LETS: Deahm Amendment Speech
This Hansard transcript deals with the "Deahm Amendment" to the Social Security Act passed in the Australian Federal Parliament in March 1995

Wednesday March 1 1995 1:53 pm
Maggie Deahm (Member for Macquarie)
Ms Deahm: The (clause) that I want to spend some time on is the amendment regarding exchange trading systems. This holds a particular joy for me, because I raised this issue with the Minister for Social Security in 1993.

It is particularly gratifying to me to find something that I raised personally has now reached the stage of being enshrined in legislation. In fact, when the minister was going through this bill with the caucus community services committee and he mentioned my involvement, the member for Moreton (Mr Gibson), said, "We will call this the Deahm Amendment." I am very happy to accept that.

The basic problem concerned people who were involved in exchange trading systems in my area and were dealing with the Katoomba office of the Department of Social Security - which was being conscientious; I am not criticising it in any way. Because this scheme was so prevalent in the area, social security recipients were asked whether they were involved in one of the schemes and, if so, how much they had earned in their credits under the program - ecos, as they are called in this particular area. Each eco was then counted as a dollar of income, so they lost their social security benefits.

The local group, called LETS - the local exchange and trading system - wrote to the Minister. The letter reads:

LETS income does not pay rates, electricity, gas or phone bills or provide food and shelter on a livable level. LETS does provide a situation where unemployed people can maintain their skill levels, gain experience in new skill areas and maintain a high level of self- esteem which ensures a healthier lifestyle and thus less strain on the National Health Care System

Mr Ronaldson: Great system.
Ms Deahm: Thank you. I am glad to hear the the honourable member for Ballarat thinks it is a good system, too. I immediately took this matter up with the Minister, who had a discussion with people from the LETS group, the Welfare Rights Association and a number of other groups who all added their contributions. After some discussion, the minister approved the dropping of this practice. Now we see it coming up in legislation.

One of the points made by the department was that these people were working in a formal situation but they were not very different from people who were working in an informal situation; for example, two people on sole parent benefits baby-sitting for each other with no money or credits being exchanged; they were gaining a benefit and they were doing some work in a sense. I am glad to see that that has been recognized.

In the Blue Mountains, where it is particularly active, it came out of a group know as the Coalition Against the Recession which started up a few years ago. Various groups were formed to look at how the local people could help those who were suffering under the recession. It included food collections where bins were placed outside the local supermarket. People could by an extra item and put it in the bin so that it could be distributed. The LETS program is one of the more permanent programs to come out of that initiative.

I have only the 1993 statistics, but at that time there were170 LETS programs nation-wide. The Blue Mountains group has 1500 members and the monthly turnover was 25,000 ecos. As I said, we count an eco as the equivalent of approximately $1. I understand there was no problem with people having ecos credited as income for tax purposes. Fundamentally, no-one has objected to that.
The great thing about the scheme is that it encompasses a wide range of workers including builders, plumbers, accountants, people doing tax returns, baby-sitters and lawn mowers. It is extremely beneficial. In my electorate the LET scheme has undertaken what is called a buddy scheme. Established members introduce and help new members in getting used to how the scheme works. They teach them the ropes, and, perhaps, teach them new skills.
A lot of people say to me, "I can't afford to employ someone to mow my lawn. I can't do it myself because I am not physically able. I can't get this sort of help under home and community care because there are higher priorities." The LETS program has responded to this by introducing what is called a community service fund. This invites
members of the group to donate either money, ecos or time to a fund from which the services can be provided for people in need - particularly the frail, the aged and disabled. So, I have been able to put the little old lady who cannot mow her lawn on to members of the LETS group and they have been able to do it for her.

The LETS group has also cooperated with a group known as Mission Employment. This is a skill share operation which is run by the Sydney City Mission in my electorate. They started a group called LET'S Work to promote the scheme to people who have been recently retrenched. As many of us know, when people are retrenched their initial thought is, "That's fine. I will have a little holiday." However, they start looking around for jobs and when they find nothing, their self-esteem drops, their confidence drops, and they are put in a position where they do not find it very easy to go out and get work.

Of course, their skills also drop. LET'S Work, together with the LETS group and Mission Employment, is there to get those people moving and also to teach them some of the skills that could earn them some ecos and keep them in work while looking for full-time employment.
The amendment to this bill removes the provision requiring that kind of exchange work to be counted in the income test for social security. However there are certain restrictions. Firstly, the normal activity test requires members to continue to look for appropriate work. They cannot say, "We are doing this for a living." They have to be looking for work. Secondly, cash amounts are not exempt. If they happen to get cash for any of those jobs, they must declare it.

Thirdly, the social security secretary must be satisfied that the system is a local community based system, the primary purpose of which is to help persons maintain their labour skills and keep them in touch with the labour market. It is not run with a view to making a profit.
Even with those requirements - the LETS group is certainly happy with those requirements - we have gained a victory in this case. I am very proud of the LETS program. There are several in my electorate and the members do a wonderful job. I was glad to hear the member for Ballarat endorse that.

Mr Ronaldson:- Yes, I have one in my electorate. They do a wonderful job.
Ms Deahm:- Thank you, I am glad to hear it. I support the issues in the bill. I do not think it appropriate to go through each one of them - that would be very boring. I just want to put on record my pleasure at seeing something that I lobbied for come to fruition. I also put on record my praise for and thanks to the LETS group for the great work it is doing.No opposition to this amendment was recorded in the ensuing debate.
Division 18 -- Exchange Trading Systems
Income test definitions:
42. Section 8 of the Principal Act is amended:
(a) by adding at the end of subsection (8): "if a person is a member of an approved exchange trading system -- an amount credited to the person's account for the purposes of the scheme in respect of any goods and services provided by the person to another member.

Note: For "approved exchange trading system" see subsections (9) and (10).";
(b) by adding at the end: (9) An Exchange Trading System is an arrangement between a number of persons ("members") under which each member may obtain goods or services from another member for consideration that is wholly or partly in kind rather than in cash. Each member has, for the purposes of the arrangement, an account:
(a) to which is credited: (i) the amount representing the value of any goods or services provided by the members to another member; or (ii) if the goods or services were partly paid for in cash -- the amount referred to in subparagraph (i) less the amount so paid in cash; and
(b) to which is debited: (i) the amount representing the value of any goods or services supplied to the member by another member, or (ii) if the goods or services were partly paid for in cash -- the amount referred to in subparagraph (i) less the amount so paid in cash."
(10) An Exchange Trading System is an approved exchange trading system if the Secretary is satisfied that: (a) it is a local community-based system; and (b) its primary purpose is to help persons maintain their labor skills and keep them in touch with the labour market; and (c) it is not a system run by a person or organisation for profit."

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