzes in here with a mini-Budget, dresses it up differently and says: `Two weeks for the first time, another two weeks for the second time, and another two weeks for the third time', so people can end up waiting six weeks. The Act says now `up to 12 weeks'. What is the big deal? How fair dinkum is the Government? It is just another con job. All that has happened is that the discretion exists within the Act for the secretary or the officer in the regional office to determine what the delay will be-and might I add that quite often there is no delay. One can walk in and say: `I am unemployed', and the benefit is immediately reinstated. All that has happened is that the discretion has been reduced and there is a so-called two weeks waiting period followed by another two weeks, compounding up to six weeks, with a total of 12 weeks over three years. That is the situation as it exists at present. There has been no change except that an arbitrary trigger has been introduced.

That is so typical of this Government. It would have us believe that it is trying to stop fraud and overpayment, that it is trying to stop the cheats and the rip-off merchants. But that is exactly what is going on. It takes a provision, it fiddles around the edges, but there is no substantial change to it. This Government is not fair dinkum about doing anything about social security fraud and overpayment. It has progressively, over its four years in office, undermined the sanctions that exist within the social security system and has given an open door policy to people who want to rip off the system. It has reduced the number of field officers. It does not prosecute anybody. It ran an amnesty. It said: `If you are cheating the system, if you are getting a benefit to which you are not entitled, come in and tell us about it. We'll forgive you and all will be okay in the future. But if you don't come in and confess, if we catch you after that, we will throw the book at you.' Its record on prosecutions is absolutely appalling. In an entire year this Government did not even manage to prosecute 2,000 cheats on the social security system. Yet it would have us believe that it will, with the so-called hit squads it has wandering around the country, catch and presumably prosecute some 10,000 rip-off merchants. It took the Government a year but it did not even prosecute 2,000. It is now trying to have us believe that it will catch and prosecute 10,000. I do not believe it, and I will be interested to see the statistics for the end of this financial year. I know exactly what the Government will say. It is not fair dinkum. It is not committed to doing it and nothing will happen.

The Labor Party, in all its years in opposition, lived and even believed its own rhetoric that it was the party which understood welfare and the party which would help people. When it got into office it did not have a policy. It did not know where it was going to go. It did not know what it was going to do. It came in and thought: `What can we do? How can we start changing the system?'. It went about it in a piecemeal way. The first thing we saw was the introduction of the assets test. The first assets test was an unmitigated disaster. It was followed by versions 2, 3, 4 and, now, 5. It still does not work with any equity and the National Party is totally committed to abolishing it.

At some time in the future we will see a Bill which imposes an assets test-it is not in this legislation-on unemployment benefit. It will be triggered at the age of 25 which is a fairly arbitrary age. One could pick 24 or 26, but 25 is the age that someone grabbed out of the computer studies which said that over the age of 25 there may be some assets to test but that under 25 it is unlikely. Of course, the Government did not recognise that, because of the inadequacy of its policy, it actually had been paying unemployment benefit to self-employed people. Those self-employed people had low or non-existent incomes, but they may have had substantial assets. But because of the way the Act is constructed at present the benefit is invariably paid to the spouse. Because of the state of the rural economy many thousands of farming families in Australia are maintained through unemployment benefit. Under the assets test that this Government is proposing, if one has a young spouse under 25 it will not apply; if one has a spouse over 25 it will apply. Where is the consistency, the equity, the fairness and the logic of that sort of social security policy? It is absolutely stupid. One of the fundamental things that we need to do in having a social security policy is to make sure that it is consistent, simple and equitable.

