A broken system: Jobseeker payments and tax obligations

This bill, the Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024, will provide welcome support for some of the most vulnerable people in our communities, and I'm proud to support that, even though, as many of my colleagues have mentioned, there's a lot more we can do in this space. But in a debate about Centrelink payments I couldn't really miss the opportunity to point out the glaring mistake that Labor has failed to fix, and it is that those receiving JobSeeker payments aren't exempt from paying income tax. This hasn't been a problem in the past; the payment hasn't gone above the tax-free threshold of $18,200. But because of increases to the payment and to indexation, JobSeeker payments have gone above the tax-free threshold for the first time ever.

Around 25,000 people in Tasmania receive JobSeeker payments. This loophole means they'll have to pay back around $1,000 in tax to the federal government. A thousand bucks, to the federal government, is nothing. They wouldn't even stop to pick it up from the ground. But to someone on JobSeeker, having to shell out $1,000 to the government is absolutely devastating. It's the equivalent of two weeks payment. That could be their rent payment, it could be the difference between keeping their heater on or not, or it could be taking the kids to the doctor for a specialist appointment.

Tasmania has the oldest, sickest and poorest population in the country, and some of the people doing it the toughest right now are those on JobSeeker payments. They're making difficult choices about whether to put food on the table, to put petrol in the car to fulfil their mutual obligations or to go to the doctor to check out that cough that's been hanging around for weeks.

I know what it's like to live pay cheque to pay cheque. When I first left school, I worked on farms and in factories. It paid okay, but not a lot. I relied on Centrelink to make up the difference and to keep me afloat when the season was done and I was in between jobs. If someone told me back then that I'd be losing about $1,000 to the income tax man every year, I would've been devastated. It's a hit I wouldn't have been able to afford.

The Labor government say they're doing all they can to help people doing it tough, but, if they really wanted to help people, they would have fixed this loophole already. Instead, the federal government is giving money with one hand to the most vulnerable people in our community and taking it away with the other. Before anyone can stand up and say, 'We can't make JobSeeker exempt from income tax for this reason or that reason,' let's put it into perspective. The age pension is exempt from income tax. If pensions aren't taxed, why is JobSeeker? It's meant to be a hand up, not a handout, so why are we forcing some of the most vulnerable people in our country to lodge a tax return and hand money back to the government? I'm calling on all parties to support my amendment to immediately fix this issue.

I foreshadow my amendment to the motion for the second reading of the Social Services and Other Legislation Amendment (More Support in the Safety Net) Bill 2024.