Transcript: 2GB Afternoons, Interview with Chris Smith

25 October 2016

The Hon Alan Tudge MP

Minister for Human Services
Topics: 
Strengthening mutual obligations
E&OE

CHRIS SMITH:
First up, to our drowning welfare system. In particular the dysfunctional dole, or Newstart. Now, what we're seeing emerge from various stories on this topic is that this is a blood-sucker on our money.

It doesn't work in a way that gradually weans people off, it doesn't entice them to get off Newstart, and it doesn't work in a way that encourages people to even find work.

These are people on the dole because they can't work or aren't earning enough money to get by, and the system, well it's supposedly there to encourage people to apply for a job - which it can - but there's no real penalty for those who don't.

In April this year data released by the Department of Employment showed one in four people on the dole are just skipping job interviews or failing to accept decent work. So they do find a job, there are jobs out there, but they're too picky to take them.

Now in these cases, they have their welfare payment suspended - that's the theory – but they are paid back once they do re-engage in applying for work. So they get their payment suspended but you get it back in your pocket.

Now I know where the incentive is, the incentive is there to remain on the benefit and maybe even take a few breaks in between. Well Alan Tudge is the Minister for Human Services, and along with two other ministers he is there and on a mission to try and get the system right.

He'll start redesigning a new system over the next few months to set higher expectations for those receiving Newstart. I want to find out what this new system might look like and where are the areas he's focusing on.

Human Services Minister Alan Tudge is in our parliamentary studio in Canberra. Minister, welcome to the program.

ALAN TUDGE:
G'day Chris.

CHRIS SMITH:
The main message we need to push here is that welfare payments are actually not necessarily a right. Yes they're available by law, but they're not a right, they are a privilege. And if you're going to abuse that privilege, surely you've got to pay for that?

ALAN TUDGE:
Well my overall message, Chris, is that we've got to be setting higher expectations upon capable people.

If you're assessed as being able to work and if you haven't got a reasonable excuse for not being able to take an interview or take a job, well then we expect you to do that interview and we expect you to take that job because we know that you can do that.

And if you set high expectations upon people in any area of life, frankly, then people tend to step up to those expectations and deliver upon them.

CHRIS SMITH:
[Interrupts] Okay, so tell me the penalties…

ALAN TUDGE:
[Talks over] On the contrary, you set very low expectations, then often people stoop down to those lower expectations.

CHRIS SMITH:
[Talks over] And that's where it's got to. So tell me what the system does to people who don't turn up to an interview or don't take the job that's on offer to them. What happens to them? Virtually nothing?

ALAN TUDGE:
Sure, sure. You're obliged ostensibly to job search if you're on unemployment benefits and I suppose what I've uncovered is that A, that you can go 12 weeks without any penalty occurring at all.

Then after 12 weeks you might get a suspension of your welfare payments but as soon as you call up and say you'll re-engage in some capacity you get full back payments. And believe [indistinct]…

CHRIS SMITH:
[Interrupts] Well that's a joke.

ALAN TUDGE:
And believe it or not, last year there wasn't a single person who lost a cent for failure to job search even though we know that there are people out there who aren't doing the right thing and stepping up to the mark.

CHRIS SMITH:
[Talks over] So you may cop some kind of delay in your payment after a quarter of the year?

ALAN TUDGE:
Correct.

CHRIS SMITH:
That's hopeless.

ALAN TUDGE:
I think that we're setting the bar too low and we're saying to people…

CHRIS SMITH:
[Laughs] Not wrong.

ALAN TUDGE:
Well, and I think that probably most of your listeners might agree and, my message is that we should be expecting more of people.

Like, you know, let's back those people to be job searchers and let's back them to take that interview, let's back them to taking that job. Because it's actually in their interests to do so.

CHRIS SMITH:
Yeah we're making it far too comfy to remain on Newstart, aren't we?

ALAN TUDGE:
Well I think most people who are on Newstart actually genuinely want to get a job.

CHRIS SMITH:
[Talks over] You'd hope so.

ALAN TUDGE:
I think the vast majority of people are, and the motivation is they just want to get more work, they want to earn more money and they want the dignity which comes from working.

But there is a lot of people who either try to avoid the system entirely or maybe they've had no-one in their life that has been working and so they have no social norm around working.

For those people we do need to have a system of mutual obligations where we're encouraging them at every step of the way to step up to be looking for work, to take that job when it's available and frankly any job is better than being on welfare.

CHRIS SMITH:
[Interrupts] Correct, any job is better. Even if you have to travel.

ALAN TUDGE:
Any job is better than being on welfare. Even if you have to travel a little bit, and you get that first job, you do that well, and then six months or 12 months down the track you'll be better positioned to get an even better job and a higher paying job.

CHRIS SMITH:
Yeah. Now, is there any part of the system that assesses when someone doesn't take a job that's offered to them? Is there anyone that sits down and goes well, hang on, Joe Bloggs got offered this job X, and I can't see any reason why Joe Bloggs shouldn't have taken job X. Now we've got to punish him.

ALAN TUDGE:
There is a part of the system. There are requirements to interview, and there are requirements ostensibly to take a job when it is offered to him or her.

