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Confronting the hard issues, ACOSS Congress 2002, Hobart.



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ACOSS Congress 2002

CONFRONTING THE HARD ISSUES

Senator Amanda Vanstone Minister for Family & Community Services

Hobart 28 November

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Mr McCallum, Ladies and Gentlemen …

I am very happy to be here to address the 2002 ACOSS Congress.

There are three things that I want to discuss today.

The first is breaching. To clear up any misunderstanding, I want to make the government’s position on this issue clear.

The second is work and family, and the difficult issues associated with getting the balance right. This is a particularly important issue for the low-income families that we are both fundamentally interested in.

Finally, I want to discuss how we can all, whatever our political affiliations, work to help our mutual constituency.

Service delivery to people in need is vitally important. We can make all the policy decisions we want in Canberra, and you can make all the resolutions you want.

However, in the end what affects low income families is whether they can get public transport to the job interview they need to get to, whether they can get respite care for their kid, and what their housing is like.

Services are crucial to our constituency. How basic services are delivered should transcend politics. It is more important than elections, and I want to touch on how we can all make a contribution to this.

However, first I want to talk about breaching.

Breaching

I am proud of Government improvements to breaching.

Many of you will also be aware that the Ombudsman has commented positively on improvements to the system.

Since coming to this portfolio, I have consistently said that we want to protect the vulnerable, but keep the system tough for those who are not willing to meet their obligations.

When I took this job I made a commitment to look at breaching. I have been good to my word.

Make no mistake - this is a difficult area of administration.

Vulnerable customers do not always disclose their circumstances to the person behind the Centrelink counter.

You can understand that if you did not make an appointment because you are an alcoholic and you were unconscious at the time, you might be reticent to disclose it to a Centrelink officer.

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Administrative Changes Over the last 18 months, we have made a number of improvements to improve the way we deal with vulnerable customers and to improve our breach decisions.

In June 2001, the 3rd Breach Alert was introduced.

This involves the provision of training to customer service officers to ensure that extra care is taken to investigate the job seeker's circumstances before a decision to impose a third breach.

We recognise that homelessness, depression, substance abuse, and family circumstances can all be barriers to complying with obligations.

We also recognise that these customers may need additional support, for example through a Social Worker, the Centrelink Psychologist, Centrelink Disability Officer or Indigenous Service Office.

The awareness campaign conducted as a part of the Third Breach Alert has also helped customer service officers identify high-risk customers at other stages of the process.

In late 2001, Centrelink’s own internal review was finalised.

This has improved Centrelink’s guidelines, reference and training material, especially where they dealt with the need to contact customers.

The review also resulted in a “Breach flyer” to community agencies with information for job seekers to help them understand their obligations, what to do if they don’t, and how to avoid breach penalties.

We have mailed the flyer to over 20,000 community organisations. Starting in late July, it was also sent to 820,000 job seekers.

More recently, as a result of its internal review Centrelink has introduced better training and systems to ensure more consistency and better quality in its breach decision-making.

Centrelink’s system changes help ensure customer service officers consider possible barriers to a job seeker’s ability to comply with their requirements before making a breach decision.

The changes have also helped ensure that all aspects of the decision making process are documented, including attempts made to contact the customer, the information considered to make the decision, and reason for the decision.

We have also made systems changes to enable our counter staff to be more helpful to customers.

Whenever job seekers come in, including when they lodge their fortnightly form, we can now check their records and remind them of what is coming up. Reminding them of appointments will help prevent breaches. Where a possible breach exists, this is

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identified and immediate contact can be arranged to discuss the issue with the customer.

Customers are already made aware of their obligations, and in an ideal world we shouldn’t have to remind them. However, this is a service we can offer customers, and it is one we are happy to provide.

Suspension In addition to these administrative measures, from July, Centrelink has been able to temporarily suspend payments when a job seeker has failed to meet their obligations and cannot be contacted, rather than breaching them.

We know that if we suspend payments, customers will contact Centrelink. If customers provide a reasonable excuse for failing to attend an interview, payments are fully restored from the date of suspension.

The suspension process also allows for Centrelink to reconnect the job seeker with employment services provided by the Job Network and Community Work Coordinators.

This initiative also involved: • A reduction in penalties for job seekers who fail to attend an interview arranged by Centrelink without a reasonable excuse. We have more than halved the penalty for many breaches. • Broader waiver provisions, and • More reviews of Preparing for Work Agreements:

Because these measures only started in July, they are not reflected in the breach figures for 2001-02.

Beginning in the new year, there will be an evaluation of the implementation of the suspension process.

