Senator STOTT DESPOJA (6:02 PM) —I rise on behalf of the Australian Democrats as their youth affairs and employment spokesperson to speak on the Workplace Relations Legislation Amendment (Youth Employment) Bill 1998 . Our industrial relations spokesperson, Senator Andrew Murray, has outlined a number of concerns that the Democrats have with the legislation before us, including our primary concern in relation to the process.

I begin where I guess Senator Cooney left off. One of the most offensive aspects of this particular bill is that it does involve the breaking of a commitment, the breaking of a word and the breaking of a written understanding. But, more importantly, it is a minister pre-empting the outcome, the findings, of an Industrial Relations Commission inquiry and report—a report and a process that was agreed to by Minister Reith and his colleagues. For that minister to pre-empt that process in such a blatant manner is disturbing to many people and not just some of the parties represented in this chamber.

I wish to address some of the principles behind the Democrats' opposition to this bill. We have concerns on a number of fronts: the effect of the retention and extension of youth wages on young people; the current state of the labour market; and the possibility of viable alternatives to age-based discriminatory wage levels. At the outset, there are two points that I think must be emphasised and understood in this debate. Firstly, the proposed alternatives to youth wages do not involve the abolition of differential rates of pay, but rather their replacement with a different system of competency based rates. Consequently, as a result of these alternatives that have been put forward that do not abolish the notion of differential rates of pay, many of the arguments being advanced for the retention of these wage rates are completely irrelevant.

The minister knows this. I think he has been quite disruptive and inappropriate in the way that he has spread this propaganda that differential rates somehow would be off the agenda. In doing so—and I acknowledge this—he has caused some concern among different businesses and some industries. But we are not talking about the abolition of differential rates, we are talking about replacing a system that is based on age alone with a system of differential rates based on competency, training, a recognition of skills and experience. That is exactly how we should operate in our work force today, not with age-old, antiquated, discriminatory wage levels based on someone's age.

Secondly, the government is not merely proposing the retention of youth wages in existing awards under this legislation but is proposing the extension of these wages to awards where they do not currently exist. Despite the minister's rhetoric, this is not about retaining the status quo; it is in actual fact about reducing the income levels of thousands of young Australians. It is in line with this government's perpetual agenda of scapegoating, targeting and vilifying young people. We are talking not about the status quo and its maintenance but about the extension of these youth wages into areas where they do not currently exist.

I do not think it can be denied—certainly contributors to this debate so far have not denied this—that youth wage levels based on age are discriminatory and grossly unfair to young workers. They fundamentally contravene the `equal pay for equal work' principle enshrined in international labour and human rights conventions to which Australia is a signatory. On this basis alone, the Democrats have significant concerns with the government's attempts to flout its promise to examine non-discriminatory alternatives.

Young workers do not have access to `junior' rates, if you like, for rent, food or clothing and only full-time students qualify for travel concessions. This is a point that my leader, Senator Meg Lees, makes continually. Indeed, last Friday at a business function she was explaining to people that young people do not have junior rates or concessions when it comes to some of those necessities of life. Young people incur the same costs of living as adult workers, yet many of them receive heavily discounted incomes.

Those over the age of 18 in our society are deemed adults. They are old enough to vote, to drive and to drink. They are tried as adults and they undertake financial obligations. Yet in many areas of policy and legislation this government believes they are not mature enough to be treated as adults—certainly in relation to being paid an equal rate for equal work carried out by their older counterparts.

Over the past 20 years in this country real wages have declined markedly for young people despite a significant increase in adult wages over the same time. Real wages for young males have fallen by 18 per cent, from $395 in 1976 to $322 in 1996. Real wages for young women have fallen by 12 per cent, from $361 in 1976 to $316 in 1996. We are all conscious of the wage disparity between male workers and female workers, a point that has been made a number of times today, which is fitting given that it is International Women's Day. Over the same period real wages for adult males have increased by seven per cent and by 12 per cent for adult females.

Senator McGauran —I'm all for the day.

Senator STOTT DESPOJA —Senator McGauran says he is all for the day. I think that means that he has just thrown his support behind International Women's Day. Perhaps you could have a chat with Senator Newman and advise her of your support for policies that actually boost women's participation in areas like education, training and employment. Senator McGauran might also raise the fact that a lot more young women these days, as opposed to young males, are looking for full-time work and not getting it.

