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Friday, 7 September 1984
Page: 860


Mr MACPHEE(2.52) —The Australian Labor Party has deceived our young people. In the last election campaign it created the impression that it would reduce unemployment by 500,000. It did not actually say that, but it wanted the public to believe that and, indeed, that was the way in which it was widely interpreted. The facts are that when people think of 500,000 new jobs being created they think of unemployment going down by 500,000.


Mr Robert Brown —That is not what was said.


Mr MACPHEE —I know. What was said was that 500,000 new jobs would be created, but of course people believe that means a reduction in unemployment. We know that the record of this Government is that it is seeing jobs created at about the same rate as the work force is growing, that the number of people now entering or re-entering the work force almost matches the figure in terms of the new jobs being created. That is why a number of people are now utterly disillusioned. Yesterday's figures on unemployment, which I analysed in detail in my speech on the Appropriation Bill (No. 1), represent the most disturbing news to have reached our young people for many years. As I demonstrated yesterday, over half of the new jobs that have been created are in the public sector. I analysed that situation and explained that if we continue to fund new jobs in the public sector-Federal, State or local government-a recurrent expenditure impacts on the deficits of those governments year after year which helps to keep interest rates high, because of public sector borrowing, and reduces the capacity of the private sector to invest and, therefore, to create the kinds of jobs which most people find sustainable and the kinds of jobs which they seek. The Budget deficit is not high to stimulate employment by means such as capital works. It is high because of recurrent expenditure in the areas which I identified yesterday, such as salaries. High deficits year after year do erode profits. They deter investments, and, therefore, the creation of jobs in the private sector.

Another deterrent is the seemingly endless addition to the on-costs. In April last year the National Economic Summit Conference was held in this chamber. That conference created an expectation of leadership. The theme of the New South Wales Premier at the Summit was 'jobs, jobs, jobs'. That theme has often been described since then as 'wages, wages, wages'. Now it may be said, even in the Budget Papers, that the theme is 'on-costs, on-costs, on-costs'. The Budget advice is that in the order of 50 per cent of the labour costs are due to factors other than wages. Some of those are imposed by State governments. The Premiers, in their National Economic Summit Conference communique, pledged themselves to restraint. Was there any follow up of this at the Loan Council or the Premiers Conference? No, there was not. No curbs were placed on payroll tax increases and workers' compensation premiums. No commitment was made regarding regulation reform which would reduce unit labour costs. No commitment was given to extended shopping hours-except more recently in New South Wales, and there is still some doubt about the way in which that was done-accompanied by a reduction in working hours. The retail traders firmly believe that extended shopping hours will actually cost jobs, and cost the jobs of students in part time work. There was no follow-up of this matter. There was no leadership of the kind promised at the last election campaign and which appeared to be getting some fulfilment at the Summit. While we all thought it was good drama and shallow, there was the potential there for follow-up. There was the potential for follow-up with the trade union movement with which the priorities have to be determined.

Do people just want more increases for those in jobs or do they want the creation of new jobs? I remember that before the last election the President of the Australian Council of Trade Unions actually said that 90 per cent of people are in a job and his job was to look after those 90 per cent. Presumably it is the Government's responsibility to look after the rest. The truth is that the Government has committed itself to supporting the trade unions. The Government, in its accord with the trade unions, agrees to be accommodative and supportive of the trade union movement. What about them both being accommodative and supportive of our young people? We know that it is the task of government economic policy to create jobs. We have said in several contributions to the Budget debate that the present policy is doomed to fail in that regard.

Even in the portfolio of employment and industrial relations there are training programs which ought to be used to lift the level of skill. Over $400m is being expended on make-work programs, job creation programs, in which the level of skill is not being lifted and in which people will not be more competitive in the labour market at the end of the subsidised job. In fact, they will not have the job when the subsidy expires. At a seminar on job creation, Dr Peter Scherer of the Australian Bureau of Labour Market Research, which is within the portfolio of the Minister for Employment and Industrial Relations (Mr Willis), said:

A job was only 'real' if it achieved something other than putting someone on the payroll . . .

Jobs which did not fulfil any function were despised by the community and could be counterproductive for those holding them if their work experience was discounted as meaningless by other employers.

