Title Community Affairs Legislation Committee
Database Senate Committees
Date 09-03-2021
Source Senate
Parl No. 46
Committee Name Community Affairs Legislation Committee
Page 1
Questioner CHAIR (Senator Askew)
Siewert, Sen Rachel
McCarthy, Sen Malarndirri
Responder Ms Stephen
Dr Goldie
Mr Irlam
Ms Crowe
System Id committees/commsen/17429b8a-cfd4-421d-bc81-b26a94d15777/0001

Community Affairs Legislation Committee - 09/03/2021

CROWE, Ms Charmaine, Senior Adviser, Social Security, Australian Council of Social Service [by audio link]

GOLDIE, Dr Cassandra, Chief Executive Officer, Australian Council of Social Service [by audio link]

IRLAM, Mr Corey, Deputy Chief Executive, COTA Australia

STEPHEN, Ms Julie, Private capacity [by audio link]

Committee met at 10:35

CHAIR ( Senator Askew ): I declare open this hearing of the Senate Community Affairs Legislation Committee for the inquiry into the Social Services Legislation Amendment (Strengthening Income Support) Bill 2021. These are public proceedings, and a Hansard transcript is being made. The hearing is also being broadcast via the internet.

I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as contempt. It is also contempt to give false or misleading evidence to a committee.

The committee prefers all evidence to be given in public, although the committee may determine or agree to a request to have evidence heard in private session. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken, and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may also be made at any other time.

The committee understands that all witnesses appearing today have been provided with information regarding parliamentary privilege and the protection of witnesses. Additional copies of this information can be obtained from the secretariat.

I now welcome representatives from ACOSS and COTA Australia. Thank you for appearing before the committee today. Do you have any comments to make on the capacity in which you appear?

Ms Stephen : I'm appearing to give my story and on compassionate grounds that Newstart will be raised.

CHAIR: As an individual—okay, excellent.

Dr Goldie : Ms Stephen is appearing as an individual, but as part of the ACOSS presentation.

CHAIR: Thank you. I now invite each of you to make a brief opening statement, should you wish to do so, and after that I will invite committee members to ask you questions. I am conscious that today's time is going to be pretty tight because of the short time frame that we have for the hearing. Mr Irlam, do you have an opening statement you wish to make?

Mr Irlam : I'm happy to yield that time for questions.

CHAIR: Excellent. Dr Goldie?

Dr Goldie : I acknowledge that we're appearing on Gadigal land and thank the committee for this very tight and important opportunity for us to present to you our serious concerns about the plan by the federal government to cut the level of JobSeeker further, to under $44 per day. I am going to immediately yield to Julie Stephen, who has been campaigning for an increase to JobSeeker and who has generously agreed to share her story with you this morning. Julie represents millions of people who are, today, directly affected by this decision by the federal government to cut the rate of JobSeeker and failing to deliver a permanent and an adequate increase to JobSeeker.

Everybody's story is important. We are very troubled that this process has only enabled a very few people to appear before you this morning. Thank you, Julie, for sharing your story. I urge the senators to listen keenly and to understand that Julie's is one story, one human reality, representing millions who are affected by what the committee will be doing this morning. Thank you, Julie.

Ms Stephen : I thank everyone for the space to have my voice heard, in regard to the JobSeeker rate. I'm just speaking from my experience. I'm a really determined woman and I've tried my best to stay away from welfare. And it is not a nice experience. It's not easy to get up and show up every day and make out you're okay when inside you just feel like you're worthless. It's isolating and it's confidence stripping. Basically, it is very hard work. I'm not a dole bludger. I'm a woman in her 50s whose situation changed because she had a hysterectomy operation. I was privately insured. It went wrong and I landed in the intensive care unit of Wollongong hospital, after being anaesthetised for an extra six hours.

