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Wednesday, 2 December 2015
Page: 9661


Senator SCULLION (Northern TerritoryMinister for Indigenous Affairs and Leader of The Nationals in the Senate) (15:39): I present the explanatory memoranda and I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

SOCIAL SECURITY LEGISLATION AMENDMENT (COMMUNITY DEVELOPMENT PROGRAM) BILL 2015

Mr President,

Every time I sit down with leaders in remote communities, they say, 'can't the Government fix things so our people have incentives to work and earn their own money.'

It's a good question and one that we will answer by passing this Bill.

Remote community leaders are telling us that welfare reliance is becoming the norm and is the primary driver of social dysfunction in their communities.

In remote communities around one in five adults of workforce age is in receipt of welfare. People in remote communities often move onto welfare payments at a young age and stay on welfare for extended periods - sometimes for life.

We know that long-term welfare reliance on this scale is detrimental to individuals. In turn, it impacts on health, community safety and crime. Andrew Forrest also highlighted this issue in his recent Creating Parity report stating that 'Nothing destroys family and traditional culture quicker than despondency, dependency and poor lifestyles'.

But, today we have the chance to help community leaders lift people out of the welfare trap: to create the right incentives for communities to work with.

Community Development Programme

The Community Development Programme (CDP), introduced on 1 July 2015, responds to the problem of welfare reliance.

It assists people to gain the skills, experience and commitment necessary to find paid work where it exists and enables them to contribute meaningfully to their community in the absence of paid work, through participation in up to 25 hours of CDP activities five days a week.

There is now a broader, more flexible range of CDP activities that people can participate in to meet their activity requirements. Activities are now useful to the community and job seekers and can include: vocational training; work preparation and foundation skills such as language, literacy and numeracy training and obtaining a driver's licence; programmes to address pre-employment barriers such as drug and alcohol problems; and community activities such as volunteering at the school canteen and supporting older people.

CDP also includes employment incentives and support to establish small businesses.

These incentives include $25 million per year to support the development expansion of remote organisations; support to provide hosted placements which provides job seekers real workplace experience; and support for employers to encourage them to employ job seekers.

CDP is already showing steady progress. We have seen a 50 per cent increase in job seekers placed into activities since the start of CDP with around 66 per cent of eligible job seekers now placed in activities.

Problems

Notwithstanding these changes, the evidence shows that further reforms to the income support system is required for remote communities to drive the behavioural changes needed to get people active, off welfare and into work.

Feedback is regularly received from CDP providers that current compliance arrangements are failing them and their communities.

They argue that current incentives need to be strengthened to support individuals to move off income support and into work.

This is a particular issue given the nature of the job market in remote Australia, in which intermittent casual or part-time work is often the only type of work available. We need to make sure the social security system is geared to encourage job seekers to readily take up this work.

Additionally, the national compliance framework is designed to re-engage job seekers in their mutual obligations and is simply less effective when applied in remote Australia.

Community leaders and jobs providers often remind me of the positive elements of the previous Community Development Employment Project (CDEP) in remote Australia.

One correspondent reflected, and I quote, "Non-compliance activities and attendance were quickly resolved within a day, engaging community participants quickly back into their activity. This can now take over 2 to 8 weeks, penalties through Centrelink are causing disengagement, which leads to alcohol, drugs, family violence, children non-attendance at school, crime and so on".

As that correspondent points out, current payment and compliance arrangements are complex, and lack both agility for those trying to apply the rules and immediacy for those on the receiving end.

Consider that a five week period can occur between when a financial penalty is imposed for not attending work and the penalty hits the hip pocket.

As a result, remote job seekers do not get the link between attending activities and receiving income support. Young people in particular don't see the link between Centrelink money and giving back to community through activity.

This undermines the effectiveness of the compliance system

And it's complex and confusing for individuals.

Delays in applying compliance lead to 'flood and famine', where job seekers' income can vary from fortnight to fortnight with little understanding of the reasons behind the variations. Obviously, this makes family and community budgeting harder.

Bill

This Bill gives effect to measures that are designed to address these problems. The Bill creates a new income support payment and compliance arrangements for individuals living in remote Australia who are eligible for activity tested income support payments including Newstart, Youth Allowance, Parenting Payment, Disability Support Pension and Special Benefit.

Payment and activity arrangements

Individuals on remote income support payments will no longer be subject to the National Job Seeker Compliance Framework. Instead, a simpler, more tailored compliance framework will apply.

Eligibility for income support, the level of income support and the level of activity requirements is unchanged.

