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Wednesday, 23 November 2016
Page: 4110


Ms SHARKIE (Mayo) (12:14): I want our government to provide tangible opportunities for young people to gain relevant on-the-job training and experience. I worked for more than four years in executive roles in the youth space. When you know the challenges that face unemployed young people like I do, you really do want ideas like the ones contained in this legislation to work. However, I must put my concerns before the House.

As I outlined in my first speech, many young people in our country, for a variety of complex reasons, are struggling to transition to employment. Contributing significantly to the youth unemployment rate is the reality that every year fewer and fewer entry-level jobs exist. Young people who are underemployed, early school leavers or those who fail to transition successfully from school to further education or employment are some of our most vulnerable members in our society. High youth unemployment rates and overrepresentation in underemployment mean that young people who are disengaged from education are not in training or employment and that they face a bleak financial future—a future with hardship, increased likelihood of health and mental health issues, and an increased probability of involvement in the criminal justice system.

As our population ages, it is imperative for Australia's economic productivity and the well-being of society more generally that we equip all young people with the skills and support needed to become active, positive, contributing citizens. Young people who are unemployed for a prolonged period of time suffer wage scarring. The effect of wage scarring can be long-lasting and financially and emotionally detrimental. A recent international study from the Work Foundation in the United Kingdom indicated that long periods of unemployment when young can reduce an individual's wage-earning capacity between 13 and 23 percent by the age of 42. This phenomena negatively affects not only a person's individual financial ability but the nation's collective fiscal productivity. Therefore, I do commend the government for pressing ahead with the idea of systematically linking youth job seekers with work-trial opportunities and paid employment. It is a fundamentally good idea. But, like any idea, it also needs to be implemented well to make it work. It is from this standpoint that I offer a constructive critique of this bill, the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016.

My first observation when reading through the bill is that there is little detail on how the Prepare, Trial, Hire program—the PaTH program—will operate in practice. Much is left to regulation and administrative discretion. I understand the advantages of retaining flexibility when implementing a program like this. You want it to be able to adapt as conditions change and to leave room to incorporate improvements when lessons from its implementation are learned. However, too many fundamental questions remain unanswered in the bill and several important protections for young people are omitted.

For a start, it is not sufficiently clear how young job seekers will be insured while they are on their placements. WorkCover-style entitlements that insure young people against accidents in the workplace are a fundamental workplace right, and my Senate colleagues will find it hard to support any final version of the bill without such protections.

The term 'internship', which is used in the bill, should be revisited. It conjures up images of making coffees for bosses in the offices of lawyers and accountants when most job seekers will be going down a very different, practical and vocational-skills-and-trades pathway. 'Work trial' would be a much more encompassing and meaningful expression to be used and would also highlight that the placements are intended to lead participants into work. Work health and safety requirements, including bullying and sexual harassment protections, must also exist to complement the WorkCover-style entitlements that are required.

The amount of and timing of the subsidy received by business to take on a young person must also be clearer so as to understand exactly how the incentives will work for business. In particular, we need to know whether those incentives may become perverse if the churning of interns can work to a business advantage. Churning would be an unintended and perverse outcome, and would not be to the benefit of either the young participants or to existing employees who find their jobs being displaced by a readily available pool of subsidised labour.

The lowest-skilled workplaces are particularly vulnerable to such churning, as young job seekers are generally less skilled and would, therefore, compete directly with other employees in a low-skilled workplace. Similarly, we also need to know that young participants are not displacing their own jobs. We need to know that businesses that employ a lot of young people, like McDonald's or a retail chain, cannot access young labour that simply replaces a significant chunk of their pre-existing workforce. It is for this reason that the Nick Xenophon team will seek to work with the government to ensure that appropriate industries are targeted for the PaTH program and that, where internship experiences are meaningful and do not displace existing labour, they genuinely facilitate a transition to ongoing employment. We cannot have a program that it is simply open slather and leaves young people open to exploitation. Between 2012 and 2015, NCVER recorded that the Australian economy lost almost 160,000 trainees and apprentices. We should, therefore, be targeting trades and the construction industry, and be, primarily, promoting this initiative to Australian small businesses. This will reduce the risk of churning by big business.

The range of reasonable excuses for a young job seeker to end their internship early needs to be expanded. Currently, it does not appear that the legislation allows for a young person to terminate their internship for judicious reasons such as for sickness or for compassionate grounds, such as the death of a close family member. That, surely, must be amended.

Furthermore, the definition of 'misconduct'—currently grounds for early termination of the internship—needs to be clarified in the legislation to avoid perverse incentives for business and to protect young people. For example, what level of proof is required for misconduct to be proven? Or is it just the word of the business owner versus the intern? Given the clear power imbalances between business and a young job seeker, there needs to be a clear and reasonable standard of proof defined in the legislation. To complement this, a complaints system needs to be established so that young people can access it if they become exploited. I am concerned that without such legislative protections and oversight we risk the cultivation of the Dickensian master-servant relationships, echoed in the 19th century.

