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Thursday, 5 May 1994
Page: 355


Senator HILL (Leader of the Opposition) (4.33 p.m.) —The coalition parties in the Senate are pleased to have the opportunity to engage the government in debate on the major social issue facing the Australian community: mass unemployment—an unemployment rate which, as Ted Evans, Secretary to the Treasury, recognised, was a matter of government choice. Mr Keating, through policy choice, drove this economy into recession in the late 1980s and early 1990s. As he put it—and I remind the Senate—`it was the recession we had to have.'

  In clinical terms, it was the recession which cost Australia half a million jobs. It was his choice of response to the overheated economy which preceded it. There were alternative responses: to cut expenditure, accelerate micro-economic reform, reform the labour market, and others. But he chose rather to force up interest rates until they crushed employers. Record bankruptcies resulting from failed businesses and record insolvencies all followed. This was his choice, as he put it, `to dampen demand'.

  Mr Deputy President, make no mistake about it: record long-term employment, mass unemployment, and underemployment as we have it today in Australia are a result of government policy choice; and it did not have to be. It did not have to be a situation where unemployment in Australia is a third higher than the OECD average. It is the new definition of Labor's social justice. It would cause Chifley to turn in his grave.

  Now, almost as an afterthought, we have Mr Keating's response to this human tragedy—a tragedy for which he, more than any one individual, is responsible. It is Mr Keating who constantly and recklessly builds unreal expectations, and then causes crushed hopes with yet further exaggerated statements such as that we are debating today.

  Mr Keating cannot seem to help himself. His enormous ego always gets in the way of good policy. Again he had to dress this statement up as reminiscent of Chifley's famous full employment paper—I remind the Senate that that was a full employment paper, as opposed to this paper—of the 1940s. Of course, Mr Keating's statement was bigger, better and more important. This is the same Mr Keating who promised a $130 billion avalanche of investment after the election—when, in fact, business investment is now at a 40-year low—and who brought down the One Nation statement, which he said would create 800,000 jobs and bring unemployment down three percentage points. Remember that, under Mr Keating, exports are going `gang busters'. Yet in yesterday's merchandise trade figures, helpfully coming down on the same day as this white paper, we saw exports of merchandise trade rising five per cent while imports rose 13 per cent. That is exports going `gang busters'.

  This is, on my calculation, the 25th of these so-called significant economic statements we have had from this government in the last 11 years. Always the next one beats the last one: so much of it repetitious; so much building false expectations; so many disappointments following, only in turn to be followed by yet another statement. What is the bottom line of this continual statement approach: 906,000 Australians unemployed as of March 1994.


Senator Patterson —On their figures.


Senator HILL —That is the statistical figure. That is without adding the underemployed and those who have given up: 906,000 people unemployed—in the recovery. We are in the recovery; we are feeling better. Yet a fraction under a million Australians are still unemployed, and 370,000 of those are long-term unemployed—that is, they have been unemployed for 12 months or over.

  Mr Deputy President, you might have seen yesterday how in the white paper long-term unemployment now seems to be conveniently defined as 18-months unemployment rather than 12-months unemployment. Redefine it as the government will, there are still just under 400,000 Australians who have been out of work for over a year—and that is an absolute national disgrace. Mr Deputy President, I remind you, as the Bureau of Statistics reminded us only a few weeks ago, that that long-term unemployment figure has trebled in the last four years. No other Australian government in our history can boast such an achievement.

  Mr Deputy President, remember also that it is not just young people who are suffering, although yesterday's emphasis in the white paper was on young Australians. I remind the Senate that, of unemployed males over 45 years of age, almost 60 per cent are long-term unemployed. They, in turn, have nearly a quarter of a million children. So we find older members of the community well under the retiring age, who never anticipated that they would be unemployed, not only losing their jobs but finding 12 months later that they are still not able to regain employment. These are qualified and trained people. Of course, they cannot regain employment, not because of a lack of training but because there are no jobs.

  This is a human tragedy clinically skimmed over in yesterday's statement. It is true that there are severe economic consequences that flow from mass unemployment, but the social consequences are even greater. As the Brotherhood of St Laurence reminds us:

. . . at a personal and individual level, the impact of unemployment—by whatever measure one chooses—is nothing short of devastating . . . unemployment means a real and hurtful contraction of personal networks and social life. People have no choice but to withdraw from mainstream activity.

The Brotherhood went on:

Ironically, one of the few constant links to other people is through what is understandably perceived to be a demeaning, ritualistic visit to the CES or DSS offices.

As John Hewson said in the other place a moment or two ago, with the background of the green paper that was put out on unemployment at the end of last year, it is astonishing that in that document of more than 240 pages, there is only one paragraph which deals with the social cost of unemployment. Yesterday's statement had little more. It is astonishing, but convenient to this government.