It took me months to recover. I went back to my job as a permanent part-time hospital assistant where I'd worked for nearly 14 years. I returned to cleaning duties and after three months I couldn't do it anymore, and I felt pressured to leave because I wasn't doing my job well enough. I felt bad as well that I couldn't do my job as well as I used to. In November 2018 I had to apply for the Newstart allowance. I'd been applying for many jobs before. I have some training and skills in many different areas but I couldn't get a job. I would spend hours searching for jobs that I had no chance of getting. I would spend further hours rewording my applications to suit selection criteria. The selection criteria had become difficult to live up to as more courses are needed and experience is essential. If you have no experience, you have no chance. I applied and was accepted into the NEIS scheme for most of 2020 because I ran an Airbnb from my home. Things were looking better. Then, the fires hit the Shoalhaven and tourists were not able to come to our area for months. I was just starting to get going again, in March last year, with a few bookings when COVID hit and I had to cancel them all.

The biggest hit for me was when I was diagnosed with an aggressive form of breast cancer last year. My aunty and sister both died of this cancer. My best option for treatment was intensive chemotherapy followed by surgery, and I'm going to commence radiation therapy next week. It's pretty sad to say that I'm fortunate that my treatment coincided with a pandemic. I cannot imagine how I would have survived on the $560 a fortnight the government was paying me before the COVID hit. The final stage of chemotherapy was at the end of last December. My nurses said my hands had been impacted from the—it's called neuropathy and I can't pick things up well and I drop things. It affects everybody differently; some people touch cold things and it's unbearable for them. For me it's hot things, so anything warm feels very hot. In October last year I made my first attempt to go on a disability pension, and I was rejected. Now I'm appealing to the Administration Appeals Tribunal. I have anxiety, and I get overwhelmed easily today. My lower back hurts from osteoarthritis, and, if I stand on my feet too long, I'm in a lot of pain. I'm limited for what I can do, and my confidence has declined and I feel quite lost most days.

There are too many of us who are really too sick to work or look for work but who are not eligible for disability pension. There are thousands of people going through cancer treatment who have lost their jobs and are struggling to survive and deal with their life-threatening illness on JobSeeker.

In terms of the reality of living on JobSeeker, at the current rate I get, which is $730 a fortnight, I can just manage on that. I don't know how I'm going to register my car this year, which I rely on.

CHAIR: Julie, sorry to interrupt. Media have come into the committee room in Canberra. I just need to check with you that you are happy for this to be recorded and filmed before we give them permission. I wanted to clarify with you that obviously this is an open public hearing and it's going to be recorded, but I just wanted you to be aware that that was happening.

Ms Stephen : Okay. Thank you for that.

CHAIR: If you object, that's fine. We can certainly consider that, but I just wanted to make sure that you are aware that that's happening.

Ms Stephen : No, that's okay.

CHAIR: Also the media are reminded that they can't take any images of witnesses' documents or of senators', not that there are any in the room, or of the audience, and media activity may not occur during suspensions or after the adjournment of proceedings. So I wanted to state that so you are aware. Please continue, but we certainly do have some questions to ask you as well.

Ms Stephen : Yes, certainly.

CHAIR: Once you've finished giving your evidence, we'll ask some questions, so thank you.

Ms Stephen : So I rely heavily on my car to get to treatments and shopping. I'm lucky my mortgage repayments are just $250 a fortnight, but I have rates and insurance, water and electricity bills—coming up—petrol and service of the car, maintenance on the house and keeping my mobile phone. I get help to pay my internet at $59 a month, and I will be trying to pay this person back. Toiletries are expensive, and that's one positive thing of chemo—I haven't needed to buy shampoo or go to the hairdresser. I'm really worried that we won't survive when it cuts back to $43.50 a day, and my worst fear is that I will need to sell my house with no hope of starting my business or finding affordable rent.

