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Thursday, 18 October 2018
Page: 7638


Senator HUME (VictoriaDeputy Government Whip in the Senate) (16:24): It's extraordinary, isn't it, when you travel overseas and you see the difference in the standard of living between Australia, our home, and other countries. Sometimes you'll go to a place and you'll think, 'Wow, this is wonderful,' but you scratch the surface and you see underneath it the devastating poverty that not just keeps people down, keeps their standards of living low, but actually affects the quality of their lives so profoundly that you know that they can never transform their lives; they will never get out of that trap.

It is quite moving: it's always when you travel and you come home that you realise just how extraordinarily lucky we are in this country to have the opportunities that we do, that we are such a prosperous and successful society and how important it is to maintain that prosperity and that success. One of the reasons I joined the Liberal Party was the fundamental belief that I hold dear, and that I know my party holds dear, that a civilised society is essentially defined by its ability to look after those who can't look after themselves. We have a responsibility there. Whether the people are disabled or whether they are going through a particularly difficult time for one reason or another—such as a marriage breakdown, a loss of employment, an accident or whatever it might be—when people are unable to look after themselves we must do so. It is so important. Everything that we do, as part of this government, takes that very, very seriously. It is our primary responsibility not just to see our economy grow, thrive and flourish but to make sure that those who cannot look after themselves are looked after.

This is a government that I believe takes poverty extremely seriously. We want all Australian families to enjoy the highest quality of life that we can possibly enable for them. That is why we are so focused on growth and on jobs. When we talk about growth and jobs, they're conceptual ideas. Why are we interested in growth and why are we interested in jobs? It's because jobs and growth provide an improved standard of living not just for those at high incomes and not even just for those at medium incomes but for everybody who can participate. For everybody who can get a job, their standard of living improves. We know that the best way to reduce poverty—just like the best form of welfare, Senator Siewert—is, in fact, a job. Getting people into work is vital in improving the standard of living for Australians and for their families. Getting a job is a transformative moment in every person's life.

In Australia, we have a very comprehensive and targeted welfare system that is there to assist those who are doing it tough. At the same time, we have to be fair to taxpayers as well as to welfare recipients, because we have to understand that every dollar that is spent on welfare is a contribution from the taxpayer. There is no magic pudding; the money has to come from somewhere. We want a fair go for taxpayers. That's why our welfare system needs to be targeted to those who need it, not those who would like to have it. It needs to be targeted, sustainable and in line with community expectations.

In order to help people who are doing it tough in the future, it is the responsibility of the government of today to ensure that the welfare system is sustainable. The Morrison government's economic management is so very important to ensuring that we have a social safety net that we can rely on so that it can continue to provide into the future that support that those most in need depend upon. The government wants a welfare system that supports our most vulnerable and encourages those who are capable of work or study to do so. Most importantly, it reduces intergenerational welfare dependency. We also need to ensure that the system is sustainable into the future.

At the very core of our government's social services agenda is a drive to support people to move from welfare to work and to achieve the positive life outcomes that come not just from the additional income but from the dignity of work itself and from the feeling that you are making a contribution and that that contribution is valued. The government wants to bring about a relentless focus on work and create opportunities for those most vulnerable people whereas the opposition simply want to pay and then walk away. That's not what we're here to do.

The best form of welfare, as I have said—as everybody on this side of the chamber has said, over and over again—is a job. And this government has seen the largest increase in jobs for at least a decade, since the global financial crisis. More than 1.1 million jobs have been created in the last five years alone since the coalition came into power, around 400,000 of those in the last 12 months, and 100,000 of them went to young people. That's the highest rate of youth employment in decades. In fact, I think it might be a record. The female participation rate is higher than it's ever been before. There were 230,000 fewer working-age recipients on income support payments between June 2014 and June 2018. That's 230,000 lives that have been transformed—off the welfare wagon and into work and the dignity that work provides.

