Tuesday, 8 November 2016
Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016; Second Reading
I rise to speak about the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. This is a bill designed, in part, to support the introduction of the Turnbull government's Prepare, Trial, Hire program or PaTH. PaTH is supposed to prepare young people for work by providing jobseekers aged 17 to 24 with pre-employment training and placement in voluntary internships for between four and 12 weeks. During that time they may work 15 to 25 hours a week. Jobseekers will receive payments of $200 per fortnight, on top of their current income support payments, while they are participating in the PaTH program. Businesses will be paid $1,000 to take on an intern and will receive a wage subsidy of between $6½ thousand and $10,000 if they hire them at the conclusion of the internship.
This bill will give the government the ability to do two things that will help get PaTH off the ground. First, a provision will be inserted in the Social Security Act and the Veterans' Entitlements Act so the $200 payment interns receive is not counted as income for social security or veterans' entitlements purposes. Secondly, it will amend the Social Security Act to allow young people to suspend their payments if they are employed. They can then restart them, without reapplying, if they lose their jobs through no fault of their own within 28 weeks.
The government is going to argue that the measures in this bill are noncontroversial. They will argue PaTH is needed to fix youth unemployment. But, make no mistake, the opposition—like many in the community—have serious concerns about whether this overall program represents a fair deal for Australia's young unemployed. The reality is, these proposed changes form part of a deeply flawed program, something drawn up in a rush, as the Turnbull government retreats from other long-running employment programs that are failing under their watch, victims of this government's incompetence. As they scramble and pivot to the Youth Jobs PaTH Program the bigger story is this: the Turnbull government is failing to provide a plan for new jobs across the nation, particularly for young Australians.
During the election, the Prime Minister who promised us the end of three-word slogans came up with one of his own and used it endlessly: jobs and growth. They might not have had a concrete plans for jobs, but at least they had a concrete plan for slogans. This is cold comfort for unemployed Australians, especially young Australians, who are worried about being locked out of the job market. Despite promising it would tackle youth unemployment, an incompetent Turnbull government has failed to deliver.
On the Turnbull government's watch, youth unemployment has climbed to nearly 13 per cent, double the national average. According to their own figures, there are nearly 300,000 unemployed young people between the ages of 15 and 24. On top of this, the Department of Employment acknowledges there are another 170,000 people who have been unemployed for more than a year, who are disillusioned by the act of looking for jobs that are simply not there. It is a disgrace. This government has left young Australians high and dry, unable to come up with a real plan to find jobs for our young people.
Let us look at how the Turnbull government has tried to 'help' young unemployed Australians. Here is one of their ideas to help young unemployed get to their feet: they made them, potentially, wait for one month before they could access income support. Some help. Here is another: pushing young unemployed onto the Work for the Dole program when 90 per cent of the participants are not in a full-time job three months after finishing the program. Only 9,460 people managed to get a full-time job through Work for the Dole. That is a shade over 9,000. While it is great that those 9,000 found full-time work at a cost of $28,000 per person, there are another 78,000 young people who need the Turnbull government to get its act together and improve the program to help them get into full-time work.
Overall around $300 million was shifted in this program in the last financial year and yet again this government could not get nearly 90 per cent of the Work for the Dole participants into full-time work. When quizzed about the performance of the Work for the Dole program, what was the response of the government? At last month's Senate estimates the Secretary of the Department of Employment said:
The purpose of Work for the Dole is not necessarily to lead … to a full-time job.
What a jaw dropper. I will repeat what the government's own department said about Work for the Dole:
The purpose of Work for the Dole is not necessarily to lead directly to a full-time job.
With an attitude like that there is no wonder this program is floundering. Make no mistake: because of the incompetence of this government that program is failing badly. It is one of a range of measures that are supposed to get people into work, and yet this government has turned it into an expensive failure.
What has been the response of the Turnbull government to this failure? You would think they would focus on fixing the flaws and getting the program, which has run successfully I might add under both coalition and Labor governments, back on its feet. Not a chance. Instead, it has rushed in this PaTH program in this legislation. It is a poorly considered attempt to divert attention from the failing Work for the Dole program. It has taken millions out of Work for the Dole. It has shifted over to PaTH nearly $800 million—$752 million, to be precise.
Again, taken in isolation, the government is going to tell you that the measures in this bill are non-controversial, but you simply cannot take these measures on face value without considering the concerns that exist about PaTH, and there are quite a few. Under what is being proposed every year PaTH will take in 30,000 young Australians, turn them into interns and place them in businesses around the country. That might not sound like a big deal, but this is a massive shift. Previously the Work for the Dole program was aimed at not-for-profits or government bodies like councils. This was done for a very important reason. It was to ensure young unemployed Work for the Dole participants were not used as cut-price labour, displacing existing workers from their jobs. The Turnbull government does not care about this. It does not understand the significance of the change it is about to make—or it does and it is not letting on. It is quite relaxed about the fact that for the first time it will provide big businesses with a pool of cut-price young unemployed people, who will be working at a rate that is less than the national minimum wage.
I will walk you through some of the issues associated with the PaTH program that this bill is going to help support. The Turnbull government has decided to call the program participants interns. They will have their income payment topped up by $200. That is provided for under this legislation. Most people outside of this place would think of an intern as being a young person working in largely a white-collar role—for example, in professional services firms like law firms. You can be pretty confident that the general public's idea of what an intern is will not match the Turnbull government's likely definition of an intern. That is because six months after announcing this program the Turnbull government still has not even defined what an intern will be. This should not be a hard thing to do.
The Turnbull government are trying to find a way to win over the general public to their new term of 'intern'. For example, it will be quite conceivable that we will see intern waiters, intern retail assistants or intern construction aides. Most Australians will see right through this. The Turnbull government will be slipping in a dodgy definition of what an intern is, and it will not benefit young Australians. The big concern about PaTH is that it will be used to displace workers. Ordinary young Australians trying to get their foot into an entry-level job will be fighting with 120,000 people in the PaTH program, who represent cut-price labour subsidised by this government. Remember that this program is not attempting to create jobs. It is creating an incentive for businesses to take government funded jobseekers.
Here is another grey area. What will these interns, undefined, actually do while they are in the workplace? We still do not know if they will simply be observing what is going on or be expected to perform as intern waiters or intern retail assistants. Again there is no detail from this government. How will workplace standards be monitored and audited across the 30,000 internships? What is the standard of supervision required for an internship to go ahead?
All of these important questions are unanswered, yet we are expected to support this bill, which will give effect to that program.
Another question: what happens to those interns who unfortunately experience a workplace incident or accident? Will they be covered by workers compensation? According to the government, that will depend on the workers compensation regimes that operate in the particular state or territory in which these interns find themselves. But in some states and territories an intern may be considered a volunteer, not an actual employee, and therefore unable to access workers compensation. This is an issue that cannot be ignored, but the government is not really stepping forward with clear assurances.
But here is the most important question: after being used for up to three months at a rate below the national minimum wage, will these interns actually get a job? Interns Australia recently wrote in The Sydney Morning Herald that unpaid interns are only offered employment with the same organisation 20 per cent of the time. Their conclusions about the PaTH program are absolutely scathing:
It creates an Australia where exploited interns are widespread but entry-level jobs are scarce, where business either flagrantly exploits its newest workers or doesn't know whether to hire them, and where the rights of interns are more confused and muddled than ever before.
PaTH interns were supposed to be placed into businesses where there was a 'real vacancy'. That is the way it was described when this program was announced and as what this legislation supports. But, since announcing PaTH, the Turnbull government quickly watered down this pledge to 'a reasonable prospect of a job'. It went from 'real vacancy' to 'reasonable prospect'—again, not a small issue. There is a concern that PaTH could cause wage deflation across entry-level positions as businesses use interns instead of hiring someone full time. Alternatively, there is a concern that young Australians participating in PaTH could be used and discarded every four to 12 weeks. There is little in the way of testing or sanction for employers that might churn through PaTH participants after the engagement with an intern concludes.
The review and monitoring process that will supposedly stop churn from happening is laughably thin—something along the lines of 'trust us, it will be fine,' which is not good enough when it comes to setting up Australia's next generation of workers. How will the government's 'trust us, it will be fine' checks and balances be implemented? The answer is that once again the government have washed their hands of the hard work and will ask employment service providers to do the heavy lifting. Employment service providers will be carrying the increased burden of risk assessments for waves of new interns, and the government have also admitted that employment service providers will do the up-front checks to try and weed out job displacement or churn. But they will not be paid any extra for these tasks. If I am wrong, I am happy to be corrected. Employment providers are supposed to find the resources to check whether larger companies, potentially with operations all over the country, might be hiding job displacement tactics and taking subsidised interns from the government instead. There could be as many as 18,000 to 20,000 companies required for 30,000 PaTH placements every single year. The government have outsourced the checking of the placements at all of those companies to the employment service providers without funding the process. Again, I am happy to be corrected, but that does not look like what is going to happen. The government's own up-front checking will not go much further than cross-referencing intern placements with company ABNs, hoping to catch out sneaky displacement tactics. This is the flaw with the government's 'trust us, it will be fine' approach. There is nothing to earn that trust.
Following on from this, I point out another concerning scenario to the House, one where we test the ability of the Department of Employment to keep an eye on business misuse of PaTH. What about the situation where big hotel chains, for instance, with a fly-in squad of intern waiters, decide to roster those interns for 15 to 25 hours over a Friday, Saturday or Sunday? Would it simply be a coincidence—a sheer coincidence—that the usual penalty rates that would apply to an existing employee would not apply to those interns? It is not a coincidence. That is a real prospect, where both the interns and the existing employees lose out—especially those employees who suddenly find they are not required to work on weekends because an intern is doing their job. What have been outlined now are all serious concerns, and they have simply been glossed over by this government.
In responding to the debate over this bill, the government must provide concrete actual responses to these concerns. They should also tell us why they are so keen to deliver a rainbow right up the balance sheets of some of Australia's biggest businesses. Many of these businesses—the big businesses—have never taken a real and sustained interest in giving a substantive start to the nearly 800,000 Australians without work.
When you ask jobactive providers, as I do, who takes on jobseekers, is it small to medium enterprises or is it big business, the answer usually is small business. The government acknowledges this—they admitted as much in last month's estimates. In parlance that those opposite would well understand, there are definitely lifters and leaners when it comes to taking on job seekers. SMEs are definitely the lifters; big business put up a whole range of barriers to bringing on jobseekers off the jobactive network. They make it hard to bring them on. Now, all of a sudden, the biggest advocates, the biggest cheerleaders, for PaTH happen to be big business, who can see a pool of young unemployed Australians working at cut-price rates, below the national minimum wage, being deployed in a way that could potentially undercut jobs and undercut wages. It is simply unacceptable that this system might potentially be rolled out without the government providing any of the assurances necessary.
