Hon Judi Moylan

Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012- Second Reading

Mrs MOYLAN (Pearce) (10:05): The Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 seeks to inflict an 18.5 per cent cut in payments to over 100,000 single parents at a time when the cost of living is skyrocketing and power bills alone have increased by over 60 per cent. This bill is an extension of the Welfare to Work reforms passed in 2006 and it removes the grandfather clauses which allowed single parents to claim the parenting payment until their youngest child turned 16. Under this bill, once the youngest child turns eight, sole parents will be abruptly moved to Newstart allowance.

It is commonly known that that the Organisation for Economic Cooperation and Development—the OECD—recently found that more than two-thirds of children in families relying solely on Newstart live in poverty. Newstart equates to $38 a day to feed a parent and child, buy school clothes, pay the rent and pay the utility bills. What a pitiful amount! This legislation, according to the government, will result in more people moving from welfare to work. I say we are moving them from welfare to worse. Let me make it clear: I am supportive of measures that are genuinely designed to assist people into the workforce. I have no difficulty with that concept at all. Paid work leads to financial independence and it provides superannuation and the prospect of engagement with the community. There is no doubt that the best way out of the poverty trap is to have access to a full-time job in the paid workforce. But this bill does nothing to achieve that objective; there is nothing in it that suggests it will achieve that objective. It is simply a cynical exercise to generate budget savings, attacking some of the most vulnerable people in this nation.

It is a fact that the number of single women under 20 years of age claiming the sole parent payment has actually dropped by about 20 per cent over the last decade. That scotches some of the myths around sole parent payments. Undoubtedly, the government will contend that a combination of new payments will alleviate the impact of this bill—we have just heard a member talk about that. However, modelling by the Australian Council of Social Service shows that this is not the case. ACOSS estimates that 50 per cent of sole parents have no earnings and they rely fully on social security payments. This group is already living below the poverty line. Even when one factors in recent increases to the family tax benefits and the new schoolkids bonus, a sole parent with no earnings, studying to acquire skills to be employable, will be $73 a week worse off if the child is in primary school or $65 a week worse off if the child is in high school. This is just disgraceful.

To most of us, $65 a week is a fair amount of money. To these people it is devastating to lose that much of their pension. We are talking about parents trying to do one of the toughest jobs in the nation—that is, raise children alone without support. For single parents who are working, the effects will be even more severe. On a parenting payment, a person can earn up to $88 a week plus $12 a week extra per child before losing a portion of their income support. On Newstart, parents will lose 40c in the dollar when they earn above $31 a week. This bill is entitled 'Fair incentives to work'. Where is the incentive in that? Some of the modelling that has been done on these policies shows that people on the Newstart allowance who are working and earning will be paying an effective marginal tax rate of up to 70c in the dollar. So where is the incentive in that? Not only will parents have money taken from them by being corralled into Newstart; they will be penalised more if they happen to find work. Some incentive!

Shifting parents to Newstart also exposes them to harsh noncompliance measures. For instance, if a child suddenly falls sick and the parent misses a job interview or training session, he or she will lose one day's pay for each interview missed. If the person had a number of interviews on that day it could easily mean losing a whole week's Centrelink benefit. While Centrelink may repay that money if there is a valid excuse, such as sickness, it can mean no food on the table that week whilst waiting for the back pay. That is an appalling possibility. In the Treasurer's recent budget speech to the Press Club he reflected sententiously on the challenges of raising children. His concerns would seem to ring hollow in the context of consigning single parents and their children to ever deepening poverty. Beware a government when it takes to espousing 'motherhood' statements—it invariably gets it wrong.

The extraordinary hypocrisy of this policy is underlined by the fact that members of this parliament participated in the annual CEO Sleepout last week to raise awareness about homelessness. There are already nearly 7,500 families sleeping on the streets in our country. I am talking about families; this does not include all the single people. Data from the Australian Institute of Health and Welfare shows that the principal cause of families ending up on the streets is that they are evicted, mostly because they cannot afford rent. And the annual Rental Affordability Snapshot by Anglicare Australia found that there are no affordable housing options for people on Newstart allowance. Despite claiming to be concerned about the homeless, the government will, by a deliberate policy decision, push single-parent families onto a payment that makes putting a roof over their heads almost impossible and certainly unaffordable. It is a decision that will push these people out onto the streets. Again, some incentive to work! How difficult it would be to get work if you do not have a stable place to live in.