The proportion of working-age Australians now dependent on welfare has fallen to 15.1 per cent, and that is the lowest level in 25 years, something I'm particularly proud of. Prominent labour market economist Professor Mark Wooden, who is the director of the Household, Income and Labour Dynamics survey—the HILDA survey, which you may have heard of before—says that growth in wages has far outstripped inflation over the last decade. And over the last decade, to June 2018, wages have in fact risen by 31 per cent whereas inflation has risen by 22 per cent in that same period. That's how we measure increases in the standard of living. Accordingly, Australians have in fact all experienced real gains in their standard of living. The Productivity Commission's recent report on rising inequality, which had a question mark at the end of its title, shows that those who are most at risk of poverty are jobless households. So, employment is the first and major indicator of risk of poverty. That's why this government focuses on the most disadvantaged in our society, to help them change their circumstances, get them into study, get them into training, get them a job and help them transform their lives and the lives of their families.

The government remains focused on jobs growth and committed to a range of programs, such as the very innovative Try, Test and Learn Fund, which supports disadvantaged individuals, families and communities, which ultimately breaks the cycle of intergenerational welfare dependence. The Try, Test and Learn Fund was based on the New Zealand experience, which I think is a fascinating one. It was about early investment into a particularly vulnerable cohort, whether it was unwed teenage mothers, for instance—I'm just pulling an example off the top of my head. You might say that that particular cohort of 300 people will cost the government purse $1 million each over their lifetime. That's what they tend to do, on average. Wouldn't it be better to invest in those people early on—to invest in their study, invest in their training, make sure that they have appropriate living accommodation, make sure that they have appropriate childcare arrangements, to give them the best opportunity to become contributing members of society rather than dependent members of society? I think this is a really fascinating project that they have done in New Zealand, with great effect, and I'm really pleased to see the Australian government taking on these types of programs in Australia as well. They are not without their risks. They're not a panacea. But they can transform lives, even if it's only one life at a time. I think it's a fantastic initiative.

So, we are moving in the right direction, but there is still so much to do. We have a very strong social safety net here in Australia to help those who are doing it tough, and the government is committing to assisting those who need help with that social safety net and encouraging those who can work to do so. We can provide the essential services that Australians rely on only because our economic management is so good. Without that strong economic management we wouldn't be able to afford essential services like Medicare, like the PBS, like the NDIS and like quality education—good, solid economic management, growing the pie, raising living standards for all. We wouldn't be able to afford those essential services.

Australia's tax and transfer system consistently reduces income inequality and alleviates poverty. We have one of the most targeted and efficient welfare transfer systems in the world. It's means tested and has a much greater proportion of payments than in any other country in the OECD. The government spends more than a third of its Commonwealth budget on social services and welfare. The bottom 20 per cent of households by income receive by far the highest amount of social assistance benefits in cash—$517 per week on average—with the highest 20 per cent of households by income receiving by far the least at only $28 per week. So the wellbeing of vulnerable Australians remains a high priority for the Australian government, and this year the Department of Social Services will provide around $2 billion in grants to more than 2,500 organisations that are specifically set up to help our most vulnerable Australians.

One of the leading indicators of poverty is housing, and that is particularly so for housing stresses most commonly seen in sole-parent families. It is an economic indicator of financial security, particularly for women, older women in particular. This government has a plan to improve housing outcomes for Australians across the housing spectrum by unlocking supply of housing, creating the right incentives and improving outcomes for those most in need. We're not talking about first home buyer grants or anything like that. That is not what we are dealing with. We are not talking about giving kids who have just finished university a wad of cash so that they can go and put their deposit down on their first home in Woollahra. This is more important than that. We are talking about things like providing $1.5 billion annually through the National Housing and Homelessness Agreement, the NHHA, to states and territories so that they can provide community and social housing. We have a $1 billion National Housing Infrastructure Facility. There is a First Home Super Saver Scheme, which, rather than a wad of cash given to you by the government, is an incentive whereby first home buyers can invest more in their superannuation in a tax-friendly environment and then access that excess savings above and beyond the retirement savings that are compulsory in that tax-affected vehicle to help them make that first deposit on their first home. There is also a $6 million investment to support the Homes for Homes initiative, which is $10 million to develop social impact investments to help young people most at risk of homelessness. There are some very interesting projects that are also being done at state levels here, and I tip my hat at this point to the Sacred Heart Mission in Victoria, who, in conjunction with the Victorian government, have done the first social impact bond for homeless people to try to lift them out of that poverty trap, lift them out of homelessness, get them into work and give them productive and contributive lives.

