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Wednesday, 1 June 2005
Page: 208


Ms KING (5:03 PM) —In this debate on the appropriation bills I want to focus on the attempt by the Howard government to laud itself as the friend of working families. It is true that since 1996 the Howard government has used a range of tactics to capture the votes of low- and middle-income families. It has revived this pitch recently in the Prime Minister’s address to the Menzies Research Centre and the constant mantra at question time. The Prime Minister knows that to keep government he needs the votes of low- and middle-income Australians. He knows that, were this group to return to Labor, he would be out of office.

At the same time the Prime Minister remains beholden to a set group of interests in the community, largely dominated by big interests but also those of independent wealth. Everything he does and says should be seen through the prism of these two interests: capturing the votes of middle- and low-income families and servicing his interest groups. It has been a fine balancing act, but when you bother to actually study the detail of what he has done and his policy approaches, you see that that is exactly what it is: an act. Far from being the friend of working families, this Prime Minister is more like the wolf in sheep’s clothing. In this debate I want to examine some of the key policy challenges facing families at the moment and the reality behind the myth generated by the Howard government that they support working families.

The self-proclaimed workers’ friend in this year’s budget failed to deliver any real package to address skill shortages—to train more Australians and to provide opportunities for the kids of low- and middle-income families to acquire a trade. He failed to actually assist people from the lowest income families from welfare to work and has presided over a growing inequality between high-income and low-income families. He failed to seriously tackle the propositions put by Labor for real tax reform, preferring to give the highest income earners a tax cut while not seriously tackling those in the middle. He has overseen a further erosion of the social wage through both his backflip on the Medicare safety net and now the introduction of his extreme industrial relations agenda.

I turn firstly to the issue of skill shortages. The most recent figures clearly show that the Howard government has presided over a massive skills crisis. Far from improving, the Department of Employment and Workplace Relations skilled vacancy index shows the shortage of skilled workers is getting worse. As with infrastructure bottlenecks, the shortage of skilled labour is restricting the economy’s productivity and its capacity to grow. In regional Australia we face a shortage in both the traditional and the professional trades. However it is in the area of traditional trades that the crisis is most acute. The Howard government’s new apprenticeship program is not offering a pathway to traditional trades to the unemployed. The only path many Australian companies can now take is to look overseas for skilled labour. Australia is already ranked third in the OECD for reliance on skilled migrants to address skill shortages.

The effect of this policy failure is that we now have around 200,000 teenagers not in education or full-time work. Government members may well point to the increase in the number of new apprentices in the retail or hospitality industry. Despite the government’s rhetoric, many of us on this side of the House value the skills and experience gained in these industry sectors. In fact many of us on this side of the House have worked pretty extensively in those sectors. However, these industries are characterised by part-time casual work and predominately employ kids after school. It is an important thing to do, but they are not trade apprenticeships. We know that 40 per cent of apprentices who commence an apprenticeship in a traditional trade drop out. The government has done nothing to actually provide incentives for apprentices to complete their trades. This means that of the 580 apprentices who commence a traditional trade in Ballarat each year 230 are dropping out. The government has dropped the ball on this issue. This is just another example of its complacency.

OECD studies consistently indicate that failure to make an early transition to permanent work or full-time study is associated with long-term risks of marginalisation, helping to trap people in a cycle of unemployment, part-time work and government schemes—which many of my constituents are, sadly, all too familiar with. This is also one of the reasons why Labor proposed providing more vocational options as part of school based apprenticeships. Nine long years of Howard government failure has created a skills crisis that is hurting Australian businesses and families. The Howard government has dropped the ball on training, and this year’s federal budget clearly showed it has no idea how to pick it up again. Instead the Howard government’s response to the skills crisis was a quick fix, short-sighted approach. The only new skills initiative in this year’s budget is an increase in skilled migration, with an extra 200,000 skilled migrants instead of focusing on training Australian kids first. This government has created not only a nation of unskilled workers but a nation living on the margins, struggling to make ends meet.

A study carried out by the St Vincent de Paul Society has exposed the reality of John Howard’s Australia—or perhaps to be more precise I should say ‘Australias’. We have become a more unequal society under this government, a chasm that will widen after the government implements its new tax cuts. The Prime Minister and the Treasurer continuously boast about the fact that their government has presided over the strongest growth in private incomes and that they have created the miracle economy. The Howard government has been trying to brand itself as a great friend of the average Australian worker. This is about as believable as saying that Tony Abbott is the best friend of Medicare or even that Brutus was the best friend that Caesar ever had. The claim that the Howard government is a friend of the Australian worker is a myth. The Howard government showed in this year’s federal budget that it was no friend of the ordinary working family and especially of those low-income families struggling to move from welfare to work.

