Senator CROSSIN (6:21 PM) —We have heard many times before about the purpose of the Workplace Relations Legislation Amendment (Youth Employment) Bill 1998, and we now know that it is just another of this government's attempts to permanently exempt junior rates of pay from the provisions of the Workplace Relations Act. At present, this act exempts junior rates of pay from the operations of its antidiscrimination provisions until 22 June in the year 2000; that is, unless the Industrial Relations Commission otherwise decides, on a case-by-case basis, that the exemption should continue to apply.

This bill is intended to amend the Workplace Relations Act and to permanently exempt junior rates of pay from the operations of its antidiscrimination provisions. It requires the Industrial Relations Commission to promote the inclusion of junior rates of pay into awards and agreements which currently do not include such rates. So what we have before us is not only a permanent exemption of junior rates of pay from the operations of the antidiscrimination provisions but also a requirement for the Industrial Relations Commission to promote—which seems in one respect an analogy when you look at enter prise bargaining—the inclusion of junior rates of pay; to ensure that junior rates of pay operate where they probably do not currently exist.

Why do we have this bill before us at all in the Senate? In order to get the Workplace Relations Act through the Senate in October 1996, Minister Reith agreed with the Democrats, as we have heard time and time again today. We have been reminded time and time again that the agreement with the Democrats was an undertaking that an inquiry be conducted by the Industrial Relations Commission into youth wages and it would report by June 1999. Here we are in early March talking about the effects of this bill and the impact of this bill. There was also an agreement to exempt junior rates of pay from the age antidiscrimination provisions of the Workplace Relations Act until June 2000.

So this bill is before the Senate, which shows that this government has completely reneged on this agreement. It is an act to intimidate the Industrial Relations Commission. It is an act that questions, I believe, its effectiveness. It disregards the evidence of the people before it, and it clearly says a lot about what this government views as the role of the Industrial Relations Commission in the future. It pre-empts the outcomes of this inquiry, and there is still a year at least before the current provisions in the Workplace Relations Act run out.

Historically, junior rates provisions have been included in a wide range of awards. They appear to have originated from consensus, by and large. The age of majority in Australia in the early decades of this century was 21 years. Well into the second half of the century persons under the age of 21 were not entitled to vote in state or federal elections and were not entitled to purchase alcohol. They were not able to enter into certain legally binding agreements. The living costs of juniors, by and large, were subsidised by their parents through their teenage years. This is no longer the case in contemporary society in Australia. The make-up of contemporary society in Australia when it comes to young people seems to be completely ignored and forgotten by this government.

The age of majority for Australians these days—the age at which they are treated as adults—is 18 years of age. At 18 they are now entitled to vote. They can make wills, they can buy alcohol, they can enter into mortgages and hold passports. They are adults before the law. Yet the provisions of this bill treat them as if they are still minors rather than adults. School retention rates have risen dramatically over the last couple of years, and many children now complete year 12. They turn 18 the following year. They enter into part-time work while studying, certainly while going through university. Generally, the skill level of school leavers is higher than it was many years ago. It is common for young people these days to live independently.

They support themselves through their own earnings, and they usually live with a couple of kids in a flat or a house together. Persons aged 18 to 20 in Australia are adults for all intents and purposes, except in respect of their entitlement to full and fair minimum wages—and that is the case in some industry sectors but not in others.

In September 1997 the House of Representatives Standing Committee on Employment, Education and Training presented the report Youth employment: a working solution. The inquiry was chaired by a member of parliament, Bob Charles, and the report has commonly become known as the Charles report. The inquiry's aim was to examine factors which influenced the employment of young people. It had to identify recommendations to improve their employment prospects. In the summary the report notes that the employment environment for young people has changed enormously since their parents and most of their teachers first entered the labour market. It says that full-time and part-time employment for 15- to 24-year-olds has fallen by three per cent since 1982, and by comparison total full-time employment has grown 16.2 per cent and total full-time and part-time employment has grown 31.2 per cent. The decline in the number of full-time jobs has been particularly severe for teenagers, falling 59.2 per cent over 15 years. On page 114, though, the dissenting report makes this statement:

The coalition members displayed a worrying disregard for the quality of life of young workers. This is evidenced by their refusal to incorporate in the report data relating to young people's standard of living, such as a comparison between the Henderson poverty line and junior wage rates.

There was evidence there to show that young people's standard of living is well below what we would expect it to be. It goes on to say that their disregard is also evidenced by their commitment to remove junior rates from the purview of the Industrial Relations Commission.

Together with the employment issues, the Industrial Relations Commission also considers questions of equity and fairness. But one of the recommendations is not to remove junior rates of pay. It is simply that the members of the coalition parties recommend the government make a submission before the Industrial Relations Commission opposing the abolition of junior wages. Back in September 1997 this government was prepared to make a submission before the commission. It still recognised that the commission had a role in conducting this inquiry. There is no recommendation at all in here that this government should break their promise, break their agreement and move to abolish junior rates of pay by the enactment of this sort of legislation.

The most significant factor influencing the employment of young people is the availability of jobs. Increasing the competitive advantage of young people within the labour market does not expand the size of the market itself. Principal determinants of youth employment include technological change, structural change and changing social mores. Again, the Charles report noted these factors.

