Dissenting Report from Labor Senators
Introduction
1.1
Labor Senators on this committee hold serious concerns about the impact
of measures set out in this Bill which will significantly erode support for
young Australians and push them into financial hardship and poverty.
1.2
These concerns are shared by all participants to this inquiry, with the
exception of the Government departments. Labor Senators note that the
recommendation in the majority report does not reflect the view outlined by the
stakeholders who provided written and oral testimony to the inquiry.
1.3
A number of the measures in this Bill are the same or substantially the
same as measures announced by the Government in the 2014-15 Budget. These
measures were considered by the committee's inquiry into the Social Services
and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the
Social Services and Other Legislation Amendment (2014 Budget Measures No. 2)
Bill 2014.
1.4
Labor Senators are of the view that the committee heard no new evidence
during the inquiry into the Social Services and Other Legislation Amendment
(Youth Employment and Other Measures) Bill 2015 to alter the conclusions
reached in their Dissenting Report from the previous inquiry.
1.5
As the Australian Council of Trade Unions (ACTU) stated in their
submission to the committee:
[T]his Bill is merely a recycled and watered-down version of
the 2014 proposals. The measures contained in this Bill are harsh, draconian
and unfair, and very little different to those proposed (and rejected by the
Senate) last year.[1]
1.6
This view was echoed in the submission of the Australia Council of
Social Services (ACOSS) where they state:
It is disappointing that measures widely regarded as unfair
and harmful for people on the lowest incomes are being recycled from the 2014
Budget into the latest one.[2]
1.7
In particular, Labor Senators remain concerned by the Government’s
attempts to completely withdraw the safety net for young jobseekers. Whether
for one month, as proposed in this Bill, or six months, as was proposed in the
previous Bills, it is clear that the measure will drive young people into
poverty and disadvantage.
1.8
The devastating impact on young Australians is only compounded by other
measures in the Bill before the committee.
1.9
Labor Senators are of the view that the financial hardship which would
result from a number of measures in this Bill will only serve to make it hard
for jobseekers to undertake job seeking activities and secure employment.
1.10
As the Australian Association of Social Workers stated in their
submission:
Factors leading to poverty such as lack of money for
accommodation, subsistence food, clothing suitable to attend job interviews or
insufficient funds for transport all interfere with people’s ability to
actually look for work.[3]
1.11
The measures in this Bill take a punitive and counter-productive
approach to the issue of youth unemployment in Australia, particularly given
the difficulties and barriers faced by young people in the current job market.
1.12
As the ACTU put it in their submission:
[T]his Bill will achieve nothing save to punish young people
for not being able to find employment in a sluggish labour market.[4]
1.13
In his evidence to the committee, Mr David Pigott, General Manager,
Mission Australia, highlighted the same issue, stating:
We are concerned, however, that the current budget measures
before us risk taking a punitive approach to young people in the current labour
market, where there is only one job available for every six job seekers. Youth
unemployment has remained stubbornly high since the global financial crisis,
and in some areas where we work it is as high as 30 per cent.[5]
1.14
Accordingly, Labor Senators are of the view that Schedules 1, 2, 3 and 5
should be removed from the Bill.
Schedule 1: Ordinary Waiting Period
1.15
Schedule 1 seeks to apply a one week waiting period to all working age
payments, excluding widow allowance claimants.
1.16
This measure is substantially the same as a previous proposal announced
in the 2014-15 Budget and examined as part of the committee's inquiry into the Social
Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill
2014.
1.17
While the measure includes a number of grounds upon which the one week
ordinary waiting period can be waived, evidence to the committee made it clear
that the grounds were too narrowly defined, administratively burdensome and
designed to push claimants to a crisis point.
1.18
The measure provides that the current exemption on the basis of severe
financial hardship will be restricted further, to only apply if a person is
also experiencing a 'personal financial crisis'.
1.19
The committee heard evidence that the changes to the ordinary waiting
period and the additional requirement that a person being experiencing a 'personal
financial crisis' would mean that people with no means of supporting themselves
would end up having to serve the one week period without payment.
