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Tuesday, 16 June 2009
Page: 3343

Senator WONG (Minister for Climate Change and Water) (4:32 PM) —I move:

That these bills be now read a second time.

I seek leave to have Senator Ludwig’s second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

International Monetary Agreements Amendment (Financial Assistance) Bill 2009

The International Monetary Agreements Act 1947 (IMA Act) currently enables the Treasurer to lend money or enter into a currency swap with a country in support of an International Monetary Fund (IMF) program.

These arrangements were put in place by the former Government in 1998, through the IMA Amendment Act 1998, with the purpose to establish a framework for the provision of financial assistance by Australia in support of IMF programs.

The purpose of this Bill is to extend current arrangements to include support for World Bank and Asian Development Bank (ADB) programs.

This will also allow Australia to enter into a standby loan agreement with Indonesia, as announced by the Prime Minister on 10 December 2008.

The Indonesian Government has approached the World Bank, the ADB, as well as Australia and Japan, to seek assistance with its budget financing.

The global financial crisis is impacting on all countries, right around the world, and it is having a very significant impact on many emerging economies.

Australia’s standby loan, which will form part of a World Bank led package, is a support mechanism in case private capital markets become too costly or effectively closed to Indonesia in 2009 or 2010.

The World Bank has worked closely with Indonesia and other development partners as well as liaised with the IMF throughout the preparation of the loan arrangement.

The standby loan would only be drawn upon if certain triggers and criteria are met.

The loan, if activated, would be paid back in full and an appropriate interest rate will be charged on the loan.

There is no certainty that Indonesia will need to draw down on the loan.

However, it is in Australia’s national interest to be able to assist should the situation deteriorate.

If drawn on, the loan would be used to help support Indonesia’s budget and in so doing support economic growth and stability in Indonesia.

Continued growth in emerging and developing countries is important for global recovery and therefore recovery in the Australian economy.

Australia also has a substantial direct trade and investment relationship with Indonesia and ensuring Indonesia’s continued economic growth and stability will benefit Australian exporters and jobs.

Supporting stability and economic recovery, particularly in our region, is an issue on which there is an established history of bipartisanship.

When the former Government introduced the 1998 IMA Amendment Bill, it noted that:

The government’s decisions to provide support reflect the importance of economic and political stability in the region for Australia and the Australian economy.

It is important that governments are able to act swiftly in such circumstances to help mobilise international support to deal with a crisis and to provide commitments on our own participation.

Consistent with the 1998 IMA Amendment Bill, this Bill will allow Australia to continue to play its part in international cooperation efforts when necessary to safeguard and promote Australian national interests.

In extending current provisions in the IMA Act to World Bank and ADB programs, this Bill also extends the same important conditions currently contained in the IMA Act that apply to IMF programs.

There must be a request for assistance by the World Bank or ADB for Australia’s assistance.

The agreement must also allow Australia to require repayment if the World Bank or ADB program is suspended or prematurely terminated.

This is to ensure that assistance is provided only where a World Bank or ADB program is in place and continues to be adhered to by the recipient country.

The Treasurer must be satisfied that other countries or international organisations will also be providing support to the recipient country as part of the World Bank or ADB program.

This is to ensure that Australia’s assistance under the Bill is part of a multilateral effort.

Consistent with the IMA Act, the Bill provides for the Treasurer to release publicly and table in each House of Parliament a national interest statement relating to an agreement entered into under the Bill.

Statements will include a description of the nature and terms of an agreement and set out why it is in the national interest having regard, in particular, to foreign policy, trade and economic interests.

This Bill ensures that Australia will be able to contribute to World Bank and ADB financial assistance programs and the provisions I have just outlined will ensure that this assistance is only offered when it is in Australia’s national interest.

Further details of the Bill are contained in the explanatory memorandum.

Social Security Amendment (Training Incentives) Bill 2009

The Social Security Amendment (Training Incentives) Bill 2009 introduces two significant changes to the social security law arising out of the 2009-10 Budget. These changes will encourage participation in study or training by job seekers with limited formal education and young people who are early school leavers.

Early school leaving is of particular concern when we look at how this affects the transition of young people into further education and employment.

When we compare the experience of working age Australians without Year 12 or a vocational qualification to people with these qualifications we find that they are less likely to participate in the labour market and more likely to be unemployed. By age 24, only seven out of ten young people without a Year 12 or Certificate III or IV qualification were in further training or employment. Nine out of ten young people with such a qualification were in further training or employment. In other words, the lack of a qualification means a young person is almost three times as likely not to be in further training or employment.

There is also a demonstrated link between higher educational attainment and significantly better wages - around $100 a week for each extra year of education for full time workers. Education clearly delivers better opportunities for individuals, and for their families.

