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"Opportunities for Australian youth", The 1999 Hollingworth Trust Lecture on Youth Unemployment, Melbourne, Thursday 10 June 1999



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THE 1999 HOLLINGWORTH TRUST LECTURE

ON YOUTH UNEMPLOYMENT

"OPPORTUNITIES FOR AUSTRALIAN YOUTH"

 

PRESENTED BY

THE PRIME MINISTER

THE HON JOHN HOWARD MP

 

MELBOURNE

Thursday 10 June 1999

 

Introduction

I am honoured to have been invited to deliver this Hollingworth Trust lecture. Few areas of public policy are of greater importance to the nation than that of youth unemployment. I congratulate the board of WorkPlacement for establishing this annual lecture to address the issue and to stimulate discussion between government, business and community sectors.

The lecture honours the most Reverend Peter Hollingworth, Archbishop of Brisbane, after whom the Hollingworth Trust is named. All of those dedicated to the plight of the unemployed and the disadvantaged in our community owe a considerable debt to Archbishop Hollingworth. He was a leading member of the Brotherhood of St Laurence for 25 years, including 10 years as its executive director - an enormously productive period for the Brotherhood and those that it serves.

Consecrated Bishop in 1985, Peter Hollingworth was elected the eighth Archbishop of Brisbane in 1989 and enthroned in March 1990. Archbishop Hollingworth has remained true to his faith and convictions, making a valuable contribution across the spectrum of public policy issues.

He played an active role in the Constitutional Convention and has always championed his convictions with vigour and determination.

The Value of Work

One of the areas in which Archbishop Hollingworth continues to make an important contribution is employment policies and programmes.

Employment is the key to young people assuming productive and independent lives of their own within their community. For many of us a secure job is so necessary for dignity and self esteem. On the other hand, unemployment strikes at personal security, challenges hope and leaves instead frustration and undeserved shame.

I do not claim to have solved the unemployment problem in just over three years in Government. But that is not to say that we will ever stop trying and that even greater success cannot lie ahead.

Even though a majority of teenagers are in education and training, we have made progress in bringing down youth unemployment. It is now 23.3 per cent against 27.2 per cent when we came to office. It had peaked under the previous government at 34.8 per cent in July 1992.

Today’s labour force statistics indicate that the total number of unemployed teenagers in May this year was 69,800, significantly lower than the average level of 113,000 per month in the 13 years to 1996. We now have the lowest number of unemployed teenagers looking for full time work than at any time since the Australian Bureau of Statistics began publishing monthly labour force data in February 1978.

The broader measure of youth unemployment as a proportion of the total youth population is currently 5.3 per cent.

The general unemployment rate is now at its lowest level in 8½ years. The current rate is 7.5 per cent and contrasts with that under Labor which peaked at 11.2 per cent in December 1992 and averaged 8.7 per cent.

The Government’s Approach

Australians have every reason to be optimistic about our future as we enter a new century. More than at any other time in the past quarter century there are fewer limitations on our capacity to achieve our full potential as a nation.

Compared with a generation ago we are stronger and more competitive. We are more assured in the world. We have stared down threats to the respect and understanding we hold for others and we are as determined as we have ever been to confront social problems within our communities.

My government seeks an Australian way to address the challenges of public policy - a way that is practical, realistic and contemporary, a way which draws upon our unique intersection of history, geography, culture and economic circumstance.

Ours is not a government shackled by ideology but committed to practical and tangible outcomes for all Australians. We set for ourselves the goal of a stronger, fairer, Australia. Achieving progress towards this goal is best met through a mix in public policy which combines liberalisation in economic policy and modern conservatism in social policy.

A strong economy will provide more opportunities for all Australians, particularly the young. At the same time, our modern conservative approach to social policy supports bedrock social institutions such as the family and promotes enduring values such as p ersonal responsibility, the promotion of individual potential and meeting our obligations to the disadvantaged in the community.

It begins with the family. A strong and stable family life can assist in preparing young people for employment. It can also provide the necessary support once young people are in the workforce. The Government recognises this and is providing families with much needed assistance and incentives through our new tax system.

A defining characteristic of modern conservatism is the encouragement of a new social coalition to address today’s social problems in a contemporary way. Our determination to relieve disadvantage is not measured by the size of government nor does it entail winding back our support for individuals and families in need. Instead, our design is to forge a new social coalition of individuals, business, government, charitable and welfare organisations - each contributing their unique resources and expertise to directly tackle problems.

I believe that such a social coalition has the capacity to be strong enough to respond to entrenched social problems yet flexible enough to address them in new ways.

It taps the volunteering sentiment and community spirit of individuals and the willingness of business to engage with their communities.

