In Summary

  • Analysis for Inside Story by Peter Mares, Swinburne University of Technology

During the last two federal election campaigns the Coalition promised new measures to tackle long-term unemployment. That pledge has found its way into legislation that would create two new payments to encourage people to rejoin the workforce. Labor has largely supported the bill, which is currently before parliament, but the precedent it sets for New Zealanders living in Australia has inflamed opinion across the Tasman.

The first of the new payments is a Job Commitment Bonus. Job seekers aged eighteen to thirty who’ve been on benefits for twelve months or more will receive a tax-free payment of $2500 if they remain in “gainful work” (and off welfare) for at least a year. After two years, they’ll receive an additional bonus of $4000. The second – with its less catchy title, Relocation Assistance to Take Up a Job – replaces the existing Move 2 Work program and offers unemployed people payments of up to $6000 (more if they have dependent children) if they need to move house to find work.

Although Labor MPs supported the bill in the House of Representatives, they argued that, by failing to create jobs or increase skills, it doesn’t go to the heart of the youth unemployment problem. They were also concerned about the expanded penalties in the relocation scheme: anyone who quits a job “without a reasonable excuse” within six months of receiving a payment will be barred from receiving any benefits for twenty-six weeks. (Under the previous scheme the non-payment period was twelve weeks.) Overall, however, this is not a particularly contentious piece of law making.

Why, then, is the prime minister of New Zealand being questioned about the bill in parliament in Wellington, and why has he has directed diplomats at the New Zealand high commission in Canberra to register his government’s concerns with the Australian government?

At issue is the fact that the bill redefines what it means to be an “Australian resident” in an unprecedented and highly specific manner. As a result, New Zealanders are excluded from the new job commitment bonus, regardless of how long they have lived in Australia.

Here, a bit of history is required. New Zealanders enjoy the right to live and work indefinitely in Australia – a right that was formalised under the 1973 Trans-Tasman Travel Agreement – and for a long time they were essentially treated as permanent residents. That changed when the Howard government amended the definition of “Australian resident” in social security laws to exclude New Zealanders. The Howard changes were prospective – they only applied to those who crossed the Tasman after 26 February 2001. So while newcomers couldn’t receive many government welfare payments (including unemployment, youth and supporting parent benefits), Kiwis already settled in Australia still could.

This division – between pre- and post-2001 New Zealanders – is expressed in the arcane bureaucratic language of visa categories. New Zealanders who arrived before the changes are deemed to hold a “protected special category visa”; their compatriots who arrived after the changes hold a “non-protected special category visa.” Of the half a million or so New Zealanders settled in Australia, about 200,000 are estimated to fall in the unprotected category, and their numbers are continuing to rise.

Regardless of the inequities involved – and there are many – the distinction between these two categories has, until now, remained completely clear. The new bill, however, qualifies “Australian resident” to exclude anyone who holds a special category visa – protected or unprotected – from eligibility for the job commitment bonus. As the bills digest prepared by the Parliamentary Library comments, this is “an exception to the usual practice in Australian social security law” and “a change without precedent in the entitlements offered to this group.”