If the government were really intent on helping people to get off welfare and into work, it would pay attention to the systemic problems that make it difficult for people to access the job market, particularly these people who are also raising children. These systemic problems were thoroughly canvassed in 1999 in the McClure report and have been largely ignored, obviously, in the development of this policy. Funding for job service providers, for example, is already inadequate. They are already having difficulties in managing the long-term unemployed and Commonwealth agencies are struggling to assist those they are currently dealing with. Despite this, the federal government has intemperately sliced $50 million per annum from the Job Services Australia budget.

When the Howard government introduced the Welfare to Work provisions, I was not particularly happy with that piece of legislation and I did not actually vote for it. But at least we did negotiate some changes to that to make it a little better than it otherwise might have been. It increased access to child care and childcare assistance as well as paying a training supplement to assist in reskilling. Under Labor, a parent transferring to Newstart allowance becomes ineligible to receive the pensioner education supplement. This previously provided up to $62.50 a fortnight for single parents studying part time. In its place the government will pay a $400 per annum lump sum in two instalments. This represents less than a quarter of the former pensioner education supplement. How can a parent find work if he or she cannot afford the education needed? This is particularly so for this particular group of people because nearly 57 per cent of the parents—most of them mothers—on the parenting payment have, at most, a high school certificate and are therefore inevitably consigned to low-paid employment. It will also mean that they have little or no superannuation in their old age, so they will become solely reliant on the age pension in future, and we know that there are a disproportionate number of women on the age pension and that people living on the age pension are, for the most part, really struggling, and that they also live pretty close to the poverty line.

The government has recently changed the JET—or Jobs, Education and Training—supplement, which covers the gap between the childcare payment and out-of pocket expenses for child care. To be eligible for JET, a person must be studying at least a Certificate II qualification. The Certificate I, which sits between a high school qualification and Certificate II, is ineligible for JET, and so are many short courses that are not officially recognised at certificate level but provide practical training. These types of courses include office administration and barista work, and improving English skills. To study these, the parent must personally pay the gap between the parenting payment and the actual childcare cost, and this can easily be more than the $38 a day the parent receives on Newstart allowance. The government chooses to ignore such systemic anomalies and chooses to imply that single parents are somehow at fault. The electorate deserves better than this.

I remain deeply concerned about the erosion of support for some of the most vulnerable people in our community. I am deeply concerned about how these changes will impact on children of single parents; the lack of attention by government to the systemic problems that prevent people from accessing work; the lack of attention to housing affordability; and the rising costs of living, including power.

Professor Fiona Stanley, a few years ago, produced a book which talked about children from disadvantaged families, and it is a very sorry saga. These parents are not single, for the most part, by their choosing. In this day and age we have no-fault divorce. We have domestic violence, which continues to be a significant problem in this country. And many women who are on sole-parent pensions are victims of domestic violence; they have had no choice but to remove themselves and their children from the family home in order to escape domestic violence and brutality. These are the children in our communities that are gravely disadvantaged.

I listened to the debate with interest in the other place when we had the address in reply to the budget, and I heard them talking about the new family payment and how the children in some schools were pooling this money so that they could go on fantastic trips abroad. Well, I can tell you, Madam Deputy Speaker, that the children of many single parents in this country will not be going abroad. They will not get out of their own backyard to have a holiday. Their parents are struggling just to put a roof over their heads, to put food on the table, and to put clothes on their backs, and I think this is truly a disgraceful piece of legislation.

I applaud the work of Patricia Karvelas, who has written so often on these issues. I would like to quote from a recent article by Patricia, quoting Maree O'Halloran of the Welfare Rights Network, who writes:

"It is logical to assume that the harsher earnings thresholds for Newstart are responsible for this significant difference in employment and earnings levels."

She cites research by the National Association of Community Legal Centres that found "44 of the 50 local government areas in Australia with the highest rates of lone-parent households are also some of the most disadvantaged areas".

I have them in my electorate. There are sole-parent families and people on disability support pensions that have to move out of the city and closer city areas to rural and semi-rural areas in order to afford a roof over their heads. Then there are transport problems. Then there are problems finding work and problems finding child care. These all mount up. It is the layering effect of these measures that I find very difficult to support in any way.

In the end, inadequate support for the poor makes us all poorer. We will reap what we sow in the high cost of social upheaval, dislocation, increased crime and a continuing upward trajectory of reliance on welfare. The policy to cut social security payments to single parents in this bill before the House is not worthy of support, and I will not support it.

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