1.20
In her evidence to the committee, Ms Kate Beaumont, President of the
National Welfare Rights Network, stated:
Make no mistake, there will be people experiencing financial
crisis who will no longer qualify for the exemption.[6]
1.21
In their evidence to the committee, ACOSS stressed that the proposed
exemption test would require an extremely thorough assessment of a claimants
financial circumstances to determine if they needed access to income support
one week early and would result in one of two outcomes:
Either the administrative cost of the proposed rules would
exceed the savings to government, or many people who need immediate help would
abandon their application.[7]
1.22
In their submission to the committee, UnitingCare Australia argued that
the requirement that a person be experiencing a 'personal financial crisis' was
counter‑productive and would likely result in increased cost to the system:
[W]e highlight that the provision of services is not only
more costly if delivered at the point of crisis than if support is provided in
a preventative manner, but also, the adverse impacts experienced by the
individual are reduced through earlier assistance being provided.[8]
1.23
The National Welfare Rights Network echoed this in their submission
stating:
[T]he additional limitations being placed on exemptions to
the OWP [ordinary waiting period] will operate so that some people, with no
means to support themselves or others to rely on for support, will be required
to serve the OWP.[9]
1.24
Labor Senators on the committee are of the view that the changes, in
particular the tightening of the financial hardship exemption, will only serve
to reduce living standards for an already vulnerable group of people,
increasing their risk of harm and hardship.
1.25
The evidence to the committee strongly refutes the Government’s claim
that 'claimants without the means to support themselves will have access to
exemptions and waivers'.[10]
1.26
This impact is compounded when considered in combination with other
measures in the Bill, specifically the proposed Income Support Waiting Period.
Schedule 2: Age requirements for various
Commonwealth payments
1.27
In line with the announcement in the 2014-15 Budget, this measure seeks
to extend Youth Allowance (Other) from 22 to 24 year olds in lieu of Newstart
and Sickness Allowance.
1.28
This measure would result in a cut of at least $48 a week, or almost $2 500
a year, for young jobseekers between the ages of 22 and 24.
1.29
This measure was originally proposed in Schedule 8 of the Social
Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014
which was previous considered by the committee.
1.30
The stated intention of the measure is to 'provide incentives to young
unemployed people to obtain the relevant education and training to increase
employability'.[11]
1.31
The need for incentives such as this for young jobseekers was countered
in the submission from the Australian Association of Social Workers, which
stated that:
[T]here is no strong evidence to indicate that the current
cohort of young people is avoiding employment more than any other segment of
the population.[12]
1.32
The evidence presented to the committee, which Labor Senators concur
with, is that the measure could exacerbate the disadvantage some young people
face in the job market, while doing nothing to address the structural problems
faced by these young jobseekers.
1.33
In their submission, UnitingCare Australia highlighted the range of
barriers that young jobseekers face, such as limited prior education and
training, limited experience and lack of job applications skills, arguing that:
These factors highlight the absence of a level playing field,
and point to the reality that extra assistance is needed to facilitate
education and employment opportunities for those at most disadvantage.[13]
1.34
Submitters to the inquiry raised particular concerns about the impact of
this measure on already at risk or vulnerable young people.
1.35
In their submission Orygen stated that:
[R]educing the income of job seeking young people is likely
to result in increased financial stress, potentially creating difficult
personal situations for young people. Such stressors may trigger or exacerbate
an experience of mental ill-health such as anxiety and depression in vulnerable
young people, which in turn creates barriers to effective job-seeking.[14]
1.36
For these reasons Labor Senators do not support this measure.
Schedule 3: Income Support Waiting Periods
1.37
This measure seeks to introduce a requirement for young people under 25
to wait four weeks prior to receiving income support, an Income Support Waiting
Period.
1.38
The Income Support Waiting Period is a revision of the Government's 2014‑15
Budget measure requiring young people under 30 to actively seek work for six
months prior to receiving income support payments.
1.39
The Government originally sought to introduce the six month waiting
period in Schedule 9 of the Social Services and Other Legislation Amendment
(2014 Budget Measures No. 2) Bill 2014 which the committee previously examined.
1.40
Labor Senator's expressed serious concerns about this measure when it
was previously considered by this committee. These concerns are not allayed by
the revised proposal which the Government seeks to implement in the Bill now
before the committee.
1.41
Throughout this inquiry Labor Senators questioned the evidence base upon
which either iteration of the policy is based. Participants to the inquiry
were unable to identify any evidence to support the rationale for the measure.
