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Transcript of press conference: Ginninderra College, Holt, Canberra: Friday 14 May 2004: Budget speech - Youth Guarantee launch.

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FRIDAY, 14 MAY 2004

Subjects: Budget Speech - Youth Guarantee Launch

LATHAM: I am here today with Jenny, Anthony, Wayne and Jacinta to release the full details of our Youth Guarantee policy. I mentioned last night in the Budget reply that we have a strategy of ensuring that young Australians are either learning or earning. We don't believe in the third option of sitting around doing nothing, getting outside the system. We want to provide additional opportunities for young Australians and we expect the responsibility in return to make good use of those opportunities for the future. Currently, in Australia, there are 45,000 young people every year who leave school early. They don't go into full-time work or study. It's very important to provide the 45,000 opportunities to give them a chance and that's what our Youth Guarantee does.

It's a comprehensive strategy. We're abolishing TAFE fees for secondary school students. That will help in lifting school participation rates an extra 15,000 students staying on at school. Here at this high school the deputy principal was saying that at the moment they haven't got any students who can afford to go to TAFE and pay the fees. So our strategy of abolishing those fees would, in her assessment, provide the opportunities for 70 students from this school to study VET, vocational education and training, through TAFE. So there’s 70 students just at this school who would be beneficiaries of this strategy and, of course, the likelihood that that would keep them on at school for a much longer period of time and give them a fuller education. We have, as part of our strategy, 1,100 training mentors to make sure young people stay at school and also to place them into full-time training and employment opportunities, an extra 7,500 TAFE places for 15-to 18-year-old students, an extra 7,500 apprenticeships under our youth guarantee and a Jobs Gateway target of 10,000 early school leavers each year going into a job with the wage and training subsidies as part of that Gateway strategy. On top of that, 5,000 opportunities for helping homeless and disadvantaged youth with life skills and some good training prospects for the future. It's a comprehensive strategy - the 45,000 places. It gives us the opportunity to do something about very significant in this country about youth unemployment, about the issue concentrated in some communities where young

people haven’t got productive things to do. We will provide the opportunity and we expect young people to take up the responsibilities in return. Let me thank Jenny and Anthony for their work on the policy but also pay tribute to the Dusseldorf Schools Forum which, in different parts of Australia, has been pioneering the Youth Guarantee. I was first exposed to their work when I visited the city of Whistlesea in the northern suburbs of Melbourne.

They explained to me the basis of the Youth Guarantee, the learning or earning strategy, no third option. Let’s provide the opportunities for young people to do productive work and training. The Youth Guarantee at Whistlesea has been a

good success and I know the Dusseldorf Skills Forum has tried to establish in my own region in Macarthur in south-west Sydney. So they have been running the pilot schemes. What we’re really saying here is we’ve learnt from their success and we’re extending this youth guarantee strategy nationally, not just for pilot areas in some parts of Australia but right around the country, particularly targeting those areas where youth unemployment is so high. You have got rates of more than 30 per cent in Wollongong, in the northern suburbs of Adelaide and in Wide Bay in Queensland. These are the areas we need to assist to make sure that our young run Australians are not being lost. They’re not a drop out generation, and they’re not a lost generation. They’re going to be productively engaged in our society with work, with training, with education, with the skills they need for a good life. It’s good for them and it’s going to be a significant improvement to the communities that have had these problems and, indeed, build a fairer society right around the country. If we just ask Jenny and Anthony to say a few words in support and provide some further details and then we’ll take questions.

MACKLIN: Thanks very much, Mark. It is terrific to be here at this high school today to see the real impact that Labor's Youth Guarantee will have. But I must say as a parent that it is every parent’s nightmare that your 15-year-old

might drop out of school and basically do nothing. What we want to do is make sure that those 15, 16, 17-year-olds are able to stay on at school, they’re able to afford TAFE courses, that they can go and do an apprenticeship, they can do another TAFE course. If they don't want to do that, we’ll make sure that they get into a properly subsidised job because we don’t want to see 15, 16, 17-year-olds sitting around doing nothing. No parent wants to see that. The kids want the opportunity to learn or earn and that’s the opportunity that Labor’s going to provide.

