Mr MARTIN FERGUSON (10:27 AM) —I rise to speak in what I regard as an important debate. The debate on the question of junior rates is part of a broader debate about how we achieve more in our endeavours to reduce unemployment in Australia, which, potentially, is the most difficult problem that Australia confronts and one that has plagued both sides of the House for a considerable period.

Having said that, as important as the issue of youth unemployment is, the biggest problem confronting Australia is not so much youth unemployment but middle age unemployment, especially those over 45 years of age. In that context, the Labor Party welcomes the statement by the Treasurer last week, which endorsed the proposition ad vanced by the Labor Party in the course of the last election, that we as a nation can achieve an unemployment rate of four per cent to five per cent as an important first point in an ongoing struggle to reduce unemployment.

In welcoming that statement by the Treasurer, I compliment the shadow Treasurer, the member for Hotham. In replying he did not seek to simply score political points. He stated that the unemployment problem is such a challenge to the Australian nation that the time has now come for a bipartisan approach, and that we should pool our resources and our respective ideas and work together to reduce unemployment. That was the first time in many years that such a statement had been made from the Labor Party's perspective.

In raising the issue of a bipartisan approach, the shadow Treasurer laid out, from the Labor Party's point of view, a range of ideas that could actually contribute to reducing unemployment. On that basis, he also suggested that the time has come for all political parties in Australia to stop searching for scapegoats. Unfortunately, I suggest, the bill before the House is partly an endeavour by the current government to create a scapegoat, to potentially even create an excuse for its ongoing failure to make major inroads into reducing youth unemployment and into reducing unemployment from an overall point of view since it was elected.

The issues that the shadow Treasurer raised were across a range of suggestions. Obviously we embrace the Treasurer's commitment to an ongoing jobs target of four per cent to five per cent. I wonder where the Prime Minister stands on that commitment by the Treasurer today, because it was the Prime Minister who so readily ridiculed such an objective during the recent election campaign.

In addition to an achievable jobs target, we also acknowledge—and I think this is a bipartisan approach—the fact that if we are to make any real inroads into reducing unemployment, we need to achieve a level of strong economic growth and a continuing evolution of the labour market when it comes to the issue of flexibility. I am pleased to say as a former President of the ACTU that the changes we achieved when it came to improvements in productivity, based on changes in work practices and a commitment by workers to higher productivity, are second to none. It is also interesting to note that during the 13-year period of the accord we also achieved fairly significant levels of employment growth, against a major jump in the participation rate in Australia.

The Treasurer also raised potential barriers in the social security and tax systems that discourage workers from returning to work, and we acknowledge that there are difficulties. That is why we put forward a major proposition during the last election campaign that was aimed at overcoming some of those barriers. It was basically about creating incentives in the tax system that encourage people to go back to work and overcoming some of the poverty traps and disincentives that discourage some so that they actually walk away from potential job opportunities, and it was in the form of a tax credit. That was the centrepiece of the Labor Party's alternative tax plan at the last election.

We also believe that, rather than cutting expenditure on training and labour market adjustment programs, there is an obligation on government to invest in skills development, innovation, education and infrastructure. I raise those issues today because I think Australia has the capacity to create more jobs, provided we come to terms with some of those disincentives—and they range across a range of government policies.

In the end, the government cannot sit on its hands and say that the solution to unemployment rests in the market alone. The government can make a major contribution to reducing unemployment in Australia through paying attention to some of the government policies that currently exist. So it really comes back to whether or not we can actually develop a bipartisan approach and commence to walk away from setting up the excuses, the scapegoats, for non-performance. That is why I am rather concerned about the bill before the House today, especially when we are debating it against the backdrop of the independent workplace relations commission's current inquiry into the feasibility of replacing junior rates with non-discriminatory alternatives.