Youth wages further undermine the value of youth labour by determining the worth of a young worker according to his or her age rather than their skill, competence and experience. This perpetuates the view that youth labour is of less worth than adult labour, a view often based on such intangibles as immaturity or maturity when, in many cases, particularly in the sectors which tend to employ young people, the work of different aged workers may not differ in any material way. This raises the possibility for young labour to be exploited. Most young workers do not belong to a union and many work in insecure casual or part-time jobs at a cut pay rate.

Youth wages are profoundly inequitable and should be resisted for that reason alone. The Democrats certainly believe that. We are also aware of the need to examine and re-examine means of creating job opportunities for young Australians. We do not believe that wage reductions are the way to achieving increased employment opportunities. Those who seek the retention and the extension of, as this bill proposes, youth wages claim that the alternatives would be worse. However, this argument ignores the real nature of the type of work many young people are engaged in. The majority of young people are employed in the retail and services sectors. The type of work they undertake shares a number of common requirements—that is, flexibility, projection of a particular image or marketing strategy, adaptability to new sales techniques or technologies and physical stamina.

The growth in the consumer market, particularly the youth consumer market, has increased the demand for highly productive, flexible and easily trained employees who reflect the image and marketing of particular retailers and service providers. There are many clear incentives, other than cost, to hire young people. They should not be discounted in the debate over the effect on employment opportunities for young people by replacing youth wages with competency based rates. In my home state of South Australia Mitsubishi and another car plant, Holden, have recently abolished youth wages, recognising the particular value of the younger employees and understanding that workers should be paid according to their skill and their productivity rather than according to some inflexible model which offers them no incentive to necessarily improve their competency or their productivity.

The nature of youth work has also changed profoundly. Youth wages grew out of the apprenticeship tradition which involved a clear training wage level trade-off between employers and employees, long-term job security and a basis in pay increments according to skill acquisition. The past decade has seen a massive reduction in the number of apprenticeships and traineeships in favour of institutionalised training, usually and increasingly at the students' own expense. Most work that is undertaken by young people is low skilled involving minimal training which generally tends to take place in the first few months of employment, with all employees retained on the basis of their acquisition of a particular level of competency regardless of their age.

The justification posed for the retention of youth wages we have heard from various quarters and from the minister is that they have a positive effect on youth employment levels. That argument is being put with a lack of supporting evidence. That is one of the reasons why people were keen to see an investigation into this issue so people could assess what the likely impact would be on employment or unemployment levels and young people's work. Youth unemployment levels have continued to rise since the introduction of youth wages, which is also worth noting.

In fact, the youth unemployment rate has undergone a more rapid rate of increase since 1968, more so than any other group in this community. The unemployment rate of 15- to 19-year-old males was 2.9 per cent in 1968 compared with the current rate of 25.3 per cent. For females it was 3.9 per cent in 1968 compared with today's rate of 27.9 per cent. Young people have been severely impacted and have really borne the brunt of structural change in the work force today, something Senator Cooney was referring to. The impact of recessions on the pool of available employment, of course, has been felt by young people severely.

The entry level positions which used to be available for young people do not exist. State and federal governments have greatly contributed to this, though the substantial reduction in Commonwealth and state public service positions in particular are reasons for a lot of that loss. Today there are next to no under-20-year-olds working in the public sector, yet the government continues to place the blame for high levels of youth unemployment on young people. Under the current government's policies on a federal level, we have seen a halving in the funding available for employment assistance. Under most of these policies, young people are no longer eligible for intensive work search or job search assistance.

One of the dangerous effects of this legislation is that it will serve as a proxy for the real action which needs to be taken in relation to creating jobs for young Australians. A lot of this is designed to deflect from the real issue—that is, a lack of sustainable policies designed to create meaningful and long-term jobs, not just part-time or casual positions, but sustainable long-term meaningful jobs for young Australians. What we are doing here today is deflecting away from that debate.

