Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

I rise today in support of this bill, the Jobs and Skills Australia Amendment Bill 2023. This bill, of course, relates to the labour market—to one of the most important areas of social and economic policy. In fact, there's no area of social and economic policy more important than ensuring that our labour market functions well and that it gives opportunities in our society to all.

Where we work is so critical. It's where we earn a living. But also, for so many, where we work gives us dignity in life. It gives us purpose. It's where we contribute to society. It's where we have a social outlet. So a well-functioning labour market means so much for the economic productivity of our society, but also for the quality of our social interactions.

I want to provide just a couple of observations about our labour market before I talk about this bill, because this bill reflects, I believe, not only the current state of our labour market but also how our understanding of our labour market has evolved over recent decades. Back when I was studying economics, many, many moons ago, when we spoke about our labour market, we used to talk about unemployment. That was basically the single characteristic of the labour market that was of interest: what proportion of the people in the labour market didn't have a job at any particular point in time? That was at a point in time when almost everybody had a full-time job, and so it was a very binary measure: were you are in a job or were you not in a job?

Now, of course, the labour market is so much more complicated. We have unemployment, which is still probably the single most reported measure of the labour market, but we also, of course, have underemployment. We have measures of job insecurity: the number of jobs where people may not have regular hours or may not have secure conditions. And now, of course, we have many people who come in and out of the labour market, people who may have gaps in their employment. That, of course, has consequences in terms of their economic stability but also in the longer term—for example, for their superannuation balances. So it's critical to think of the labour market in a far more nuanced way.

Going back to when I studied unemployment, we used to think about unemployment as having three types: frictional unemployment, cyclical unemployment and structural unemployment. I think that, while the real world is never so neat as that, those types still characterise, in broad terms, some of the main types of dislocation that people have from the labour market. 'Frictional unemployment' generally means people who have a short-term break from employment and maybe are just unemployed for a period while they do up their CV. They're just looking for a job and will find something very quickly. 'Cyclical unemployment' reflects the ebbs and flows in total unemployment numbers as a result of the business cycle. And 'structural unemployment' is where there are deeper, tectonic, changes in the nature of the economy, where some industries are on the rise and some industries are on the decline and where it can take a while for workforces to shift between those industries. As I said, things aren't that neat, but that's a useful frame for thinking about it.

The reason I raise that is: that last type of unemployment—structural unemployment—has always been more of a policy challenge. It can reflect where there is a mismatch between the skills of people who are looking for work and the jobs that either exist or are emerging—a mismatch between the experience and the qualifications of those people who are looking for work and the jobs that are currently open or are emerging. These mismatches can be difficult to identify and can take quite a while to fix.

The reason I raise that is that we now, I believe, have a much better understanding: that understanding that kind of mismatch requires much more granular data than we used to apply some decades ago. In order to truly understand how we can help people who are mismatched to emerging jobs, we need to deeply understand—and at a very granular level—what qualifications and skills those people have. If they don't match with jobs, we need to understand what it is that we can do to help those people update their skills or qualifications to match with the jobs that either are currently on offer or might be emerging in the economy. It's that really granular data and granular analysis which are so key.

I raise that because that's exactly the kind of data that Jobs and Skills Australia is going to be able to provide to government. It will form the basis, the underpinning, of the advice that JSA provides to the minister, to the government of the day and to the bureaucracy. Of course, it's important to be able to cut and splice that data to reflect the particular challenges that young people might have, that people in certain regions might have, that older people undertaking mid-career transitions might have, that people from particular backgrounds might have or that women might have in particular contexts. That kind of analysis requires very detailed data, which, again, is exactly what this organisation is going to produce and analyse and provide to government.

Another piece of context which I think is critical when it comes to Jobs and Skills Australia is that we are facing a massive skills shortage at the moment, which previous speakers have identified. To some degree that reflects the fact that our economy is in a state of significant flux. There are some industries that are declining in terms of their demand for employment and some that are rapidly increasing. But, at the same time, we've just come out of quite an unprecedented period where our borders were shut or near shut for a couple of years, and we went from a period of very high levels of migration to essentially zero levels of migration. This has created very sharp shortages in many areas. So, coupled with the fact that it's an inherently difficult kind of area of policy to deal with when there are mismatches between people looking for jobs and jobs that are either open or emerging, it's particularly difficult at this time, given that we have so many areas of skills shortage and such sharp skills shortages because of the period we've just experienced with COVID. That makes the work that Jobs and Skills Australia will undertake so timely and so critical. In fact, Australia has the second-highest labour shortages at the moment across all OECD countries. Those skills shortages are partly a reflection of mismatches—partly a reflection of the fact that there are people out there looking for work who don't have the skills and experience to precisely match up with emerging jobs—and it's partly a reflection of those broader macroeconomic issues that Australia has experienced over the last few years with the borders shutting.

