Payment Integrity Bill - 02/12/2019

02 December 2019



The Social Services Legislation Amendment (Payment Integrity) Bill 2019 is another example of misuse of the word 'integrity' by this government. We were very pleased to see last week the defeat of the 'ensuring integrity' bill in the other place, which was nothing but a disgraceful attack on working people and the unions that represent them. As I said, we were very pleased to see that bill defeated, and it's really a credit to the unions and the working people who campaigned against that, and that's a win for them.

Don't even get me started on the Prime Minister's current trouble with his Minister for Energy and Emissions Reduction. But it's clear that this is a government that does not understand the meaning of 'integrity'. In fact, they use that word, such as in this case, to pretend that they are addressing problems that are not actually there. And we can be sure when we see the word 'integrity' in the name of one of their bills that it's just a cover for another of their ideological crusades. Calling this bill the 'payment integrity' bill implies that it is somehow addressing an issue with the payment system, that somehow people are rorting their entitlement to payments, that the system is out of control and that people are somehow getting something they don't deserve, something they shouldn't be entitled to. Again, it is just the ideology of those in the government. They are looking to make cuts to the most-vulnerable in our society by making out that they are not entitled to a social safety net, to a social security system that has been a huge part of ensuring that our country has been relatively egalitarian.

This bill does three things. First of all, it increases the residency requirements for pensioners from 10 to 15 years. So, they want people to wait 15 years to access the age or disability pension if they've been born overseas. The bill wants to stop the payment of the age pension supplement to pensioners if they're overseas for more than six weeks, perhaps going to meet their grandchildren or perhaps going to see family one last time while they're still well enough to do so. It also extends the liquid assets waiting period that applies to Newstart, youth allowance and other allowances. This is making sure that people are in dire poverty before they even begin to receive these inadequate payments. Labor opposed this when it was introduced in the last parliament, and we're proudly opposing it again. This is the third time this bill has been brought back, because this is a government that has no agenda other than demonising unions and people who receive social security. It is just dredging up the worst parts of the 2014 budget.

First of all I want to talk about pensioners, because the government always pretend to be the friend of pensioners, but the fact is that they have tried to cut the pension and increase the pension age to 70 in every budget, including in three budgets where the current Prime Minister had the job of Treasurer. They were happy to run scare campaigns in the last election to make pensioners believe that our policies on franking credits would affect them, when they did not. They were happy to perpetuate untruths about policies that they knew were untrue.


Tim Wilson interjecting - 


I point towards interjections from the member for Goldstein when our shadow minister, the member for Barton, was speaking before, just in case the Hansard didn't pick them up. When she was speaking about pensioners travelling overseas to meet their grandchildren for the first time, he said, 'So they can pass the buck to their grandchildren, because they have no sense of responsibility,' or perhaps it was 'we have no sense of responsibility'. Either way, that is what these people are about. They believe that people who have worked their entire lives and paid their taxes shouldn't be entitled to a meagre pension in their retirement and to go and meet their families, to care for their loved ones, overseas. I don't know if he would have the guts to say that in his electorate, but that's what he says under his breath in this place. I think everyone needs to know what is at the heart of this government.

It is Labor that actually delivered the greatest increase to the pension in its history, under the Gillard government, and Labor is proud to always stand up for pensioners. I want to run through some of the cuts that this government have made or tried to make to the pension in the six years they've been in power. In the 2014 budget they tried to cut pension indexation, a cut that would have meant that pensioners would be forced to live on $80 a week less within 10 years, a cut that would have ripped $23 billion from the pockets of Australian pensioners and affected every single one of them. They cut $1 billion from pension concessions, support designed to help pensioners with the cost of living. They axed the $900 seniors supplement to self-funded retirees receiving the Commonwealth Seniors Health Card. They tried to reset deeming rates thresholds, a cut that would have seen 500,000 part-pensioners made worse off. In 2015 they did a deal with the Greens party to cut the pension to around 370,000 pensioners by as much as $12,000 a year, by changing the pension assets test. In the 2016 budget they tried to cut the pension to around 190,000 pensioners, as part of a plan to limit overseas travel for pensioners to six weeks. They also tried to cut the pension for over 1.5 million Australians by scrapping the energy supplement for new pensioners. Their own figures show that this would have left over 563,000 Australians who are currently receiving a pension or allowance worse off. On top of this, they have spent five years trying to increase the pension age to 70.

Labor is proud to fight these cuts, and we will continue to do so. This bill will rip $185 million from the pockets of Australian pensioners. It will do this first by making people who were not born here wait longer to receive a pension. Currently people who were not born in Australia have to wait 10 years to receive an age or disability pension. This bill wants to extend that to 15 years. It adds a new self-sufficiency test, which will mean that people can still wait only 10 years if they have not received any income support payments such as Newstart. So we have another example of this government demonising people who are receiving payments that are designed to keep people out of poverty and keep our economy going, because they don't believe that people should receive these things. This change has no policy rationale except to make a saving from recently arrived migrants of pension age. And, of course, it disproportionately affects people from culturally and linguistically diverse communities. The Federation of Ethnic Communities Councils of Australia have called this out and called on the parliament to vote against these changes.