1.42
The ACTU argued that the Explanatory Memorandum:
[F]ails to provide
any real rationale for the introduction of these waiting
periods, beyond claiming
(with no evidence)
that it will 'provide an incentive for affected persons
to be self-sufficient'.[15]
1.43
In their submission, the National Welfare Rights Network, stated that
they were:
[N]ot aware of any modelling or evidence that there will be a
measureable increase in take up of work by young people or a reduction in time
spent on benefits if this measure is introduced.[16]
1.44
The same was noted by UnitingCare in their submission:
[We are] not aware of any evidence that these measures will
do anything other than lower the living standards, and increase the risk of
harm, for an already vulnerable group of people.[17]
1.45
Under questioning from the committee, officials from the Department of
Social Services conceded that there is no evidence that the measure will help
young people find work:
It was a decision of Government, Senator, to apply the
four-week waiting period and that was after, I believe, extensive consultation
on the previous year's budget measure, which was a six-month waiting period and
following that consultation the Government has decided to apply a four-week
waiting period.[18]
1.46
Officials also told the committee:
We don’t have evidence that is directly comparable to this
particular policy...[19]
1.47
The officials also refuted claims, by the Government, that the measure
was comparable to the New Zealand model of support for young jobseekers,
stating:
I do not think you can directly compare the two policies
though.[20]
1.48
In contrast the committee heard evidence from a range of stakeholders
about the possible unintended consequences of the measure. In their submission
the Brotherhood of St Laurence stated:
[A] period of four weeks without income support continues to
have potential for harsh unintended consequences that will be borne hardest by
those young jobseekers who do not have financial support of their families.[21]
1.49
Other submitters were less circumspect about the negative consequences
of the measure. The National Welfare Rights Network argued that the measure
would do nothing to improve young people's employment prospects and only serve
to entrench disadvantage, stating:
The likely outcome, despite the Government’s stated
intentions, will be to exacerbate poverty and disadvantage.[22]
1.50
ACOSS Chief Executive Cassandra Goldie was similarly clear on the
consequences of the measure, saying:
The only outcome that will be the result of this kind of
proposal is to place more young people into financial hardship.[23]
1.51
A number of submitters highlight that the allocation of additional
emergency relief funding for individuals affected by the measure shows that the
Government expect the measure to cause harm and drive individuals to access these
services. Ms Kate Beaumont, President of the National Welfare Rights
Network, highlighted this in her evidence to the committee:
This is clearly is not a path to self-sufficiency; it is a
one-way street to poverty, an impact on long-term unemployment, poor health,
depression and homelessness. This is borne out by the government allocating
$8.1 million to help pay the people made destitute by this very policy. The
simple reclassification of people and grant them interventions, if their
situation deteriorates during the four-week waiting period, should be enough to
be convince the public that this is a bad idea, poor social policy and should
be rejected.[24]
1.52
The National Union of Students also highlighted this issue, arguing:
It seems very poor policy to deliberately create
circumstances where many more people will be in need of the already highly
stretched and limited emergency relief system.[25]
1.53
Labor Senators are also convinced by testimony from submitters which shows
that rather than assisting young jobseekers into work, the financial hardship
that would result from this measure would have disastrous impacts on the health
and wellbeing of young people.
1.54
Orygen’s submission stated that:
Rather than the increased waiting period acting as an
incentive to work, research has shown that a lack of income can impact on a
young person’s capacity to meet job seeking requirements and look for
employment (such as limited access to transportation, impact of financial
stress on mental health potentially triggering depression and anxiety).[26]
1.55
In their submission Headspace also made it clear the measure will
negatively impact on the mental health and wellbeing of young Australians,
stating:
[W]e believe these changes are unlikely to encourage greater
workforce and education participation, but rather have the potential to impact
negatively on the mental health and wellbeing of all young Australians and
disproportionately on those already disadvantaged due to factors such as mental
health difficulties, poverty, social isolation or disengagement from family.[27]
1.56
Headspace went on in their submission to argue that the negative impacts
of this measure would be counter-productive and would actually make it harder
for jobseekers to find employment:
The impact of such a change has the potential to leave young
people without the ability to meet their basic needs at a time when they should
be focused on finding and securing employment, and to increase their risk of
experiencing homelessness and mental health difficulties. Such changes would
also impact disproportionately on those most vulnerable young people, who are unable
to rely on family or other social connections for financial or housing support
in times of crisis.[28]
1.57
Labor Senators are of the view that extreme financial hardship which
would result from this measure is counter-productive to the stated intention of
encouraging people into workforce participation.