I urge the inquiry to reflect on those currently in this position of relying on JobSeeker. I'm living in fear of what my life will go back to once it's cut back. Yes, we live in a country that has opportunity, and that opportunity is not always available for all. We do not all have the support and family backup to be able to thrive, we do not all have the determination it takes to lift ourselves out of the welfare hole and we do not all have the skills needed. But, even with all these necessary requirements to thrive, all you need in our circumstances, some of us cannot. Raising the rate to a liveable income will benefit all, and I hope the inquiry will consider the many different situations out there and the difficulties we face trying to live off $43.50 a day. Thank you for your time.

CHAIR: Thank you for sharing your story with us. I will go to Senator Siewert, who might start asking questions of both organisations. Thank you.

Senator SIEWERT: Julie, thank you so much for the evidence that you've given. It takes a lot of strength to articulate your circumstances. Come the 1st of April, you've obviously done your calculations of your costs. How much do you calculate you will have after you've paid for, as you've articulated, your car, the internet and your fortnightly mortgage repayments? How much do you calculate you will have left to live on after the payment goes to the new rate on 1 April?

Ms Stephen : Well, I calculate I'll have nothing. I'll be in arrears, if anything. I'll be behind the eight ball. That's what happened after the fires hit and I wasn't getting income from my Airbnb. When the government doubled it, I was able to get back on my feet and pay everything back, pay bills and even put a little bit into my superannuation.

Senator SIEWERT: I really dislike asking this question, but what do you see that you will have to forgo once the rate goes back on 1 April, when it goes back to the rate of less than $44 a day?

Ms Stephen : I'll definitely have to forgo my healthy holistic treatment that I've been taking, like vitamins and aloe vera juice. I'll definitely have to forgo going out and using my car too much, because I won't be able to afford the petrol. I definitely won't be going and meeting up and having a coffee anywhere, unless my friends shout me. And maintenance on the house, well that's just a no-go. It's a no-go now, really. I don't buy clothes. If I do buy something, it's usually at the op shop. Food—my cholesterol went up last time because I was just eating lots of pasta and starchy foods. It's expensive to buy fresh fruit and vegetables. So, yes, things will change a great deal.

Senator SIEWERT: Thank you once again. I'm going to run out of time and I do want to ask COTA a couple of questions. Mr Irlam, what impact will this new rate have on older Australians who are out of work? Actually, I'll ask both cohorts. What impact will this have on those that are already long-term unemployed, whether that's a growing cohort, and those that are newly unemployed?

Mr Irlam : Look, $25 a week for somebody who is unemployed is always welcome, but it's one-third of what a very conservative estimate said was needed. We know that older renters in particular are finding it quite hard. We've seen decades of reviews tell us that we need to increase CRA. I think the biggest challenge for COTA for the mature-age unemployed person in the current environment is that we know, based on past economic downturns, that people simply won't work again. Many of those people will be staying on JobSeeker right the way up to the age pension.

For those who are trying to get back into the workforce, one in three HR managers openly admit, in anonymous surveys the Human Resources Institute has conducted for the Human Rights Commission, that they won't employ someone over the age of 50. It's an uphill battle to try to get the one person back in the workforce. Those people trying to get back into the workforce face the problem that every nine people applying for one job are facing age discrimination and will basically live on JobSeeker for the next five, six, seven, 10 years while they're facing that battle. It's not good enough that we're only able to find $25 a week to be able to increase JobSeeker by.

Dr Goldie : May I also add to that answer from my colleague from COTA?

Senator SIEWERT: Yes.

Dr Goldie : I would like, on behalf of the millions of people who are affected by this decision which you are considering today, to thank the Australian Senate for passing a motion which was that the rate of JobSeeker should lift people above the poverty line. You've heard from Julie. Thank you, Julie. Julie's story is her story, but she represents so many people of whom you have their basic economic security in your hands. In order to ensure people are lifted above the poverty line, the absolute minimum that is needed to fix JobSeeker is to increase it to $65 per day. This is based on the relative poverty measure. I urge the Senate to confirm what it has already expressed in your inquiry today—that this is about the very basics of life.

