Senator GREIG (6:26 PM) —I rise to speak on what is one of the most pernicious bills to come before this place. The Workplace Relations Legislation Amendment (Youth Employment) Bill 1999 will have the effect of consigning hundreds of thousands of young Australian workers to unequal pay for equal work under a discriminatory scheme which has no justification. What makes this piece of legislation even worse is that the only reason we are debating it at all is because the Labor Party has col luded with the government to sell out young Australians dirt cheap in a dirty deal. Under the terms of this deal, the Australian Labor Party will flout a tenet it has long held as inviolate: that work of equal value should be paid equally. In the context of yesterday's call for a return to basics by the Labor opposition, this betrayal of the principle of fairness for workers is even more shameful.

Not surprisingly, the announcement by the ALP last week that it would turn its back on five years of opposition to youth wages and discrimination against young workers and vote with the government was met with horror and anger by union and youth representatives, who had thought that they could at least rely on the ALP to hold firm on this issue. Up until last week, this faith was well placed. Hansard is full of grand speeches from the members of the opposition detailing their strident opposition to youth wages. How quickly they have recanted on five years of what has amounted to little more than empty rhetoric, and what a pity it is that so few have come forward to explain themselves this evening.

The opposition to youth wages is well founded, and workers and young people have every right to be livid with the opposition. The opposition of the Australian Democrats is similarly well founded, and I would like to set out the reasons this evening, although the objections to the government's youth wages proposals have been on record for years now. Our opposition is concentrated in three areas: the effects of the retention and extension of youth wages on young people, the current state of the labour market, and the possibility of viable alternatives to age based discriminatory wage levels.

At the outset, two points must be emphasised and understood. Firstly, the alternatives that were proposed to youth wages do not involve the abolition of differential rates of pay but rather their replacement with competency based rates, and consequently many of the arguments being advanced for their retention are irrelevant. Secondly, the government proposed not only the retention of youth wages in existing awards but also their extension to awards where they do not currently exist. Make no mistake: the government is not about retaining the status quo but is about reducing the income levels of thousands of young people. Now the ALP is labouring under the illusion that the deal they have brokered with the government prevents this extension from happening. It does no such thing. In fact, it leaves the way clear for extensions to take place on application to the AIRC. Furthermore, these applications will take place within the context of the de facto approval by the parliament of youth wages as an employment generating measure—a contention which has never been proven.

It cannot be denied that youth wages are discriminatory and grossly unfair to young workers. They fundamentally contravene the equal pay for equal work principle, enshrined in the international labour and human rights conventions to which Australia is a signatory. On this basis alone, the Democrats have significant concerns with the government's attempts to flout its promise to examine non-discriminatory alternatives.

Young workers do not have access to junior rates of rent, food or clothing and only full-time students qualify for travel concessions. Young people incur the same costs of living as adult workers, yet many receive heavily discounted incomes. Those aged over 18 are deemed to be adults by our society: old enough to vote, to drive, to drink, to be tried as adults, to undertake financial obligations and so on. Yet this government believes they are not mature enough to be paid an equal rate for equal work with their older counterparts.

Over the past 20 years in Australia, real wages have declined markedly for young people, despite a significant increase in adult wages over the same time. Real wages for young males have fallen by 18 per cent from $395 in 1976 to $322 in 1996. Real wages for young women have fallen by 12 per cent from $361 in 1976 to $316 in 1996. Over the same period, real wages for adult males have increased by seven per cent and by 12 per cent for adult females.

Furthermore, youth wages undermine the value of youth labour by determining the worth of a young worker according to her or his age, rather than skill. This perpetuates the view that youth labour is of less worth than adult labour, a view often based on intangibles such as maturity when in many cases, particularly in the sectors which tend to employ young people, the work of differently aged workers may not differ in any material way. This raises the potential for young labour to be exploited: most young workers do not belong to a union and many work in insecure, casual or part-time jobs with cut-rate pay.

Youth wages are profoundly inequitable and should be resisted for that reason alone. The Australian Democrats are aware of the need to examine means of creating job opportunities for young people but do not believe that wage reductions are the way to achieve this. Those who seek the retention and extension of youth wages claim the alternatives would be worse. However, this argument ignores the real nature of the type of work most young people do. The majority of young people are employed in the retail and service sectors. The type of work they undertake shares a number of common requirements: flexibility, projection of a particular image or marketing strategy, adaptability to new sales processes and technologies, and physical stamina.

