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Thursday, 5 May 1994
Page: 363

Senator BOSWELL (Leader of the National Party of Australia) (5.15 p.m.) —Yesterday, one million Australians who are currently unemployed were offered a deal by the government which may help some, which will disadvantage the short-term unemployed, and which will miss the main point of any address on unemployment, which is getting policies right so that real, sustainable long-term jobs can be created. Over the next four years $6.5 billion of taxpayers' money will be directed to government incentives. The one million unemployed, including the 350,000 long-term unemployed and the 35 per cent of our youth who are unemployed or underemployed, deserve the nation's concern and assistance. They deserve a government initiative that will give them hope for a secure future in a job with all the social, family expectations that a regular job provides.

  However, the only area where real hope features in this document is the hope practised by the government that it can find the $6.5 billion price of the package from increased growth in the economy, and that it can convince the Left of the Labor Party to sell all the federal government owned airports to finance the deal. The Prime Minister has called it a true Labor document; that it has the marks of Labor governments written all over it. We do not dispute that. We have had too many of them. We have had state Labor governments spending public money on plans and allowances without worrying about the long-term consequences.

  Sadly, the $6.5 billion spending spree will cost jobs and not create them. What jobs does the government expect to be available when the six months subsidised wage scheme has finished? The government has put the focus on training. Even in the training area the government has failed to recognise that mickey mouse training courses are no substitute for proper vocational training. The government has not provided the necessary number of apprenticeships to provide a skilled youth work force.

  The loss to the nation of a large group of long-term unemployed is a national tragedy. Unfortunately, this package does not address the issues which would have taken the final step of setting an environment where real jobs could be created.

  Two coalition initiatives have been adopted: the suspension of the training guarantee levy and the training wage—although the final approval and figures on the training wage have not been given by the real masters of this government, the ACTU. The package will park slightly more than 300,000 off the unemployment figures; 220,000 have already been transferred to the wage subsidy program; 37,000 of 15- to 17-year-olds will be removed onto the new youth training allowance, with a further 35,000 over-60s removed onto the mature age allowance. Massive new bureaucracies will be created. The government might feel good about artificially removing hundreds of thousands off the dole queues. It looks good on paper, but it does not do a lot for anyone.

  This Labor government has given us 11 budgets, eight major economic statements and five employment statements. All have been presented in the most glowing and superlative terms, each one being the ultimate solution until the next one comes along and reveals otherwise. They have all been spectacular failures, despite all the money that has been thrown around. We are still left with unemployment of around 10 per cent.

  This statement in glorious self-promotion is claimed by Mr Keating to be the biggest that the government has made since it won power in 1983. However, during the same 11-year period of labor governments, Australia has experienced some of the greatest cost increases to business and job losses of a magnitude not experienced since the Great Depression. We have seen a recession `we had to have', manufactured by the present Prime Minister, with tremendous loss of jobs. We are seeing massive relocation of manufacturing industry offshore; for example, $8 billion worth of industry in recent year has left the shores of New South Wales, let alone the rest of Australia.

  The McKinsey report on emerging exporters told the government that 13 per cent of firms surveyed had already set up offshore, with 50 per cent more considering a move in the near future. We have seen business on-costs cripple business, such as the superannuation guarantee levy, the training guarantee levy, and the social welfare demands of the ACTU—all resulting in lost jobs and lost job opportunities.

  Yesterday I told the Senate that the cost of labour in New Zealand was 69c a minute, whereas it costs 90c per minute in Australia to run a similar factory. We might be creating more elaborately transformed manufactures but we are losing our manufacturing base in less sophisticated manufacturing. We are also losing all the skills that maintained that manufacturing base. Put simply, we are losing all those jobs in the general engineering area and the process workers that go with them.

  The government cannot have it both ways. It demands that Australian industry be internationally competitive and take part in world markets, but the facts are that as tariffs have come off, imports have increased on a large scale. The government has continued to increase costs on Australian industry competing in the new cutthroat world marketplace. Australian industry not only goes offshore for the lower wage rates, but also for the benefits of tax holidays, factory investment incentives, free land, no duties or government charges—all forms of government incentives. We cannot afford to lose our manufacturing jobs. We cannot continue to increase charges and costs and throw red tape in the faces of existing manufacturers—because with their demise go our jobs.