Now, I guess what I've discovered when you actually look at the data though is only about four per cent of people who miss an important activity like a job interview and don't have a reasonable excuse for missing that activity actually suffer any type of penalty.

CHRIS SMITH:
Four per cent.

ALAN TUDGE:
Only four per cent. And so this is what I mean by on the surface we appear to have very stringent requirements, but in the practical application of our mutual obligations, I actually think we're setting the bar way too low.

CHRIS SMITH:
[Talks over] It's as weak as water.

ALAN TUDGE:
It's not doing them a service. It's not doing them a service.

CHRIS SMITH:
No, it's not. So can you differentiate for me between those who don't turn up to an interview and those who refuse to take the jobs offered to them?

ALAN TUDGE:
I haven't got that data at the moment. These are the type of things I do want to delve into further, but I know overall …

CHRIS SMITH:
But it'll be miniscule.

ALAN TUDGE:
Well …

CHRIS SMITH:
[Interrupts] If four per cent is the total of those in both those categories …

ALAN TUDGE:
[Talks over] Four per cent, yeah.

CHRIS SMITH:
The ones that are punished who don't take the job are probably miniscule.

ALAN TUDGE:
I don't know the answer to that, Chris. I was shocked when I saw this figure myself of only four per cent of people, and that is four per cent of people who don't have a reasonable excuse. Now, life always throws up unexpected events for people.

You know, you may be very ill on the day. You may have had a family tragedy, and of course that's a reasonable excuse why you might not be able to make an interview.

But these are classified where the job agency has said no, you haven't got a reasonable excuse in this instance. So putting those aside, then only four per cent of people are suffering any sort of penalty.

CHRIS SMITH:
Would you entertain having a three strikes process where someone refuses to take the third job that is offered to them, they no longer get Newstart or get their Newstart cut in half?

ALAN TUDGE:
Well, we want to have a look overall, and at this stage, we're just trying to unpack what the overall problem is, and start a conversation, if you like, before we get to talking about it precisely and what the policy prescription should be.

CHRIS SMITH:
[Interrupts] Because that would motivate me to take a job.

ALAN TUDGE:
Well … many people are going to come forward with ideas, and we're going to be encouraging that. Overall, as a theme, we want to back people in their capabilities.

If they've been assessed to be being capable, then we want to back them in that and we want to expect them to be able to do those things, Chris.

That's going to be the overall message, and if that means some of those things that you're talking about, well let's take a look at that.

CHRIS SMITH:
Alright. After you unpack and when you start redesigning, have you ever considered looking at the Scandinavian model where recipients who find themselves unemployed get some really generous unemployment benefits, but the system tapers off on the basis that you only have found or only look for X amount of jobs.

If you don't go over that particular threshold and look for 10 or 20 jobs, you then have your Newstart reduced.

ALAN TUDGE:
Yeah, that's an interesting model, and we'll take a look at that, and we're also taking a look at what they're doing in New Zealand which tends to have a more robust mutual obligation system there as well.

CHRIS SMITH:
Explain that to us. What do they do?

ALAN TUDGE:
Well, it depends again on what category you are. But certainly if you're a younger person and you're looking for a job in New Zealand, first of all as soon as you walk into the equivalent of the Centrelink office, the discussion is immediately about getting you into a job rather than a discussion about what payment do you want to go on. So that's the first point.

Secondly, you'll have a case manager who is assigned to you to say right, we're going to get you into a job. You may need to fix yourself up on these couple of areas. Maybe you've got a- you know, a housing issue.

Maybe you need a bit of support on something else. We'll sort that out. And then in addition though, we expect you to step up to the mark, to be looking for jobs, and to be accepting one when one is available.

If they don't do that, then an immediate notice is sent through, and there will be a repercussion associated with that.

CHRIS SMITH:
[Interrupts] So a carrot and a stick.

ALAN TUDGE:
It seems that that's what they have in New Zealand. I think that's an interesting model. They're doing some really interesting things overall in New Zealand actually, Chris, in relation to welfare reform.

And our whole, what's called our social investment approach is modelled off what they've done there as well, which is really analysing using data the categories of people who are likely to be welfare-dependent for a long period of time, and trying to do some very targeted investments on those groups of people to put them onto a better pathway.

The overall objective of what we're trying to do here, be it the payment simplification, be it this social investment approach, or be it this stronger mutual obligations, is to put people onto better pathways, to create better lives.

Because you know that if you're on welfare for any length of time, it actually becomes debilitating on the individual. You lose your motivation. You lose some of your capabilities.

I mean, I actually call it a poison, being on long-term welfare, because it can suck the life out of you. And so everybody's got an interest, I think, in supporting those jobseekers if you're out of work to immediately getting back into work as quickly as possible.

CHRIS SMITH:
Okay. Hopefully you have got the determination to see this through, and hopefully in two or three years' time, Australia has a very different Newstart program that offers a little bit of carrot and a little bit of stick and some motivation to go and find a job. Thank you for your time.

ALAN TUDGE:
Thanks so much, Chris.

CHRIS SMITH:
Alright. Federal Human Services Minister Alan Tudge.

[ENDS]