Responsibility for receiving, processing and determining claims for a job seeker's payment as well as assessing eligibility and capacity to work will remain with the Department of Human Services (DHS). DHS will also continue to fully administer other payments such as Family Tax Benefit and income management.

Income support payments for remote job seekers, however, will be made regularly every week by CDP providers on the ground instead of fortnightly at arm's length by Centrelink.

CDP providers will be permanently based in remote regions and be accessible and able to support the nature of the payments.

Job seeker compliance arrangements

CDP providers will be able to apply an immediate financial penalty to each job seeker for every day they do not attend activities.

I will work with communities and CDP providers to ensure the detailed arrangements are appropriate before implementation via a disallowable instrument.

This will enable the application of penalties on a weekly basis, with the maximum daily penalty equivalent to a day's remote income support payment. There will be greater flexibility within this maximum penalty though. Penalties will not be limited to only a full day but instead will allow providers to reduce an hour's payment for an hour's non-attendance - lessening the financial burden on the job seeker while maintaining the behavioural impact.

This will strengthen the link between attending activities and receiving income support and, as proven in past programmes, will promote work-like behaviour.

The instrument will also provide arrangements to ensure job seekers with a reasonable excuse for not attending an activity, such as illness or cultural business, are not penalised.

In addition, a new community investment fund will be established to enable funds that have been withheld as a result of compliance penalties to be put back into communities to assist local economic and community development initiatives and programs. This will be delivered through the Commonwealth's Indigenous Advancement Strategy.

To summarise, weekly payments and a new, simplified and tailored compliance framework administered by locally based CDP providers, who know and understand the job seeker and the community will result in more immediate and easier to understand compliance arrangements.

New income thresholds to drive employment

In addition to the compliance framework, we are also setting new income thresholds to drive employment in remote Australia.

Full-time work is always the goal, but the reality in remote Australia is that casual, seasonal and part-time work is often the option. There is little incentive for remote job seekers to take up this work because currently an individual's income support tapers off after earnings greater than around $100 per fortnight. So the current system means that often this short term work is done by fly in fly out workers. To increase incentives to take up casual and intermittent work when and where it's available, these new measures would allow job seekers in remote income support regions to earn up to the equivalent of minimum wage before their income support reduces.

Increasing the income thresholds means that individuals will not be penalised through a reduction in their income support. If a job seeker undertakes paid work instead of attending their work for the dole activities, they would receive less income support (as penalties are applied) and receive more real income. With low complexity in the system, job seekers will be able to seamlessly move between CDP activities and intermittent and casual employment. This measure reflects the on-the-ground reality in remote Australia.

The new arrangements under this Bill will be phased, in order to ensure the settings are correct. They will be introduced initially in up to four regions and following extensive community consultation. CDP providers will be consulted in the development of supporting systems and processes, and to ensure that the selected providers are ready to implement the revised arrangements. Further regions would be progressively added, based on community readiness and provider capability.

Conclusion

Improving the lives of Australians is the nuts and bolts work of this Parliament. Even if you haven't experienced it personally, you know that the problems in remote communities are acute, immediate and unique.

This proposed Bill answers the concerns of CDP providers and community leaders and is an important next step in helping communities put an end to welfare reliance and the resulting social dysfunction.

I commend the Bill to Senate

 

COURTS ADMINISTRATION LEGISLATION AMENDMENT BILL 2015

The Courts Administration Legislation Amendment Bill, will merge the corporate services functions of the Federal Court of Australia with those of the Family Court of Australia and the Federal Circuit Court of Australia, and bring the courts together as a single administrative entity.

But in doing this, the Bill will set the scene for achieving a vital public policy outcome: placing the courts on a sustainable funding footing over the longer term, leaving them far better placed to deliver services to litigants. This is because savings arising from the efficiencies will be reinvested in the courts. This is an important point. These are not savings to be extracted and returned to Government. Savings will be retained by the courts to benefit the courts.

As the Bill solely deals with the administration of the courts, it will have no impact on the judicial and functional independence of each court. The Bill maintains and supports the separate standing of each of the courts concerned.

The imperative to merge corporate services

The merger of the courts' corporate services was central to the package of measures announced by the Government as part of its 2015-16 Budget Streamlining and Improving the Sustainability of Courts.

The pressing need for efficiencies forecast from the merger is manifest. The Family Court and Federal Circuit Court, in particular, are facing significant budgetary pressures and ongoing deficits. The serious financial circumstances of the family courts triggered the need for the Government to consider and implement this reform.