Nothing this Government has done in the area of social security in over four years that it has been on the treasury bench has done anything to introduce fairness, consistency, equity or simplicity to the social security system. We have the biggest mess this country has ever seen in social welfare right now after more than four years of Labor administration. In fact, the Government admitted that it did not have a social security policy when it established the social security review. Basically that review was told: `Go out and work out a social security policy for us and come back in a hurry because we want to implement it because we don't know where we are going'. To date, we do not know where we are. The Minister has never introduced a statement which outlines his intentions for welfare reform. There are consistently inconsistent statements between the Minister and the Prime Minister (Mr Hawke) about the direction of welfare policy. There is continual brawling within Cabinet about what priorities will be attached to expenditure within this Government, and time and again we see last minute changes in the social security area which lead to the inconsistencies that I have highlighted.

The National Party, supported by the Liberal Party, moves the following amendment which we believe sums up the problems that this Government has encountered in social security:

That all words after `That' be omitted with a view to substituting the following words:

`whilst not declining to give the Bill a second reading, the House is of the opinion that the Government has failed-

(1) to undertake necessary and major reform of the unemployment benefit and welfare system in Australia to limit fraud and overpayment and to implement a work for unemployment benefit scheme, and

(2) integrate effectively the social security and taxation systems to overcome poverty traps, restore incentive and break the cycle of dependency'.

The Government understands the need to make those changes but it does not have the political courage or perhaps the intellectual capacity to do it. Instead of a work for unemployment benefit scheme we see a whole series of activity tests. The Minister knows that there is a need to ensure that people do not fall into sloth and indolence on unemployment benefit. He knows the psychological problems of being unemployed. No one more than the Government would know the consequences of its policies for the unemployed. When it came to power the average time of unemployment was about 30 weeks; it now has gone to 60 weeks. There were about 124,000 long term unemployed; there are now about 180,000 long term unemployed. This Government's policies for employment and for the unemployed in this country have been abject failures. As I said, we see a whole series of measures which are designed to force people to do something, but which do not address the problem of working for the unemployment benefit. The reason the Government will not address-

Mr Cohen —Why didn't you do it when you were in government? You were there for seven years.

Mr BLUNT —I invite the Minister for Arts, Heritage and Environment, whose microphone may be on now, to look at the handbook and see when I was elected.

Mr Cohen —I am talking about the coalition.

Mr BLUNT —I do not care what the Minister is talking about. The fact of the matter is that the Government has failed in the area in which it claims to have some expertise. We have a whole series of activity tests and reporting to the Commonwealth Employment Service to try to make sure that people do not cheat on unemployment benefits. The simple answer is to require them to do something for their benefits; to restore the work ethic; to teach young people that there is no such thing as a free lunch; to build self-confidence; to increase self-esteem; to remove the stigma of unemployment; to bring people back into the work force; to improve their employment chances by giving them something to do; to do something to give Australian taxpayers confidence in the system; and to do away with the stigma that currently applies to this Government, which is known increasingly as the `Hawke handout Government'. The Minister for Social Security (Mr Howe) is known as the chief dole operator who hands out money to anyone who will stand up and ask for it.

Mr Howe —Mr Deputy Speaker, on a point of order, I think that the last comment might be withdrawn. I think it reflects on another member and I would like it withdrawn.

Mr BLUNT —I withdraw. Our amendment addresses the problem that the Government has created for itself by having a very lenient and extremely generous social security policy without any sanctions applied to it. The introduction of a work for unemployment benefit scheme would go some way to fixing the problem this Government created by not enforcing the work test and not having effective liaison between the Department of Social Security and the CES.

Our amendment also highlights the Government's failure to do anything to integrate the social security system and the tax system. Many Government members do not understand what that is about. I will explain by way of example what it really means to people on unemployment benefits. Only the other day I spoke to a supporting parent with two dependent children who was receiving a benefit and working casually as a teacher. I will explain her circumstances and then speak about the significance of the Government's hypocritical approach to poverty traps in a moment. By working one or two days a week over a period of months this person had earned $901; the tax on that was $309, so the net benefit to her was $592. The Department of Social Security, as a result of assessing her circumstances, reduced her pension by $524.55. A couple of days work a week over a period of months gave her a net income of $68.45 after tax and after reduction of her social security benefit.

