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Thursday, 8 September 1983
Page: 597


Mr CONNOLLY(4.59) —I should congratulate the honourable member for Canberra (Mrs Kelly) for her contribution to the examination of public administration in recent years, especially for the role she played in the preparation of the Report of the Selection and Training of Senior Managers which was the 202nd report of the Public Accounts Committee. I feel however that the Department of Finance Minute procedures, which will enable this Parliament to see what the Government's views are on our recommendations, would be a more appropriate opportunity for us to debate the questions of public administration, notwithstanding of course the fact that there are very real problems in that area.

The issue before us today is unemployment. It is for that reason that I wish to address specifically that area. This Bill has the principal purpose of ensuring that the Government's community employment program, which the Opposition parties support, will be implemented in full by all government departments, statutory authorities and instrumentalities which are responsible to this Parliament. Some $300m has been made available for the community employment program during this financial year. I understand that some $50m will be made available to Federal departments and authorities at this time.

Under section 82 of the existing Public Service Act, which is subject to amendment in this Bill, applicants to temporary positions have to be chosen on the basis that he or she would be best qualified. That of course has traditionally been the principle of selection within the Public Service and one which the Opposition parties certainly endorse. However, in the context of major unemployment, especially youth unemployment, which the nation is facing, there is no doubt that the question of need must be taken into consideration. That is why we agree with the proposal in this Bill that the definition be amended insofar as it refers to personnel who will join the Service as a result of going through the community employment program. Therefore, we must seek people who are best able to gain something because of their needs caused by long term unemployment.

On the general question of unemployment, recent statistics from the economic intelligence unit of the Organisation for Economic Co-operation and Development in Paris-of course, Australia is a member of the OECD-predicted the very sad situation which faces not only this country but all the other Western nations as well. It suggests that rising directly from the micro-processor revolution 35 million people will be unemployed in the world's major industrialised nations by 1985, leading, it suggests, to an even more staggering 65 million to 70 million by the mid-1990s. It follows therefore that solving the unemployment problem in this nation as elsewhere is the most vital task for all governments in the industrialised democracies. On the second of this month, the Sydney Morning Herald made the point:

High unemployment is here to stay. That is the gloomy message in the Federal Government's Budget Papers. In the face of this prediction, questions are being asked about the wisdom of the Government's $300 million community employment programme (CES) for short term job creation which was announced last month.

The guidelines which have been set down for the CEP are very specific. Its target group is those who are least likely to benefit from improved economic activity; that means those who have been looking for work for a long period as well as those who are disadvantaged in the work force, such as Aborigines, migrants with language difficulties and the disabled. The Commonwealth proposal to fund this program at a cost of $1.3 billion over three years is estimated, according to the Treasurer (Mr Keating), to create approximately 40,000 jobs of an average six months duration, in this financial year. It is hoped that there will be an increase of some 70,000 jobs a year when the scheme is in full operation. However, if one is prepared to judge that on the basis of jobs for three to six months duration alone, it suggests to me that it is creating employment over only a 12-month period for approximately 35,000 people only, which is certainly not the impression one gains from reading the releases of the relevant Ministers.

While some are likely to benefit from greater work skills and boosted morale, it is an unfortunate fact that many more could end up back on the dole queue even more disillusioned than before and, in many cases I would suggest, even more disadvantaged. The Government admits that the scheme will do nothing to reduce the level of unemployment overall. We must note that, by the end of June this year, some 720,000 Australians were looking for work. That is a rate of 10. 3 per cent. Today's unemployment statistics reveal that only 100 jobs, in seasonally adjusted terms, have been created since the Labor Government came to power. In fact, between July and August, 52,000 jobs had been lost. Since March, the unadjusted figures show employment has fallen by an enormous 68,300. It is therefore difficult to see why although the Prime Minister (Mr Hawke) has seen fit to boast on the basis of last month's figures that Labor's policies are already putting Australians back to work. Quiet clearly on the basis of the statistics announced today, that is not so. As a member of the Opposition I do not draw any satisfaction whatsoever from having to make that observation. Nevertheless, as a parliament, all Government and Opposition members alike must appreciate the realities of the problems facing Australia and see what we can do to solve them. Mere histrionics will not achieve that. The continuing very high level of unemployment and the fall in the participation rate are obviously reminders to us all of the difficulties of trying to apply a wages policy which will return full wage indexation regardless of capacity to pay and industry productivity. The fact that some 52,700 people actually left the work force in August obviously shows a lack of confidence in the ability of the Government's programs and policies to create new permanent jobs. I seek leave to incorporate a table in Hansard.

