Second Reading: The Social Security Legislation Amendment (Increased Employment Participation) Bill 2014

Release Date: 
17 March 2014

Mr TUDGE (Aston—Parliamentary Secretary to the Prime Minister): The Social Security Legislation Amendment (Increased Employment Participation) Bill 2014 is an important bill because it is about one of the most important things that we can do as a parliament and as a government, and that is to help people get into work. I want to speak today specifically from the perspective of the portfolio that I am helping the Prime Minister with, and that is from an Indigenous employment perspective.

All members of this chamber would be aware that at the beginning of this year the Prime Minister made the annual Closing the Gap statement to parliament. In that statement he reported against six key indicators of progress. In two of those indicators we were, in fact, ahead of the game.

In a few of those indicators we were pretty much exactly where we should be, but had not moved a great deal. But in one indicator, out of the six that were reported at the start of the year, we, in fact, were going backwards, where the gap was getting larger not narrower.

That indicator was in employment. This is particularly disturbing because in some respects it is the most important indicator. We know that if people have a job then most other things tend to take care of themselves. They tend to be able to look after their children better. Your physical and mental health is better. Your housing tends to be better if you have a job. And, of course, having a job gives tremendous dignity and gives tremendous economic empowerment. There is great pride in holding a job and contributing to our broader community. So it was disturbing that the employment gap had, in fact, gone backwards over the last six years and had not significantly improved.

The numbers show that only 46 per cent of Indigenous people of working age are actually in work. What is even more concerning are the remote numbers. When you look at those figures in remote areas, only 30 per cent of Indigenous people of working age are in employment, and only 18 per cent of the 17- to 24-year-olds are in full-time work or training. That is 18 per cent, which is extraordinary.

Those people are the future leaders of those communities, but 82 per cent are not in study or in employment today. That is the situation today when you look at those figures—46 per cent overall in work, only 30 per cent in the remote areas and only 18 per cent of the younger generation. When you look at the demographics, you see that about 50 per cent of the Indigenous population of Australia are below the age of 19 years. So the problem today is already very large; it is getting bigger and the demographics show that the proportion of young people entering workforce age is going to get even larger in the years ahead.

We can see when we look at those figures that we simply have to do things differently—and it is getting more urgent every single year for us to do things differently. This indeed is part of the reason why the Prime Minister has made Indigenous employment not just a priority for the Indigenous Affairs portfolio but a priority for the government overall. I raise these matters in this debate because the bill in front of us will assist us in addressing this great national priority. This bill is not Indigenous specific—it covers all Australians—but it will greatly assist Indigenous people who are out of work today and address some of those appalling statistics that I have outlined.

So what will this bill do? In essence, it provides two significant financial incentives for unemployed people to take up jobs and to keep their jobs. Firstly, it provides an incentive to hold a job for two years or more. It does this through what is called the Job Commitment Bonus, which gives $2,500 to an 18- to 30-year-old person who holds down a job for 12 months. Then, if the person holds down the job for a further 12 months, there is a further $4,000 bonus. That is a $6,500 commitment.

Secondly, the bill offers incentives for a person to move to where a job is located. It does this through a measure that will give up to $6,000 to those who move to a regional area for a job and up to $3,000 to those who move to a city from a region or from a city with higher unemployment. And it provides an extra $3,000 on top of that first relocation payment for job seekers with kids.

These two measures provide very substantial financial incentives and they will make a difference. I would put to you, Mr Deputy Speaker, and to the House that the relocation assistance is particularly important for those in remote communities who want to move to a larger economic centre to take up a job.

As you would well know, many of the remote communities simply do not have jobs available in their communities today. Often there is terrific work being done by the leaders in those communities to create further opportunities right there in those geographical locations, but frequently there are simply not enough jobs for the young people to go from school immediately into employment.

For those people in remote communities who do want to move to take up a job, there are sometimes significant impediments to do so. There are cultural barriers, there are Indigenous specific barriers; but also, when you analyse it, there is frequently very little financial incentive to get off welfare in a remote community and take up employment in a larger economic centre.

