Liquid Assets Waiting Test
Senate Hansard, Thursday 10 February 2011
Senator SIEWERT (2.20 pm)—My question is to the minister who is representing the Minister representing the Minister for Employment Participation and Childcare. As part of the stimulus package, the government agreed to double the liquid asset threshold for relevant payments and remove the liquid assets waiting period for a period of two years, until 31 March 2011. As part of the agreement, the government also agreed that these arrangements would be reviewed after one year to determine their adequacy. Have the changes to the liquid assets threshold and waiting period been reviewed? If so, what were the findings and will those findings be publicly released? If they have not been reviewed, why not?
Senator CARR—I thank Senator Siewert for her question. As she indicated, I am representing a minister who is representing another minister, so there is a long chain back to where we can try to get some answers for you. The liquid assets waiting test involves a waiting period that is applied to ensure that people with substantial assets use their assets for self-support before calling on the community for income support. For the benefit of the chamber, this is a test that applies to youth allowance, Austudy, Newstart allowance and the sickness allowance recipients whose liquid assets exceed the specified threshold. Liquid assets include cash, shares and term deposits and moneys due or able to be paid by the person’s former employer and other readily realisable assets.
As part of the global recession response, the liquid asset waiting period was temporarily doubled to $5,000 for a single person with no children and $10,000 for all other recipients for the period 1 April 2009 through to 31 March 2011. This was a measure that was included in the jobs and training compact of the 2009-10 budget. Given that circumstances have substantially improved across the economy as a result of the strong economic management of this government, there is now a situation which is much better for people. There has been no decision to extend these temporary arrangements beyond 31 March 2011. This wait can be waived if a person is in severe financial hardship because they have incurred unavoidable or reasonable expenditure, including cost of living, while serving the waiting pe-riod. So there is an opportunity for there to be discus-sion around that matter. But the government has determined to stick—(Time expired)
Senator SIEWERT—Mr President, I ask a supple-mentary question. Or rather I will ask the question again: did you do the review? If not, why not? It is very simple.
Senator CARR—The advice that I have been given is that, as a result of the actions of the government in the 2009-10 budget, the amount of money that was deemed to be the limit for the liquid assets waiting period test was doubled. It was doubled for a specific period of time. Since the economic conditions have improved, the government has not made any decision to extend that period of time. Frankly, that is about all that I can say to you in these circumstances. If there is further information that the minister wishes to provide, I will of course get that information to you.
Senator SIEWERT—Mr President, I ask a further supplementary question. I am assuming that the answer is no, the review has not been done. I therefore ask: on what basis have the government made the decision not to extend the changes to the liquid assets test? What proof do they have that in fact there is no need to extend the provisions that were made through the stimulus package? What evidence do you have that you do not need it when you have not done the review?
Senator CARR—What I am advised is that, based on the arrangements made in the 2009-10 budget, there was to be an extension of these arrangements for a limited period—from 1 April 2009 to 31 March 2011. That is what was in the arrangements in the budget. Nothing has changed in that regard. The government takes the view that, as a result of the improvement in the eco-nomic conditions, particularly where we have a situation in which the unemployment rate is at five per cent—which compares favourably with the unemployment rate in the United States of nine per cent and that of Europe, where it is at 10 per cent—it is not necessary to extend that. Australia is economically faring so much better. That is a result of the sound economic management of this government, a result of the deci-sions that we took to spare this country from recession. (Time expired)
Read Senator Siewert's speech on the Liquid Assets Waiting Test.