It provides incentives for people to form strong families and communities.

It embraces prevention as much as cure.

This approach is rooted in notions of mutual obligation - that those who have done well have an obligation to the less fortunate and that those who are supported by the community should give something in return.

One of my first initiatives as Prime Minister was to find innovative ways to support young people who are at risk of homelessness and promote reconciliation within their families.

Last December I received a report from my Youth Homelessness Task Force, chaired by Captain David Eldridge of the Salvation Army, which supported the need to help young people within their own families and to support them before they reach a point of crisis. There was a particular concern among parents that previous welfare processes did not properly involve families and that some forms of income support actually contributed to family breakdown and youth homelessness. We sought to find new ways to provide incentives for families to become reconciled and to provide sufficient security for young people to stay at home.

Our response to this problem has harnessed the social coalition by involving that committed group of volunteers and professionals who have a special insight and understanding of the impact of homelessness. In December I announced that the government would commit over $60 million over four years to provide an ongoing youth homelessness early intervention programme involving 100 services across the country, helping 7,000 young people and 5,000 parents a year.

There are many other examples of how individuals, families, community organisations, the Government and private sector employers can work together in a strong social coalition.

Mis sion Australia recently made me aware of the story of Ben who had been abused by his grandfather when he was a toddler. As he grew up he displayed both anti social and aggressive behaviour at school and at home. At the age of 16 his parents referred him to Mission Australia’s Youth Accommodation in the south west of Sydney.

In supported accommodation, Ben received counselling to deal with the causes of his behaviour and the support he needed to continue his year 10 schooling. At the same time the Mission staff worked with Ben and his parents towards a family reconciliation.

When Ben decided not to continue at school, he was referred to a job placement and employment training programme run by the Mission. When he completed that programme, he undertook a work experience programme in roof tiling.

As a result, Ben secured permanent employment with the roofer tiler. It was through secure employment that he was reconciled with his parents and returned home.

The social coalition also underpins the Government’s signature policy of Work for the Dole and our initiatives to enhance individual and corporate philanthropy. I have often expressed the view that a business that derives a profit from the community have an obligation to give something back.

My conception of Australian philanthropy is about more businesses giving - because some businesses already give generously, not government giving less. It is also about understanding that business can do well by doing good. Ask philanthropic businesses why they become involved in their communities and the answer frequently lies in enlightened self interest.

It is appropriate that I pay tribute to the Chairman of the board of WorkPlacement, Mr Rupert Myer, the other members of his board and to all the businesses who have co-operated in a very practical way to find work for Australia’s young unemployed. You represent our social coalition in action.

Strong Economic Foundations

The first precondition for a fair society is an economic foundation strong enough to provide for those in need.

Since 1996 our economic policies have fortified Australia’s economic foundations through responsible fiscal policy reinforced in our recent budget, a sound and credible framework for monetary policy and ongoing structural reforms.

Australia cannot achieve significant reductions in unemployment, and youth unemployment in particular, without sustained levels of strong economic growth. Over the long term achieving a better than four per cent growth rate is a necessary condition for lower unemployment.

Staring down the worst of the Asian economic collapse, we have succeeded in reducing unemployment through the achievement of strong economic growth, currently 4.8 per cent through the year.

Australia’s expected growth of 4¼ per cent in the current financial year is stronger than growth in each of the G7 economies and than the OECD average including the United States. For the year 2000 both the IMF and the OECD predict that Australia will grow faster than all G7 countries.

The current strength of the economy will support continued jobs growth. Employment growth is expected to remain at around 1¾ per cent in 1999/2000, following rates of around 2¼ per cent in the current financial year.

It is in the context of maintaining strong economic growth that tax reform is so important. Our new tax system will remove a huge tax burden off exporters and business, reducing costs and creating new jobs.

Workplace Relations

Sustainable economic growth also requires removing barriers to job creation in the labour market consistent with the Australian way of providing an adequate safety net for our workers.

The Workplace Relations Act of 1996 modernised a system that was devised in 1904 and had long outlived any usefulness.

We are building a system of workplace relations founded on common interests rather than competing ones; which puts individuals, businesses, workers and the unemployed ahead of institutions and vested interests - a system which is relevant to a modern Australia.

Our workplace relations reform will provide more real jobs for young people. Awards can no longer limit the proportion of junior to adult employees and the Industrial Relations Commission is required to support training arrangements through trainee wage provisions and awards.

By stimulating higher productivity growth, the new workplace relations system has allowed real wages, profits and jobs to rise together rather than one being sacrificed for the other.

A good example of our new system was the fifty thousandth Australian Workplace Agreement which was one of a number of AWAs covering employees of the Blackbird Café at Cockle Bay Wharf at Darling Harbour in Sydney.

