Senator STOTT DESPOJA (8:00 PM) —Perhaps the best way to describe the budget is as a missed opportunity. The government had an opportunity and a chance to address some of the major issues confronting Australian society and the economy today. It could have done that through a range of innovative policies and the continued funding of proven successes. Instead, and perhaps somewhat unsurprisingly, the government took the same old route of slashing funding and withdrawing entitlements from the sectors of society that need them most. I would like to concentrate this evening on a couple of issues where the government has been quick to recognise the problem but very slow to provide answers, if any.

Foremost among these is the issue of unemployment, and youth unemployment in particular. For a government which likes to claim fiscal expertise and responsibility, the coalition has been stubbornly asserting that simply relying on high growth is one way of delivering jobs for the 8.1 per cent of Australians who are still out of work. This is in the face of a financial crisis in the Asian region and the potentially looming recession and depression in Japan. The simple equation that high growth will necessarily result in lower unemployment or an increase in job creation is an extraordinary assertion when you take into account some of the other economic and social factors.

The Committee for the Economic Development of Australia stated in May this year that growth would not be as high as predicted and certainly not high enough to deliver the jobs that were promised by the government. It was certainly not high enough to deliver the growth rate predicted in budget papers, let alone when the government first came to office almost three years ago. It identified investment in human capital and research and development as the means by which employment can be created. This is certainly a position that has been long advocated by the Democrats. You have to have a measure of intervention. Governments have to be positive and active in the focus of job creation.

Only today it was revealed by the Australian Bureau of Statistics that 3,000 businesses across Australia have indicated that they plan to cut jobs by almost one per cent in the coming year due precisely to the Asian economic crisis. Furthermore, a survey of 11 academic economists has indicated that it is very likely that Australia will be in recession for the next two years. The government clearly cannot try to perpetuate this assertion that economic growth will deliver jobs, because this is simply not going to happen.

The other answer we get from government and Treasury officials when we are talking about the answer to unacceptably high levels of unemployment has been the idea of the introduction of a competitive employment services market to replace the former government run service, a universal service that was publicly funded and accessible to all. But we have now seen the absolute privatisation of employment services in this country and their replacement with a competitive market privatised employment service.

It is interesting to note that the government has also treated this reform as an opportunity for cost cutting and for profit making with its service provider, Employment National, directed to make a profit at the expense of job creation. Approximately $37 million was saved through a tender process which favoured cheaper bids. This comes on top of the $1.8 million that has already been cut from the provision of employment services. With a large number of smaller providers trying to remain open—almost struggling to remain open—and hampered by the unviable contracts they have been awarded, and a lack of promised referrals from Centrelink to provide them with the necessary capital, the Democrats urge this government to bring about a review, a review that was promised for the end of the year. The least the government could do is refund the $37 million which the Treasurer, Peter Costello, boasted of saving.

The government must undertake some positive action to create jobs. It cannot simply rely on the rhetoric of growth increasing. This budget has attacked some of those very measures and strategies that were responsible for assisting job creation such as labour market programs. But this, like other budgets, has seen cuts to these very areas. Of course, we have seen cuts to the processes by which unemployed people are assisted in looking for work.

One of the remaining few schemes, the highly successful new enterprise incentive scheme, also suffered a budget cut. Even a scheme that was demonstrated to have positive and high results in terms of placement suffered a budget cut of $8 million, leaving it with $25.5 million to carry out its work of encouraging unemployed young people in particular, but unemployed people generally, to start their own businesses.

Despite its rhetoric that unemployment `is the single most important issue facing Australians', this government evidently feels that it is not important enough for it to take positive action—some form of interventionist action, some kind of action to create jobs. It is relying instead on unlikely growth. This government is not prepared to monitor and fix some of the flaws that beset its new employment assistance service. It is a $1.66 billion Job Network gamble.

This government continues to slash funding to job creation and to labour market programs. Sadly, one area where the government has been willing to take some action has been in attacking young people. I note for the record that tomorrow is the last day that young Australians will have an effective national representative peak body. The government's decision to axe the Australian Youth Policy and Action Coalition, known as AYPAC, makes Australia one of the unique nations amongst OECD nations in terms of our lack of a national, universal and peak representative body for young people.

This is a mean-spirited, ideologically motivated decision, designed to silence the voice of young people the day before—and I suggest that this timing is rather coincidental—the introduction of the new income support system for young Australians, the common youth allowance. This is a policy that will see many thousands of young people cut off from benefits and dependent upon their families for support. By the government's own admission, this is going to happen. We are going to see tens of thousands of young people either losing support completely or having their benefits reduced.

There are a number of nasty measures in this legislation. Before the Minister for Social Security, Senator Newman, insists on correcting the record by saying that there are some positive elements, people have acknowledged that the streamlining of income support payments is a positive thing. Ensuring that people do not have to run between one department and the next, say, the Department of Social Security for unemployment benefits or the Department of Employment, Education, Training and Youth Affairs for Austudy, if you are a student, that you do not have to have that kind of administrative bungle or inflexibility, is a good thing.

However, it seems that the government has taken the lowest common denominator approach. So you have an income threshold that kicks in—just over $23,000 per annum; you have ages of independence which are absolutely concocted. They are a sham—to think you do not qualify for the independent rate until the age of 25 if you are a student or 21 if you are young and unemployed. Do not forget that this common youth allowance also allows for 16- and 17-year-olds who are not in employment, education and training to be completely knocked off benefits. We are still yet to hear from the government how those families, potentially struggling families, are going to look after their essentially old teenagers or young adults. But then again the government does not consider people independent or of adult status until 25 in some cases.

So there are regressive, indeed nasty, parts of this legislation and this policy framework that the government has yet to explain or rationalise in a way that makes sense to ordinary Australians. It makes sense if you are a hard-nosed government that wants to meet a budget bottom line and does not factor in social, intellectual and other deficits that can impact on a society as equally as can a budget deficit.

The government is actually going to spend $3.8 million on an advertising campaign to convince young people that the common youth allowance is advantageous to them and $4.5 million on telling young people about youth issues. Yet it will only put $225,000 into giving young people any access to policy development. This is only twice a year, so a select few—roughly 50 people—will meet for a round table experience with Minister Kemp.

Senator Conroy —What's second prize?

Senator STOTT DESPOJA —I can see people lining up for that one! You will have to get in line, Senator Conroy! So entitlements have been cut for over 45,000 people.

I point out, as an aside, that even some of those advertisements have met with some challenge and wrath from members of the community. I know that there is one advertisement running now, which members of parliament may have seen, in which the actor playing the role of father, referring to his younger daughter, talks about the common youth allowance and all the great benefits it is going to bring young people. He then makes an offside comment that he will not necessarily be there and who is she going to have there to give her a `kick up the bum'. I think members might have heard that some members of the public have complained about the overtones of that ad. They cannot even get their ads right. If it is going to spend more money on the advertising than it is on young people's representation, the government could at least get it right.

This budget has shown once again that the government has no answers to unemployment, that it prefers scapegoating young people, cutting funding and shutting down services to taking positive action to stimulate jobs growth, job creation and providing assistance to those who need it most.