The second schedule will cease the pension supplement after six weeks overseas. The pension supplement is an additional payment of around $620 a year for a single pensioner and just over $1,000 for couple pensioners, and this is paid fortnightly as part of their pension. Currently, when pensioners are overseas for more than six weeks, it is reduced, but this bill seeks to remove it entirely. There are no grandfathering arrangements, so people who are overseas would have it cut immediately. These are pensioners who are most likely still maintaining their homes here in Australia, paying their rents and paying their utilities, and, as the member for Barton was saying, they're going overseas to meet their grandchildren and going to see their own children and their families. They have worked their whole lives, saving up and planning to make perhaps the trip of a lifetime, something that many of us take for granted. People should be able to do that with the security that they will be getting the same income. It is a meagre pension as it is and they have expenses that they need to meet. This is another bill that will disproportionately impact culturally and linguistically diverse communities as well.

The third schedule of this bill will increase the liquid assets waiting period to six months, doubling the time that people need to wait before they can access payments like Newstart or youth allowance if they have a minor amount of savings in the bank. Currently, people claiming Newstart, sickness allowance, youth allowance or Austudy must wait up to 13 weeks to access payments if they have savings or a redundancy payout of over $5,500 if they are single; and, if they have a partner or dependants, it is $11,000. This measure would increase that to six months for people with liquid assets of more than $18,000 for singles, or $36,000 for couples and people with dependants. This means that people are driven into poverty before they even begin to receive these payments—payments that everyone except this government agrees are too low.

The Department of Social Services estimates that around 13,800 claimants will be affected by this extension, and, of those, around 11,000 will have to wait the full six months. Everything we know about financial resilience says how important it is to have a buffer for when people face crises such as the car breaking down, or needing a new fridge or needing to pay a rental bond to keep a roof over your head. We're not talking about huge wealth here. Of course social security should be targeted, and of course that includes your wealth or your savings, but this drives people into poverty, which will only deepen when they have to survive on Newstart, when they have to try and survive on less than $40 a day. Why does this government want people to be destitute? Why isn't it using this system to avoid poverty and inequality in our society?

The majority of people impacted by these changes will be older Australians, because this is the current cohort who most commonly serve the liquid assets waiting period, and it will particularly impact people who have lost their jobs and received redundancy payouts. Catholic Social Services Australia provided the Senate committee, when it reviewed this bill in 2017, with some calculations to step through the impact of this. Even for a person with dependants and with savings of $36,000, it would not take very long to expend these savings. For example, using the household expenditure measure, a person with two dependants—perhaps a single parent—in the ACT, renting and having a basic lifestyle, would need a minimum of $21,792 to survive over a six-month period. This assumes there are no contingencies such as medical bills, costs for retraining or vehicle repairs and maintenance. After six months, over 60 per cent of these savings would have been spent on basic household expenditure. So you can see that it leaves very little for these people to survive on.

The thing about Newstart allowance is that it is designed to be a short-term allowance while people are between jobs, to support them to get another job. Even the Business Council of Australia acknowledges that this payment is now so low that it is actually preventing people from getting jobs, and the poverty that people are driven into by this inadequate allowance is worsened when they are on it for long periods of time.

Under this government, which refuses to do anything about our currently floundering economy, people are on Newstart for increasing amounts of time. Currently, people under 25 spend, on average, 45 weeks or just less than a year on Newstart, but by the age of 50 that has blown out to 188 weeks or almost four years that people are supposed to survive on $40 a day. You can see how having a small amount of money in the bank to cope with the things that come up in day-to-day life is very important to keep these people out of crisis—out of homelessness. These are real issues, and this government wants to make it even harder for these people.

Another issue is youth allowance. This payment will remove any incentive for young people to save up before they might have to move away to study in order to support themselves. Youth allowance is based on the Newstart rate. Recently, when our shadow minister the member for Barton visited Canberra, we talked with a group of students about how difficult it is for them to continue with their study when they have to work so much to meet the huge rents in Canberra and that we see in capital cities around the country. They talked about feeling excluded when they couldn't afford to go to events at the university or focus on their studies.

We have high dropout rates at the moment from TAFE and university, and the reason is the costs of living as a student. This is the greatest challenge to equal access to university, higher education, and TAFE in this country. Think about moving from a regional area, perhaps, to a capital city where you've got increasingly high rents. People can't do it on these payments. A survey released by the National Union of Students this week shows that 90 per cent of recipients are skipping meals and most have $14 a day left, after paying rent, for the rest of their expenses.

This bill is another example of how out of touch with these issues this government is. Don't they talk to people in their electorates about these challenges—or maybe just to people not receiving social security? It is wrong that in a wealthy country like ours we are not supporting those in our society with a basic social safety net. In fact, every day, this government is demonising them and wanting to make life harder for them. St Vincent de Paul have said of the measures that they are morally, socially and economically indefensible. I agree. Labor is proud to oppose this bill.