Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Hansard source

In speaking to Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, I would like to focus on the measures which appropriate funds for employment services and for incentives for apprentices. In this legislation, there is $36.8 million for the provision of intensive customised assistance for newly redundant workers, $43.7 million additional funding to cover increased commencements and completion claims under the Australian Apprenticeships system, and $38.8 million to assist out-of-trade apprentices.

I will look firstly at the intensive customised assistance for newly redundant workers. Treasury forecasts now see unemployment reaching seven per cent by June 2010. I caution that, as recently as the May budget, the forecast was for an unemployment rate of 4.75 per cent. That, of course, was the most optimistic of any around. There are a number of other economic analysts who are putting forward more pessimistic forecasts than a seven per cent unemployment rate by June next year. For example, ABN AMRO are suggesting that unemployment may be as high as eight per cent by the end of the year.

One of the concerns the opposition has is that the government has delayed providing this additional support. We highlighted the lack of early intervention in the government’s new employment services model on 7 August and have been telling the government and the Minister for Employment Participation that more early intervention would be required with a deteriorating labour market. In a media release on 7 August 2008, the opposition highlighted that new employment services would provide nothing more than assistance in writing a resume and information on the local labour market for the majority of new job seekers in their first three months.

Almost six months ago, in response to a ministerial statement on employment services, we demonstrated that only 12.8 per cent of resources would be provided for stream 1 job seekers, who are the majority of new job seekers. In fact, 61 per cent of new job seekers will be in stream 1, and they will be receiving only 12.8 per cent of the resources for employment services. We said that to reduce the early intervention for employment services was risky, inflexible and showed a lack of foresight. Unfortunately there are 80,000 more Australians who are unemployed since we first warned of the problem with Labor’s new employment services.

As many members will know, it was the Howard government which introduced the Job Network, which privatised employment services and had employment services delivered by not-for-profit organisations, by charities and by private companies. The Job Network was highly successful. It reduced unemployment from 7.7 per cent in May 1998 to below four per cent in February this year. However, the Minister for Employment Participation, in a discussion paper, said:

The Job Network is no longer suited to a labour market characterised by lower unemployment, widespread skills shortages and a growing proportion of job seekers who are highly disadvantaged and long-term unemployed.

In a nutshell, the Rudd government designed an employment services model for a period of full employment. They designed a model when unemployment was around four per cent. It was designed to work in periods of low unemployment, full employment and strong labour market growth. The mistake the government made was to assume that the vast majority of job seekers would find jobs themselves. They came up with the wrong model at the worst possible time. It has been very obvious to employment service providers, the not-for-profit sector, the opposition and industry groups—everyone except the Minister for Employment Participation—that this model, these new employment services, would not work in a climate of rising unemployment and weak or negative jobs growth.

We had a breakthrough last month when the Rudd government and the Minister for Employment Participation finally acknowledged what had been obvious to everyone else: there was a problem with their model. The $298.5 million extra being put into employment services is welcomed by the opposition. In this specific appropriation there will be $36.8 million, which will be providing intensive customised assistance. We think that this will go some of the way towards addressing the problems with new employment services. However, we point out that this is almost exactly the amount which was ripped out of employment services in last year’s budget. In last year’s budget, one of the major savings measures of the Minister for Finance and Deregulation was to cut funding to employment services by $279.8 million.

As I said, the Rudd government have known about the shortcomings of their employment services model for months. Since we first warned of this problem in August, 80,000 Australians have lost their jobs and have not been afforded this support, due to the Rudd government’s refusal to act earlier, to act decisively. It has been no surprise to anyone who has been following employment that we are facing a period such as this. We had matters of public importance discussions in June when it was impossible to get a Rudd government minister to acknowledge that there was a problem with jobs and job security, and yet the Department of Education, Employment and Workplace Relations has its very own leading indicator of employment now showing 14 consecutive months of falling employment growth.