Can I also highlight that anybody who suggests that this is an issue about fiscal responsibility completely ignores that the Australian parliament has legislated to deliver billions in tax cuts to people who already have jobs. Overwhelmingly those dollars will go to wealthier men who already have jobs. These are the choices the Australian parliament is making today. I urge you to act with human dignity, to act with human decency and to listen to what Julie is saying to you today. I urge you to act. There are older workers who are affected, as you heard from COTA; there are young people who have never had a job; and there are single parents who are trying to make ends meet. This is the diversity of Australian life. It is a shocking example that the government has announced a policy which seems to suggest that the problem is that people are not trying hard enough to get into a job and that we need a line to dob them in when what all people want is just enough to be able to meet the basics of life. Thank you, Senator.

CHAIR: Senator Siewert, I'm conscious of time, so we need to perhaps move to Senator McCarthy.

Senator SIEWERT: Fair enough. Thank you.

Senator McCARTHY: Thank you very much, Chair. If I could also just add my voice here to say thank you to you, Ms Stephen, for telling us your story, which I know, as Ms Goldie has said, reflects millions of Australians. So thank you very much. I'd just like to ask you just a couple of questions, if that's okay, and then I might go more broadly to the other two. You spoke quite in depth about your treatment in terms of your medical situation. By all means tell me if it's not what you want to answer, but I guess the stress of having to look for support is not assisting you in any kind of recovery—would that be a fair comment?

Ms Stephen : Support in regard to just the government support or the support I've been given from the cancer society and my—

Senator McCARTHY: No, the stress of having to—

Ms Stephen : The continual worry of the insecurity is that I just don't know what my life is going to be like when I've worked the majority of my life and been independent. The stress of that is enormous. I don't want to be on welfare. This wasn't my life plan.

Senator McCARTHY: One thing now is that this is an opportunity. What would your message be directly to the Prime Minister today?

Ms Stephen : I would say: 'Come and speak to the people. Get down on our playing field, where we're at. We're not doll bludgers. We're actually just struggling to juggle this system that we live in, and we just want a fair go. We don't want this handout. We want a hand up.' I don't feel that the government gets that. I feel the government is very out of touch with what's really going on. I think it's very disturbing that we're putting this divide out there—that people are dole bludgers and they don't want to work. There's 'have a go and get a go' and all of these things that are going around. It's very upsetting and hurtful to people who actually have been trying so hard to get work. They struggle or they've got disabilities or they're students and they don't have supportive families; there are endless different situations out there. I just would like to see the government get in touch with the reality of what's really going on and raises the rate.

Senator McCARTHY: Thanks, Ms Stephen. Dr Goldie and Mr Irlam, could either or both of you answer the following questions. The partner income test has been doubled from about $35,000 to $70,000 for unemployment payments since the start of the pandemic. But this is due to end at the end of March. What do you think the impact will be on families, and are you seeing evidence of mortgage stress? Dr Goldie?

Dr Goldie : I might pass to my colleague, Charmaine Crowe, to answer that one.

Ms Crowe : We are certainly seeing evidence of housing stress from 1 January, and even from before then, where people were unable to pay their housing costs as the coronavirus supplement declined. I stress that it is the minority of people currently able to access paid work at the moment. As well all know, there is one job available for every nine people out there looking for one. The vast majority of people on JobSeeker at the moment—almost 80 per cent—just cannot get that supplementary work or that part-time or casual work to supplement their income support payments. Obviously, changes to the income test are going to negatively affect those people who do have some paid work, but they're certainly in the minority. This is why the increase to the base rate is so crucial, because, at the end of the day, you can do all you like with the income test, but it is not going to address the core issue that we're here today to discuss, and which Julie has expressed so well. That is: the inadequacy of the base rate of payment. This has to be fixed. That's why we're urging this committee to recommend that the bill be amended to lift working-age payments to at least $65 a day.

Senator McCARTHY: Mr Irlam, is there anything you'd like to add?

Mr Irlam : No, thank you.