Leave granted.

The table read as follows-

JOBS: CIVILIAN LABOUR FORCE

Raw Figures

Unemployment Participation 1983

Employment Unemployment Labour Force rate rate

March 6,300,800 731,600 7,032,400 10.4 61.3

July 6,284,500 684,800 6,969,300 9.8 60.4

August 6,232,500 684,100 6,916,600 9.9 59.8

March/Aug. -68,300 -47,500 -115,800 -0.5 -1.5

July/Aug. -52,000 - 700 - 52,700 +0.1 -0.6

Seasonally Adjusted

Unemployment Participation 1983

Employment Unemployment Labour Force rate rate

March 6,263,200 713,200 5,965,100 10.1 60.7

July 6,282,800 718,600 7,001,500 10.3 60.6

August 6,263,300 713,200 6,976,500 10.2 60.3

March/Aug. + 100 +11,300 +11,400 +0.1 -0.4

July/Aug. -19,500 - 5,400 -25,000 -0.1 -0.3

Based on ABS figures.


Mr CONNOLLY —I thank the House. According to the Budget Papers, the Treasury expects unemployment to grow rather than fall during 1983-84 from an average of 540,000 a month last year to an average of 680,000 this year. Of course this is partly due to the fact that the labour force is expected to grow at a rate faster than employment. However, employers will need firm evidence of improved profitability and demand before they are again likely to hire labour. In addition, jobs lost during the recession are not likely to be replaced as they have been effectively wiped out by labour-saving investments. Therefore, quite obviously we must seek new areas of employment and keep control over wage costs. The Treasury has suggested that any wage rises higher than the 7 per cent forecast could result in another increase in the jobless rate. That is obviously so, because the Government has already stated that it believes a minimum wage increase of at least 4 per cent will have to be taken into account by the Australian Conciliation and Arbitration Commission.

I would like the House to give further consideration to what the alternatives to the CEP may be. I refer specifically to the possibility of providing small capital loans or grants to selected unemployed to set up small businesses. Local community groups comprising businessmen, retired bankers, accountants and so forth could well provide expertise which should be used as a basis for advising unemployed people to enter into regional or local enterprises which would meet the requirements of the community. Undoubtedly some of these would be successful and, from that success, in turn additional employment opportunities would develop for others. Such an approach would not be more expensive than the present scheme. It could well be substantially more useful and undoubtedly less wasteful. At best I believe that the CEP will affect fewer than one in 10 of the unemployed. It may have been a more courageous and constructive advance for the unemployed if the funds allocated for the CEP had been made available to the unemployed, to set up businesses which would at least contain the potential to give them continuing independent income. For example, a loan of $8,500 which is the basis of the cost to the Government per individual entering the CEP could well be enough to set up many in their own small businesses and thus achieve independence. Ken Davidson of the Age in an analysis of the CEP recently made the point that it:

. . . resembled little more than an unimaginative rehash of the Whitlam Government's regional development scheme.

