Michael Sukkar MP

Second Reading: Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023

This omnibus social services bill includes a range of measures that the government announced in the budget. We have considered each of the proposals put forward by the government, and in essence we can say that we will be supporting the expanded eligibility for assistance for single parents, we will support the expansion to the higher rate of JobSeeker for those aged 55 as opposed to 60 at present. We will support the increase in Commonwealth rental assistance of 15 per cent, as announced. But we will call on the government to support the coalition’s policy in relation to JobSeeker as announced in the Leader of the Opposition’s budget-in-reply speech in relation to the government’s announcement to increase working-age payments such as JobSeeker by $40 a fortnight. I will largely confine my remarks to that aspect of this bill and will be moving an amendment in relation to that aspect of the bill in a moment.

At the moment, we have historically low unemployment rates, we have 438,000 formal job vacancies and, I suspect, many hundreds of thousands of informal job vacancies. We have a small- and medium-business sector—indeed all businesses, let’s be frank—who are crying out for workers, crying out for employees. I expect there are few people in this chamber and, indeed, few people in Australia more broadly who can walk down any shopping strip and not see signs in the windows advertising for staff, asking people to apply within for a job. The tightness of the labour market is very clear to everybody, and the human toll of that is quite significant because we have millions of Australians who get up every single day, work hard and pay their taxes to fund our social welfare system, and who are working harder. Under this government, their cost of living is skyrocketing. The average mortgage holder is paying an extra $22,000 a year more, spending thousands of dollars more on grocery bills and thousands of dollars more on power prices. These are the people who ultimately fund our social welfare system—the millions of Australians who get up every day and are very happy to pay their taxes and are very happy to contribute to our social welfare system—but they do expect that people avail themselves of the opportunity to work where there are jobs available. I think it’s without question that there are hundreds of thousands of jobs available today.

That is why in the opposition leader’s budget-in-reply speech, we outlined a far preferable way of providing additional support to people on JobSeeker. Our approach has been to increase the income threshold before which the very punitive taper rates of JobSeeker payments kick in, from $150 to $300 a fortnight, giving those people more opportunities to work, which we know is wonderful for the economy, we know is crucially vital for small and medium businesses who are looking for more employees and looking for people to do more hours but, more importantly, is the best thing for that JobSeeker recipient. Encouraging a JobSeeker recipient by giving them that financial incentive to take up hours of work that we know are available or to take up even further hours of work if they are already working is a far better way in this economic environment of providing support to those JobSeeker recipients as opposed to simply increasing the amount of JobSeeker that they receive for no work, with no requirement or incentive to do additional work or even to do some work. I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) while in Government, the Coalition through disciplined economic management was able to deliver the largest permanent increase to the JobSeeker income support payment;

(b) this increase saw a $50 per fortnight increase in JobSeeker with the income free area increased to $150 per fortnight to support job seekers as they secure employment and re-enter the workforce;

(c) throughout the height of the COVID-19 pandemic the Coalition Government provided $32 billion in emergency support payments;

(d) JobSeeker payment is not meant to be a wage replacement and creating jobs and getting people back into work is the best way to improve the living standards of people and their families;

(e) every taxpayer dollar spent is a dollar that someone else earned;

(f) there are over 840,000 JobSeeker recipients of which more than 75 per cent had no reported earnings, that is, no part-time work; and

(g) the failure of this year’s Budget to reduce barriers to work and get Australians to fill over 438,000 job vacancies; and

(2) calls on the Government to scrap the $40 per fortnight increase to the base rate of working age pensions and implement the Coalition’s policy to increase the income free area to $300 a fortnight to allow job seekers to earn more and still retain the full JobSeeker allowance”.

It goes without saying that removing what I think most people acknowledge can be very punitive taper rates in our welfare system, particularly for JobSeeker, and by increasing the income threshold from $150 to $300 a fortnight achieves each of the objectives that I suspect all fair-minded people would be after. Firstly, it helps alleviate labour shortages that are currently being faced throughout the economy. As I said, there are 438,000 formal job vacancies, and we all know there’d be hundreds of thousands of informal job vacancies—that sign in a window that’s not formally captured or reported. It helps those businesses.

I know of businesses like this right now. In Melbourne there is a restaurant and cafe which operates from morning to night, for breakfast, lunch and dinner. The small-business owners of this cafe-restaurant have never, since they started the business 20 years ago, had to work both ends of the day: opening up the cafe at six o’clock in the morning, getting that started, and then closing it after dinner, late in the evening. But they are doing both ends of the day now because, for the first time in a very long time, they’re unable to find an employee who will do the hours they now have to make up. They have said to me, ‘We’ll do this for as long as we can, but we’re not sure we can do it for long. Physically, we’re not sure how long we can do this for.’