However, early indications are that it is working well: • The suspension process is only used as a last resort, when Centrelink Customer Service Officers are unable to contact the job seeker to discuss the possible breach. • In the majority of cases, where the job seeker does make contact with

Centrelink, a breach penalty is not imposed because job seekers can explain why they couldn’t meet their obligations. • A number of jobseekers do not contact when their payments are suspended, suggesting that they do not require assistance. They are possibly working.

Early indications are that this could be more than 10% of the cases that are suspended.

Personal Advisers We also believe that breach decisions will be improved by Personal Advisers, who started in September 2002 as part of the Australians Working Together initiative.

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Personal Advisers have a key role in the early identification of barriers to participation for targeted groups, including Indigenous Australians, released prisoners and customers with special needs.

The introduction of Personal Advisers, further adds to Centrelink’s capability to assess and respond to individual’s needs.

Breaching and welfare reform As I have said, we think that this is a solid group of reforms to a highly sensitive area of administration.

We have done much to improve breach decision-making. Penalties have been reduced.

Partly as a result of the initiatives introduced in the 2001-02 year, and partly also as a result of customers being better aware of their obligations, there was a 30% decline in the number of breaches between 2000-01 and 2001-02.

It is obvious that our administrative changes have been working, and the newer changes should be given the chance to work.

Therefore, you can see why the government is not interested in political point scoring and grandstanding on breaching.

You can also see the folly on the part of the Labor Party to hold up a big spending Bill. They have asked for an additional $450 million to be spent on going softer on welfare compliance. This, unfortunately, shows just how out of touch some people are.

Families and work

Let me turn to the next issue I want to raise: work and family.

Families are not all the same. Centrelink’s family customers come in all different shapes and sizes. We are helping just about every permutation of family you can imagine.

Not only that, our families also change their circumstances in complex ways throughout the year. We have six and half million customers in a wide variety of circumstances whose lives change often by the fortnight.

Families have complex lives and working arrangements for Centrelink to cope with.

New babies are born. Older kids lose eligibility. Old lovers move out and new lovers move in. Addresses change. Incomes change.

This means that there are many different work and family issues for our families.

Paid maternity leave is one, but it is not the only product on the shelf to assist families.

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Sadly, the current debate focuses on maternity leave and seems to imply that unless the government funds it, there is something wrong with our policies.

We need to peel back the rhetoric around work and family and ask: what are the pressures on families?

Two income families One pressure is that more women in couple families are working.

These two income families are not high flyers. • Most two income households earn less than $70,000 a year. • They get more than single income households, but that is because the parents effectively work more hours. They do not get paid at a higher rate.

I would not call two income families privileged.

However, the basic reason that women in these couples are returning to the workforce is to give their families more.

Our aspirations are rising.

We want larger houses, we rely more on cars, and we try to give our kids more than we had as kids. That is human nature.

1952 to 2002 comparison We are clearly more materialistic than we used to be.

Take the traditional ‘white picket fence family’ and look at its circumstances in 1952.

In 1952 a couple with two children under five on average weekly earnings after tax and family payments got the equivalent of $18,900 year in 2002 dollars.

Between 1952 and 2002 this couple’s net income has increased by 100% in real terms. After tax and family payments, a couple with two children under five on average weekly earnings now gets nearly $38,000.

However, we do not feel twice as rich as our parents because our aspirations are higher.

Transitions Our rising expectations mean that for many families it is not a question of whether the second income earner will return to work after having children, but when.

That puts the issue of paid maternity leave into perspective.

Parents make a lifelong commitment to children. If you ask a mother at home whether she would like support for the first 14 weeks of her kid’s life, or help with the transitions that they have to make through out their kid’s life, I would bet they would take the latter.

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The key issue for women wanting to return to work is the transition in and out of the work force over their child rearing years, not a payment that lasts 14 weeks.

We need to provide assistance to single income families while one potential wage earner cares for children.

However, we cannot afford to create barriers to women who want to return to the workforce, either through high effective marginal taxation rates or inflexible employment conditions.

Sole parents This focus on the transitions in and out of the workforce for the second income earner in couple families is consistent with our approach to sole parents.

Sole parents face considerable barriers to participation. • We know that many lone parents will have average durations on payment of at least 12 years. • Half of all lone parents who are still on payment when their youngest child

turns 16 are on still on income support 5 years later. • Other FaCS research and pilots tell us that most people on income support want to work, not just for the money but also for the social inclusion that it

brings.

It is in their own and their children’s best interests that more sole parents find work when their children are older.