The community understands the fundamental importance of the courts' independence and impartiality to ensure integrity and transparency in the judicial system. However, the community also demands the efficient and effective use of taxpayers' funds, particularly in the current tight fiscal environment. All arms of government are currently expected to operate within these constraints.

Constitutional protections, of course, are in place for the courts to preserve the separation of powers and ensure their independence. Appropriately, however, the Executive Government and the Parliament retain oversight of the courts' operating budgets.

At the time of the Budget, the family courts were projecting over $44 million in operating losses over the forward estimates. The Government could not allow these losses to continue unabated.

Without the merger implemented by the Bill, alternative and much less palatable measures would need to be explored to allow budgets to be met. Because access to the courts is a fundamental tenet upon which our justice system is based, the Government was anxious to ensure budget rectitude did not result in frontline court services being cut.

The performance, funding and operation of the courts has been considered in many reviews and reports. These provided a strong evidence base for the Government's decision.

The 2012 Skehill Strategic Review of Small and Medium Agencies in the Attorney-General's Portfolio considered there was merit in the idea of amalgamating the corporate services functions of the federal courts.

Most recently, amalgamation was recommended by the 2014 National Commission of Audit Report, Towards Responsible Government, and the 2014 KPMG review into the performance and funding of the federal courts.

The KPMG review also highlighted the necessity to address the unsustainable financial position of the federal courts as it found that the courts were on track for a deficit of almost $75 million by 2017-18.

Further independent analysis conducted by Ernst & Young in 2015 identified potential savings and efficiencies to be gained from a merger model.

Merging the courts' corporate functions is projected to deliver efficiencies to the courts of $9.4 million over the six financial years to 2020-21 and result in ongoing annual efficiencies of $5.4 million from this time.

In turn, this will create potential for further organisational agility through economies of scale and improvements in the long term financial sustainability of the courts.

Importantly, the savings and ongoing efficiencies generated are to be reinvested into the federal courts to support the delivery of their core business of providing justice for Australian litigants.

Corporate services efficiency

Currently, the Family Court and Federal Circuit Court maintain separate corporate administrative structures to the Federal Court. More effective and efficient services will be delivered through the sharing of financial, human resources, information technology, property and operational corporate services.

There is increasing recognition that, although courts are specialised institutions, they share characteristics with other large public organisations with many staff and large systems.

Courts' administration, therefore, can benefit from increased collaboration, organisational streamlining and centralised corporate services, within appropriate frameworks.

With ever-growing caseloads and the current tight fiscal environment facing all arms of government, more efficient administration provides scope to relieve some of the administrative burden on our federal courts.

This is consistent with Government's commitment to reduce inefficiencies in public administration by removing unnecessary duplication.

Staff of the single administrative entity will have new opportunities to share their knowledge and expertise with a larger group of colleagues.

Working groups consisting of key corporate services representatives from each court have already been established, collaborating to complete the essential implementation planning for a 1 July 2016 commencement.

Merged model and maintaining courts' independence

The Bill is directed to the organisation and administration of the courts. It, of course, maintains the protection of the judicial and functional independence of the courts in accordance with the Constitution, while promoting their effective management.

Access to justice for court users will not be affected. Each court will maintain its separate and distinct judiciary, with no changes made to the courts' jurisdiction. Therefore, there will be no loss of family law or general federal law expertise across the courts.

The Bill consists of a carefully designed governance structure to preserve the autonomy of the heads of jurisdiction in relation to their own courts. Heads of jurisdiction will retain responsibility for managing the administrative affairs of their respective courts (excluding corporate services).

The separate and independent standing of each court will be further supported through replacing the position of joint Chief Executive Officer (CEO) of the Family Court and Federal Circuit Court with separate CEOs for each court. This will ensure each head of jurisdiction has a dedicated CEO to assist in managing the administrative affairs of their respective court.

To facilitate this amalgamation, the courts will be designated as a single entity under the Public Governance, Performance and Accountability Act 2013 (the finance law) and a single statutory agency under the Public Service Act 1999 from 1 July 2016.

The Bill will place control of corporate services in the hands of the Federal Court CEO. The Federal Court CEO will also hold the roles of accountable authority under the finance law and agency head under the Public Service Act.

This does not mean that the Federal Court will be 'taking over' the running of the Family Court and Federal Circuit Court. Each court will remain independent in their core functions and will not be subject to the control of another court.

