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Employment Services Reform

The Welfare to Work regime introduced by the previous government was unfair, punitive and ineffective in providing an adequate safety net and genuinely engaging job seekers in securing appropriate work. The Australian Greens opposed that legislation vehemently, and we continue to oppose that punitive approach. The Australian Greens believe that, for the majority of those on welfare, the best outcome is for them to find meaningful employment. It is the best outcome for their families, their self-esteem and their standard of living, and it is the best outcome for our society and the productivity of our economy. We do not believe the Welfare to Work approach was the right way of achieving these outcomes.

As I said at the time of the debate on the Welfare to Work legislation:

We are concerned that the measures contained in the Welfare to Work proposals are unnecessarily harsh, badly targeted and ultimately ineffective. They focus on reducing income support and rely on coercive measures and unduly harsh penalties to force people into the work force, rather than providing incentives and support. There are no carrots, only sticks. The proposals do not address the very real barriers people face in finding employment, including lack of education, skills, experience and confidence.

The biggest stick-and that has proved right, by the way-and the most harmful aspect of Welfare to Work is the arbitrary and mandatory eight-week non-payment penalty. As many in this chamber know, I have taken a particular interest in looking at the number of eight-week non-payment penalties and the affect of these penalties on some of the most vulnerable members of our community. In April this year, I discovered shocking data through Senate estimates that between July 2007 and February 2008 there were more than double the number of eight-week non-payment penalties applied in the 2006-07 financial year.

The data also revealed that the eight-week non-payment penalties were hitting the Aboriginal community hard, with 29 per cent of those breached in Western Australia and 68 per cent of those breached in Northern Australia being Indigenous job seekers. The data I received in April also showed an appalling rate of financial case management, with only 3,012 people out of the 31,789 people breached receiving financial case management. The government's own data on the impact of non-payment periods reinforces our position.

The government's survey of people who had received an eight-week non-payment penalty found that 64.6 per cent had borrowed money from someone else; over half had failed to pay rent or board on time; around 15 per cent of those who had failed to pay rent were evicted, putting them at high risk of homelessness; 37.6 per cent could not pay their electricity, gas or phone bills on time; 31.8 per cent had reduced expenditure on food; and 12.4 per cent went without medication they would normally take. There are also the social impacts of non-payment penalties with marriages and relationships coming under stress and people being unable to take their children on outings.

Of particular significance is the finding that the eight-week non-payment penalty actually makes it harder for people to find work because of a lack of money for job search activities-for example, transport is more difficult and making telephone calls is more difficult. This is completely contrary to the stated objective of the legislation-to assist people into work. These figures demonstrate that the system is not working and that it is completely contrary to the governments social inclusion agenda.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 goes some way to addressing the harmful affects of the current system. But, in our opinion, it does not go far enough. In particular, the Australian Greens are dismayed that the ALP government has decided to keep the eight-week non-payment penalty. We appreciate the provisions in the bill that are designed to minimise the number of these penalties, particularly in relation to participation failures. But we see no place in the welfare system for such punitive penalties. We note that around half of the eight-week non-payment penalties are for ‘serious failures', not participation failures. Serious failures under the bill will still attract an eight-week non-payment penalty for a first offence. We believe that the bill is not going far enough in assisting these people.

We have particular concern about the ‘preclusion period' of eight weeks for people who become unemployed from a voluntary act or misconduct. There is no provision in the bill for people on this eight-week penalty to mitigate the penalty through re-engagement. This is inconsistent with the stated objective of the government to focus on re-engagement. We note the call from Mission Australia before the Senate inquiry:

... that the legislation be amended to allow all job seekers that have an eight-week non-payment period applied to them have the opportunity to engage in a ‘serious failure requirement' in order to access income support payments irrespective of the reason for unemployment-

A willingness by job seekers to engage in periods of intensive activity, even when due to the application of a serious failure requirement, we believe, is to be encouraged and recognised. It serves to maintain continuity of engagement with an employment services provider and of participation in activities that are intended to support the achievement of sustainable employment outcomes.

