Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697630315971.pdf (Australia)
COMMONWEALTH OF AUSTRALIA PARLIAMENTARY DEBATES SENATE Official Committee Hansard COMMUNITY AFFAIRS LEGISLATION COMMITTEE (Consideration of Estimates) MONDAY, 18 AUGUST 1997 BY AUTHORITY OF THE SENATE CANBERRA 1997 CONTENTS MONDAY, 18 AUGUST Social Security— Program 1—Income Security for the Retired—Subprogram 1.1—Age pension .

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19 Program 2—Income security for people with a disability and for carers— Program 2.1—Disability Support Pension .

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Subprogram 2.6—Child Disability Allowance Program 3—Income security for the unemployed—Subprogram 3.1—Newstart allowance .

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Program 5—Housing .

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Program 7—Corporate—Subprogram 7.3—Corporate infrastructure .

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29 36 38 62 67 Monday, 18 August 1997 SENATE—Legislation CA 1 SENATE Monday, 18 August 1997 COMMUNITY AFFAIRS LEGISLATION COMMITTEE Portfolios: Health and Family Services; Social Security Senators in attendance: Senator Knowles (Chair), Senators Denman, Eggleston, Faulkner, Forshaw, Gibbs, Neal, O’Brien, Synon, West, Woodley DEPARTMENT OF SOCIAL SECURITY Proposed expenditure, $1,584,755,000 (Document A).

Proposed provision, $5,774,000 (Document B) Consideration resumed from 4 June 1997.
In Attendance Senator Newman, Minister for Social Security Department of Social Security— Executive Mr Anthony Blunn, Secretary Dr Jeff Harmer, Deputy Secretary Mr John McWilliam, Assistant Secretary, Budget Development Branch Program 1—Income Security for the Retired Ms Kerry Flanagan, First Assistant Secretary Program 2—Income Security for People with a Disability and for Carers Mr Andrew Herscovitch, Assistant Secretary, Disability and Carers Programs Branch Program 3—Income Security for the Unemployed Mr John Powlay, Assistant Secretary, Labour Market Programs Division Program 5—Housing Mr Jeff Whalan, First Assistant Secretary Mr James Jordan, Assistant Secretary, Housing Programs Program 6—Special Payments and Services Ms Peta Winzar, Assistant Secretary, Youth Allowance Implementation Ms Fiona Smart, Acting Assistant Secretary, Special Payments Program 7—Corporate Mr Graeme Hope, First Assistant Secretary Mr David Tune, Assistant Secretary, Strategic Development and Change Ms Helen Fleming, Acting First Assistant Secretary, Legal Services Division COMMUNITY AFFAIRS CA 2 SENATE—Legislation Monday, 18 August 1997 Commonwealth Services Delivery Agency Executive Mr Ross Divett, Deputy Chief Executive Officer Mr Jim Humphreys, Deputy Chief Executive Officer, Operations Program 7—Corporate (CSDA) Mr Ian Carnell, General Manager, Compliance, Call Centres and Privacy Mr Mike Goldstein, General Manager, Contestability Mr Andrew Phelan, Leader, Property and Resource Allocations Theme Team Mr Fiona Howell, Customer Segment Leader, Youth and Students Department of Finance— Toni Case Brad McDonald Grant Taylor Conrad Nell Colleen Hassall Robert Janssens Mary McDonald Bronwyn Taylor Janet Douglas CHAIR—I declare open this supplementary hearing of the Senate Community Affairs Legislation Committee considering the budget estimates for the portfolio of Social Security.
The committee has before it a list of the subprograms relating to matters which senators have indicated that they wish to raise at this hearing.

In accordance with the standing orders relating to supplementary hearings, today’s proceedings will be confined to matters within the relevant subprograms.

I welcome the Minister for Social Security, the departmental secretary and the officers of the Department of Social Security and Commonwealth service delivery agencies.
Minister, do you wish to make an opening statement?

Senator Newman—No, thank you.

CHAIR—The committee will therefore commence with program 1.

Senator FORSHAW—Before we start on program 1, I have some questions which cover more than just one program relating to measures that impact upon a number of programs and some general questions from the overview.

Senator Newman—You have some general questions across programs.

Senator FORSHAW—Could I start with those first?

CHAIR—In terms of an overview?


Yes, go right ahead.

Senator FORSHAW—The first one is a follow-up to a question that Senator Mackay asked on notice relating to the two-year newly arrived residents waiting period.

She provided three case studies which she asked the department to comment on.

The answer that was given said, firstly, that it was not possible to comment specifically on the three case studies because the full circumstances of each case were not known.
It then went on to say: COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 3 Special benefit is available for newly-arrived residents who find themselves in financial hardship because of an unforeseen change in their circumstances or the circumstances of their sponsor.
The Minister for Social Security issued guidelines for the payment of special benefit in these circumstances and these were subsequently tabled in March 1997 as a disallowable instrument in the House of Representatives and the Senate.

The answer then further goes on to outline the intention of the ministerial guidelines.

It said, particularly: From March 1996, the Department of Immigration and Multicultural Affairs.
in conjunction with the Department of Social Security, has been informing migrants, intending migrant sponsors and intending sponsors about the two-year waiting period and that only in special circumstances would the Australian taxpayer support a new migrant during their first two years in Australia.

Minister, these guidelines were disallowed by the Senate on 25 June this year.
Could you inform me as to what steps the department has been taking to advise potential applicants for special benefit that the rules have actually changed from that date?

Mr Blunn—We, in consultation with colleagues in the Department of Immigration and Multicultural Affairs, have been ensuring that there is a general information provision at overseas posts, through posters and other devices, to alert intending migrants to that.
In the interviews that are conducted with each intending migrant and person seeking a visa, I am informed they are advised of this and the almost universal practice is that the letter which goes out accompanying the advice from the overseas post contains a paragraph which alerts the intending migrant to these conditions.
I say ‘almost universal’, because there is at least one instance in which the paragraph was inadvertently left out of the letter, but as far as I am aware the general practice is that they be alerted.

In addition to that, although not specifically covered by your questions but implicit in the fact that the guidelines were disallowed, is the fact that I have put out instructions to staff to assist them in exercising their decision-making role in this area.
Senator FORSHAW—Are you able to provide the committee with copies of what documentation was provided to alert intending migrants and sponsors?

Could you give us an idea of what was actually said?

Mr Blunn—I do not have it at the moment.

I spoke to the Secretary to the Department of Immigration and Multicultural Affairs last week to verify the practice as we understood it.

I had that confirmed over the weekend, but I am afraid at the moment I do not have the material.
I can get it easily enough, and I would be happy to get it and provide it.

Senator FORSHAW—If you could provide it in due course that would be helpful.

Have the people who claimed special benefits during the period when the guidelines were in place and whose claims were rejected been advised to reapply?

Mr Blunn—I cannot answer that, Senator.

Ms Smart may be able to answer that question.

Ms Smart—To my knowledge, those people have not been notified.
It is the case that a number of those people will have come in to the office and inquired and not actually lodged a claim, more so than having had their claims rejected.

It is very difficult to identify those people because no records would have been kept.

However, steps can be taken to identify those people whose claims were rejected and have them assessed under the revised situation.

Senator FORSHAW—Steps can be taken, but have they been taken?

Ms Smart—To my knowledge, not at this stage.


Senator FORSHAW—Will they be taken?

COMMUNITY AFFAIRS CA 4 SENATE—Legislation Monday, 18 August 1997 Ms Smart—We can arrange that with the Commonwealth Service Delivery Agency.

My understanding is that there has been a relatively small number of people who have had their claims rejected and that, by and large, those people could be identified but have not as yet been, and that steps will be taken.
Senator FORSHAW—You say you could, it is possible and it is a small number but— Mr Blunn—Let me make it clear: we will do that.

Senator FORSHAW—Will they actually be given the opportunity to reapply?

That is what I am asking.

Mr Blunn—They will be given the opportunity to test under the new instructions.

That may not produce a different result.

Senator FORSHAW—I am not even aware of the reasons why they were rejected and I am not necessarily suggesting what the outcome will be.
I am just saying that, presumably, they are entitled to make an application.

Mr Blunn—We will certainly ask the agency to contact those whom we can identify and they can retest themselves.

Senator O’BRIEN—I have a question with respect to the disallowance of the guidelines on 25 June.

Mr Blunn, would you identify the consequences of the disallowance of those guidelines in terms of the department’s actions and activities?

What procedures has the department put in place?


Mr Blunn—With the disallowance of the guidelines, the binding nature of the minister’s instructions ceased to have effect and that meant that departmental officers, acting as delegates, made their own decisions on the basis of their understanding of the law and, where relevant, the policy.

To assist those officers in making those decisions, I have issued a series of guidelines.
The difference between my guidelines and the minister’s guidelines is that they are not binding on officers; they are simply for assistance.

Senator O’BRIEN—Could you supply us with a copy of those guidelines?

Mr Blunn—I certainly can.

Senator O’BRIEN—Are they substantially or consequentially different from the minister’s guidelines?

Mr Blunn—They are different, but they pick up the same policy line.

Senator O’BRIEN—That is why I used the words ‘substantially or consequentially’.
Mr Blunn—They are different, and in some areas they are significantly different, but not in intent.

The intent of giving effect to the government’s policy is still reflected in those guidelines.

But, as I said, they are not binding.

Senator O’BRIEN—Do those guidelines specifically advise officers that they are not bound to follow those guidelines?

Mr Blunn—That is standard practice.

That is the difference, and that is well known.

Senator Newman—Can I just intervene by way of clarification?
By not having binding ones, you are then in a situation where there is less certainty that you will get conformity of decision making right across the department, but it is not unusual in the department to not have legislated guidelines on particular things.

They are delegates of the secretary.

Mr Blunn—I have a copy here, Senator.

Senator O’BRIEN—That would be good.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 5 Senator Newman—The delegate is the secretary for a whole lot of things.
This is one more without specific guidelines but which has gone through the parliament.

Senator O’BRIEN—There are many activities of the service where officers act as delegates of superior officers.

Mr Blunn—Yes.

Usually of me.

Senator O’BRIEN—I am thinking not only of your department but others.

Mr Blunn—Usually, the act reposes the power in the secretary—for the time being—and that is then delegated down or authorised.

There is a difference between those two, but it is usually delegated.
Senator O’BRIEN—Minister, is it the intention to pursue a new set of guidelines by regulation?

Senator Newman—Not at this stage.

That does not mean to say that we would not be reviewing the situation—it depends on how it is administered.

As I flagged with you before, you can get into difficulties where people have been treated in different ways because of the discretion of officers.

If that became a problem, we would have to look again.
Senator O’BRIEN—Given the debate in the Senate about the guidelines, has any consideration been given to amending the guidelines to take into account the objections raised in the Senate?

Senator Newman—Not at this stage.

Senator FORSHAW—In the last round, there were some questions asked by Senator Faulkner and some on notice regarding the reduction in the number of financial information service officers and how that would be achieved.
In the written answer, it was indicated that it would be possible to give a clearer picture of how the reduction would occur in the additional estimates round.

Maybe we have reached that point today, so could we have a clearer picture?

Mr Blunn—We certainly have a structured reduction in numbers, and perhaps I could ask Ms Flanagan to run you through that, Senator.
Ms Flanagan—We have written to the area managers of the Commonwealth Service Delivery Agency asking them to nominate reductions in their areas that will still mean that FIS has good coverage across Australia.

Those replies have been received and looked at centrally, and a report is going to be forwarded to the minister shortly for her consideration.

Senator FORSHAW—So we do not know today precisely where they are going to occur?

Is that what you are saying?


Ms Flanagan—No, those final decisions have not yet been taken.

Mr Blunn—We have a series of intended reductions, if you will—how we are going to spread that loss—and they will be going through the approval process quite shortly.

I think we indicated how we were proposing to accommodate the total number by spreading it across all of our areas and regions.
Senator Newman—The principle is largely the same principle that the JET advisers or the migrant liaison officers have been using in the past—that is, if you go to visit an office, you will find that the JET adviser or the migrant liaison officer visits on this day or on these days of the week.

Similarly, the FIS office is to be shared.


Senator FORSHAW—It is just that the answer that we have been given is no different from the answer to the question on notice, and that was that the area managers had been asked to COMMUNITY AFFAIRS CA 6 SENATE—Legislation Monday, 18 August 1997 consider the position and that you would have a clearer picture by the time the additional estimates round occurred.

That is what the statement said.

It is not much clearer to me, to be honest.


When will this actually be decided?

Senator Newman—I have just received the piece of paper this morning, and the officers are asking me whether I mind if you have it.

I have not signed off on it yet.

I received the briefing note just this morning that Ms Flanagan was referring to; but, yes, the committee can have that.

Mr Blunn—My only concern is that this is not a matter for additional estimates.
I accept that the committee can ask questions on it—I am not suggesting that they cannot—but we have not identified the actual number withdrawn.

We have indicated where a withdrawal will be made and how many will be left, and if that would help the committee I can do that.

Alternatively, I can quickly identify the amount of resource that will be withdrawn, which was your specific question.

I have four pages of where and how, but it does not specifically answer your question.
I can give you this information now, or we can provide you with the detail.

Senator FORSHAW—I am happy to have it now if you can give it to us.

Mr Blunn—It is not quite what you asked for.

Senator Newman—It relates to it, but is not specific.

Senator FORSHAW—I will ask for that as well then.

Mr Blunn—I don’t think I should have started that.

Senator FORSHAW—Well, it started at the last estimates when it was actually in the papers that this was going to occur.
We are trying to ascertain what is going to be the position when the reduction occurs.

Mr Blunn—I will make those available now.

If they don’t satisfy what you are looking for then we will be happy to provide it—we have actually provided them.

Senator FORSHAW—Thank you.

Senator O’BRIEN—The matter I want to raise is the fact that the department provided a copy of the evaluation of the operation of the compensation provisions of the Social Security Act by Rush Social Research.
That paper was dated February 1997 and it was supplied on 10 June 1997.

Some paragraphs and the whole of part 7, which is the conclusions and future directions provision, have been deleted.

I think we are entitled to know why those particular parts of the report were deleted prior to their supply.
Mr Carnell—Those sections were deleted on the same sort of basis that we would delete something from an FOI request, where they relate to deliberative processes of government—in other words, the working papers exemption under FOI.

They were comments on particular policy issues and the stance that might or might not be appropriate about them.

Senator O’BRIEN—Each one of them were comments on policy, were they?
Mr Carnell—It was only very small sections that were removed; you got the very large part of the report.

Senator O’BRIEN—The whole of part 7, the conclusions and future directions, was deleted.

That seems to be a fairly fundamental part of the report to delete.

Mr Carnell—As I said, it fits within that standard sort of exemption.

Senator O’BRIEN—Every part of that section?

Mr Carnell—It was a relatively short part, yes.


COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 7 Mr Blunn—As I recall, and I stand to be corrected, it really did go to what advice might be given to government about it.

Senator O’BRIEN—It is not your advice, is it?

It is a briefing paper the department has commissioned.

It is not the department’s advice.


Mr Blunn—The advice was given to us, and what we do with it in informing government, I believe, is the basis on which we took that view.

Senator O’BRIEN—That is extending the principle from the advice that officers give to ministers, to material that officers gain upon which they might base their advice.
Mr Blunn—Certainly there is a distinction there, but in this case I believe that the advice that was given was critical to the advice we were giving to government, and indeed, in many ways reflected the advice we were giving to government, but I stand to be corrected.
Senator O’BRIEN—The point is that you can say that; we are not entitled to ask you for the advice paper you gave to the government, but I believe we are entitled to ask for material upon which the department might or might not base its advice to analyse policy for the future.

What has occurred here is that you have taken parts of it, perhaps because you have decided you are going to base your report on it.
That may or may not be the case but I do not believe it is appropriate to remove from the papers that material, in effect to make the supply of the research paper less valuable to us, if of any value at all.

Mr Blunn—That is a matter for government to consider.

I do not think it is a matter that I can advance any further.

What we asked for from our consultant was particular advice which we required to form the basis of advice to government.
What we would probably not do in future is ask for that advice; we would get it other ways.

There are a number of issues involved in this, but that is a matter for government to decide and if the committee wishes to pursue it then— Senator Newman—It is not a matter where there has been a change of policy with a change of government.

Senator O’BRIEN—It may not be.

The principle that I am addressing is that this is not advice to government; it is advice to the department.
Senator Newman—I just wanted to make that clear.

Senator O’BRIEN—Our position is that it is not appropriate to delete parts of it on the basis that it is allegedly justified to delete them.

I would ask that this matter be reconsidered, because I believe we are entitled to the full paper.

Senator Newman—What are you asking?

Senator O’BRIEN—We are asking that the question of deleting parts of that research paper before supplying it to us be reconsidered.
I would suggest that it is appropriate that the committee be supplied with the whole paper.

Senator Newman—We can look at it.

Senator FORSHAW—I have some questions on superannuation exemptions.

Minister, you put out a press release on 30 June 1997 which indicated that you were exempting from means testing inaccessible superannuation assets and traditional endowment of life superannuation contracts which had been purchased before the 1996 budget announcement.
How much revenue was the government forgoing in exempting these particular classes of assets from the means test?

COMMUNITY AFFAIRS CA 8 SENATE—Legislation Monday, 18 August 1997 Ms Flanagan—No estimate has been put on that.

It is assumed that there will be very few exemptions given under that.

When we were preparing the estimates originally we looked at the numbers of people that might be in these sorts of products.

We believe that very few will be.


As you probably would be aware, another initiative whereby people can now access superannuation under hardship has also been approved.

They can get a letter from the Department of Social Security or the new CSDA and approach their superannuation fund to have their superannuation released on hardship grounds.

We do not have an estimate of how much revenue will be forgone.
Senator FORSHAW—The measure whereby people can access their superannuation on hardship grounds is not restricted to people over 55, is it?

Ms Flanagan—That is correct, Senator.

Senator FORSHAW—Correct that it is not?

Ms Flanagan—Correct that it is not—that is right.

Senator FORSHAW—Whereas the minister’s statement on 25 June in relation to the superannuation exemptions was in relation to the budget measures for people over 55, was it not?

Ms Flanagan—That is correct.


The exemption provisions are for genuinely inaccessible assets.

That is, people cannot access them on hardship grounds.

We have not put a dollar figure on it because all the research that we have done so far suggests that there will be only a small number of cases where people cannot access their superannuation.

Examples were given in that press release.


For example, people who continue to work part time and continue to contribute to a superannuation fund are, under the fund provisions, not able to access their superannuation.

That would be a case in point where the minister would exercise her exemption power.

Senator FORSHAW—Are you able to be more specific as to what a ‘small number’ actually is?

Do you have any indication?

Ms Flanagan—No, we do not yet.


The basis of the exemption is that it is done on an individual basis.

We are not exempting products per se.

People will have to come in and we will need to look at their individual circumstances.

For example, there will be people with only a small amount of superannuation who will not be affected in any way by the over-55s measure.

In effect, the minister will not need to use her exemption power because there will be nothing to exempt; they are not going to be affected.
Until we actually see the cases coming through, we cannot estimate that.

Senator FORSHAW—You make me wonder why the minister bothered to put out a news release about this if it was going to have so little impact and was not all that terribly newsworthy anyway.

It might have been a slow day.

Senator Newman—I thought you liked information, Senator.

Senator FORSHAW—I like accurate information.


Senator Newman—Can I just add that it is the sort of information that, obviously, the financial advisers need to know.

So it is more of an information exercise to make sure the information gets to those who are likely to need it.

Senator FORSHAW—Let us come to that.

What was the legislative basis for your announcement that you were going to exempt some assets from the means test?
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 9 Ms Flanagan—In effect, the minister already has an exemption power under current legislation to exempt from the deeming provisions particular assets under the income test, so this is an existing legislative provision.
When the measure was announced in the budget, there were cases raised where people said, ‘We are not going to be able to access our superannua- tion,’ and it was made clear when the budget initiative came up that the minister would look at how to exempt those people.

And, as I said, she already has an existing power under legislation.

Senator FORSHAW—This is what has got me a bit confused.
As I understand it, as you just said, the minister has a power to exempt certain classes of assets under the income test.

But is it not the case that it is only under the income test; it is not under the assets test?

Ms Flanagan—That is correct.

There are provisions in our legislation to exempt assets under what we call hardship provisions, and they are also available in this case.

Senator FORSHAW—But that is not what this press release was about.

Ms Flanagan—It was about both those cases.


Senator FORSHAW—The press release stated: Exemptions will be made in cases where: the asset is inaccessible because of a contract entered into before the 1996 Budget announcement, or because of the rules of the superannuation fund.

It gave an example of where a customer purchased a fixed term rollover before the budget announcement and the contract does not permit access until the end of the contract.

Another one was where: .

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the asset is inaccessible because of a legislative bar, for example where a person who is working, part time can’t access the asset because they do not satisfy any of the "conditions of release" specified in the superannuation regulations.

Is the press release not misleading, wrong?

Mr Blunn—I do not think the officer should answer that question, Senator.

Senator FORSHAW—Would the minister care to answer it?
Senator Newman—Are you suggesting that those are not cases of hardship?

That is surely consistent with what you have just been told by the officer.

Senator FORSHAW—Minister, what I am asking you to do is to clarify upon what basis this press release that you would provide exemptions for inaccessible you put out superannuation assets under the assets test when you do not actually have that power.

Mr Blunn—I do not think that is the case.

I am not commenting on the minister’s press statement.
Let me make that quite clear.

The advice that I think the department would have given to the minister in those sorts of cases would have been that they were examples of hardship and they would have come under the exemption provision that the minister has under the legislation.
Senator O’BRIEN—The question that Senator Forshaw is asking, I suppose, is directed to the minister and that is that the press release says in its second paragraph: The exemptions will apply to some people affected by the 1996 Budget measure which removes the means test exemption of assets held in superannuation and rollover funds .

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The answer we have just been given is that the exemption is to income deemed to be derived from assets.
That is a differentiation between the press release and the point that I think Senator Forshaw is attempting to make.

COMMUNITY AFFAIRS CA 10 SENATE—Legislation Monday, 18 August 1997 Mr Blunn—I am sorry if I have misled the committee.

My belief, and I would ask Ms Flanagan to confirm it, is that there are two things that we can do.

We can exempt from assets in particular circumstances where there is hardship, and we can exempt from the deeming rules.

There are two separate areas that we can operate in.
The exemption from assets is fairly prescribed but does apply in individual cases of hardship, as Ms Flanagan has said.

Senator O’BRIEN—You are saying that there is legislative power for the minister to exempt assets from the assets test.

Mr Blunn—In some cases, yes.

Senator O’BRIEN—What are the limitations?

Mr Blunn—It is limited to cases where there is hardship.

Senator O’BRIEN—What limitations apply?


Ms Flanagan—We can actually give you the part of the legislation which shows that they have to hold, for example, a very low liquid asset level—I think it is under $10,000—and demonstrate, for example, that, if they hold a significant amount of property under these sorts of provisions, it would not be reasonable for them to sell the property in a particular market.
There is a range of conditions that need to be applied, and then people can get the exemption from the asset test or the assets exempted.

Senator O’BRIEN—Apart from the legislative guide, are there any other guidelines that you or the department would work off in approaching any request for exemption?

Ms Flanagan—I can get back to you if there are other parts of our guide, for example.
I will get you all the provisions that people would need to use—all the documentation that they would use to make that decision.

Senator O’BRIEN—Let me understand this.

A person who has money in a superannuation fund or a rollover asset which is non-liquid does not necessarily gain an exemption for that asset unless they pass certain other tests set down in the legislation.

Mr Blunn—They would have to comply with the legislation, yes.

Senator O’BRIEN—Those tests are set down in the legislation?
Ms Flanagan—The conditions to qualify for an assets test exemption or an exemption for a particular asset is set down in legislation.

Senator O’BRIEN—We have used the word ‘hardship’.

Is hardship defined in the legislation?

Ms Flanagan—It is.

It is usually a test of holding less than $10,000 of liquid assets.

That is my understanding, but I have not got the legislation in front of me.

I would need to check it for you.


Senator WEST—Is it not possible that those who have the significant wherewithal—the millionaires the minister is trying to catch or stop—are the ones that are more able, with the use of smart accountants and advisers, to lock up their assets so that they cannot be touched and still take their liquid amounts down to $10,000?
They are more likely to be the ones who are able to pay the advisers to do that than some poor sod who has lost his job at age 55 with a minimal amount of superannuation but enough to trigger any blasted thing that happens in this particular act.

Mr Blunn—Yes, it is likely that people who have significant resources at their disposal can use them in that way.

That is exactly what we are trying to get at and stop.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 11 Senator WEST—But you are squashing the average battler.

Senator Newman—The average battler has $38,000 of super.

Senator WEST—We have heard all this story before.

Senator Newman—Your own Jenny Macklin is the one who has used that figure.

Senator FORSHAW—With respect to your press release— Senator O’BRIEN—That might be the average.