The Federal Court CEO's pivotal role in delivering shared corporate services is key to generating the expected savings from the amalgamation. Mr Warwick Soden OAM, renowned for his sound financial management, will continue in the role.

Mechanisms exist in the Bill to ensure consultation between the Federal Court CEO and heads of jurisdiction and the other CEOs for decisions relating to corporate services matters.

The Bill contains provisions to ensure the Federal Court CEO makes relevant delegations to the Family Court CEO and the Federal Circuit Court CEO, in relation to the administrative affairs of their respective courts. The Federal Court CEO will be under a general statutory duty to ensure the other two CEOs have the necessary powers and functions to fulfil their roles.

Further detail in relation to these matters will be set out in a Memorandum of Understanding between the courts.

The Bill also contains provisions to safeguard the allocated budget of each court within the single administrative entity.

Merging the courts into a single administrative entity with shared corporate service is not a new idea. In many ways, it is consistent with the historical administration of the courts by the Attorney-General's Department prior to the courts becoming self-administering in the latter part of the last century. This is still the approach taken in many state jurisdictions.

There is an important difference: the corporate services to be provided to the courts are to be provided by a court and not a government department. It is entirely consistent with the Government's view that the courts, as an entity, are self-administering within the legislative and budgetary obligations placed on government entities.

Key features of the Bill

Schedules 1 to 3 of the Bill will facilitate the establishment of the single administrative entity under the finance law through amendments to the legislation governing the Federal Court, Family Court and Federal Circuit Court.

Schedule 1 of the Bill amends the Federal Court of Australia Act 1976 to support the merger. It provides for the courts to become a single entity under the finance law and a single statutory agency under the Public Service Act.

Powers and functions relevant to the finance law and the Public Service Act, including appointment powers, are centralised in Schedule 1. These powers are given to the Federal Court CEO, with delegations to be given to the other CEOs in relation to the administrative affairs of their respective courts. The position of the Federal Court CEO will be retitled.

The Bill clearly delineates what is within corporate services and these items are excluded from the administrative affairs of the courts. Corporate services are defined as including communications, finance, human resources, information technology, library services, procurement and contract management, property, risk oversight and management, and statistics. Critical security functions will remain within the administrative affairs of the courts.

Schedule 2 and 3 of the Bill contain amendments to the Family Law Act 1975 and the Federal Circuit Court of Australia Act 1999, respectively, to support the changes, including defining corporate services and repealing provisions that will be centralised in the Federal Court Act.

A separate position of Federal Circuit Court CEO will be established and the position of Family Court CEO retitled, to effect the separation of this role into a CEO for both courts. Each CEO will also hold the position of Principal Registrar, with the combined Family Court CEO and Principal Registrar role to take effect from 1 January 2018.

Schedule 4 of the Bill amends the Native Title Act 1993 to reflect the amalgamation and update references to position titles.

Schedule 5 of the Bill consists of consequential and other amendments to a number of Acts to change and update relevant titles and references.

Schedule 6 of the Bill provides for transitional arrangements to ensure the courts can continue their administrative and corporate services functions without disruption at the date of the merger. There is also a rule making power to respond to further areas where clarity in transitional arrangements is required.

Conclusion

The Courts Administration Legislation Amendment Bill signals a significant reform in the approach taken to the management and administration of Australia's federal courts.

The merger will facilitate not only short term savings but also substantial scope for longer term efficiencies, all to be reinvested in the courts to ensure their financial viability. The Bill implicitly upholds the key features underlying our federal courts system, such as independence and impartiality.

As a lynchpin to ensuring the financial sustainability of the federal courts into the future, the merger will enable the courts to continue to deliver core judicial services to litigants without compromising access to justice.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.

Senator SCULLION: I seek leave to make a short statement in regard to the Social Security Legislation Amendment (Community Development Program) Bill 2015

Leave granted.

Senator SCULLION: In remote communities around one in five adults of working age are in receipt of welfare. Many people start on welfare at a young age and stay on it for long periods of time, often for life. When I sit down with leaders in remote communities, they say, 'Can't the government fix things so our people have incentives to work on and earn their own money.' We know that long-term welfare reliance impacts on health, safety and wellbeing. The bill creates a new employment support payment, with a simpler, more tailored compliance framework. Eligibility for income support, the level of income support and the level of activities required is unchanged. This bill gives CDEP providers the capacity to better support job seekers and more closely monitor compliance. The bill addresses the problem of passive welfare, by encouraging job seekers into meaningful employment. I commend the bill to the Senate.