I would like to start my contribution on the Social Services Legislation Amendment (No. 2) Bill 2015 by humbling myself in some way before this chamber.
I want to say up-front that I do not have all the answers in this area, and I certainly do not know what the best approach is to tackle the crushing cycle of welfare dependence that exists in some of our communities, particularly in some Indigenous communities. I do not pretend to have all of the answers. Many governments of good intentions from different sides of politics have tried lots of different approaches in the past few decades, and yet we still have not substantially improved outcomes in many Indigenous communities and, indeed, in some respects, in some areas we have probably gone backwards in the past half a century, despite those good intentions and certainly substantial financial resources. I think it actually would be beneficial if, more often, we admitted to the fact that we do not have all the answers. Sometimes I suppose showing humility in politics makes you vulnerable—as if showing some form of weakness or timidity. But in fact what it would show I think is perhaps a little more honesty with the Australian people—that these matters involve the interaction of complex issues that no-one and no political party has a complete answer for.
What should you do in that environment? What should you do when you do not necessarily know the answer—when you have a good intention and when you want to commit substantial resources to tackle a problem but you do not exactly know what might be the best solution? I would suggest that the best approach in such an environment of uncertainty is to trial different things. The best approach is to have a go at trialling different ways of doing things, and that will provide you with a real-world comparison of different policies and different approaches.
Unfortunately, public policy is not an exact science. We do not have a lab environment which allows us to test different policies and then weigh the results like a scientist would, and then establish theories or hypotheses on the basis of that experimental evidence. We cannot do that. But we could more often seek to trial different approaches in public policy and have a genuine and good-faith attempt to judge the results of those policies.
Much of what we are discussing in this bill—at least, in schedule 1 of this bill—goes to a trial that was introduced by the then Howard government in the Northern Territory emergency response for income management in Indigenous communities in the Northern Territory, and I will expand further on why I think this trial was important and it is important to build on the results that have been established by this trial.
Before I do that, I want to recount a trip that Minister Nash, who is sitting in front of me here tonight, and I took to Mornington Island a few months ago. It is in the gulf region of Queensland. It is basically just off the bottom of the Gulf of Carpentaria off the Queensland coast. We were joined by Minister Scullion, the Minister for Indigenous Affairs. I should also give credit to Senator Barry O'Sullivan, who helped organise and facilitate the visit after he was there a few months earlier. That visit confirmed to me both the scale of the issues and problems we encounter in this area and our lack of easy, ready-made, off-the-shelf solutions to the problems.
I am not going to spend too much of this speech recounting those issues because that would not leave me the time to talk to this bill. But certainly lack of any major industry or employment source apart from government funded programs is, to me, a real issue in communities such as these. When almost the entire community is dependent in some way, shape or form on money coming from outside, on wealth being generated from outside and on the decisions of different governments to provide them assistance and support to provide for their future, clearly that reduces the enterprise, initiative and, I would argue, too, the dignity of individuals in a community.
We met many great people at Mornington Island trying to drag their community forward, but it appears very difficult to do so when there is a culture of depending on welfare. There does not seem to be a culture for the majority of able-bodied males and females to be working, at least in the sense that we probably consider working for a job. There is no easy way to break that cycle, I think, once it gets going. It is a cycle, and it is a self-perpetuating one in some respects as well. Once the cycle has started, we are caught in a dilemma between wanting to continue to provide support and assistance to people who clearly need it and also wanting not to perpetuate a culture and cycle of dependency. Trying to do both of those things at once is an incredibly difficult public policy trade-off and one I think governments still struggle with today.
I think the topic of schedule 1 of this bill—an income management regime—is a method that should be supported and applauded for being introduced. I note that the Labor government which took over not long after it was introduced did continue it. There were some changes made to it, but generally it was continued. This bill seeks to continue to support, in general, this program as well as to make some further adjustments and amendments.
I know there is some controversy about some of those amendments, but in broad terms there is widespread support for the existing income management regime as first introduced by the Howard government in 2007. That scheme has been expanded by various governments since then and now includes not just Indigenous but non-Indigenous people as well across the Northern Territory and, indeed, the entire country.