Our amendment not only helps them by encouraging more people to do more hours or, as I pointed out, encouraging the 75 per cent of JobSeeker recipients who had no reported earnings to actually do some hours without it eating into their JobSeeker payment. It helps that small business as well. It helps that family. It helps those people who are creating jobs and creating wealth for our country. It also means that people are getting the vital skills that they need for meaningful long-term employment. We all know that the longer you’re out of the workforce, the harder it is to re-enter it. Again, it should be plainly obvious to everybody in this House that the coalition’s approach of incentivising work, not incentivising welfare, is the best approach for those people.

It’s ultimately best for the JobSeeker recipient too. It’s not just about the economic dividend, the improvement that it provides to our economy more broadly, which I know we often focus on in this chamber. Think about the individuals on JobSeeker. Surely nobody believes that encouraging people into work, removing the barriers to employment, is anything other than a policy designed to help those individuals on JobSeeker. We all know the dignity of work and the dignity of having a mission. For that reason, our approach is far superior, and we will continue to encourage the government to adopt this policy. I give credit to the government; they partially adopted the policy that we announced in our budget reply in October, in relation to senior Australians being able to work further hours. They did it begrudgingly, but in the end they saw the absolute commonsense in our proposal. The logic and commonsense in this proposal are just as profound as in that one.

In defence of people who are doing part-time hours on JobSeeker, the taper rate of what you lose for every marginal extra dollar you earn over the $150 threshold is punitive. People are making decisions, asking themselves, ‘Do I do those extra hours even though I’m going to lose a huge portion of that in a reduced Jobseeker payment which I would otherwise receive?’ That’s what I mean when I’m talking about removing barriers. I think, undoubtedly, the best way to help facilitate people into meaningful work is to help them make that first step. How do you make them make that first step? You remove the barrier, the financial disincentive, of doing that extra hour, taking that job or taking on that part-time work. The evidence is clear: where you can facilitate someone who is unemployed into part-time work it is often a pathway into meaningful part-time or full-time work. That’s an outstanding dividend for that person, for our economy and for our welfare bill. It’s a trifecta.

Compare that with what the Labor Party is proposing. The Labor Party’s proposing, in this bill, $9½ billion of spending over the forward estimates, undoubtedly putting even more pressure on inflation. Every dollar the government spends, at a time when the Reserve Bank is trying to effectively remove money from the economy, just means that the government and the RBA are working at cross-purposes to one another. It means the risk that inflation stays higher for longer, which means mortgages stay higher for longer. The perverse part of this proposal from the government in relation to JobSeeker is that the people who get up and work every day and happily pay their taxes—work their guts out—not only are having their living standards go backwards at a rate of knots but also are going to fund increased spending from this government that is likely to have the impact of higher inflation for longer. That is going to impact their living standards even further. So, not only do they pay for social welfare out of one pocket but they get smashed on the other side as well, with higher cost-of-living expenses.

The coalition’s strong view is that we need to respect those people who get up every single day and work hard. Many of them, quite rightly, say to me that there are hundreds of thousands of jobs available right now—hundreds of thousands. So, there is widespread support for our approach to removing these disincentives to work and encouraging people to work. Sure, it’s a fairness objective as much as anything. It’s good for the person themself. But we can’t keep expecting hardworking Australians to be funding our social welfare system if the government’s not going to help them and encourage those jobseekers to re-enter the workforce. That’s what this proposal does. We encourage the government, either here or in the Senate, to have a rethink, to reflect on this far superior proposal.

The wonderful thing about this amendment, too, is that if a jobseeker avails themself of this opportunity then they will be financially better off. A jobseeker who increases their earnings, under the coalition’s proposal, from $150 to $300 a fortnight—obviously earning that extra $150 without impacting their JobSeeker payment—will be $150 better off, compared with $40 better off under the Labor Party. So they will be personally better off as well, and that’s without taking into account the other benefits I’ve spoken about—of re-entering the workforce, of engaging in the workforce: what it does for your self-esteem, for your morale, for your life, by being engaged in work.

Again, most fair-minded Australians would say that when there are hundreds of thousands of jobs available then able-bodied people who are able to work should be working; they should be taking up those jobs. Then the question is: how do you encourage them or remove the barriers for them to do that? Well, it’s very clear: you provide them with an incentive to work; you remove the barriers, rather than what the government is proposing, which is simply to increase the payment and ask hardworking Australians to fund just a little bit more—just a little bit more of your tax, a little bit more from you, while your cost of living is skyrocketing, while in material terms you’re poorer now than you were 12 months ago, when the Labor government was elected. When the cost of the absolute basics of life—mortgage, food and energy—is skyrocketing, this government’s asking those people to pay a bit more, rather than the alternative which we are proposing here again today, which is to encourage those people who are not in work to find and take up the abundant jobs that are available and to do it not just for themselves but also for the broader economy.