The opposition is very concerned about the potential for young job seekers to be exploited and whether this program could undermine workplace standards. Given all those concerns, the opposition will refer this legislation to a Senate committee inquiry for further consideration, and that is why we will reserve our position on this bill until the inquiry report is tabled and we will reserve our right to make further amendments in the other place. We are also moving an amendment to seek assurances in this place that we will get answers to the concerns we have continually raised—answers which have not been forthcoming—about the system design of the program that is being put forward in the legislation that we are about to debate. Frankly, can you blame us for being suspicious of the Turnbull government's motivations when you see the attractions of this program being singled out by their own backbenchers? Last month, during estimates, it was demonstrated through Senator James Paterson that you just cannot trust the government to make PaTH fair for young people. Senator Paterson showed how sidestepping unfair dismissal laws under the Fair Work Act was a 'benefit' of PaTH. In a big win to big business, Senator Paterson took the Department of Employment through a series of questions explaining how the Fair Work Act would be dodged using PaTH. Senator Paterson asked:
I guess one potential advantage for a business is that if an intern does not work out they are not going to be subject to any unfair dismissal claims or any costs in that respect?
The Secretary of the Department of Employment confirmed that, while they are PaTH intern, the young person would not be classified as an employee, meaning employers could take them on without risk of Fair Work proceedings. This creates the risk that employers will not use this program as a pathway to work but rather as a pathway to churning through workers. It begs the question: is the Turnbull government trying to help young Australians get a job or make it easier for them to get sacked? On top of that, the sheer volume of interns is going to increase massively.
You would think the government had a report or a review to underpin their assumption that this golden ticket for youth employment would exist, but they have not even evaluated an existing program, the National Work Experience Program. That is undergoing a review right now—not before the PaTH program was drawn up. After that sort of rigorous evidence-based approach, the government has decided to take the current program, which places between 3,000 and 6,000 people a year, at best guess, and a ramp it up to the 30,000 per year Youth Jobs PaTH Program.
I touched earlier on another program with PaTH, and it relates to safety. The safety and risk processes used in the failing Work for the Dole program are apparently going to be copied across to the PaTH program. Unfortunately in April this year a young participant in the Work for the Dole program suffered a fatality while on a placement in Toowoomba. The department has since handed a finished report into the management of Work for the Dole to Minister Cash to determine whether or not people who provide the Work for the Dole program are meeting the expectations on workplace health and safety as enunciated under the deed. The government has not said what changes have been made to the Work for the Dole program, or how it monitors safety in the program, since the report was completed. We have had a fatality, and we have not had the government say what changes have been made as a result of their own internal investigation.
I have been very grateful for the two meetings that I have had with this government, its representatives and the department over this internal review. However, I have asked them repeatedly, 'When are you releasing that report?' They indicate that they are waiting for the outcome of a workplace safety regulator incident report that is being conducted in Queensland before they release their report. Frankly, given that these are looking at different matters insofar as the internal government report is looking at the deed and the way that people who are undertaking the Work for the Dole programs for the government are adhering to the expectations of the deed, this report should be released, and it should be released in consideration of what is going to happen under PaTH, given that there are going to be parallels between the workplace safety arrangements under both the Work for the Dole program and PaTH.
The government have admitted that the safety monitoring and standards in PaTH will be modelled on those in the Work for the Dole program. The government want 120,000 young people to trust that their workplace health and safety will be protected under this program. If they want that trust to be earned, they should release the report into this fatality and demonstrate what tangible differences and changes are being made to workplace health and safety under the programs they run. It goes back to the fundamental issue of workers compensation. The government will not say how interns, who will be supported under this legislation, will be covered should an accident or death occur under the PaTH program. It is not good enough for a government program to not have that spelt out. You cannot make workplace safety, in a program you devised, someone else's problem.
Ultimately, as we have had concerns about the way in which the Turnbull government is failing young Australians in finding them work through the programs that they have set up, we remain concerned about whether or not PaTH will actually deliver. Its employment policies and results show that the government does not know how to address changes in Australia's labour market. In fact, a new report from Anglicare, Positions vacant? When the jobs aren't there, showed that there is only one job advertised for every six low-skilled jobseekers in Australia. The report warned that low-skilled workers are increasingly excluded from the workforce, and now, under PaTH, government subsidised interns could be competing for similar roles. A staggering figure from the report was that in May this year nearly 140,000 people competed for roughly 22,000 entry-level jobs advertised across Australia. It is proof that the Turnbull government is failing to create new jobs, and under the Turnbull government employment conditions have deteriorated to the point where they are worse than at any time since the peak of the GFC. In fact, things are worse than that. Underemployment in the August 2016 quarter was 8.7 per cent. The macro division of Treasury said that was the highest result since the series of data began way back in 1978.
Another change hindering the young people targeted by PaTH getting into work is that more people are staying in work longer than ever before. This means that the Turnbull government has to increase the pie and not just send young people off to compete for jobs that are just not available. In 1992, for instance, fewer than one in 10 people in the workforce were over 55, and today it is one in six. This is going to become a bigger issue as people live longer and stay in the workforce longer. There are fewer openings for younger people to get their foot into the workplace. The government should be focusing on creating jobs and training people for the types of jobs that are coming down the pipeline instead of erecting flawed programs that could displace jobs and depress wages.
Again, our big concerns about this program and what this legislation will enable are that it will potentially create 30,000 interns a year—interns whose role has not been defined, who could potentially displace people out of work or lead to falling wages at a time when wages growth is at its lowest on record, and whose safety has not been guaranteed; that there are some people within government ranks who have suggested that this will be an ideal way to circumvent unfair dismissal protections; and that those businesses that are doing the work of helping out in taking on more jobseekers will not be prioritised above bigger businesses who have failed to do the hard yards in providing work for the 800,000 or so that are seeking work, going through the government's own jobactive network and not being helped out by big business. But big business, without helping the unemployed, wants to help itself to a cut-price pool of young labour to be able to, as I said before, potentially displace jobs and displace wages. These are serious concerns.
PaTH, with so many flaws at the heart of the program design, is unlikely to help young jobseekers overcome these significant employment market barriers, and it is another flawed policy from a government without a jobs plan, running from some of the failed programs it has had under its watch and trying to put up new programs with some of these barriers to them. This is why we are moving a second reading amendment: to basically get assurances out of this government for things that we have been asking for ages. Tell us whether or not you are able to define what those interns are. Tell us whether or not they are going to displace people's jobs. Tell us whether or not they are going to lead to a cut in wages. Tell us whether or not the people that are involved in the PaTH program will have the protection of workers compensation or like arrangements. Tell us whether, for example, you are using this as a mechanism to circumvent the Fair Work Act when it comes to unfair dismissal protections. Tell us whether or not you are going to be fair dinkum in making sure that big business finally does what a lot of us expect, which is basically to start providing jobs for those people that are currently without work and are left to be dependent on government programs like Work for the Dole where, in some cases, nearly 90 per cent of the people that go through the program are without full-time work three months after they have gone through the program, a program which the government then says, through its department, is not there to provide work for people, which is simply staggering.
We expect better, young Australians expect better, and we expect answers from the government. It has taken six months to get those answers, and we have got nowhere.
That all the words after "That" be omitted with a view to substituting the following words:
"Whilst not declining to give the bill a second reading, the House notes that the Turnbull Government cannot guarantee that, under Youth Jobs PaTH (Prepare, Trial, Hire):
(1) jobs will not be displaced by cheaper labour;
(2) wages will not be undercut and some participants will be paid below minimum award wages;
(3) participants' safety will not be compromised and that adequate insurance arrangements will be provided;
(4) participants won't be used to help businesses sidestep unfair dismissal protections; and
(5) it will prioritise using small to medium enterprises in PaTH because they have a demonstrated track record of employing more job seekers through the jobactive programme".
It gives me pleasure to talk about the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. I have listened for the last half an hour. I have listened to the criticisms, but I did not hear too many solutions. I guess that is the challenge we have as a country. Sadly, we have 600,000 Australians who are living in a household where no-one has ever held a job. That is staggering. That means that there are young Australians who have not seen the model of mum and dad getting up and going to work. There are young Australians who do not know the value of a work ethic. There are young Australians who do not know that, in working, you can have a sense of purpose and self-worth and an opportunity to better yourself.
So I think it is important for members on both sides of this parliament to think very creatively about how we address this major challenge. The first thing you have to do if you are going to have jobs for Australians is have something you can produce. You have to have a marketplace for those jobs. I am pleased to say that, under our leadership within this government, we have been able to develop three key free trade agreements, with China, Japan and South Korea. People ask: how do you draw the links? I am going to explain just how clear those links are in the electorate that I represent.
Last week I was in both Beijing and Tokyo. I was in Beijing launching nectarines into China. Our nectarine growers have been screwed over for a long time by the supermarkets—that is a very descriptive parliamentary term but an accurate term. As we have found greater markets, they have then been able to get better prices. So it was really pleasing that this year, for the first time, we are going to get nectarines into China.
We have also seen this recently with table grapes, which are grown in the Mallee. Table-grape season is soon, so people in the gallery might want to look for some good, fresh table grapes soon. They have been getting great prices into Japan, into China and into Korea. The outworkings of that mean that people are planting more plantings and people are looking to hire more staff. The local Toyota dealer told me he has had the best year he has ever had. He is putting on apprentices. He is selling utes and products. So, creating the marketplace creates the opportunity.
The next challenge for us, though, is to take that opportunity and turn it into a reality of jobs for young Australians. Now, we have had a discussion in the public domain around backpackers, who are an essential part of our workforce. But we do not want to have jobs just for foreign workers. More importantly, we want to have jobs for young Australians.
If you go and talk to people who are potential employers, they will say, 'The difficulty we have with employing young Australians is that they are not job ready in an aptitude or OH&S sense.' What the measure in this bill is attempting to do is to create a pathway for those young Australians to go from being effectively unemployed to being in gainful employment. Keep in mind that, as I said, 600,000 Australians are in households where they have never seen a model of working people. We are taking young Australians who have been on unemployment benefits for six months—so they have been looking, but they have not been successful—and we are saying to them, 'We are going to invest in you by giving you some training, some basic OH&S.'
I was and still am a farmer, and I used to do a lot of youth work with the Salvos. I dealt with a lot of these kids. I would take some of these young unemployed kids out to my farm and get them on a handpiece, doing pretty hard physical work. They would say to me, 'I'm a bit disadvantaged. I've got ADHD, I've got difficulty with my concentration, I'm hyperactive.' But, after dragging sheep out and crutching them all day, they slept at night. They were very tired. I got some of these young guys out and they actually helped paint my house. They are supposed to have attention deficit disorder, but they could do the skirting and the cutting-in. It was a matter of working with these kids, getting them through the first step.