I have to say on record that, while I believe the administration of the regional employment development scheme-the RED scheme-was in many respects a shambles, in fairness it would have to be said that in some areas at least a number of regional projects were worthwhile. This, of course, does not in any sense underestimate the fact that those projects were achieved at enormous cost. Nevertheless, when that program was introduced, unemployment was less than 5 per cent. Unemployment is now 10 per cent plus. In other words, programs of that nature which make work in the short term to try to keep the statistics low over a 12-month period by giving people three to six months work experience, are simply not enough and do not go to the heart of the problem, which is to establish a framework of economic policies which will enable employers, through the private sector-not simply through the Government-to be a primary source of additional employment opportunities for the Australian people. The long term, hard core unemployed will not be satisfied and their problems will not be solved by simple methods of using temporary jobs for three or six months duration. It would have been much more fruitful if the Government had looked at ways of providing job experience and retraining for the jobs which will need to be filled if there were a general economic recovery which, of course, we all hope we will see in the not too distant future.

With unemployment heading towards 11 per cent and an entrenched structural problem, participants in the CEP will, after three or six months, undoubtedly in many cases still end up on the unemployment queue. The European experience in this matter is well worth considering because those countries went into the recession before Australia. There are some indications that the western European countries and the United States may well come out of it ahead of us. They have examined these matters in some depth. The general consensus contained in the European Economic Community's report on this matter, due for publication later this year, is likely to recommend a substantial increase in government support for permanent, rather than temporary job creation programs. In other words, the proposal I noted earlier, of giving individuals the incentive and the capability of going out into the community to try to do something to help themselves is of great attraction to the Europeans who have already gone down the make work type route and have not found it satisfactory. The European predictions of a lift in economic growth, when it occurs, is unfortunately, unlikely to lead to a significant increase in job opportunities. Thus we must look to the development of the business co-operatives or public mini-business and private sector partnership. Again, these matters have been explored in Canada, the United States and parts of western Europe. Regrettably, we have not seen them considered by this Government, nor by its departmental advisers. The small sums of money required to set up such enterprises often do not attract existing financial institutions and for that reason it will obviously be necessary to look to the Government for greater support.

I take this opportunity to mention briefly to the Government and to the Parliament some of the work that we have been doing in Sydney in the Youthwork program which I established in my electorate in 1979. After four years it is now possible to say without much doubt that our unemployment program has been successful. Let me say at the outset that the principle behind Youth- work was that we wanted to give--


Mr DEPUTY SPEAKER (Hon. Les Johnson) —I think the honourable member would understand that if honourable members contributing to the debate are allowed to move away from the Bill we will enter a very wide and interesting area of conjecture. Youthwork programs are hardly the essence of the situation.


Mr CONNOLLY —They are, because they demonstrate the alternative to money spending under CEP.


Mr DEPUTY SPEAKER —I remind the honourable member that they are relevant only in respect of the management of the scheme through employment in the Public Service .


Mr CONNOLLY —CEP is only a facet of total expenditure. The Commonwealth is identifying expenditure under CEP. Many hundreds of millions of dollars are being spent in local communities and Youthwork is the sort of program which fits into the CEP analysis.


Mr DEPUTY SPEAKER —I require the honourable member to be relevant to the aspects of the Bill to which I have referred.


Mr CONNOLLY —I am asked to return to the effect of CEP in relation to employment in the public sector. I am concerned that there will be limitations on the ability of CEP trainees to be adequately used by departments and statutory authorities within the control of this Parliament. Therefore, I totally support the observation made by my colleague the honourable member for Dundas (Mr Ruddock) who opened the debate on this Bill for the Opposition, that he will require the Government to provide this Parliament on a regular basis with information on the number of CEP trainees taken on strength by departments. It is only fair to add that I would also like to see that we are advised exactly what activities those CEP trainees will be encouraged to perform while they are in government service.

As I noted earlier, while we have difficulties in our longer term perception of the Government's attitude towards the solution of the problems of unemployment, we support this legislation because quite clearly it is not satisfactory for a program of this nature to be directed at local and State governments as well as the community as a whole unless it is also possible for the Commonwealth Government to set a standard. I believe most firmly that the opportunities within the nation have not yet been fully explored. Australians must be given a chance through the initiatives of government to make a contribution to overcoming what is obviously today and is likely to remain for some time, the greatest problem facing our nation.