Over the last few weeks, the Howard government has laid claim to creating a more equal Australia. However, nothing could be further from the truth. The Howard government has cited NATSEM figures showing a 163 per cent increase in private incomes for the bottom 10 per cent of households over the eight years to 2002-03 compared to 38 per cent for the top 10 per cent. Suddenly, after years of denigrating NATSEM, the Prime Minister is out there discovering the ‘good’ Ann Harding. However, the St Vincent de Paul report The reality of income inequality in Australia highlights the fact that the actual increase for the bottom group was $26 a week, from $16 to $42, compared to $762 a week, from $1,989 to $2,751, for the top group. I can imagine speaking to a teacher, cleaner or child-care worker in my electorate and telling him or her that if they receive an income rise from $10 to $50—500 per cent—it is better than a CEO income rise from $1 million to $1.5 million. It really does not add up.

After nine years of unbroken economic growth, far from making the lives of average Australian families more comfortable, the Prime Minister has plunged 30 per cent of households into poverty, and middle-income families are relying more and more on debt to keep their heads above water. In the electorate of Ballarat, over 14,000 people, including over 4,000 children, are living in poverty according to Commonwealth census figures that show huge wealth disparities across Australia. The research also showed that rural Australia has much higher rates of poverty than cities, with almost 12 per cent of rural people living in poverty compared with 7.6 per cent in inner suburbs.

It is widely acknowledged that work is the best way to get people out of the cycle of poverty and to re-engage them with the mainstream community. We know that many of the people on Centrelink payments such as the disability support pension and single parenting payments require additional training to move into the work force. A government serious about helping struggling families would not be spending three times more on compliance in this budget than they are on training measures. A real friend would give such people a hand up, but the Howard government has gone for the handball, shifting them from one welfare payment to another that is punitive and provides a lower level of financial assistance.

It is also a package that provides more cuts than carrots. While the $1.5 billion invested in child care, wage subsidies and employment assistance for people with disabilities is welcome, that is almost totally offset by the $1.4 billion of cuts to payments and employment assistance. We cannot actually get the figures on this because, despite the fact that the government has put its measures in the budget and it has calculated those measures in the budget, it is refusing to provide that information to one of the Senate estimates committees that has been holding hearings this week. I ask the government what it has got to hide.

Five hundred million dollars has been cut from Job Network employment assistance, which means that the level of help, training and work experience available to people who need to skill up to get back to work will be inadequate. The Australian Council of Social Service already considers the current level of assistance for training and other assistance for most job seekers as inadequate. Cuts to employment services will affect the most disadvantaged Australians, who have low levels of skills and education and who have little more than $200 a week to live on.

It is not only the lack of adequate skills training but also the lack of incentives to move from welfare to work that is such a shame in this budget. Raising the lowest marginal tax rate from 17 to 15 per cent will not be enough to move people off welfare and out of poverty into work. In fact, the Howard government’s Welfare to Work scheme actually decreases incentives for welfare recipients to engage in paid work. This is despite yet another OECD report highlighting the fact that stronger incentives are needed to move people from welfare to work.

This shines a light on the true motives of the Howard government’s move to force single parents from the single-parenting payment to enhanced newstart or the new dole, which will begin to be withdrawn earlier and at a higher rate than existing payments. Parents who move from the lower newstart payment will face higher effective marginal tax rates than they otherwise would have on the pension income test. That means that, under the new scheme, welfare recipients keep less private income earned than they would have under the existing system, robbing them of the incentive to work and the opportunity to become more independent of welfare payments. Again, as with tax reform, the opportunity for welfare reform has been squandered in this budget, as has the opportunity to assist low-income families into meaningful work.

Nothing shines a light more clearly on the true colours of the Howard government than the tax cuts contained in the budget. The tax cuts were for the top end of town, not for the nurses, policemen, teachers and tradespeople of Australia. The budget exposes the masquerade that the Howard government is the friend of ordinary Australian families. It openly celebrates the growing divide in household incomes in our communities. After becoming Australia’s highest-taxing government, the Howard government has decided to provide $22 billion in tax relief, but it is unfairly skewed towards the top end of town and it is still the little people who are going to be carrying the burden.

This is a budget for the Liberal Party heartland, not a budget for the ordinary men and women of Australia. The Treasurer has been unable, in either his commentary in the media or the consideration in detail on those bills, to give any reason for not supporting Labor’s fairer tax package. He has never substantially addressed the amendments moved by Labor, preferring to hide behind a procedural debate rather than account for why he has skewed the tax cuts in this way. The reality is that, while the government knows that it needs to keep middle-income earners happy, two years before the election it is not that worried about wearing some flak over providing a small amount of tax relief to middle-income families while also providing substantially larger tax cuts to Liberal Party interest groups.

At the same time as providing tax cuts skewed to families on higher incomes, the ‘worker’s friend’ has been busy eroding the social wage. What Howard has given in cash advances to low- and middle-income families he has taken back in increased medical costs. We have seen the Medicare safety net backflip—the safety net that was supposed to fix up the mess that the Prime Minister had made of Medicare. He has gone back on that as well. Private health insurance premiums have been increasing. There is also the GST, which was the pride of the last two elections. There are also issues with the Pharmaceutical Benefits Scheme, and petrol prices are increasing. Not satisfied with this, the Prime Minister wants to further erode working conditions for Australian families through an extreme industrial relations agenda.