The growth in the consumer market, particularly the youth consumer market, has increased the demand for highly productive, easily trained and flexible employees who reflect the image and marketing of particular retailers or service providers. These are clear incentives other than cost to hire young people and should not be discounted in the debate over the effect on employment opportunities for young people of replacing youth wages with competency based rates. Both Mitsubishi and Holden have recently abolished youth wages, recognising the value of their younger employees and understanding that workers should be paid according to skill and productivity, rather than according to an inflexible model which offers them no incentive as workers to improve their competency or productivity.

The nature of youth work has also changed markedly. Youth wages grew out of the apprenticeship tradition, which involved a clear, training/wage level trade-off between employer and employees, long-term job security and a basis in pay increments according to skill acquisition. The past decades have seen a massive reduction in the number of apprenticeships and traineeships, in favour of institutionalised training, usually at the student's own expense. Most work undertaken by young people is low skilled, involving minimal training which generally takes place in the first months of employment, with all employees retained on the basis of their acquisition of a particular level of competency, regardless of their age.

The justification posed for the retention of youth wages is that they have a positive effect on youth unemployment levels. This argument is put in the absence of any supporting evidence. Youth unemployment levels have continued to rise since the introduction of youth wages. In fact, the youth unemployment rate has undergone a more rapid rate of increase since 1968 than that of any other group in our community. The unemployment rate of 15- to 19-year-old males was 2.9 per cent in 1968, compared with the current rate of 25.3 per cent. For females it was 3.9 per cent in 1968, compared with today's rate of 27.9 per cent.

Young people have been severely impacted by the effect of recessions on the pool of available employment. The entry level positions which used to be available for young people no longer exist. The state and federal governments have greatly contributed to this through the substantial reduction in Commonwealth and state public service positions. Today there are next to no under-20-year-olds working in the public sector, yet the government continues to place the blame for youth unemployment on young people.

Under current federal employment policies, which have halved funding to employment assistance, most young people are no longer eligible for intensive work search assistance. One of the most dangerous effects of this legislation is that it will serve as a proxy for the real action that needs to be taken to create jobs for young people. Minister Reith's employment agenda is all about wage and condition reductions to try to spread available work more thinly, extending the growing numbers of the working poor in our society. Now the opposition will also be able to enjoy the protection of this proxy, thanks to its complicity in the perpetuation of the myth that all that is needed to address youth unemployment is to keep youth wages below subsistence levels.

The Democrats do not accept this agenda and will resist the government's attempts to shirk its responsibility for job creation. This is a government which last November reneged on its commitment to invest in job creation through industry support and instead prefers to pursue a regressive approach which will reduce the income levels of hundreds of thousands of Australians. This legislation breaks faith with young people. Is it any wonder that young people are becoming increasingly cynical and disenfranchised with the political process? It is based on little evidence that it will lead to job creation and, as presented, is deeply flawed.

The minister is fond of quoting employer surveys in his favour, conveniently failing to mention that they are based on selective sampling, misleading questions and that, even so, the results show employers citing other reasons than merely the cost of hiring young people. International evidence is similarly inconclusive and cannot support such an inequitable policy. Past Australian experience shows that the reduction of wage levels has little effect on unemployment levels. For example, between 1981 and 1983, youth wages declined relative to adult wages but youth unemployment rose by a 64 per cent. In 1992, the Reserve Bank of Australia stated:

The recent deterioration of the youth labour market does not seem to be due to any change in relative wage levels, which have been declining steadily since the mid-1970s.

The same arguments being advanced now for youth wages were put in favour of retaining gender based differential rates of pay. Yet the disastrous effects that were predicted to result from paying women the same rates as men for work of equal value never eventuated.

In our submission to the Australian Industrial Relations Commission inquiry, the Democrats argued for the replacement of discriminatory, age based junior rates of pay with a competency based structure. Young people must also be offered training to develop skills and receive appropriate remuneration through wage increases as their competence increases. This would recognise the value of youth labour, and end the discrimination and exploitation that currently exists in over half of industrial awards.

The government wants to entrench youth wages where they exist and extend them to all awards. In doing so, it is breaking its promise to wait for the AIRC to examine non-discriminatory alternatives, proposing the drastic reduction in pay rates for hundreds of thousands of young people and turning its back on positive job creation. If the government is serious about creating job opportunities for young people, it would do far better to direct its employment efforts towards extending eligibility for job search assistance to young people, improving access to education and training, and making and maintaining commitments to investing in sustainable industries to create meaningful and secure jobs.