Thursday, 5 February 2009
Social Security Legislation Amendment (Employment Services Reform) Bill 2008
Consideration of Senate Message
Bill returned from the Senate with amendments.
Ordered that the amendments be considered immediately.
(1) Schedule 1, item 1, page 4 (line 22), omit “must”, substitute “may”.
(2) Schedule 1, item 1, page 6 (line 5), at the end of subsection 42C(5), add “, provided that the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the no show no pay failure”.
(3) Schedule 1, item 1, page 6 (line 18), omit “must”, substitute “may”.
(4) Schedule 1, item 1, page 8 (line 32), omit “must”, substitute “may”.
(5) Schedule 1, item 1, page 9 (line 35), at the end of subsection 42H(5), add “, provided that the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the reconnection failure”.
(6) Schedule 1, item 1, page 12 (line 10), omit “must”, substitute “may”.
(7) Schedule 1, item 1, page 12 (after line 22), after section 42N, insert:
42NA Comprehensive compliance assessment
(1) Before the Secretary determines that a person has committed a serious failure under section 42M, the Secretary must conduct a comprehensive compliance assessment in relation to the person.
(2) The comprehensive compliance assessment must assess the following:
(a) the reasons why the person may have committed failures under this Division;
(b) the reasons why the person may have failed to meet other requirements under the social security law;
(c) whether the person has any barriers to employment;
(d) whether the person’s participation requirements are appropriate.
(8) Schedule 1, item 1, page 12 (after line 22), after section 42N, insert:
42NC Determination about serious failure requirements and severe financial hardship
If the Secretary determines that a person commits a serious failure, the Secretary must also determine that this section applies unless the Secretary is satisfied that:
(a) the person does not have the capacity to undertake any serious failure requirement; and
(b) serving the serious failure period would cause the person to be in severe financial hardship.
(9) Schedule 1, item 1, page 12 (line 25), after “serious failure”, insert “and has determined that section 42NC applies”.
(10) Schedule 1, item 1, page 13 (line 28), after the note, insert:
(1A) The Secretary may make a determination under paragraph (1)(b) on request or on his or her own initiative.
(11) Schedule 1, item 1, page 13 (lines 32 and 33), omit paragraph 42Q(2)(b), substitute:
(b) if the Secretary makes a determination under paragraph (1)(b) on request—the day before the request was made; or
(c) if the Secretary makes a determination under paragraph (1)(b) on his or her own initiative—the day before the Secretary makes the determination.
(12) Schedule 1, item 1, page 13 (line 34), after the note, insert:
(3) Section 42NC does not affect the operation of this section.
(13) Schedule 1, item 1, page 17 (line 24), omit “42Q(2)(b)”, substitute “42Q(2)(c)”.
(14) Page 17 (after line 31), at the end of Part 1 of Schedule 1, add:
42ZA Review of impact of compliance regime
(1) The Minister must cause an independent review of the impact of the amendments made by this Division to be undertaken as soon as possible after 30 June 2010.
(2) The review must report on:
(a) the effectiveness of the compliance regime in:
(i) meeting job seeking requirements;
(ii) reducing financial hardship;
(iii) reducing compliance costs for job seekers, employment services providers and the Government; and
(iv) using the ‘no show, no pay’ provision to increase compliance with job seeking requirements;
(b) the impact on vulnerable job seekers including Indigenous job seekers;
(c) the impact of the compliance regime on employment participation and long-term unemployment;
(d) the number of complaints made with the departmental hotline, Social Security Appeals Tribunal or Ombudsman’s office in relation to the new arrangements;
(e) the gaps between federal policy and state service provision for persons with non-vocational special needs or barriers;
(f) the adequacy of non-vocational support services in regional areas;
(g) the effectiveness of training for and consistency of understanding of Centrelink staff, employment providers and departmental contract managers in the new arrangements;
(h) the adequacy of information and education provided to new and existing clients about the new system;
(i) the adequacy of resourcing for Centrelink to implement the new arrangements and deal with related complaints;
(j) the effectiveness and use of criteria such as hardship, vulnerability and reasonable exclusion within Comprehensive Compliance Assessments; and
(k) any other related matter.
(3) The review must be conducted by an independent panel, chaired by a person with expertise in social security and employment services matters.
(4) The Minister must provide the panel with adequate resources to undertake the review.
(5) The panel must give the Minister a written report of the review, and the Minister must cause a copy of the report to be made public and tabled in each House of the Parliament by 30 September 2010.
That the amendments be agreed to.
I will summarise the amendments that have been agreed to by the Senate and that are now under consideration in the House. The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 is a very important piece of legislation. It goes to the way in which job seekers will be dealt with under the compliance regime. The government has been concerned to ensure that the compliance arrangements for job seekers were effective but also fair. We introduced the bill last year and amendments were proposed. The bill successfully passed the House and there was debate on amendments in the Senate yesterday. There were a series of amendments and the government considered them in turn.
We would like to put on the record our appreciation for the constructive way in which Senator Siewert, on behalf of the Greens, and Senator Xenophon discussed these particular matters with us. I believe that some of the amendments have improved the bill and that others were not necessary, but I did not have any particular objections. I will now turn to the amendments and go through them for the benefit of the House.