  The government has continued on its destructive path for business and job prospects. Now we have a new industrial relations system which deters business from employing people because of the unbalanced dismissal provisions that it contains. I say unashamedly that this would have to be the greatest disincentive standing in the way of anyone wishing to employ people. Speaking as a former employer, I know that one must have room to move. Again, the government has tried to have it both ways. It cannot claim the credit for creating jobs, which are really only training positions, by spending $6.5 billion of taxpayers' money. Certainly it cannot make such claims when its policies have destroyed jobs and job growth.

  As Leader of the National Party in the Senate, I wish to refer to specific items in this package which affect rural and regional Australia and which must be addressed. It is alarming to see the two sentences in the package suggesting that the rural adjustment scheme is to be directed to meeting the structural adjustment needs of specific regions. Rural adjustment schemes must stay with the farm businesses that they are presently supporting. The RAS scheme is not a negotiable amount to be redirected by the government. The scheme must remain focused on farm businesses. The 15,000 farmers who are being helped through the present rural downturn will ensure that there is a strong, viable rural sector for Australia in the future.

  The meagre RAS payments to 15,000 farmers—I think the figure is now less—to keep alive one of our major exporting industries is as justifiable an investment as the $6.5 billion investment of this package, but at the same time it is a lot cheaper. Without regional development, Australia will end like a doughnut, with a hole in the middle and certainly without a life-providing heart. The white paper will have little benefit for rural dwellers.

  Farmers cannot afford to put anyone on, no matter what the subsidies. Rural traineeship schemes have proven to be of negligible help in solving rural unemployment. There are 4,000 to 4,500 farmers or their spouses currently receiving jobsearch allowance. This is usually the only buffer between the farming family and bankruptcy in hard times. The whole thrust of this white paper will be lost on them.

  What training and work is the government to provide in depressed rural areas? The government in its white paper has made no specific mention of farm household support—support which is used by a few hundred farming families to keep food on the table but which becomes a loan after 9 months. Again, what training can be provided to people in isolated areas?

  One of the most inequitable features of the white paper is the impact the youth training allowance will have on the children of farmers. The government is replacing the jobsearch allowance for 15- to 17-year-olds with a youth training allowance, and also changing the eligibility criteria. Under the white paper, the Austudy personnel assets test and the parental income and assets test will now apply to the youth training allowance. It is impossible for the average farmer's children to qualify for Austudy. Time and again in the Senate we have seen the government move to restrict Austudy eligibility for rural children.

  Now, however, under the youth training allowance such children are to be assessed on the same basis as Austudy—on an inequitable test of their parents' assets. So rural children who cannot get Austudy now will not be able to get the youth training allowance. There will be a lower payment of $30.90 a week to be paid free of the parental income and assets test—a large shortfall on the $132.30 received by all off-farm 15- to 17-year-olds?

  The white paper takes away from rural children the right to be part of the jobs compact. They will not qualify for the intensive case management, education, training and jobsearch assistance that are on offer to everyone else. At the same time much restructuring is needed in some rural industries. Industries such as the tobacco and citrus industries are in particularly urgent need. Both the tobacco and citrus industries have been victims of the GATT Uruguay Round resolution. The tobacco industry, which injects annually $50 million into the Mareeba-Dimbulah areas of north Queensland, will have its production requirements slashed to three million tonnes.

  We cannot just let industries such as this pull out from the rural communities that they support. Export earnings of $17 billion are forthcoming from agriculture industries, with a further $20 billion from mining industries. Rural industries have just experienced major hurdles, not of their making. There have been high interest rates induced by government policy, widespread drought and low commodity prices from massive world subsidy programs, and international events such as the collapse of the wool markets.

  Rural industry does not need to be robbed of its meagre RAS allocation by the government, when the entire nation, and particularly regional Australia, needs the strong backbone of the efficient Australian agricultural industries. The level of support for farm businesses under RAS should not be reduced and diverted. These are exactly the economic growth areas on which the government is basing its growth in jobs.

  The regional development response of the government is most disappointing. After the taxpayer has funded the Kelty report on regional Australia, an Industry Commission report, the McKinsey report, and now this white paper, many questions are still left unanswered. For example, where does the government stand on the Kelty recommendation for an extra fuel tax for road funding. Rural communities stagger under the extra impost of fuel taxes. It is one of the great costs that are bleeding our industries in rural Australia.

  Rural Australia deserves to know where the government stands. A further fuel tax cannot be imposed on rural Australia. I hope that in next week's budget we will not see an increased fuel tax brought in to pay for some of the white paper proposals. What about the conclusions of the Industry Commission report on impediments to regional adjustment to the effect that greater flexibility in work practices and conditions across regions to fit their needs would enhance regional productivity?