Income management, in very simple terms, seeks to set aside or quarantine a proportion of a recipient's income support payment to pay for necessities such as food, clothing, housing and utilities. Recipients of welfare under these programs can spend their income managed funds using a BasicsCard or by arranging for Centrelink to make a payment on their behalf—for example, regular rental payments or other bills. Recipients can use their BasicsCard only at approved merchants and cannot use it to buy excluded goods, such as tobacco, alcohol, pornography or lottery tickets.
As I suggested earlier, the outcomes have been broadly positive. Although this is certainly not a panacea for the issues that face many communities, the outcomes from these programs show that those who have been placed on income management now substantially continue to use the scheme voluntarily. Apparently, about two-thirds of people who have been placed on income management now use the scheme voluntarily. That itself is a vote of confidence in these programs. If a substantial and clear majority of welfare recipients are themselves choosing to be on the schemes, I believe it would be greatly remiss of this chamber or this parliament if we were to end such schemes.
It is also telling that, if some of the basic needs of these families are being met, in some of these regions the social issues that have previously caused relationship breakdown and emotional fractures are potentially being altered. The gaps that have at times occurred in households because of mismanagement, traps of temptation or dysfunctional lifestyle choices are being curbed for the betterment of household recipients and their dependents.
The broader social impacts are positive too. A household whose benefits were previously spent largely in the first couple of days after receipt of payment now has a kitchen with food for their child every day. Benefits flow on to the child's education and their ability to engage with peers and build social skills and awareness rather than be disruptive or show inattentive behaviour because of hunger. That is extremely important.
Although the income management programs are being implemented to assist with skills, it is important to remember that they are modelling a balance to children and other members of the community as well. It is habit forming. We can continue to talk about child, youth and family intervention as a priority or we can create and support some practical programs to assist with lifestyle changes.
That is why I support the government committing a further $146.7 million to ensure the vulnerable people benefiting from income management continue to receive support. This will be done by extending a streamlined version of income management programs to all existing locations until 30 June 2017, and then systematically we will align the end dates across all 12 locations across Australia.
The alignment extends to the income management element of the Cape York Welfare Reform program, which will also continue until 30 June 2017. This will enable income management to continue to provide additional support in disadvantaged locations for vulnerable people, children and families. Additional support is also provided to people on income management through support from social workers and other specialist staff. As I said earlier, there are 12 locations across the country where income management is used, including: the Northern Territory and Cape York, which I have already mentioned; the Perth metropolitan area; the Peel and Kimberley regions in Western Australia; in Queensland, there is Logan, where I grew up, and Rockhampton, where I now live; Bankstown in New South Wales, greater Shepparton in Victoria and Playford in South Australia. It is also in some Indigenous communities—for example, the APY region in South Australia.
Income management participants have priority access to financial capability services. These include money-management courses and other assistance for people experiencing ongoing financial difficulties. Aside from the Cape York model, there are seven separate income management measures. Measures differ according to whether they are voluntary or compulsory, by the group they target, whether this group is identified on a case-by-case basis or through membership of a class and by the percentage of a person's income support that the measure quarantines. The Cape York model operates using a single distinct measure—case-by-case referral by the Family Responsibilities Commission—and is unlikely to be affected by the measures in this bill.
Streamlining also includes the removal of social worker assessed referrals through the Vulnerable Welfare Recipient Measure, as this was an underused tool by social workers and highly resource intensive. The removal will allow social workers to better service their vulnerable clients. While participants remain able to adjust how they use their funds to meet priority needs at any time, they will no longer be required to discuss these arrangements with Centrelink every eight weeks. There will also be a phased removal of the Matched Savings Payment, which offers people on the compulsory measures up to $500 in matched savings if they complete an approved money-management course and have demonstrated an appropriate savings pattern over a 13-week period. It is intended that these programs will cease from 31 December 2015, as they were largely undersubscribed and costly to administer. I note that at estimates recently the department gave evidence that only 45 payments had been made under the Matched Savings Payment since the beginning of the scheme, although by January this year it had risen to 57—obviously not a substantial take-up of this program over almost five years.
