Hansard debates

Mr PALLAS (Treasurer) — I move:

That this bill be now read a second time.

Speech as follows incorporated into Hansard in accordance with resolution of house:

During the 2014 election campaign, the government announced key reforms designed to encourage and support employment growth in the Victorian economy by creating jobs and growing industries. The Back to Work plan is a landmark plan to work with business leaders, grow industries and help create jobs for the unemployed.

The number of Victorians out of work increased by almost 68 000 during the term of the previous government. Unemployment increased from 4.9 per cent in December 2010 to 6.8 per cent. Youth unemployment grew from 12.5 per cent to 14.1 per cent over this same period. Labour force participation has been trending downwards since 2011 and is set to continue falling steadily in coming decades to 60 per cent as the population ages.

The government recognises its responsibility to develop policies to support employment growth. The government is taking action now to help Victoria get back to work.

The Back to Work plan will create jobs and position Victoria for sustained economic growth. Through the Premier's Jobs and Investment Panel, Victoria's economic leaders will provide direct advice to government on how best to target public investment. The Future Industries Fund will bring a strategic focus to industry policy and maximise the long-term value generated by our most promising industries. The introduction of reverse super trade missions and additional Victorian government business offices will enhance local businesses' ability to access international markets. A Regional Jobs Fund and regional business centres will be established to provide support and assistance to businesses expanding or relocating to regional Victoria.

This bill enacts the government's election commitment to establish the Back to Work scheme. It will provide financial assistance for businesses through payroll tax relief or a cash grant for those employers with payrolls below the payroll tax threshold. This will help offset employment costs associated with the hiring of unemployed and retrenched workers.

This bill establishes the broad framework and structure for the Back to Work scheme. It outlines the process for employers to make claims, empowers the commissioner of state revenue to make payments, provides for necessary compliance and enforcement powers, objection and review rights and for various administration and other provisions necessary for the effective operation of the scheme.

The bill establishes the key legal elements necessary for the scheme and provides for associated eligibility criteria that will outline the necessary details for employers to satisfy in order to be eligible to make a claim. The eligibility criteria will set out specific details about eligible employers and employees, payment amounts and other aspects of the scheme's administration.

It is proposed that the scheme be available in respect of full and part-time workers, with a minimum number of hours per week to be enshrined in the criteria. This reflects the reality of modern working arrangements and the structure of several growing industries which include a significant share of part-time workers. It also reflects the fact that a part-time job can be an important avenue into sustainable employment for many people.

The scheme has been designed to have a broad reach across a wide range of prospective employees in Victoria. The scheme will apply to any person from any background, provided they meet the eligibility criteria of long-term unemployed, young unemployed and retrenched workers. Employers will be able to access the scheme in respect of any new employees that fall within any of these broad categories.

The long-term unemployed and young unemployed categories will be defined in terms of a specified period of unemployment. Documentary evidence such as a statutory declaration by the employee, documents from an employment services provider or evidence that a person has been receiving commonwealth income support during that time will be sufficient to establish that the individual has been unemployed and actively looking for work during that time. No such test will be applied in relation to retrenched workers. The criteria will impose a maximum income limit in relation to new jobs under the scheme to ensure that the policy is appropriately targeted.

The class of eligible businesses will include those currently paying payroll tax, those below the payroll tax threshold (who would otherwise be liable for payroll tax) and some employers who are currently exempt from payroll tax, such as not-for-profit entities.

The government wants to ensure that compliance and administrative burdens on businesses are kept to a minimum and that the scheme is made as attractive as possible to employers. As a result, the payment amounts will be fixed in dollar terms, rather than requiring proof of costs incurred.

Additional provisions will be included in the eligibility criteria to provide rules and safeguards to prevent opportunistic and gaming behaviour by employers, ensuring that the scheme meets its intended objectives of supporting unemployed workers in getting back to work.

Administration provisions

The commissioner of state revenue will be responsible for administering the scheme as the State Revenue Office (SRO) already have an established relationship with many Victorian employers. Where relevant, the legislation providing for the administration of the scheme has been modelled on existing provisions to ensure continuity of the administrative framework in which the SRO operates.

Under the Back to Work scheme, employers will be required to be able to demonstrate that eligible employees have been employed for a three-month probation period before they can lodge a claim for payment under the scheme with the SRO. Accordingly, the period for eligible employment will effectively commence from 1 April 2015, with scheme payments to be made available from 1 July 2015. The eligibility criteria, including definitions of long-term unemployed, young unemployed and retrenched workers, will be determined by the Treasurer and published in the Government Gazette. This is a similar approach to that taken in other jurisdictions with equivalent schemes and provides maximum flexibility for ensuring the scheme operates effectively.

A claim for payment under the scheme must be made to the SRO by an eligible employer, in the approved form and must provide any information as required by the SRO. The SRO will have the ability to apply the payment or part of the payment towards an employer's payroll tax liability if requested by the claimant. This allows those employers who have a payroll tax liability to elect to offset the payment against that liability. Scheme payments may also be paid as an offset against other liabilities by the state, by electronic funds transfer, or any other way the SRO thinks appropriate.

The bill also provides the SRO with the power to vary or reverse a decision within five years, if the SRO determines that the decision was incorrect. In these circumstances, the SRO must provide written notification of that decision and state the reasons for the decision.

The bill also provides for enforcement provisions that have been designed to ensure they provide an effective deterrent for non-compliance. Moreover, the bill includes investigation provisions by adopting powers typical of other acts which protect public money, such as the First Home Owner Grant Act 2000. These include the powers to require a person to give information and to attend to answer questions or produce documents, the power of entry and inspection and the power to apply for a search warrant.

Non-compliance with the requirements of the bill may result in a business receiving money to which they are not legally entitled. Therefore, it is important that the SRO has effective means for monitoring compliance and investigating suspected offences. These powers have been designed with the overall public benefit purpose of the scheme in mind, yet ensuring an adequate balance between the interests of business and the SRO's obligation to protect public money.

As promised, the first legislation the government is bringing before the current Parliament is part of getting Victoria back to work. The Back to Work scheme is an election commitment that responds to increasing unemployment and forms one element in a broader jobs plan that this government will implement.

I commend the bill to the house.

Debate adjourned on motion of Mr WAKELING (Ferntree Gully).

Debate adjourned until later this day.