There might be battlers who have more super.

It is not a case to say the average covers every case.
Senator WEST—What about all these 55-year-olds that you are retrenching?

Mr Blunn—I do not think there is any argument about the group we are trying to hit.

That is all I am saying.

Government has made it very clear.


Senator FORSHAW—When the press release went out and, presumably, advice was given to people in the industry, which the minister said earlier was one of the reasons the press release went out, did you advise those industry personnel or companies that the means test exemption was an exemption from both the income and the assets test?

Was that the advice you gave?

Ms Flanagan—No, it is not the advice we gave.

Senator FORSHAW—What advice did you give?


As you know, I am sure, concern has been expressed in the industry about what people understood this exemption announcement to mean and what in fact it does now mean.

Ms Flanagan—There is certainly some misunderstanding, but I suppose what I would say is that not everybody has misunderstood it.
Some people understood very well the distinction between the exemption under the income test and the different sorts of exemptions that the minister has by virtue of legislation under the assets test.

When we discovered that there was some misunderstanding, we very quickly wrote to the people and advised them to correct the misunderstanding that they had.

Senator FORSHAW—How did you find out very quickly that there was a misunderstanding in your view?
From what I understand, it was not so much a misunderstanding as an impression or a statement made that led people to believe something which in fact was not the case.

Ms Flanagan—I am not aware of the statement to which you refer.

Senator FORSHAW—The press release, for a start.

Could you tell me when the department became aware that people had a different interpretation?

Ms Flanagan—We had a number of industry representatives ring directly and ask us to clarify.
They stated that there was some misunderstanding in the industry, and that is when we very quickly made the information available to them in more detail.

Senator WEST—How many and when?

Ms Flanagan—How many actually came in?

Senator WEST—Yes.

How many inquiries were there?

What breadth of the industry are we talking about?

Ms Flanagan—Personally, I only had a couple of phone calls.

After I had those phone calls, we put into train the release of further information to clarify the situation.
COMMUNITY AFFAIRS CA 12 SENATE—Legislation Monday, 18 August 1997 Senator FORSHAW—Presumably you had an expression of concern—I will put it at that level, but I think it was actually higher and more serious—from RetireInvest, which is a leading organisation involved in providing financial management and advice to retired people.

Ms Flanagan—Yes, RetireInvest was one of the companies that rang me.
Senator FORSHAW—An article in the Sydney Morning Herald only two days ago refers to the press release, and says: Many people interpreted this to mean an exemption from both the income test and the assets test, says Louise Biti, a senior technical adviser at RetireInvest financial planners.

Why do you think they came to such a misunderstanding, in your view?

It is pretty hard to imagine people in this business making that sort of simple mistake, isn’t it?

Ms Flanagan—That is your view, Senator.


Senator FORSHAW—Sorry?

CHAIR—That is your assessment, Senator.

It is unfair to ask the officer for a comment on that.

Senator FORSHAW—You claimed they misunderstood— Ms Flanagan—Some of them misunderstood.

Senator FORSHAW—and that the minister’s press release and your advice were clear.

Is that what you are saying?

Mr Blunn—No, Senator.

What the officer said was that some people misunderstood and other people did not.
Where we had evidence that there was a misunderstanding or uncertainty, we moved to remove that, as I think we have had to do.

I agree with you that it was unfortunate that there was misunderstanding.

This does happen occasionally.

Senator FORSHAW—I would put it to you and put it to the minister that, when you say ‘some’, we are talking about some leading institutions in the superannuation industry.

I have mentioned one of them and there are others.


Senator WEST—These are people that do not normally get things wrong.

They normally are able to read press releases— Senator FORSHAW—I would not go that far, Senator West!

Senator WEST—They are normally able to read ministerial press releases and understand what the situation is, aren’t they?

In particular, they are used to dealing with the Minister for Finance’s press releases.

Mr Blunn—I have no comment on that.


Senator FORSHAW—Also in the press statement was a very interesting comment that you made, Minister.

You said: As the issues involved are complex— I think you have just proved that— a comprehensive investigation was undertaken before announcing exemption details.

What was the nature of the investigation and who was involved in it?

Ms Flanagan—I referred to this earlier.

What we tried to do was to find situations where there would be cases of genuine inaccessibility.
We went out and spoke to a number of industry representatives to find out where those cases might be and some of them, of course, were listed in the press release.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 13 Senator FORSHAW—This was done by officers of the department, was it?

Ms Flanagan—That is correct.

Senator FORSHAW—Did you use any consultants?

Ms Flanagan—No, we did not.

Senator FORSHAW—When was that done?

Ms Flanagan—It was done over time.


We did it before the budget initiative was actually announced to try to get a feel for that in order to advise government of what an exemption might mean and, subsequently, we engaged in further work.

As I have said, we contacted industry and spoke to the Insurance and Superannuation Commission to try to further establish what sorts of cases there might be where superannuation assets were genuinely inaccessible.
Senator WEST—That was all done before the press release, I take it?

Ms Flanagan—It was.

Senator FORSHAW—It still makes me wonder further why some people apparently or allegedly got it wrong, if you were consulting with the industry.

Minister, is the department or are you putting out a further statement to clarify this?

Senator Newman—The department has certainly been in contact with people.

You got an answer earlier that most people were not confused by this and did not have a problem.
Those that did have a problem contacted the department and were responded to.

Senator FORSHAW—Minister, I did not get an answer to say ‘most people’ at all.

What happened was that companies in the industry contacted the department.

We know of at least one, and I know that there are others.

Whilst you might think that only one, two or three companies making a phone call, in your view, is very small, in fact they represent quite a significant sector of the industry.
The point I am getting at is that you put out a press release making the announcement which was, in the words of the department, ‘Going to impact upon very few people’.

It has obviously created some confusion in the industry.

There have been at least two or three— Senator Newman—This is a huge industry, remember.
Senator FORSHAW—It might be a huge industry, but some of the companies involved have a big stake in this and represent a lot of people both now and, presumably, in the future who may be affected.

Are you proposing or considering putting out a further press release—to be consistent—to clarify the misunderstanding, as you put it, to correct the record?

Senator Newman—I have no plans to do so.


I think that the consultation process, which is ongoing with this section of the department, with the retirement industry has been very effective in a whole range of measures.

They are in constant contact, and I think that is a very appropriate way to be dealing with the areas of misunderstanding.

If we decide that there is a need for any further advice to industry, then we may put out a departmental statement if it is needed.
Senator FORSHAW—Why would you not consider it— Senator Newman—You did not listen to the end of the answer.

You were planning your next question.

I said that if, after that process, it appears that there is a wider misunderstanding than we believe is the case then we may consider putting out a departmental statement giving full details.
Senator FORSHAW—The point I am making, Minister, is that the confusion arose—and I am using the word ‘confusion’, although I think it is stronger than that, but I am being COMMUNITY AFFAIRS CA 14 SENATE—Legislation Monday, 18 August 1997 polite—out of your press release.

All I am asking is, given that you took the trouble to put out a press release to announce some news which was of pretty limited import in any event— Senator Newman—So therefore this is not important?
Senator FORSHAW—I am not saying— Senator Newman—That is what you are suggesting.

Senator FORSHAW—I am not suggesting that.

Your own officers— Senator Newman—You can’t have it both ways.

Senator FORSHAW—You cannot have it both ways.

You cannot put out a press release making an announcement which your own officer then says will have an impact upon very few people.
You seek to make some great political capital out of it, and when your press release is shown to be misleading, you refuse to even take the next step of apologising to people and putting out a correction.

I am asking you why not.

Senator Newman—There is no need for a correction.

It is something which has been misunderstood by some players in a very large industry.

The officer has already told you that the department has been in contact with those people who have had a misunderstanding about this matter.
If we find that it is a wider misunderstanding than we believe, then we may move to a departmental statement giving further details, but I am afraid I do not accept your suggestion that there is widespread concern or misunderstanding.

That is not the experience of the department, and we will play it by ear as we continue the continuing consultations that are going on.

There are many areas in which the department is in constant contact with the financial planning industry.
It is very easy for them to assess the degree of concern or misunderstanding.

Despite your claims, I think the department is in a better position to know the view of the industry.

Senator FORSHAW—We will soon see whether your predictions are true, Minister.

Senator O’BRIEN—Minister, was the press release we are now discussing prepared in your office or by the department?

Senator Newman—I am advised it was prepared in both, together.
Senator O’BRIEN—So there was a cooperative effort between officers of the department and your ministerial staff?

Senator Newman—So I am advised.

Senator O’BRIEN—Did the department provide any pro forma of the press release prior to its release?

Mr Blunn—What we would normally do is to provide a draft which we would refer to the minister’s office, and I assume that is what happened in this case.

Senator O’BRIEN—And that draft was altered?

Mr Blunn—It is not unusual for drafts to be changed.
I simply do not know in this case, but usually that is then the subject of further discussion.

Senator O’BRIEN—Does Ms Flanagan know whether the draft was altered?

Ms Flanagan—The drafts are very often altered.

Public servants, as you might imagine, sometimes write in something that is perhaps not appropriate for press releases and very often ministers’ officers change our wording.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 15 Senator O’BRIEN—I can accept that, but the question I asked was a little bit more specific and that was: in this case, was the draft altered?

Ms Flanagan—I personally do not know as I did not see the draft as it came through.

I was not in the department at the time.

Senator O’BRIEN—I see.

Someone else in the department prepared the draft?

Ms Flanagan—Yes.
Ms Flanagan—Yes.

Senator O’BRIEN—Could you ascertain for us whether there was a change between the draft and the final press release?

Ms Flanagan—We are saying that there was a change, it is just that I am not aware of the extent of the change and actually what was changed.
Senator O’BRIEN—So there definitely was one or more changes from the point of preparation of the draft within the department and its release, and would it be fair to say that that change occurred in the process of collaboration between the minister’s office and the department?

Ms Flanagan—That is usually how it happens for most press releases.

CHAIR—Could I just remind senators that we are actually meant to be on additional estimates and how something impacts on the budget.
I am yet to understand how who wrote a press release and who amended it actually impacts on forward estimates.

Senator O’BRIEN—We will advise you, Chair, as it becomes clear.

Senator Newman—Madam Chair, it is the budget before last, this measure.

CHAIR—That is right, so we are not even on the exact budget, Senator O’Brien, so I would ask you to move on.
Senator O’BRIEN—We are not on the exact budget; we are on an advice about the expenditure of the department which has been given to the public, and the process of achieving that.

CHAIR—We are actually on about who wrote a press release and who amended it.

I do not think that that is relevant to the budget.

Senator Newman—It is related to the previous budget.

CHAIR—I do not think that that is now relevant to this budget and this meeting.
I am going to rule further questions on the press release out of order.

If you have any issues to raise on matters across portfolios and the overview, please do so.

just about Senator WEST—I raise a point of clarification, Madam Chair.

The estimates procedure is the budget but also about questioning government administration and not departmental process, and I think that Senator O’Brien is quite within that gambit of the estimates procedure.

CHAIR—I have issued my ruling and I will stand by it.
Are there any further questions of the overview?

Senator FORSHAW—I did have some questions about a dog kennel at the Lodge, but apparently I cannot ask it under this government.

You used to be able to under the previous one.

CHAIR—Are there any further questions on the overview?

COMMUNITY AFFAIRS CA 16 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—I wanted to ask a number of questions which deal with this issue.

You, Madam Chair, are saying that I cannot.


CHAIR—Senator O’Brien, if you are prepared to be expeditious in the way you ask a question about the issue, as opposed to the detail of a press release and who wrote it and who amended it, which has absolutely nothing to do with why we are here today, then I will allow a couple more questions.

We have now been on this subject for 22 minutes.

I do not plan to go any further on an issue that relates to the previous budget and not this budget.
I have allowed a fair degree of indulgence and the minister and the officers have agreed to answer the questions.

But we are now sawing sawdust.

They have answered the questions repeatedly.

Senator O’BRIEN—I am not sure that we have answers to all the questions, but I will see how we go on a couple just to see if we can put this matter to bed.

We are not setting any records in spending 22 minutes on the subject, I can assure you.
In terms of the issue, has the department issued advice to the minister, subsequent to the press release, about the accuracy or otherwise of it?

Ms Flanagan—No, Senator, we have not.

As I say, there were a few isolated examples where we were contacted and we very quickly cleared those up.

We did not see the level of misunderstanding as being worthy of having to go back to the minister on it.
Senator O’BRIEN—Has the department sent separate material to industry advisers about the effect of— Mr Blunn—You mean generally, Senator?

Senator O’BRIEN—Yes.

Mr Blunn—I do not believe on this issue we have.

If it would help, and I think it might help, we are in close contact with the industry and they do not usually rely on press statements for detailed knowledge of these issues.

They usually do contact us.


If it would put the committee’s mind at rest, I would be very happy to undertake to contact the industry and to elucidate the issue if there is a problem.

Senator O’BRIEN—If I may make this comment, Madam Chair, it would be good if there was a statement of clarification issued because the reading of the release leads to different conclusions and certainly led me to a different view than we learned this morning.
Ms Flanagan—We have fairly detailed guidelines that are publicly available to people.

If you are hearing from particular groups that they do not quite understand it, then we can very quickly get those guidelines to them.

Senator O’BRIEN—They are available on request, are they?

Ms Flanagan—Yes, they are.

Senator O’BRIEN—The only point I make is that that is a good initiative, but in this case it may be appropriate to be a bit more proactive given that there is other information in the field.
CHAIR—That is a decision for the minister.

Senator FORSHAW—On the last occasion there was discussion about the formula for maintaining pensions at 25 per cent of male total average weekly earnings.

Over the five years that the legislation, which is about to be considered by the Senate, I understand, is to be effective, how much are pensions expected to increase over and above the CPI?

Ms Flanagan—Those figures are not available because they are confidential figures on wages growth that are not released.
They are revised very often because wages growth is very COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 17 volatile, as you would understand.

We can give you an estimate of the quantum of increase that is expected, but the actual estimates are not available.

Senator FORSHAW—Are they not available because they are confidential or because—?

Mr Blunn—They are not our figures.

We do not have them either.

You would have to ask Treasury that question.

CHAIR—Wrong estimates, Senator.


Senator FORSHAW—I am interested in ascertaining what the difference will be in the amount for pensions as against allowances because of this measure.

Senator Newman—Can I ask for guidance, Madam Chair?

This, also, is not a 1997-98 budget measure.

It is a matter which is a bill before the parliament and, therefore, I would not have thought that it was a matter for supplementary estimates.

Senator FORSHAW—What is your ruling, Chair?


CHAIR—We have a very clear ruling that we do not debate anything in the chamber or committees that is currently before the parliament.

Senator FORSHAW—I am not seeking to debate the legislation.

CHAIR—It is pertaining to the legislation.

You actually mentioned the legislation yourself.

Senator FORSHAW—I said that the legislation has come into the Senate.

I was not asking questions about the legislation.


CHAIR—Just keep your temper under control, Senator Forshaw.

Do not lose your temper again.

Senator FORSHAW—I do not lose my temper.

CHAIR—Let’s move on.

We will not ask questions on matters that are before the Senate.

Senator FORSHAW—We may as well all go home.

Are you going to define ‘matters before the Senate’?

CHAIR—In legislation.

Senator FORSHAW—I have not asked— CHAIR—Control your temper!

I am not going to have your temper tantrums today.


Senator Newman—This is the additional estimates; not the main estimates.

And this is not a budget measure from this budget.

Senator FORSHAW—Minister, thank you very much for the attempt at education and thank you, Chair, for your endeavour to continue to refer to temper tantrums at least three times on the record.

I know that you have actually got it on the Hansard, but it is not all that clever.
CHAIR—I am just saying to you: keep your temper under control.

Senator FORSHAW—I am asking a question about a matter which was extensively canvassed at the last estimates.

Senator Faulkner asked a series of questions regarding the provision in budget measures in the PBS.

At page 55, it says: .

.

.

maintain the single rate of pension at .

.

.

25 percent of male total average weekly earnings .

.

.

There it is: page 55 in the portfolio budget statement.
And you are trying to tell me that this is not a matter that I can ask questions about—why don’t you read the papers?

COMMUNITY AFFAIRS CA 18 SENATE—Legislation Monday, 18 August 1997 To go back to the question, what I am interested in ascertaining—I am not asking questions about the legislation—is how much it would cost to extend the benchmark, using male total average weekly earnings, to persons receiving allowances as distinct from pensions?
Mr Blunn—For the reason we have given, I cannot answer that, but there is another reason why I cannot answer it.

As has been the practice for a long time, the increase has been applied more broadly than the legislation specifically provides, and may well continue to be.

The short answer is: we do not know.

It is not that I will not answer you; it is that I cannot answer you.

I do not know the answer to your question and I do not think anyone does.
I think you asked a question outside the forward estimates period.

As far as the forward estimates are concerned, of course, they are reflected in the budget documentation.

That is true, is it not, Ms Flanagan?

Ms Flanagan—Yes.

Mr Blunn—They are there and they are available.

But, beyond that period, I just do not think we know.
Senator FORSHAW—Can I ask you this, at the risk of an intervention from the chair again: the proposed youth allowance test of independence includes an earned amount which is about half the average weekly ordinary time earnings over a certain period.

Can you just explain for me the difference between average weekly ordinary time earnings and male total average weekly earnings?

Ms Flanagan—We would have to get back to you on that one, Senator.

They are different indexes.


The male total average weekly earnings has a feature of commitments, both by the previous government and this government, to 25 per cent of that particular series.

But there are other measures of wages used in different areas.

Senator FORSHAW—I am aware of that and that is why I am asking you questions.

At the last estimates the minister stated that male total average weekly earnings is the highest benchmark.
I would be interested to know from the department whether or— Mr Blunn—Senator, I am nervous to try, but my understanding is that the one includes overtime, the other does not.

But I am nervous to give you that as a dogmatic answer.

Senator FORSHAW—Do you know which one is higher?

Mr Blunn—Mr Powlay may be able to help us.

Mr Powlay—The two measures are alternative measures of earnings adopted by the Australian Bureau of Statistics.
All male total, as the secretary suggests, includes overtime whereas ordinary time earnings just includes the period covered by the relevant award.

It does not include overtime or extra earnings.

The relativities between the two vary over time.

I believe at the moment all male total is higher, but there have been occasions where ordinary time earnings have been higher.

Senator FORSHAW—So the answer is that, as a measure of average weekly earnings, it varies as to which one is higher?
Mr Powlay—It can vary, but all male total is generally the highest.

Senator FORSHAW—Thank you.

I have no further questions on that.

CHAIR—Can we move on to program 1?

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 19 [10.08 a.m.] Program 1—Income Security for the Retired Subprogram 1.1—Age pension Senator FORSHAW—Can I just follow up some questions that were actually asked by Senator Harradine.
Senator Harradine asked a question regarding the number of people that the department expected to claim the cash bonus and defer the receipt of age or service pension in the next five years, and how much income tax these people would pay.

Senator Newman—Is this 1.3 you are on now?

Senator FORSHAW—It is 1.1.

CHAIR—Age pension—1.1.

Senator Newman—It is 1.3, isn’t it?

CHAIR—Anything on 1.1?

Anything on 1.2?

Senator O’BRIEN—The original question was question 5 from Senator Harradine on program 1.1.
Mr Blunn—I am sorry, Senator, perhaps I can clarify this.

It is under program 1.1, but the briefing is under 1.3.

Senator FORSHAW—Fancy that!

Mr Blunn—The briefings just run sequentially, Senator.

Senator FORSHAW—It is just that the suggestion always seems to be that we get it wrong up here, you see.

CHAIR—Have you got a question, Senator Forshaw?

Senator FORSHAW—I was proceeding to the question when I got interrupted by the minister trying to tell me that it was under 1.3.

CHAIR—Fine.
CHAIR—Fine.

Just control yourself, Senator.

Senator FORSHAW—I am containing myself.

CHAIR—Senator, have you got any questions?

Senator FORSHAW—I have got a question; can I get to it?

CHAIR—Would you proceed?

Senator FORSHAW—I will go back to what I was saying, because maybe people have forgotten it.
Senator Harradine asked questions on notice regarding how many people would defer, who would claim the cash bonus and defer the receipt of age and service pension, and how much income tax these people would pay.

Have taxation arrangements for the pension bonus been clarified with the Taxation Office yet?

Ms Flanagan—Yes, they have.

The pension bonus will be tax free.

Senator Newman—We announced that at the time, Senator.

Senator FORSHAW—Have any other arrangements been clarified?
Is there anything else besides that?

Ms Flanagan—No, I think that having it tax free is a fairly clear indication that it will be received as a lump sum at the time of pension eligibility, so it will be quite easy to calculate.

It will not be an issue in terms of other tax arrangements.
COMMUNITY AFFAIRS CA 20 SENATE—Legislation Monday, 18 August 1997 Senator FORSHAW—Another question that was asked by Senator Harradine regarding this issue was whether the government had done a study on what effect the cash bonus pensioners plan will have on the level of unemployment, and what effect the bonus plan would have on job vacancies.
An answer to that question 7 on subprogram 1.1 was provided and it stated that: The calculations used for establishing the costs of the pension bonus plan assumed that 30 per cent of people participating in the labour market as a result of the bonus scheme would displace other workers.

Could you or the minister outline how that is consistent with, or how that relates to, the government’s policies on unemployment?
Ms Flanagan—As you can see from the answer to question 7, the displacement effects are very minor.

There are 700 people in 1998-99 and 1,784 in 1999-2000.

Basically, what it means is that older people are continuing to work.

Even though it is talked about as a displacement effect, it just means that people who might have otherwise qualified for an age pension are continuing to work.

Senator FORSHAW—You say the figures are quite minor; I do not think that 2,000 or 3,000 people would regard them as minor.
Senator Newman—That is an exchange of opinion, isn’t it, Senator?

Do you have anything you want to ask?

Senator FORSHAW—On what basis do you say that it is minor?

Senator Newman—In national terms it is a very small number of people who are remaining in the work force and therefore better able to spend money that leads to jobs for young people in the service industries in particular, where so many young people have a chance of jobs.
Older people are less likely to be buying goods, but they are much more likely to be buying services, and that gives job opportunities for the young through the dollars going around further in their communities.

Senator FORSHAW—Can you give us some figures as to how many additional jobs for young people this measure is likely to create as a result of what you say—?

Senator Newman—No, I cannot give them to you now.


Senator FORSHAW—On what basis do you make this— Senator Newman—There are formulae for this sort of thing.

Mr Blunn—There are multipliers that can be used to derive those sorts of figures if you— Senator FORSHAW—Has the department done any work on this?

The department has said in answer to Senator Harradine’s question that 30 per cent of the people participating in the labour market, as a result of the bonus scheme, will displace other workers.
You have given a table that shows the expected decrease in job vacancies.

In 1998-99, 698—Ms Flanagan, you read out the other figures—rising to a 3,843 estimated decrease in 2002.

You are able to give us figures on what you anticipate the impact will be in displacing other workers; what I would like to know is, why are you not able to give us the other side of the ledger, which is how many— Mr Blunn—I have not said we are not able to Senator, we probably are able to.
We just weren’t asked to do it and we have not done it.

We could if you wished, I think, try to establish that figure.

My understanding is those are the direct displacement figures, not the total impact on the economy.

That is what we understood we were being asked for.

If you wish us to apply the formula that would apply, we could certainly try to do that and give you an answer.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 21 Senator FORSHAW—What I would like, Mr Blunn, is what increase in employment this department—this government—believes will be generated by this measure.

Mr Blunn—I do not know that this measure was specifically intended to be an employment generator, Senator.

But as I have said, I can certainly try and do that for you.

If your question is, can I do that?

Then the answer is, I believe I can and I will.


Senator FORSHAW—I am also interested in why the department did not even consider doing that.

Mr Blunn—I thought I had already answered that.

Senator FORSHAW—Well you have Mr Blunn, and I appreciate that, but earlier, in response to my question, you, Minister, were very keen to take the opportunity to point out that, in your view, elderly people over 55 remaining in the work force was going to have beneficial effects.
Senator Newman—No, it was not simply a displacement issue.

Senator FORSHAW—You went on to point out that, for instance, this would have a beneficial effect for young people in service industries, because these people would be spending more money.

Senator Newman—They would have more to spend than if there are on a pension.

Senator FORSHAW—That is a nice generalised statement.

But what I would like to know is, what more precise information you can give us as to what the outcome will be there.
You are able to give us one side of the ledger, that is the number of jobs that are displaced— Senator Newman—That is what was asked for.

Senator FORSHAW—I know that was what was asked for.

But if this is part of the benefits to be derived in your view, or your government’s view, from this scheme, I would have thought it reasonable that some calculations would have been done in advance of the measure being implemented, to give us and the public an indication of how your predictions are going to come true.
Senator Newman—I hear you, Senator, and Mr Blunn has said that we will get some material to you.

You must remember that this was an election commitment.

We came into government promising this.

We have honoured that commitment.