1.58
As the ACTU stated in their submission:
The proposed changes will only serve
to place financial stress on those who can least afford
it and make it more difficult for young people
to focus their energies on job search
activities.[29]
1.59
The Australian Association of Social Workers similarly stated in its
submission that:
This enforced destitution will further inhibit the ability of
young people to look for work.[30]
1.60
As with other measures contained in this Bill, the only policy basis for
this measure appears to be the ill-informed and incorrect assumption that
unemployment in a choice for young unemployed Australians and that depriving
them of income support will force them to support themselves through
employment.
1.61
This assumption and consequently this measure do not take account of any
of the systemic issues impacting on the extremely high youth unemployment
levels right across Australia.
1.62
In her evidence to the committee Ms Margaret
Quixley, Founding Director, Young Opportunities Australia, commented on
the flawed assumptions underpinning the measure and the systemic issues which
are at play, stating:
We believe the basic tenets underpinning this policy around
the causes of youth unemployment to be problematic. Implicit in these policy
changes are assumptions around the availability of work, that the problem has
to do with supply and willingness of use rather than a lack of demand affected
by broader macroeconomic conditions.[31]
1.63
In their submission ACOSS similarly stated that the measure:
[S]hifts the risk of financial hardship arising from
unemployment from government to the individuals affected, implying that they
are personally at fault for an economic policy problem governments have
struggled to fix.[32]
1.64
Labor Senator's concur with the evidence provided to the committee, that
there is no evidentiary basis for this measure and that it is instead based on
the false belief that young people choose unemployment.
1.65
All the information available to the committee shows that this proposal
is merely a punitive measure which would push young jobseekers into poverty,
negatively impact on their health and wellbeing and possibly decrease their
ability to seek employment.
Schedule 5: Indexation Pause to Income Thresholds
1.66
This measure seeks to freeze the income free areas for working age
payments and student payments for three years from 1 July 2015 and 1 January 2016
respectively.
1.67
This measure was previously announced in the 2014-15 Budget and was
examined by the committee in the aforementioned inquiry.
1.68
The impact of a freeze on the income free areas will be a decline in
their value in real terms.
1.69
Labor Senators are of the view that this measure will only further
financially disadvantage jobseekers and provide a disincentive to engage in the
workforce. As Anglicare stated in their submission:
[T]his is a cost cutting measure only and provides no added
benefit in terms of goals of either the safety net or the participation agenda:
that is it will not provide protection against poverty or support an individual
to prepare for, seek or sustain employment.[33]
1.70
Low-income earners, low-skilled employees and part-time and casual
employees will be impacted by this measure which will erode the value of what
they earn.
1.71
In their submission to the committee, ACOSS stated:
It is therefore clear that this measure will affect people in
very low paid employment, who are attempting to transition from unemployment to
a secure, reasonably paid job.[34]
1.72
ACOSS go on:
It will particularly discourage part time and casual
employment, which is often the only work low-skilled unemployed people can
obtain.[35]
1.73
Due to the likely negative impacts on jobseekers financial position and
the reduced incentive to work Labor Senators are of the view that this measure
should be rejected.
Conclusion
1.74
The measures from the 2015-16 Budget in this Bill are endemic of a
Government that attacks the most vulnerable and at risk within our country to
find budgetary savings.
1.75
As Ms Michelle Waterford, Research and Policy Director, Anglicare
Australia, told the committee:
[T]he most disadvantaged members of our society should not be
the catch-all for efficiencies and cost savings.[36]
1.76
This view was echoed by Ms Kate
Beaumont, President of the National Welfare Rights Network, who said:
We cannot find if there is an evidence base for it, except
for saving money. That seems to be the agenda here.[37]
1.77
The measures discussed above appear to be based on the belief that youth
unemployment in Australia is the fault of young people rather than a product of
the current economic and labour market conditions.
1.78
Many of the measures that the Government seeks to introduce in this Bill
will have a negative impact of jobseekers ability to seek and sustain
employment, counter to the stated intention of the Bill.
1.79
This approach also risks the health and wellbeing of young jobseekers
across this country. The committee heard compelling evidence on the impact the
measures would have on the general wellbeing and mental health of young people,
including concerns that people could be forced into abandon study, be pushed
into homelessness and family relationship stretched to breaking point.
1.80
For these reasons Labor Senators recommend that Schedules 1, 2, 3 and 5
should be removed from the Bill.
Recommendation
1.
The Bill not be passed in its current form.
Senator Carol
Brown Senator Nova
Peris
Senator Claire
Moore
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