In essence, AWT is about helping sole parents with a gradual transition back to the workforce compared to the current shock they face when their youngest child turns 16. At that point they either have to find a job, or if they are still on income support, they have to meet Newstart conditions.

I am pleased that there are some indications that the Labor Party may be re-considering its position on the Australians Working Together Bill.

State taxes and charges

Finally, I want to talk about an issue where we share common ground.

We all know that the Federal Government plays important role in assisting low-income families. We make direct income payments of around $51 billion per year to those on low incomes. In addition, our concession cards provide an array of benefits such as heavily subsidised pharmaceuticals.

There needs to be a greater recognition that the States and Territories have responsibilities too. They can help or hinder low-income people.

Service delivery Australians, particularly the most vulnerable, depend on States for the services that are critical to their welfare. For example, disability services, public housing, and homeless shelters, as well as services for children.

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The Commonwealth contributes dollars to the States to help them, but they remain State services, and it is State priorities that determine the quality of services available to people in each State.

Take disability services as an example. In Victoria, the Government spends about twice as much per capita ($4,233) as the South Australian Government ($2,181).

Not surprisingly, services are better in Victoria.

In housing on the other hand, the positions are reversed. South Australia has invested a lot more on public housing than Victoria, and has more than twice the number of dwellings per capita.

Public transport Public transport costs can be crucial in getting and keeping employment. They also affect low-income families’ ability to take part in social activities outside the home.

However, public transport prices are rising in real terms in all capital cities.

Priorities It is all a question of priorities.

I have a very strong interest in making all of the spending by State Governments on these critical services much more transparent. I hope all members of ACOSS share that interest.

State taxes and charges have grown strongly over past decade, while their direct support for low-income families is patchy at best.

Insurance Insurance taxes are most likely to cause under-insurance among low-income people. Half of the 31% of uninsured homes destroyed in 2001 Christmas bushfires were not covered due to cost of insurance.

Yet the States and Territories are increasing their insurance taxes in real terms.

Conveyancing High conveyancing duty makes buying and selling a home harder and impedes the movement of low-income families as their work, social and family situations change.

Since July 2000, Commonwealth offered assistance to first homeowners through Commonwealth's First Home Owner Grant, with funding totalling around $2.9 billion.

So with the one hand the Commonwealth gives, and with the other hand the State taxes.

Gambling taxes Gambling taxes place an extra heavy burden on poorest households.

Take my State of South Australia: In real terms since 1990 gambling taxes have risen by 116.7%. This is an increase of $126 per South Australian resident.

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Concessions The concessions offered by States on basic infrastructure services can make all the difference to low-income families.

Some States do not provide concessions to Health Care Card holders for essential services like electricity yet other States do.

It is the same when you look at concessions for pensioners with water usage charge in Victoria attracting a concession but not in Tasmania.

Budget transparency Now is the time to start asking States about the transparency of their budget statements and accounts.

Enron, Worldcom, State Bank SA all have something in common.

They all had sets of accounts that were not transparent, comprehensive or easily read. Budgets are about a lot more than the bottom line.

A budget sets out what a government intends to do - what its agenda is. Federally we outline plans over the next 4 years. It is how the people, through journalists and lobby groups are meant to see a government’s plans. The bottom line is important - but it is arrived at in part through the line items in particular policies.

Line items in budgets are important as they inform the person in the street what is really happening with government’s program. Look at it this way - would you pay your AMEX bill if all you were told is the bottom line?

The NSW Government’s treatment of disability services is a case in point. The AIHW disclosed a funding shortfall of at least $39 million for 2000-01.

The NSW government’s explanation to AIHW was that ‘merging 3 different financial systems’ was responsible for the apparent discrepancy.

In correspondence with my department, NSW has admitted $39 million was not spent. I am not aware that NSW has corrected the public record.

Would ASIC or ASX allow any corporation to fudge $39 million in its accounts and let the market remain uninformed?

With GST revenue flow to the States steadily increasing, transparency will be even more important.

I have tried to get to the bottom of state disability budgets, my department has tried and consultants have tried.

We have been unable to see clearly where the money goes.

What hope has the ordinary person who wants to understand?

New bottom line must be better accountability and transparency in State budgets. People, especially the needy and the vulnerable rely on services provided by state

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government. It is only fair that state governments have clearer, more transparent budgets and are held more accountable.

Conclusion

ACOSS seeks to be the voice of the most vulnerable and disadvantaged in our society.

To do this role properly it is neither enough nor necessarily appropriate to simply say everyone should get more. You need to work in partnership with governments to address the hard questions - in particular how to get more people independent, with a job and off welfare.

I wish you well in your deliberations.