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Social Security Legislation Amendment (Strong Penalties for Serious Failures) Bill 2014


Mr Deputy Speaker, I thank the house for the privilege to speak on the Social Security Legislation Amendment – Stronger Penalties for Serious Failures Bill 2014 which seeks to amend the Social Security (Administration) Act 1999.


Australia is called the lucky country by so many, because it is a nation of hope, opportunity and reward. Most Australians believe that through hard work and fortitude, they will have the opportunity to succeed in all aspects of life and thus be rewarded for it.


I believe individuals shape their own destiny by identifying opportunities that can enable them to learn, elevate them at work and prosper for their future.


As a fair society, our governments and policy makers have a responsibility to ensure a system of equal access to opportunity.


Similarly, governments and policy makers also recognize that people, despite best efforts, may not always achieve equal outcomes through no fault of their own.


In light of this, Australia has created a welfare system that provides assistance and resources which are available to those who need it most, but this system is built on the concept of mutual benefit.


A sense of mutual obligation within our welfare system has been a long feature of society, where job seekers who receive income support through tax payer funds, contribute back through activities such as work for the dole, active job seeking and meeting with job service providers.


The system was built on the basis of offering individuals necessary interim solutions to help them get back on their feet. It has always been about a hand up, not a hand out.


These individuals who may be down on their luck often do the right thing and want to work, and contribute. Most individuals do so quickly, and discontinue income support once an available job comes through.


Others may have genuine and unfortunate circumstances in life, which impeded their aspirations, from traditional forms of employment.

This Bill is not designed to target those individuals.


This Bill is about tightening the rules for job seekers, who refuse a job or persistently fail to meet their requirements as part of the conditions with their income support.


Mr Deputy Speaker, it is important for the integrity of our welfare system and as an active society of lifters, that there are strong deterrents in our arrangements for individuals, who abuse tax payer funded support.


The Coalition firmly believes that anyone in receipt of a tax payer funded income support payment, should be prepared to accept legitimate, suitable work that comes their way. All workers in Australia have started somewhere in terms of paid work and it is wrong to turn down legitimate, paid employment.


Individuals absolutely have a right to accept or refuse work however they do not have this right at the expense of the taxpayer, unless the work offered is clearly beyond their capabilities.


This Bill is about safeguarding our welfare system, to ensure it is sustainable and that individuals in receipt of income support, are doing so, on the merit of actual needs rather than choice.


Mr Deputy Speaker, I would also like to note that there are a multitude of benefits in working and it is not just about receiving an income. There are studies which highlight the importance of work on the health and wellbeing of the individual and the flow on effects to society.


The Royal Australasian College of Physicians along with The Australasian Faculty of

Occupational & Environmental Medicine produced in 2011 a detailed report on the effects of work and its subsequent positive impact on wellbeing. It said and I quote:


“Work is an effective means of reducing poverty and social exclusion, including that faced by indigenous populations and other currently disadvantaged groups…good outcomes are more likely when individuals understand the health benefits of work, and are empowered to take responsibility for their own situation.”


This is absolutely true for all Australians who are able bodied and can work, especially our youth. It is unfair to burden the taxpayer and our welfare system with unnecessary support at the indulgence of the few, who choose income support with no desire to reciprocate.


The Coalition is opposed to this in policy and practice. As a government, we are responsible for supporting individuals through a system that actively helps and encourages employment and self-reliance, rather than welfare dependency.


It is by having stringent policy measures in place without ambiguity or areas for exploitation that people who are able to work must now do so.


This Bill ensures that job seekers who refuse or fail to commence work without a good reason will be penalized in two ways:


job seekers who incur an eight week non-payment penalty for refusing suitable work, will no longer have the penalty waived; and

Those who persistently fail to comply with participation obligations will only be able to have the penalty waived once, during each period of continuous receipt of their participation payment


The current situation did not provide enough of an incentive for individuals to get off welfare, because there were significant areas of weakness in this social policy that allowed those, who did not want to work to remain there.


Under current job seeker compliance provisions devised by Labor, such as the non-payment penalty may be waived if the job seeker begins to comply with a ‘serious failure requirement’, for example Work for the Dole, job search training or undertaking increased levels of job searches.


The non-payment period may also currently be waived if the job seeker does not have the capacity to comply with any such requirement and would be in serious financial hardship if the non-payment period was not ended.