I personally am prepared to wait and consider the commission's report, and consider it on merit in an objective way. In making that statement, I must say that I have a fairly open mind about what the commission might come up with and what its recommendations might be. The recommendations might even make for tough decisions for the Australian Labor Party in trying to develop a bipartisan approach to the issue of junior rates. But we as a nation should not rule out the right of an independent commission to actually consider the issue of junior rates and their relationship to employment and the difficult issue of youth unemployment in an objective, constructive way rather than in the political way in which the bill before the House is currently being pursued by the Howard government.

I suppose, especially when I consider the performance of the current minister, from a political point of view and one of point scoring, one should not be surprised. We can almost imagine the minister, his associates on the frontbench and their flunkies roaming up and down the country looking into nooks and crannies for people to blame. We saw evidence of that only a week or so ago when it came to a question of a debate about the reciprocal obligation. I personally am a major supporter of the reciprocal obligation. I had to confront those issues through 13 years of Labor in government.

Not only in 1991, for example, did we commence to pilot the reciprocal obligation in labour market training in a major way; we also, in the development of Working Nation, accepted that those who had been unemployed for an extensive period of time were not necessarily at the same level of employment skill and capacity as those who had been in employment. In developing Working Nation, and some of the more comprehensive labour market programs associated with it, we actually accepted a training wage, a lower wage, for those who were returning to work after an extensive period of unemployment.

That was about the nation coming to terms with the fact that when unemployment benefits were first developed in 1945 they were regarded as being something that we paid for a period that was short in duration, because it was basically paid to a person who would soon find another job. But through the 1970s and 1980s, the nature of the labour market changed considerably. We developed special pockets of long-term unemployment, and we also had to come to terms with, for example, the fact that single mums who had been unemployed for long periods should no longer be allowed to remain at home and just draw what was then regarded as the `widow B pension'. We brought in schemes such as JET—jobs, education and training—which was about making sure that we got people back into the work force, which also created hurdles for us because it helped to increase the participation rate. But I suppose that is the difference between facing up to reality and scapegoating.

What worries me is that late last year we saw legislative suggestions on changes to unfair dismissals and now we have this legislation on junior rates. The truth of the matter is: there is no magic bullet, there is no magic pudding, when it comes to a determination to reduce unemployment in Australia. It is a major challenge, it is a major difficulty irrespective of who is in government. We should not be putting up suggestions such as making it easier to sack people or a determination that young people should be exploited, as potential solutions—though, I dare suggest, more so excuses—for the government's non-performance on the jobs front if it fails with respect to this legislation.

I suggest that the facts speak for themselves. The government has failed when it comes to industrial relations and unemployment. The workplace relations bill is a dud when it comes to the question of unemployment, especially for young people. I can remember the rhetoric when it was introduced. The rhetoric about reform, I dare suggest, has proven to be overblown. It is way off mark when it comes to an examination of the real facts on the jobs front.

For example, in December 1996, when the bill came into operation, there were 6,400,100 people in full-time employment in Australia. In December 1998, there were 6,540,800 people in full-time employment. So after two years of this so-called magic bullet, full-time employment in Australia jumped by 140,700. I then go to the issue of part-time employment. In December 1996, there were 2,096,400 part-time jobs. In December 1998, there were 2,254,500. So after two years of the magic pudding in operation, we have created an additional 150,100 jobs.

But what has happened for young people? In December 1996, there were 639,900 young people in work. In December 1998, there were 657,200 young people in work. So the number of young people who have actually got jobs out of these so-called major changes on the industrial relations front is 17,300. At the time of the election in March 1996, youth unemployment was 26.8 per cent. The Prime Minister then said that, if he wanted to achieve one major thing in his first term of parliament, it was a reduction in youth unemployment. In December 1998, he had got it down by two percentage points to 24.8 per cent. I might also say in passing that people ought to consider that against a backdrop of an overall drop in the participation rate in the Australian work force. The number of men and women actually looking for work in Australia has dropped since the Howard government was elected, because people have given up any hope of finding a job.