The phased removal of the Voluntary Incentive Payments, which offer individuals a payment of $250 for every continuous period of 26 weeks, will cease on 28 December 2015—which is the day 26 weeks after 30 June this year— as evaluations have shown that incentive payments are not the main driver for people commencing income management and that they can create a dependency on the program. The BasicsCard Merchants Approval Framework will also undergo administrative and policy changes that will simplify the model and improve the customer experience, removing unnecessary customer contact. The streamlined arrangements will achieve a saving of approximately $36 million over two years. This funding also included a limited expansion to new locations which may need additional support and would benefit from the income management program.
I note finally for Schedule 1 that, in response to a request from the South Australian Premier in the wake of the Chloe Valentine tragedy, the minister announced the child protection and voluntary measures of income management will be introduced to the Greater Adelaide region from October 2015.
In the time I have available I will mention some of the elements in the remaining two schedules. The amendments in Schedule 2 seek to formalise the ceasing of payments of the residential care subsidy to residential aged care providers for holding a place open for a care recipient that is a targeted one of a specific set of outcomes. These changes better target aged care expenditure by only paying care subsidies on behalf of people who have actually entered permanent residential care The government currently pays a residential care subsidy to approved providers who supply residential care to a person approved to receive that care. The subsidy is paid for each day that the recipient is cared for and accommodated in a residential facility and when the recipient is on approved leave. One type of approved leave is pre-entry leave—that is, leave undertaken by the recipient before the commencement of residential care. The savings associated with this measure, as stated in the explanatory memorandum, have largely been realised through amendments to related pieces of legislation, but the amendments in this bill formalise these changes in the principal act.
Previously, subsidy for the pre-entry period was paid to providers for up to seven days at the rate of 30 per cent of the full residential care subsidy that would have been payable, once the care recipient enters full-time care. Care recipients will still be able to take pre-entry leave prior to entering an aged care service, but the provider will not be able to recoup any lost residential care subsidy from the care recipient. However, the aged care provider will still be able to charge the care recipient the standard resident contribution for the pre-entry period. Previously, any days taken as pre-entry leave were counted as part of the care recipient's entitlement to 52 days of social leave from the aged care service. Under these amendments, the 52-day cap on social leave will not include any leave that was taken as pre-entry leave. This ensures any pre-entry leave taken by a care recipient does not negatively impact on their ability to take other forms of leave from the residential care service. The impact of lost pre-entry leave payment revenue should be considered in the context of other recent aged care changes, such as the redirection of the former government's workforce supplement into the general pool of aged care funding and the introduction of a higher level of accommodation supplement. The government is expected to provide $11 billion for residential care subsidies in 2015-16.
Finally, Schedule 3 of the bill ends the Aged Care Planning Advisory Committees as part of the government's decision to drive efficiencies and smaller government. These reforms are part of the broader push to reduce the size and complexity of government, to streamline services and to reduce the cost of government administration. The government has rationalised or amalgamated a number of different bodies since coming to government. Specifically, Item 3 of Schedule 3 repeals section 12.7 of the Aged Care Act 1997 so that the secretary can no longer establish Aged Care Planning Advisory Committees.
Each financial year the minister determines the number of aged care places available for allocation in each state and territory for each type of care. The Aged Care Planning Advisory Committees were established in all states and territories to advise the department on the most appropriate distribution of new aged care places across aged care planning regions. Specifically, the Aged Care Planning Advisory Committees give advice about the distribution of places among regions and the proportion of care to be provided to certain groups of people. However, the last appointments to the various committees expired in September 2014 so last year the government announced that these advisory committees would be abolished with ongoing functions to be performed by the Department of Social Services.
The government has made it clear that it remains committed to engaging with stakeholders and obtaining local intelligence as part of the needs-based planning framework. The department has consulted with a broad range of aged care stakeholders to help inform the distribution of aged care places in relation to the 2015 Aged Care Approvals Round, which was announced on 15 August 2015.
I commend this bill to the chamber and in particular the additional $150 million the government is providing to the income management regime, which is working well and I hope it will continue to be supported with this injection of resources so it can continue to work well in the future.