The Youth Jobs PaTH program is about that. It is about getting them job ready before they go and work in a workplace. Why this program is so much better than a work for the dole program is that you are putting a young Australian in a real workplace, not a token workplace. We are not asking a young Australian to go and pick up rubbish for the council, like in a work for the dole program. It is not a mickey mouse job. We are putting them amongst real men and women who are holding down jobs. We are putting them in the orchards, we are putting them in the almond fields, we are putting them in small manufacturing, and they are working with real Australians. It is like having a hit of tennis—I do not know what you are like at tennis, Mr Deputy Speaker Vasta, but, if you have a hit of tennis with someone like me, I can guarantee that you are not going to lift your game. However, if you have a hit of tennis with JA, John Alexander, former Australian tennis champion, you are going to lift your game. If you put young Australians in the workforce, where they are working with people who are already in the industry, they will learn the tricks of the trade.
The secret of success is very simple, and if there is something that I want people to take home from this speech today—someone said this to me once, and I have always remembered it—it is: look around at what everybody else is doing and do a little bit more. That is the secret of success. It is pretty simple: look around at what everyone else is doing and do a little bit more. If you are in a workplace and you are trying to do a little bit more than everyone else is doing, the boss notices you, and that is how you get a promotion.
So we take these young Australians and put them in an internship. You have to understand that there has to be an incentive for the employer to take on an intern, because that intern's productivity is not going to be great. If we are honest, it is not going to be great. I have had these kids on my farm. They might break something. They might set the place on fire—that is a risk on a farm. You have to understand that their productivity is not going to be great. But you are doing this because you believe in the future of our young workers.
So you take these young people on. It is up to 12 weeks that they are working in that situation, and that is a good length of time. They are learning off one another and they are getting a sense of self-worth. They are also getting a little bit of extra money. It is amazing what happens when people who are not used to getting money get a little bit of extra money. Suddenly they get a little bit of extra freedom. And I saw this when I did some youth work with these kids. You give them a little bit of extra money and, suddenly, yes, they are tired, but they get to take their girlfriend out to Maccas. They got to put a new stereo in their car. It actually starts to light the fire in the eyes of young Australians who never thought they could aspire to something—now, they think, perhaps they could aspire a little bit more. And that is what this is all about. At the end of 12 weeks we want them to be so enthusiastic about their employment that the boss says, 'Actually, this guy is really worth investing in.'
I have been out talking to potential employers across Wimmera and Mallee, and they are pretty keen to take on young Australians. They actually are. They know that it is a cost to them. And they know that even with a wage subsidy it is a cost to them. Often a tradie who is an employer will say: 'It takes more time when you have an apprentice. I am not as productive when I have an apprentice. But, you know, I'm a small-business man and I am passing on a skill.' That lights their fire. And so we in this program then give a wage subsidy for a further 12 months for that young Australian to be working in that business. Then, hopefully, at the end of that they are up and running.
Successive governments have tried many, many things to try and address the problem of the 600,000 Australians who are unemployed and how to move them into the workforce. They have tried the big stick approach—which, I have to say, was some of the 2014 budget that we tried—which was, 'You've got to get out there and look for 40 jobs a month'. I never supported that. It was not workable. They have tried the sugar approach: give you more money and more money. That has never really worked. They have tried the Work for the Dole approach but it has never led to any real employment because it has not been in a real employment setting.
So I really think this is worth breathing life into. I have heard all the criticisms from the member for Chifley and I wonder if his criticisms would be as severe if he took off his opposition hat. I think if you look at this very clearly, you will see that the idea of taking a young Australian and getting them working safely in a workplace—and the idea of immersing them with employees so they get into the work culture and they get a bit of extra money, and the idea of subsidising that ongoing employment for that first 12 months—is perhaps the best model that has ever been put forward in this parliament.
Sure, there will be some changes that will need to be made as we roll it out. But the principle is very sound. I have seen it on my own farm when I worked with some of these young unemployed Australians. I have seen it from their perspective. I have seen it from the perspective of an employer. And I am really pleased that we are allocating some money to this.
One of the things I think is also very fair about this is that, if at the end of that 12-month period, or even less than that time, that person through no fault of their own is sacked—and that does happen at times—that person does not have to go on a waiting list to receive unemployment benefits. That young Australian will be able to go straight back on to unemployment benefits while they look for another job. I think that is very fair. If we think this through we will see that this is really about nurturing, mentoring and transitioning a young Australian—and, frankly, the longer they stay unemployed, the more unemployable they are—and moving them into the opportunities that are there before them.
This is what defines us as a country. We as a government have the macro right. We have the macro settings whereby there are now more job opportunities in my patch than there have ever been. Yet, at the same time, there is higher youth unemployment in my patch. We needed something to be that nexus, to be that transition period. This I think has the potential to do that. I am really proud to speak on it. I look forward to seeing it implemented in my patch. It makes me proud to be part of a government that can see the macro policy but is also making sure that we turn the macro policy about good financial settings into great job opportunities for young Australians. You have to say to those young Australians, 'The best thing we can do for you is get you a job, get you an opportunity, and for you to seize that opportunity, take that opportunity and make something of yourself, and you'll look back on your life and say, I started from nothing, but I'm really proud of what I've been able to achieve.'
I would like to add my voice and make some remarks on this important bill, the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. I will start by agreeing with about half of what I heard the member for Mallee say. I have had a couple of conversations with him. His electorate is in fact one of my favourite parts of Victoria, through family and other connections, and home to my favourite national park; long may it continue. The part of your remarks that I agree with—and I really do; I think there is a lot of common ground—is around the ends and the objectives. No-one could deny the importance of doing more to deal with entrenched youth unemployment in well-designed, well-targeted programs. Often, as I heard you say, in your part of the world—and I have different cultural issues but similar socioeconomic issues in parts of my electorate—with entrenched disadvantage and households where for both parents and intergenerationally there has been no-one as a role model who has worked, there are real problems that the government needs to pay attention to. That relates to the objectives of this bill.
Unfortunately, I do believe at the moment that the best you can say about this bill itself is that it at least provides some focus and time for members of parliament and members of this House to reflect on and debate the serious and growing problem of youth unemployment. I say that because I believe that more attention on this issue is sorely needed, given the government's performance, particularly in the past couple of days. It beggars belief. They are falling to bits in front of our eyes. Question time today said it all. We moved at least from a plebiscite, where we are too afraid to actually stand up and do our jobs, to stunt legislation about refugees—pretty much B-grade stuntmen—and now section 18C is back on the agenda. As I said, I did some street stalls on the weekend and, funnily enough, not once did anyone come up to me and say, 'The national priority needs to be to allow me to say more racist stuff to my neighbours and that's what the parliament needs to spend its time on and devote its committee time to.'
We know that the senators, those in the other place, are sorely constrained for committee time, and I think their time would be better used in having a broader exploration of the sorts of things we could agree on across the chamber in relation to youth unemployment rather than on nonsensical debates about weakening Australia's race hate laws. Really, none of that creates a job. It is about saving one job, and we know that is the Prime Minister's job.
Nevertheless, there is a bill in front of us. It covers and implements only a small part of the government's overall program—such as it is. But the PaTH program, like the failed Work for the Dole program, right now seems, as best as we can tell, destined to fail the very people it purports to help. It is an important conversation to have. I will summarise the concerns I hold with the bill. First, are the internships genuinely voluntary? What sectors? What is the outcome? Is there any reasonable prospect of a job, given that we have learned that it is not really an objective of the Work for the Dole program? Payment of below award wages: young jobseekers deserve better. And there is the potential for businesses to rort this program, both through churning numbers of interns through in work that would otherwise be done by properly paid employees—and the member for Chifley well outlined some of that. I also have concerns about limitations around the volume of interns a given business can employ and the ability of businesses to reinvent themselves with different ABNs and so on.
That is a summary. But it is not just me, of course. Others have raised concerns. Even with the scant level of information we have managed to wrangle out of the government over many months about the meaning of this, it is instructive to have a look at what other organisations are saying. Organisations like ACOSS, the Australian Council of Social Services, have raised concerns about the exploitation of young people and the questionable employment outcomes of the PaTH Program:
Funding for the internships program should not be used to support long, unpaid internships that do not lead to permanent jobs for disadvantaged young people … The PaTH Program … is unlikely to have a major impact on reducing youth or long-term unemployment in isolation.
There are further concerns about the program undermining workforce standards, the potential for the program to undermine wages across industries, to displace jobs with cheaper labour, coverage by workers compensation schemes and to churn numbers of internships through, particularly, may I say, in industries that might otherwise attract penalty rates—another flawed ideological crusade of the government.
The ACTU—and I know members opposite would say that you would quote the ACTU, but they do have substantial policy capability and a genuine interest in this area—said:
This policy takes employment standards in this country back almost 30 years and has the potential to drag down wages and conditions for all workers …
Importantly, they say:
The Government's plan is either very badly designed and underfunded, or very well designed to exploit Australian workers and strip them of their legal rights and pay.
They point out the failure of Work for the Dole and the ANU evaluation that showed a two per cent in the probability for paid employment. That is pathetic. Any program worth its salt must have a better outcome than a two per cent increase in the probability of paid employment. So that failed program has now resulted in this, and they have shuffled some money from left to right—sort of the 'look over here' trick.
The exploitation of young jobseekers, who will receive only $100 a week extra for up to 25 hours of work, was referred to by the National Union of Students as 'government-sponsored slave labour'. I remember my time in student politics many years ago. They are at times prone to robust language, but I understand their point. The NUS campaign also said:
The Government claims that PaTH is the way to solve welfare dependence among young people, but at the same time provides businesses incentives to churn through low-paid interns every 12 weeks, giving them $1,000 with each new intern they take on.
… … …
What's to stop employers from picking up a new intern every 12 weeks, relying on this cheap labour, and repeating the process over, and over.
I take the point that these things can be dealt with to a degree in program design. I feel as though I am repeating myself today, having spoken on the previous bill, but, yes, when I was a public servant I worked for a Liberal minister running youth employment programs in Victoria. We did our best to actually try to stop these things in some of the detail, program design, regulations and guidelines. And if they do happen to get this legislation through, or if indeed it is improved in the Senate to the point where we could support aspects of it, those matters of detail are critical to get right in the guidelines to enable the program administrators and the public servants to pick up rorting behaviour and rule it out.
There were a number of matters touched on by the member for Chifley that are worth amplifying and recording again. There is the issue about what an intern is. There is no definition. We have no clarity. Are we talking about someone who is working or are we talking about someone who is simply observing. Who knows?
