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Thursday, 5 May 1994
Page: 367


Senator MARGETTS (5.37 p.m.) —Before I commence the Greens' critique of the white paper, I should like to respond to Senator Boswell's speech. Senator Boswell said that there would be a cost of $6.5 billion as a result of this program. As I go through my presentation, I will demonstrate how that $6.5 billion expenditure is achieved by mirrors. So, in reality, there will be no problem finding the money because much of it has been pulled out from other programs. In reality, there is very little spending at all in this white paper.

  Mention was made of a possible investment allowance. Earlier today, I said that at the moment taxpayers are required to do quite a lot for business. There was a call for public participation in research and development. In many cases, business has stood with its hands behind its back and insisted that the government fund research and development. So bodies like CSIRO are now, by default, business research and development. In many cases, business requires government to do its training. This means that, once again, the taxpayer is subsidising training in lots of ways for business. Does business now require taxpayers to also fund its investment?

  I have quite a problem with requests by the most powerful members of the business lobby—not all of them—making requests of government and how, in many instances, uncritical government has been of what is supposedly required to make business successful. Yet, with record profit levels and record salary levels for executives, that investment has not been forthcoming and the employment has not been forthcoming. Taxpayer funded subsidisation of business has not brought home the bacon in terms of whatever outcomes were meant to be provided to the government and the taxpayer.

  We asked a number of questions of the paper, such as, what is the government doing for the unemployed? Yes, it is offering to subsidise jobs to those who have been unemployed for 18 months—something like 350,000 places. The government is requiring that such jobs are accepted, it is creating an under award training wage and it is suspending the training guarantee under which industry agrees to contribute funding to some training.  What the government is not doing is creating jobs for the public or private sector. It is not ensuring that subsidised work leads to permanent work; it is not ensuring that subsidised work is a first step to a career path offering reasonable potential for bettering a position; and it is not ensuring that such work is not in a dead-end job. It is not ensuring that subsidised jobs do not lead to a reduction in normal jobs, so it cannot guarantee that there will not be a great deal of unemployment created by this so-called employment package.

  The government is not ensuring that training wages do not exert a downward pressure on normal wages for the same or similar classes of work. Being a suspicious kind of character, I often have felt in the last day or so that that is exactly why many powerful people in the business lobby accept this package quite well—because they know the overall outcome is that there will be a very strong push to keep wages and conditions as low as possible.

  The government is not providing any information at the moment about the rights of the unemployed in terms of being required to move, to take odious or ethically objectionable jobs, and so on. There are some things which nobody should be asked to do or there may be good reasons why people should not do them. We do not know what kind of conditions will or can be imposed under this kind of scheme.

  I mentioned that most of this $6.5 billion, on our estimation, is being done by mirrors. I will give an example. In the employment program there is a change, but we have to remember that from the previous year there was a cut of $425 million in the labour market programs. So when the white paper jobs compact promises $538, which is supposed to be the main part of this program, we have a net effect of $113 million. This is nothing like the billion dollars that has been mentioned in the public pronouncements.

  There has been so much talk of training programs, but the reality is that the change from the previous year's funding is $99 million. It is going down. The white paper promises $72.7 million. The net change is minus $26 million. How can the government provide training for everybody, when it is actually cutting its training funding by $26 million in the 1994-95 year?

  What is the government doing for youth? It is eliminating the stages of unemployment for those under 18 and replacing unemployment benefits with a youth training allowance. The maximum amount is unspecified; the minimum could be as low as $31 a week. The government is means testing against parents' income. That is not done necessarily for the other program.

  The government is ensuring that there is industry acceptable training in schools for years 11 and 12. What the government is not doing is providing substantial increases to education budgets for additional expectations. How will the system be able to cope with this additional load? It is not ensuring that parents' income has any relevance to a young person's circumstance. It is not giving any assurance that the youth training allowance will be set at a level that is at least comparable to the current support. The government is not ensuring that the training allowance will not incorporate training in areas such as fast food work, which will be available only to trainees. So that means it is not going to offer them further positions in work.

  The government is not ensuring that the training allowance is not administered in such a way that it will become a de facto below-award wage paid by the state for work in the private sector. There is a great concern that the widening of this test to the long-term unemployed means that there is that possibility. How would this be properly policed in businesses where people do not have much bargaining power or much confidence to be able to fight back? Entire work forces could be sacked and brought back on some form of training wage.

  Let us look at the changes for youth. With respect to changes to Austudy, there is minus $145 million from the previous year. There is minus $4 million in the DSS savings on youth training. What we have for the 1994-95 year is minus $111 million. For a paper which is meant to be good for youth, I think this is an indictment on what the government is saying it is doing and what, as I mentioned before, it is doing by mirrors.

  In employment services, the government is moving from processing people in employment services to a case management approach. It is moving towards privatising employment services. It is setting up a new bureau to set performance criteria, monitor delivery and distribute funds. It is cutting employer contributions to training. What the government is not doing is ensuring that there are additional jobs and funding to implement a case management approach so that it can do what it says it is going to do, which is probably one of the reasons why it is not starting this year. If there were an election this year and the government tried to do this without providing the funding, it would find that it would be very greatly embarrassed when people saw that it was not able to achieve what it said it could achieve with no money.

  The government is not ensuring that it has sufficient funding to pay for the restructuring of the employment services and the establishment and running of the new bureau. It is not explaining how and why the private sector is assumed to be able to provide required services as good as or better than the public sector. I wonder how one would assess criteria in providing private sector participation. Would it be assessed by the cases handled or by the number of placements? If it is assessed by the cases handled, one wonders about the thoroughness of it. If it is assessed by the number of placements and we are looking at the private sector competing with the CES, does that mean that there will be a preference for those people who are more employable to be able to get the throughput for results in this private sector involvement?

