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Tuesday, 24 May 2011
Page: 4386


Mr KELVIN THOMSON (Wills) (19:48): I wish to commend the Australian government on this budget, which continues our tradition of sound economic management. It stands in stark contrast to the opposition's troubling lack of insight on this core issue.

Peter Costello is on the record as saying that an opposition leader's responsibility consists of going through the budget saying what the opposition agrees with and what it does not agree with; putting forward alternative tax proposals and saying when they would start and how they would be paid for; and saying what the opposition would do if it were bringing down a budget. Peter Costello was scathing of any budget reply speech that was short on detail or full of motherhood statements and cliches, which he believed let the Australian public down. What, then, are we to make of the opposition's budget reply?

The opposition say they would bring the budget to surplus sooner than Labor, yet they oppose and run interference on all of our savings measures, they produce no savings measures of their own and they even come up with more spending measures. They are not serious. Family payments is a classic example. The government will maintain higher income thresholds for certain family payments at their current levels. When the government announced similar measures two years ago, the opposition leader said they were soft and wanted the government to go harder. Now he wants to talk about the 'forgotten families' on $150,000 or more!

Analysis by Commonwealth Securities suggests that, on an Australia-wide basis, families with incomes above $150,000 are among the better-off families in the country. The average male income is currently around $57,500, with the average female income just over $38,000. Only three per cent of all taxpayers have an income above $150,000. In 2012-13, the number of people who will cease to be eligible for family payments will be less than two per cent. You would think, based on the scare campaign of the Leader of the Opposition and shadow Treasurer, that the government is running an assault on all families' standard of living. As Tom Dusevic identified in his article of 14 May in the Weekend Australian on the coalition's position:

Abbott and Hockey have lost the plot on the basic tenet of Liberalism. Unlike Menzies, who saw government handouts as helping hands to the destitute, the Liberals became the chief advocates for unsustainable middle-class welfare, which grew out of the revenue boost from the first phase of the mining boom.

Absolutely right.

I would like to acknowledge the measures in the budget to boost workplace participation and expand the economy's productive capacity. I agree with the Prime Minister that we do not want to see a situation where the economy is booming but where we still have long-term unemployed people who do not have a job and people on the disability support pension who want to work, who do not have the opportunity of a job. And the Treasurer is right when he says, 'Our economy can't afford to waste a single pair of capable hands.' In my electorate of Wills there are at present 1,397 very-long-term unemployed people who have been without work for two years or more. To help them prepare for and find work, the Labor government has provided in the budget an additional $2.7 million over the period 2012 to 2015 to support local employment services in Wills. This will provide them with training and work experience. Additional funds have also been provided for a wage subsidy to support employers who give the very-long-term unemployed a job.

An investment of over $1.6 million for Australian Disability Enterprises in Wills is also welcome. It will support the work of the Brunswick Industries Association, North West Employment Group, the Trustee for The Salvation Army Victoria Property Trust, and Yooralla.

The budget initiative establishing the $558 million National Workforce Development Fund will assist in responding to the most critical emerging skills needs facing Australian industry. This will deliver 130,000 new training places over four years. The fund will be supported by the establishment of a new National Workforce and Productivity Agency, from 1 July next year, which will work closely with industry to identify critical skill needs and build a more skilled and capable workforce. The Labor government is improving support for Australians with a disability to help them into work where possible. I support these significant reforms to address the issue of workplace participation and skills shortages.

I do not, however, agree with raising the skilled migration target for the 2011-12 financial year to 125,850—a record level. I have seven objections to increasing skilled migration. The first is that it is the principal driver of Australia's rapid population growth. Only recently our population used to grow by 200,000 a year; now it is rising by a million every three years. The increase has not been driven by natural increase, refugees or family reunions. It has been driven by an increase in skilled migration from 24,000 in 1996 to over 100,000 now. This is the main reason net overseas migration is now 180,000 per annum and the main reason Treasury is using net overseas migration of 180,000 per annum to project that Australia's population will rise to 36 million by 2050. That is, it is giving us big Australia. I have set out in numerous speeches in the parliament and at public meetings my objections to big Australia: cost of living pressures and pressures on food, water, land and energy supplies, carbon emissions, housing affordability, traffic congestion, species extinction, loss of open space et cetera.

My second objection to increasing labour force migration is that there are people in Australia who want work and we should be getting them jobs. There are 500,000 people on Newstart allowance and 800,000 on disability support pension. These people should be our first priority. In the last decade the number of people receiving disability support pension grew around six per cent per annum in real terms. As Budget Paper No.1 outlines:

Past growth … reflects increases in the number of beneficiaries arising from population growth and changing composition of the population …

Population growth will continue to contribute to sustained real growth in the cost of this program.

As I mentioned earlier, I support the steps that seek to move people from these benefits to employment, but there needs to be jobs for them to go to. Cutting back workforce migration numbers will ensure there are jobs for them to go to.

