TRANSCRIPT OF THE HON CHRISTIAN PORTER MP MINISTER FOR SOCIAL SERVICES INTERVIEW WITH DAVID SPEERS, PM AGENDA, SKY NEWS

Transcription

1 28 June 2016 TRANSCRIPT OF THE HON CHRISTIAN PORTER MP MINISTER FOR SOCIAL SERVICES INTERVIEW WITH DAVID SPEERS, PM AGENDA, SKY NEWS Subjects: Welfare integrity; Composition of new Senate. E&OE We are joined by Social Services Minister Christian Porter, live from Perth. Thank you very much for joining us this afternoon. So explain to me how you re finding these savings in your area, in your portfolio. Well a big part of it, David, is technology but also technology that we ve applied and learnt from previous experience. So there are four essential changes. The first revolves around what s known as data-matching that s a process of real time data-matching of the information that s provided to the Department of Human Services with the information provided to the ATO. And that will allow us to get better and more accurate assessments of employment income and non-employment income. That same process, secondly, will also be applied to people s disclosure of assets. Of course inside the welfare system there are a variety of income tests and asset tests so we are now able to cross-match in a very sophisticated and quick way disclosure to the ATO with disclosure of assets to the Department of Human Services. Thirdly, something that is very new is the use of data analytics to provide preventative measures for people who we identify as being in high risk groups of providing information which may lead to overpayment and debt. And the final thing is a strict recovery measure and it relates to garnisheeing tax returns. The average tax return we find in Australia for the relevant groups here is about $2,000 a year. So people who have outstanding debts owed to the taxpayer because of an overpayment of a welfare payment will find that they re required to utilise that tax return to pay their debt. So that last bit is interesting. If you get a tax return, you ll be automatically deducted what you might owe in a welfare bill?

2 Essentially, yes. Interestingly, that already occurs in one instance at the moment and that is in respect to former welfare recipients who have not entered into time-to-pay arrangements. But there are three other categories of debt and that is: both former and present recipients who have entered into time-to-pay arrangements, and present recipients who haven t entered into time-to-pay arrangements. So we re extending a process that exists for about a quarter of the debtors at the moment to everyone. So yes, if you owe money to the taxpayer through the welfare system because there has been an overpayment, and you re at the same time receiving an income tax return, then that can well be allocated to pay off your debt. Alright. A lot of families don t mean to actually rack up a debt, they aren t doing anything particularly dishonest, I suppose. When they change jobs or circumstances change in their family they re suddenly not entitled to what they ve been receiving, so they could face an end of financial year sting with what you re talking about here? If the tax return that many families would be relying on doesn t actually come through because they ve got a debt? Well, in actual fact part of this process, as I ve noted, is a range of use of data analytics for prevention here. So you re quite right, there s a whole spectrum of reasons why people might receive an overpayment and owe a debt. At the one end there might be those instances of a very small group of people who do the wrong thing and fraudulently misdisclose their circumstances, right down to the other end where there are genuine mistakes. In the middle, there s indifference or a failure to pay attention. So one of the tranches here of the saves is actually using our data analysis to, in effect, warn people and proactively prompt them to update their information as quickly as possible to prevent debts accruing. But yes, part of this is around the fact that we do need to identify where overpayments have been made, and then encourage those individuals to move into time-topay arrangements. On an average wage, for instance, for someone who has left the welfare system with the average debt, people pay about $60 a fortnight and their debt is cleared within about 38 weeks. So there are a whole range of safeguards in the system to ensure any repayment is not onerous or crushing for the individual involved. But nevertheless, there is an obligation to the taxpayer and the sustainability of the system to use the best technology and the experience we ve gained in the last 18 months to ensure we both identify debts, recover debts, but also of course as you point out prevent debts.

3 Now Labor s Chris Bowen, you might have seen this afternoon, has reacted to this by saying that since the Budget you ve announced something like $5.7 billion in savings measures through better compliance. This is another further measure that you ve announced today. I mean, he s got some scepticism obviously about this. He s wondering whether you ve actually achieved what you ve been announcing in the last couple of years. That $5.7 billion in better compliance has that actually been realised? Well, I mean Chris Bowen at his press conference also thought these things require legislation, so it does go to show his level of knowledge about the matter. But the question as to whether or not these are realisable and credible savings is a fair question. If I can answer it but pointing to three matters of context. The first is the size of what is the known debt at the moment. And Labor let that debt increase very rapidly without taking these proper administrative measures to recover and identify the debt and get the amount down. In the last three years of Labor, debt accrued to a total of $1.9 billion so we were left with a situation where there s $3.5 billion worth of known debt outstanding. And this process, as I said, is about both prevention, but also identifying unknown debt and enlisting proper recovery processes. The second point of context which goes to the credibility of these savings measures is that when you consider this $2 billion in the scope of the entire amount over four years that is spent in the welfare system it represents 0.29 per cent of the entire scope of the welfare system. The final point of context is that the income data measures we ve already started to use with respect to previous years worth of payments in our first year of using this new technology and knowledge-management system, we expected we would identify $329 million worth of debt which we can then recover; already as at 17 June we have identified $395 million worth of previously unidentified and unknown debt that we will now recover for the taxpayers of Australia. So in the first year of using this technology, with respect to previous payments, we ve overshot our target by 20 per cent. Now we are looking to use the same technology and methodology in the years going forward. Final question, Christian Porter, it goes to the zombie measures as Labor calls them in your budget bottom line. Measures you ve been unable to get through the Parliament and may not be able to get through even if you win the election with whatever Senate you ll face after Saturday. They are things like family payments, they are things like Paid Parental Leave crackdown, as well there s also measures on Newstart the payment for those under the age of 25 not receiving that for four weeks and so on. My question to you is, if you can t get those through obviously your budget bottom line is going to be out of whack, it s not

4 going to be as good as you think it is. Will you search for similar or equivalent savings in your own portfolio? Well I think the first port of call is to sell the savings to the newly constituent Parliament when it s elected. And of course your question presumes a certain outcome, and we don t know what that outcome will be. One thing that you ve missed David if I might raise it is that part of our previous measures on recovering outstanding amounts of money was with respect to applying a general interest charge to people who were in the welfare system and were overpaid, and who have subsequently left and become employed which is an excellent result but those people have an average debt of $2,800. And the Labor Government did absolutely nothing substantive to recover that debt. Now we have put through a policy, which is now clearly known, to apply a general interest charge to incentivise the payment of that debt. And yet that policy has been out for months and months and months and Labor still have not provided a position as to whether or not they would support that. Now I think any rational Parliament moving forward, when the legislation goes to a rational Parliament, would support that because its fair on the taxpayer and it s done in a way which Well fair enough. But just quickly if you can t convince the new Senate, will you look for fresh savings in your portfolio? Or will the budget bottom line sink further into deficit? Well I mean we re always inside Social Services looking for ways to be more efficient, but as I said the first port of call is to sell to a newly constituted Parliament the savings that we have identified, that are well known. And I d also put to you, David, that should the result be favourable to the Coalition, given that the sort of savings like these preventative, recovery and identification measures for debt have been well known and people have the opportunity to vote upon them, I think that suggests that whoever might be making decisions in the Senate or in the House of Representatives should take care to note that people have understood them and voted for a party that wants to make reasonable, rational savings to make the system sustainable. Christian Porter, Social Services Minister, thank you very much for joining us this afternoon.

5 Thank you David. [ends]