The National Employment Services Association also makes a very important point in relation to people losing their job through misconduct:

... lots of job seekers we see have been sacked because of misconduct, but it becomes fairly evident that the misconduct was a result of mental health issues or other personal circumstances that interfered, not that they were intentionally sabotaging work to go back to welfare. The ability to distinguish between some of those factors and better protect the people who are in those positions would be welcomed.

The Greens will be moving amendments to address these concerns. We also repudiate the idea that this level of punishment is somehow necessary as a deterrent. We agree with Catholic Social Services Australia when they argue:

It is not acceptable to use financial hardship, or the threat of financial hardship, as a tool to promote compliance. Nor is it acceptable to place already vulnerable individuals and their families under severe added stress. Individuals who are unable to support themselves through paid work should be entitled to an adequate level of support and to lives where dignity is maintained.

We are moving into a period of time when unemployment is expected to rise. We need an income support system that respects the dignity of individuals who need to rely on income support. While the Australian Greens acknowledge this bill as a step in the right direction, we do have a number of concerns about it and suggestions for its improvement.

I would like to address the issue of complexity in this legislation. A key issue to emerge from the committee inquiry into this bill relates to the complexity of the new system. The complexity comes from having five different types of ‘failures' each with its own particular criteria, different levels of discretion, different consequences and different access to hardship provisions. We acknowledge that the intention of the structure of the new system is to provide penalties to more appropriately reflect the relevant breach and shift from the current one size fits all approach. We support this intention but suggest that greater consistency between the categories of failure in relation to matters such as when discretion is allowed, when hardship provisions will apply and when penalties are to be ‘worked off' would result in a simpler system which would be easier to understand and implement. National Welfare Rights Network has indicated that it is:

... concerned that job seekers will struggle to understand just how the new system will work, their obligations under it and, second, how they can avoid penalties and if an error occurs how it can be remedied. This is of great concern, given NWRN members' current experience that jobseekers' lack of understanding of how the existing compliance regime operates in practice has led to the imposition of penalties.

The Australian Greens will be moving amendments to create greater consistency on the application of reasonable excuse and hardship provisions and the ability of job seekers to ‘work off' their penalties.

I would now like to touch on the issue of discretion. An important area where the Greens believe there should be greater consistency is the ability of Centrelink to exercise discretion in applying a penalty. Centrelink has discretion in applying an eight-week penalty for wilful or persistent noncompliance but, as the bill stands, it does not have discretion for the other penalties, apart from whether a reasonable excuse exists. We understand that the intention is for employment service providers to have discretion in reporting participation breaches, but we note that in evidence to the Senate inquiry Mr Carters from the department made the point that Centrelink are the final determiner. As the final determiner, we strongly believe Centrelink should have the discretion to evaluate the report from the service providers and make their own judgement on whether a penalty should be applied. We will be moving amendments to provide Centrelink with this discretion. We also believe that the discretion employment service providers are to have in reporting participation failures should be in the legislation and not left to contractual arrangements, as is currently the case. This is an important aspect of the new regime and we believe should be reflected in the bill. We also understand that the reason it is there is because of the way the former government chose to make some of its decisions and implement Welfare to Work.

No show, no pay and connection and reconnection breaches are part of a new process under this bill-no show, no pay in particular. One of the key elements of the reforms introduced by the bill is the no show, no pay regime for certain activity related breaches. We appreciate that the government is intending to create penalties for noncompliance that more accurately reflect the breach. We believe this approach is a better approach than the current system, although we still have concerns about how it in fact may operate in practice. We are worried that even a one- or two-day deduction may make it more difficult for people to comply, leading to people breaching more often. We believe that to address this problem the bill should be amended to include hardship provisions for no show, no pay and reconnection failure penalties. This would allow the penalty to not be applied where a person is in severe financial hardship. We can not see the purpose of causing people in severe financial hardship even more difficulties.