But I go not only to the percentage of young people unemployed but also to the actual numbers. They show that this government has only been able to reduce the number of young unemployed in that period from 88,500 to 75,100—a reduction of 13,400. It is also a difficulty when you go around the states. Go to New South Wales and Victoria. We have actually got higher youth unemployment as at December of last year than at the time of the last election. The same applies in smaller states such as the state of Western Australia where we have the same pattern.

Because of these consistent examples of failure, the government is now trying to push through these unfair dismissal laws and what we have before us today—the junior rates of pay legislation. The government has clearly failed young people, and now it wants to blame young people for the youth dilemma it has not solved—the issue of joblessness. In an attempt to try to clothe this attempt to discriminate against the young in some respectability, we even saw the minister recently misquote the Shop Assistants Union.

I urge people to examine and read in detail the submission from the Shop Assistants Union to the Industrial Relations Commission inquiry. It is a very interesting submission because it does not actually argue for the total abolition of junior rates. It is about a proper debate about what is right and wrong when it comes to the question of getting young people back to work. It argues that there ought to be some changes but also suggests that there is a case for some young people to continue with youth rates in some industries—a proper, constructive proposition put before the commission for debate, not a black and white suggestion as is the suggestion before the House today.

The Shop Assistants Union is one of the largest unions in Australia. It is also probably the biggest representative of young people in the workplace, and is a very effective representative of young people. The problem is that the minister is trying to ignore the fact that the Shop Assistants Union has put an effective case to show that his proposal to maintain junior rates of pay is a discriminatory practice. Whilst acknowledging that in some cases there is a need potentially for junior rates of pay—but not across industry in general—it argues that work of equal value is an important principle. If two people are standing side by side doing work of equal value, why should they be paid differently just because one is 18 and the other 28 or 38? That is the real issue before the chair today.

The Australian award system has, over the last decade, quite correctly moved to one of paying people based on skill and competency, and the facts speak for themselves. It has been a huge success. There has been a huge jump in productivity which has, in turn, assisted in making Australia more productive and more competitive, and has increased, for example, the export of manufactured products. So what is wrong with competency and skill? We have achieved on the competitive front, not by seeking to rip off young people but by encouraging them to put their heads down, apply their minds to training at work and increase their skills and competency and make their workplace more competitive.

I personally do not have a difficulty with a skills based payment system because I believe it has made an important contribution to the restructuring of Australian industry over the last decade and a half. But this government, for some strange reason, wants to discriminate against one group of workers and tell them that competency in the job should not be the basis of payment for them. But, strangely, it is just young people that they want to discriminate against. I am not prepared to stand by and allow employers to discriminate against young people when Australian society now says that employers should not be able to discriminate against women in the workplace or discriminate on the basis of race or ethnicity. Why should young people be any different from women or other people of different races and ethnicity in the workplace?

We, the Australian community, have come a long way in a short period. A lot had to be achieved in the post-1983 period because of a failure of previous governments to modernise the Australian economy. I now suggest that we should not put in place an archaic system of employment for young people that discourages them from accepting additional responsibilities, from working harder at work, from achieving greater on the skills front and from improving their competency and their efficiency at work.

For those very reasons, as we go into the 21st century we must really adopt a modern and consistent pay system based on skills and competency. I venture to suggest that anything else is out of date, antiquated and discriminatory. I also suggest to the House that we are being two-faced and dishonest if we continue to tell our young people, the future leadership of this nation, `Yes, we will pay for skills, we will pay for competency, but not if you are a junior.' Because that is the thrust of the bill before the House today. If you are a junior, this government will legislatively permit employers to discriminate against you, the end result of which is that you will be discouraged from accepting additional responsibilities at work, making a major contribution to your training and your skills development, and, in doing so, improving the competitive opportunities in your workplace at an industry level and at a national level.

So I end on this point: the shadow Treasurer was right when he welcomed the Treasurer's commitment to a jobs target of four to five per cent. Stop the excuses; get on with a bipartisan approach. (Time expired)