We believe the benefit is, in particular, focused on older people who do not want to leave the work force; who would rather have more disposable income for longer, than spend longer on the pension at 25 per cent of total average male weekly earnings.
It is surely better for them to have wages coming to them.

When they have wages coming to them, they are better able to have a lifestyle that, in fact, means they are spending money that others can derive employment from.

That was really the point I was making to you.

The department answered the question that Senator Harradine asked.

Senator FORSHAW—With respect, Minister, I appreciate all that and I am not seeking to argue with that.
I have views about that, but I am not discussing the merits of the scheme in relation to how it impacts upon people who otherwise would retire and go onto the pension.

I am not seeking to take issue with that at this stage.

What I am seeking to do is ascertain the flow-on effects of this measure to employment.

If, as you say, this is also intended to have—or will have— Senator Newman—No, it will have.
It was not the intention— Senator FORSHAW—You said, if it will have these effects— COMMUNITY AFFAIRS CA 22 SENATE—Legislation Monday, 18 August 1997 Senator Newman—It was not the purpose of the scheme.

Senator FORSHAW—I understand that is not the purpose, but it was your statement to me.
It is arguable at least that the measure, on the figures that you have provided, will have a displacement effect upon other people who would otherwise be entering the work force, who would also otherwise have disposable income to spend.

We can run down that theoretical argument for a long time, but I would ask the department to provide some indication of what employment generating benefits this will have.
Senator O’BRIEN—Another matter that Senator Harradine raised on notice—question 8— was whether unemployed persons who wish to continue seeking work beyond retirement age will be eligible for employment assistance, including unemployment payments.

The answer was no, and that qualification for unemployment payment ceases when a person reaches age pension age.

Can the minister confirm that people who are unemployed at retirement age will not be able to claim the bonus?
Ms Flanagan—Certainly, one of the things that I suppose we do not want to do is to have people continuing to try and work when they would be better off claiming age pension, rather than trying to accumulate a pension bonus when they would actually be better off claiming an age pension.

One of the things that we are currently doing with this measure is getting together an information campaign so that people can take that decision.

Mr Blunn—Could I just seek a point of clarification?
This question, and particularly the answer, relates only to unemployment payments, and the pension bonus is not an unemploy- ment payment so this question does not actually answer the question or lead to the question that you have actually asked, I think.

Senator O’BRIEN—I guess we will debate whether it leads there.

Mr Blunn—Sorry, I was not meaning to be provocative.
Senator O’BRIEN—I guess it leads there in the sense that you have a bonus for people who do not claim the pension at retirement age—a projected bonus, I should say.

Mr Blunn—Senator, I look to be corrected, but I think the situation is that if a person ceased to work after retirement age but did not leave the work force—in other words, they came back into the work force—there is provision I think under the bonus plan.

Ms Flanagan—It would in some ways be better if you gave a specific example.
For example, if people want to continue to work after age pension age of 65, they can do that, and if they are receiving a low wage or they are only working part time, they are entitled to claim part rate age pension so that you can continue to work after age pension age and the payment that you get will be age pension.

So that is one case.

The other thing that I would mention is that the pension bonus plan is accrued because people are working.
One of the things that was intended in the design of the way the scheme operates is that we do not want people to stop working and, in effect, run down their assets before they claim age pension.

The whole idea is that they will need to satisfy some sort of a work test after age pension age.

Senator O’BRIEN—So for someone who is unemployed three months before their 65th birthday, there is nothing to prevent them getting a job at 65 years plus one day and working the next five years?
Will that person who was unemployed and receiving a benefit up to 65, then not receiving any benefit and working between 65 and 70, be eligible for the bonus?

Ms Flanagan—Yes, that is correct.

The way that we have it designed at the moment is that they can take up to 12 months before they have to claim an aged pension.

So after they have COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 23 turned 65 they have in fact got another year to try to find work if that is what they want to do.
Senator O’BRIEN—But in that year they are not claiming benefit?

Ms Flanagan—That is right, if they want to accrue a pension bonus.

Senator GIBBS—I want to follow up on that point.

This is another question from Senator Harradine.

It is question 9, asking about reaching retirement age and, after making a decision to continue in the work force, whether a person changing jobs will continue to be eligible for the cash bonus.

The answer was: Yes, if he or she satisfies the work test.
Exactly how will the work test work?

Ms Flanagan—We are having a bit of a discussion about that at the moment.

The decision that was announced was that people had to work an average of 25 hours a week, and it was intended that they needed to do that over 44 or 52 weeks.

However, we have conducted some informal consultations with community groups and with the Financial Planning Association about how this might actually work on the ground.
We have had some suggestions about possibly looking at an income test as well as a work test, or some combination of the two.

What we are looking to do is to have something where it is clear to people what sort of work they need to perform, and whether in fact we do need an income test as well.

Senator GIBBS—If these people choose to do this, will they have to show that they have been working for the whole time?
Will there be some sort of booklet or pay slip to prove that they have been working for the whole time?

Ms Flanagan—Yes.

The intention at this stage is to get them to give us their statement of earnings and that we would actually use that as an indication of how much they have earned.

If we have a work test—that is, an hours test—we would look to perhaps having some sort of a statutory declaration and/or a statement from their employer that they have actually worked that amount of hours.
Senator GIBBS—How will this affect people who work on the land: for instance, farmers, itinerant workers?

Ms Flanagan—This is one of the issues as to why we are looking perhaps at an income test, because it would be a much easier method to get that from a statement of earnings in terms of their tax return.

It is very difficult for people like that, as you suggest, to keep a record of the hours that they have worked.
Senator GIBBS—It is, because if people go fruit picking, for instance, a lot of it is cash in hand, isn’t it?

Ms Flanagan—I do not know that I should answer that, Senator.

Senator FORSHAW—Not when they were in the AWU.

CHAIR—Situation normal was the answer to that, I think.

Are there any further questions on subprogram 1.1?

Senator O’BRIEN—Going back to that point, you made a comment that you did not want people to be running down their assets.
Are there guidelines on what amount of the asset base a person can use in that five-year period and still be eligible for that bonus?

Ms Flanagan—Again, we have looked at that issue as to whether we should have some sort of an assets or a background assets test in all of this.

The intention is not to.


We are assuming COMMUNITY AFFAIRS CA 24 SENATE—Legislation Monday, 18 August 1997 that, if you have a substantive enough work test and people are actually earning income, the peril of them running down their assets is minimised.

Senator O’BRIEN—What about disposal of assets in that time?

Ms Flanagan—Certainly under current provisions, as you know, we have divestment provisions, and we are looking at how those will apply in this period.
But the idea would be that you would have some sort of a divestment provision throughout the pension bonus accrual period.

Senator O’BRIEN—If someone was working and using their assets to live, have you got any idea what sorts of limits would be placed on a person liquidating their assets to live while they worked, for example, for a lifestyle reason?

Ms Flanagan—We have not done any work in that area.
As I say, one of the reasons we are looking at an income test as well as a work test is that that is a fairly good measure of what people might need to live on.

If you said that you need to earn at least, for example, $15,000 a year, which is higher of course than the pension itself, then that might be a good enough measure to use.

Senator O’BRIEN—Someone could decide, as, for example, some annuity products allow, to draw down capital and earnings to, say, have a $40,000 income over five years.
I was just wondering, projecting that to the end of the five-year period, whether that was not an opportunity to run down assets to become eligible for the pension.

Just to clarify it in my mind, do you have to be eligible for the pension at 65 to be eligible for this bonus at 70?

Ms Flanagan—No, you do not need to satisfy pension eligibility at the beginning of the accrual period.

You only need to satisfy pension eligibility at the end, at the point of claim.
Senator O’BRIEN—You have in these circumstances an additional five years.

I guess I am putting the case as a devil’s advocate, but you have an additional five years to organise your assets to become eligible.
Ms Flanagan—As I say, there will be divestment provisions that will apply in this period to get around those sorts of major asset divestments, but the idea is that we want to try to make this system, as we do with all systems, as simple to administer as possible and understandable so that people can understand what is required of them in the accrual period.
You need to find this balance between being concerned that people will use this period to run down their assets and therefore qualify for pension and, on the other hand, having a fair and equitable system that is easily comprehended by people.

Senator O’BRIEN—How will this affect a farm owner?


Where there is an intermittent income through, say, the operation of a family farm, and assuming that at the end of the five- year period the farmer satisfies the assets test, will they have to show a regular income or will there be some special provision for the farming community?

Ms Flanagan—At the moment we are looking at a test whereby people would have up to 12 months to claim.
For example, if there was intermittent income, then people could, say, work for six months—going back to Senator Gibbs’s example of fruit-pickers.

If you have got itinerant work the idea would be that you could— Senator O’BRIEN—I understand that.

Let me direct you to another example.

The farming community talks about good years and bad years.

A farmer who crops cherries has a good crop of cherries one year and makes $30,000.

It rains the next year and they get nothing.


They do not have a taxable income in the second year.

How do you envisage that circumstance applying in your work and income test?

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 25 Ms Flanagan—The dilemma there is that if a farmer has a bad year then they might be better off coming in to claim an age pension at that time.
One of the things that we have to be very careful about is advising people which is the best decision—that is, whether they are better to continue to try to work to accrue a pension bonus or whether they are better to come in and claim the age pension.

There will be a judgment on behalf of the farmer as to whether they think that the next year will be a good year and whether they want to continue to work.
That has been a real dilemma in designing the scheme: people might be better off to come in and start on an age pension rather than to continue to defer.

Senator O’BRIEN—But that is the problem, isn’t it, that sometimes a farmer’s cash income will come in at the end of a financial year?
They have not claimed a pension for nine months, they have got no income because of crop failure, market failure or the cattle herd has been quarantined because of brucellosis or something like that but they can live on the previous year’s income, and they are happy to do that, and they are arranging their assets so that they will be eligible when they reach 70.

Mr Blunn—We are still designing some elements of this.

First of all, we are talking about people at retirement age.
The situation you were describing is not so far different from a cyclical problem with farms.

We would regard that as being the normal course of employment, I think.

But do not let me leave you with the impression that we have got all the answers cut and dried.
The sort of commonsense approach to it and where we are starting from is that, if they are not claiming the pension during that period and you can trace an attachment to the work force or their normal employment, that is what we are looking to prove.

Would that be a fair statement?

Ms Flanagan—Yes.

Mr Blunn—That is the sort of commonsense position that we are trying to lock into the scheme that we are designing.

Senator O’BRIEN—So we take the example of the farmer who says, ‘I’ve worked the farm.
I can produce 50 witnesses that say I’ve been out on the tractor and I’ve been doing the work.

I didn’t get the income.’ At the same time, the farmer runs down the assets, sells assets to survive.

Mr Blunn—Again, it is not so far different from a lot of normal situations on the farm.

I think we would have regard to the normal incidence of that employment.

What we are looking for is attachment to the work force and non-claiming of their pension entitlement during the period.
There are going to be a lot of permutations and combinations in that that are going to cause us some heartburn.

Senator O’BRIEN—Let me try one other.

I am not a farmer but a share trader and I have a very good year.

Mr Blunn—Then you are probably not entitled to an age pension anyhow.

I am sorry, I am being facetious.

Senator O’BRIEN—That may be the case.

It may be that at 65 I do not satisfy the assets test.
I have a very good year and I draw down on all my earnings and capitalise all the gains for some years, and then I say, ‘I’ve had a bad year of trading, so I’m going to sell off assets.’ Will that be acceptable to, first, get the pension at age 65 and, secondly, get the bonus?

Mr Blunn—I think the same sort of commonsense rule would apply.

I meant no disrespect to share traders—let me make that quite clear—in my perhaps unfortunate comment.
If that is a normal incident in the way in which they earn their living and there is a clear indication COMMUNITY AFFAIRS CA 26 SENATE—Legislation Monday, 18 August 1997 that they have not surrendered their attachment to the work force and they are not claiming pension, then the broad intention of the scheme would be to try to admit them.

What we are looking for is trying to maintain that attachment to the work force and to reduce the call on age pension.
We will be trying to work around those to come up with the solutions.

Senator O’BRIEN—It is true to say, just following on a comment that I made, that people do not need to satisfy any of the eligibility tests for the pension during the deferment period?

Mr Blunn—That is true, they do not, because if they did they would be seeking pension, and that goes against that basic tenet.
Senator O’BRIEN—Is that a bit of a contradiction, that you are deferring something you do not actually have a right to and you get a bonus at the end because you did not claim it, even though you did not have a right?

Mr Blunn—One of the problems we have always had with devising this scheme is to know whether the people would have maintained their work force attachment with it or without it, which is the mirror image of the proposition you are putting.
I think that the government’s decision on that was that it is worth it for those few cases where that might be the case.

But, yes, I take your point.

If they had not qualified— Senator O’BRIEN—It is an incentive for claiming what you could claim.

Mr Blunn—Yes, there is that element to it.

I think actually we will be looking across to see that there was a broad entitlement.
Senator O’BRIEN—That is why I asked for clarification, because your earlier answer was that they did not have to be eligible, and the corollary clearly is that the bonus for deferment is in these cases a bonus for nothing.

Mr Blunn—I am sorry, perhaps I misled.

I understood your question to be—and properly to be—whether we would require them to test at the beginning of the period.

I think the answer to that is no.

Senator O’BRIEN—And during the period?

Mr Blunn—And the answer to that is no.


Clearly, that is why we are interested in the divestment situation.

Because if there is evidence that they started from a very wealthy position—let’s argue hypothetically—and deliberately divested during the period then, yes, we would be concerned about that.

That is why we are looking at divestment.

That is the way, at the moment, we think we can deal with that situation.
We will certainly look at what they have done over the period of the five years in terms of their assets, income and whatever else.

Senator O’BRIEN—If a pensioner, who is single and has certain assets, marries in that five- year period and is able to split those assets, that might have the effect of making them eligible, mightn’t it?

Mr Blunn—I do not know the answer to that.

Senator O’BRIEN—It is probably an unfair question because it is too general.

Mr Blunn—But, thank you, we will think about it.


If you have any others, please let me know.

Senator O’BRIEN—There are probably a number of other questions.

Senator GIBBS—Could I just follow up with a question about the farmers.

Because the farmers are on the farm, who is going to sign their income statements and stat decs?

They are the employer, aren’t they?


COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 27 Mr Blunn—I guess it is that question of looking to their taxable situation in terms of income.

As for periods of work, if we go to a periodicity test, the suggestion was a statutory declaration, and they would have to provide us with that statutory declaration.

What we will do with that statutory declaration is another one of those things that we are still thinking about.
Whether we test the statutory declaration or accept it at face value is the sort of issue that we are still grappling with.

Senator GIBBS—That would also apply to self-employed people, wouldn’t it?

Mr Blunn—Yes.

Senator GIBBS—We all know—we do not have to be an accountant—how we can work the books if we are self-employed.

How will those problems be overcome?

Ms Flanagan—This is why we are looking at the whole issue of whether we have some sort of backup income test as well.
My understanding is that, for self-employed people, rather than just getting their taxable income, if you get their statement of earnings, they actually have the gross income that they have earned or the wages income that has been derived.

So there are ways of making an assessment of what— Mr Blunn—I think it is the self-employed that Senator Gibbs was more concerned about— and that is a problem.
That is an issue, and we will still be relying on taxable income because, as you have indicated, we cannot and should not ignore taxable income.

But we will be looking at divestment and other things during that period to see if there is any reason for investigating particular cases further.

I would not pretend that it is a scheme without its problems, and those are the sorts of problems we are trying to resolve now.
Senator Newman—I would have thought that we would deal with it in a similar way to the way we have dealt with matters of self-employed people and family payments.

It is a complicated area, but the department does have access to their tax returns, so they know both the gross and the net income for taxation purposes.

I think that is the direction in which we would be looking.

Mr Blunn—And you can seek accountants’ certificates and other things.

Senator Newman—It is not a new problem to the department.
Senator GIBBS—No, it is not, and something that has bothered me for many years with self-employed people is black money.

We all know about black money: it goes straight into the handbag.

I have a friend who owns a pub and she always walks around with $5,000 in her purse and is always broke.

It annoys me because PAYE payers cannot do that sort of thing.

Mr Blunn—It is a big issue.

There is no doubt about that.


Senator Newman—That is why the Taxation Office put out a paper just recently on the cash economy.

Senator GIBBS—I know, but it has been going on for years—as long as I have lived and probably a lot longer than that.

Senator Newman—Tax reform perhaps will help.

Senator GIBBS—I hope so.

Senator WEST—They stamped it out in the UK.

Senator GIBBS—Getting back to this 25 hours per week we were talking about, the original proposal only said 20 hours, not 25.

Isn’t that correct?
Isn’t that correct?

COMMUNITY AFFAIRS CA 28 SENATE—Legislation Monday, 18 August 1997 Ms Flanagan—No, the original proposal was always 25 hours.

Some community groups suggested that it should be reduced to 20 hours so that it would allow people to do voluntary work, but the initiative, as announced, was envisaged as being 25 hours as an average.

Senator O’BRIEN—I want to follow up with the minister on the matter that I was asking about earlier.
Minister, we have just had a mini-debate about some of the potential pitfalls with this deferment bonus.

Is there any reason that this scheme should be reconsidered, given the potential which obviously exists for problems in its administration?

Do you think there is a reason to reconsider the deferment bonus scheme, given the potential problems in its administration that we have just discussed?
I think we only scratched the surface with regard to, for example, the deferment bonus becoming a bonus for deferring a pension that you were never entitled to.

Senator Newman—I think that you have, not unreasonably, raised issues that either have to be addressed or are being addressed by the department.

But I did say earlier that this was a government commitment that we took to the election.
We were elected on the basis of a lot of things—that was one of them—and wherever we possibly can we want to make sure that our election commitments are implemented.

When the legislation comes forward, perhaps you will be able to see then whether we have succeeded in dealing with the concerns that you might have.

Senator O’BRIEN—I suppose we can say that.


I think I am asking a slightly more specific question, and I think you have answered it, and that is the question of whether you think you ought to reconsider this initiative in the light of the problems.

Senator Newman—The answer is, clearly, no.

And, having said that, I then gave you the rest by way of explanation.

I am sorry that I did not make it clearer for you.


Senator FORSHAW—While we are still on subprogram 1.1—this should be the last issue but it may also touch some other areas—I want to ask some questions about the recent decision or announcement on deeming rates, which will be reduced from 20 September.

Is that correct?

Ms Flanagan—Yes.

Senator FORSHAW—Could you tell us on the record what is actually going to happen?

Is it going down to three per cent and five per cent?

Senator Newman—That is right.


Senator FORSHAW—What is the cost in additional outlays by payment type for this measure?

Ms Flanagan—We can give you that figure, but I would like to point out that, just because the deeming rates are reducing, it is not a real cost as such.

All the deeming rates do is reflect what happens in a cyclical sense in the market.

Because there are changes in interest rates throughout the cycle, these would have been reflected in the forward estimates anyway.
It is not as though it is a real cost or a real saving to government when the deeming rates change.

Senator WEST—Can you refresh my memory: did the forward estimates reflect five interest rate cuts?

Ms Flanagan—No, the forward estimates have not.

The forward estimates are being changed as the deeming rates are changed.

What I am saying is that they would have been changed anyway in the absence of the deeming rates because that is all that pensioners can now earn on their investments.
All the deeming rates do is reflect an averaging effect of what is happening in the marketplace anyway in terms of pensioners’ investments.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 29 Senator WEST—What is going to be the change in the forward estimates then?

Ms Flanagan—That is the figure that we can give you as a split—the figure that Senator Forshaw has asked for.

Senator FORSHAW—Are you able to also tell us how many people will now qualify for an increased payment?
Ms Flanagan—I can look to see whether we can provide that information.

Senator FORSHAW—And could you also look at the number of people who would qualify for a first payment?

Ms Flanagan—We can have a look at that, yes.

Senator FORSHAW—What is the department doing about letting people know that they may now be eligible for a part-payment or for a senior’s card?

Ms Flanagan—For existing pensioners there will be an article in Age Pension News, which is due to be released in September.
Mr Blunn—That goes to every pensioner.

Ms Flanagan—That goes to every pensioner, mature age allowee and Vets pensioner in the country.

It has a circulation of around two million.

There will also be a publicity strategy announcing the reductions to three and five per cent.

As you can see, there has been quite a significant press coverage of the issue already.

Senator FORSHAW—Without revisiting our earlier discussion, you cannot always believe what you read in the press.

Thank you for that.
Thank you for that.

If you could provide that other information, that would be certainly of assistance.

[10.51 a.m.] Program 2—Income security for people with a disability and for carers Program 2.1—Disability Support Pension Senator GIBBS—In the last round of estimates I was told that at the additional estimates you would have a much better idea of the number of DSP recipients who were expected to transfer to newstart.

Has the estimated number of 22,400 DSP recipients transferred to newstart?
Senator Newman—Excuse me, this is not the additional estimates; this is the supplementary.

Senator GIBBS—Sorry.

Senator Newman—It is pretty soon after the last estimates.

I will leave it to the officer to give you the answer, but you said ‘additional’.

I do not think that there was any belief that we would be ready with that material for you by the supplementary estimates, Senator.

Senator GIBBS—So we have not got those figures as yet?

Senator Newman—No.
Senator Newman—No.

I think we could help you when we get to the additional estimates.

Senator GIBBS—That is in October.

Is the department consulting with community groups on these tables for assessment and how far have you got with that?

Which community groups are you discussing this with?

Mr Herscovitch—Are you referring to the disability support pension impairment tables?

Senator GIBBS—Yes.
Senator GIBBS—Yes.

Mr Herscovitch—The tables were reintroduced into parliament at the last sittings and they will be debated in the Spring sittings.

We went through an extensive consultation process.

We COMMUNITY AFFAIRS CA 30 SENATE—Legislation Monday, 18 August 1997 wrote out to a large number of community groups and we had quite a number of responses and the tables have been amended in the light of those responses.

The tables in front of parliament now reflect those changes.
Senator GIBBS—What I am particularly concerned about, and I have been talking to disability groups, are the people with multiple minor disabilities.

How is this going to affect them and what sorts of barriers are they going to have to employment?

Is that being considered?

Mr Herscovitch—Yes, there have been some modifications.
But it is true that one of the major changes in the impairment tables, compared to the ones that are currently in force, is that minor disabilities will not be given as much weight as they are now.

There are situations in which people have relatively minor disabilities that do not really have a significant impact on their ability to work.

They can accumulate a score of 20 under the present impairment tables when their ability to work is not significantly affected.
Senator GIBBS—How will that affect people who have multiple minor disabilities?

Mr Blunn—What Mr Herscovitch is saying and certainly what I would say is that previously we looked at not the ability of the person to work but their disability, if you will.

We did not relate it specifically to the work force.

What we are saying now—and I would ask Mr Herscovitch to correct me if he does not like this formulation—is what we are interested in is the impact of those disabilities on their capacity to work.
Now, if they have a number of minor disabilities and they add up to a significant impact on their ability to work, they would still be entitled to disability support pension.

If they had a number of minor disabilities which individually or in aggregate did not seriously impact on their capacity to work, then we would not be paying a disability support pension.

The test is, how does it impact on their capacity to work?

That is the change.

Previously we did not apply it in that way.


Would that be a fair view?

Mr Herscovitch—That is right.

Senator GIBBS—Could I turn to psychiatric and brain injury disabilities and the social and workplace consequences.

Is this being given regard within this table structure?

How has the department addressed this?

Mr Herscovitch—Psychiatric impairments certainly can attract an impairment rating.

I am not quite sure of the precise concerns that you have, Senator.
Senator GIBBS—A lot of brain injuries are not exactly picked up.

They can be picked up by different behaviour but the person can function properly.

This is happening a lot where, I guess, there is not a lot of money there for it.

People can actually function properly but they do have a lot of psychiatric problems where they can become violent or whatever.

They are quite capable of working, but then in the course of their work something could happen and they could snap or whatever.
How are you addressing this?

They can work but, because of their psychiatric problems, maybe they should not work, maybe they should just have the ability.

What about if they do not take their medication on time.

It is like these people who are being put out into the community from the institutions.

That is fine as long as they take their medication and they are monitored for, say, a period of 12 months.
But if they are not monitored for a period after that, and they do not take their medication, some of them become quite violent and quite a danger to society.

Because of the fact that these people have to be monitored to make sure COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 31 they take their medication, because they think they feel okay and they do not do it, how is the department addressing those problems?
Mr Herscovitch—It is impossible to give a general answer to that, it will vary with the individual case, but the fundamental test is the person’s ability to work and how the disability affects that.

That will depend upon the severity of the condition and a number of other surrounding circumstances.

I would not want to give a general answer to that because it is just so variable with individuals.

Mr Blunn—Senator, again, I am subject to Mr Herscovitch commenting on what I am about to say.
Certainly we recognise that in psychiatric and mental injury cases there is a special area, and I think we would certainly be looking to satisfy ourselves, or have the advice that would satisfy us, because it is largely a medical issue, that a regime was in place.