It is for that reason Minister Reith has put forward this particular piece of legislation. Minister Reith's agenda is all about wage and condition reductions in an attempt to spread available work more thinly—basically, extending the growing numbers of the working poor in our society. I certainly look forward to Senator McGauran outlining and telling us about—as he promised Senator Campbell he would—the government's options for creating jobs for young Australians.

In relation to the eroding of conditions and wages of Australian workers, be they older or younger, the Democrats do not accept that agenda. We resist that agenda, and we will resist this government's attempt to shirk its responsibility for job creation. This is a government which, in only November last year, reneged on a commitment to invest in job creation through industry support. Instead, it prefers to pursue a regressive approach which will reduce the income of hundreds of thousands of Australians.

This legislation breaks faith. It breaks faith with the Democrats to whom Minister Reith gave his word—primarily, to our former leader—one that some of us had grave concerns about; but no, we were assured that Minister Reith would keep his word. I find it hard to believe that even he would have the audacity to not only pre-empt the findings of an inquiry but also break his word to young people, to the Democrats—

Senator McGauran —What about Cheryl Kernot? She broke hers to you.

Senator STOTT DESPOJA —I am not responsible for her, thank you, Senator McGauran. Not only did he break his word to young people and to the Democrats; he also had the audacity to pre-empt the findings of an inquiry to which he had given a commitment and his support. Surely, if there were no non-discriminatory alternatives to youth wages available, he would not feel the need to pre-empt the inquiry's findings.

His rationale for doing so, that it will lead to job creation, is based on little evidence. Even the evidence that was presented in the submissions is deeply flawed. The minister is quite fond of quoting employer surveys—only those in his favour, of course—while conveniently failing to mention that they are based on selective sampling and often misleading questions. And, even so, the results often show employers citing reasons other than mere cost for hiring young people. I think that already had been alluded to in a previous speaker's comments here today.

International evidence is similarly inconclusive and cannot support such an inequitable policy. Past Australian experience shows that the reduction of wage levels has little effect on unemployment levels. For example, between 1981 and 1983, youth wages declined relative to adult wages but youth unemployment rose by 64 per cent. In 1992 the Reserve Bank of Australia stated:

. . . the recent deterioration of the youth labour market does not seem to be due to any change in relative wage levels, which have been declining steadily since the mid-1970s.

The same arguments now being advanced for the reduction of youth wages previously were put in favour of retaining gender based differential rates of pay. Yet the disastrous effects that it was predicted would result from paying women the same rates as men for work of equal value never eventuated.

In the submission I presented on behalf of the Australian Democrats to the IRC, we argued for the replacement of discriminatory age based junior rates of pay with a competency based structure. Young people must also be offered the opportunity to develop skills through training and, of course, to receive appropriate remuneration for doing so. This would recognise the value of young people's labour and end the discrimination and exploitation that currently exists in over half of industrial awards.

This government wants to entrench youth wages where they exist but also to extend them to awards where they do not necessarily currently exist. In doing so, the government is breaking its promise to wait for the AIRC's findings on examining non-discriminatory alternatives; it is proposing the drastic reduction in pay rates for hundreds of thousands of young people. The government, by suggesting this course of action, is turning its back on meaningful job creation.

If this government is serious about creating opportunities for young people in employment, it would do better to direct its employment efforts towards extending the eligibility for job search assistance to young people, improving access to education and training and other opportunities for young people to develop their skills, and making and maintaining commitments to investing in sustainable industries to create meaningful and secure jobs.

The Democrats will be opposing this bill before us today on principle grounds, on employment grounds and on procedural grounds in the sense that the minister has pre-empted the findings of a meaningful, important and worthy inquiry, and also because he has broken his word with legislators and young people, and the Australian people generally. I see this as just another part of this government's ongoing targeting and scapegoating of young Australians, with the suggestion that their lives, their worth, are somehow less valid than those of older Australians.

Many people, young workers and old workers, have felt the brunt of structural change in the work force. I think this government would do well to start investigating opportunities to create jobs for those many displaced or out of work Australians as opposed to continually bashing them over the head, whether through so-called mutual obligation policies, extension of policies like work for the dole, cutting employment assistance, or even the extension and retention of youth wages in law. Perhaps this government could look at sustainable opportunities for meaningful and full-time work for all Australians. I would hope perhaps that Minister Reith could investigate those areas more thoroughly.