The workers compensation problems and issues are incredibly serious. The possibility that a young person in a workplace—whatever the capacity the government ends up inventing as the classification for the work or activity they are undertaking; if they say it is not about work in the end, who knows?—may not be covered by workers compensation legislation and may be vulnerable and fully liable, left with accidents, is unconscionable. These are serious technical issues that have to be worked through, given the different jurisdictions of different state governments and the complexity of that area of law. There is no clarity there, despite our questions to the government. And, as I said, there is the potential for large numbers of interns to be churned through.
Lest I be criticised for quoting the ACTU, the NUS and the Australian Council of Social Services, let me also record some of the views of the government's ideological love match, that left-wing radical think tank the Institute of Public Affairs—and didn't they look like a bunch of geese last night on Q&A talking about climate change, but that is another discussion. In relation to the Victorian government's incentive program—my first point—the Institute of Public Affairs said:
… the subsidy offer provides a powerful incentive for businesses to fudge the paperwork to fit the eligibility requirements, particularly when combined with a government desperate to make its policy a success.
They would say that and use that kind of language in relation to a Labor government. But then they went on, talking about this government's program, to say:
The problem with the PaTH program is that wage subsidies have been tried, and the problem of youth unemployment has persisted … There is no value in these programs if they displace jobseekers that would have been hired without a subsidy, or if employment ceases as soon as the subsidy ends.
The potential for rorting is a warning for the PaTH Program, as the Institute of Public Affairs briefing said. I am not in the habit of quoting them, but they do highlight important risks which the government would be well advised to pay attention to. It does point to the importance of honest program design, careful evaluation of what is working and what has not. As the member for Mallee said, perhaps with some more deliberative conversations between us we could find different mechanisms to try that we agree on. But these things have to be honestly evaluated, because they will not always work.
More broadly, in relation to youth unemployment, 12.8 per cent is the youth unemployment rate, which, as we know, is around twice that of the wider population. The data is seasonal and lumpy and the honest thing to do generally, unless you are looking at particular aspects, is to look at the annualised average. But that figure of 12.8 per cent can numb the mind. What that represents in human terms is 271,400 young people across this country aged between 15 and 24 who will be disillusioned, disenfranchised and well aware of the status accorded to them by this government. It further disenfranchises young people when we spend public money on a system that funds the payment of below-award wages and encourages rorting by business. Youth unemployment has deep and complex causes, and understanding the causes and tried and tested program responses—and there is surely enough experience from times past around what works and what does not—must inform our decisions about where we focus our energies.
In my electorate of Bruce youth unemployment remains well over 12 per cent. In fact, in the south-east of Melbourne the youth unemployment rate is pushing 20 per cent—slightly over at the moment—and there are anecdotal reports in certain migrant communities of youth unemployment approaching 30, 40 and 50 per cent. In terms of the government's failings, in our view this is a poorly designed proposal. It is a thought bubble from an election campaign, because they had to have something to say, and unfortunately it continues this government's focus on punitive, harsh responses. They are obsessed with punishment. Just recently, as we know, the social services minister announced plans that he would force some young jobseekers into poverty by forcing them to wait four weeks to be eligible for Newstart. As we have said, that is an improvement on six months waiting, but they still do not get that unemployment is not a personal choice. For most people unemployment is not their preference. For most people unemployment is a failure of the market or the economy to create the right jobs and a failure of governments to help those with entrenched disadvantage to get into those jobs.
Labor's approach is not just about readying young people for the workforce, but real employment opportunities. We floated the idea of work placements at an award-equivalent training wage, cert IIIs in the subject of their choice, looking at gap training and six-week work readiness courses focused on essential employment skills. I feel like I am repeating myself for agreeing with the member for Mallee, but he makes a very valid point that often what the research finds, from my previous work in this area, is that it is the soft skills that many people lack. They may have finished year 12, but they need the soft skills and the ability and habits they learn from their parents of just getting out of bed and getting there on time. All the evidence shows that at times, in families where there is no role model and no-one to support them, the role of mentors and those wraparound services is what makes the difference. It is not the couple of thousand dollars to the employer that gets a disadvantaged young person there, it is having someone holding their hand, giving a hoot about whether they get there and checking on them. The research, as I recall—although I would have to refresh my memory in detail if I were doing a program design, which I am not now—showed that it was in the order of at least six months that you need someone standing there, ringing that person, being available to them every week, helping them with the soft skills and mentoring them through if you are going to break that cycle of disadvantage.
We had some of those programs and that approach. They were Labor programs, successful programs: Youth Connections, Partnership Brokers, national career development services. But of course the government, when they came to office, cut them all.
The fact that we have such a long gap between the election, when this policy was announced, and when it is apparently commencing, which is around April or May next year—who really knows when?—is nothing new. Last year, in the government's previous term—you never know whether they are a new government; sometimes they are and sometimes, as we heard from the Prime Minister today in relation to his absence of knowledge of Senator Day's matters, it is a different government, so how could he be responsible?—we went through well over a year where the government had no youth unemployment policy. They had no programs, no care—nothing.
We believe there are serious problems with this bill and serious questions that need to be answered. To date, our questions have not been answered. It is a regrettable fact that the parliament's time and the government's time is being spent on saving the Prime Minister's job and helping keep his backbench at bay instead of actually using proper committee inquiry time to have a look at the program design and the causes and what we can meaningfully do together. Nevertheless, perhaps the Senate inquiry will shed some light on this and maybe we will find some more common ground.
I would like to start this discussion on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016 with a real-life scenario that has occurred in many homes in Gilmore. In discussions with different provider services, their conversations have gone something like this when we talk about some of the problems with young unemployment: 'Hey, mum; I got a job. I work with some really cool people that don't mind my sleeve of tattoos and I'll have enough money by the end of the year to buy a car.' And then the mother says: 'Oh, whatcha want to do that for? Go down to Centrelink and get on the dole and then you can help pay the rent here, watch the games, we can get a slab of beer every two days and you can get a car in maybe a year and a half. Anyway, your dad never had a job. I never worked and neither did pa or nan.' I have never been so keen on a policy as I am with this one, PaTH—prepare for a job, trial for the job and then become hired for the job. When you have second- and third-generation unemployment in the household, it is extremely difficult to break the cycle. There are many young people who do not know how to even start getting work, and they too are looking forward to this program.
Our government has announced a new approach to tackling welfare dependence, with a focus on helping people enjoy all the benefits of a stronger and growing economy. The focus is on investing in vulnerable people to help divert them from this cycle of welfare dependency, while giving them opportunities to find more prosperous futures. We have seen the problems that intergenerational welfare dependence can have, particularly in relation to the impact it has on crime, poverty, broken relationships and domestic violence. It is something that we need to change if we are to build a more prosperous future for our residents and for people who care about each other. That is the thinking behind PaTH, the prepare, trial and hire program, designed to help train and mentor long-term unemployed and vulnerable young people and get them into paid employment.
This new approach to welfare is based on unprecedented levels of data about our welfare system. The Australian Priority Investment Approach to Welfare is about using the best available evidence to ensure vulnerable Australians have a better future. It uses detailed modelling to give us a sharper picture of groups of people at risk of long-term welfare dependence who will benefit from the right policy responses at the right time. More than one-third of Australia's population is receiving welfare payments and, of those not currently in the welfare system, 88 per cent are expected to receive some type of welfare payment at another point in their lifetime. The future lifetime cost of welfare payments for all Australians in the population as at 30 June is estimated to be $4.8 trillion. We used to talk about billions and think that was a big number and now that we are starting to think about trillions of dollars it is almost unimaginable.
Analysis shows that there are significantly poorer outcomes for young carers, young parents and young students who transition to long-term unemployment benefits. We have identified that these particular groups of people are likely to be on welfare for a longer period of time. So we are able to provide much more targeted interventions for them. We need to place the emphasis on getting people from these groups onto a better trajectory, trying to get them into work and make them feel better about themselves. The program's three interconnected goals are: to improve lifetime wellbeing for all Australians by increasing people's capacity to live independently from welfare; to reduce the risks of intergenerational welfare receipt; and to reduce the risks of long-term social security costs.
The $96.1 million Try, Test and Learn Fund will be vital to achieving these goals, and it will call for proposals in December. Stakeholders, academics, states, territories and anyone in the non-government sector will be able to put forward their ideas for programs to divert vulnerable groups away from welfare dependency. We have had many people being informed about this in our region. The fund will foster collaboration and bold ideas. This is not a traditional government funding round. We are looking for new, cutting-edge ideas which might return better outcomes than existing approaches. But, as usual, there are those in the House and in the general population who have completely misunderstood the intent of the current policy. One such permanently outraged resident wrote to the local paper demonstrating his lack of knowledge on this issue. He grabbed the wrong end of the issue and used this misinformation to make claims about the youth employment program. He referred to the program as being youth internment, which many politicians have used as a way to encourage young uni students to see part of the real world behind the scenes and to work for free.
The PaTH program is so very different. We want to leave behind the road that leaves young people with less opportunity to learn some of the essential social skills that are so very important, such as having a positive attitude to work, being motivated and reliable, and having good personal presentation. Tackling intergenerational unemployment and welfare dependency is a huge challenge for governments all over the world. It is hard to unlock the potential and abilities of a young person when they have never learnt the basic skills associated with gaining and keeping a job. That is why the Youth Jobs PaTH Program starts with the preparation stage, focused on employability skills and training, which is industry endorsed and evidence based, to give young people under 25 a competitive edge in the jobs market. It will also give young people a better understanding of what employers expect of them in the workplace, as well as offering industry-specific training, which will teach them the skills and behaviours that they need to be successful in a job. When their family says, 'Stay home,' they will be able to say, 'Oh, it is so much better at work.'
Once the young jobseekers are offered work experience at local businesses, during which time they will receive a payment of $200 per fortnight as well as their welfare benefits—I repeat, this payment is on top of their regular welfare payment—the young person will be in a better place. Indeed, if the work opportunity does not end up with an offer of employment, then the young person has not lost their safety net of income support; this will continue during their trial phase. We will also be offering incentives to the employers to offer permanent work beyond the trial period for the young people involved. This is a win-win situation that has generated plenty of interest from employers, while also providing a chance for young people to move off the welfare treadmill and create stronger, brighter futures for themselves. Our government is determined to ensure younger generations are not confined to a lifetime of welfare dependency. So I have encouraged and will continue to encourage residents, such as the one criticising the PaTH program, to bring their concerns to my office for discussion with their plans to help with youth unemployment initiatives.
We must ensure that jobseekers are not disadvantaged by taking part in the youth employment initiative, which was announced in the May budget. The participants will be paid that extra money. The bill will make sure that that extra $200 is not considered as additional income so that it does not affect their other entitlements. The bill will also make sure that it is easier for eligible young people to return to the employment services and have their income support payment restored if their wage subsidy supported job is ended due to no fault of their own.