There needs to be adequate resourcing for jobactive providers so that they can effectively negotiate placements with businesses and support internship participation. An additional question is whether jobactive or Transition to Work providers are better placed to house the PaTH program. I would argue that Transition to Work contract providers are a better fit as the government has a collective of organisations in Transition to Work that have proven specialist experience in delivering employment and transition support to young people.

The proposed bill currently excludes related entities from being able to deliver the 'prepare' phase of the PaTH program. In practical terms, this means that a provider that is both an RTO, a registered training organisation, and a jobactive provider will not be able to refer jobseekers from its own caseload to its own RTO to complete employability skills training. This runs counter to the notion of creating integrated services to prevent service gaps and will create particular problems in regional areas, where few providers are readily accessible. One possible remedy might be to exempt not-for-profit providers from the related entities rule.

One hundred dollars a week is very little to be paying an intern when their prospective employer is being paid a multithousand dollar subsidy to take them on and help them into employment. The balance of incentives needs to be much more fairly weighted. Furthermore, in rural communities, $100 may be barely sufficient to cover the cost of running a car—remember that in communities such as mine there are few buses. The dollars offered would not cover the long drives that are required to even attend a program.

A work-trial style program like PaTH is only the beginning of the work the government needs to do in the young jobseeker space. The economic burden for Australian society and government as a result of youth inactivity and poor transitions is substantial. A national youth activation and transition service targeted towards young people who are not engaged in education, employment or training and who have multiple barriers would contribute to reducing this burden and increasing the productivity of the nation as a whole. For many young people who have had experiences of employment, those experiences have been temporary in nature. The Australian government Productivity Commission working paper Prevalence of transition pathways in Australia recognised that many young people frequently 'churn' in and out of the labour force. One of the main reasons for this is the casual or temporary nature of the majority of their employment opportunities. There is an urgent and compelling need for a youth activation and transition service to exist for disengaged young people to ensure that they successfully transition into stable employment or further training. The current jobactive service does not provide the specialist support needed for young people to successfully transition to sustainable employment, particularly young people who face complex non-vocational barriers, and yet those young people, who are the most vulnerable with the highest barriers to overcome—the stream C young people—are not in the youth transition service but in the adult transitional employment service, jobactive. It does not make sense. Of those young people, we know that many are not 'employment ready' after they leave school, particularly young people who did not experience a solid secondary education. For those young people, the opportunity to connect with vocational or pre-employment education and training needs to coincide with intensive support to address non-vocational barriers through the development of an individual plan with mutually agreed specific steps to address barriers, to identify and develop personal strengths and to reach goals. This level of support is the best way to create a foundation for future employability. International experience suggests that such rapid activation of young people who are not in education or employment provides the greatest opportunity for a positive outcome. Such a national plan should be delivered as a specialised youth service, it should adopt a place based approach and it should be delivered by local community services. This is especially the case in regional and remote communities, where local delivery by providers allows for the flexibility to tailor the service to specific community needs and is integral to successful delivery.

Addressing the needs of young people who are unemployed, underemployed or inactive is equitably responsible and would be fiscally advantageous to the Australian government through the implementation of cost-effective, preventative activation programs that will ultimately reduce long-term dependence on welfare and increase Australia's productivity.

I and my colleagues do commend the idea behind the bill before us, but adequate safeguards would also need to be legislated in order to make it work in practice. It also must be understood that a workable program for young jobseekers is but a first step in engaging young people transitioning towards employment. I will support the bill in this House, but I acknowledge that my colleagues in the Senate reserve the right to propose amendments relating to what I have spoken on today.

I want to finish by telling you a story of a young person from my electorate, who served me at a checkout in the supermarket just a couple of weeks ago. This young man graduated with a bachelor's degree in science majoring in geology and ecology, and went on to study honours in environmental biology at the University of Adelaide. He is now in his first year out of university and has struggled to obtain even an interview for an environmental job, not just in South Australia but also interstate. He has also emailed a lot of companies explaining his interest in doing work experience or vacation work, but most employers will not take on work experience students. For every graduate or entry-level job he has applied for, the employer requires years of experience. As the young man described it to me: 'It's a never-ending cycle. If employers don't want work experience students, how are we supposed to get the experience in the first place? It's an issue of not just experience but also the sheer number of applicants for the jobs.' One job he went for, a graduate-level environmental officer position, had over 200 applicants, and this level of competition was not unusual. Of the group of about 20 to 30 talented students who graduated with honours with this young man last year, only 10 per cent have obtained full-time work in their area of specialisation and most have resorted to working in a supermarket and the like.

Young people, just like the rest of the population, want to build a good life for themselves. Currently, our society is failing to provide the jobs for our next generation of workers to get their start. As we do that, we will continue to fail our young people and we will fail Australia.