ALBANESE: As part of the Youth Guarantee today a new announcement is Link Up. What Link Up will do is provide an interim strategy until the Jobs Gateway comes into being in 2006. It will begin from 1 January 2005 and will operate for that 18-month period. It will assist 8,000 people in the first year and then a further 5,000, bringing a total of 13,000 young people, particularly in

areas of high unemployment, such as those which Mark has mentioned. The northern suburbs of Adelaide have a youth unemployment figure of 37 per cent. We believe that we need to intervene from day one. Whereas at the moment under the Job Network young people by and large don’t participate. They’re not

in Work for the Dole until they’re 18. We believe that from day one of someone being unemployed they should get assistance.

Under this plan, they will get assistance for three months, with a personal advisor who will try to get them back into school, get them into training or get them into work. If that is not successful, they will then go on a 26-week wage subsidy of $100 a week, total of $2,600 to employers, to make sure they get that work experience. All the data and research shows that chances are if you look at an unemployed person who has been long-term unemployed, who is 27 or 28 years old, and have a look at their history, they fell into unemployment between the ages of 15 and 18. It’s not good to wait for three months or under the Job Network to wait for 12 months when they’ve been unemployed to get assistance.

We will give them the support that they need from day one. And that’s what the Link Up program will aim to do leading up to the introduction of the Jobs Gateway.

JOURNALIST: Mr Latham, what makes you think these 45,000 kids are sitting around doing nothing now. Don’t they have obligations under the Youth Allowance anyway?

LATHAM: We don’t want young people sitting around doing nothing. We want to provide them with the opportunities and for them to take their personal responsibility to make good use of the training and employment opportunities. So we don’t want to run the risk that anyone might be sitting around doing nothing. But, under the current government, there are 45,000 young people Australians each year who drop out of school and don’t go into full-time training or employment. So they haven’t got the opportunities at the moment. They haven’t got the opportunities to do good, productive things for them.

Our Youth Guarantee program is about that opportunity, that opportunity for all young Australians. And our expectation, our demand of responsibility, is that they’ll make good use of the opportunities available and that’s the big difference. We’re providing the opportunity as well as demanding the responsibility in return.

JOURNALIST: But they do have a responsibility now, don't they? They have an obligation to either undertake training or job search?

LATHAM: But they haven’t got the training positions. They haven’t got the employment opportunities to actually do good productive things and that’s the difference with our Youth Guarantee. The Work for the Dole program, for instance, has no training component, no skills component, and that’s been a criticism that we’ve always made of it. So, too, it hasn’t got the wage and training subsidies that we’ve got in our Jobs Gateway program and, obviously, if someone is in a subsidised job and training position for two years they’ve got a

much better chance of maintaining full-time employment with that company. That’s the difference of providing opportunity that young Australians haven’t got at the moment.

JOURNALIST: Isn’t it a case that earn or learn is just mutual obligation rebadged?

LATHAM: No it’s a $700 million investment in young Australians, making sure they’ve got the opportunities available for them, the 45,000 opportunities needed, to give them more productive things to do as opposed to the current circumstances.

JOURNALIST: Can you clarify how much of this is new money today?

LATHAM: You will see in the rear of our policy announcement that we’re making available significant new resources as well as re-working existing Government programs. It’s a $700 million investment, of which $300 million is reallocated from the GEERS program. There’s a $73 million saving from the youth allowance offset. That is bringing down youth unemployment, reducing the outlay on youth allowance to actually give people good productive things to do in training and employment. You will see there the other programs making more effective use of existing Government resources to get better results in the future.

JOUNRNALIST: What’s the bottom line of what’s new?