  How will the private sector employment services be funded? The total change in employment services has risen a little. In 1994-95 it is a total of $76 million, but honourable senators should remember that there has been from the previous year a change of minus $74 million. The white paper promises $150 million extra.

  In income support, the government is changing social security to recognise spouses of the employed and both members of couples as individuals who may be eligible for benefits in their own right. The Greens certainly applaud this measure. It allows those in the category above who wish to look for work to be classed as unemployed and retain eligibility for benefits and training programs. Once again it is a measure for the better.

  The government makes an equivalent allowance available to mothers or older women not caring for children who do not wish to work to maintain choice for women. It is changing the treatment of how income from part-time work affects unemployment benefits by reducing the free area and changing the 100 per cent taper to 70 per cent pre-tax. This is not recognising that reducing the benefits to 70 per cent of the pre-tax income means that it is reducing the benefits by 90 per cent of after tax income. People are allowed to keep only an additional 10c of every dollar they earn. This will often not outweigh additional expense, time and loss of benefits such as transport and medical discounts. So it will not achieve what I presume it is supposed to do, which is to encourage those people who have been on the unemployment roundabout to move towards economic self-sufficiency and skilling in the work force. If people see that they will not get the benefits for it, there will be very little incentive for them to do that.

  What the government is doing in regional development is giving a tax cut to investors in infrastructure bonds and pooled development funds. It is setting the stage for privatising public infrastructure. It is reducing Commonwealth influence in favour of the states, suggesting moves to regional self-funding and using the regional adjustment scheme to fund regionally based projects. It is proposing major transport infrastructure projects and tailoring labour market programs to the needs of industry.

  What the government is not doing is supporting the concept of setting minimum standards for basic services for all communities. It is not guaranteeing an equitable distribution of funding between regions. It is not supporting the principle of equal access to and equal cost for social infrastructure; that is, power, water, phones, et cetera. With the continual privatisation of such services, there is no guarantee that this can be maintained.

  When a government continues to sell off the attractive parts of social infrastructure or utilities, the government owned sector has to bear the cost of those sectors which are less financially attractive and bring back less financial return. It is very difficult to continue to do such a thing without, first, running down the utility and, secondly, creating it into a less competitive utility and giving benefits to the private competitor.

  What the government is not doing is tailoring labour market programs to meet community social needs. It is not ensuring that communities have control over the direction of the development in their region.

  It is quite astonishing, considering this is meant to be the white paper about employment and regional development combined—remember that the Kelty report, which did do some consultation but very little, was overridden by the McKinsey report, which did not even go out to tender—that the net change in regional development for the 1994-95 year is minus $265 million. As I said, it is done by mirrors and, in reality, if we look closely at the figures we see that the government is doing very little at all.

  What is the government doing in industry policy? It is reducing corporate costs by improving infrastructure. It is reducing the cost of infrastructure by privatising it. It is increasing opportunities for investment by privatising basic public infrastructure, maintaining low inflation through the accord, and maintaining high business profits by low taxes and industry assistance. It is reducing corporate expense by suspending the training guarantee. It is reducing tariffs and bounties. It is moving to integrate our economy with Asia's and the global economy. It is giving grants and assistance to industry to develop export products and markets—as I said earlier, with very little accountability so far.

  The government is setting up Ausindustry as a one-stop shop to give industry government assistance. It is starting another `buy Australian' policy for the public sector, which is fine, but it is saying, `The way we deal with this is to blame the consumer, instead of looking at how our policies are affecting how our industries operate in Australia.'

  What the government is not doing is making any real demands that industry contribute to the process of reform or to society. It is not explaining how reducing demands on industry to contribute to society, while increasing contributions to industry, is consistent with equity, particularly when two major elements of a good economic environment are keeping corporate profits high and keeping wages down, in the government's opinion.

  The government is not explaining how cutting barriers to imports from nations which exploit workers and the environment will stimulate jobs or growth here. It is not explaining how making Australia more vulnerable to international change outside our control will ensure a sustained recovery or healthy economy. It is not explaining how further deregulating international investment will ensure that the 1980s are not repeated. It is not explaining how further deregulating investment will ensure that effective investment in productive enterprises increases and that productive investment goes to technical improvements to efficiency rather than work intensification. It is not explaining how passing responsibility for infrastructure to the states and eliminating tied grants will set the framework for national initiatives to improve infrastructure.

  The government is not explaining how eliminating trade barriers with nations that use child labour and work-camp labour, and pay labour rates of under $5 a day will not exert a downward pressure on wages or result in job losses in Australia. It is not explaining how losses of labour intensive jobs will automatically generate jobs creating higher value added products. These are the big unknowns.

  What is the government doing in technology development? It is increasing funding in major science agencies to subsidise technological support for industry research and development and technology transfer, and it is putting in schemes to support research and development in industry. It is not, however, increasing basic funding for science. It is not increasing funding for research and development into reducing environmental impacts of processes or products through increased materials and energy efficiency, or designing in renewable or recycled inputs, or product improvement, in spite of the clear national demand for such goods and services. It is not putting any obligation on industry, put on by countries which are considered to be very competitive, such as Japan, for a proportion of the income to be invested in improving and upgrading productive technology and processes or in research and development.

  All in all, we would have to say that the Australian public has been sold short and that what has been said to be the main aim of this document is not. It is a document that is designed to control inflation and to please the international money speculators. It is not a document to create employment and it is not a document for youth. It is not a document which actually addresses the structural changes which have occurred over a number of years, which have created unemployment and which will continue to do so unless those structural changes are addressed.

  Debate (on motion by Senator Panizza) adjourned.

  Debate resumed.