I believe the general assessment of the community employment program, for which over $400m is allocated in this Budget, is that the criteria established in that statement by the Bureau of Labour Market Research will not be met, that people will not have gained anything more than the merest work experience. Work experience itself does not lift their capacity to compete for jobs in the market place. If one looks again at yesterday's figures one will see that in January 1984, 64.3 per cent of people in the age group of 15 to 19 years were looking for their first job. In August 1984 the figure was 75.9 per cent. Those two figures are seasonally adjusted and mean that there is an increase of nearly 12 per cent in the number of first job seekers still seeking jobs. Figures which have been tabled in this place in the course of the Budget also indicate that the length of unemployment is growing for those who are unemployed. We see remarkably little recognition of that by the parties to the accord, which is the linchpin of the economic strategy of the Government.

In the same age group, 15 years to 19 years, the figure for total unemployed in January this year was 25.4 per cent, and in August 25 per cent, which means a modest decrease, in seasonally adjusted terms, in the number of teenagers looking for work. But the Budget promises only a further modest decrease in the next 12 months. All of this is when we have had the benefits to the economy of the wage pause, the ending of the drought, and the United States economic recovery, none of those things being the work of this Government. What we find is that the policies implemented under the accord have jeopardised and squandered recovery.

This Opposition committed itself, quite some time ago, to an inquiry into teenage unemployment, which would include, obviously, the question of wages relative to adult wages. On 12 February I released a news release to get this subject on the political agenda. At no stage has the Government or the Australian Council of Trade Unions responded with any imagination to this issue, yet every employer to whom one talks says: 'I would employ more young people if their wages were relatively lower than those of adults'.

I believe, and the Opposition is committed to this view, that the Conciliation and Arbitration Commission ought to have an inquiry into the relativities between youth wages and adult wages, and that this would then lead to a determination of the guidelines to be used in setting junior wage rates in the future. I also called for, on that occasion-and we are committed to having it-a qualitative survey of employer attitudes to young people to determine what precisely the reasons are for young people not gaining employment. Are there other reasons besides the alleged wage levels? Are there reasons to do with literacy, numeracy, presentation, motivation, and so on? I went on to say in that Press release in February:

The January unemployment figures show that there are now 100,000 teenagers aged 15 to 19 who are unemployed and looking for their first job. By the Government's own admission there could be as many as 130,000 additional teenagers in the ' hidden unemployed' category-making close to a quarter of a million in all.

There will never be a better time than now for the Government to demonstrate that its professed concern for Australia's young people is genuine. There are positive steps which the Government can take. A failure to take them will be seen as an abandonment of our youth.

Then I criticised the Government for failing to act upon the report of its own Bureau of Labour Market Research, which suggested that:

. . . the Government should encourage the Commission--

that is, the Conciliation and Arbitration Commission-

to conduct a general inquiry into the determination of youth wages.

It is important that we recognise that the major finding of that report, which was entitled 'Youth Wages, Unemployment and the Labour Force', is that:

. . . youth employment would tend to rise if youth labour costs were reduced relative to those of adults.

The Government and the ACTU have responded merely by saying that by attrition somehow or other that situation will correct itself. At a time when 25 per cent of our young people are unemployed, that is not an acceptable approach.

The other major findings of that report were that industrial tribunals in Australia have generally paid little attention to the principles by which junior -adult wage relativities should be determined; that they have done it, on the contrary, in an ad hoc way. The report also observes that the tribunals do not have the ability to conduct inquiries of their own. Therefore, we believe very strongly that at a time when 25 per cent of our young people are unemployed, when more will come on to the labour market at the end of this year, it is extremely important that the Government take the initiative and that the Government set up an inquiry and ask the ACTU to do some trade-offs to assist younger people to gain employment.

The Opposition stands by those views. When we released our industrial relations and wages policy in April, we committed ourselves to such an inquiry. The need for it is abundantly clear. In the Australian Bulletin of Labour of June this year, at page 162, Mr David Pitman concluded, after a very erudite study:

There has been no effective test case in the determination of junior wages in Australia.

This issue is becoming very grave. The sooner it is resolved and acted upon, the better. So, I return to the commitment in the accord-that the Government will be accommodative and supportive of the ACTU. I ask again that both of them consider the 76 per cent of young people looking for a job and those who will join them at the end of this year. Cynics are saying that trade union officials are quite content to see youth wages high, because then older workers do not lose their jobs. I have never shared that view, but it is hard to escape a belief that the way in which the ACTU is continuing to place demands, an apparently endless set of demands, without forgoing and without examining any of the outmoded provisions now applying, is either heedless of economic sense or is certainly heedless of the wellbeing of younger people who do not have labour market experience and who in many ways cannot easily commend themselves to employers.

The situation is tragic. The Government has an obligation to set up an inquiry in lieu of the national wage case that would have been heard, and to examine carefully what is the situation regarding junior wage rates relative to adult rates and youth employment prospects.