Additional comments from Coalition Senators

1.1Coalition Members of the Committee thank all those who provided submissions, witness and testimony to this Inquiry.

1.2We acknowledge the lived experience of the many witnesses especially as rampant inflation unmanaged by Labor takes its toll on households and individuals.

1.3The Coalition supports a range of measures, but not all, that are contained in this bill, namely:

We support expanding eligibility for assistance for single parents;

We support expanding the higher rate of Jobseeker to those aged 55;

We support an increase in Commonwealth rent assistance by 15%; and

We do not support increasing JobSeeker and related working age payments by $40 per fortnight.

1.4Coalition Members were disappointed, but not surprised, to discover the Albanese Government had not done an appropriate level of modelling on increasing the income free threshold from $150 a week.

1.5It is the Coalition’s view that JobSeeker and related working age payment income free thresholds be increased by $150 per fortnight and the Government not proceed with the $40 increase per fortnight.

1.6The Government reluctantly implemented a coalition recommendation in 2022 to increase the amount job seekers could earn before their income support payments are affected but we believe there is room for further increases in this threshold to encourage people to remain connected to work and the transition to work and off support payments.

1.7It is well known, and supported by Coalition policy, that the best form of welfare is a job and more should be done to help those on Job Seeker get the training and confidence needed to renter the workforce. This benefits all Australians.

1.8When in Government the Coalition, through disciplined economic management, was able to deliver the largest permanent increase to the Jobseeker income support payment. In the last three decades, no Government has done more for Australians doing it tough than the former Coalition Government.

1.9A number of stakeholders although supportive of any improvement remained critical of this legislation.

1.10In its submission to the Committee the Institute of Public Affairs (IPA) held that the income threshold was a disincentive to re-entering the workforce. In what they called the ‘Work Bonus’ plan, the IPA advocated for a position that will see people who rely on Youth Allowance, Aged Pension and Job Seeker able to work more before being penalised.

1.11This would have a two-fold benefit, the first to those on income support and the second to the wider economy, as stated in the IPA’s submission:

In these uncertain economic times, it is critical for the federal government to create an environment where businesses can find the workers they need, and Australians can enter the labour market without being penalised by tax and red tape. It would allow more Australians to earn an income during a cost-of-living challenge, help stimulate the economy, and allow the government to earn more income tax which can be reinvested into the community.[1]

1.12Other witnesses shared similar sentiment that the income threshold was a barrier to work.The Committee heard from Mx Sam Thomas, appearing with the Australian Council of Social Service as an individual with lived experience, who called the existing system ‘aparachute with holes’. Mr Thomas said that:

Given how low Youth Allowance currently is, if you get 10 hours of work a week, that's making just about a 50 per cent increase in your income. It is massive. I think little things like that, just remove every barrier that you can throughout the market to make employment more accessible.[2]

1.13Despite a consensus from recipients and stakeholders that increasing the threshold would make a positive difference, Labor refuses to address this.Asexpressed by Mr David Allen from the Wesley Mission:

We find that people want to engage, but, as soon as their ceiling is maxed out, they'll stop, or the employer limit can't give them full and proper support. As someone mentioned earlier, it's definitely low-hanging fruit to increase that level. It would help people on and around those margins, and it would also help people get more gainful employment, because they could actually commit longer hours than what's currently available.[3]

1.14The Coalition supports mutual obligation to support a pathway from welfare either to work, or back to work. In a further attack of some of Australia’s most vulnerable people, the Albanese Government confirmed on 5 May that it will abolish the ParentsNext program. This program keeps young parents, the vast majority of whom are young women and single parents, connected to the workforce. This will punish many of Australia’s most vulnerable people. What this demonstrates is that the Albanese Labor Government does not believe in mutual obligation. It means that the Labor Government is happy for some Australians to be consigned to a poverty trap, rather than having appropriate policies in place to ensure people can transition into the workforce.

1.15Work readiness is not at the centre of these reforms and leaves a policy gap that will have a disproportional impact on those already disadvantaged in entering and remaining in the workforce.

Recommendation

1.16JobSeeker and related working age payment income free thresholds be increased by $150 per fortnight and the Government not proceed with the $40increase per fortnight.

Senator Kerrynne Liddle

Senator Maria Kovacic

Footnotes

[1] The Institute of Public Affairs, Submission 8, p. 2.

[2] Mx Sam Thomas, Committee Hansard, 18 July 2023, p8.

[3] Mr David Allen, Committee Hansard, 18 July 2023, p18.