Newstart is what Senator Siewert is most concerned about here. As I said, the coalition knows that a job is by far the best form of a welfare. The government wants a sustainable welfare system that supports the most vulnerable but encourages those who are capable to work and study to do so and reduces that intergenerational welfare dependency. Newstart is primarily a payment designed to assist people in transition to the labour market. It is not supposed to be a sustainable lifestyle choice. For this reason, Newstart recipients must earn income from work or other sources before their payment is affected. Around two-thirds of those who are granted Newstart exit income support within 12 months. Over 99 per cent of Newstart recipients receive more than just the base rate of Newstart. Their payments might include the energy supplement. They might include rent assistance for those in the private rental market. They also may get the family tax benefit, if they are raising children. The government remains committed to ensuring that there are social security payments and that they are well targeted and sustainable into the future.

Those opposite have a policy to undertake a root-and-branch review of Newstart and other allowances, but it is clearly a commitment to do exactly nothing. The only difference between Labor and the coalition on Newstart payments is that the coalition are able to maintain the sustainability of the welfare system into the future because of our strong budgetary management and the work that we've done in reforming and rebalancing our tax-transfer system. The Productivity Commission's research paper that I mentioned earlier, Rising inequality? A stocktake of the evidence, was released on 28 August this year. It showed that households across the entire income distribution have in fact benefited greatly from Australia's 27-year period of uninterrupted economic growth.

This 27-year period of uninterrupted economic growth has delivered income growth for the average Australian household in every single income decile and has led to improved living standards. The report also shows that in recent years income inequality has remained relatively stable. One reason for that is our highly targeted tax-transfer system that reduces inequality. The commission found that, over nearly three decades, income inequality had risen only slightly in Australia. In 2015-16, analysis from the ABS, the Survey of income and housing, found that Australia's level of inequality, which is measured by something called the Gini coefficient, was 0.32. Let's not go into the intricacies of the Gini coefficient, but what we can say is that Australia's level of inequality is close to the OECD country average. In fact, most OECD countries have experienced rising income inequality in recent decades at a much faster pace than Australia.

When measuring income inequality using consumption rather than income, the commission found that Australia's overall inequality is around 30 per cent lower than that for disposable household income, and that's because consumption is a far more expansive measure and picks up on other in-kind transfers—things like health, education, childcare subsidies and government housing,—rather than the more basic measures of inequality that we tend to call upon for political convenience. The commission found that the risk of economic disadvantage is, in fact, becoming entrenched. This is one of the government's key concerns. It's particularly pronounced for children who are living in jobless households. For us, that confirms the soundness of the government's approach to addressing poverty and disadvantage and to maximising access to as many opportunities to get out of the welfare trap as possible.

Social security welfare is estimated to cost over $176 billion in 2018-19. That represents more than one in three dollars, or 36 per cent, of all spending by the Australian government. Under Labor, social security and welfare were growing at an average of 6.2 per cent per year—much faster than total tax revenues, which were growing at 3.3 per cent per year. That was clearly an unsustainable position. Under the coalition, social security and welfare have been growing, on average, at 2.9 per cent per year, which is lower than the growth in total tax revenues of 5.3 per cent per year. That is sustainable, and it actually includes expenditure on the NDIS. That's why we are so determined to make sure that our economy continues to grow and that we continue to thrive and to prosper as a nation—because it grows the pie for all. When the pie grows for all, it means standards of living increase and there is more money to spend on essential services like the NDIS, the health system, Medicare, the PBS and the pension. To make sure Australian families, pensioners and those in need get the support that they need when they need it, we have to ensure our welfare system is, most importantly, sustainable.

The ACOSS report on poverty that was referred to by Senator Siewert shows that the rate of relative income poverty in fact declined by more than one percentage point from 14.4 per cent in 2007-08 to 13.2 per cent in 2015-16. While the government welcome that improvement, we understand that the problem with many income poverty measures, including ACOSS's, is that they don't reflect people's actual living standards, and what matters is, in fact, living standards. We know that, over the decade to June 2018, wages have risen by 31 per cent whereas inflation has risen by only 22 per cent. That's a rise in living standards. Accordingly, Australians have experienced real gains in their living standards, reducing poverty. When we talk about reducing poverty, we want to put policies in place that will transform lives and that will allow individuals a chance to grow, experience the dignity of work, thrive and flourish.