We also support the ability of job seekers who have a no show, no pay penalty or reconnection failure penalty applied to be able to ‘work off' the penalty, similarly to the provisions for eight-week non-payment penalties. We are particularly concerned about the impact this system may have on Indigenous income support recipients. Under the current system we have seen a very significant increase in breaching, with a disproportionate increase in Aboriginal communities. There is also anecdotal evidence of significant rolling breaches in Aboriginal communities resulting in complete disengagement from the system. We believe there are real risks that the no show, no pay system could result in disengagement for particularly vulnerable job seekers. The Greens will be moving amendments to introduce hardship and reconnection provisions into the no show, no pay regime. We will also be moving amendments to ensure that penalties can only be applied to the instalment period after the first instalment period following notification of the failure. This will allow people to prepare to have less money and also provides time for Centrelink to ensure that correct decisions are being made.

Similarly, we strongly believe that the bill should provide for comprehensive compliance assessment. This process is an integral part of making the compliance regime fairer and more responsive to individual circumstances. We understand that the intention is that before a serious failure is determined and an eight-week non-payment penalty applied a person must undertake a comprehensive compliance assessment which will consider whether the person's employment pathway plan is appropriate, and what barriers a person may face to employment. The government has also indicated that the trigger for a comprehensive compliance assessment will be three connection failures and six no show, no pay failures. As this is such an important part of the new process, we believe it must be contained in the legislation, and we will be moving amendments to that effect.

Strong arguments were made during the Senate committee inquiry by Homelessness Australia about the need for the compliance system to take into account the particular vulnerabilities of homeless job seekers and also the potential for the compliance system to place people at risk of homelessness. Homelessness Australia argued that a consistent definition of homelessness based on the ABS census definition should be used in the social security legislation and legislative instruments. They noted that the definition of homelessness currently used in the reasonable excuse legislative instrument is very narrow and only applies to when an individual is sleeping in a non-permanent location on the streets or in a refuge. This is a completely inadequate definition of homelessness and we support Homelessness Australia's recommendation that the government define homelessness to reflect the cultural definition of homelessness used in the census.

We believe that this legislation will have positive impacts, particularly if it is amended along the lines the Greens are proposing. We think it is important that there should be a review and we want to see a review conducted after 12 months of the new system. In particular we would like to see the government pay specific attention to the impacts of the new system on Indigenous job seekers. It is vital that the new system meets the needs of Indigenous communities and that breaching rates are minimised. Welfare to Work had a disproportionate impact on Indigenous Australians and we must ensure that that disproportionate impact is not continued.

The reform of the compliance regime is an important measure, but there are other measures of Welfare to Work that we believe the government also needs to reform. One of the most contentious aspects of Welfare to Work reform was the changes directed at single parents. The majority of parents on income support are single mothers. We urge the government to revisit the policy of putting single parents onto Newstart, with all the attached participation requirements, including in particular the downgraded educational opportunities provided to single parents.

This new legislation does provide a fairer approach to helping people to find work, particularly by working with them to meet their individual needs through the employment pathway plan. I believe it will provide a much better approach, particularly for those people with mental illness and those who also face great barriers in employment.

The Greens note that there is broad support from stakeholders in the community services sector for this legislation. I was a little dismayed, I must admit, to hear Senator Bernardi use David Thompson's evidence to try to justify their position. That is certainly not the impression that Mr Thompson gave to the committee of inquiry. I understood him to be supportive of this legislation, although he had some concerns about some of the provisions and he recommended a number of amendments. But, as I said, I understand that the community services sector broadly supports this legislation but does want some amendments.

The bill goes some way to removing some of the harshest impacts of the Welfare to Work regime. We do not wholeheartedly support the bill and I have outlined our concerns. As I mentioned at the beginning of this speech, we believe Australia's welfare system should be focused on assisting people in need, including through encouraging and supporting people back into work and then acknowledging people's individual circumstances and difficulties. This bill does go some way to recognising those individual difficulties and circumstances. As I said, we do not believe it goes far enough but it does go a substantial way and we look forward to seeing the government bringing in another bill that addresses the other punitive approaches of Welfare to Work, and then Australia can finally celebrate the death of Welfare to Work.

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