History is a great teacher. The Prime Minister’s record of opposing every minimum wage case since coming to office tells us how much the Prime Minister’s friendship means to low-income families. In 1997 the government sought a wage increase that was $2 a week less than that awarded by the Australian Industrial Relations Commission. In 1998, it was $6 less; in 1999, $4 less; in 2000, $7 less; in 2001, $3 less; in 2002, $8 less; in 2003, $5 less; and in 2004 it was $9 less—totalling $44 a week, or $2,300 a year, less if the government’s view had prevailed. Are these the actions of a friend? I do not think so.

Under the government’s new reforms, the Australian Industrial Relations Commission, the independent umpire, will be stripped of its powers in setting the minimum wage and award wages. The Howard government has reduced the role of the AIRC to that of merely a spectator of industrial relations. Can you imagine the umpire Dickie Bird being told that he had to sit in the stands and let the Australian and English cricket teams sort things out? That is basically what the Prime Minister has done in terms of the Australian Industrial Relations Commission.

The Prime Minister stood up in parliament yesterday and defended the independent umpire of the politicians’ wages, the Remuneration Tribunal. The federal government wants to abolish the independent umpire for low-wage workers, and it is currently arguing against a $26.60 a week minimum wage rise in front of that umpire, the Australian Industrial Relations Commission. Why does the Howard government hate the independent umpire for minimum wage workers, the Industrial Relations Commission, but seem to think that an independent umpire is perfectly okay for politicians? These are double standards. Patrick Gourley summed this up well in yesterday’s Canberra Times:

Let’s be clear: the Government has knackered the Industrial Relations Commission because it has, since 1996, given those on a minimum wage $44 a week more than the Government wanted. The entire rationale for the FPC, about which the Government will not be frank, is to dampen the rates of increase in minimum wages so that pay for 1.5 million people dependent upon awards will increase at a slower rate than those on higher wages.

It is not just the Australian Industrial Relations Commission that the Howard government is setting about dismantling with the awards system reforms. The number of allowable matters is being reduced from 20 to 16. Gone will be shift penalties, annual leave, long service leave, bereavement leave and jury leave, just to mention a few. While the impact of the Howard government’s reforms are unlikely to be felt by the Australian worker in the short term, there is no doubt that over time the Australian Fair Pay Commission will leave workers worse off, a fact confirmed by the Prime Minister’s refusal to say otherwise—his absolute inability to give a guarantee that no Australian worker will be worse off under these changes.

I want to talk briefly about a case example from my electorate and about some of the things that can happen. In my electorate, Telstra Country Wide has a large call centre which is fantastic. It provides great employment for people in my district. However, Telstra has contracted out the employment for that call centre to a labour hire company. All of the workers under that labour hire company are not employed by Telstra and they are not subject to the EBA conditions to which other Telstra workers are subject.

Quite recently Telstra Country Wide wanted to change the shifts at the call centre. Without any consultation with the work force, which is what the EBA for Telstra workers required, Telstra decided to extend and change a shift, which would have required people who are now working a fairly reasonable amount of time during the day to work fairly late into the night. A large number of women in this industry work part time while their children are at school. They are supplementing the family income. The changes that were going to be forced on them by the labour hire company at Telstra’s behest meant that the workplace was no longer going to be family friendly. If this government thinks that implementing those sorts of changes—forcing people onto individual contracts, not allowing them to be part of enterprise-bargaining agreements and particularly agreements that cover companies such as Telstra, and allowing companies to suddenly change workers’ shifts without any consultation or without allowing them to put a case as to why it would be very difficult for that type of work force to comply with those changes—is being family friendly and being the friend of Australian families then the government is kidding itself.

The industrial relations reform agenda that the Howard government is bringing to this place is not friendly to families. If the government thinks it is, it needs to go out to Australian work forces and talk to people about their living conditions and their expectations of balancing work and family. If the government does that, it will see that its reform agenda is not family friendly.

The self-proclaimed workers’ friend has targeted low- and middle-income families as systematically and doggedly as he went after the Liberal Party leadership. It was a long-term agenda. He sees them as a group that has to be captured—families that have to be wooed and votes that have to be bought. He sees them as a commodity that is of use to him to be bought for the highest price. When we examine the Howard government’s record closely, we see that its claims and commitments to the Australian worker are little more than clever, deceptive marketing and spin—and it is spin that has worked: the broken promises, the Medicare safety net, interest rate rises, the never-ever GST, the unfair tax package, tax cuts for low- and middle-income families and larger tax cuts for high-income families, the erosion of the social wage and now the extreme industrial relations agenda.

This government is not a true friend to Australian families. Its friendship stems from political opportunism and self-preservation. As Australian families start to wonder why, despite the trappings of material wealth with which they have surrounded themselves, they find they have a creeping despair about their level of debt, the future of their children, whether their jobs are secure and whether they will have the resources ever to retire, perhaps it is time for them also to wonder whether the self-proclaimed workers’ friend, this wolf in sheep’s clothing, has all the time just been pulling the wool over their eyes.