I’ll reiterate our position in relation to each of the other measures contained in the schedules. We will support, and we do continue to support, the change for eligibility for assistance to single parents. I think it’s worthwhile noting, though—and it’s very important that I mention it in this context—the quite disgraceful things that the government has said and that the government, sadly, is going to do in relation to the ParentsNext program. In an astonishing attack on what I consider some of our most vulnerable people, the government confirmed that it will abolish the ParentsNext program. This is a program that keeps young parents, who are overwhelmingly women, connected to the workforce. This will clearly punish some of our most vulnerable people and reduce and remove a very successful way of keeping them connected to work. It’s a vital program to help them maintain that connection whilst facilitating their parental responsibilities, and it shows to Australians that this government has no understanding of mutual obligation, or maybe they do have an understanding but they have an ideological opposition to mutual obligation.

For a parent who is out of the workforce for many, many years, it’s to some extent cruel for the government to say, ‘We’re going to remove the ParentsNext program which helps keep you connected and job ready, but once your child turns 14’—so they’re potentially out of the workforce for that long—’all the mutual obligation kicks in again, and you’re expected after 14 years of being out of the workforce to get straight back into it.’ That is essentially the expectation of removing ParentsNext. Even though this is an increase from eight to14 years, it’s an extraordinarily long time in a policy sense to say that someone who is potentially out of the workforce for that long is going to be job ready once their child turns 14: ‘Bang! I’m ready to go, even though I haven’t been in the workforce for that long.’ So it’s quite shameful, ideologically, that the government has abolished the ParentsNext program.

I would be very keen to hear from the minister what the government proposes to do to keep people connected to the workforce and to be job ready when their child does hit those milestones. When they are able to work and they do want to work, what practical and tangible assistance will be provided instead of the ParentsNext program? Abolishing this program, we all know, is ideological, but even the government, through their ideological lens, must accept that they have to do something to help parents, whilst managing their parental responsibilities, also to remain connected to the workforce. The point in time will come when, under our mutual obligation system, they will be expected to re-enter the workforce. The government is thinking that, magically, after many, many years of being out of the workforce, people are going to be ready to jump back in. Undoubtedly some will be, but many will not. Without the ParentsNext program, I fear that that situation will get worse for those parents.

To sum up, we will support the expansion of the higher rate of JobSeeker to those aged 55. We will support the increase to Commonwealth rental assistance. We are, to some extent, drawn to the position of supporting Labor’s increase to CRA because of how badly they have managed the housing portfolio and how desperate the situation is out there now. We have a government with no housing agenda. We have a government that is seeking to bring in 1½ million migrants over the next five years, with absolutely no plan for where those people will live. The situation right now is absolutely dire, and the government isn’t even saying: ‘Things won’t get worse. We’ve got no plans to make things better, but it will at least plateau at this level.’ Instead, they are saying, ‘We’ll bring in 1½ million people with absolutely no idea where those people will live.’ That is, it’s going to get a whole lot worse.

We saw in the budget in October the government with their Rudd-esque announcement of a million new homes over five years. They didn’t really want to mention that a million new homes had been built over the previous five years. That was business as usual, to be frank. Everybody knows—every economist, the HIA and the MBA—that they will now fail to meet that target. There won’t be a million homes built. It will be significantly less than that. So we are drawn to supporting the increase to Commonwealth rental assistance, perversely, because of how badly housing policy has been mismanaged by this government. So we are brought to the table in supporting this measure because—whether you are a renter, whether you are a prospective first home buyer or whether you are struggling with a mortgage at the moment even though you were promised cheaper mortgages by the Prime Minister before the election—every single one of those groups is struggling so badly. Let’s be frank. The increase to Commonwealth rental assistance will help a relatively small number of people. It’ll be very few people around the country. But we are drawn to supporting this measure because the Labor Party has trashed the housing portfolio so badly in just 12 months that we can’t in good conscience oppose this. So we will support that aspect of the bill as well.

We are asking that the government reconsider their approach, that they adopt the far superior proposal from the coalition, which has respect for taxpayers, which will reduce inflationary pressures in the economy and which will remove the disincentives for people to work either more hours or at all. That will help hundreds of thousands of businesses around the country, businesses that are struggling, people who are literally working themselves to the bone, by giving them additional sources of employees.

Finally, we call on the government to support our proposal, as opposed to theirs, because it will materially improve the lives of those jobseekers. Not only will they have more money at the end of every fortnight; they will re-engage in the workforce in a way that we know is the best thing for their lives, morale and self-esteem and financially, quite frankly. It’s a trifecta of good outcomes for the economy, small businesses and the individual, as opposed to Labor’s very lazy approach to JobSeeker.

In this chamber, if the government does not adopt our approach and stubbornly refuses to adopt the more superior approach of removing disincentives to work and giving people the ability to earn more money, we will not stand in the way of the bill and will therefore support it. But that doesn’t mean that we won’t be encouraging the government at every opportunity here and also in the other place to take up what is an eminently sensible idea. The hallmark of a good government is when you take up ideas, even when they are not your own but you know they are good. It shows a maturity when you can say, ‘Okay, it wasn’t our idea, but clearly what the opposition here has proposed is superior for everybody.’ If the government decides to do that, I will be very grateful and I will give them great credit for adopting another policy that we are proposing that makes so much sense.

Please click here for a PDF copy of the Hansard extract for this speech.