It is not true to say that just because a person can physically work, necessarily they are able to work; I suppose that is what I am saying.
I agree with you that that is an issue that we would certainly be seeking advice on in those cases—whether that person is competent and able to work under medication or whatever, and that there was an appropriate regime in place.

Mr Herscovitch—Psychiatric conditions can attract a rating.

They are certainly taken into account, I was not implying otherwise.

Senator GIBBS—So they do have the rating?

Mr Herscovitch—Yes, certainly.

As I said, circumstances—other disabilities.


it depends on the severity and other Senator GIBBS—This involves people who undergo personality change.

The disability groups are concerned with the psychiatric side of it, because a lot of people can undergo personality changes, and they are worried about those people, how it is going to impact on work performance.

It seems that they are being put out into the community to work.

Is the department going to look at that specifically?
I think it is a real area of concern.

Mr Herscovitch—We had representations on this issue during the consultation phase, and there are some changes in the tables to reflect that.

Senator GIBBS—My other questions on this have to wait for October, I am afraid.

Mr Blunn—It is actually November, but it matters little.

Senator DENMAN—I have three quick questions.

How many recipients of DSP in the last financial year are sponsored migrants to Australia?

Mr Herscovitch—I would have to take that on notice.
Senator DENMAN—There are three that relate to that, so I will put the three of them on notice.

Mr Blunn—Thank you, Senator.

We will certainly do what we can.


Senator O’BRIEN—What are the differences between the impairment tables which were withdrawn from the Social Security Legislation Amendment (Budget and Other Measures) Bill 1996 and the impairment tables as they are set out in the Social Security and Veterans’ Affairs Legislation Amendment (Family and Other Measures) Bill 1997which was introduced into the House of Representatives on 25 June?
Mr Herscovitch—As I was saying earlier, the impairment tables which were introduced on 25 June are the revised version of the ones which were withdrawn last December and were introduced after the budget last year.

Senator O’BRIEN—What are the revisions?

COMMUNITY AFFAIRS CA 32 SENATE—Legislation Monday, 18 August 1997 Mr Herscovitch—They are very extensive.

I would prefer to give you an answer on notice to that.

Senator O’BRIEN—Is there a table which sets them out and compares them?
Mr Herscovitch—We can get you that.

Senator O’BRIEN—I would appreciate that.

This is a complex area and it will assist us.

Mr Herscovitch—It is.

Senator O’BRIEN—I am sure the minister will appreciate one as well, if you do not already have one.

Senator Newman—I think it will be very good to have that, just so long as you do understand that, as the officer said before, they came out of the consultations that took place.

Senator O’BRIEN—Okay.

What was the consultation process?

Can you elaborate again?


Mr Herscovitch—Yes.

We wrote to a number of disability organisations and invited submissions from them on the impairment tables that had been debated previously.

I think we had about 50 responses, although I would not swear to that number.

In the light of those responses, we had another look at the impairment tables with the assistance of the Australian Government Health Service, as it then was.

Senator O’BRIEN—You had 50 responses.

Were they from individuals or organisations?


Mr Herscovitch—Both.

Senator O’BRIEN—Can you tell us which organisations responded?

Mr Herscovitch—No, I do not think I have that with me, but again I would be happy to give you a summary of the organisations which responded.

Senator O’BRIEN—You have a summary of the responses and the nature of their responses?

Mr Herscovitch—I am not sure we have a summary of the responses by organisations, but we certainly would have a summary of the responses.
We could give you that, and a list of the organisations which did respond.

Senator O’BRIEN—Apart from this written exchange, were there face-to-face consultations with all or any of the authors of the submissions?

Mr Herscovitch—I do not think there were any face-to-face discussions.

There were certainly some discussions over the phone.

Again, I myself certainly did not participate in any face-to-face discussions.

Senator O’BRIEN—Was that consultation done within the department?
Mr Herscovitch—Yes, it was.

Senator O’BRIEN—Entirely?

Senator Newman—You mean as distinct from consultants— Senator O’BRIEN—Or as distinct from your office, Minister.

Senator Newman—No.

Mr Herscovitch—No.

It was done by the department and we had some assistance from the Australian Government Health Service, which is responsible for doing the medical assessments for disability support pension.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 33 Senator Newman—Mind you, some organisations have said how helpful the department has been in ready access to their input—willingness and encouragement of their input.

Senator O’BRIEN—It is pleasing to hear that there is a positive response.

I am sure we look forward to that comparison so we can see what the effect of the consultation was and where we end up.

That is all I have on 2.1 CHAIR—Any more on 2.1?


Senator WEST—Could I just ask about the possibility of introducing impairment tables for assessing eligibility for carer payment.

Is the use of impairment tables for eligibility for the carer pension being considered for introduction?

Mr Blunn—You mean the person who is being cared for?

Because a lot of those people would be on DSP, of course.

Senator WEST—No.

I mean those that are in receipt of carer payments.
Mr Herscovitch—We are currently in the process of looking at the development of new tables for domiciliary nursing care benefit.

We have hired a consultant to look at that on our behalf.

It may well be that the results of that consultation will be able to be transferred to carer payment as well.

We have no outcomes from that as yet.


Senator WEST—The question arises from one of the consultancies which were current at 6 May 1997, and it is to the partners of Ernst and Young to develop and test disability tables for assessment of eligibility for carer payments.

That was to be completed in June or July 1997 at the expense of $98,750 to the taxpayer.

Is the minister planning to introduce impairment tables in accessing the eligibility for carer payments?
Mr Herscovitch—It is ongoing work of the department.

Senator WEST—It is ongoing work of the department?

Mr Herscovitch—Yes.

Senator WEST—But at this stage it was mainly to look at domiciliary nursing care?

Mr Herscovitch—That was the catalyst for it, but methodologies can also be applied to carer payment.

The criteria at the moment are fairly subjective.

Senator WEST—What is happening with the domiciliary nursing care payments?

The Department of Health and Family Services handles those, does it?
Senator Newman—They are being increased by 26 per cent.

Senator WEST—Yes, I am aware that there has been some increases, but small social changes.

Senator Newman—Yes, to be paid by the agency.

Senator WEST—Mr Herscovitch said that this work was being done on domiciliary nursing care benefits, but this consultancy talks about carer payments.

Do you classify domiciliary nursing care benefits as carer payments or are they separate payments?

Mr Herscovitch—It is a separate payment.


Carer payments generically include carer payment and domiciliary nursing care benefit.

Senator WEST—So, for this consultancy, was this use of the term ‘carer payments’ the generic payment or was it precisely carer payment?

Mr Herscovitch—I should have expressed myself more precisely.

The consultancy is looking at both carer payment and domiciliary nursing care benefit.
COMMUNITY AFFAIRS CA 34 SENATE—Legislation Monday, 18 August 1997 Senator WEST—It was due to finish in June-July.

Has it been completed?

Mr Herscovitch—No, it has not.

It will probably be towards the end of this calendar year.

Senator WEST—Why the run over?

Mr Herscovitch—Because it is much more complex than we expected.

Senator WEST—I would have thought it would have been rather difficult.

So you do not expect the Ernst and Young consultancy to complete until towards November-December.
Is that correct?

Mr Herscovitch—That is about right, yes.

Senator WEST—What is that doing to the total cost of the consultancy?

Mr Herscovitch—Nothing.

The $98,750 still stands.

Senator WEST—So this was a consultancy that, instead of running six to seven months, is now going to run about 12 months?

Mr Herscovitch—It could be, yes.

Senator WEST—Or was it not started on time?

Mr Herscovitch—The process was initiated on time but, as I say, it has proved more time consuming than we expected.
Senator WEST—Are you able to tell us what the methodology is that is being used?

Mr Herscovitch—Yes.

We have undertaken a survey of people receiving care.

We are trying to look at the conditions from which they suffer.

We have done it by questionnaire.

We have had a very good response rate, as it has turned out.

On the basis of those responses, the consultants will seek to develop a framework for a more objective test of need for care.
Senator WEST—I am a few years out of date on domiciliary nursing care benefit, but that did require certification from the medical officer, did it not?

Mr Herscovitch—Yes, or a qualified nurse.

Basically the test of eligibility for domiciliary nursing care benefit is that the person would otherwise require nursing home type care.

Senator WEST—So that has not changed.

But that has to be certified by qualified personnel?

Mr Herscovitch—Yes, that is right.


Senator WEST—Are you doing some comparisons between the certifications you are getting and the responses you are getting in the survey?

Who are you surveying—the recipients of the pension, the people who are being cared for or those who are actually oversighting or supervising those particular clients?

Mr Herscovitch—We are surveying both the carers and the people receiving care.

Senator WEST—But you are not surveying those who are doing the supervision of the carers?
Mr Herscovitch—The supervision of the carers, no.

Senator WEST—My experience in this—and, as I have said, it is some years ago but I have had a number of years experience in supervising people in receipt of this pension—would tell me that you will have a faulty report if you do not seek some backup, some cross-testing or some accuracy testing in terms of utilising the response from those who are supervising the carer and the recipient of the care.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 35 Mr Blunn—You can rely on the fact that we would be consulting with those people, even though we are not surveying them.

There is a difference between the survey and then what we do with the survey.

I think one of the tests we would want to apply the survey to would be in consultation with both the relevant parts of the medical profession and— Senator WEST—And the relevant part of the nursing profession.
Mr Blunn—I include that in the medical profession.

If I am wrong, then I apologise.

Senator WEST—I would like someone to check that to see that that is actually going to happen because, as someone who has community health nursing experience—and a number of years of it—what the patient will tell somebody on a piece of paper, particularly your brain injury patients— Mr Blunn—I can assure you that we will be consulting the relevant health and other parties.
Senator WEST—Yes, including your occupational therapists and— Mr Blunn—And the people who manage some of the benefit areas that we will be involved with in this.

I am sure Mr Herscovitch is going to nod when I say this, but we will be consulting very extensively.

But the survey is not that phase.

Is that right?

Mr Herscovitch—Yes.

Senator WEST—The whole of the process then is more than just the survey.

Mr Blunn—Yes.
Mr Blunn—Yes.

Out of the survey we will get data which we will then be applying to developing policy options for the government.

That is the intention.

Senator WEST—Can you provide me with the details of what consultation is going to go into this process, because I am getting more and more confused as I ask more questions?

Because, whilst there is a consultancy going on, it is not going to be the only— Mr Blunn—We are doing a survey.

Mr Herscovitch—The survey is the starting point.


Senator WEST—So the consultants are doing the survey?

Mr Blunn—Yes.

Senator WEST—What else are they doing?

Mr Blunn—Basically the survey, as I understand it.

Mr Herscovitch—That is right.

Mr Blunn—So we are collecting the data.

When we have collected the data we will then put that through the normal processes leading up to policy to government on what we think should happen about that.
Senator WEST—I want to know what the consultative processes and mechanisms are going to be for those outside of the ones that are included in the survey?

Mr Blunn—We will not know that until we have got the survey.

I can give you a general and, I believe, absolutely truthful answer that we will be consulting with all of the relevant health workers and others in developing policy options for government.

But we will not actually know the answer to that until the survey comes in.
Mr Herscovitch—That is quite right.

Senator WEST—So I take it that in November you will be able to give me an update on the progress of all of this?

Mr Herscovitch—Yes.

COMMUNITY AFFAIRS CA 36 SENATE—Legislation Monday, 18 August 1997 Senator WEST—And early next year when I put the question on the additionals to the supplementaries, if that is the phrase to use, you will be able to tell me what the results of the survey were?

Mr Blunn—I hope so, Senator.


Senator WEST—Maybe I will hold my breath and in the budget next year we will see some changes to the eligibility criteria for carer pensions.

Mr Blunn—If the minister has no objection, I would be quite prepared to brief you as it goes on.

I have no problem with that.

Senator WEST—Thank you.

It is an interest that I have had for a number of years, and I want to keep following it.

CHAIR—Are there any further questions on 2.1?


There being no questions, are there any questions on 2.2, 2.3, 2.4 or 2.5?

Are there any questions on 2.6?

[11.15 a.m.] Subprogram 2.6—Child Disability Allowance Senator DENMAN—When is there to be the first review of the operation of the child disability allowance tables?

Mr Herscovitch—The tables have not been implemented as yet.

They are not due for implementation until— Senator DENMAN—So when are you going to— Mr Herscovitch—July 1998.
There is to be an evaluation about two years after that.

Senator DENMAN—How are you going to monitor the tables?

Mr Herscovitch—The starting point would have to be the effects on the numbers and characteristics of those people who are coming onto payment.

That would be what we would be looking at first.

We would also be in consultation with staff on how they are working.
If you remember, the development of the child disability allowance tables was done in consultation with three reference groups of staff, customers and treating health professionals.

We would be consulting with them as well.

The early monitoring process would be very much a— Senator DENMAN—So that will be refined, too, if you find there are difficulties with it?

Mr Herscovitch—Yes.

Senator DENMAN—The following questions relate to the form you are using for the child disability allowance survey.
Are the CDA claimants completing part B of the claim form, which appears not to be compulsory?

Mr Herscovitch—I would have to take that on notice.

Senator DENMAN—Because the rest of the questions relate to that, maybe I should put those on notice as well.

Mr Herscovitch—That would be fine.


Senator GIBBS—In the last round, I was asking about the evidence of diagnosis of disability with the decreasing theory from 12 months to 6 months and I was told that there was no quantity of evidence to demonstrate that there was an improvement in the diagnosis of disability for children who might qualify for child disability allowance.
I believe that between June 1995 and June 1996 there were 40,013 claims for CDA and about 35 per cent COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 37 were rejected and 65 per cent were accepted.

In round figures that is 26,000.

I would like a break-up of how many included arrears of one month, two to three months, three to six months and six to 12 months.

Mr Herscovitch—I cannot give you those figures here, Senator.
I do know that a very large proportion of claims actually attract 12 months arrears at the present time.

Senator GIBBS—Could I have those figures, though?

Mr Herscovitch—Yes, we will get those figures for you.

Senator GIBBS—How many are expected to get less because of the six months limit on arrears, and what amount less?

Mr Herscovitch—The number of customers affected in a full year is about 4½ thousand.

Senator GIBBS—Is that in the six months limit?


Mr Herscovitch—That is the reduction from 12 to six months.

About 4,500 customers will be affected per annum.

Senator GIBBS—In the case of children who will fail to qualify for CDA, will their eligibility for a health care card be subject to a means test?

Mr Herscovitch—No.

Senator GIBBS—It is my understanding that the new assessment tools to be used to determine who qualifies for CDA are close to completion.

Is this correct?
Is this correct?

Is this the same thing that Senator Newman was talking about or is this a different thing?

Mr Blunn—I am sorry; did you mean Senator Denman was talking about it?

Senator GIBBS—Yes.

Mr Blunn—The CSDA tables are very close to— Mr Herscovitch—The CDA tables—yes, we are talking about the same thing.

Mr Blunn—Yes.

But your question was: when will we be introducing them?

Was that the question?


Mr Herscovitch—In July 1998; and that will apply only to people claiming CDA on or after that date.

Senator GIBBS—I have been informed that there will be two questionnaires, one for parents and one for the medical practitioner.

Is this correct?

Mr Herscovitch—That is correct.

The minister has just pointed out, and she is quite right, that that will not necessarily be in every case.
There will be situations in which a child’s condition is manifest and we would not go through the questionnaire process.

Senator GIBBS—Thank you.

With regard to the questionnaires, if there is a large gap between the questionnaire scores of the parents and the medical practitioner, which one will decide the qualification of the child?

Mr Herscovitch—We would seek a third opinion.

Senator GIBBS—A third party?

Mr Herscovitch—Yes.


We do not expect that to happen in very many cases, but it certainly is possible and we clearly need to get a third party involved.

Senator GIBBS—Yes.

If a child is not found eligible, how often can a child be reassessed?

Mr Herscovitch—In theory, there is nothing to stop the parents from claiming again.
COMMUNITY AFFAIRS CA 38 SENATE—Legislation Monday, 18 August 1997 Senator GIBBS—This is of particular concern to parents who have a child that has a deterioration problem.

There is no time limit when they can reapply, is there?

Mr Herscovitch—Heavens, no.

Mr Blunn—No.

They can apply the day after if they want to, Senator.

Senator GIBBS—Good.

What would the third party be—a specialist?

Mr Herscovitch—Yes, in all probability.

Senator GIBBS—It would have to be another professional person in that field.
Mr Blunn—I guess that depends to some extent on where the area of disagreement exists.

What we would be looking for is somebody who can sensibly contribute to resolving that area of difference.

It would usually, I think, be a health specialist or a person working in related areas to that.

It could be, for example, a social worker who was practising in the area of health work.

That would depend on the individual case—that is what I am really saying.

Senator GIBBS—Like an audiologist or a psychiatrist?
Mr Blunn—Yes.

Senator GIBBS—Thank you very much.

Senator WEST—Madam Chair, subprogram 2.6 is finished.

CHAIR—Has anyone got anything on program 3?

Senator WOODLEY—Yes.

[11.23 a.m.] Program 3—Income security for the unemployed Subprogram 3.1—Newstart allowance Senator WOODLEY—I have got questions under 3.1 and 4.5, but they are the same, and I may need to seek some guidance.
They are to do with the announcement by the government that they will be using private investigators to investigate social security fraud.

Senator FORSHAW—Just before there is a response to that, Senator, you mentioned that you have got questions under 3.1 and 4.5.

We have some questions relating to the youth allowance which I think fit in all of them, but also in the introductory remarks in the statements, so would it be better if we dealt with that first?
I do not mind if Senator Woodley wants to have the call now.

Senator WOODLEY—As long as I get mine in before 3 o’clock.

Senator FORSHAW—I am happy for Senator Woodley to ask his questions as long as we can come back to the youth allowance.

Mr Blunn—Program 6 would be where we would normally expect to take questions on a youth allowance.

I am sorry 3, my apologies.

CHAIR—Program 3.4.


Mr Blunn—What I was trying to get around to saying was, Senator, because 4 was not advised to us as a program that was going to be subject to questioning, we actually do not have people here in relation to program 4.

CHAIR—Program 4.5 was the only section the department was advised of.
So Senator Woodley could I ask you to ask your questions on newstart, and any of the other questions COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 39 which may fall beyond the category of those officers who are here today can be placed on notice.

Senator WOODLEY—All right.

CHAIR—Thank you.

Senator WOODLEY—All my questions are to do with the idea of having private investigators for social security fraud.
They obviously have budget implications but I am just not sure where they fit in those, so I am happy to get your direction on that too; I am very flexible I hope.

The first question is to do with policy.

Does the government have a Public Service-wide policy addressing the use of private investigators by departments and statutory authorities?

Senator Newman—No, I do not think so; I am not aware of it.
Senator WOODLEY—Does the government have some reporting measures in place which will monitor the activity of any private investigators which are appointed; and how are the activities of private investigators compliant with existing investigation practices?

So, where do they fit?

Senator Newman—Can I first of all make it clear we are talking about a pilot program at the moment that is to be evaluated.

Senator WOODLEY—Sydney and the Gold Coast?

Senator Newman—I did not say where it was to be.


Senator WOODLEY—That was simply the press report.

Senator Newman—Of course any pilot program is going to be evaluated very carefully and monitored therefore.

Senator WOODLEY—That will save that question, that is anticipating.

What about where this fits within the current program of investigation?

Senator Newman—You might like to have Mr Carnell give you the details.
Mr Carnell—Regarding your first question in terms of Commonwealth administration in the broad, there is use of private investigators by some other agencies.

Indeed, that is partly why there were the 1992 guidelines put out by the Privacy Commissioner—so that those things could be regulated.

I am also aware that the Commonwealth Law Enforcement Board is looking at a process whereby there might be a panel of approved providers of these services, but I am not quite sure where that process is up to.
I gather it is not imminent and hence we are considering doing this pilot in the meantime.

In terms of our proposal, as the minister has indicated, it is a pilot.

We are certainly anxious that we do the pilot in accordance with those guidelines of the Privacy Commissioner, and I think key things in the spirit of those guidelines are that the cases that are referred are ones that traditional investigation has not been able to have a success with.
In other words, they are very targeted cases, because naturally this process is quite privacy invasive—you only do it if you have a very good reason to in a particular case.
I think it is very much within the keeping of the spirit of those guidelines too that we carefully retain control of the process within the agency, so there will be our case officer who has evaluated the cases where it is appropriate and who will give quite specific instructions to the firm we are using about what is to be done, and very regular reports come back so that we keep a very close eye on the process.
COMMUNITY AFFAIRS CA 40 SENATE—Legislation Monday, 18 August 1997 We are also very conscious of using reputable firms who do have a track record of doing the right thing in this area.

For the pilot we are looking at a selected tender using firms with a good reputation with the larger insurers.

So we are very conscious of the need to monitor very closely what goes on and make sure it is all done with appropriate behaviour.

Senator WOODLEY—That answers a couple of questions I had, but let me continue.
Will private investigators be carrying out any of the functions that would have been previously undertaken by the Federal Police?

Mr Carnell—Generally we have not referred the sorts of cases that we have in mind for the pilot, which is cash in hand and, overlapping to some extent, disability support cases, where there is not the degree of impairment claimed.

Traditionally we have not referred those to the Australian Federal Police.

So there is not an overlap.


I should add, though, that I gather in Sydney there are a very small number of cases that are dual claims, which are ones that in the past may or may not have gone to the AFP and that they might have done some surveillance on.

We may include those in the pilot.

But the multiple claim cases—the ones that are, in a sense, the very traditional ones we have referred to the Australian Federal Police.

We will continue to refer them to the AFP.


Senator WOODLEY—Have they or the Attorney-General’s Department helped you in setting up your guidelines for the practices to be employed by private investigators?

Mr Carnell—Not directly.

We have had discussions, naturally, with the Privacy Commissioner’s office and we have also had discussions with people in the insurance industry who are well used to outsourcing these sorts of investigations.

They have been our two main sources for advice.


Senator WOODLEY—It is reassuring to hear you say that you use reputable firms.

Would you think that it was necessary to get clearances on the people working for those firms or would you simply accept their assurances that their employees were themselves reputable?
Mr Carnell—One of the pieces of advice we have had from some in the insurance industry has been, ‘No, you have to take an interest in the actual staff that will be used.’ It is not enough to simply rely on the principals in the company.

Mr Blunn—If I could add to that, one of the issues that I think Mr Carnell mentioned earlier was that there will be a close involvement by a departmental officer in each case.

I think that is the intention.

Mr Carnell—Yes.


Mr Blunn—And that officer will be clearly monitoring, if you will, performance.

Senator WOODLEY—That is helpful because—just a comment rather than a question—I was going to ask the question, but you have given me an answer.

There have been cases where some private investigators themselves have had criminal records.

So you can imagine that that would be cause for concern.
In terms of contracts between the department and commercial private investigators or firms, are the contracts commercial-in-confidence?

Mr Carnell—Some part probably is, but if your interest is in seeing the elements that go to confidentiality and so forth I cannot see why we would not be able to provide those to you.

Senator WOODLEY—It is more a question of accountability as far as the parliament is concerned.
It would be the general issues that the parliament would be concerned about that I would want to see.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 41 Mr Carnell—I would think we should well and truly be able to give you enough to give you that assurance.

Senator WOODLEY—Does the Commonwealth Law Enforcement Board assist you with information and advice about private investigators?
Mr Carnell—I know my staff have had a couple of conversations with them, because we were interested in this process of them establishing a panel.

I do not think they have gone to the detail of discussing particular firms with them, though.

Senator WOODLEY—My next question I think you have already answered, but perhaps I can just make sure that this is what you said.

It is about the whole privacy provisions.

You will be working under the guidelines provided by the Privacy Commissioner.
I think that is what you said.

Mr Carnell—Yes.

We have been drafting the request for tender and guidelines that would attach to that.

My staff have been to Sydney and have discussed the draft with the Privacy Commissioner’s office and have made some changes as a result of that.

Certainly that is documentation that we would be readily able to provide you.
That would probably be one or two weeks away when we would issue that to the selected tenderers, and I would be more than happy to give you a copy of it.

Senator WOODLEY—That would be useful.

Would those guidelines include any privacy training for investigators?

Mr Carnell—I do not think they refer to training, but they certainly refer to an awareness of the requirements of the Privacy Act and the 1992 guidelines, and an absolutely mandatory requirement, naturally, that they adhere to those.
Senator WOODLEY—I know that this is a pilot project, so you are moving into uncharted waters, but you have used private investigators previously in other ways.

Is that what you said before?

Mr Carnell—No, other organisations have.

Senator WOODLEY—Other departments have.

Mr Carnell—Yes.

I should say, too, that it may be that they have been used in one or two staff compensation cases.

I am not immediately aware of whether that is the case or not, but it is possible.
Senator WOODLEY—Are private investigators subject to the same laws and accountability measures as the Federal Police?

You can see that the accountability issue is one that I am concerned about.