Early school leavers and people with low skills are likely to experience particular disadvantage both during the economic downturn and recovery. In times of economic downturn, we know that youth unemployment tends to rise rapidly and then fall back more slowly during the recovery. In the recession of the early 1990s, young people without Year 12 were around three times more likely than their counterparts with Year 12 to not be in further education and to be unemployed. In fact, around 1 in 3 early school leavers was unemployed.

This can result in youth unemployment remaining stubbornly high compared to the broader labour market.

We need to act decisively to prevent those with low formal qualifications or skills being left behind. This is why the Council of Australian Governments agreed that governments needed to work together, without delay, to improve young people’s connections to education and training.

The initiatives in this Bill support the Government’s commitment to improve the educational attainment level of Australians by encouraging completion of Year 12 or equivalent, and the commitment to unemployed Australians to provide improved access to education and training opportunities.

The first component of the Bill will give effect to the Government’s $83.1 million investment in a training supplement for certain recipients of Newstart Allowance and Parenting Payment. The supplement is for recipients who do not have a Year 12 or an equivalent qualification, or who have a trade or technical qualification that could be enhanced or upgraded. This measure will better equip recipients to find future employment.

Job seekers meeting these requirements will receive an extra $41.60 per fortnight if they undertake an approved training or further education course of less than 12 months duration at the Certificate Level II, III or IV Level.

The Training Supplement will be available for people commencing this training between 1 July 2009 and 30 June 2011. This is a temporary measure to respond to the global recession. The Training Supplement will be available until any approved training commenced in this period is completed. It is estimated that over 50,000 low skilled job seekers will be assisted over this period.

The second element of the Bill will introduce changes to the participation requirements for Youth Allowance. This will support the action agreed by the Council of Australian Governments on 30 April 2009 to increase and improve young people’s participation in education and training.

All governments signed up to a Compact with Young Australians. This is a commitment to give young people aged up to 25 years an entitlement to an education or training place for any government-subsidised qualification, subject to admission requirements and course availability. For 15-19 year olds, states and territories have agreed to fully implement this commitment by 1 July 2009.

Young people will access this education entitlement through schools, TAFE Colleges or Registered Training Organisations. In some cases, they may also be referred to do a course through the Productivity Places (PPP) program.

At the same time, COAG agreed to introduce a National Youth Participation Requirement, to commence on 1 January 2010. Under the National Youth Participation Requirement, it will be mandatory for young people to participate in school, or equivalent institution until they complete Year 10. It will also be mandatory for young people who have completed Year 10 to participate full-time (for 25 hours a week) in education, training or employment or combined activities until age 17.

Consistent with this, the Council of Australian Governments also agreed to bring forward the 90 per cent Year 12 or equivalent education attainment rate target from 2020 to 2015.

To support these initiatives, the Commonwealth Government committed to make education and training a precondition for young people without Year 12 or the equivalent to obtain Youth Allowance (Other) and Family Tax Benefit Part A. The Social Security Amendment (Training Incentives) Bill 2009 will give effect to this commitment for Youth Allowance. The changes to Family Tax Benefit will proceed by way of separate legislation later in 2009.

The changes in this Bill will apply to young people who do not have Year 12 or an equivalent qualification. This is currently agreed by all jurisdictions to be a Certificate Level II qualification under the Australian Qualifications Framework.

To receive Youth Allowance, young people will need to ‘learn or earn’. If they have not completed Year 12 or an equivalent qualification, they will need to either participate in education and training full-time; or participate full-time (that is, generally for at least 25 hours a week) in part-time study or training, in combination with other approved activities. They will need to do so until they attain Year 12 or an equivalent Certificate Level II qualification.

The arrangements will be flexible for young people with complex needs. Young people with multiple barriers such as homelessness or substance abuse issues will have alternative ways in which to meet their participation and qualification requirements. Similarly, young people with a partial capacity to work or young parents will have their hours of participation tailored to their assessed capacity.

The present legislative exemptions that deal with any difficulties a young person may be having, for example alcohol or drug abuse issues or homelessness, will continue.

Also, young people or young parents with a partial capacity to undertake study or training will have their hours of participation tailored to their assessed capacity.

The amendments will apply to applicants for Youth Allowance from 1 July 2009. The new requirements will be progressively implemented for existing Youth Allowance recipients without Year 12 or the equivalent between January and July 2010.

Past economic downturns have taught us that young people and others with limited education and skills are particularly vulnerable to becoming unemployed over the longer term.

The Training Incentives Bill provides two much needed measures to encourage people to continue to train and learn during periods of downturn so they are skilled for the recovery ahead.

I commend the Bill to the senate.

Debate (on motion by Senator Wong) adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.

Ordered that the resumption of the debate be made an order of the day for a later hour.