Amendments that were passed by the Senate include amendments (1), (3), (4) and (6). These amendments allow Centrelink, as the final decision maker, to have discretion to apply penalties.
Amendments (2) and (5) provide for the deduction of a penalty amount in the period immediately after the penalty is incurred, allowing sufficient time for Centrelink to apply penalties consistently. There was a concern that there would be difficulties administratively without these amendments, and we accepted the proposal put.
Amendment (7) includes the CCA in legislation rather than in a legislative instrument, without affecting the substance of the CCA. We believe that this amendment, whilst not entirely necessary, certainly does not affect the integrity or intention of the bill that was proposed by the government, and therefore we accepted it and it is now here for us to consider.
Amendments (8) to (13) go to ensuring that job seekers who are in severe financial hardship are not adversely affected by any administrative delays. I think these amendments were well considered. I think they will lead to it being less likely that an unemployed person receiving income support will find themselves adversely affected unnecessarily. We accepted the reasoning of the mover of those amendments and acceded to them.
The final amendment, that was accepted, which was moved by Senator Xenophon, establishes an independent review to consider the impact of the compliance regime after 12 months. This was something that we had discussions about with Senator Xenophon and Greens Senator Siewert. Those two senators reached an agreement themselves, we accepted that there would be an independent review and the terms of reference were agreed to.
I would also like to place on the record another commitment that the government undertook in discussions with Senator Xenophon, and that was to change the no show, no pay incidences within six months from a proposed six occasions to three occasions. There are a number of incidences or breaches in the no show, no pay approach that would trigger a comprehensive compliance assessment. We believe that the argument that Senator Xenophon put—that reducing the number would provide earlier intervention for those job seekers who might be most at risk—was a compelling argument. We also accept that, if there were people wilfully and persistently breaching, this undertaking by the government would allow for a more effective compliance arrangement. For that reason, we supported that change to the compliance regime proposed. That change will take place by way of legislative instrument.
I thank Senator Siewert of the Greens and Senator Xenophon for the constructive discussion that we had with them in improving the operation of the bill. I also thank Senator Fielding for his support.
The opposition, which of course are on the record as opposing the bill, moved some substantial amendments to it in this place before Christmas last year, and indeed we divided on them. The amendments that were proposed by the opposition yesterday were withdrawn without debate, so the opposition clearly did not want to proceed and debate the amendments that they had proposed and the amendments that they chose to divide on in this House when the matter was last before us. I think that is probably because the constructive discussions between the senators in question and the government left them with no answer. More importantly, I think the amendments that were proposed by the opposition were not really seeking to improve the workings of the compliance arrangement and indeed were not amendments that would have been acceptable to any party other than the opposition. For that reason, those substantive amendments were withdrawn without any consideration at all.
These Senate amendments, as I say, are acceptable. This bill is very important for the operation of the compliance regime for the many Australians who are on income support. These arrangements will take effect upon the enactment of this bill on 1 July this year.
I welcome the opportunity to speak on the Social Security Legislation Amendment (Employment Services Reform) Bill 2008, which outlines the compliance regime that will operate for the new employment services which will begin on 1 July this year. The opposition wish to place on record that we believe that these amendments do improve this legislation. The most substantive of the amendments is the one that was moved by Senator Xenophon relating to an independent review of the compliance regime after 12 months. This will begin on or about 1 July 2010 and it will be a useful review to inform the parliament on how the compliance regime is working.
Very importantly also, the opposition was concerned that six no show, no pay failures over a six-month period was too many and that it did leave open the possibility that someone could be slipping through the gaps and missing their obligations without any action being taken other than being docked one day’s welfare. I welcome the minister’s announcement that this will be done through legislative instrument. We believe that this goes a significant way towards improving the bill.
A remaining concern that the opposition does have is the treatment of deliberately missing a job interview which is part of someone’s obligations. I accept that missing a job interview has been treated differently under different employment service regimes over the last 15 years. Now we are moving towards a system where there will be three no show, no pay failures before a comprehensive compliance assessment is triggered. That does capture when someone deliberately misses a job interview, and would be one no show, no pay failure before a comprehensive compliance assessment. Having said that, the number of job seekers who receive a penalty for deliberately missing a job interview is quite small—of the order of about 200 per month in recent times.
We know from the updated economic and fiscal outlook that the outlook for jobs will deteriorate quite dramatically over the next 18 months. On the government’s own forecast the unemployment rate will reach seven per cent by June 2010. The numbers of Australians out of work will increase by 300,000 by June 2010. This increase will place enormous pressure on Centrelink, on employment service providers and on the job seekers themselves. It is very important for us as a parliament to make sure that we have a compliance regime which is effective but which also gives the strong message that it does not give up on job seekers and that it does make sure that, although the labour market will look quite bleak over the next 18 months, job seekers do remain actively looking for work and do not become discouraged.
None of the other amendments passed in the Senate are objectionable—the discretion for Centrelink, the timing of the penalty amount and putting the comprehensive compliance assessment in the legislation. On reflection, the severe financial hardship provisions are a good improvement. One of the weaknesses with the existing bill was that financial case management to deal with people in financial hardship had been dispensed with. In summary, the opposition agrees that these amendments do improve the bill. Having seen these amendments, the opposition will be supporting this bill.
Question agreed to.