Finally, if eligible young people employed with a youth bonus wage subsidy lose their job through no fault of their own, they will get straight back onto their support. That means that there is no waiting period, and that is very important. The most important part of the changes we are making is that the current income support provisions in social security law require job seekers to make a new claim and serve any relevant waiting periods if their income support payments previously ceased. So this really is a good part of those changes.
The bill proposes to allow job seekers with up to 26 weeks to reconnect to income support without having to make a new claim or to serve any waiting period. Previous speakers have criticised this program, saying that the path will displace people from employment positions, but they have completely glossed over the concept that this is centrally framed around young people who have not experienced the benefit of being employed. It could be that their family is unemployed—perhaps second- or third-generation unemployed. This whole program is a method to initiate a young person into a pattern of work which will then keep them going for the rest of their lives. It certainly has potential. We really need to take care with our young people to help them thrive and to give them chances to develop their own personal drive.
There are businesses with vacancies they simply cannot fill, and these would be great locations to start work careers for some of our young job seekers. These businesses too are looking to assist people into positions, to become part of their teams. Those on the other side of the House always doubt the integrity of the businesses. While there may be some who try to twist a financial advantage, the majority have the overall desire to help young people into work they enjoy and give them a new outlook on employment altogether. I believe most people are good and I know that some local businesses in my electorate cannot fill positions. Trialling the program will certainly help them to find the right person for the job.
We believe that the Youth Jobs PaTH program will support up to 120,000 young people over four years, which will be an amazing story of social change. It will inspire young people to be the best they can be, to be welfare independent and to know that they can achieve their own dreams financially. We are, indeed, a very lucky country. Having just returned from conferences and delegations in developing nations, I know that Australia has so much to offer. Young people in developing nations often have no chance of an education, no chance of employment and no opportunity to make a difference in their own country until someone offers them some kind of pathway to change. We, in this legislation, are doing exactly that—making a pathway to change in our country. I most certainly commend the bill to the House.
I too rise to speak on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. Youth unemployment is an enormous problem in Australia today. We know that unemployment among youth is far higher than most other demographics; we also know that, if there are no programs or training opportunities or proper direction towards employment, then those young unemployed people are more likely than other demographics to remain long-term unemployed.
In my electorate of Hindmarsh I often talk to constituents and community groups that are constantly grappling with this problem. Recently a grandmother came into in my electorate office and she was really concerned for her granddaughter's welfare. The granddaughter could simply not find work, even though she was trying very hard. She had applied for over 100 positions, had gone to the job-seeking agencies, looked at newspapers and made phone calls, but was becoming more despondent as time went by. This is the added cycle to unemployment for youth—when you are trying and trying and doing the best you can, but getting constant knock-backs. It also devastates you psychologically.
She explained to me that her granddaughter was getting very depressed to the point where she was giving up. That is the point we do not want unemployed youth to get to. We want to give them hope, and we want to do all we can to ensure that we are creating jobs and proper apprenticeships, traineeships, that will lead them on a path to full-time employment. It is our job to address this problem constructively and positively.
This bill is designed, in part, to support the introduction of the government's Prepare, Trial, Hire program or the acronym known as PaTH. PaTH is supposedly designed to prepare young people for work by providing jobseekers aged 17 to 24 with pre-employment training and placement in voluntary internships of four to 12 weeks. During that time they may work 15 to 25 hours per week. Jobseekers will receive payments of $200 per fortnight on top of the current income support payments while they are participating in the PaTH program. Businesses will be paid $1,000 to take on an intern and then receive a wage subsidy of between $6½ thousand and $10,000 if they hire them at the conclusion of their internship.
On this side of the House, like many others in the community, we have some serious concerns about whether this program represents a fair deal for Australia's young unemployed. The reality is that PaTH was a hastily cobbled together program announced at the time of the 2016 federal budget. This is nothing new for this government. We see them backflipping and flip-flopping between policies continuously—weekly—cobbling policies together for political purposes and other things.
Who can forget the 2014 budget? It included plans to punish young people who could not find jobs. It proposed changes to Newstart that would have made unemployed people under 30 forced to live for six months without any income—that is, six months without a single cent. They called this 'tough love' for young unemployed people. Too bad if you did not have mum and dad to go home to, to provide for you, too bad if you were found to be unemployed and too bad that for six months you would receive nothing. That was this government's proposal.
They completely ignored the fact that there are fewer jobs available for young people. There are young people looking for work and those numbers are growing. It appears that this government is intent on sentencing young people to a cycle of poverty by taking them off any payments for six months rather than investing in the skills required and job creation so we can put these people into work, so they can find jobs. In my state of South Australia who can forget, after the 2013 election, the Treasurer's speech, which chased General Motors Holden out of South Australia? It will have a knock-on effect of nearly 30,000 jobs going. Not only did they chase GM Holden out of South Australia—they have something against blue-collar workers and we see that constantly—they also tried to renege on a promise they made on the eve of the 2013 election to build 12 submarines, in South Australia, which would have created jobs.
They came to the party screaming and kicking when their own jobs were in danger. So hopefully the submarines being built in South Australia will create some work and give youth the opportunity to go on and do apprenticeships and real traineeships that will lead to full-time work. This will give them skills to fill any shortages that we may have, instead of continuously opening up the markets for 457 visas. When we have so many young unemployed people here, it is a shame that we have nearly 1,000,000 people on different visas working in this country. What we should be doing is training people, educating them, ensuring that they are getting the skills to be able to go on and get full-time work.
And now this bill is being introduced at the same time that other government job programs, such as Work for the Dole, are hopelessly failing our young unemployed. We have seen that nearly 90 per cent of people who go through that program of Work for the Dole do not get a full-time job and are back on the unemployed lists. These were the government's own figures, which show that nearly 90 per cent of its participants are not in full-time work three months after exiting the program.
That is the sad truth. Australia's youth are counting the costs of this government's failure to develop real jobs and a jobs plan for the nation. We hear the Prime Minister constantly talking about cutting-edge jobs—jobs of the future that we will create to employ Australia's youth and young people. But the reality is that to create those jobs of the future—these cutting-edge jobs in IT and STEMs and everything else—you have to invest at the foundation, and the foundation is our education system. But when we see the government trying to rip millions of dollars out of our education system—the primary school system, the high school system, the university system—then we cannot create those jobs. And you cannot talk about jobs of the future if you do not invest in education. I was very proud to be part of the Gonski government, I suppose I could call it, in 2013, when we announced a good plan that would ensure that all children had basic, good education to take them on to be able to get full-time jobs and to be trained properly through VET systems, apprenticeships and other design programs.
This program was designed to operate in locations of high youth unemployment to help 3,000 young people move from unemployment to work. We propose to boost training in core employment skills: reliability, communication, self-management and willingness to learn, along with basic literacy and numeracy when needed. And I go back to what I was just saying: these things could be taught through our education system if we funded it properly and ensured that every child has the same opportunities regardless of their postcode, regardless of which state they are in and regardless of what suburb they live in and what their background is. This will provide the foundation for skills for young people to find and keep a job in the future.
We propose to focus on developing strong links with local employers to provide young people with work experience and employment opportunities in their businesses. This is something that I think a lot of us do in our own electorates. We know business people, we know businesses, and I am always keeping my eyes and ears open to see what is going on. When people come to see me about issues, such as that grandmother's issue, occasionally we can link them with people. That is so important, and I have spoken to many other members of this House, on both sides, who basically do the same thing.
The opposition is concerned that under the PaTH program young people will be forced to pay an even heavier price through the program's apparent flaws. We know that the government, despite promising that it would tackle youth unemployment, has failed to deliver. According to the Department of Employment, youth unemployment was at 12.8 per cent—these are the official figures; we know it is much higher—with a total of 271,400 unemployed young people between the ages of 15 and 24. On top of that, the department acknowledges that there are another 170,900 people who have been underemployed for more than a year and who are disillusioned by the act of looking for jobs that are simply not there.
And that is the question I am asking: will this bill that is before us today address these problems? I have my doubts. The bill was designed to provide support to participants in the program. It does that, as we heard earlier, through two measures. First, a provision will be inserted into the Social Security Act and the Veterans' Entitlements Act so that the $200 payments that interns will be able to receive is not counted as income for social security and veterans' entitlements purposes—and rightly so. Secondly, it will amend the Social Security Act to allow young people to suspend their payments if they are employed. They can then restart them, without reapplying, if they lose their jobs, through no fault of their own, within 26 weeks. Both these measures are no-brainers.
Taken in isolation, the government will claim the measures in the bill are non-controversial. I know that it is going to be referred to a Senate committee, but the reality is that they form part of a broader new program design that the opposition is concerned about. It could see young jobseekers exploited and could undermine workforce standards. Chief amongst these criticisms is the fact that, unlike with Work for the Dole, for the first time participants will be placed in the private sector and will be paid below award wages. We on this side of the House are concerned that PaTH could be used to displace jobs with cheaper labour; that participants may be working for below minimum award rates; and that this program could be used to undermine wages across industries at a time when wage growth is at its lowest rate on record.
Despite repeated questioning by this side there are few assurances that interns will be covered by appropriate workers compensation schemes in the event of an accident. That is because PaTH participants will be considered volunteers and not employees. In some jurisdictions this could affect the way workers compensation systems would treat participants in the event of an accident. While the program was announced in May, and is scheduled to start in April, the government cannot even tell us how it has defined what an intern is. The government has had trouble explaining what jobseekers will be doing in the internship phase of the program, even down to the basic level of whether they would be working just observing.
There are so many holes in this program that it cannot be taken seriously until the government shows how they will fix them. That is why we are calling for the legislation and the PaTH Program to be considered by a Senate inquiry to ensure that the concerns outlined above are meaningfully addressed.
To wave PaTH and this legislation through without demanding a better deal for young Australians would not be fair for all those young jobseekers we are talking about here. Young people are crucial to Australia's future. I visit many schools, as many others here do, and I am enthused by the next generation. However, they need the assistance, the training and the programs that will lead them to real jobs. They also need the learning abilities put in place to ensure that they do not go into long-term unemployment and therefore long-term disadvantage. The government's failed plan is a desperate attempt to divert attention away from their poor record in generating jobs for young Australians and in preparing young Australians work. Their Work for the Dole program is evidence of that failure.
I rise to speak on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. This legislation, announced in the budget earlier this year, will make real inroads in ensuring that young Australians get the right assistance and the encouragement they need to learn new skills, to become job ready, to get a job and to stay in a job. That is why the coalition is investing $751.7 million over four years to establish the youth jobs PaTH Program for young jobseekers aged under 25 years, to improve youth employment outcomes. The coalition is committed to making sure those who are able to work have the necessary work-life skills required to enter into and remain in the workforce. The employers I speak to say that young people need the basics before they start work. It is a common theme that I hear over and over again. They need the fundamentals. They need people who will turn up on time, who are dressed appropriately for the role and who are willing to give things a go not be glued to their smartphone for a number of hours a day. But they also need people who have a good understanding of the values and behaviours that are expected in the workplace and in the recruitment process.