  The government has conveniently chosen to ignore this advice on labour market reform in regional centres and not take on the hard issues. The OECD last week echoed this advice when it told Australia that it should free up its labour market. There is the threat to rural industries from indiscriminate application of the Hilmer report, which is being further funded by this package with $4 million to the Trade Practices Commission.

  The existence of statutory marketing arrangements for rural commodities serving a large number of separate producers has ensured that Australian commodities can benefit on export markets from the premium of their high standard and quality. Statutory marketing authorities have provided some balance to the market power where many Australian commodities are sold into countries where the buying power rests with one desk buyers.

  The Liberal-National Party coalition will fight most vigorously any action by the government to bypass the states and get rid of state-based statutory marketing authorities like the Queensland Sugar Corporation, which uses its single desk export powers to obtain the best long-term contracts and sales for the $1 billion plus raw sugar export crop. At the same time there is great concern that user-pays policies on water, electricity and telephones will disadvantage rural communities which are located at the end of the line for these services.

  The Liberal-National parties will remain vigilant to ensure that the government maintains its community service obligations with government services to ensure that all Australians receive comparable government services. If the government wants regional development, these community service obligations must be maintained.

  It has been demonstrated on many occasions that the Trade Practices Commission is in great need of commissioners with expert knowledge of the industry under examination. This appears to be true of rural industries where there is a need for a good understanding of the industry under examination. Australia will suffer the consequences for a long time to come of the decision of the Trade Practices Commission last year not to authorise the merger of Mackay Sugar Cooperative, E.D. and F. Man and CSR in the Mackay sugar refinery. This decision will deny Australia entry into the growing refined sugar export market. Through a narrowness and a wrong decision by the Trade Practices Commission, it maintained that the smaller Mackay refinery joint venture could enter the export market, which in reality it just cannot do.

  We need jobs from economic growth—jobs not funded by taxpayers; jobs that this package is meant to address. The government in this package has not given business in general the signals it needs to have the confidence to invest and create full-time and real jobs for the unemployed. The industry statement has not delivered the micro-economic reforms, taxation reforms and public sector reforms which business so badly needs. It has not helped business competitiveness—and it has not addressed the major stumbling block to complete reform of the labour market.

  This white paper does very little to encourage the small business sector which consists of 700,000 businesses and employs 2.57 million people. The small business sector stands ready, willing and able to assist in the promotion of jobs. Over the last few years, whilst small business has been increasing its work force, big business has been shedding labour to get its profit line in order.

  The package extends the lending capacity of the Commonwealth Development Bank to small business; but it must have adequate funds to supply small business. Major banks are steering away from any development funds for small business. In other industrialised countries small business is able to access funds at nearly the same rate as big business. In Australia, the difference is around four per cent to five per cent.

  Small business is carrying a lot of lead around in its saddle. If interest rates are maintained and the Commonwealth Development Bank is opened up to the small business sector, this will be a very helpful initiative. But what both small business and our farming communities need is investment allowances which this paper does not deal with.

  The present situation with many small and farming businesses is that they are desperately in need of business investment in plant and machinery. It is a grave threat to the future of their businesses that any extra earnings go in higher tax, leaving plant and equipment in a run down and outdated condition. I speak for both rural and small business when I say that an investment allowance must be introduced.

  I acknowledge the government's new commitment to `Buy Australian'. This commitment is welcomed but far too long overdue. The federal government is a major consumer of goods and services. The Bevis report pointed out that between $8 billion and $12 billion a year could go to Australian manufacturers. This new local procurement policy will provide a considerable boost to Australian suppliers and its effects should flow through the economy.

  This new procurement policy is one of the few sensible inclusions in the white paper. However, it should not be confined simply to Commonwealth departments, but should also be extended to all semi-government authorities such as Telecom and Australia Post. And I hope it spells an end forever to practices such as the Australian Army buying subsidised Canadian pork for its ration packs, for reasons of economic efficiency, when a much better local product is readily available.

  While this white paper presented the chance for the government to introduce a strong and constructive industry policy that would create real jobs for the future and underpin regional development, instead we have been left with a piecemeal and inadequate approach in all three areas. While wishing for a solution to the queues of one million unemployed and the loss their plight represents for us all, it is hard to escape that the numbers of program participants who will go on to lasting non-subsidised jobs as a consequence of these measures will not improve on present trends. By the government neglecting to provide for stronger growth and the needs of industry and regional development, the white paper will do very little to address the deep-seated causes of Australia's major unemployment problem.