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Tuesday, 10 September 1996
Page: 3141


Senator VANSTONE (Minister for Employment, Education, Training and Youth Affairs)(4.23 p.m.) —I am somewhat amazed that Senator Bolkus would have the sheer front to bring on a matter such as this, particularly when I look and see the previous government's record on unemployment. We must understand that the people opposite were in government for some 13 years. I think Senator Bolkus was there for all of those years. For a good many of them he was a minister and, therefore, bears some considerable responsibility for the position we now find ourselves in.

The government of the day came into office on 2 March when the policies of people opposite were roundly rejected as not being effective. It is important to recognise the record of the previous government, now opposition. In 1990-91 we had an unemployment rate of 8.3 per cent. Then there is the consequence of their policies. In the following financial year, it went up to 10.3 per cent and then it went up to 11. Then it came down to 10.5 per cent and then down to 8.9 and then down to 8.5, which is basically where we are at this point.

So people opposite are complaining about us turning away from the unemployed when their record shows that at the commencement of this decade unemployment was around 8.3 per cent. In most of the years that they were in government subsequent to that, they pushed the unemployment rate up by their ineffectiveness and have only managed in the last two financial years to bring it down to what it now is. To somehow expect that in six months the damage done by 13 years of fiscal irresponsibility could be undone is, of course, sheer lunacy. But what Senator Bolkus complains of is our preparedness to tackle this problem, to tackle it in a different way from that which Labor would have done. The old `Spend, spend, spend. Shove it on the Bankcard. Don't worry. Let the younger generation pay for it later' is not the approach we take.

There is at the moment some further weakening in the labour market, and that further weakening started about 12 months before the coalition was elected. The trend employment—not the seasonally adjusted month-to-month business that jumps up and down all over the place—began to falter in April 1995. Employment grew by 4.6 per cent in the 12 months up to April 1995, but it only grew by 1.2 per cent in the 12 months after April 1995. That, of course, demonstrates the point I am making—that a further softening in the labour market was clearly evident in the previous 12 months.

We have a general framework for fixing these problems: balancing the budget, taking the pressure off interest rates and, therefore, encouraging business investment. We have industrial relations reform, reforming unfair dismissal laws. We are also making the labour market more flexible. We have micro-economic reform and are reducing business costs, making exports more internationally competitive, taking the pressure off the current account deficit to allow the economy to grow—all of these things are things Labor was not prepared to do.

What we have said is that we are going to—in addition to the things I have mentioned, putting the budget back into the black and the other matters that I raised, such as industrial relations reform—very substantially reform the delivery of services to unemployed Australians because, quite simply, Working Nation was not working.

Do you know the previous government in the last financial year spent, I think, $860 million on the three least effective brokered programs? They were programs that had effectiveness rates of 22 per cent up into the low 30s per cent; that is, they were about 70 per cent ineffective. They spent $860 million of hard earned taxpayers' money. This is not money that all comes from the so-called rich. It comes from very low income earners. Every dollar of theirs that we spend has to be spent carefully and effectively. We decided that that was not happening under the previous government.

Before we get carried away with the deceit being perpetrated by arguments raised on the other side, let's just look at some of the facts. The facts are that we have planned to spend in the next four years more on labour market programs—


Senator West —Tell the truth.


Senator VANSTONE —Senator West is mouthing that it is not true. It is amazing she knows that before I have completed the sentence. Amazing!


Senator West —I'm telling you to tell the truth.


Senator VANSTONE —Let me finish the sentence, and then you can challenge it. We have planned to spend more on labour market programs in the four years to come than Labor did in the four years prior to Working Nation.   I do not dispute that there are very significant reductions in spending on labour market programs against forward estimates and against what you did in Working Nation. But what I say is that Working Nation was not working. You spent $860 million of taxpayers' money on your three least effective brokered programs. They were programs with efficiency rates of 30 per cent; in other words, 70 per cent of it was not working.

They had a complicated and confusing system: too many programs, far too much red tape. They had four separate training programs, four different work experience programs, three different wage subsidy programs, and three different English language and literacy programs. They were new programs to create the impression of action, hiding what was the reality; that is, with all the good faith you put into Working Nation, it simply was not working. People were forced to fit into labour market program boxes designed in Canberra.

What we have done is cancel the bad parts of Working Nation. They are the programs that were not working. What we have done is pick up the very good part of Working Nation.


Senator West —You have cancelled the lot.


Senator VANSTONE —I notice Senator West says that we have cancelled the lot. She simply does not understand. I am happy to give you a briefing, Senator, if you need it to take you out of the ignorance you are clearly in. We are taking the good of Working Nation—there was some good and innovative work in Working nation: shifting to one on one case management was a creative response to the problems of the long-term unemployed. You did a good thing when you introduced case management.

When you introduced competition between the CES—or Employment Action Australia, which was their case management arm—and private sector case managers, that was a most innovative and creative thing. That is the thing that we think has got good sense to it. It has got a chance to be built on and to actually deliver real outcomes for the unem ployed. To pretend that it is all being thrown out is crazy.

We are refusing to continue to put money into programs that have a 22 per cent effectiveness rate. What we are doing is shifting to a much greater emphasis on one-on-one case management—in other words, discarding the bad of Working Nation and building on the good. I would have thought even members opposite could understand that you can learn from mistakes.


Senator Bolkus —Who decides what's bad, Amanda?


Senator VANSTONE —Senator Bolkus interjects and asks, `Who decides what's bad?' Ask any taxpayer, Senator Bolkus—through you, Mr Acting Deputy President—if they want $860 million worth of their taxes spent on the three least effective programs. Ask them if they think that is a good idea, because I do not think they will think it is a good idea at all.

It is important to note just a few other facts that seem to be inconvenient for members opposite to recognise. It seems very inconvenient for members opposite to look at the truth of the matter. I have already raised the point that in 1990-91, when unemployment was 8.3 per cent, Labor was then spending—this is in constant prices—$640 million. That is what you were doing in 1990-91 when the unemployment rate was 8.3 per cent. Next year, we are spending $1.63 billion.


Senator West —That's over four years.


Senator VANSTONE —No, that is next year. You interject and say, `Over four years.' You have not checked your figures. Just check them again. You have probably been sucked into believing the lies that some of your people publish. Next year we are going to spend $1.63 billion with a projected unemployment rate of not far over eight per cent. In other words, when we go to the previous year when Labor had a similar unemployment rate and we compare it in constant prices, we are going to be spending double what they were spending when they had that sort of unemployment rate.

Let us introduce a bit of decency into this debate. Let us be honest about what the situation is. Let us not pretend things that are not true. Let us be frank with the electorate about what is happening. Let them recognise that we are spending $1.63 billion next year and that in the previous year when you had a similar unemployment rate you spent $640 million. We are spending double what you did when you had a similar unemployment rate in 1990-91. That puts paid to the lie that you go on with. The mere fact that Senator West interjects, and has all the facts wrong, indicates that you do not even bother with the facts. (Time expired)