The prepare part of the PaTH Program will give young jobseekers who need to boost their job readiness intensive pre-employment skills training within five months of registering with the jobactive. The first three weeks of that training will help to build practical industry skills, with a focus on concepts like working in a team, presentation and communication. A further three weeks of training will centre on advanced job-hunting skills, job applications, career development and interview skills. The employability skills training will ensure that young jobseekers can present the right attitude and the right approach to work. I have spoken with many employers—I used to be one myself. Certainly, most of the ones that I speak to are willing to take on young people and give them a go, but they need them to show up, be ready and have the right attitude to work.
The next part of the program, trial, will give jobseekers a chance to gain valuable work experience in a real workplace. That is a key component: real work experience in a real workplace, with an internship of between four and 12 weeks. There will be up to 30,000 internships per year available in both profit and not-for-profit businesses for up to 25 hours per week. For jobseekers, this means $200 a fortnight on top of their income support payment. For the businesses, it means $1,000 up-front in recognition of the costs of hosting the placement and an internship outcome payment to the provider who brokered each completed placement. The data shows that of jobseekers who undertook unpaid work experience, 48.6 per cent were in employment three months later compared to 26 per cent across all activities—almost half. So from 1 April 2017, jobseekers, employers and employment service providers can work together to design work experience placements and businesses who are interested in hosting an intern can register now through the employment website.
The final part of the program, which of course is hire, provides businesses with stronger incentives and greater flexibility in hiring jobseekers under the age of 25 years. The coalition is spending $298.3 million on the Youth Bonus wage subsidy. From 1 January 2017, employers will be eligible for a Youth Bonus wage subsidy if they hire a young jobseeker under the age of 25 who is in jobactive or Transition to Work and who has been in employment services for six months or more. Employers will receive $6,500 if they hire an eligible job ready jobseeker and $10,000 if they hire other eligible jobseekers. These wage subsidies create a strong incentive for employers to consider hiring unemployed youth.
Enhancements have also been made to wage subsides, which have been further strengthened and streamlined to make them more attractive and simpler for employers to access. Existing wage subsidies such as Restart will be retained but will now be paid over a six-month period, which is the same as the Youth Bonus, rather than 12 months, and give employers more flexibility to negotiate how often instalments are paid and over what period. The Youth Bonus will increase the young jobseeker's competitiveness in the labour market, allowing them to get their foot in the door of an employer.
The bill I am speaking on today will amend the social security law, to protect young jobseekers whose employers are eligible to receive a Youth Bonus wage subsidy in relation to them. It will allow these young people to have their income support payments suspended for a period rather than cancelled. This is an important change. These young people will be able to have their social security payments restored without having to make a new claim if they lose their job through no fault of their own with an eligible employer within 26 weeks of ceasing to receive income support because of that employment.
Youth Jobs PaTH, prepare, trial, hire program is part of the wider youth employment strategy which the coalition government has invested $840 million in. The coalition government has taken a multipronged approach to tackling youth unemployment, which is a serious issue, with programs such as Transition to Work and Engaging Early School Leavers. Transition to Work provides young jobseekers with intensive one-on-one support from community based organisations experienced in working with young people who face greater barriers to enter the workforce. The government has committed $322 million over four years to the Transition to Work service to help young people aged between 15 and 21 become work ready or find their way back to education.
Engaging Early School Leavers is an initiative which strengthens requirements for young job seekers aged between 15 and 21 who have not completed year 12 to continue their education or look for work to receive the youth allowance. Evidence shows that the longer a young person remains unemployed after leaving school the more likely it is that they risk becoming long-term unemployed. That is a very, very important fact. But early intervention can mean the difference between a young person taking their first steps into a productive and happy working life or entering a life of welfare dependency. We all know the effects of long-term unemployment on individuals, on families and on communities. It can be extremely damaging. Being unemployed for an extended period can erode people's skills and erode their confidence, sense of purpose and pride, which can lead to a cycle that makes it even harder to find work.
In my electorate we have a historically high unemployment rate. It is due to a complex mix of economic and social reasons. This is of course impossible to address overnight or in one fell swoop. Reducing unemployment takes time but we are making real progress. Two out of the 18 trial sites for Work for the Dole were located in the Hinkler electorate. An independent evaluation released in November last year showed that the program was effective in helping participants gain the confidence that they need and learn skills. An independent evaluation by the Social Research Centre and the Australian National University found that, of the participants surveyed, 83 per cent agreed that Work for the Dole is an opportunity to give back to the community, 79 per cent agreed that the routine was good for them, 81 per cent said that they were treated like a valuable member of staff, 81 per cent said that they were satisfied with the amount of responsibility that they were given, 76 per cent said that they were satisfied with the amount of work, 74 per cent said that they were satisfied with the variety of tasks and 68 per cent agreed that their placement was a valuable experience.
Work for the Dole programs create opportunities by giving people soft skills—routines, structure and presentation skills—and, most importantly, they provide access to potential employers. Unfortunately, in many cases those skills are not taught to the children of intergenerational welfare parents. Punctuality, teamwork and commitment are things that a person typically learns at a young age. This government is committed to ensuring that those young jobseekers are on a positive pathway into the workforce, not a life of dependency. The people of this great nation should be able to depend on their elected representatives for assistance when they need it, but that does not mean that we should be building a nation of dependants.
The coalition government's youth employment package also includes measures to encourage young Australians to start a business and create their own job. The New Enterprise Incentive Scheme will be expanded by the coalition government. Over the next four years we are investing $77.6 million to provide an additional 2,300 places for NEIS each year, bringing the total number of places to 8,600. Eligibility for NEIS will enable those jobseekers not in receipt of income support, including youth and redundant workers, to access the scheme for the first time. NEIS is delivered by a network of providers who give individualised help for jobseekers to become self-employed business owners. Business mentoring support is an essential component of NEIS. Participants will receive business mentoring during the first year of operation of their business. As I am sure you know, Mr Deputy Speaker, the first year is the most dangerous time for any new business. NEIS business mentors are people with proven business acumen and experience. They will provide assistance and advice about organisational, financial and marketing initiatives to help participants to develop their business.
Also part of the youth employment package is the establishment of the two-week 'Exploring being my own boss' workshop. It will give up to 1,000 young people per year a taste of what is involved in self-employment and entrepreneurship. This will include internship opportunities of up to 12 weeks for those participants to gain firsthand experience of what it takes to run a small business. As you know, Mr Deputy Speaker Goodenough, that can be incredibly difficult, but there is certainly nothing more fulfilling than running your own show. The 'Exploring being my own boss' workshop will run over a two-week period and give young jobseekers aged between 18 and 24 a better understanding of what self-employment entails.
The coalition is on track to deliver a range of programs to support young jobseekers. Since the government's jobactive service began on 1 July 2015 it has improved the quality of services for jobseekers and employers. From 1 July 2015 till March 2016 jobactive has placed more than 64,000 young jobseekers into jobs. Through the job commitment bonus the government is already rewarding long-term unemployed young people who find and keep a job, with eligible jobseekers able to receive a payment of up to $6,500 if employed for two years. Between 1 July 2015 and 1 March 2016, 2,632 claims were lodged for that bonus. Of these, 1,867 have been granted, totalling some $4.67 million.
As well as these programs targeted at young jobseekers, the coalition is creating opportunities in my own electorate with the Wide Bay-Burnett Jobs Package. This is a $20 million commitment and it will create a community-driven government investment. It will be a genuine partnership between the coalition and the local community. The jobs package will provide business innovation grants on a competitive basis to help businesses invest in new technology, diversify operations, create new export opportunities and deliver new, sustainable jobs. It will also allow upgrading of existing local infrastructure or investing in new infrastructure to boost productivity and generate more local investment. It will deliver targeted skills and training programs to address regional skills shortages, and support workers impacted by structural change to retrain and upskill.
This job package will give local business the confidence to invest and grow. As I have said all along, it is not government that creates jobs; it is businesses that create jobs, and we need to provide the structures for them to be successful. It will attract matching funding from participating businesses, resulting in a total package of at least $40 million for the region. This is a much and desperately needed economic boost for the electorates of Hinkler and Wide Bay. These grants will assist existing local businesses to grow, and also offer incentives for metropolitan based companies to expand their businesses into the Wide Bay-Burnett region, creating new, sustainable jobs.
If you are looking for cheap housing, you need only look into regional Australia. It is far more affordable than it is in the major cities. What we need to ensure that we can drive that population shift is work, because work will draw them to the regions. I want my community of Hinkler to be one in which my children want to stay or come back to; I do not want the talents of our young people to leave for the city. To avoid that, they need good job prospects in their home town. The coalition has a plan to improve regional economies, to attract more investment and more jobs, and improve employment outcomes for jobseekers. We are delivering for the people of regional Australia, and this bill demonstrates that commitment. I commend the bill to the House.
I rise to speak on the Social Security Legislation Amendment (Youth Jobs PaTH: Prepare, Trial, Hire) Bill 2016 and urge that it be referred to a Senate inquiry. As it stands, for young people the Youth Jobs PaTH is not a pathway to employment; potentially, it is a road to nowhere, an expressway to exploitation. The Youth Jobs PaTH (Prepare, Trial, Hire) Program was announced by the Turnbull government in the 2016-17 budget, and it is expected to take effect from April next year. The program, as we have heard, will provide jobseekers aged 17 to 24 with pre-employment training and placement in voluntary internships of four to 12 weeks, where they may work for 15 to 24 hours a week. Jobseekers will receive payments of $200 a fortnight on top of their current income support payments while they are participating in the Youth Jobs PaTH program. Businesses will be paid $1,000 to take on an intern, and then will receive a wage subsidy of between $6,500 and $10,000 if they hire them at the conclusion of their internship.
But the opposition, like many others in our community, have very real concerns about whether this program does in fact present a genuine opportunity for young people to gain meaningful employment, or whether it is just an opportunity for them to be exploited and again disappointed. We are now hearing this PaTH Program touted to be a success, much like Work for the Dole, but, as we have heard the member for Mallee say just a few speakers ago, that program in and of itself has not been the success it was touted to be, and unlike Work for the Dole, for the first time interns will be placed in the private sector, and they could be paid below award wages.
This bill implements a small part of the Youth Jobs PaTH Program; however, other legislation will be needed to establish the program in full. It is understood that the bulk of the Youth Jobs PaTH Program can be established by departmental direction and regulation, and this is something that Labor is seeking to clarify. In fact, there is much about this bill that needs clarification, and it really does warrant Senate scrutiny. This is such a vital and important part of our economy, of our culture. We are talking about the future of our young people. We should stop creating programs that just do not work, and do something meaningful instead. The bill contains the following measures: schedule 1 inserts a provision into the Social Security Act and the Veterans' Entitlements Act 1986 so that the fortnightly incentive payment is not counted as 'income' for social security or veterans' entitlements purposes; and schedule 2 amends the Social Security (Administration) Act to allow young people to suspend their payments if they are employed. They can restart them without reapplying if they lose their job through no fault of their own within 26 weeks.
