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Wednesday, 22 June 1994
Page: 1827

Senator TROETH (10.29 a.m.) —I rise to support the remarks made by my colleagues Senator Gibson and Senator Watson. The coalition has long pushed for the suspension of the training guarantee levy. In supporting this Training Guarantee (Suspension) Bill we note that the levy should never have been implemented initially. Rather than merely suspending the levy, the coalition would hope to see it abolished. Senator Gibson has moved an amendment to this effect. The Training Guarantee Act is an absurd piece of legislation that required employers with minimum annual payrolls of $222,000 to spend at least 1.5 per cent of their payroll on eligible training.

  Right from the start there were drawbacks to this legislation. There is no requirement for firms to have their training accredited. There have been allegations that up to 30 per cent of the total of $1 billion spent on the training guarantee levy has been misused, with training seminars being held in extremely unlikely places, as detailed by Senator Margetts, and dubious practices, as detailed by Senator Bell. The training guarantee levy is yet another example of a tax on jobs that inhibits employment. The increased cost of record keeping in regard to training expenditure in many cases works to the detriment of expenditure on individuals. Indeed, the government-sponsored McKinsey report noted that 28 per cent of respondents considered on-costs, including the training guarantee levy, to be an impediment to investment. It said:

(on-costs are considered) a significant irritant affecting the willingness of business to invest and employ additional people.

It has taken the government four years to suspend this levy—this absurd and dictatorial approach to training. Who knows how many jobs have been lost as a result of it. Resources for employers have been scarce enough in the last four years; and money spent on paperwork cannot then provide salary or wages for an additional employee.

  The rest of the government's training reform agenda, as outlined in the white paper, is little better. All that the new training programs will do is shuffle numbers between unemployment queues and training programs. There is still no real prospect of a job at the end of the training. Without real private sector investment, the government will have to continue a very high level of spending on labour market programs to maintain the charade that people are being trained for jobs. Without real growth, unemployment will simply dip artificially for the life of the white paper measures, and then rise again when the life of the program expires.

  As was canvassed in this place in May, the Department of Employment, Education and Training, the department responsible for running these programs, has had serious allegations of abuse and fraud made against it. Very serious doubts have been raised about the ability of DEET to administer these hugely expensive programs in an accountable and effective manner. In addition, the white paper did not outline any industry policy or plan for reducing unemployment. There is still no incentive for business to take on more employees.

  In another Australian Chamber of Commerce and Industry report, 61.1 per cent of respondents said that, in order to raise the level of employment, the reduction of on-costs was extremely important; 53 per cent of respondents said that the easing of award restrictions was very important in raising the level of employment; and 52.3 per cent said that easing termination restrictions was very important in order to increase employment. All of the factors I have mentioned are very important in the ability of employers to employ. Until we see a rise in the level of that ability, there will be no long-term solutions to Australia's unemployment problem.

  If the government learns anything from the suspension of the training guarantee levy, it ought to be that decreasing taxes on business and removing restrictive business legislation is the only way to get real job growth. Suspension, rather than abolition, adds an element of uncertainty to the business plans of employers. Merely to say that the levy will be suspended for two years means that employers have no idea what will happen at the end of that time, and they may yet have to devote additional funds to the training of employees. Abolishing the training guarantee levy outright, as recommended by the coalition, would at least be a start to reducing the high level of unemployment and getting Australia going again.