By agreeing to restructure their terms and conditions employees have been able to obtain significantly more flexible working hours so that they can work as much as they want, undertake further education during working hours, or finish at three o’clock in the afternoon so that they can pick up their children from school. At the same time employees are provided with other benefits such as free meals during their meal breaks.

The Blackbird Café has found that the improved flexibility and communication between employees and employer has been to their mutual benefit. The result has been that the work force has grown from 25 in December last year to around 75 today.

Our improvemen ts to Labor’s unfair dismissal laws have resulted in the number of unfair dismissal claims under federal laws in 1998 falling by 44 per cent since the Coalition came to office. The problem remains, however, that unfair dismissal laws are still deterring employers from taking on new employees. For the sake of new job opportunities for the young unemployed these laws should be improved and better targeted.

Small business has estimated that up to 50,000 new jobs would be created, particularly for young people, if small businesses’ new employees were exempt from unfair dismissal claims.

That is why we will keep fighting for those jobs, particularly for our youth. Equally, we believe that there should be a permanent exemption for small business from unfair dismissal laws for newly employed workers. This proposition has been blocked by Labor and others in the Senate three times.

The policy that we took to the last election foreshadowed further evolutionary and progressive reform to the current system of workplace relations.

Our proposed legislation will entrench the promotion of youth employment in the objects of the Workplace Relations Act. It also provides for the continued availability of junior wage rates in awards and agreements as well as the reintroduction of such rates where they currently do not exist.

Junior rates of pay assist young people to establish a foothold in the labour market and helps make them more competitive for jobs. Alternatives to junior wages, often floated but never delivered, would price young people out of the market and would be overly complex and impractical to implement.

Currently 420,000 young people are employed on the basis of youth wages. According to the Australian Retailers Association, the jobs of up to 300,000 young people will be put at risk by the abolition of junior wage rates.

Our Bill to maintain junior wages was rejected in the Senate in March and we will continue to work to preserve jobs for young people by retaining vitally important youth wages.

Other Preconditions for Employment Growth

Complementing our policies for economic management and labour market reform, are social policies to fulfil our obligations to the disadvantaged, particularly the young and the unemployed.

It is important that young people are given the opportunity to take responsibility for themselves and their future. We aim to give young people support and encouragement to achieve sustained employment, so necessary to realise their full potential as individuals.

A Sound Education

A strong education and training system is the key to getting the right start in life. Ours is a broad ranging approach to education which is aimed at lifting literacy and numeracy standards and support parental choice. A report released late last year by the Australian Council for Educational Research into the factors influencing youth unemployment found that school achievement in literacy and numeracy is the "one consistent factor in youth unemployment and unemployment duration".

As a government we refused to accept the situation where almost one in three of our primary school students could not read and write to a suitable standard. That is why

we put in place the first ever national literacy and numeracy standards, unanimously agreed to by all states and territories.

In this year’s budget, we allocated an extra $130 million over the next four years to lift literacy and numeracy standards, taking direct federal spending in this crucial area to record levels. This funding will help implement our goals for the early years of schooling and will also provide ways to improve literacy and numeracy in the middle years for those who have not previously developed basic literacy and numeracy skills.

However, higher standards will not be sustained unless parents are given effective choice and that demands strong, financially secure government and non-government schools sectors.

It has long been the case that the states provide the bulk of funds for government schools and limited funding for non government schools while the federal government’s role is really the mirror reverse. The Commonwealth provides the bulk of funding for no n government schools and provides supplementary or specific purpose assistance - for example for literacy and numeracy - in relation to government schools.

On this basis it is plainly false to claim that the federal government is discriminating against government schools simply because its direct per capita spending on non government schools is greater than it is for government schools. It would be equally ludicrous to claim that state governments are discriminating against non government schools because their direct per capita spending on such schools is demonstrably less than it is on government schools.

Yet the latter would be the case if the mantra of our opponents were embraced.

To demonstrate my point, the last New South Wales budget devoted around $4.6 billion to government schools but only around $400 million to non government schools. Likewise, this financial year the Queensland government will allocate around $2.7 billion on government schools, compared to only around $260 million on non-government schools.

Contrary to what appears to be a common misconception, my government is actually increasing support for government schools. In the 2000 school year we will directly spend $382 million more on government schools than was the case in 1996.

On top of our direct spending, increases in the states financial assistance grants in the near term and the GST revenue over the longer term will deliver even more money to the states for essential services like schools.