Taken in isolation, these two measures in the bill are not controversial. However, the reality is that they form part of a broader new philosophy which could see young jobseekers exploited and really could undermine workforce standards. Labor would want make sure that participants were protected by health and safety measures and that no participant could be paid below award wages or the award wage equivalent, pursuant to the Fair Work Act. Labor welcomes additional resources being invested in youth employment, but the Youth Jobs Path program is not the best way to support young jobseekers or invest Commonwealth funds.
There are specific concerns with the program that I would like to raise. There is no firm definition of what an intern is under the program and what sectors they could be asked to work in. Large numbers of participants could be used within a company at one time with little sanction for employers that might churn through participants after the engagement concludes. Large numbers of interns could completely negate the need for existing employees in certain sectors, such as hospitality, to work at certain times, for instance on the weekends, reducing access to penalty rates for those people who are already employed. Youth Jobs PaTH participants are considered to be volunteers in some jurisdictions, affecting the way workers compensation systems would treat participants in the event of a workplace accident or incident.
This government has put little planning into the broader policy and there are many deficiencies in this Youth Jobs PaTH program. It is nothing but a response to a failing Work for the Dole program in which nearly 90 per cent of participants are unable to secure work after they finish the program—90 per cent! The Youth Jobs PaTH program has the potential for worker exploitation and undercutting of standards.
Youth unemployment is truly a scourge in our society. According to the Department of Employment youth unemployment is running at 12.8 per cent, with a total of 271,400 unemployed young people between the ages of 15 and 25. In my electorate of Paterson in the Hunter Valley it is even higher. In my first speech in this place I highlighted youth unemployment as one of my main policy areas of concern and one of the biggest concerns to our community in the Hunter region, particularly in the Port Stephens area. In July, youth unemployment in the Hunter region was 15.3 per cent, well above the national average of 12.8 per cent, but it has been as high as 21 per cent. Twenty-one per cent of our young people not being able to get a job—if that was the general rate across the population people would be up in arms. They would be protesting in the streets. Yet that is what our young people have faced at times.
That figure I have quoted is double what it was three years ago. One in five people who want to work cannot get a job. Well might we ask, what has happened to our youth workforce? I can give you some answers to that. What has happened to the opportunities for our young people? In the Hunter we have been hit hard by a downturn in mining and manufacturing and we have lost thousands of apprenticeships. Why have we lost apprenticeships? I can tell you exactly why—it was the horror budget of 2014. The Abbott-Turnbull government cut off vocational education and training and excellent partnership programs that were helping people into work—helping them create real linkages into real jobs, not just pretend jobs. We are seeing the fallout and the horror of the 2014 budget, as so many people predicted. I still remember, the day after that budget, going to work at a local organisation that helps young people. They were wringing their hands and saying, 'What happened last night? What a horror night and what a terrible time for our young people into the future.'
Those people saw the future. They knew that young people would miss out, and now we are feeling the fallout from that disastrous budget. As I said in my first speech, and as I truly believe, every young person deserves the right to get out of bed with a purpose and fulfil their potential. It is not just a romantic notion. We need people, especially our young, to be participating and working, to be continuing to grow our skills base and, believe it or not, to be contributing to the tax base. We need that. It is so important. But it requires excellence in education, skills-based training, real experience and the genuine opportunity to work.
The Youth Jobs PaTH program does not give young people a genuine opportunity to work; it gives them the genuine opportunity to be disappointed and, potentially, exploited. There are very real concerns that this path could be used to displace jobs with cheaper labour also, and there are very real concerns that participants may be working for below minimum wages. This program could very well see young Australians stacking supermarket shelves for less than the minimum wage. At a time when wages growth is at its lowest on record, there are very real concerns that the Youth Jobs PaTH program could be used to undermine wages across many industries. So it will be not just young would-be workers who suffer but all workers in lower-paying jobs.
And what protections would these interns, these young people who are so desperate to gain work, be afforded? Despite repeated questions, the government has not assured us that these interns will be covered by appropriate workers compensation schemes in the event of an accident. That is because the Youth Jobs PaTH scheme will treat these young people not as workers but, again, as volunteers.
Herein lies the problem: the Youth Jobs PaTH program does not specify real job areas in which job seekers will acquire skills. All we have been told is that these programs will give young people the skills that employers tell us those young people do not have. What are those skills, Minister Cash? Labor would like to know, young people would like to know and, I am sure, their hardworking and angsty parents would like to know. What is the definition of 'intern'? We are yet to understand who will be considered an intern and under what circumstances. Again, this is something that young people and their parents rightfully deserve to know. What will these interns be doing exactly during this intern phase? Will they be working or just observing? Will their experience be meaningful and their skill set used? Again, this is something that young people and their parents desperately want to know.
And just how many interns will be able to be employed by a particular company at any one time? Large numbers could be used at any given time, with little sanction applied to employers that might churn through all of these participants after they finish their engagement. One lot of interns finishes and another lot starts, without the need to ever employ anyone full-time or anyone with more experience who demands and deserves to be paid more money. Large numbers of interns could in fact completely remove the need for existing employees. There lies another problem.
We really just do not have enough detail, and that is why this bill should be referred to a Senate committee inquiry. Imagine the appeal of using large numbers of interns over the weekends, removing the need for regular employees at those times and removing the need to pay those penalty rates that the coalition would so happily do away with anyway. Labor is calling for this legislation and the entire Youth Jobs PaTH program to be referred to a Senate committee inquiry where it can be scrutinised and these concerns can be meaningfully addressed. To just pass this legislation without demanding a better deal for young Australians is not fair to those young people, their hardworking parents or, indeed, others in the workforce who might well be considered dispensable when a whole new intern market is developed.
This program is not an attempt to give young people a fair go at getting meaningful skills that lead to meaningful work. It is a desperate attempt by a desperate government to divert attention away from its poor record on generating jobs for young Australians and its poor record on preparing young Australians for work. The Work for the Dole program is evidence of that failure. Remember that, on the government's own figures, 90 per cent of Work for the Dole participants are not in full-time work three months after exiting the program. What is the point? When Work for the Dole was introduced, we were told that it would be the great panacea. The Youth Jobs PaTH appears to be just as destined to fail. It is poorly planned, full of holes and ripe for exploitation. More than that, it is potentially damaging to the prospects of young people and to other workers who may well become redundant with a new generation of interns.
The Senate needs to inquire into this legislation, because the government cannot seem to give us answers. How will this Youth Jobs PaTH program work? What is the definition of 'intern'? What work will interns be doing? What skills will interns be learning?
How can the government guarantee the Youth Jobs PaTH will not depress wages? How can the government guarantee the Youth Jobs PaTH will not displace jobs? How can the government guarantee the Youth Jobs PaTH will provide vital access to workers compensation? How can the government guarantee the Youth Jobs PaTH will not sidestep unfair dismissal laws?
This is a thought bubble backed up by a 'just trust us, everything will be fine' mentality. Well, Labor does not trust this government to look out for our young people, to look out for its young workers and for those who would work and could work, if only they had the skills, the training, the experience and, most importantly, the opportunity. We need to do everything possible to ensure our young people can get a good education, can get a good job and can keep that job. This government has an appalling record when it comes to helping young people.
Again, I think back to horror night in 2014. Apprentice numbers have been in freefall under the Abbott-Turnbull government. When Labor left office there were 415,000 apprentices in training; in March this year that figure was down to 286,500. We have had the whole Work for the Dole debacle; we have had that vet fee help debacle and savage cuts to TAFE; and now we have this Youth Jobs PaTH debacle. As one organisation described it, this has been one of the heaviest betrayals of Australian workers since Work Choices. Far from being the path to secure work the Youth Jobs PaTH is a road to nowhere. We demand that this government give the young people of Australia the opportunity that they so rightfully deserve.
I rise to speak on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016.
I recommit to this House that I am here to represent hardworking, aspirational Australians who want to apply their own efforts to succeed. I am here to create an Australia where young people, regardless of their financial and social situation, can work hard to reach their full potential—whatever that might be. I am here to make sure people, particularly young people, find meaningful employment and fulfilment.
The government has drawn together feedback from business and the preliminary findings of the Investment Approach analysis to design the innovative Prepare Trial Hire program that will make a difference to people's lives. Youth Jobs PaTH intervenes with early investment and training to get people into work and off lifelong welfare dependency. The program will increase young people's employability and provide them with real work experience to get the start they need in the workforce. It will focus on making sure young job seekers know what to expect when they get into the workplace, but also what is expected of them. They will know when to turn up, how to dress, how to behave. They will know the usual routines that go on in a workplace—something that young job seekers who have not had that experience do not know. Missing out on these essential skills does affect their employability.
Employability Skills Training will make sure young people have the right attitude and approach to work—making them reliable and well-presented employees. Young job seekers will participate in intensive pre-employment skills training within five months of registering with jobactive, training that will help build practical industry skills, like working in a team, presentations, effective communications, IT skills and job-hunting skills.
Training is great, but practice and practical application let you learn new skills and refine your skills much faster. Voluntary internships of four to 12 weeks will give young job seekers time in real businesses. Up to 120,000 placements over four years will help young job seekers gain valuable work experience. Businesses and young job seekers will be able to co-design internship placements. Giving job seekers and the businesses the flexibility to co-design training placements that work pragmatically is a great step forward and is so important.
Young job seekers have an opportunity to learn how to arrive at work on time, in the correct dress standard and with the relevant tools for the job; to learn how to take instructions and complete tasks; and to negotiate and compromise with the people they work with; to interact with customers and represent their work place. These are skills that are transferable and relevant in all sorts of life situations; these are skills that make job seekers so much more employable. In addition to gaining valuable hands-on experience in the workplace, young people will receive $200 per fortnight on top of their regular income support payment as an incentive to participate in work experience. This bill will ensure these payments are not considered as income for social security purposes. Employers will also receive an up-front payment of $1,000 and will benefit from the opportunity to see what a young worker can bring to their business.
So, jobseekers have had training and have refined their skills with their workplace experience—now they need a job. From 1 January 2017, Australian employers will be eligible for a youth bonus wage subsidy of between $6,500 and $10,000 if they hire a young jobseeker under 25 who has been in employment services for six months or more—a much smarter way of leveraging what the community would otherwise spend on welfare payments. Taxpayers expect their taxes to be invested in making Australia even better; they do not expect them to be simply redistributed to those who do not use that investment in them to improve their employability. This bill will also make sure it is easier for eligible young people to return to employment services and have their income support payment restored if their wage subsidy supported job is ended due to no fault of their own.
