Mr KELVIN THOMSON(11.19 a.m.) —What the government is saying to us in relation to unemployment is: give us more time. Unemployment has gone from 8.5 per cent when we left office to 8.8 per cent now and the government says: give us more time. Given that when John Howard was Treasurer, he left us with unemployment at 10 per cent, does that mean that the electorate ought to give him time to bring unemployment up from 8.5 through 8.8 to 10 per cent? Plainly, the government has no answers in relation to unemployment.

They have said `Give us our industrial relations legislation.' They have said, `Let us cut the budget. Let us implement all the reforms that we want to do.' Then they look around and say, `Oh dear, unemployment has gone up. What are we going to do about it now? Are we going to introduce a GST?' It is always, `Give us our agenda and then something will happen in relation to unemployment.' In fact, they have no answers in relation to unemployment. It is particularly severe in regional areas, with 12.9 per cent in Gippsland and 12.9 per cent in other areas of rural Victoria.

The thing that I particularly want to put before the committee in consideration in detail is the future of the skillshares. I and other members have received correspondence from skillshares about where they will be left in this brave new employment services market world. The National Skillshare Association has pointed out:

. . . in the event that the government does not provide the advance payments we are seeking, the great majority of our more than 350 community organisation members will not be in a position to submit tenders for this important element of the new market. The inevitable consequence of this would be that many would be forced to cease operations altogether, with associated loss of valuable community infrastructure and dimunition of capacity, diversity and competition in the proposed market—particularly in terms of provision of assistance to the most disadvantaged unemployed people. We think it not unreasonable that the Government should set conditions for initial operation of the new market which recognise the particular and special circumstances of not-for-profit organisations and which give them a reasonable chance to adapt to the competitive environment the Government intends to create.

We have had correspondence from the National Skillshare Association to the minister which says:

Our own analysis of the financial parameters for providing employment assistance services under the terms set out in the Exposure Draft make it clear that even the most optimistic assumptions about client flows and outcomes achieved will still see organisations facing significant negative cash flows in the early stages of the operation of the market.

They go on to say:

It is entirely unreasonable for the government or the department to expect that the good citizens who comprise the Boards and Management Committees of sponsor organisations should expose themselves to the significant additional burdens and personal financial risks associated with borrowing funds so they can continue . . .

Similarly, Mr Deputy Speaker, we had correspondence from the Maylands skillshare. This is a Western Australian skillshare but it reflects the situation found by skillshares in my electorate and in other parts of the country that were set up by non-profit organisations. Maylands was set up by the Royal Western Australian Institute for the Blind. They point out that after February 1998 they will experience negative cash flows for at least three months until payments for the employment services provided are made.

They say that, having had to operate as not-for-profit organisations, skillshares do not have any cash reserves, let alone substantial ones. It is little surprise against that background that the Royal Western Australian Institute for the Blind has made the decision that it is unable to underwrite the temporary negative cash flow—at this stage estimated to be in the range of $45,000 to $70,000—and this leads to a scenario of the pin being pulled on Maylands skillshare. As they point out, it will be repeated with many skillshare organisations all around Australia.

Mr Deputy Speaker, I and a number of other members of parliament have also received correspondence from the north-east employment project where they have talked about Dr David Kemp's plan to spend $200 million on school based employment programs. They pose this question: is there any way in which Dr Kemp might be persuaded that effective, efficient not-for- profit organisations already exist, at least in Victoria, to do exactly the job for which he proposes reinventing the wheel?

That is exactly right. The abandonment of the CES—or the carve-up of the CES—in my view will lead to a disaster in terms of employment placement at the very time this community can least afford it. (Time expired)