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Wednesday, 18 June 2014
Page: 6396


Mr ANDREWS (MenziesMinister for Social Services) (09:13): I move:

That this bill be now read a second time.

This bill introduces a package of measures from the 2014 budget in the Social Services portfolio.

The 2014 budget is a key part of the government's Economic Action Strategy to build a strong, prosperous economy and a safe, secure Australia.

The government's welfare reforms encompassed in the budget are aimed at increasing everyone's ability to contribute to the economy—everyone who can contribute, should contribute.

The government will continue to provide assistance for families, seniors, people with disability, carers and those most in need. The 2014 budget includes $146 billion of welfare spending—or 35 per cent of total budget expenditure. This includes pensions, family payments, unemployment benefits and childcare support.

However, our population is ageing, and government spending has been growing faster than the economy. This is placing greater pressure on our welfare system. We want government assistance to be targeted towards supporting the most vulnerable Australians, while encouraging those who are able to work or study, to do so.

Firm and decisive action is required to put the budget back onto a secure and sustainable footing.

Budget measures

Seniors supplement and energy supplement

To help ensure that payments to senior Australians remain targeted to those who need them the most, the first budget measure in the bill will cease the seniors supplement, currently received by holders of the Commonwealth Seniors Health Card (or the Veterans' Affairs Gold Card) after the June 2014 payment.

However, other benefits will continue to be available to cardholders, including discounts on medicines under the Pharmaceutical Benefits Scheme, health safety net thresholds, and lower fees on medical services.

Recognising the government's commitment to abolish the carbon tax, while keeping in place the associated payment increases, this bill will rename the former clean energy supplement as the energy supplement, and maintain it at current levels from 1 July 2014 by permanently removing indexation of the supplement.

The new energy supplement will be available to people who formerly received the clean energy supplement in association with their main income support payment, family payment or veterans affairs payment, or through being a holder of the Commonwealth seniors health card or an eligible holder of the gold card.

Indexation and rates

Several changes and pauses to indexation for Australian government payments will be implemented. These measures will help reduce our debt, but pausing indexation will not reduce payments.

These measures include pausing indexation of the income and asset-free areas for all working age allowances (other than student payments) and for parenting payment single for three years from 1 July 2014.

Family tax benefit income thresholds (for the maximum rate of family tax benefit part A and the lower income earner threshold for family tax benefit part B) will stay at current levels for three years from 1 July 2014.

The bill will also ensure parenting payment single is indexed only against the consumer price index from 20 September 2014.

Disability support pension

The bill will also introduce changes to help young people with disability to enter the workforce if they are able to do so.

From 1 July 2014, certain disability support pension recipients aged under 35 will undertake compulsory work focused activities, such as a program with an employment service provider, work experience, or education and training, to help increase their chances of finding and keeping a job.

A targeted review will also be undertaken of disability support pension recipients aged under 35 who originally accessed the payment under less rigorous impairment tables in operation between 2008 and 2011. Recipients will have their level of impairment reassessed against the current impairment tables, and will also have their work capacity reassessed.

People with a manifest disability or with a work capacity of zero to seven hours a week will not be reviewed under this measure. Recipients assessed as having an ability to work at least eight hours a week will be provided with the support needed to allow them to develop their work capacity, while still receiving the disability support pension.

Workforce age and student changes

As part of a package of changes to simplify the social security system, and strengthen the incentives for young unemployed people to participate in education, training and employment, the bill will apply the ordinary waiting period of seven days for all working age payments from 1 October 2014.

A further measure will ensure that, while a student can currently continue to receive payment even while they are overseas on holiday, students will continue to receive payments while overseas, from 1 October 2014, only in certain circumstances such as when studying or in a family emergency.

Family payment reform

Several reforms were announced in the budget to improve the sustainability of family payments, while ensuring they continue to support those most in need of assistance.

The government will continue to provide payment assistance to families to supplement their incomes. In 2014-15, the government will provide around $19 billion in family tax benefit. However, the payment should provide assistance to families who need it most, and encourage everyone who can work, to do so.

Amendments in this bill, effective from 1 July 2014, will maintain the standard payment rates of family tax benefit parts A and B at current levels for two years until 30 June 2016.

Social and Community Services Pay Equity Special Account

The bill will also make a non-budget amendment to add the Western Australian Industrial Relations Commission decision of 29 August 2013 as a pay equity decision under the Social and Community Services Pay Equity Special Account Act 2012. This amendment will allow payment of Commonwealth supplementation to service providers affected by that decision.

Conclusion

Our welfare system must be sustainable and it must be fair. It needs to provide a safety net, whilst ensuring we are delivering a work-ready, not a welfare-ready, nation.

Our welfare system is complicated and costly and, in the budget measures introduced by this bill, we begin the work of making it strong for the future. I commend the bill to the House.

Debate adjourned.