There are 286 occupations experiencing skills shortages, double the number that were experiencing skill shortages just 12 months ago. There are particular areas which warrant mention. Construction, for example—the industry recorded difficulty at 80 per cent levels in December 2022. This is critical, of course, because it relates to so many areas, like housing and those critical to supply chains, that are important for dealing with pressures on rent, pressures on homelessness and all sorts of other areas of social policy. Construction shortages are absolutely critical to dealing with a whole raft of other policy areas. Health care and social assistance is an area where massive employment growth is expected, and there are some particular occupations within that broader sector that are currently experiencing significant skill shortages. So, again, it's critical that an organisation like Jobs and Skills Australia provide the government with the most up-to-date and granular information so that we can understand our best to deal with those areas.

Another issue in the labour market that is absolutely critical is the underutilisation of skills. This relates to matching, but it's a different dimension to matching. It's where the skills of a whole raft of people in the community are not being currently recognised in a way where they are able to fully utilise those skills. A good example of that is a raft of people in the CALD community. This is a group of people that I talk to regularly. These are people who might come to Australia with qualifications in other countries or experience in other countries but those qualifications or that experience are not able to be utilised where that person would desire them be used and where they would benefit the community for a considerable amount of time. Again, fully understanding that challenge of the underutilisation of skills requires very granular data and very expert analysis of that data.

As I've indicated, Jobs and Skills Australia will put the government in a much better position, firstly, to understand these challenges and, secondly, to develop the appropriate responses. Jobs and Skills Australia, I think, was the first bill that passed through both houses of this parliament after this government took office—if not, it was one of the first. It reflected, right from the start, that getting better labour market outcomes is right at the top of this government's priority list.

As previous speakers have indicated, Jobs and Skills Australia has been operating on an interim basis. This bill will provide a permanent governance arrangement for this extremely important organisation. It will establish a ministerial advisory board, which will be a key part of the governance structure of this body. It will also require the minister to commence a review of the JSA within two years and it will establish the key functions of Jobs and Skills Australia, including a range of functions in terms of advising the minister. Jobs and Skills Australia will identify labour market imbalances and analyse the demand and supply for particular skills. Again, as I indicated at the beginning of my speech, it's extremely critical that government has that very granular level of analysis. It will analyse workforce needs in relation to migration, an area that touches on the matching of skills and labour force shortages, as indicated. That will also help us to get over the challenge of workforce shortages which were exacerbated by those two years of very low migration. This lies at the heart of the government's response to a more functional and better suited, better designed migration system, which the Minister for Home Affairs has talked about so much over the last few weeks. So it's important that we pass this bill to put Jobs and Skills Australia, an absolutely critical organisation, on a more permanent footing.

The kinds of analysis and the kind of advice that will come out of this body to the minister, the government and the bureaucracy are going to be absolutely critical for the government. That's not just in resolving shortages within the labour market but in dealing with a raft of much broader policy issues. We're not going to be able to deal with housing shortages unless we deal with workforce shortages in the construction sector. We're not going to be able to deal with shortages in the care economy, or be able to provide the quality service in care that people deserve, unless we deal with skills shortages in that area. This organisation is going to put the government in a much stronger position to deal with those issues.

This government has a very broad agenda when it comes to providing people with the opportunity to reskill or for people leaving school to gain additional skills. There will be 180,000 free TAFE places and 10,000 New Energy Apprenticeships—those are just two examples. But in order for school leavers to make the right choices about what degrees or courses to take and what areas to focus on, and in order for those offering courses to know what the right courses are, given the emerging industries in the economy, everybody in the ecosystem that is the labour market needs to be better informed. All of these different areas of government policy priority are going to require better information and better quality advice. As Minister O'Connor said in his second reading speech:

I firmly believe that JSA is, and will be understood widely as, one of Australia's essential social and economic agencies.

I think that when you consider the importance of a well-functioning labour market in giving people opportunities and also in underpinning long-term productivity growth, then that it is going to underpin better policy in exactly the way that the minister indicated.

I can think back to the jobs and skills round table that I held in my electorate—fittingly, at Victoria University, one of Australia's dual-sector universities. I heard there from employers at the coalface right across my electorate about the skills shortages they were facing, and also from people helping young people to make decisions about what courses to undertake after they finished school. Information coming out of Jobs and Skills Australia is going to help all of them. It's going to help government, it's going to help young people choosing courses, it's going to help employers and it's going to help those offering courses to do so in a way that better suits the emerging economy, which will be a higher productivity economy and also an economy with opportunities provided for all.

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