This is particularly the case when you look at the whole package of economic incentives, including housing. Take, for example, a couple who might have a few children and who are currently unemployed in their remote community. Should they want to move even temporarily to take up a job in a larger economic centre, yes their wage would be slightly higher but, in the process, they would lose other benefits, particularly housing benefits. So, net overall, the financial gain that family would have would actually be very small.

When you consider the small financial increment which that family might get from moving from the remote location to the larger economic centre versus the additional work and the loss of leisure time, being away from their family and homelands and the potential loss of their social house, which they may have had for many years, then you can see that it is not always a good deal for them to take up that opportunity in the short term.

An Indigenous grandmother from Hope Vale on Cape York Peninsula coined, for this disincentive to take up employment, the 'welfare pedestal' that her people were sitting on. By that she meant that the system presently creates a pedestal that people sit on, such that they have to take a step down off the pedestal onto the first employment step before they can start the staircase of further opportunity, and that creates a significant disincentive for many people.

This bill will change that equation somewhat. It will partly address this welfare pedestal by providing additional financial incentives for people who are on welfare to take up opportunities elsewhere, should they choose to do so. Other measures to address the pedestal are also being considered through the Forrest review on Indigenous employment and training. We know that financial implications are not the only things that prevent a person or encourage a person orbiting from one location to another and perhaps going backwards and forwards, but of course they are an important consideration. I am hopeful that the measures which are outlined in this bill will make a difference in providing opportunities for more families to take up work if they choose to do so.

I visited Palm Island last week with the member for Herbert and we saw some inspiring things there. One was a family who had built their own home on Indigenous land. We believe it is the first home built on Indigenous land on a homeownership basis and the construction price was much lower than the government delivered social housing.

It was heartening to see that positive development, as well as the increased school attendance on Palm Island which had come about from our school attendance officers who have been put in place. I was also interested to learn from the local people on Palm Island that many young people under the age of 30 generally had a desire to work, even if that did involve moving to Townsville, which is not far away from the island. It is currently difficult for them to do so, but the right attitude was clearly present.

Perhaps it is hard for those of us who do not have their background to understand how insurmountable some of the obstacles are for them to take that step of getting employment somewhere else and perhaps orbiting backwards and forwards. If you or your family have limited resources, that first step of moving, of paying a bond and so on, might be exceptionally hard. This is where the measures of this bill will be vitally important.

The important thing here is opportunity; that is what this bill provides. It provides that opportunity and it gives people the choice to take it up if they choose to do so. We would like them to consider that and to work out if it makes sense for those individuals and for the families concerned.

Finally, let me briefly mention the differences that the measures that this bill makes compared to some previous measures that were in place. There are several different changes that are being put in place in this bill and which are different to previous schemes.

Firstly, it is only the long-term unemployed who are eligible to take up the assistance which is on offer through this bill, and not redundant workers—there are other measures for redundant workers through Jobs Services Australia.

Secondly, the bill specifically encourages mobility to those regional areas where there are jobs and where there are labour shortages—that is a specific goal of this particular bill.

Thirdly, it is worth more than the previous scheme, which on average only gave $1,600 for people with no dependents and $3,600 for people with dependents. This scheme offers a total value of up to $15,500 for a family if they choose to take up all of the opportunities which it provides.

Finally, an important difference is that the non-payment period will increase from 12 weeks to 26 weeks. The reason that is important is because all of the research shows that 26 weeks is one of those tipping points; that if a person gets to 26 weeks of employment, having been unemployed for some time beforehand, then they are highly likely to stick it out from there on. This package provides those payments at 26 weeks only and not payments earlier on.

This is the ethos that we should all share; wanting to get and encouraging people to take up work where it is—to provide incentives for people to move, should they want to, to take up those jobs.

We know—as I said at the outset—that if people have work, then they are empowered and have dignity. They have the ability to look after their family better, their mental health and their physical health is going to be better and they are going to have a better outlook on life, including better housing.

I commend this bill for improving the employment prospects not just of Indigenous people but of all Australians across this great nation.