Senator McCARTHY: The government said they want more people to be able to take seasonal or casual work. Will their plans to decrease the income-free area make it easier or harder for people to take this kind of work? Mr Irlam?

Mr Irlam : I'm having trouble hearing you, but I believe the question is whether the increase to the income-free area will make it harder or easier?

Dr Goldie : I'm happy to answer that. They are separate issues. The issue about what's happened to the labour market and the withdrawal of people on temporary visas to be available for that kind of work is an issue. It is not the same issue as what we are presenting to you today. The labour market is very clear. Overall, there is only one job available for about every nine people who are looking for paid work. You will have heard and read the evidence from Professor Borland, who has done the analysis to show that, when the government did the right thing and doubled the rate of JobSeeker, there was no slowdown whatsoever in terms of people taking up paid work. As you've heard from Julie today, people are desperate to get paid work. What people need is your support. What people need is for you to back them in. What people need is for you to give people a sense of hope and that, as a very wealthy country, we will do the right thing to at least provide the basic support of a level of income, so that people can then try to get ahead—whether those decisions are about how to continue to deal with the situation Julie's dealing with or whether it's about a decision of: 'Do I need to move, because I can't get a job where I live now? Do I need to sell my house? Do I need to change my children's school?' All these are terrible decisions that people will have to make. The one thing that you can do is at least give people basic economic security, because, if there was ever a time, as the government says it wants to be a government known for its approach to mental health and suicide prevention, it's now. They could ensure people know that when they wake up in the morning they're not going to be deprived of the very basics of life.

Senator McCARTHY: The government also announced mutual obligations, Dr Goldie. What impact will the job hotline have on people looking for work? Is there further risk of exploitation here?

Dr Goldie : We're strongly opposed to what the government has announced in terms of its approach to mutual obligation. I note again the hearing this morning is not hearing from, for example, the National Council of Single Mothers and their Children, Australian Unemployed Workers Union, Anti-Poverty Network, Anti-Poverty Week or from all the social services from all the business groups. But you will have heard, on the day the government made this announcement, that overwhelmingly there was a strong condemnation of the approach the government took to say that, for a measly $3.50 a day increase, the government was going to bring back 'get tough on you because you're on social security'.

The government has ignored its own expert panel that looked into what was wrong with JobActive and what was wrong with mutual obligations. The expert panel strongly recommended a completely different approach, which would see every person affected by unemployment as an individual, with an individual set of circumstances and skills and capabilities. The expert panel's approach was to design a job plan appropriate to that person's expertise and identify where they needed to invest, for example, in education and training—that is, to have an appropriate, tailored job search plan. Instead the government wants to go back to forcing everybody to apply for 20 jobs a month. The employers do not want to get these job applications from people where everybody knows that they do not have a chance of getting that employment and that all they're doing is wasting very precious time and energy on useless job applications. We need a very tailored approach here.

I'm done—that the federal government, coming out of a pandemic, would come up with this kind of rubbish in the face of its own expert panel advice. It says it cares about people's mental health, but then comes up with this notion of, 'We're just going to get tough on you.' It also encourages employers to use their power against people trying to find employment. You can see the business groups do not want to be part of it either. We strongly urge you to reject this approach.

We want to work with the Department of Employment and the minister for employment, with business groups and with the union movement on what we all know is really needed here, which is investing in local labour markets and investing locally in the job creation that we need, making sure that we've got really smart education and training options for people and getting behind the millions of people who are affected by underemployment or unemployment at the moment. That's what we need. We don't need the further tying up of bureaucracy. Frankly, it really chronically affects people's mental health by putting people through useless hoops just to satisfy some tired, old notion of what it looks like to be a responsible government. They think they somehow have to get tough on people on social security. You don't need to get tough; you need to get behind people affected by unemployment. Thank you.

Senator McCARTHY: Mr Irlam, would you like to comment on that, and then we'll leave it at that, because I'm conscious of time.