It is a bit general, I guess, but what I am trying to say is that I presume you would be using private investigators in the same way that you would use other investigators, and they would be accountable to you.

Mr Blunn—Not quite—and I would look to Mr Carnell for correction if he disagrees.
What we normally do with the police is, of course, hand the matter over to the police and they take it through, and they are then responsible for all of the involvement, whereas with this process this is basically evidence gathering.
In that phase of a police investigation, I would anticipate that we would certainly be as stringent as the police would be in terms of the propriety of the way in which we achieve that evidence—partly because we are bound by our own Public Service rules, and I do not think we could extend those dramatically.
Mr Carnell—In our draft documentation, the things that we require them to adhere to are our guidelines themselves, those 1992 guidelines of the Privacy Commissioner, the privacy COMMUNITY AFFAIRS CA 42 SENATE—Legislation Monday, 18 August 1997 principles, naturally, the Commonwealth fraud investigation standards—that is a document that has come from CLEB—and, of course, all Commonwealth and state laws, including traffic laws.
in the Privacy Act 1988, Senator WOODLEY—This may be a question for the Attorney-General, but you may know.

Do you know if private investigators require training and some kind of certification before they can be engaged as private investigators?

Mr Blunn—I do not know.

If they did, I guess they would be mainly licensed under state law.

But I simply do not know the answer.


Senator WOODLEY—I think you answered this question before, but this is simply expanding it: does the government have measures in place to guarantee that private investigators are persons of good character?

You did say before that this was something you were taking account of.

Mr Carnell—Yes.

We will need to establish that the people who are actually going to do the work are suitable.

Senator WOODLEY—At this stage it is a pilot project and it has not started yet.
It is, I think, to start in September.

I was just going to ask you a question about how many had been referred, but at this stage none, I presume.

Mr Carnell—Realistically, it will probably be the end of September by the time we go through the necessary tender processes.

Senator WOODLEY—I do not suppose you would have any idea of the costs of this project until you have run it for a while, or have you put a ceiling on the costs?

Mr Carnell—Yes.

I effectively put a ceiling on the costs of $150,000.
Again, it depends on the numbers and the cost of each case.

It may be somewhat less but, yes, I have put that ceiling on it.

Senator WOODLEY—You are not aware of complaints made by the public about the activities of private investigators—I guess that, again, will be part of your evaluation of the pilot project as it goes along?

Mr Carnell—Yes.

Senator WOODLEY—I will try asking this question.

Are you able to tell us the names of any of the companies that may be used by the department?
Mr Carnell—No, not as yet.

I need to sit down with my staff, probably later this week.

Senator WOODLEY—I did anticipate that answer but I thought I would try.

Do you have any model for the trial program?

Simply, I suppose the guidelines—I should not be answering the question myself but I can see the obvious answer.

Mr Carnell—I think the guidelines will give you a fair sketch of how we see it operating.

Senator WOODLEY—What type of social security recipients will the trials be targeting?
I know that it is those where you cannot get the evidence in any other way.

Are there are any categories in which that evidence is harder to get than others?

Have you thought about that or is it simply across the board?

Mr Carnell—My predominant interest in it was the cash-in-hand cases, particularly ones where there is a very strong suspicion that they are working but, under our current methods, we cannot identify where, or indeed under what name they are working.
That is the group uppermost in my mind.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 43 Senator Newman—Senator Gibbs, from her previous comments, will be pleased that actions have been taken.

Senator WOODLEY—I have a couple I could refer to you too, actually; I have concerns in both directions.

Are you setting any benchmarks to evaluate the success of the program within the department?

Mr Carnell—We have not sketched out anything in detail yet.
Obviously the cost- effectiveness in the individual cases; what will be harder to weigh up is the broader deterrence effect.

Obviously I would be most concerned if there were any difficulties in areas such as the propriety of the behaviour of the investigators we use but, no, we have not sketched out the detail yet.

Senator Newman—You understand the fact that people know we are doing it is in itself a useful exercise to encourage some voluntary compliance before we actually catch some people.
Senator WOODLEY—I am sure you are right.

The only other question concerns the state workers compensation board.

They have used private investigators successfully in quite a few cases; no-one would want to deny those successes and I commend them for it.

Is your program going to take account of what the State compensation boards have done in terms of their surveillance?

Mr Carnell—Yes.
Mr Carnell—Yes.

As I said, we are certainly talking to the insurance industry generally, and I know we have had some discussions with at least one of the state workers compensation authorities.

Senator WOODLEY—Thanks very much.

Senator WEST—Can you tell us where the pilots are going to be conducted?

The media has said Sydney and the Gold Coast, but the minister expressed some— Senator Newman—I did not; that was the point.

Mr Carnell—At this stage I am still looking at Sydney and the Gold Coast.
Senator WEST—It has not been decided as yet, I take it?

Mr Carnell—I guess that will be finally decided when we put out the tender documentation.

Senator Newman—It may very well be, but— Senator WEST—When do you expect to put out the tender documentation?

Mr Carnell—In a week or two.

Senator WEST—What is going to be the length of time for the pilot?

Mr Carnell—We are looking at three months.

Senator WEST—Do you have anything to indicate how you plan to evaluate it?
Mr Carnell—This goes to a question from Senator Woodley.

No, we do not have detailed criteria written down yet.

Mr Blunn—We did indicate the sorts of things we were looking at, which would be the cost benefit, the deterrent effect, the effectiveness of using this mechanism in terms of its propriety and those sorts of issues.

But the specific performance evaluation measurement indicators have not been decided.
Senator WEST—Are you going to put the tender document out and invite companies to tender when they do not know what the tender evaluation mechanism is going to be?

COMMUNITY AFFAIRS CA 44 SENATE—Legislation Monday, 18 August 1997 Mr Blunn—They will know what the mechanism is.

They will be told that we will be evaluating their performance, and we will certainly be identifying in the documentation what we expect to achieve.
As Mr Carnell said earlier, measuring the deterrent effect goes beyond their charter but, from the department’s point of view—and there is a difference between the department and the agency—we have supported this for the reasons the minister outlined because, significantly, the advantage will be in the deterrent effect.
I am not saying we will not be pleased to catch people who are also defrauding—we clearly will be—but, if it has a deterrent effect across a wider population, that is of major concern to us.

I think we will have to see how to measure that as it develops a bit.
Senator WEST—I am interested because, as you plan to start the tender process in a week or two, I would have thought that those who are about to be part of the pilot process would have liked to have known the precise details—or at least a fair degree of the details—of the evaluation that they were going to be subjected to at the end of three months.

Mr Carnell—Hopefully, we are quite specific in the documentation about what is required of them.

Senator WEST—I will wait with interest to see that.
Because private investigators are registered on a state basis, have you looked at whether each of the states has similar qualification requirements and registration processes for private investigators, or has that not bothered you?

Mr Carnell—I do not see registration in any state as being sufficient to necessarily satisfy us that that is the person we want to do the work.
Senator WEST—I would have thought that the registration process and qualifications required by each state to register private investigators would have been of some significance.

Mr Carnell—Oh, yes.

Senator WEST—I do not know, but it might well be that what is required in New South Wales and in Queensland is totally different or that it is very similar, but what is required in maybe Tasmania or Western Australia is totally lax and is basically just the issue of a piece of paper.
I know that in recent years some tightening up and changes have been taking place in some states.

In some places registration is basically just having a piece of paper written out and given to you, whereas in others study and qualifications are required.

I want to know that, if this goes to more than just a pilot, the people you have undertaking this will have similar sorts of qualifications and experience.
If you are going to get a differing range of qualifications required by different states— Mr Carnell—We will not simply rely on that state registration process.

Senator WEST—But will you require your investigators to be registered with the appropriate states?

Mr Carnell—Yes, it would be a prerequisite.

You are quite right: you would not want a national scheme to rely on each of those arrangements being good enough.

Senator WEST—Absolutely.

Thank you.


Because it is still so unclear as to what is going to be happening at this stage, I do not have further questions.

Senator O’BRIEN—Following through on the evaluation of the program, while you have no detailed criteria, you say that you are going to be looking at the cost benefit of the program.
I take that to mean—and correct me if I am wrong—that you will look at the cost recovery that is occasioned by the program; in other words, establishing that someone is getting a benefit that they are not entitled to via the revelations of the private investigator?

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 45 Mr Carnell—Yes, there will be the costs of the investigators themselves and our in-house costs and the savings that we achieve from cancelling or reducing a payment.
Senator O’BRIEN—You will evaluate the program that way.

Will you evaluate individual contractors that way?

Mr Blunn—Yes, because that is how we will evaluate the program.

Senator O’BRIEN—It raises the question that the contractor will be encouraged to discover breaches so that there is some longevity to their contract.

Is that what you are saying?

Mr Carnell—No.

At this stage we are just doing a three-month pilot.
I suppose if it proves desirable to extend it we would go to a much broader tender process.

Senator O’BRIEN—But if the contractor finds nothing then there is no cost benefit?

Mr Blunn—That is right.

Senator O’BRIEN—But they may have done their job well.

Mr Blunn—That is right.

Can I just clarify one thing.

What we will actually be doing is referring areas of concern to us.

We are not just saying to the contractor, ‘Go out and work to rule.’ Senator O’BRIEN—If you get a tip-off, for example.
Mr Blunn—I think we will be identifying particular areas by reference to classes of customer or geographical areas or whatever—and Mr Carnell might like to elaborate on that— but, absolutely, if at the end of the three months we had not produced any evidence of default at all, sufficient evidence to be able to take people off benefit or recover a debt, then we would certainly be saying, ‘Is it worth while going ahead with this?’ Senator O’BRIEN—You talked about $150,000 as the projected cost of the pilot.
Would you expect to save $150,000 to judge that the pilot was worth while?

Mr Blunn—Not necessarily.

Mr Carnell—Not necessarily.

Probably we would break even.

Whether it is a much better cost benefit ratio than one is to one I think is probably what we are really looking at.

Reflecting on your question, this is not a pilot really to test out the skills of competitors out there in the marketplace.
It is really a matter of us testing whether there could be longer term and larger arrangements which would be useful.

If we have a case where a particular private investigator has not produced a result, we ourselves need to look at whether there was something about that case that in fact indicates that it would not be the right sort of case to use in an ongoing sense, or it may tell us something about the effectiveness of the private investigator, or it may tell us neither of those things.
Senator O’BRIEN—So the department does not have any substantial experience of dealing with private investigators in the investigation of claims?

Mr Carnell—No.

That is why we initiated talks with others who have had that experience.

Senator O’BRIEN—The process to now has been to refer matters to the Federal Police?

Senator Newman—Or an internal investigation.

Mr Carnell—On some matters.

Senator O’BRIEN—Will internal investigation continue?

Mr Blunn—Yes.
Mr Blunn—Yes.

COMMUNITY AFFAIRS CA 46 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—Will the internal investigation process on an individual case be conducted concurrently with a private investigation of that case?

Mr Blunn—Mr Carnell might like to answer that.

Mr Carnell—I think we are at risk of a misunderstanding arising here.

The Department of Social Security did not traditionally attempt surveillance on, for example, cash in hand cases.
Mr Blunn—I am drawing this distinction between the department and the agency pretty carefully, but I would think—and Mr Carnell can comment on this—that one of the areas that we would be interested in, would be when our mobile review teams, for example, have a well founded suspicion, and that would be reviewed.

That might be one of the sorts of cases that we might refer to a surveillance investigator.

Would that be fair, Ian?


Mr Carnell—Yes, where the team has done what it can to try to, within the current guidelines— Senator O’BRIEN—Have you got guidelines for the sorts of cases you will refer or are you just thinking them up as we go?

Mr Blunn—We have guidelines for the mobile review teams, I think would be the way I would answer that.

Mr Carnell—Particularly in the light of those 1992 guidelines of the Privacy Commissioner about covert optical surveillance.
The national instruction that we put out at that time said that if people wished to do surveillance, my permission, as then division head, was required.

So they were prohibited from doing it unless I personally approved it.

Senator O’BRIEN—Taking it a step beyond those terms, to refer the matter to the private investigator, what guidelines are in place?

Have you got a guideline process in place now so that, when you initiate the pilot, you can decide which cases will be referred for surveillance?
Mr Blunn—I assume Mr Carnell will still be exercising significantly that role of deciding which cases go.

I do not think it is a question of providing guidelines to staff down the line to decide that.

In a sense what we are doing is doing what was always able to be done which is to direct surveillance, but because of the difficulty and because of the situation we are in, we are going to use that rather than use our own people, by using these private resources for surveillance.
Senator O’BRIEN—Mr Blunn, when you say ‘because of the difficulty because of the situation we are in’, what do you mean?

Mr Blunn—Partly, there has been a significant amount of publicity given to a number of cases where people would appear to be claiming benefit and at the same time conducting businesses.

The difficulty is to establish the evidence to support that.
Now, what the agency will be doing, at our request is, in a very limited area, testing whether it is worth our while to look at that as part of our armory of using private investigators.

I believe the contract will be specific about what those investigators will do.

But the big issue, as I said earlier, is the deterrent effect, and that is why it is not necessarily $150,000 worth of saving, directly.
If we were to judge the deterrent effect of having been very worth while, the way you would measure that might be the number of people who voluntarily go off benefit or there may be a host of ways in which you would measure it, and I am glad my colleague Mr Carnell has to determine that and not me.

Senator Newman—Or a big increase in the amount of declared earnings in that particular locality.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 47 Senator O’BRIEN—How quickly are those statistics going to be known?

You are talking about a three-month pilot.

You are talking about commencing at the end of September.

Will those statistics be known at the end of the program or months into the future?

Mr Blunn—That is the problem.

Ian, if I go into your area, please stop me.


What we will be doing is, at the end of the three months, evaluating whether we think it has the potential for achieving a lot of those maybe longer terms gains, I think would be the way I would put it.

That is certainly the way we have been discussing with the agency.

But you might want to comment on that, Ian.

Mr Carnell—No, that is true.


It often takes some time, regrettably, to extract data from our main payment systems, given their sheer bulk, but we would certainly be attempting to extract what we were able to.

Senator O’BRIEN—Mr Carnell, I take it from the answers given that it will virtually be at your discretion whether these private investigator surveillances occur on a case-by-case basis.

Mr Carnell—No.

In the two localities there would need to be one or two case officers who are experienced staff.
Senator O’BRIEN—So you will deputise that down to case officers in the regions.

Mr Carnell—Yes, but in terms of criteria, we would be looking at cash in hand or disability support pension or dual claim.

The second question for those referring officers to consider— and this will vary from case to case—is whether we have done everything that we reasonably can in the agency to investigate the matter.
If we have, but it is also a case where strong suspicion remains, then it is potentially suitable for referral.

The referral officer will also have to decide what specific actions he wants the private investigator to undertake for us.

It is not simply, ‘Put this person under watch for a fortnight.’ That is not good enough.

It has to be quite specific.


Senator O’BRIEN—If it were alleged that a benefit recipient was actually involved in, say, cutting firewood—I use that example because it is an allegation that has been made against a number of recipients in the state of Tasmania where I come from—would you use the agents to observe them in that activity?

Mr Carnell—Yes.

We would tell the agent to follow them, attempt to observe them and, if appropriate, film them over a specified period at certain times.
Senator O’BRIEN—And supply a written report?

Mr Carnell—Yes.

Senator O’BRIEN—And that would form the basis of a prosecution later, I suppose?

Mr Carnell—Yes.

It may be that we then ask for some further period of observation or some other aspect to be looked at.

We may have things that we can then follow through and later ask for a specific piece of work to be done by an investigator.

You will see what I am driving at.

We very much need to retain control of the investigation.
As the secretary said, it is specific pieces of evidence gathering that we are asking to be done.

Senator O’BRIEN—If the agent cannot get film but can submit a written report of what they say they have observed, could that become evidence for some future prosecution?

Mr Carnell—Yes, we would be looking for a factual report.

We do not want their opinions in there.

Obviously, if they have filmed, we would want that material and they are not to retain a copy.
COMMUNITY AFFAIRS CA 48 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—If their written report alleged a breach, that would be what you would rely upon, naturally enough, in— Mr Carnell—I would not be looking to them to recommend— Senator O’BRIEN—No, but their written report of observing activity would be what you would rely upon.

Mr Carnell—Yes.

Senator O’BRIEN—Does the department have experience of this process with private investigators?

Mr Carnell—No.
Mr Carnell—No.

Senator O’BRIEN—Has the department sought any information from Commonwealth or state government bodies who use similar processes—for example, in workers compensation claims?

Mr Carnell—Yes, my people have spoken to at least one state and I know they have had general discussions with the staff who service the Commonwealth Law Enforcement Board.

We have particularly had discussions with people who effectively run these operations for some of the larger insurers.
We have had good, lengthy discussions.

I sat in on one of those.

Senator O’BRIEN—Have any shortcomings been identified—that is, shortcomings of using this process of private investigators?

Mr Carnell—In the broad, at least with respect to the larger insurers we spoke to, their experience is that they still outsource the work but there were certainly many cautions there about the need to monitor it closely and to make sure you are satisfied with all of the personnel who are involved.
They gave us some hints on the sorts of things we ought to put in these guidelines about what should be in reports and how the invoicing should be done.

It is a process that, in the broad, they feel they have to do.

They feel that it is best to use the private investigators, but that you have to very carefully manage your contract.

Senator O’BRIEN—Is there any statistical information that you have received about the rate of acceptance in the courts of evidence by private investigators?

Mr Carnell—No.
Mr Carnell—No.

But, again, they have certainly discussed those sorts of issues with us.

Our reference people have emphasised that some can give you evidence which does not hold up at all and others give you good, professional evidence which does have probative value.

Senator O’BRIEN—When you say that some can, is that going to be the basis of selection?

Have you got some profile of private investigators who have a good track record in that regard; that is, that their evidence tends to stand up in court?
Mr Carnell—For this selective tender for the pilot, we are certainly looking at using firms that have a good track record with the larger insurers.

Senator O’BRIEN—So you have been getting that information on particular firms, up to now?

Mr Carnell—Yes.

Senator O’BRIEN—Will you be targeting your tender process or will you— Mr Carnell—Yes; selective tender.
Senator O’BRIEN—So you will be targeting the tender process to those who have got— COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 49 Mr Carnell—Yes.

For the purposes of this pilot.

Obviously, after the pilot, if we do decide to go broader, we will have to then think about a much large tender process and how we, again, screen within that.

But that is for a decision later.

Senator O’BRIEN—Thank you.


Senator FORSHAW—I think Senator O’Brien actually covered the issues that I was going to ask you about just in those last five or 10 minutes of his questions.

I understand that it was said earlier that there is consultation with A-G’s about this.

Is that correct?

Mr Carnell—We have certainly touched in the broad with the staff who service the Commonwealth Law Enforcement Board and I think that they are part of A-G’s.

They had a title change recently.


I am desperately trying to remember it, but I can’t.

Senator FORSHAW—It may be the frustrated lawyer coming out in me, but the thing that immediately strikes me is the issues that arise about ensuring that, in the evidence gathering process, if it is aimed towards prosecution, that you do not end up destroying a case rather than actually assisting it because you are not using a law enforcement agency, as such, or a departmental agency, but outsourcing.
That is one of the concerns I have.

Is the process to be directed towards evidence gathering for the purposes of prosecution or do you start off just looking at it from an evidence gathering point of view and then decide later?

You mentioned, for instance, what happens in workers compensation.
From my experience in my union days, a lot of the time the surveillance operation may gather evidence that is not necessarily going to result in a criminal prosecution but, rather, results in a change in the application or withdrawal of the application or in a negotiated settlement.

So it is not necessarily targeting fraud but, rather, targeting the veracity of a claim that has not yet been resolved.
Senator Newman—But that is not the sort of cases that have been— Senator FORSHAW—No, that is what I am wondering here.

I would presume that there would be situations where not every breach, intentional or otherwise, results in a prosecution but, rather, can result in— Mr Carnell—Yes, you are quite right.
As with all our review work, our first order interest is in correcting incorrect payments and then we are always interested in recovery of any overpayment that might have occurred and then prosecutions are a further more selective process.

Senator FORSHAW—That is why I asked the question.


Is this intended to be directed towards where there is envisaged a prosecution ultimately being undertaken or— Mr Blunn—The direct answer to that is no, but if in the process of getting evidence there is sufficient ground for believing that there may have been an offence, then that would be referred, as normal, to the police.

Mr Carnell—To DPP.

Mr Blunn—It could be either.

Mr Carnell—It could be; it depends on the nature of what is unveiled.
Senator FORSHAW—I appreciate that in the early stages surveillance can involve just finding out and then proving a suspicion.
But, clearly, if it is for the purposes of assembling evidence which is later to be used in court proceedings, then, clearly, procedures would need to be very precisely— COMMUNITY AFFAIRS CA 50 SENATE—Legislation Monday, 18 August 1997 Mr Blunn—I accept and agree that that is a matter about which we would need to be in consultation with our colleagues, probably in the DPP area, to make sure that we were not covering the trail or setting off on something.
That is an issue that is of concern and one that we have to take account of.

Mr Carnell—As I think was implied in one of the secretary’s comments, it may be that in a case we do a piece of surveillance that indicates that it is part of a much larger fraud, and in that sort of a case we would have to refer it off to the Australian Federal Police at that point.
Senator FORSHAW—I hope I am not repeating any of the questions that were asked when I was out of the room, but is this the first occasion that this has ever been contemplated or used?

Mr Blunn—You mean in this department?

Senator FORSHAW—Yes.

Mr Blunn—I think the answer to that is yes, it is.

It is in this area, to my knowledge.

There is an area where it can be used of course—and you have referred to it—and that is in the compensation cases area.
As far as I know, this department has not used it, but it may well be that the compensation authorities have used it in relation to cases.

But I am not aware of that.

Mr Carnell—There have been a very, very small number of occasions when I have approved us doing something very minor with departmental staff in relation to dual or multiple claims.
Invariably, that has been essentially to watch, identify the person and say, ‘Lodge a continuation form and then attempt to see what vehicle they get into and drive off in,’ so that from the registration we can get a potential suspect, but in a handful of cases all personally approved by me.

It is obviously not on the scale that you are looking at with the pilot project.

Senator FORSHAW—Thank you.

CHAIR—Any further items under program 3.


Senator O’BRIEN—How many unemployed people aged between 18 and 20 on newstart allowance who are currently living away from home are expected to lose part of their payments when youth allowance is introduced?

There is an argument as to whether they have to live away from home.
Mr Blunn—You are right, it does cover a range of areas, so could I ask Mr Whalan, who is the First Assistant Secretary with particular carriage for youth allowance, and if he cannot provide the detail we might have to go to Mr Powlay.

Mr Whalan—There are some 112,000 people 18 to 20 years of age who are recipients of newstart or sickness allowance.
It is expected that some one-third of these young people will have their payments reduced or stopped as a result of the introduction of parental means testing of 18- to 20-year-olds under the youth allowance from 1 July next year.

Senator O’BRIEN—What about the effect of living away from home?

I understand that those who live away from home now might find themselves in a situation where, receiving a benefit while living away from home, they may no longer be eligible.
What arrangements will be put in place to deal with those circumstances?
Mr Whalan—As a result of the introduction of youth allowance, the greatest impact on those people living away from home is that young people living away from home will be eligible for greater benefit, because under the youth allowance students who currently are not COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 51 eligible for rent assistance will be eligible for rent assistance, and we expect some 70,000 students will be eligible for rent assistance under these new payment arrangements.
There will be some people who currently live away from home who will no longer be eligible for rent assistance.

These would be young people currently on newstart allowance who are, say, under 20 years of age and who will not be classified as independent and who live away from home because they choose to but who from 1 July next year have no education, training or work related reason to live away from home.

They are a much smaller group than the first group I mentioned.
Our estimate is that some 4,000 young people may lose eligibility for rent assistance or the higher away from home rate under those arrangements.

So 70,000 will win and some 4,000 may lose.

Senator O’BRIEN—Of those people who are on youth allowance and who move away from home to seek work, I understand they will have to get approval to live away from home to be eligible for rent assistance.

Mr Whalan—If they are not independent, yes.


So they form the two categories: those who are independent and those who are dependent.

Those who are classified as dependent will have to have an education/training related reason to live away from home and they would need to demonstrate that reason.

For example, it may be that they live in the country and they want to study and the course available is in a large country town or city further away.
Senator O’BRIEN—What if they just want to move to a larger population centre where there might be more chance of work?

Mr Whalan—Let me give you a more specific example.

Under youth allowance, rent assistance will not be paid to the person aged under 20, who is classified as dependent, who would rather live around the corner from their parents than live with their parents.

Senator O’BRIEN—That tells me one thing.


If they want to live in the next town because they believe there is a better opportunity of getting work, will that entitle them to rent assistance?