LATHAM: You can see that in the listing.

JOURNALIST: We can’t and that’s why we’re asking.

LATHAM: It’s almost $400 million in the two allocations that I’ve mentioned - the $303 million for the re-allocation of the GEERS saving and the youth allowance offset of 73.

JOURNALIST: Now you’re picking up the tab for $120 for state government for currently [inaudible] kids who are doing VET schools, why can’t you do something about the upfront fees that kids who go to TAFE now and adults who go to TAFE are currently being charged by governments, including the Carr

Government in NSW?

LATHAM: Our Youth Guarantee makes a very significant commitment to ensure that students who want to be part of the secondary school system, study at TAFE, have got that opportunity without paying fees. Here at this school an extra 70 students would take up the opportunity. Part of the school system but also part of TAFE and making get better use of their skills and potential in terms of vocational education and training. So that’s a very significant investment and we think that’s the right place to start.

JOURNALIST: [inaudible] big increases that the Carr Government have introduced for places?

LATHAM: I’ve been critical of those increases in the past but I’m more interested in what we can productively do in the future and our $120 million investment to ensure that secondary school students go to TAFE without fees is a very, very significant way of keeping more students in the education system and reducing the drop out rate. So I’m interested in the positive thing we’re doing out of this youth guarantee and it’s a fantastic investment and the opportunities for those young Australians.

JOURNALIST: In terms of the breaching arrangements, will it be the same as the [sounds like cartilage inaudible] obligations will they loose one in $5 for six months and what will happen if potentially you are going to take them off benefits altogether?

LATHAM: We’ll have strict activity tests and breaching arrangements similar to the current policies in place now. So we’ll be demanding the responsibility. The big difference against the current arrangements is we’re providing the opportunities. We’re making the investment in the future of young Australians that we haven’t got under the Howard Government.

JOURNALIST: Which group of workers will miss out on tax cuts under Labor?

LATHAM: We’ll have a broader and fairer tax relief plan. We want to help as many Australians as possible who have missed out from Tuesday’s budget. As we design our policy, as we identify the savings and the funding of our strategy, we’ll have all those details in due course.

JOURNALIST: But some will miss out?

LATHAM: I’m not saying that. I’m saying we’re going through the process of developing a broader and fairer tax relief strategy for Australia. We’re

not putting a number on it - 100, 90, 80 per cent at the moment. We’re going through the process to broaden the Government’s very limited program of tax relief and give Australians under $52,000 a fairer go in the future.

JOURNALIST: Can you guarantee when you overhaul the Government’s family tax benefits that nobody will be left worse off than they would be under the Government’s proposal?

LATHAM: We believe there are significant ways in which you can make that family assistance package more effective for the future.

JOURNALIST: And they would be left worse off?

LATHAM: That depends how you define worse off? If you’re talking about solving problems like ending the family debt crisis we are hoping a lot of families will be better off. If you’re talking about greater incentives in the interaction between the tax and social security system, we are hoping a vast number of Australians will be better off. If you’re talking about providing this assistance fortnightly, when the families need it, as the kids are growing and they need new clothes, shoes, school equipment, sporting equipment. Then we are hoping the vast majority of Australian families will be better off than having to wait till the end of the year for the Government’s lump sum. So we are interested in solving problems and making family assistance more effective for the future. We believe families will be better off for that.

JOURNALIST: Worse off means getting less or finding it hard to get it?

LATHAM: I’m not announcing detail in dollars and cents about every family under our policy. I’ve given you the objectives of our policy, and the ways in which we will provide more effective relief. You’ll see all the dollars and cents and the detail when the policy is actually released.

JOURNALIST: When will that be?

LATHAM: It will be before the federal election. If the election is on 7 August, hypothetically, then obviously you will have our policy in June or July.

JOURNALIST: Why couldn’t you say if everybody will get a tax cuts. Surely you have a framework by now and know whether you will be giving tax cuts across the board to all income levels?