Mr Irlam : The only comment I would make on a different topic. In the last sitting day of the Senate, the Greens and the ALP attempted to amend a previous bill to continue the stop on the liquid asset waiting period. We'd strongly encourage you to revisit that amendment, which was poorly drafted at the time. This is an important matter for people looking to retire. Having $12,000 in your bank account when you're 64 and you're three years from retirement doesn't make you rich, but it does make up potentially eight per cent of your retirement income—that is, for the average person retiring $180,000 a year. Asking them to dwindle that down for 13 weeks or 26 weeks sitting before another bill in the Senate is inconsistent with this government's intention that people should be saving for their own retirement.

Senator McCARTHY: Thank you.

CHAIR: Just before we do move on, I want to ask a quick question of ACOSS. Dr Goldie, with regard to your previous position, pre-COVID, you wanted to raise Newstart-related payments by $75 a week. In this submission you're proposing an increase of $175 a week. Can you clarify why you changed that?

Dr Goldie : I'll make some comments about it and then pass to my colleague. You will recall that we had a global financial crisis. We then had successive Treasurers who decided that, at that time, their main job was to return the budget to surplus. When the coalition got elected, it delivered a 2014 budget which attempted to slash and cut social security even further. In the face of that, ACOSS was doing everything it could to stop the effort to cut social security further, including the removal of the energy supplement; that's what your government wanted to do. Then, at an absolute minimum at that time, we were trying to get some base rate increase into JobSeeker. We had a government saying its main job was to cut the social security budget and restore the budget to surplus. The reality is that the government was able to find $300 billion to fund the largest level of tax cuts the country has ever seen. In the face of that, last year the government did the right thing by finally recognising that we needed an adequate and permanent increase to JobSeeker. That is what the country actually needs.

Everything has changed; you can see that. This is about the choices that the parliament will make. This is about the human cost of what we fail to do, but it is also about the economics of it. In many submissions before you, you will see—and Treasury also has highlighted, in terms of supporting the economy—that the most effective fiscal policy the government can make is to put more money into the hands of people on very low incomes who really need it. In terms of job creation, this is one of the most efficient things you can do. Let's remember the dollars that have been spent on the tax cuts. It's costing about $500,000 to create one job; that's the cost on the tax cut. Here we have an option for you to deliver a permanent and adequate increase, and we have now put forward to you what is needed—a minimum increase of at least $65 per day to bring it up above the poverty line. Do you want to comment on that, Charmaine?

Ms Crowe : Yes. The $75-per-week increase that we had been advocating around 2019 was a first-step measure; we made that very clear at every opportunity we got. Alongside that recommendation, we were also calling for a social security commission, which we continue to call for. A key role of that commission would be to advise the parliament further on adequacy of payment rates, with the idea that $75 is just the first step and then the commission would do its job and recommend further increases as required.

When COVID hit and the government doubled payments, we saw that it well and truly lifted hundreds of thousands of people out of poverty. It also lifted the unemployment payment in Australia to around the average rate of unemployment payment compared with wages in the first couple of months of unemployment. It brought it up to the average level that we see among wealthy countries. At the end of March, when it drops back down to $44 a day, it will take us from the lowest unemployment payment in the OECD, as it was before COVID, to the second lowest.

CHAIR: Can you clarify for me what that would cost, in economics terms, if it was increased to $175 a week or $65 a day? Have you done that calculation?

Ms Crowe : We've not been able to do detailed modelling on that calculation, because we don't have enough data modelled with the current JobSeeker, youth allowance and parenting payment recipient numbers. We look forward to when we can get that updated and do that modelling for you.

Dr Goldie : I think we've safely estimated it would cost less than the overall tax cut package.

CHAIR: I'm conscious of time; we've gone 15 minutes over time, so I'll end it there. I don't think we've had any questions put on notice, unless Senator Siewert or Senator McCarthy want to provide some? No? Okay. On that basis, thank you very much, and thank you, Julie, for joining us and sharing your story with us.