Mr Whalan—If they can demonstrate that there is not an opportunity of work locally and a better opportunity of work in another town, yes, they would be considered on a case-by-case basis and if it can be shown that there is value in them shifting to the next town, then they would receive assistance.
Senator O’BRIEN—For someone who moves—I am not sure if you are familiar with the state of Tasmania—from Deloraine to Launceston, do you know whether that would entitle them to rent assistance?

It is the minister’s home-town.

Senator Newman—I was just saying that it is 40 minutes away.

Senator O’BRIEN—Forty minutes if you have got a car.

Senator Newman—But there is a bus, and it is 40 minutes away.

I was only trying to let the foreigner understand.

Mr Whalan—That would be a marginal call.


I would want to understand more than a little about Tasmania and about the public transport there.

Senator O’BRIEN—Who would make that call?

Mr Whalan—It would be the local office of the agency.

Senator O’BRIEN—So that would be delegated to the agency head in Launceston— Mr Whalan—If there is a Deloraine office and the applicant— COMMUNITY AFFAIRS CA 52 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—No, there is not a Deloraine office.
Mr Whalan—At the Launceston office then.

Senator O’BRIEN—What criteria would be used to make that call?

Firstly, are there written guidelines?

Ms Winzar—At this stage we are still in the process of developing some of the guidelines in an area such as this.
One point I would like to make here is that we are really not so much about denying rent assistance to large numbers of young people as we are about making sure that where young people have got a choice about living with mum and dad, that they seriously consider that choice.

As Mr Whalan just pointed out, what this measure does is it actually directs assistance to those people who often do not have a choice about living away from home to look for work or to study.
In terms of how prescriptive we want to be about this, it will depend on local labour markets; it will depend on local public transport infrastructure; it will depend on whether or not, for example, a young person’s home circumstances are very difficult or perhaps not tolerable.

That might be an instance where we would say, ‘Sure, you can, in fact, live around the corner from Mum and Dad, but not in the same house’, if there is, perhaps, a lot of conflict.
In terms of prescriptive guidelines, we are not yet in the position where we can give you specific answers.

Senator O’BRIEN—How far away are those guidelines?

Ms Winzar—Christmas, perhaps.

Mr Blunn—Implementation is not until— Senator Newman—1 July next year.

Senator O’BRIEN—I understand that we are talking about that.

I think some of these things are planned.


The minister will appreciate this comment perhaps better than some of the officers, that young people who live in George Town, which is probably half an hour from Launceston, where there is very limited work opportunity—there is probably not a lot more in Launceston, but some—the only return bus is a school bus at four in the afternoon.

Senator Newman—That is something that the local office, like Mowbray or Launceston, will be well aware of.
Senator O’BRIEN—That is the reason why I am asking the point about the guidelines.

Some people at the end of their school year will need to plan what they are going to do.

I think that is going to be an issue as well.

That is why I am asking about the availability of guidelines, because I think they are going to be issues that people are entitled to consider.

I have a few other questions before we break.


Will the family payment, the family tax initiative, dependent spouse rebate and the child support scheme all be extended to parents who will now have to support their 18- to 20-year-old adults?

Ms Winzar—At this stage it is not proposed that we make any adjustments to the family tax initiative, dependent spouse rebate or child support arrangements.
Perhaps there is one thing I might point out here: FTI is available to people who have student children under the age of 18, so there will be some capacity for people to get youth allowance for their child up to the age of 18 and also FTI, as there is at the moment.

Senator O’BRIEN—Can you explain the logic of using average weekly ordinary-time earnings as the standard for young people to prove independence?

It does not seem to relate to young people’s earnings so much.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 53 Ms Winzar—Basically, we were looking for a measure which was fairly simple and reasonably achievable by young people.

For example, that figure is roughly around $660 a week at the moment, and I can give you the exact figure on notice if you wish.

That provision would mean that a young person would need to earn on average around $230 a week over an 18-month period before they qualified as independent.
Obviously youth wages are a fair bit lower than adult wages, but a figure of $230 a week seemed achievable for some of the people in this age cohort.

They might move in and out of casual work, in and out of part-time employment and full-time employment, back onto income support payments and so on, but over that 18-month period that is the average that we are looking for.

Senator O’BRIEN—That is the gross income figure.

Ms Winzar—Yes.
Ms Winzar—Yes.

Senator O’BRIEN—Have you related that to any particular award standard to assess that?

There are plenty of awards that specify rates of pay at 18 and 19.

Ms Winzar—No, we haven’t.

Senator FORSHAW—I am trying to recall.

Haven’t award rates been used in the past for the purposes of setting the minimum payments under traineeships, for instance, and LEAP?

Weren’t they used as the basis— Ms Winzar—I believe that is the case, yes.
Senator FORSHAW—And they were programs specifically directed to young unemployed people.

Is there any particular reason why the same approach was not taken in this regard?

Ms Winzar—No.

We were simply looking for a fairly simple measure that could be easily understood by young people and that was achievable.

We did not look particularly at specific awards in this regard.

Senator FORSHAW—What was the figure again?

You said around about $660 per week, which produces a figure of $230.
Ms Winzar—About $230 a week would be the average gross income which we would expect a young person to earn over an 18-month period to qualify as independent.

Senator FORSHAW—From my memory, that figure is a fair bit higher than the other figures that were being used to set a rate upon which the traineeship scheme, for instance, was based.

That was well below $230, and that was an actual amount that people would then be paid.
Admittedly, they were paid for only 39 weeks out of 52, but it was still based upon a weekly rate that was referable to minimum rates awards for juniors.

You are nodding, so I take it that you agree with me.

Ms Winzar—I take your point, Senator, but in terms of this particular criterion for independence we were seeking to have reasonably achievable measures of self-support for young people.
For example, if you look at the alternative measures, somebody who has worked for 18 months in essentially full-time employment will qualify as independent and somebody who has worked substantial part-time hours for at least two years will qualify as independent.
We know that there are young people who move in and out of employment and who would not be able to accumulate 18 months worth of full-time employment, but they may well be able to demonstrate self-support over that two-year or 18-month period by earning that sort of money.

Senator FORSHAW—I appreciate that the two situations may not be directly comparable.
At the same time the fact is that people who may have been under another program, like a COMMUNITY AFFAIRS CA 54 SENATE—Legislation Monday, 18 August 1997 traineeship, may still have been independent—so-called living away from home—and it seems to me that there is a fair disparity in the schemes.
In the one situation you are looking at minimum award rates for people under 21—and that is what they could expect to be earning out in the workplace if they had a job in many industries—and that figure is somewhat less in many cases, I would suggest, than the figure that you have used.

Anyway, Senator O’Brien asked you the logic behind using average weekly ordinary time earnings, and I think your answer was that there was nothing special about it.

Thank you.
Thank you.

Sitting suspended from 12.29 p.m. to 1.35 p.m. CHAIR—We will reconvene the meeting.

I call Senator Forshaw.

Senator FORSHAW—I have a few questions about the youth allowance.

How many families with income below male total average weekly earnings will be adversely affected by the introduction of the youth allowance?

Ms Winzar—I could not give you that figure today, but we can take it on notice, if you like.

Senator Newman—There never would be, would there?


It is $41,000-odd for somebody at home and $58,000 for somebody away, and those are fairly high income levels in Australian standards.

We will get you the detailed information.

Senator FORSHAW—What will be the average amount lost for each family with total income below male total average weekly earnings?

Senator Newman—Could I just make it clear.


The ceiling levels for those families will effectively be higher than the current ceiling levels for Austudy.

That is why I was saying it is $41,000-odd for one child in the family living at home; it is $58,000 and something for one child living away from home, and more when there are more children in the family.

That should give you an indication of the income levels that are affected, and we will give you the details.

Senator FORSHAW—Thank you.


You will take that one on notice.

Will the grandfathering arrangements—do we say grandparenting arrangements now?—apply to all current income recipients over the age of 15, whether living at home or away from home?

Ms Winzar—The grandfathering arrangements will apply to those 18- to 20-year-olds who are receiving newstart allowance or sickness allowance on the date that the youth allowance was announced.
So if they are still in payment on 1 July next year, they will be treated as they are now, they will not be subject to the new arrangements.

Senator FORSHAW—So some young people will be allowed to keep their existing payments and others will not be?

Ms Winzar—That is correct.

Senator FORSHAW—Can you give us a reason why that is the case?

Mr Whalan—The decision was made that those that will be grandfathered were those that were on payment at the time of the announcement.
Other young people will come onto payment, post announcement, and prior to the introduction of the youth allowance.

They are not grandfathered.

Senator FORSHAW—Just refresh my memory: what is the intended date for the start of the youth allowance?

Mr Whalan—It is 1 July next year.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 55 Senator FORSHAW—Currently there are around 30,000 16- and 17-year-olds looking for work and receiving the youth training allowance.
How many of these people would be expected to qualify for the youth allowance, for instance because they have got the year 12 certificate?

Ms Winzar—Of that group of 16- to 17-year-olds who are on youth training allowance at the moment, I think about 32,400 are currently in receipt of payment.

Around five per cent of those have the year 12 certificate.

Senator FORSHAW—Five per cent?

Ms Winzar—Yes.

Senator FORSHAW—I am sure we can figure that one out.
It would be handy to get a breakup of those that have year 12—you say it is about five per cent.

What about those that are in school or in training currently?

Ms Winzar—At the moment, close to 2,000 of those young people are currently doing a training course of some sort, maybe a short training course or a longer course.

Senator FORSHAW—I have not done the maths; five per cent of— Ms Winzar—It is about 1,600.

Senator FORSHAW—Right.

How many would fit into the category of homeless?


Ms Winzar—At the moment there are just under 10,000 homeless young people.

Senator FORSHAW—What about other categories?

Can you give us a further break-up of— Ms Winzar—Of those who would be exempt from the requirement for full-time education and training?

Senator FORSHAW—Those who will qualify to get the youth allowance—in your calculations.
Ms Winzar—Our estimate is that, of that 32,000, obviously those who have got their year 12 certificate—1,600—will be able to get youth allowance on the basis of jobsearch activity.

Of the remainder who have not completed year 12—there is about 30,400 of those—we estimate at this point that about 15,400 of them will be exempt from the full-time education or training requirement for— Senator FORSHAW—That is 15,400?

Ms Winzar—Yes, 15,400.


That includes a proportion of those who are homeless, those who are ill—there are about 1,000 of those—some young people with caring responsibilities, some young people who have left school to go to a job and then that job has fallen through and they have come back onto payment, the short courses we have mentioned, and there will be a group who cannot access full-time education or training because there are no appropriate places available to them.
Senator FORSHAW—Would you mind putting that into table form and giving it to us?

Ms Winzar—Certainly.

Senator FORSHAW—You have given us some figures, but in others you have said ‘some’.

It would be helpful if it could be laid out in a tabular form.

Mr Whalan—Of the total population now on youth training allowance, our estimate is that 1,600 or five per cent will not be granted an exemption.
COMMUNITY AFFAIRS CA 56 SENATE—Legislation Monday, 18 August 1997 Senator FORSHAW—I was going to ask how many will have their income support reduced to zero, but I think you have just answered that, haven’t you?

So we are talking about 1,600?

Mr Whalan—Yes, that is our estimate.

Senator O’BRIEN—What is the lowest family income level which will cause an unemployed person aged between 18 and 20 to have a reduction in their support?

Ms Winzar—That depends on a number of things.


It depends on the number of children in the family, it depends on the ages of those children and it depends on which of them are also receiving, for example, youth allowance.

The very lowest figure for a one-child family with an 18-year-old unemployed young person, for example, could be as low as $23,350 per year.

I should point out that, when I say it could be that low, there are some offsetting factors here.
For example, some of the other components of the youth allowance package would offset some of those losses for some of these families.

Senator O’BRIEN—Some at $23,350 will get reduced benefit or no benefit?

Ms Winzar—Reduced benefit.

Senator Newman—Can I just butt in there to perhaps make it clear.

The education leaver waiting period, which can be up to 13 weeks, is being abolished.

Therefore, that is an element which, for a low income family, is very important.
They are not keeping their 18- to 20-year- old for that 13 weeks.

That is why I think it sounds a bit complicated when you are told that you cannot be given a definitive answer.

The $23,000 does not take into account what that 13 weeks has done to that family’s income.

Mr Whalan—Just to add to that, because of the impact to the education leaver waiting period, which will no longer exist from 1 July next year, the vast majority of families will have no impact until an income of $30,000.
That is where the first partial impact starts to hit.

The education leaver waiting period is currently where people who leave full-time study and become unemployed have to wait without access to any payment as a disincentive to leaving study.

With the youth allowance and the aligning of these two rates for the unemployed and people leaving study there will not be a need for the waiting period.
That is a great advantage of the youth allowance and significantly impacts on the point at which any family is hit.

Senator O’BRIEN—Can you explain the circumstances in which 18-year-olds would be eligible for a benefit under the youth allowance?

Ms Winzar—For 18-year-olds?

Senator O’BRIEN—Sixteen to 18-year-olds.


Ms Winzar—Young people who are 16- and 17-year-olds will be required, generally speaking, to be in full-time education or training unless they have already achieved the year 12 certificate or equivalent.

We covered some of this earlier.

There are a number of exemption reasons which would mean a young person would not necessarily have to meet a full-time education or training requirement.
They are illness; homelessness; young people who are dealing with substance abuse; those that are facing traumatic home circumstances, for example, the death of a parent or a sibling; those who have left school to take up employment and lost that job; those who cannot secure a full-time education or training place at that time—for example, in parts of the Northern Territory it is very difficult to access more than about year 8 or year 9 education—or young people who may be participating in a part-time apprenticeship or traineeship.
There may be other circumstances COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 57 such as caring responsibilities that make it unreasonable for the young person to undertake full-time study.

Senator O’BRIEN—Will all 16- and 17-year-olds be eligible, subject to their family income circumstances, for the benefit if they are in full-time education or training?

Ms Winzar—Yes, they will, subject to a normal range of conditions.

They have to meet a residence requirement, for example.
Their parental income obviously has an impact as well and so on.

Senator O’BRIEN—Is it the same income level tests as for the 18- to 20-year-olds?

Ms Winzar—Yes, it is.

Senator FORSHAW—You just listed a number of cases where their circumstances would be taken into account.

I assume that, essentially, the department would already have that data on each of the current recipients in order to make that assessment, would they?
Or will people have to, as it were, start from scratch again when they are applying?

Ms Winzar—For a number of them we will already have enough information to assess whether or not we can give them a temporary exemption from that full-time education or training requirement.

For others, we will need to talk to them to find out what they are doing.

Senator FORSHAW—What process do you envisage implementing to sort that out?
Mr Whalan—There are a number of things which have to happen between now and early next year, both in terms of collecting information from some groups of people where we need information and also in terms of advising schools, school counsellors and individuals who are likely to be affected by the new arrangements about the likely impact.
There is activity in collecting information and in advising people to make sure that young people have sufficient information sufficiently early to be able to make a decision for next year.

Senator FORSHAW—I recall reading a few weeks back that there was likely to be a need for injection of further funds into the school education sector to take account of the fact that more young people would be remaining at school than otherwise projected because of these arrangements.
Was that circumstance taken into account by this department when it was developing this proposal and considering the funding and appropriation of additional funds that would be required?

Mr Whalan—The proposal was developed jointly by a number of departments, including DEETYA and ourselves.

The funding for schools, as you are probably aware, is on a per capita basis, so there is some recognition in terms of funding for the additional students that will return to school.
The issue of measures beyond that would be a matter for DEETYA.

Senator FORSHAW—I appreciate that it would be covered by another department.

there has been some press coverage in the last couple of days regarding Minister, correspondence to you, the Prime Minister and other members of parliament from a range of welfare groups and church groups, seeking review of the youth allowance arrangements.
Without reading that entire letter, the correspondence, whilst it recognises some beneficial aspects of the proposal, raises particular concerns in some of the areas we have just talked about—young people between 16 and 17 years; young adults between 18 and 20 who have completed their education and are seeking full-time employment, and the requirement, effectively, that they may have to remain dependent upon their parents.
Minister, could you put on the record today the position taken by you and the government in response?

Senator Newman—I did that yesterday, Senator.

COMMUNITY AFFAIRS CA 58 SENATE—Legislation Monday, 18 August 1997 Senator FORSHAW—I would not want to just rely upon what I have read in today’s paper.

Senator Newman—I put out a press release yesterday.

I am happy to let you have a copy of that.


To elaborate, all the organisations that put out an open letter to the Prime Minister yesterday had had substantial input into the development of the youth allowance in the first place.

In fact, several of them had been lobbying for a number of years for such an allowance.

That is why they give credit to the fact that it has been undertaken.
They said quite clearly in their letter—you obviously have a copy—that there are three points with which they still have some remaining concerns.

In my press release—which I will give you a copy of—I make it clear that, in relation to the independence of the 18- to 20-year- olds, the parental means test will not apply to that age group where they can demonstrate their independence.

We have set out criteria and, if you want to ask the officers about the criteria, you are welcome.
As far as the second point is concerned, we were determined to remove the disincentive that currently exists financially for young people of the same age group between unemployment and study, because they are three times more likely to be unemployed if they drop out of any kind of education or training at grade 10 level than if they go on for another couple of years and acquire more skills.

It is a work force which is increasingly having to be skilled, and unskilled jobs are going.
That was the second issue that I addressed in my press release: we wanted to reduce the differences of income support for students and the young unemployed.

We think that that is what we have achieved in this.

The third item surprised me mightily, that they were talking about rent assistance for young people.

That is the first time in Australia’s history that rent assistance has been made available to students.
That is really something that they have been lobbying for—quite reasonably, I think—for many years.

Perhaps they do not yet understand that that is the case.

I saw an NUS letter the other day when I was travelling—a young person from NUS showed it to me—in which they were claiming that there was a paltry $15 a fortnight of rent assistance available to students.

In fact, it is up to a maximum rate of $75 a fortnight.
For a lot of families, that will really make the difference between a young person staying on in education and training and acquiring skills or dropping out to a very uncertain future in the employment market, without skills.

So it is a very important initiative and one which I would have thought all adults in Australia anyway would see the good sense of.

We are bringing students up to the support levels of the young unemployed.

We are not taking young unemployed people down in any way.
So I think it is important to understand that.

Those are my three answers to the three points that are made in the open letter.

I also go on in my press release to add a few more points about the virtue that I see in the youth allowance.

I hope it means that people are not frightened unnecessarily by something that is new when it is obviously something of great benefit to young people that has been needed for a long time.

Senator FORSHAW—Thank you.


It would help if you would provide us a copy of the press release.

Senator Newman—I will get you a copy of that.

Senator FORSHAW—Minister, are you saying that the organisations, the groups that have called for these changes or called for consultation about them before the legislation comes in, have got it wrong?
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 59 Senator Newman—I am surprised—I will put it no higher than that—because they had a very meaningful involvement in the consultation process prior to this announcement.

After all, the Minister for Employment, Education, Training and Youth Affairs and I and our departments worked on this for about a year.

We put out a consultative document in our first budget in May last year.

We asked for individuals and organisations to respond to that.
We had a good response.

I have had lots of contacts with parents who very much wanted us to go in this sort of direction.

I have said in my press release, as you will see, that I am very happy and keen for dialogue to continue, but the government has now, after a long process, come to the points that we believe need to be implemented.

I have argued the case in there, in a fairly brief fashion, as to why I think their three points are disappointing.
I am looking forward to more consultation and dialogue with them.

Senator FORSHAW—That was going to be my next question.

Senator Newman—And I was speaking to one of the officers, Ms Winzar, during the break and she was assuring me that the department was continuing to have contact with the organisations.

So I hope that these matters will be resolved, for the good of young people.

Senator FORSHAW—That part of it at least is encouraging, Minister.

Thank you.
Thank you.

CHAIR—Senator Woodley has a couple of questions on this issue as well.

Senator WOODLEY—Minister, I have got to say too that I think the idea of the youth allowance is a very positive one.

You need to hear that from me, because we have debated this one a bit.

In fact, I was involved with the major churches in 1985 in writing a social justice statement called It’s a rocky road.
It was a social justice statement about young people and the main proposal there was a common youth allowance, so it has had legs for a long time.

However, I think what the groups are saying is that they would like a common youth allowance without any of the negatives.

I guess you would want to argue that you have to have a balance.

But there are a couple of things they say that I just like to maybe get some answers on the record about.
One of the concerns raised by the alliance of groups is that there are young people who will lose their rent assistance through this common youth allowance.

Is that so?

Ms Winzar—Yes, that is correct.

About 4,000 young people will lose rent assistance.

Senator WOODLEY—I think you did give some of this evidence before, but I had to go out.

I am sorry if I am repeating some of it.


Mr Whalan—If I can just mention there, the disappointing thing is that there seems to be no recognition of the fact that there are 70,000 people who will gain access to rent assistance and an undue concentration on a small number of people who may lose rent assistance— 70,000 get access to rent assistance; 4,000 may lose.
Senator Newman—Of course, a lot of those young people are from regional areas who have found it very hard to stay in education and training when their families have been on relatively low incomes.

Senator WOODLEY—I can confirm that, as a university chaplain, that was one of the areas that certainly was a big problem.

Senator Newman—I had a meeting with a number of ministers of religion last Thursday and I must say that, talking through these issues with them, they were very positive about it.
Senator WOODLEY—Can I just check that the 70,000 are additional people?

COMMUNITY AFFAIRS CA 60 SENATE—Legislation Monday, 18 August 1997 Mr Whalan—Yes.

Senator WOODLEY—Let us give the government a tick for that.

Senator Newman—Thank you.

That is why I was a bit surprised that they put rent assistance in their open letter, you see.

Senator WOODLEY—Yes.

I think that is the main one I wanted to check.

Most of the other things I was interested in have already been discussed.
Senator WEST—I wonder if someone can refresh me on the criteria for receiving rent assistance for those living away from home?

Senator O’Brien went through some of this just before lunch, but can someone refresh me on the criteria for the receipt of that?
Mr Whalan—Rent assistance will be available under the youth allowance to all independent youth allowance customers living away from their parental home; to dependent recipients who have an approved employment or study related reason to live away from home; to students continuing full-time study past the age of 24 years; and to independent recipients who are married and/or who have children and who continue to live at their parental home.

Senator WEST—I am glad that you can list those that are married.
Mr Whalan—And continue to live with their parents.

Senator WEST—With the difficulty in getting accommodation these days, we are going to see more of that.

In the material that they sent out, they say: .

.

.

some unemployed young people will lose their current Rent Assistance entitlement because assistance will only be paid to young people who "must" live away from the parental home .

.

.

I am just wondering how flexible or inflexible that ‘must’ is.
Are you going to get to the stage where you are going to be saying to people, ‘We will not pay it to you because you could have actually done that university course at X university instead of Y because X university is half- an-hour’s transport travel away from where your parents live?

Mr Whalan—We had some of this discussion earlier with Senator O’Brien.

Some cases will be clear-cut and others will require some judgment.
The concerns raised in that letter are about the fact that, under the youth allowance, dependent recipients will have to show that they have an employment or study related reason to live away from home.

Once again, to give a clear example, if you live in Kensington in Sydney, near the University of New South Wales, and you are attending the University of New South Wales, and you would prefer to move away from the parental home around the corner or onto campus, then rent assistance will not be paid.
Senator WEST—I was thinking more in terms of a young adult who might well live in Kensington but actually gets to study at the University of Western Sydney.
Are you going to say that, because he had a TER that meant he had a choice of the University of New South Wales and he chose to go to Western Sydney, for whatever reasons, because he could have studied his course at the University of New South Wales near where his parents live, he will not get the rent assistance because he is living out at the Western Sydney campus or something like that?
Mr Whalan—Whilst the guidelines here are not finalised, we would be picking up a lot of the approaches that have been taken under Austudy in relation to other areas, and they are quite flexible, so in that case we would recommend that youth allowance be granted and that rent assistance be granted in respect of that young person.
Senator WEST—So you will give me a cast-iron guarantee here and now that in the future, if I have a constituent in Bathurst where there is Charles Sturt University and good teacher COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 61 education training programs and they could have a choice of either there or, say, the Wagga campus and they take the Wagga campus for the same course, they will be allowed to receive rent assistance because they choose the Wagga Campus, even though the same course is available at the CSU campus at Mitchell and their parents live— Mr Whalan—I cannot give you a cast-iron guarantee of anything, but I fully expect that that is what the arrangements will be.
Senator WEST—When are we going to know whether what you fully expect actually transpires and remains— Senator Newman—On 1 July next year, I would have thought, at the latest.

This was only announced—what, six weeks ago or something.

I am not arguing with you; I am just saying that they are working on it, and you will know.

Obviously, there is no reason to try to hide it.


Senator WEST—I can suggest to you that, if you take the last scenario I talked about, there will be— Senator FORSHAW—It makes it sound like there might be other things.

Senator Newman—I realise it sounded like that, but I did not mean that.

Senator WEST—Roll around next May!