Mr Deputy Speaker, I would like to stress that this Bill encourages participation payment recipients to engage with opportunities to work with the appropriate incentives to do so. By implementing policies that provide incentives, we enable job seekers to experience the benefits of employment not just monetary ones, but in particular, greater social and economic inclusion which contributes to their health and well-being.


In alignment with the incentive to work is the penalty when actively choosing not to work. A policy which reduces the number of penalty waivers in place when job participation is non-existent means job seekers are more likely to be pressured to move off welfare and become a productive participant of the workforce.


Having a strong deterrent to this type of behavior and mentality will foster job seekers to accept suitable employment.


Mr Deputy Speaker, a responsible government must ensure the integrity of our policies and that our social security system is not hemorrhaging finite resources and that support is appropriately channeled to those who genuinely need it.


Further, the Coalition has to make these decisions and reforms given the bleak economic landscape we find ourselves in. Given there are no funds left with Labor’s record six consecutive deficits, these important changes will save $20.5 million by 2017/18.


Our commitment to restoring the budget and building a stronger economy goes hand in hand with individuals working and contributing to society.


I am certain that both sides of government believe in everyone being a part of our workforce but the difference in how the Coalition and the Opposition has approached this is telling.


Previously under Labor, individuals have been able to exploit the welfare system due to weakening of the rules regarding the application of penalties for serious failures. It ultimately encouraged and manifested poor behavior and a mentality of social dependence.


Individuals could have their penalties waived by simply doing additional activities such as intensive job searches.


Between 2012-13, there were 1718 instances of serious breaches for refusing a job of which 68% of the cases had penalties waived. In these instances, 550 people experiencing financial penalty as a consequence of refusing a job.


This is in stark contrast to the record in the year 2008 to 2009 under the former Prime Minister Howard where 664 penalties were applied to instances where a reasonable job was refused.



Similarly, there were also 25,286 serious failures for repeated non-compliance such as failing to attend 3 appointments with their employment services provider in 6 months, where 73% of cases were waived.


Labor’s policies and systematic weakening of our welfare system meant there were no real meaningful consequences for repeat offenders and more job seekers were able to exploit the system and misuse tax payer funds.


Furthermore, Labor’s record on employment has not been encouraging. Under their governance, unemployment went from 4.4% in 2007 to 5.7% in September 2013. By the time Labor left office, there were 200,000 more unemployed Australians than in November 2007 when the Coalition were in office.


It is crucial that the now Opposition supports this amendment which will benefit all constituents in Australia.


That is why the Coalition is committed to helping people move from welfare to constructive employment through a number of key initiatives including the Job Commitment Bonus for job seekers between 18-30, relocation assistance to help people move for work, the Tasmanian Jobs Programme and restart wage subsidy for mature age workers.


Whilst most job seekers do the right thing, there are those that deliberately do not. It is not satisfactory to be content to remain on welfare at the expense of hard working Australians. This Bill will ensure that those on support may have their benefits withheld if they do not comply with their job search and income support requirements.


This is pivotal to ensuring we have a sustainable welfare system that actively helps place people in employment rather than keep them in welfare due to convenience or complacency.


As mentioned previously, this Bill will not impact on job seekers who cannot get work despite their best efforts, but rather targets those who refuse a reasonable and suitable job offer.


It will reinforce the message that those who deliberately flout the rules will be appropriately penalised. Consequences of this Bill will see a support system assume one of strict compliance devoid of weaknesses created under the previous government.

This Bill will limit the number of times a job seeker may have the penalty for persistent noncompliance waived.

This is for the good of job seekers and society as a whole.


The government knows that there is little tolerance in the community for those who do not fulfil their mutual obligations as part of income support. It is an unfair and unjust expectation on the hard working Australian tax payers to support those who have no desire to accept suitable work and repeatedly abuse the system.


There are simply not enough resources to allow the unnecessary diversion of tax payer funds for those unwilling or unprepared to help themselves. This Bill will reinvigorate tax payer expectations of mutual obligations and the government’s commitment in restoring this accordingly.


The previously identified savings of $20.5 million is money better spent elsewhere in society, in particular, helping to restore Labor’s debt and deficit.


Our society can only prosper when all participants contribute as self-reliant individuals. Finding and accepting suitable employment opportunities alleviate poverty, and aids in overall health and wellbeing of Australians.


I commend the Bill to the House