Included among the people who are out of work and are deserving of our attention are quite a few skilled migrants already in Australia who are either not working at all or not employed in areas for which they are qualified. As reported by Michael Quin in the Melbourne Times Weekly, a local newspaper which circulates in my electorate, four out of five skilled migrants in Melbourne are unemployed or underemployed, according to a recent survey. The article outlined the case of Preston skilled migrant Natalia Garcia, who has applied for 17 engineering jobs in the past four months without getting an interview or feedback, despite speaking advanced English and holding an engineering degree and seven years industry experience in Colombia. Ms Garcia said:

We were told Australia was desperate for engineers and that we would find a job in a maximum of two months,

Ms Garcia is working as an office cleaner, and said most skilled migrants she knew were doing the same. It is highly revealing that a qualified engineer with seven years industry experience should be working in Australia as a cleaner. I suspect that quite a few of the business leaders who bang the drum incessantly about skilled migration know about this kind of outcome perfectly well. They are not so much interested in the skills of migrants as their potential to provide cheap labour in occupations such as cleaners and taxi drivers and in providing personal services like house cleaning and chauffeuring at cut price rates. So my third objection to the skilled migration increase is the treatment of, and outcomes for, many skilled migrants.

My fourth objection is that the skills shortage is overstated and is abused in ways which undermine the wages and conditions of Australian workers. National Secretary of the Australian Manufacturing Workers Union, Dave Oliver, believes the skills shortage issue is overstated and that successive federal governments have failed to deliver an adequate labour market testing system, which means employers can exploit the system. The AMWU has launched a skills register to give skilled workers and young people seeking apprenticeships the opportunity to register for work before employers are allowed to bring in workers on 457 visas. As Dave Oliver has said:

We do not deny that skills shortages exist in some areas, but they are being exaggerated by employers seeking to use 457 visas to undermine local wages and conditions and avoid the cost of investing in apprenticeships.

With apprenticeship completion rates below 50%, the long term answer to our skills problems cannot be importing workers from other countries on a temporary basis.

Employers can't complain about skills shortages while they are dropping their investment in training.

I encourage people who have skills which are not being made use of to make contact with the AMWU to get their details put on the skills register.

The fifth objection I have to increasing skilled migration is that we have become addicted to it. We need to do more to educate and train our own young people. Going back two or three decades, governments and employers dropped the ball on training. Governments closed technical schools and cut back on technical education. Private employers lost interest in taking on apprentices. We started outsourcing our requirement for training. This has been an addictive, self-fulfilling circle and we need to break the habit. Those countries which do not run a big migration program put more effort into educating and training their young people, and they have better participation rates as a consequence. The sixth objection I have to increasing skilled migration goes to the claim that this is necessary to avoid capacity constraints and bottlenecks in the resources industry. The truth is that running the resources boom as fast as possible has a number of economic consequences, not all of which are positive. Using the resources boom as a reason to ramp up skilled migration and staking a lot of our economic prosperity on Australia's high terms of trade overlooks some of the negative ramifications of the two-speed or multispeed economy. For example, as reported in the Australian in early May, hundreds of fruit processing workers face the sack if Coca-Cola Amatil goes ahead with plans to close parts of its SPC Ardmona division and capitalise on the strong Australian dollar by importing food from Indonesia. CCA chief executive Terry Davis has said one or two of SPC's three plants in central Victoria could be closed due to the strong Australian dollar putting pressure on the business. He said that the current strength of the dollar severely limits the potential for SPC Ardmona's export business, which produces some of the country's best-known canned fruit brands.

The strong dollar has been cited by the Reserve Bank as impacting adversely on manufacturing and tourism. A report in 2006 by the Victorian Department of Treasury and Finance on the previous mining boom used modelling to determine its impact on non-mining states and found that there were adverse consequences for Victorian exporting and import-competing firms. Their modelling results showed that the Victorian and New South Wales gross state products were about half a per cent lower. Most industries in these states contracted, apart from the mining industries.

I believe the relentless rise of the Australian dollar as a result of the resources boom presents a real challenge to the Australian economy. The current mining boom mark 2 represents the highest terms of trade in 140 years, so the pressure on manufacturing and other trade exposed industries not directly benefiting from higher commodity prices is severe. Retail, manufacturing, building and tourism are labouring under the weight of subdued sales, weak profits and low orders. We need to ensure that we do not become a one-trick economy and that the structural changes that occur as a result of this boom do not leave ordinary people behind. If the resources boom generates growth levels that cause the Reserve Bank to lift interest rates, then many Australian households and small businesses will suffer. As a nation, we need to be more sophisticated than simply trying to run the resources boom full throttle.

The seventh and final objection I have goes to the question of the morality of skilled migration. Last week I participated in a debate— (Quorum formed)(Time expired)