Senator Newman—It is not a confidential matter, obviously, is what I meant.
Ms Winzar—The only thing I would add to that is that young people choose educational courses for a variety of different reasons and, even if superficially the same courses are offered at two institutions, their focus or their expertise may differ quite a lot.

I think it would be fair to say that we are not interested in making those sorts of judgments about which course is appropriate for the young people.

That is their own decision.


Senator WEST—Actually, in my last scenario, I used the same university with multiple campuses offering similar sorts of courses at both of those campuses.

Mr Whalan—But, to pick up that example further, if in the mind of a young person one university course, by having exactly the same syllabus, is of better quality and they think will give them better job prospects, then we would support them having access to rent assistance.
Senator WEST—I used the earlier example of someone living near the University of New South Wales and doing a course at the University of Western Sydney, for which there was an equivalent course at the University of New South Wales.

I think your argument is a bit iffy, because New South Wales is one of the sandstone universities and employers would tend to look at that as more prestigious than a university degree from Western Sydney.

I just think that you want to be careful.


Mr Whalan—We do have more work to be done.

Mr Blunn—We would agree with that.

But, as Mr Whalan said, the current intention is not to discriminate.

I do not think we can add to that.

Senator WEST—I shall wait and see with great interest.

Thank you.

Senator FORSHAW—This question might be a little bit out of left field, but does the department keep details of what school young persons who go on to newstart allowance benefits or other benefits attended?
Mr Blunn—What school they attended?

Senator FORSHAW—Yes.

COMMUNITY AFFAIRS CA 62 SENATE—Legislation Monday, 18 August 1997 Mr Blunn—I do not believe so.

Senator FORSHAW—Whether or not it was a private school or a government school?

Mr Blunn—No, we do not.

Senator FORSHAW—So you have no way of assessing the proportion of unemployed who come from government schools as distinct from private schools?

Mr Blunn—I certainly do not.


CHAIR—There being no further questions on program 3, we will move to program 4.

There being no questions on program 4 we will move to program 5.

[2.10 p.m.] Program 5—Housing Senator WEST—My favourite subject is rent assistance for sharers.

It came in on 1 July 1997.

Do we have any idea of the number of people this has been impacting upon?

Mr Jordan—We do not have details of the numbers at this point, no.

Senator WEST—Why not?

Mr Jordan—We have the previous estimates.


Senator WEST—It has been going for over a month now—in fact, six weeks.

How many people have suffered reductions in their rent assistance?

Mr Jordan—It takes a significant amount of time to collect the data from the system about how many people have been affected across the network.

Senator WEST—When do you think you will have that data?

Mr Whalan—We do not have that information at the moment.

When we have that information we will provide it to you.
Senator WEST—When do you think you will have it?

Mr Whalan—I am going to make an estimate and say in six weeks time.

Senator WEST—So you might have some idea three months after it has been in operation.

Mr Whalan—Yes.

One of the issues about rent assistance is that it is an add-on to other mainstream program payment types within the department, and we have much greater difficulty in extracting information about rent assistance than we do about other payment types.
Senator WEST—But you were able to make estimates as to what you thought the savings were going to be and the number affected.

Mr Whalan—That is right.

Senator WEST—So can you give me those, please?

Just to refresh my memory, how much did you think you were going to save?

Mr Whalan—We will find that for you, Senator.

It is in the PBS and we will look it up.


Senator WEST—So you cannot tell me how many people who are sharing have been affected by this and, therefore, you are not able to give me a breakdown of what their age profile might be?

Mr Jordan—We have previously given you the estimates made at the time when the measure was announced.

As we have just been saying, we do not yet have numbers of the actual people affected and, therefore, we do not have a breakdown of them yet.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 63 Senator WEST—In six weeks time you will be able to do that for me.
Certainly by November when we come back here I should be able to ask you about the number of people who have been affected, the profile as to their accommodation situation, their age, the amount their rent assistance has been cut by, the amount of savings that the government has made, where these people are living, the number of people who are living in flats, houses and private hotels or— Mr Whalan—No, we would not have that spectrum of information unless we did a specific collection on it.
For example, our system does not collect data in such a way that allows us to access information easily about whether people are currently in private hotels, boarding houses or flats, et cetera.

Senator WEST—But you will be able to tell me how many people who are on aged pensions have lost their rent assistance?

Mr Whalan—Correct.

What we ought to be able to tell you is the number of people who are affected and some breakdowns of those numbers in terms of social security classifications.
Senator WEST—Will you be able to give us some indication of their household incomes at the time they suffered the cut in their assistance?

Mr Whalan—We will aim to give you as much information as we can about the breakdown of this group when it is available.

I expect that it ought to be available in some six weeks time, or as it becomes available we will provide it to you.

Senator WEST—So you are not going to be able to give me a major outline of the impact upon the community of this measure?
Mr Whalan—I expect that, certainly by the November estimates, we will be able to give you information about the number of people affected by type of person—whether they are on an age pension or on a newstart allowance—and by the amount that they have, on average, lost.

I would say that we are able to give you an impact but it will not be as much information as some of those things you have been asking for.
Senator WEST—I will go back to my grotty tenements or ‘boarding houses’—which do not actually provide any food—or private hotels in the inner parts of the cities.

I am told from the community nurses who work in the area that they are still there and they have not moved in 20 years.

Do you know at this stage how many people in those circumstances and in those sorts of accommodation have been affected by this?
How many people in private hotels have had their rent assistance cut because the private hotel does not provide them with food, so therefore they do not get the lodging part of it and they are affected by this?

Mr Whalan—As we mentioned a moment ago, we do not have information, as yet, about the numbers.
Senator Newman—There have also been some cases—I do not know how many—where people have, for instance, got breakfast and they have been deemed to have to have their rent assistance cut and when it has been looked at again, because it has not been full board and lodging, the money has been restored?

I have just signed a letter to that effect.

Senator WEST—That is the complaint I have had, Minister.
There are a number of people out there in those sorts of accommodation situations and, from experience, those situations are appalling.

My contacts tell me they are still appalling accommodation situations.
There was a great deal of disquiet at a community housing conference I went to in July that these people were being affected, but I am glad that you have signed off and made that— COMMUNITY AFFAIRS CA 64 SENATE—Legislation Monday, 18 August 1997 Senator Newman—I have just signed off on a letter in response to a colleague who had a constituent who had been wrongly assessed.
Obviously in the introduction of a new measure that will happen with 20,000-odd employees, but I will be very keen to make sure we get it straight for people as soon as we can.

Senator WEST—No keener than I will be to see that it does remain straight.

Senator Newman—The detail is what decides, and so the detail in each case will have to be looked at.

Senator WEST—If you have to get all this detail, how many extra staff are you going to have to employ?
Mr Whalan—Once again, we will find you that figure in a moment.

Senator WEST—Thank you.

I will wait with great interest for those.

CHAIR—Are there any more questions on program 5?

Senator FORSHAW—What Senator West was going to ask, but I will ask it, was about a response to question on notice No.

35 from Senator Denman.

The question was: Has the Department completed any research as to the particular characteristics of those individuals who are likely to suffer under this measure?
The answer to the question was: The department estimates that about 90 per cent of those affected are likely to be single people.

More detailed information will be available following a data collection of those likely to be affected.

Senator WEST—That is rent assistance for people living in public housing.

Senator FORSHAW—Yes.

Could you give us some further details about this data collection process that is to take place, or is it taking place at the moment?
Mr Jordan—In order to implement the measure, we are getting information from state housing authorities so that we can find out which of the DSS clients receiving rent assistance live in public housing.

Then we will be writing to the people who are living in public housing and checking that they are living in public housing before ceasing the payment of rent assistance to them.

That process will be completed before 1 January 1998 when the measure is implemented.
Senator FORSHAW—Where you have situations where there is more than one person living in the accommodation, will you be seeking to obtain information as to what the relationship is between, say, the primary tenant and other people in the residence?

Mr Jordan—No, we will not.

Senator FORSHAW—You will not be.


Senator WEST—In another answer to Senator Faulkner, in relation to the Privacy Commissioner’s response to the program protocol for the removal of the double rental subsidy measure, you said: The department will advise the Committee of the nature of the Privacy Commissioner’s response when it becomes available.

Has that become available yet?

Mr Carnell—No, not as yet.

The program protocol has been drafted and will go to the Privacy Commissioner today.

Senator WEST—When?
Senator WEST—When?

Mr Carnell—Today.

I told my staff to send it regardless of whether I got back or not.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 65 Senator WEST—That is very fortuitous for us, isn’t it?

How long do you think the Privacy Commissioner will take to— Mr Carnell—They are usually pretty expeditious.

Senator WEST—So we can keep that question on notice then?

Mr Carnell—Certainly.

Senator WEST—Thank you.

Mr Blunn—Could I just seek clarification?


When you say ‘keep it on notice’, do you mean that you will raise it again?

Senator WEST—I would like the department to advise the committee of the nature of the Privacy Commissioner’s response when it becomes available.

That remains ongoing.

Senator Newman—It does not get wiped off the list.

Mr Blunn—No, I accept that.


Senator FORSHAW—Just to go back to that issue we were discussing a moment ago about public housing and the rent assistance, you said that you were obtaining information from the state departments to ascertain whether the people were still living in the public housing, and then you were going to write to them and seek details of their circumstances.

A letter from the department, under your signature, Mr Blunn, was sent to the committee on 4 June.

I will read the last paragraph.


It refers to the earlier questions asked by Senator Faulkner.

Are you aware of the letter I am referring to?

It says: It now appears that the Department may now need to obtain more data than simply the addresses of public housing dwellings.

I am not yet satisfied of the details of the data we will need to seek from the States, but I will write to inform the Committee of those details as soon as they are finalised.
Mr Blunn—I wrote a subsequent letter to that in which I so advised.

Senator FORSHAW—I do not actually have that letter.

Mr Blunn—The copy I have is not dated for some reason, but it was about 22 July.

Senator FORSHAW—Could we be provided with another copy?

Mr Blunn—Yes.
Mr Blunn—Yes.

Senator FORSHAW—The question I wanted to ask, in any event—and I appreciate your informing me that you have followed that up—is whether you are now in the position where you have clarified the full extent of the data that you will be seeking.
Mr Blunn—We notified the committee that we would be looking for the address of the dwelling, the state or territory housing authority reference number, an indicator of whether the market rent is being charged and the names and dates of birth of each member of the household.

The latter was because we did not think that address-matching alone would be sufficient to identify the affected persons because of coincidence of names and things.
Senator FORSHAW—I asked you a question earlier, Mr Jordan, about you seeking to obtain further information such as, for instance, who else may be living in the premises.

That information will come through, presumably?

Mr Blunn—We are asking for the names and dates of birth of each member of the household.

Mr Jordan—I understood your question to be about family relationships.

Mr Blunn—So did I.

The relationship between the parties was what I thought you asked for.
COMMUNITY AFFAIRS CA 66 SENATE—Legislation Monday, 18 August 1997 Senator FORSHAW—Yes, but it could still throw up the same answer, couldn’t it?

Mr Whalan—What is not being asked is the relationship between the individuals in the household; it is the names and dates of birth of the people in the household, not the relationship between them.

Senator FORSHAW—I appreciate the distinction.


I know you would not want to make assumptions, but if you were given information where three people had the same name and two of them had similar dates of birth and one of them was 25 years younger or something and of a very young age it is reasonable— Senator Newman—If Warwick Smith and Silvia Smith were sharing a house in Launceston, I think you would have a hard job convincing people that they were related despite their surname.
That is being flippant, but the name is not always an indicator, is it?

Senator FORSHAW—If Warwick Smith and Silvia Smith were doing that, Minister, then I would hate to say what the polling of the various political parties would show up in their telephone canvassing, but we will not go down that track.

I appreciate the point you make.

Mr Blunn—The distinction, Senator, is that we are not getting it for that reason.
Senator FORSHAW—I am not suggesting that you would do this, but from that raw material it would still, nevertheless, be possible through checking of other records held by the DSS or other government departments to ascertain relationships, wouldn’t it?

Mr Blunn—We might be able to do it from our own records; it might show up in some data-matching but I would not guarantee that it would.
I do not think that there would be any way I could say to you, ‘Yes, we would be able to do that in every case.’ Certainly in some cases, yes.

In some cases we might have all of those persons on our databanks anyhow, but whether we would want to correlate them is a different issue again.

We probably could, but I am not sure we would.

Senator FORSHAW—What do you envisage the information that you are collecting is going to tell you about the circumstances of the people in the dwelling?
Mr Whalan—The aim of the measure is to collect information about people who are in public housing and who are in receipt of rent assistance.

One of the difficulties is that, because of difficulties to do with addresses, misspellings of names, juxtaposition of numbers, common street names, et cetera, collecting information about address alone is insufficient.

Senator FORSHAW—Yes.


The information on the date of birth, presumably, gives you a lead into whether or not the people may be in receipt of some other form of allowance or payment.

If they are young people they may— Mr Blunn—I stand to be corrected, Senator, but that is not the reason.

Senator FORSHAW—What is the purpose then?

Mr Blunn—It is just to verify the identity of the person.
It is not a unique identifier, but it goes a long way towards making— Senator FORSHAW—We had a discussion in regard to the previous programs about rent assistance for young people and I am just wondering whether there is some relationship.

Mr Jordan—We do not hold on the DSS records accurate information as to whether people live in public housing or not, and to implement this measure we need to know whether people are in public housing or not.
If you just went and got addresses from the state housing authorities there would be various problems in ascertaining whether people are in public COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 67 housing or not.

So we are getting the extra information just to assist us in finding out which of the people getting rent assistance are in public housing.

Senator FORSHAW—Have you got agreement with all the states and territories about this process?

Those consultations are completed, are they?


Mr Blunn—I am not sure about all of them, but perhaps Mr Whalan can answer that.

Mr Whalan—We are in the process of getting agreement from all states and territories.

Some have already agreed and some are still in the process.

I do not expect there are any states going to not agree.

Senator FORSHAW—I was not at my residence on or about 22 July, Mr Blunn, so maybe that was why I did not receive your subsequent letter.
CHAIR—Are there any further questions on program 5?

If not, we will go to program 7.

[2.30 p.m.] Program 7—Corporate Senator FORSHAW—Information has previously been provided through the estimates process on consultancies.

According to my records, the information was provided in response to some questions on notice from Senator Faulkner relating to the name of consultants, the company, the nature of the consultancy, the duration and the cost.

The material is as at 6 May 1997.


We have a table which we appreciate you providing.

Could you provide—I am happy for you to take this on notice—an updated list of consultancies for the period 1 July 1996 to 30 June 1997 and also since July to the present date because some of the companies on this list who were still engaged as at 6 May 1997 would fit into that category but there may well be others who are finished?

Mr Blunn—We will undertake to do that.

Senator FORSHAW—Thank you.


If I could just identify those consultancies where the committee would appreciate a copy of the report, the first one is Impact Research and the nature of the consultancy was customer survey of maternity allowance recipients.

I will read these into the Hansard for you and we can give you a list later.

Then Roy Morgan: survey of child care assistance and child care cash rebate recipients.
Yann, Campbell, Hoare and Wheeler: provision of customer focused research including qualitative research and biannual telephone surveys to measure customer satisfaction with service delivery.

Shane Thomas and Associates Pty Ltd: a consultancy on the patterns and level of non-discretionary costs faced by people with disabilities, et cetera.

You will be able to pick up the title from there, I am sure.

Swinburne University of Technology: housing needs of mentally ill community treatment orders.
CSIRO: housing stock condition indicators.

Orima Research: market research of information products for two-year migrant waiting period.

University of Canberra: profile of the distribution of housing assistance.

If those could be provided to the committee, that would be appreciated.

Senator WEST—On that list, is it normal for DSS to use outside consultants to recruit DSS staff?

You have one there for AIDA Centacom and (AWV) recruitment of DSS staff for 4½ months of $23,400.
There is one to Drake International for recruitment of DSS staff for 6½ months of $4,500.

Mr Blunn—Senator, you ask whether it is usual.

It is not something we have done on a significant basis in the past, but it is something we are moving to do more frequently where we have quite significant numbers to deal with.

It is really the processing of applications—of COMMUNITY AFFAIRS CA 68 SENATE—Legislation Monday, 18 August 1997 calling for them and the first cut—that we are fairly significantly involved in.
I think the ones you referred to were teleservice centre recruitment programs—I am not sure whether Mr Carnell can confirm that—and they were for quite significant numbers.

We were really just speeding up the process by doing the administrative tasks, largely, through that.

Since then, we have used outside consultants in our recruitment processes in a number of ways.

It has proved to be very effective.


At the end of the day, of course we are still responsible for the people who are appointed, and it is something that I think you will see more of.

Senator WEST—So the staff numbers in your human resources area will be decreasing?

Mr Blunn—Numbers in our human resources area have decreased.

Senator Newman—But the teleservice hiring was a major undertaking in terms of about 900 new jobs to improve the teleservice system.
Senator WEST—I want to talk to Mr Blunn about a couple of teleservice glitches I have had.

Senator Newman—That was a very logical reason—to have so many extra new jobs coming on stream that needed to be dealt with as expeditiously as we could.

Senator WEST—I will debate that one at another time, I am sure.

Senator Newman—Are you suggesting that the teleservice system should not have been improved?

Senator WEST—No, the outsourcing of the hiring and that sort of thing.
Senator Newman—But I am sure, as a regional Australian, you will appreciate the extra jobs.

Senator WEST—I will talk to Mr Blunn about a couple of problems my constituents have had with it in recent times, but I will not do it here.

Mr Blunn—Senator, can I correct one impression I may have left with you.

You said that the corporate area would be reduced and I said that it has been.

That is absolutely true, but the hiring and recruitment process is not essentially done by the corporate area.
The corporate area may assist, but it is largely done by the program or operational area that is involved.

Certainly the corporate area does assist.

Senator WEST—Each program or operational area has its own human resources?

Mr Blunn—It is responsible for recruitment for those areas that it needs.

It uses the services of the corporate area.

So I think my answer is still valid to that extent.
Senator O’BRIEN—Minister, in response to several questions on notice to Senator Kemp concerning the Child Support Agency, advice has been provided that matters of child support policy should be directed to you, as Minister for Social Security.

I take it that the minister advised you of this advice that he gave us?

Mr Blunn—He did not advise me.

I am unaware of it, Senator.

Senator Newman—We share responsibility for child support, as you would understand, Senator.

Let us see what you want to ask.


Senator O’BRIEN—I have a considerable number of questions that have been declined on the basis that they should have been directed to you.

Senator Newman—I see.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 69 Mr Blunn—Senator, I am a little embarrassed to say that this would normally be something we would be looking at under program 4, which is the program area that we are not well covered for today.

Senator O’BRIEN—Are these policy issues?


Mr Blunn—Yes, they are, and that is the program area that is responsible for policy.

Having said that, if you would like to ask us— Senator Newman—If we cannot answer something today, we will give you an answer on notice.

Senator O’BRIEN—That is fine.

They were on notice to Senator Kemp.

Mr Blunn—I will speak to my colleagues.

CHAIR—I am sure Senator Newman will speak to her colleague too.
Senator O’BRIEN—Firstly, what is the approximate cost of the government funded study into the costs of children currently being undertaken by the Social Policy Research Centre in the University of New South Wales?

Senator Newman—That study is our responsibility.

In fact, we mentioned it at previous estimates hearings.

I do not know what the cost is.

Mr Blunn—I do not have the figure with me, but we can get it for you easily.
Senator Newman—That study was started by the previous government in 1995, so it comes to fruition at the end of this year.

Senator O’BRIEN—It has not been completed?

Senator Newman—No, it has not been completed yet.

It is a long and very big study extending across Australia.

Senator O’BRIEN—Minister, are you aware of the recommendations of the Joint Select Committee on Certain Family Law Issues in its examination of the operation and effectiveness of the child support scheme?
Senator Newman—Yes, I am aware of it.

Senator O’BRIEN—Are you aware of the budgetary implications for the social security portfolio of the committee’s recommendations concerning the child support formula?

Senator Newman—There are a lot of recommendations that go to better administration, which is very much Senator Kemp’s responsibility.

Matters that change the payments between individuals obviously can have an impact.
They do not necessarily have an impact, but some of them do have an impact on social security payments.

Senator O’BRIEN—Is there any material that you can assist us with to understand the implications?

Senator Newman—Not at this stage, no.

It is something the government is looking at so it can respond to the parliamentary report.

Mr Blunn—There are two categories.

Some of the recommendations of that committee, I believe, have been accepted and it is possible to cost those.
There are others which are still, as the minister said, subject to consideration by government, and that will depend on what government decides.

Senator O’BRIEN—Can we be supplied with the costings that have been done?

Mr Blunn—I believe so, Senator.

For this portfolio?

COMMUNITY AFFAIRS CA 70 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—For this portfolio.

Senator Newman—I think they are not ours.


I think what has been done has tended to be in the Assistant Treasurer’s area because they very much went to administration.

Mr Blunn—Largely, I think that is true.

Senator Newman—And there are still administrative matters to be attended too, so that there is greater fairness and perception of fairness.

That may or may not be a cost; it may be just the way things are done.
Mr Blunn—Senator, rather than have you tossed between departments and portfolios, if it is acceptable to the committee and to you, what I will do is I will talk to my colleagues and get you the information.

Senator O’BRIEN—Thank you; if you would please.


Some of these questions are asked because a report in the Courier-Mail on 13 February this year stated that you, Minister, and the Assistant Treasurer, Senator Kemp, were examining recommendations of the government’s backbench committee on child support but were concerned at the possible budgetary implications.

Senator Newman—Any government is concerned at budgetary implications, I have found.

But, yes, that is a fair comment.


Senator O’BRIEN—Okay; so that is true.

A later article in the Sunday Age of 8 June 1997 states that the Prime Minister and yourself, Minister, have indicated willingness to consider changes to child support legislation based on the recommendations of the backbench committee.

Is that a fair report?

Senator Newman—Yes; but if I can amplify that.

We have had—as, I guess, our predecessors in government did—lots of people wanting to express a point of view on this issue.
It is probably one of the major areas for constituent work in most members’ and senators’ offices.

We have, no doubt, on a number of occasions, by way of letters, said we are very interested to see what we can do about implementing the recommendations of that committee, but that it will, as the secretary said, wait for government decision on exactly what.

Senator O’BRIEN—I take it then that the matter has not been fully resolved?
Senator Newman—A lot of work has been done, because it is a very complicated area.

Complicated, partly, because there are two departments involved; complicated for a whole lot of other reasons as well.

So it has required a lot of work and when we can announce some decisions we will do so as soon as we can.

Senator O’BRIEN—Can you put a rough timetable on when there would be a full government response to the recommendations of the joint standing committee report?
Senator Newman—I would like to, but I can’t.

I just do not have the ability to give you a timetable at the moment, but we are not letting the grass grow under our feet; we are just keeping on working on the issues involved.

Senator O’BRIEN—I thought it was expected last September.

Senator Newman—Was it?

Senator O’BRIEN—So we are approaching 12 months overdue.

Senator Newman—I do not think I thought it would be last September.
Senator O’BRIEN—Perhaps, Minister, if there is any other information on the likelihood of a response, we would appreciate it.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 71 Senator Newman—Yes.

Senator WEST—You wouldn’t be able to say yet whether there are going to be some legislative changes or anything as a result of that.

Senator Newman—I can’t say yet, no; I am just not in a position to.

Senator WEST—No; I recognise that.


Subprogram 7.3—Corporate infrastructure Senator O’BRIEN—In answer to question 63 on notice, I was given a list of the offices and staffing arrangements for the Service Delivery Agency.

Are those offices and those numbers of staff relevant today, or have there been changes since that information was supplied?

Mr Blunn—Can I ask Mr Phelan, who is the relevant officer in the agency, to assist the committee?

Mr Phelan—There probably have been some movements since then.
We can update it if you wish.

Senator O’BRIEN—Have any of the offices closed?

Mr Phelan—There may be one or two that were scheduled for shutting.

I am just checking the date that we listed those offices, which was 1 July 1997.

Senator O’BRIEN—If there have been any that have closed or any amendments to that, I would appreciate an update to that list.

Mr Phelan—Certainly.

Senator O’BRIEN—In relation to some other information I was given about property in answer to question No.
65, I was advised that there was an estimated need for an additional 10,000 square metres.

The total property costs— Mr Blunn—Did you say question No.

65, Senator?

Senator O’BRIEN—Yes, question No.

65, on page 103.

Do I understand correctly that the total property costs of $40 million are the costs of rental and repair of the properties to be occupied by the agency?

Mr Phelan—It is mainly fitout costs, but there is a small amount of rental in there.
Senator O’BRIEN—I am a little confused; is that $40 million mainly fitout for the offices?

Mr Phelan—That is correct.

It is for redoing all of the accommodation or part of the accommodation to allow the transfer of functions into the agency from either DSS or DEETYA.

Senator O’BRIEN—Is that a budget figure at this stage or has it been broken down into actual project costs?