LATHAM: I think most Australians were surprised there was no tax relief below $52,000 in the budget. We have to go through the tax design and policy making to provide a boarder and fairer tax plan. We also have to go

through the identification of savings and the funding plan to make that possible in a financially responsible way. There is $52 billion worth of new spending in the budget on Tuesday. We need to examine that. All of these things can’t be done in the space of three days. The Government had six months to do its policy. We won’t need that length of time but we are going to get it right. We are going to do it in a methodical and considered way and when it’s right, it will be available for public release.

JOURNALIST: You did say this morning that not everybody will get a tax are cut.

LATHAM: No, I haven’t said that. I said we want to help as many people as possible. We can’t say that will be everyone. We’re only at the beginning of our policy making process in response to the big surprise, the big dashed expectation in the federal budget that no-one under $52,000 a year is receiving tax relief from the highest taxing government in Australia’s history. So we’ll do things step by step and get it right.

JOURNALIST: You can’t help everyone so surely that means you can’t give tax relief to everyone.

LATHAM: I’ve answered that question.

JOURNALIST: You have mentioned a figure of $30,000 a couple of times. Should people earning below that not get their hopes up?

LATHAM: I’m not saying that. I’m just saying that the Government has a rather limited definition of middle Australia. It seems to be saying that a middle Australia tax relief is between $52,000 and $80,000. I think middle Australia is much broader than that - the hard workers on 30, 40, 50,000 a year; the sales reps, the shop assistants, the labourers, the technicians. My definition of middle Australia is the true blue definition of who’s out there in the middle of our country working hard on middle incomes from $30,000 up to $80,000 or $85,000 a year. That’s the broad base of middle Australia and more than half of them have been totally ignored and forgotten by the Howard Government.

JOURNALIST: Is there a case for tax relief below $30,000? LATHAM: We’ve outlined our case for broader and fairer tax relief and the scope of it you will see when the policy is announced.

JOURNALIST: You just said you are just starting work on based on the big disappointment of no tax cuts below $52,000, does that mean that you weren’t planning to give tax cuts to people below $52,000 until you saw the Government’s Budget?

LATHAM: No, I think everyone - the hard workers on $30,000, $40,000, $50,000 saw the free publicity for the budget. They know that this is the highest taxing government in Australia’s history. They know the average Australian household’s paying an extra $9,000 in federal taxes since 1996. People had an expectation of a broad base of tax relief. That’s the thing that was dashed on Tuesday and that is what the Labor Party is now responding to.

JOUNRNALIST: The Senate inquiry into schools Dr Nelson has said is an attack on the values of the parents who choose to send their children to non-government schools and the [inaudible] of the politics of envy. Is that what the Senate inquiry is all about? Are you attacking parents for sending their kids to private schools?

LATHAM: I am not a Senator. The last time I looked I was standing there in the House last night. I outlined last night my belief - doesn’t matter if the school is government or non-government - I see that as a tired old debate. I want equity and good schooling right across the sectors. I outlined last night our commitment to maintain the funding to the non-government schools but with a fairer pattern of distribution, redistributing from wealthy schools to needy Catholic, Christian and independent schools. We’ll also have a separate funding initiative for government schools to bring them up to a national standard. So to me it’s all government, non-government schools reaching that national standard of fairness and quality right across the school sectors.

JOURNALIST: You have said that there will be cuts to some government programs to pay for your election promises if you’re elected. How many Public Service jobs do you think are likely to go under a Labor Government?

LATHAM: We have a commitment to reduce waste and mismanagement. We’ve already identified agencies to be abolished but we also have important investments in health and education, which will be good for the public services of the Australian community. So I can’t give you a detailed job number but our determination, our strategy is to save money at the centre of

government, to clear away unnecessary bureaucracy and get that money out from the centre of government to the communities and families on the edge, particularly in health and education services. [ends]