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Monday, 15 June 2009
Page: 5923

Dr SOUTHCOTT (5:06 PM) —I am pleased to speak on the Social Security Amendment (Training Incentives) Bill 2009 and indicate that the opposition will not be opposing this legislation. It is worth looking back 18 months because the government have now been in place for a little bit more than 18 months and it is time to deliver a mid-term report card on them.

When you look specifically at the area of youth unemployment, you see in only 18 months a terrible performance in jobs for teenagers, young Australians. Looking back to November 2007, specifically at 15- to 19-year-old Australians, there were 257,000 in full-time jobs, compared with 222,400 now. There are almost 35,000 fewer teenagers in full-time jobs now than when the Rudd government was first elected. There are 31,000 fewer teenagers in jobs in total. There are now an extra 4,300 teenagers who are unemployed. We have also seen very large falls in the participation rate for teenagers, from 60.4 per cent to 57.4 per cent and in the employment rate for teenagers—that is, the employment-to-population ratio—from 51 per cent to 47.8 per cent. That is a big change in just 18 months.

The lesson of previous recessions, of the early 1980s and early 1990s, is that people who are just entering the labour force for the first time are often hit much harder. Youth unemployment in Australia generally rises at twice the rate of total unemployment. When we look at 15- to 24-year-olds, we see almost 70,000 fewer full-time jobs and 32,500 more unemployed. The unemployment rate for those looking for full-time work is up from 9.8 per cent to 12.4 per cent. The overall unemployment rate is up from 9.7 per cent to 11.4 per cent. This is in just 18 months. The participation rate for these young Australians has fallen from 71.2 per cent to 69.4 per cent, and the employment rate, or employment-to-population ratio, has fallen almost three per cent, from 64.1 per cent to 61.2 per cent.

When you look at the labour force as a whole, over the last 12 months the economy has lost about 60,000 full-time jobs and there have been about 100,000 part-time jobs created. When you look at the losses that have occurred in the 15- to 24-year-old age group, there have been 70,000 full-time jobs lost in the Australian economy, and that is equivalent to the entire loss of full-time jobs in the Australian economy over the last 12 months. So this group is definitely bearing the brunt of the global financial crisis, but the Rudd government has introduced some specific policies that will disproportionately affect young Australians and their opportunities to get a start and to get a job.

The bungled Job Services Australia will see massive disruption in the area of employment services, such that 47 per cent of job seekers will be changing their provider and changing their case worker on 1 July, at a time when unemployment is rising. We have heard from industry groups, from Restaurant and Catering, from pharmacies and from newsagents that the award modernisation process will again lead to the loss of jobs, and, typically, a lot of these jobs will be entry-level jobs for young people. We have heard from a variety of groups that the government’s Fair Work Bill will again be job destroying. These are three specific decisions that the government have taken. It is no wonder they are having to pump out billions and billions of dollars without having any idea of how many jobs will be created or supported when they have made specific decisions which go to the heart of the opportunities that there will be in the labour market.

There are two parts to this bill. The first part is for a temporary training supplement of $41.60 per fortnight to eligible job seekers on Newstart or parenting payment who undertake approved training. These will be job seekers who do not have a year 12 or equivalent level qualification, or who have a trade or vocational qualification that can be upgraded to help them find work. The payment will be available from 1 July 2009 to 30 June 2011.

The opposition are not opposed to training, but we believe that training is only one limb or one element of getting someone into a job. One of the weaknesses of the government’s approach has been a complete failure to create a climate of strong job creation. Labor have failed to define a clear pathway between training and a job. There is a training mantra but not a jobs mantra. It is critical that unemployment is addressed by boosting business confidence and encouraging employers to take on new employees. The training supplement is something we do not oppose, but, again, we believe that it is critical to demonstrate how this will lead into employment.

The second part of the bill relates to amending the participation requirements for certain young people, requiring them to either earn or learn to be eligible for youth allowance. The opposition supports this approach. Over the last 12 months we have seen the number of teenagers who are not in full-time education or full-time employment increase from fewer than 200,000—about 195,000—to 242,000. What we know is that people who are not in full-time education and not in full-time employment traditionally will languish and have trouble remaining in the labour force over their lifetimes. As I said earlier, during past economic downturns youth unemployment has increased disproportionately. It is critical that we ensure that young people do not become disengaged and disenfranchised. One of the concerns about the labour force statistics is that we are seeing very large falls in the participation rates of young Australians. We have seen in a period of 18 months very dramatic falls in the participation rates of young Australians. It is critical that we do keep people engaged in the labour market and we do keep people actively looking for work.

As I said, the opposition does support the tightening-up of youth allowance. But, again, it is only one aspect of improving youth unemployment and providing more opportunities for younger Australians. There are lots of aspects that need to be addressed so that employers will take on extra workers so there will be the jobs there for younger Australians. As I said at the start, what we have seen is disappearing jobs for younger Australians—full-time jobs and overall jobs—and big falls in the participation rate and the employment rate. So, whilst training and education can certainly boost employability, training is not for everyone and not everyone gains a benefit from training. The experience around the world is that training programs can be very expensive and actually have quite poor employment outcomes. We believe it is important to tailor approaches to the individual.

The opposition will be looking very carefully at the labour force figures, ensuring that ‘learn or earn’ is not a cynical attempt to distort and manipulate the unemployment figures as people who would otherwise be looking for work are pushed into training in order to claim income support payments. We do not want to see a return to the training treadmill and many of the training programs of Working Nation, which actually had very poor employment outcomes and very low chances of people going from those programs into a job. We will be watching the figures on youth unemployment very carefully. We think that this is a critical area to address for the future because it is very important that people do remain engaged, do remain active, so that they have a much stronger connection with the labour force over their lives.