We hear frequently from Government members in this House about the need to restore incentive in the social security system. Well, $68.45 is not much incentive. The effective marginal tax rate for that person is absolutely horrific. That is not the end of it. She then lost concessions available to her for rates and other concessions because she had gone below the trigger point for them. In 1985 the Government introduced an amendment which proposed to do something to alleviate what is known technically as poverty traps. It was introduced 12 months in advance of when it was to be brought into effect. It was then deferred by six months and it is yet to come into effect. In that time the Government has reduced the marginal income tax rates applying to wage and salary earners in Australia. What sort of priority, consistency and humanity does that indicate on the part of this Government?

We also hear this Government talking a lot about the need to encourage people to undertake training to get back into the work force. The Government introduced what it describes as a $250 administration charge or tertiary education fee. There is a provision which says that, if one is receiving social security benefits, one can obtain an exemption. However, I will tell the House about another case, involving a woman who wants to complete her training as a teacher to give her an opportunity to get back into the work force. Her husband is unemployed and she is an unemployed student with two dependent children. Because the benefit is paid on the family rate to the husband the Government says that she cannot obtain an exemption from the $250 tertiary education fee because the benefit is not paid to her in her own right; the benefit is paid to the husband in respect of himself, his wife and the two children. This Government's incredibly tight policy-incredibly inequitable policy-says that that woman cannot have the exemption from the $250 administration charge. How fair dinkum is the Government about getting that woman some extra training and extra skills so that she can get back into the work force?

Today I received a telephone call from a person from Mount Morgan who wants to get back into the work force and wants to borrow some money to set up his own business. He asked the Department of Social Security whether it would reduce his unemployment benefits level while he gradually got back into the work force as he tried to give his business a go. Under this Government's policy that cannot be done. The Government introduced the national employment and training system on a trial basis in the western suburbs of Sydney, but it has done nothing to provide an effective taper to get people back into the work force. This Government does not really know where it is going. Only a couple of weeks before the mini-Budget the Prime Minister (Mr Hawke) circulated in his own electorate of Wills a pamphlet stating that there would be no cutback in unemployment benefits for those under 18 years of age. That is what the Prime Minister said. This shows how far in advance the Government works out its social security policy. A couple of weeks before the Treasurer came into this Parliament and announced a mini-Budget which does away with unemployment benefits for those under 18 years, the Prime Minister, in a pamphlet circulated in his electorate to promote himself, his policies and the policies of his Government, said that there would be no cutback in unemployment benefits for those under 18 years of age. If that is not a last minute ad hoc change to the system, I do not know what is.

While the National Party of Australia does not oppose this legislation, it believes that it has been poorly considered. Some of the consequences of the changes which have been introduced and which in many cases are long overdue will mean that some people will find themselves in pretty difficult circumstances and that there will be a need for extra emergency cash relief. We have seen the hassles that this Government has had in the past with State governments about the provision of emergency cash relief in the administration of that scheme, but where have we seen any comment from this Government about the possible and, might I add, probable increase in the demand for that sort of relief? What funding provisions have been made by the Government to ensure that emergency relief is available to those people who, because of changes introduced by the Government in this Bill and in future legislation, will find themselves caught without any cash, without any other option and in need of help? Where is the budgetary allocation for that?

As I have said, this Government continues to operate on the basis of an ad hoc social security policy. We see one change after another change followed by more changes to compensate for the changes that were made in the first place, but overall we see no effective measure to stop fraud and overpayments and to introduce simplicity, consistency and equity into the social security system. Not only that; the Government has also lost control of the Department of Social Security. Even today Department of Social Security offices were closed because work bans over the withdrawal of flexitime had shut most of them. They were shut today and will be shut on Wednesday afternoon when the telephones are not answered--

Mr DEPUTY SPEAKER (Mr Ruddock) —Order! The honourable member's time has expired. Is the amendment seconded?

Mr Tim Fischer —I second the amendment and reserve my right to speak.