The measures that we are discussing do nothing for the 200,000 people who will not gain employment as a result of the economic climate—people who are returning to the workforce, school leavers and mums returning to the workforce after raising a family. There is nothing in the Labor government’s announcements on employment services for these people. There is nothing in this appropriation bill for these people. The link in this bill—and it shows a wider problem, which we saw during question time today—is that it seems the Rudd government’s focus is on preparing people for unemployment; that is, not keeping people in jobs and actually focusing on creating jobs but focusing on redundancy payments. In question time today we saw a Treasurer who was unable to identify what the government’s ambitions were for job creation over this term of the parliament. We had the Minister for Employment and Workplace Relations unable to give a guarantee that the Fair Work Bill would not destroy a single job. The Prime Minister backed her up, again, by failing to guarantee that Labor’s industrial relations legislation would not destroy a single job.

We also see nothing in this appropriation bill and nothing in the employment services announcement for the tens of thousands of workers who were made redundant between 24 November 2007 and 24 February 2009. Over those 15 months more than 25,000 Australian workers were made redundant. There is nothing, for example, for the 1,500 workers at the BHP mine at Ravensthorpe who were laid off when the mine closed on 21 January. They are therefore not eligible for the intensive customised assistance. They will go into employment services, and beginning on 1 July the vast majority of those people will receive very little assistance in the first 12 months of unemployment. Unfortunately, the reality is that the focus of the Rudd government is not on creating jobs and it is not on getting people back into jobs; it is on preparing people for unemployment. Young people in particular will need support. In the last recession in the early 1990s we had the disgraceful situation of more than one-third of young people aged between 15 to 19 unable to find full-time employment under the Keating government.

I turn now to the measures that relate to support for apprentices. The opposition does welcome this support; however, we point out that, in a month when the government spent $42 billion on its cash splash, it only spent 0.37 per cent of that on helping apprentices who have lost their jobs. Again, there is a thematic consistency, I have to say, with the Rudd government. This is consistent with the broader approach in that it is targeted at apprentices who have already been made redundant. It does nothing for employers who are struggling to keep apprentices in employment. This is akin to closing the gate after the horse has bolted. It highlights what a low priority apprentices are for the Rudd Labor government that, in a month when it found $42 billion to spend in its cash splash, there was only $145 million, or 0.37 per cent, of that available for apprentices who have been made redundant.

Apprenticeship commencements have already decreased over the last 12 months. Employers are reluctant to take on as many apprentices. In the month of January we saw, in Western Australia, apprenticeships in construction decrease by 50 per cent. It is concerning that the government, in response to a question on the Notice Paper, was still forecasting the commencements, completions and numbers of apprentices in training to increase by one per cent a year over the next four years. That does not seem to stack up with the experience with the recession in the early 1990s when we saw the number of apprentices fall from 160,000 in 1990 to 120,000 in 1993.

There are three specific measures as part of this appropriation bill. The first one is $1,250 or $2,500 for a registered training organisation where an apprentice or trainee who has been made redundant completes their off-the-job training. This is available after 21 July, so it is not part of this appropriation. The second measure is $1,800, made up of $150 per week for 12 weeks where an employer recommences an out-of-trade apprentice or trainee who has been made redundant. The third measure is $1,000 to an employer, including group training organisations, that successfully completes an eligible apprentice or trainee on or after 1 January this year, and that will run over a two-year period. So effectively these incentives will apply for apprentices who have lost their jobs and who were in their last two years of their apprenticeship or traineeship. It will be paid through the Australian apprenticeship centres, which I welcome. There has been a lot of speculation about the future of the Australian apprenticeship centres, and we have been unable to get any guarantees for their future from the minister. I see the fact that these incentives are going to paid through the AAC as a good sign. They have been a very useful mechanism for making it very easy for employers to take on apprentices.

But, as I said before, my concern is that there is nothing there for employers who are doing the right thing by trying to keep their apprentices in what is a very tough period of trading for them. It is emblematic, I think, of the wider approach of the government—not increasing confidence, not focusing on creating jobs, not focusing on increasing job security but instead actually preparing people for bad news and unemployment.

The link between these two measures in the appropriation bill is that they will only be available to people who have been made redundant, beginning this year. It precludes, as I said, the tens of thousands of Australian workers who have lost their jobs over the 15 months since the Rudd government came to office, based on Treasury’s own forecast. It does nothing for the 200,000 Australians who will be joining the ranks of the unemployed, people who are entering the labour force for the first time, for school leavers or mums who are returning to the workforce after raising a family. There is nothing in this appropriation bill for them and nothing in Labor’s announcement on employment services for them, and that is a shame.

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