  If Mr Keating led a less imperial lifestyle, perhaps he would appreciate the consequences of his policy choices, such consequences as increased crime, family breakdown, homelessness, health problems, drug and alcohol abuse and the creation of a permanent underclass of Australians deprived of opportunities available to others. But there was ample evidence to tell him that such was the case. Last year his own Economic Planning Advisory Council found that reducing unemployment to 6.5 per cent, even though a high figure—

. . . would reduce the divorce level by just over 800 annually, increase marriages by 4400, and lead to around 20 fewer annual homicides.

Dr Brendan Nelson, federal president of the AMA, found that rates of death and illness for unemployed Australians is significantly higher than for the employed. He said that the death rate for unemployed men is 17 per cent higher. Unemployed men have 42 per cent more serious illness; 35 per cent more hospital admissions; 267 per cent more mental disorders and visit the doctor 50 per cent more often. Professor Riaz Hassan of Flinders University has noted:

The period of increasing youth suicide strongly correlates with a high youth unemployment rate.

I read recently that Australia now has the highest level of youth suicide in certain age groups in the world. What a shocking indictment and what a shameful embarrassment to all policy makers! Graham Burrows, professor of psychiatry at Melbourne University, told a Senate committee on youth unemployment recently of a study that:

. . . showed a significant rise in amphetamine use with unemployment.

And there is homelessness. Need I remind honourable senators again of the 1989 Burdekin report which estimated that between 50,000 and 70,000 young people were either homeless or at serious risk, and that the stresses of youth unemployment were listed amongst the causes of such youth homelessness. Labor's decade of unemployment has also coincided with a doubling of the proportion of the population who were victims of robbery.

  When Mr Keating and the Labor government chose the recession path, did they take these social consequences into account or were they blissfully ignorant? On either account they fail the test. However, whilst prevention is always better than cure, the government nevertheless set the wrong policy framework and we as a nation are now faced with the question of how to address this tragedy.

  The white paper has become the government's policy prescription to correct its errors. The question, of course, is this: has it finally got it right? The clear choice of this government that comes through this document is that it remains that the training option, with some subsidies for at least temporary jobs, remains its preferred choice. It has been the government's approach for some time. I remind honourable senators that currently over 150,000 people are on jobstart; nearly 70,000 are on jobtrain; nearly 40,000 are on special intervention programs; 11,000 are on the accredited training for youth program; 10,000 are on the landcare and environment action program; 10,000 are on jobskills; 5,000 are on the new enterprise incentive scheme; 7,000 are on the community activity program, and about 25,000 are on the community development employment program. With this program it adds a new subsidy and short-term jobs for long-term unemployed—that is, those now unemployed for over 18 months—which it dresses up under the title of a jobs compact. Therefore, it is basically a more of the same approach. It has not varied its answer despite the experiences that it has seen.

  Of course, there is political advantage in it for Mr Keating. It again artificially reduces the number of jobless, as does the mature age allowance and as will the parenting allowance, although there are some positives in that initiative. The fact that most of the government's new scheme will be at its maximum effect about the time of the next election could be just coincidence but for the fact that we have seen it so often before. The jobless are conveniently parked outside the official figures.

  But, leaving aside justifiable cynicism, will this policy prescription lead to a significant reduction in the jobless in real terms? That has to be the test. Will it lead to a significant reduction in the jobless in real terms—that is, after taking into account those who are parked in training schemes or make-work schemes, those who have given up and those who are significantly underemployed? Regrettably, the answer must be no.

  Adequate education and training is important, and work experience is important in the competition between individuals for employment opportunities, but the only way to significantly reduce Australia's mass unemployment is to create a large number of new jobs—real and sustainable jobs. That will not be achieved by the policy prescription contained in this white paper. Only a small fraction of the $6.5 billion of extra money which must be found by government through increased tax and borrowings is targeted to the creation of new jobs. Sadly, it could even be counterproductive because it contributes to further cost pressures on business, increased interest rates and increased inflation.

  Mr President, we would not want to be misinterpreted. We accept that there will be a need for public money for training in some instances, for counselling in some instances and, in other ways, to put the long-term unemployed in the best position to take employment opportunities. But if they are to be further trained, albeit in conjunction with short-term placements—if real, sustainable and satisfying jobs are not available—then it becomes yet another cruel hoax. Even if it means simply a churning of the unemployed with the short-term—up to 18 months—missing out at the expense of those unemployed for over 18 months so that the short-term unemployed have to become long-term unemployed to get the same opportunities presented to them by this government, then that amounts to an equal disaster.

  Even the government in its document talks about a redistribution of jobs. What an indictment in its own terms! The government has allowed itself a long time to think about its solution, but there is little in this document to build public confidence. The administering department, DEET, is in an awful state, as is now publicly known. Astonishingly, the government still has to negotiate its training wage with the ACTU. It is very convenient for it not to have to give details in this paper one might think, but, fancy, this is one of the two principal pillars of this statement yet it has the nerve to tell the Australian people that it is not yet negotiated, that it has not received the imprimatur from the ACTU.