We have announced a more equitable funding system for non government schools where, from 2001, Australia’s 2,500 non-government schools will receive funding to better meet the needs of schools communities and their families. Non government schools serving the neediest communities will receive 70 per cent of the cost of educating a child in a government school from the Commonwealth - up from 56 per cent.

No non-government school will be financially worse off under the new system. Overall, the Coalition is providing greater choice for parents and higher standards for all of our students.

We are complementing these efforts with incentives for young people to stay longer in structured education and training. Our Youth Allowance removes the previous incentives for young people to opt out of education and training. They are now encouraged to complete their studies and better themselves.

Apprenticeships

Seventy per cent of young people do not go on from school to university. Apprenticeships are the key to helping these young people. When the Coalition came to office, Australia’s apprenticeship system was at a low ebb but that has been quickly turned around.

According to the National Centre for Vocational Education Research, the number of apprentices and trainees rose to over 206,000 at the end of 1998, an increase of more than 60,000 since the beginning of 1996. We are on track to meet our target of 500,000 New Apprenticeships over four years.

Our recent Budget provided $354 million in the next financial year for New Apprenticeships and initiatives to help young people to move from school to the workforce, particularly in rural and regional Australia. Assisting an expected 30,000 New Apprentices, the Rural and Regional New Apprenticeships Initiative will help employers in the bush train new apprentices in occupations where a skills shortage has been identified.

The Job Network

To better match the unemployed with real jobs the government has reformed the provision of employment services and more directly involved community organisations in the process.

For the next four years the we have committed an extra $220 million for employment assistance over and above that committed in the previous four years. In total the government will provide $4 billion over the next four years to help more Australians find work and to boost employment growth.

Up to 860,000 places in employment assistance for job seekers will be provided under the new Job Network over the next four years.

Our Job Network is one of the most innovative social initiatives ever attempted in an OECD country. We are bringing together employers and job seekers faster, at lower cost, with less red tape and a much greater focus on results. This is truly an example of the social coalition in action, with 300 community based charitable and private sector organisations that make up the Job Network now consistently outperforming the old CES by almost 50 per cent.

In its first year, the Job Network had over 500,000 notified vacancies compared to about 325,000 vacancies notified by the CES in the year to May 1998 and placed 240,000 eligible job seekers into work compared to about 124,000 placements by the CES in the year to May 1998.

In the last six months of operation the Job Network has placed an average of around 6,000 job seekers per week into real jobs.

A particular priority has been putting the long term unemployed into work. In its first year the Job Network made over 70,000 placements for long term unemployed and other disadvantaged job seekers receiving intensive assistance. This is around 30 per cent of all job placements under the Job Network.

Mutual Obligation

In addition to providing a more effective job service market, the government has sought to encourage unemployed young people to stay in touch with their community and prepare for work.

Work for the Dole is based upon our principle of mutual obligation - that it is fair that people be asked to give something back to the community from which they receive support.

The scheme was recently expanded to include year 12 school leavers unemployed for three months and 25 to 34 year olds who have been unemployed for more than a year. This has doubled Work for the Dole from 25,000 in the current financial year to 50,000 by 2000-2001.

A recent survey of more than 9,000 participants in the Work for the Dole pilot programme demonstrated that three months after leaving the scheme, 34 per cent were in employment and 11 per cent had gone on to education or training. A further 23 per cent of those who were unemployed at the time of the survey had experienced some paid employment since participating in the scheme. This means that about half of the participants who were surveyed had experienced some employment outcome.

The report found strong support amongst Work for the Dole participants for the principle of giving something back to the community. They not only benefited from improved employment prospects but gained greater confidence, self respect and the chance to prove themselves.

These results reinforce the findings of a Morgan and Banks survey last year which found that 83 per cent of employers considered that Work for the Dole would improve the employment prospects of participants. 

Work for the Dole and other mutual obligation activities rely on business and the community for their continued success. In the spirit of the social coalition, I would like to see even more businesses supporting these initiatives, providing opportunities for part time work for young unemployed people and for full time work once they have completed their Work for the Dole obligations.

Conclusion

Upon our election to government, we set ourselves a top priority to find work for the jobless. While we have made important progress in lowering the rate of youth unemployment and unemployment more generally in the community, the job is never done.

Behind every unemployment statistic are individuals whose financial security, dignity and hope are challenged on a daily basis.

Tonight I have outlined the comprehensive approach we have adopted to promote the employment prospects of our young people. We will continue to forge a great social coalition which harnesses the unique skills, talents and experience of individuals, families, business, the community and government.

In doing so I pay tribute to Archbishop Peter Hollingworth and to each of you here tonight who are actively working to build such a coalition in local communities throughout Australia. The security and esteem of a generation of young Australians depend on our combined efforts.

 

 

jy  1999-06-18  16:16