In response to the Charles report, the ACTU had the following to say. They have calculated an optimistic view by applying the current age based relativities in the retail industry to the current minimum adult wage, and they calculated a realistic view by applying current apprenticeship rates for a commencing 18-year-old hairdresser. Substantial wage cuts for young people result either way. Optimistically, the cuts amount to 12 per cent for retail workers at each year of age from 15 to 20, while the realistic view sees cuts of up to 41 per cent in the basic minimum rate payable to these young workers for ordinary hours of work. Minimum award rates for teenagers in Australia are much higher in the retail industry than in the manufacturing industry.

Sitting suspended from 6.30 p.m. to 7.30 p.m.

Senator CROSSIN —Prior to the dinner break I was making some comments on the Youth employment: A working solution report, commonly known as the Charles report. I want to put on record that this report does not claim that cutting wages will create measurably more jobs for young people. It rests on the conventional belief that lower wage costs will cause employers to offer more jobs and vice versa. In fact, there is a huge body of international research that contradicts this conventional belief. Facts in Australia also challenge it. This report went on, under a section `Lack of information on wages and employment', to say:

In examining the relationship between youth wages and employment the Committee was amazed by the dearth of current Australian information on the issue. It is the Committee's view—

it went on to say—

that a detailed study of the empirical evidence in Australia to provide a clearer picture of the extent of the relationship must be undertaken.

In fact, one of the recommendations of this report was:

. . . that the Department of Industrial Relations undertake or commission empirical research on the relationship between the changes in the level of wages and employment levels.

Minimum award wage rates for teenagers in Australia—as I was saying before the dinner break—are much higher in the retail industry than in manufacturing, with a differential of 35 per cent at age 16 falling to 15 per cent at age 20. But the retail sector employs five times as many 18- to 20-year-old sub-trade workers than does manufacturing and it employs more than 12 times as many 15- to 17-year-olds. On the same measure, between 1986 and 1997, youth employment in the retail sector grew by about 70,000, or 30 per cent, but fell by around 25,000, or 40 per cent, in manufacturing, despite youth wages for retail workers rising relative to manufac turing by about eight per cent over the same period.

Also, the Charles report noted that over the last 15 years there have been major structural changes in the labour market for young people aged 15 to 24. Overall there has been a decline of nearly 32 per cent in the number of full-time jobs available for young people in this age group, which has been offset by the growth in the number of part-time jobs. The decline in the number of full-time jobs has been particularly severe for teenagers, falling 59.2 per cent over 15 years. Growth in the number of part-time jobs has failed to offset the decline in the number of full-time jobs, and the total employment of teenagers has declined by 10.6 per cent over 15 years.

The changes in youth employment recorded in this country over the past 15 years have occurred in conjunction with a decline or no change in the relativity of junior to adult award wages and with falls in the relativity of junior to adult earnings. Wage rates simply have not been a decisive influence driving these changes—to the contrary, award rates of pay for juniors appear to be wholly or substantially unrelated to teenage employment outcomes over the past 20 years. In fact, junior rates of pay have been amongst the few factors held constant throughout this period of change. The incomes earned by teenage workers are, however, significantly affected by any changes in the junior rates submission.

I would like to draw the Senate's attention to an article in the Sydney Morning Herald of 28 November last year, headed `Youth need wage justice'. The author of this article, Adele Horin, makes a number of very true points. She said:

When women workers were treated as second-class citizens, dire predictions were made about the economic consequences of granting them equal pay. History proved the doomsayers wrong. Women's employment grew in leaps and bounds, all of it after the historic 1969 and 1972 equal pay victories.

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For the young, it is never a right time to improve their wages.

She continues:

A government intent on overhauling the industrial relations and taxation systems is fiercely committed to maintaining the outmoded and unfair concept of junior wages.

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. . .. research points to increase numbers of impoverished young workers in Australia who cannot support themselves despite having a full-time job.

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. . .. Judy Schneider of the Social Policy Research School at the University of New South Wales maintains that it is virtually impossible for full-time workers under 18 to support themselves, even at an austere standard of living.

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Even when you compare industries, youth wages are lower in manufacturing and retail, but youth employment has fallen faster in manufacturing.

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Wage rates have not been the decisive factor in youth unemployment. But they have been the decisive factor in the poverty of young workers.

In conclusion, let me just refer back to the fact that the most significant factor influencing the employment of young people in this country is the availability of jobs. As my colleague Senator Stott Despoja mentioned, it is not in fact the rate that you pay these people but the availability of jobs. She was correct when she talked about the spreading of available jobs even further and thinner.

The benefits of economic growth have not transferred into jobs for young people. Many entry-level positions have disappeared. There is no evidence to suggest that young people are less job-ready now than in the past. The cause of youth unemployment cannot be found in asserted deficiencies of young people themselves but in the economy which increasingly fails to provide them with employment opportunities. It is imperative to find innovative ways to approach the problem of youth and employment, including adopting a more interventionist approach to industry policy so as to promote job-intensive industries.

The intended cuts to youth incomes through this bill, the cuts to the provisions maintaining junior rates and the conditions contemplated by this government are unjustified and are suggested without considering the consequences for young people themselves. There is a wish to maintain junior rates of pay rather than to accept competency based pay. There is no evidence at all that the abolition of junior rates of pay will increase youth unemployment. Competency based wages in this country should be allowed to proceed.