  Also, the terms of the job compacts are unknown. What is to be the obligation of the employer under the job compact? What is the obligation of the employer after the term of the compact is complete? In particular, is the employer bound by the provisions of the so-called Industrial Relations Reform Act that was passed last year that makes employment even more rigid and that will be a disincentive to employers taking unemployed people on under these job compacts? Today Senator Evans, the Leader of the Government in the Senate, did not know. He turned to Senator Schacht, who nodded his head and thought it was the case. This government has not even worked out the detail of the two principal pillars of the document that it brings to this chamber.

  It was vitally important for the government to this time get it right because, if we go into the next cyclical downturn without having slashed unemployment before then, the position will be even worse. In fact, respected labour economist Professor Judith Sloane warns that the next downturn could see unemployment rates of over 14 per cent. Labor does not seem to recognise that the number of full-time jobs lost by teenagers has doubled each recession. That demonstrates how critical it is this time to get it right and why we are justified in being so disappointed in the response that this government has brought down after such a long period.

  Even if Labor astonishingly achieves its objective—and Senator Short indicated today that it is premised on 4.75 per cent growth until the end of the century, which is highly unlikely to be achieved—what is its bottom line? What does it regard as satisfactory? The answer is 5 per cent unemployment—half a million Australians destined to the unemployment scrap heap forever. Is that a strategy to generate jobs? It is again an appalling abdication of responsibility of government. This is not Chifley's Labor Party. This is not Chifley's full employment statement. This is a partial employment statement to create make-work jobs on a short-term basis.

  We would have positively responded to an objective analysis of the disincentives to employment by small business, in particular the overregulation which was touched on by the government but not seriously. It even had the gall to claim deregulation by temporarily suspending the training guarantee levy, which it itself imposed a few years ago. The government says that it is now going to have a program of review. This is something really to grab hold of as a real achievement! In fact, the cost to business of compliance with regulation in this country is estimated at over $20 billion a year.

  If the government had really tackled overregulation, which every small business person will tell us is a disincentive, we would have been more impressed. If it had tackled high taxation, particularly taxes that add to the costs of business—such as the increase in fuel taxes we had last year; the capital gains tax and the fringe benefits tax, which in their current form are disincentives to employment; and payroll taxes, which are state taxes but the removal or reduction of which the Commonwealth could help fund—we would have been more impressed.

  If the government had tackled high interest rates—and I remind honourable senators that real interest rates in this country are still among the highest levels of all Western developed countries—we would have been more impressed. If those opposite had tackled the real rigidities in the labour market—and they were reminded the other day of them by the OECD and IMF—they would have got a positive response from us. If they had tackled such disincentives with real programs to reduce them, we would have applauded such a move.

  What we wanted to see in this white paper was a policy program that would encourage business to invest, to take risks, to grow and to employ—that is, a strategy to generate jobs. But it was not there. What we wanted to see was a new commitment to micro-economic reform, recognising that our exports to Asia are growing—but only because Asia is growing, not because we are more competitive than others. In fact, Mr Acting Deputy President, as you would know, if we look at our market share in the region, we see that our competitors are improving their position more rapidly than we are because we are less competitive.

  This is not a static game. We cannot afford to stop. We cannot afford to slap ourselves on the back, as Mr Keating did a while ago when he said that micro-economic reform had basically achieved its goal. We want to see a government seriously tackling the issue of low business investment, the related issue of the deficit and, in particular, the need to build domestic savings.

  Sufficient jobs will not be created without a huge lift in business investment, and that will not occur without business confidence in government. The problem is that business cannot have confidence in a government which promises to reduce taxes and then reneges on that promise—the great election lie; a government which is so blind as to the cost burdens of business that it puts up fuel taxes as business is struggling to come out of the recession; and a government which rams through even more restrictive industrial relations policies, as it did last year, when everyone knows that a more flexible labour market is so badly needed by business in this country.

  In each of the Labor Party's anti-business stances and therefore anti-employment stances, it has moved hand in hand with the minority parties—the Australian Democrats and the Greens (WA)—who must accept their share of the blame. No doubt we will hear from Senator Kernot in a minute that the answer to Australia's unemployment is to increases taxes even further and put more pressure on business and on its potential to profit and employ. With over 300,000 long-term unemployed and a million unemployed overall, and Chifley's call abandoned, how can a government which lied its way back into office come to the parliament with, in effect, policies that offer more of the same?

  We say proudly that we on this side of the chamber, the Liberal and National parties, have led the policy debate in so many areas that could have offered constructive change—in enterprise bargaining, in privatisation and corporatisation, in tax reforms, and in incentives for saving. We led the debate on trainee wages, which has now been taken up by the government. We urged the introduction of private sector efficiencies into the CES and private sector opportunities, and were condemned for doing so.

  We will continue to lead. Labor has failed and offers only more of the same, as evidenced by this disappointing white paper. It is time for a new direction, and it is only the coalition parties which offer to the Australian people that alternative.