Mr Phelan—Of course we have a rolling budget, covering property.
The point of that paragraph was to point out that DSS had, and it continued into the creation of the agency, a rolling program of refurbishing its offices.

Some of that is either directly or indirectly related to the establishment of the agency.

In addition to that, we had to accommodate staff transferring across, so what is in that paragraph is an estimate.

Senator O’BRIEN—Are there more accurate figures at this stage?

Mr Phelan—I can provide them if you wish.


COMMUNITY AFFAIRS CA 72 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—If there are any specific costs for particular projects, I take it that each office will have a project and a project budget.

Mr Phelan—I am cautious about disclosing too much.

Some of this is commercial-in- confidence relating to budget estimates for works that were going to the private sector to have provided.

Do you want me to group it up in some way?


Mr Blunn—Senator, if we could get an idea of what you are looking for, we might be able to help.

Senator O’BRIEN—I am looking for some sort of a cost to upgrade premises in relation to staff costs.

You are going to have staff space, you are doing fitout, which you describe as a rolling upgrade, but some of the fitout is obviously to do with additional staff being moved into particular areas.

Mr Blunn—Yes.

Senator O’BRIEN—And I will give you an example.


In Launceston the DSS office—which I take it will be the agency’s office—which is adjacent to premises that I occupy, was recently remodelled.

That would probably have been in late 1996.

I understand it is to be remodelled again.

Mr Phelan—Not totally.

There will be some modification to that office.

Senator O’BRIEN—Is there a cost to that project that is available?

Mr Phelan—I could probably derive one, yes.

I do not have it with me.


Senator O’BRIEN—It has been sent to tender, has it?

Mr Phelan—I am not sure.

I cannot recall.

Mr Blunn—We can give you an indicative cost at least, but I would like to just make a point, and Mr Phelan might want to comment on this.

That is not solely attributable to the creation of the agency.
Although, as you rightly say, that was fairly recently refurbished, there were some deficiencies that have come to light in the way that it was operating, and certainly our experience with other offices suggests that we can achieve significant efficiencies, so we would be looking to do that at the same time.

There will be some element, therefore, of what we would have wanted to do to modify that which was a good design but not an optimum design, but because of the agency roll-out we will do that together.
We probably would not have done it at quite the same time, I think.

Mr Phelan—Yes, we are incorporating student functions, youth functions, as well that are coming across into that particular office.

The office in fact was new; it was a relocation 12 months or so ago and fitted out—I cannot recall off-hand— Senator O’BRIEN—I think the minister opened the facility this year.

Mr Phelan—Yes, that is correct.

Senator O’BRIEN—Now there is an additional cost which is occasioned by this change.

Mr Phelan—Yes.
Mr Phelan—Yes.

Mr Blunn—I guess that is my point.

In a sense, that is true.

Some of it is simply because we are adding those functions, but at the same time—I am sure I am right about Launceston— we are looking to improve some elements of what was the DSS office anyhow that did not work quite as well as we had hoped it would.

We probably would not have done it now had it not been for the agency fit-out, but we will pick up some remedial work, if you will.
COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 73 Mr Phelan—Yes, we are taking the opportunity to incorporate later standards in accommodation.

Mr Blunn—We will get you the cost of that job and try if we can, if it is possible, and we will do our best, to give you a breakdown.

Senator Newman—Can I just add my sixpennorth here.

The decision about the Launceston office was made before we came to government, because it was a fairly long lead time.
In a very real sense, it is a transitional model where other offices over the last 18 months or so, where they have been upgraded, have been moved to a more open-plan arrangement.

Launceston was more open plan than it had been but not as open plan as it could be, and one of the things that is very clear when you visit a whole lot of Social Security offices around the country is how much better it is for customers when they have got an open-plan office.
That does not mean much to people, but in fact it is all the things that it implies.

People do not have a barrier between them and the person they are going to see.

The person that they are going to see comes out and gets them and takes them back and sits them down.

It is the treating of people with dignity.

I think perhaps Launceston was being finalised before the outcomes of the pilots on open plan had been seen, how good they were.
I now find that staff who had been wondering about the virtues of open planning are now saying, ‘Gee, it has made a huge difference to the attitude of the customers and through that to the morale of the staff.’ I think Launceston got done just a bit before it was realised how good an even more open plan can be.

Is that answer relevant?

Mr Blunn—That is true, Minister.

But it is also true to say that the way the agency’s offices are increasingly working requires a different structure.
We have point-of-contact decision making and a much more open management style which gets away from the back-office, front- office dichotomy, and that brings its own changes.
The other thing that I would say is that, certainly whilst I still had the carriage, I was convinced that there were significant advantages for customers, both in terms of their satisfaction, as the minister says, but also from a staff point of view in that I think it is fair to say that our aggression levels have dropped significantly.

It is generally a more efficient and a more pleasant working environment for both customers and staff.
Senator O’BRIEN—There is not the sort of labour market where attrition is an attractive proposition for the staff who leave either, is it?

Mr Blunn—No.

As I recall, the Launceston office has a quite linear focus.
The last time I visited there the staff were saying that if they had their time over—we do involve staff in office design around broad parameters—they would like to look at some aspects of that again and, as I have said, we have to change it, so we are taking the opportunity to— Senator Newman—The point-of-contact decision making really has been very significant in that the person you see is the person who makes the decision, and it is all over and done with there and then.
So you do not have somebody who stands at a counter with you and deals with the issue, which is then determined later by somebody more senior.

So that, in itself, makes for a demand of a different kind of office.

Mr Blunn—The Mowbray office is not a bad example of the sort of way we are going, Senator, and you would be familiar with that.

Senator Newman—Yes, it is.

And yet they both were moving along one after the other.
COMMUNITY AFFAIRS CA 74 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—I assume the agency now has a name, a board and a chief executive.

I asked some questions at the last estimates but you were not able to give me all of that information.

Can you do so now?

Mr Blunn—Can you direct me to the question?

Senator O’BRIEN—It was on page 157 of Hansard of that time.

Mr Blunn—I am sorry, I do not have the Hansard with me.
Senator O’BRIEN—At that time, I wanted to know whether a decision had been made on who the members and the chair of the board would be, and I wanted information about the people who had been selected to be members of the board.

Has that been decided yet?

Mr Blunn—Yes, the board has been appointed: Mr Robin Marrett is the chair of the board and Mr John Thane, Ms Chris Gillies and Mr Phil Pierce are the members of the board.

They are the voting members of the board.


In addition to that, for the time being, the Secretary of the Department of Social Security, to wit myself, and my colleague from DEETYA, Steven Sedgwick, are also members, but we are non-voting members of the board.

Senator O’BRIEN—That was the interim board?

Mr Blunn—No, that is the board.

Senator O’BRIEN—I just make the point that in the Hansard that was the interim board.

Mr Blunn—Yes.

Senator O’BRIEN—It is now the board.


Senator FORSHAW—Did a press release go out on that, Minister?

Senator Newman—I cannot recall.

I think it might have.

Senator O’BRIEN—There was one in relation to the interim board referred to in the Hansard.

Senator Newman—I am not sure, I shall have to be reminded.

No, apparently not.

Senator FORSHAW—It is a bit late now.

Senator Newman—We are not certain, anyway.

Would you like me to put one out now?


Senator FORSHAW—It is just that we were getting some other information from your press releases, and I thought that might have been appropriate.

Senator O’BRIEN—So that was the board proper from 1 July?

Senator Newman—No, it was after that.

Mr Blunn—No.

It has only recently been formally confirmed.

It has acted as the board since 1 July, but it is now a board with tenure for three years.

Senator O’BRIEN—Will you let us know the operative date of the appointments?
Mr Blunn—I certainly will do if I cannot do it now.

I think it was 29 July, but I will make absolutely sure that that is the legal date.

Senator Newman—That is why probably because I was on leave.

Senator O’BRIEN—You will have to learn to delegate, Minister.

The other matter I wanted to touch on in relation to the agency was the employment services package which I understand Minister Vanstone announced would be pursued without legislative change.
It will be administered, as I understand it, by the agency and I wanted to ask some questions about that.

Mr Blunn—Some elements of that package will certainly be administered by the agency.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 75 Senator O’BRIEN—I would like to know how the announcement by Minister Vanstone that it will be administered without amendment or change—that is, employment placement enterprises, et cetera—affects the implementation of the package.
Mr Blunn—That is not really the agency’s part of the package.

The agency part of the package will be those things they were going to do and which they are variously authorised under either the Social Security Act or executive power, I guess, to undertake on behalf of another department.

The actual creation and operation of the employment agencies is not a matter for either the agency or ourselves.

The agency will relate to them.


Mr Powlay—If I could add that Senator Vanstone announced some changes in terms of the timing of it which obviously will impact on when certain work is done within the agency in relation to referrals and so on.

Senator O’BRIEN—So no work been done so far on that matter?

Mr Powlay—There is obviously planning going on within the agency with DEETYA about the necessary referral arrangements for the new system.
Mr Blunn—And there has been a considerable amount of work done in relation to the gathering of what one might call common information, which is information which DSS would require the agency to collect on its behalf but which is equally applicable to those functions that the agency will be performing in relation to the employment area—that is registration details, names and those sorts of things—so that we collect them in the most efficient manner from the customer.
Senator O’BRIEN—Will the operation of the system proposed by the minister that is not based on legislation by entities that are not recognised within legislation have any effect on your department’s requirements as to the keeping of records or privacy matters?

Mr Blunn—I do not believe so.

I think the information that DSS requires of the agency which, of course, is legislated for, is largely common to that which they will be collecting anyhow.
I do not think it impacts on our requirements in any way at all.

Senator O’BRIEN—So the information that you hold which is available to DEETYA can be made available to— Mr Blunn—Some of it.

It does not necessarily follow that all the information that DSS requires the agency to keep will be available to DEETYA.

There may be some matters which, under the privacy guidelines and under the Privacy Act, we would keep to ourselves, but there would be little of that I suspect.
Mr Powlay—There has been no change in the type of DSS information that is provided to DEETYA as a result of any of this change, and there would not have been a change arising from the legislation either.

Senator O’BRIEN—Certainly, because there is no change in the legislation, I would not expect a change between your department and DEETYA.
What I am asking about is if the agency is liaising with employment placement enterprises and there is some exchange of information, how does the fact that the employment placement enterprise will not be an entity recognised in legislation affect the transfer of that information?

Mr Blunn—That is really a question that I think you would have to ask DEETYA because they would be responsible.

There are a number of possible answers to that, but I would be speculating.
One of them is that, with the consent of the customer, you can transfer whatever information you want.

That is within the privacy guidelines.

There might be a number of ways COMMUNITY AFFAIRS CA 76 SENATE—Legislation Monday, 18 August 1997 in which that might be managed, but it really is a matter more for DEETYA, I would have thought, than for us.

Mr Powlay—Yes, that is right.

It is not a matter of the agency providing the social security information to employment placement enterprises.
If there is a flow of information required, one to the other, it would be more from employment placement enterprises to the agency.

That is likely to be via DEETYA for such things as advice of changes in a customer’s circumstance and so forth.

Senator O’BRIEN—What about information coming the other way; information that is perhaps collected by the employment placement enterprise which goes to DEETYA and to you?
Will the fact that there is not a legislative basis for the employment placement enterprise affect the status of that information?

Mr Powlay—No, it should not.

It is the same as any information that would come from an external source to us.

It does not necessarily need a legislative base for us to receive information.

Senator O’BRIEN—This is such an imprecise area in the current circumstance that— Mr Blunn—I do understand the problem.
Senator O’BRIEN—You did say that there were certain matters which, for privacy reasons, might not— Mr Blunn—I said there may be.

Actually, I am not sure that I can think of any at the moment but I would not want to say that there could not be.

We are still bound by the Privacy Act and the privacy guidelines, and we would observe them.

Senator O’BRIEN—Could the department consider that, and perhaps take on notice the responses if there are any.
Mr Blunn—Certainly, if we can identify any we will let you know.

Mr Powlay—Can I clarify that please, Senator?

Senator O’BRIEN—I want to know about any matters which, because of privacy, cannot now be distributed to DEETYA for the purposes of operating the employment service regime that is proposed.

Mr Powlay—I do not believe there are, but we can take that on notice.
Mr Blunn—Part of the reason there are not is that I have a very wide discretion to make information available under the Social Security Act.

It is limited; I can only make it available to certain categories of people, but it is quite broad in the sort of information that I can deal with.

Senator O’BRIEN—Can you advise the committee of the current status of the implementation of the work for the dole pilot through the agency?
Mr Powlay—As I understand it—and I cannot talk for the agency—the necessary guidelines for staff are being prepared.

The specifications for the agency computer systems are being written.

There is some external publicity material being prepared; it is a normal preparation for implementation process.
Senator O’BRIEN—You mean to say that you cannot talk for the agency; the agency is— Mr Blunn—This matter is going to be canvassed fairly extensively before another committee tomorrow and the officers from the agency who are involved with that side of it will be COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 77 supporting that committee.

It is really not our business; in a sense, it is much more DEETYA’s business.
Senator O’BRIEN—It is the minister’s legislation but I understand what you are saying.

Mr Blunn—Yes.

It is our legislation that will be used to give effect but the policy responsibility really is with DEETYA.

Mr Powlay—That is right.

We have some interest in relation to activity test matters to do with work for the dole but, beyond that, matters of the tender process and policy about what groups are selected and so forth is a DEETYA policy matter.
Senator O’BRIEN—While we are on that subject, what measures has the department taken to publicise the availability of voluntary work as a means of satisfying the activity test?

Mr Powlay—There are a number of things that we have done in that area.
We have a regular publication that goes quarterly to all unemployed people and we have included in three editions of that publication—including the latest edition which is going out to customers shortly—information about the voluntary work rules and information about the desirability of undertaking voluntary work as a way of, perhaps, improving employability, and as a way of participating with the community.
We have also worked through peak volunteer organisations to promote the current rules, as well as groups that we know are users of volunteers, particularly in the welfare and health sectors.

Beyond that, we also have a tender process under way to establish our referral service which will commence from the end of September.

Once that successful tenderer is appointed, part of their role will be also to promote the availability of voluntary work as an option for unemployed people.
Senator O’BRIEN—I am wondering how much of the department’s budget will be allocated to promoting that as an option.

Mr Blunn—Do you mean of the budget for this particular project or do you mean— Senator O’BRIEN—An amount of money that you are allocating to it.

Mr Blunn—There will be an amount of money which, I believe, will have been identified for promotion.

We may have it with us, Senator, if you can bear with us for just a moment.
Mr Powlay—Yes, if you could just bear with me, Senator, I will see if I have got it.

Senator O’BRIEN—Certainly.

Mr Powlay—No, I do not appear to have it with me, but I could get that for you—how much we have spent to date and how much is remaining to be spent on publicity of that initiative.

Senator O’BRIEN—While you are doing that, is it possible to ascertain how many unemployed people are participating in voluntary work programs as part of their activity test?

Mr Powlay—Yes.
Mr Powlay—Yes.

I can get you an updated figure, but the figure as at May was 1,457.

Senator O’BRIEN—Is there a trend that could be shown?

It saves coming back and asking for past and future things.

Mr Powlay—As an example of the trend, in September 1996, when the first part of the changes to voluntary work rules were introduced to make this more accessible for older unemployed people, there were 155 unemployed people approved to participate in voluntary work to meet their activity test requirements.
As I said, as at May, there are now almost 10 times that many.

The majority of them are customers aged over 50.

COMMUNITY AFFAIRS CA 78 SENATE—Legislation Monday, 18 August 1997 Senator O’BRIEN—It would be fair to say it has not received the publicity or promotion that other schemes have received.

Senator Newman—Not yet, it hasn’t.

I do not think it has.

I found, in meeting with organisations around Australia during the break, that people were delighted when they heard about it.
I think there will be a very good uptake of this as it becomes more widely known.

Voluntary organisations have an interest because, obviously, often they cannot afford to have as many staff as they might like.

They see virtue in it for their own organisation but also for the self-esteem of the volunteer who comes to help them.

The scheme is really being expanded as from 20 September so it really comes to fruition, in the full-blown sense, from then on.
I think the take-up from September last year through to May this year shows that even without publicity people are moving, where they are eligible, to take up this opportunity.

I think it is really good because it does say to people that voluntary work is also valuable; that paid work is not the only thing that we respect in our country.

Mr Powlay—I think the other thing to say is that the changes last September were specifically targeted at people over 50.
They did receive a fair amount of publicity at the time; as I said, we wrote to every unemployed person or we provided a newsletter to every unemployed person, and informed them of the new arrangements.

It did get some press coverage and publicity at the time in September last year, and the feedback that we got from voluntary referral agencies at that time was that they were inundated with inquiries from people in the over-50s age group about voluntary work.
The figure of 1,400 is not very high but it does not include unemployed people who do voluntary work, not necessarily to meet their activity test requirements but in addition to the normal activity test requirements.

We think there are many thousands more who would be within that category.

Senator O’BRIEN—I do not disagree.


I would be interested if you would supply me with copies of the promotional material that you have used including the correspondence and publications you have sent to unemployed people.

Mr Powlay—We can do that, Senator.


Senator O’BRIEN—And any correspondence or promotional material you have sent to bodies which are able to utilise those people in accordance with the activity test, so that I can ascertain the degree of promotion and simply say that, yes, it is very valuable.

I would agree that many more people would take it up.

I have not struck a lot of people who have absorbed the information, excepting that they have received it.
Senator Newman—What I find is that information takes a while to trickle through and where national organisations know about something you cannot be sure that state organisations know about it, and certainly the regional organisations may not know and certainly it is even harder for individuals to know these things.
I have found that organisations like the volunteers association and some of the others that I was speaking to on Thursday—I met with them for an hour or so—knew and were saying to the others, ‘Yes, we know about this, this is great’, but others in the audience did not know about it.

So you just have to keep on with this.

Senator O’BRIEN—I guess the question I asked about promotion and the amount spent on promotion is aimed at finding out what sort of priority this has been given.
It seems to me that it could have been given a much higher priority and achieved a much higher penetration.

Mr Blunn—I think it will after 20 September, but having said that, I understand what you are asking.

COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 79 Senator Newman—In one sense, you are raising people’s expectations if, prior to 20 September this year, they heard that there was an opportunity for volunteering and then they found they were cut out of it by age, et cetera.
Whereas now, it will be much more widely available and therefore I think it is much more appropriate that we have a larger scale exercise on information.

Mr Powlay—The major changes are from 20 September this year.

Senator O’BRIEN—I was recalling the evidence you gave, Mr Powlay, at another inquiry we had recently about this matter.

Mr Powlay—I remember it well.

Senator O’BRIEN—I understood that there was general availability to satisfy at least part of the activity test by engaging in voluntary work.
Mr Blunn—I think that is the newsletters that Mr Powlay was talking about earlier that go out to all unemployed people that certainly alerted them to what was then available.

Mr Powlay—The changes from 20 September will make it much simpler and easier to understand so it is much easier to promote those changes than it is at the moment.

Senator O’BRIEN—I look forward to seeing that information.

Senator WEST—What is going to happen to your computers when they flip over from 311299 to 1100?
Mr Blunn—We hope they will continue to purr and provide an excellent service.

Perhaps I can ask the expert to give you a more technical answer than that.

Senator WEST—Not too technical.

Mr Blunn—All I am saying is that we are well aware of the 2000 problem and we have been working on it for some time.

It would be a very brave person, I think, who said that nothing will go wrong, but we believe that what we are doing is appropriate and apposite.

Perhaps Mr Humphreys can add to that.


Mr Humphreys—As the secretary says, we have been working on this for quite some time.

We believe we have the situation fairly well in hand, although again, as he indicated, we do not expect it to go without any problems whatsoever.

It is going to cost us quite an amount of money to actually implement it, although not quite as much as some of the press have indicated is going to occur around the world.
Our estimate is probably about $10 million to $15 million over a period of years to actually make the change.

That is fairly consistent with estimates around the world of something like $1 to $1.50 per line of code to change, and that is consistent with what we have got.

I actually chair a committee of Commonwealth agencies looking at this, and I have made sure that our agency has always been volunteered to be looked at.
We have already been looked at by Coopers and Lybrand to investigate how we are going and we have got a fairly good report from them.

We also volunteered last week to be audited by ANAO, which is again rather unusual.

We are doing all we can to reduce the risk in that area.

Senator WEST—You are going to have the additional problem that a number of other departments do not have, and that is that your computers will have to interact for payments with a lot of the financial institutions as well.
Is that going to be an issue and a problem?

Mr Humphreys—It is a problem that many organisations have.

The sort of problem that we have is not a unique one.

Many businesses, which are doing everything they can to deal COMMUNITY AFFAIRS CA 80 SENATE—Legislation Monday, 18 August 1997 with the year 2000 problem and could really be in trouble with their suppliers, et cetera, have not handled it.

They might be in great shape.


In our case, we are very dependent on the financial institutions to get payments to people and we are organising, in conjunction with the Department of Finance, to have a full-scale test of our payments system through the banking system during next calendar year, to make sure that the full chain works through.

In that process we will expect to find some difficulties on our side and some on the banks’ side as well.

That is part of the testing.


We are aiming to finish our testing by the middle of next year to allow full-scale testing right through the chain to occur, well before 31 December 1999.

Senator WEST—So you are in consultation with the financial institutions and other organisations like that?

Mr Humphreys—Yes, and being organised through the Reserve Bank, I should mention, because they are our chain.

We do it all electronically through the Reserve Bank.
The Department of Finance, the Reserve Bank and ourselves are organising that test for next year.

Mr Blunn—Without wishing to delay the committee in any way, I think it is just mildly interesting that I suspect we were the first organisation to hit what is effectively the year 2000 problem—which we did this year—with a particular application.

As far as I know, it is the first in the world.


Senator WEST—Mr Blunn, I have had other departments sit here and tell me that it will not be a problem at all, and they do not know what we are talking about.

I fully plan to take that department further to task about the issue because they have a lot of computers too.

Mr Blunn—It was quite a serious problem; we fixed it fairly quickly.

Senator WEST—Your new computers, the new programs, coming on-line would have enabled you to do that too?
Mr Humphreys—The amount of change we have had as a result of legislation and other things over the last few years has made it easier for us to handle this, because all of our programs that have been changed in the last several years have been made year-2000 compliant as they were changed.

Senator WEST—Are you going to introduce any new teleservice centres or have you reached your maximum number?

Mr Carnell—I am sorry, I missed part of the question.
Senator WEST—Are we going to get any new teleservice centres, apart from those that are already listed to start in 1997-98, which are Ballarat, Port Macquarie, Traralgon and Launceston?

Mr Carnell—No, we have no plans on the drawing board for others.

Senator WEST—When were the last few decided upon?

Mr Carnell—The last two decided upon were Traralgon and Launceston.

Senator Newman—I put out two press releases.

Senator WEST—I know you put out the press releases, Minister.
Senator Newman—One on the previous centres, and one on the last two centres which were purpose built.

Senator WEST—When were the decisions made for those centres to be approved?
Members of a regional city council rang my office about three or four months ago and said, ‘We have COMMUNITY AFFAIRS Monday, 18 August 1997 SENATE—Legislation CA 81 just put in an application for a teleservice centre.’ I scratched my head and said, ‘I thought they had all been decided.’ They said, ‘No, we had to do it really quickly.’ I am just wondering whether in recent times— Senator FORSHAW—Did they get a phone call?

Senator WEST—Yes, they did get a phone call.

Senator FORSHAW—It would be this year.


Mr Carnell—Yes, but I cannot remember the exact date.

Senator Newman—They were this year.

Mr Blunn—It would have been earlier this year that those two centres were decided upon.

Senator WEST—If you could give me the dates, that would be helpful.

Senator Newman—I will send you an autographed copy of my press release.

Senator FORSHAW—You could e-mail it.

Senator WEST—No, you cannot e-mail it around here yet.
Mr Carnell—Perhaps I should add to my answer to the first question that, naturally, we are always watching to try to predict future demand and changes and to try to make sure that we will have sufficient capacity to meet likely demand.

That will change as the agency takes on new business, so we are always keeping an eye on the question of whether or not we need additional centres.

My answer was very much at this point in time.

Senator WEST—I appreciate that.


Senator Newman—We will have to evaluate new technology and the ability to switch between centres before we decide our needs.

I think there will always be unmet demand in teleservice centres, because more people will use it if it is not so user unfriendly.

Senator WEST—I know that a lot of constituents use it.
But when I had this phone call from an area asking for support, I thought that this was right out of left field because the other communities I know that had made bids for other ones had done so six months or more before.

I thought, ‘What is going on?

Are there some more coming up that we don’t know about?’ CHAIR—If there are no further questions, I thank the minister, Mr Blunn and the other officers.
I advise you that written questions have been placed on notice by Senator Faulkner across programs, and by Senator Denman on programs 1, 2, 3, 4, 5, 6 and 7.

Thank you senators, Hansard and the secretariat.

Committee adjourned at 3.27 p.m. COMMUNITY AFFAIRS