We cannot underestimate the empowerment of having a job—the personal value of contributing to our community as a taxpayer and the boost to self-esteem and physical and mental health. Prepare-Trial-Hire helps to instil confidence in young people. It is all about helping young Australians by getting them ready, giving them a go and getting a job. This government is improving lives with pragmatic solutions to get more people into work. I have the same determination as the chair of the government's social policy committee: early intervention can mean the difference between a young person stepping out into a productive working life and entering a cycle of long-term welfare dependency.
Australia cannot afford to leave thousands of young people rotting away on welfare. There is a big difference between my colleagues and I who sit on this side of the chamber and those who sit opposite. The difference is that a great majority of the members on this side of the House have employed people. Those opposite have not had the experience, have not taken the risk and reaped the rewards and the satisfaction, of giving someone a job. They do not know what it is like. If a young person came to me having applied their effort, having completed training and refined their skills, I would be much more inclined to offer them a job than if they had not. What a contrast with those who sit back and feel it is their right to get a handout without any personal obligation or responsibility to improve their situation. I was disappointed to hear the member for Hindmarsh, who spoke just before me, mention that he was not sure if there would be a fair deal for young people. A fair deal? There is $200 a fortnight for someone in addition to their income support to go out there and experience a job, to experience what it is like being employed and to learn skills. That is more than a fair deal.
A mother contacted me in the lead-up to my election to this place. Her son was struggling to find a job and hoped that I could help with government support. I agreed to meet her son, but I took a very different approach. I asked him, 'What have you done to help yourself?' I wanted to know whether he had a good work ethic before I would be able to put my name towards supporting him into a job. I helped him to line up a week's work experience with a hardworking small-business owner operating not far from my electorate. I said I would happily help him find a job and give a reference if he was a hard worker and applied his own efforts to succeed. And he did. He turned up on time for work experience. He worked hard. He tried his hand at a whole range of new tasks, including putting his forklift ticket to good use. Do you know what? He enjoyed it. He enjoyed getting up every morning, and even texted me one morning saying that he was quite sick, but he was going to push through because of the opportunity that we had given to him to prove that through the application of his effort he could improve his own circumstance in life. He enjoyed the satisfaction of getting the work done. Through the application of his effort, with the work experience opportunity given to him, he has avoided taking the first steps into our welfare system.
This government is committed to ensuring that young jobseekers find work as quickly as possible. The Australian community rightly expect that young people should participate in the work force to their full capacity. This is what the government is committed to. It may mean we invest more now to get people out of the welfare trap and on a real path to work, but we will save billions otherwise spent on lifelong dependent welfare recipients and their lost opportunities. We are about making lives better. The Youth Jobs PaTH Program seeks to meet these expectations by helping job ready young people to maximise their chances of finding work and avoid moving onto long-term welfare.
My eldest child first entered the workforce at the height of Work Choices. It was a shock to me and to her grandfather, who had run his own small business for decades, employing many people, including me, as young people, to see some of the conditions that were built into a 16-year-old's agreement. She worked from 5.30 or 6 am at a shop which was open to the street—all good. It was the middle of winter, and she had to wear the company's own new woollen jumper, not very fashionable, but all good—except that she had to pay for that jumper out of her own pay, out of her meagre casual hourly earnings. Well, even that might be understandable, except that her contract specified that she did not get to keep the jumper if she left. Essentially she was renting a jumper that the company would eventually retain ownership of after she had paid it off.
This was more than a decade ago, but it epitomised the unfairness detailed by a dozen little clauses and rules in that contract. It represented my daughter's first experience of being in the workforce. Even now, the demands on young staff can be an exercise in power: if you are sick and you cannot come to work, you have to find your own replacement; if it is not busy, we can send you home only an hour or two into your shift; if it is not busy when you arrive at work, you cannot clock on until we tell you to; if you cannot come in and work at short notice because you have an essay due or an exam on, we will punish you by not giving you many shifts the following week. Young people have told me all of these things about how they can be treated in a workplace—very different to the workplace I grew up with.
Of course, not every employer is like this. But when they are, how on earth can an employee feel loyalty or even respect for their employer when so little is shown to them? Of course, teenagers and young adults refuse to let their parents advocate for them around their working conditions, but they rarely have the power or negotiating ability themselves with an employer when they are desperately trying to enter the workforce, learn some skills and earn some cash.
I tell these stories because the damage that was done to the relationship between many employers and their staff in the years of Work Choices—which I think fundamentally changed the way a whole generation of workers feels about their job and their boss—has parallels for me in what the government is proposing in these legislative changes in the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. Not only are we debating stripping away the rights of the average worker, but the coalition is today proposing that we strip away the workplace rights of the members of our workforce who are most in need of protection: young people.
Those sitting opposite, those proposing this bill, are the same people who tried to remove the rights of workers young and old with Work Choices. They are the same people who have slashed welfare, slashed education and slashed training budgets. And then they wonder why youth unemployment is so high. Youth unemployment currently sits at 12.8 per cent, and since the coalition took office in 2013 it has been consistently higher than it was even through the years of the global financial crisis. This is a government that has consistently promoted itself as the superior economic manager but is consistently failing our country's young people. You are not managing the economy if you are not providing people with decent and secure work.
I will give the Treasurer and Senator Cash some credit for realising, finally, that youth unemployment is unacceptably high and that we must address it. However, the PaTH scheme is not the way to rectify unacceptably high youth unemployment. PaTH is an initiative designed, I think, to exploit young people. I do not understand how it makes any reasonable or moral sense to pay an individual $200 a week for 25 hours of work and give business $1,000 per intern for the privilege of employing this free labour.
I am greatly concerned about the implications of this program for the more than 14,000 young people in my electorate of Macquarie. Of main concern is the internship component of the PaTH Program. This legislation removes the final barriers for the government's so-called 'intern army'. Unlike other government job programs, this for the first time places participants in the private sector, being paid below-award wages. The government is proposing voluntary internships of four to 12 weeks. You might think that this bill is on a highly successful intern program running somewhere in some sector. But, at present, fewer than 20 per cent of unpaid internships result in paid employment. Given that this culture of internships has failed so seriously and widely in the past, I think we need more than a five-page piece of administrative legislation to fix youth unemployment.
In this bill, despite using the word 'internship' multiple times, not once does the government define an internship. How can we expected to debate fully a motion regarding a system of internships when the government has not even fleshed out its own plan enough to actually tell us what that system would look like. Not defining internship at all is probably an easier sell than stating that it is a system that deprives you of the ability to protect yourself under the National Employment Standards, which Labor has always stood for and the Liberals have also sought to destroy.
I ask Senator Cash, the Treasurer and those opposite where the references are to the rights of the interns under this system? Where is the guarantee that volunteer interns will have their workplace health and safety protected, along with access to workers compensation processes? Where is the guarantee that volunteer interns will not be used to displace jobs from other employees? Where is the guarantee that volunteer interns will actually get a job or concrete qualifications? This bill does not ensure that young workers will be protected under the PaTH Program and nor does it provide any clarity.
In its submission to the government about this program, the peak body from interns, Interns Australia, states that it has significant concerns that the PaTH Program will accelerate an internships culture where unpaid entry-level workers are left unprotected by law, especially if businesses are given a $1,000 incentive to do so. I want to add here my congratulations for the work that Interns Australia does. They are a group of highly motivated people with a strong sense of justice. They recognise the problems and the opportunities that legitimate internships offer young professionals, and they want to work with all parties to ensure it is a fair and beneficial experience. Of course, we do not see that here.
Under the PaTH Program there may well be many great employers who genuinely want to mentor and develop a young worker and after some weeks take them into their organisation on a permanent basis. But the danger is that this program attracts unscrupulous employers who see a ready supply of free labour to do unpaid, low-skilled work. This program target sectors—we think—where there has not previously been a demand from internships. We do not know exactly, because the detail is so thin. But sectors like hospitality, retail and motor trades have been named. For years kids have been asked to do a trial shift for free to test their coffee-making skills, but this embeds the four-hour or eight-hour trial into a three month thing. Realistically, it is hard to see how under this program the majority of PaTH interns will progress onto substantive employment.
I have studied this policy from a couple of perspectives. I was a small business operator for 25 years prior to coming to this place. I certainly do not begrudge incentives being given to small businesses to help them take on new staff. It actually takes time and reduces your productivity to have a new untrained worker in your small business. Often, we are talking about micro businesses, where it is the owner who gives up their time to train up the newcomer. But a fundamental flaw in the government's jobs PaTH Program is that there is no support for employers or for the interns. I have heard of the hours of unpaid time that supervisors of Green Army participants had put into the scheme to ensure that there were good outcomes for the participants. Small business does not have that capacity—they are already stretched. So, after one or two interns, small businesses will get weary of having to retrain over and over. And without any formal training or support being on offer, the transition to permanent staff seems pretty unlikely.
Big business will not do more than they have to. They will just churn through an endless stream of virtually free labour and avoid employing people on a permanent basis. I guess that is what we call built-in flexibility for the market. There is obviously a need for support, for employers, for interns who are working with dangerous equipment. How will an employer be required to provide that and, if training is required, does that come out of the $1,000? Who pays the workers' compensation? Does that also come out of the $1,000? Remember, under the legislation, these people are defined as volunteers not employees. We know that in some states that could affect the way workers' compensation systems treat the participants if, God forbid, there is an accident.
I also worry about the skill set that employers will be required to develop in their interns. There is no responsibility or support for employers to develop a clear set of training and skills outcomes. As an adult educator for many years I want to remind people that there is a bit more to it than just letting employers come up with their own training program over the weekend—that is, if they even have the time to do that. Will there be a different set of skills if you have an intern for four weeks than for 12 weeks? Many industries require some sort of formal training, even if it is just in safe workplace practices, so what is the requirement for supervision of the intern?
All those questions really go to the heart of it: is this work experience, is this a training program or is this a Work for the Dole scheme? Who knows? There are just not answers in this ill-thought-through program. If the Turnbull government cannot be bothered to work through the detail, then the Senate certainly needs to. Fundamentally, my concern is that this is a further attack on work conditions and decent wages in this country dressed up as some sort of jobs scheme. You effectively lower the costs of entry-level staff, with people working well below minimum wages. That in itself undermines the entire wages system.
As a mum I do not want to see that; I want to see young people fairly paid for a fair day's work. As a former small-business owner I do not want to see that either; I want to know that I am paying a fair pay for a fair day's work. As a union member I do not want to see that; a fair day's work deserves a fair day's pay. Unfortunately, nothing in this legislation gives us any confidence that any of that criteria will be met. As far as I can see, this scheme offers little more than the churn effect, where young PaTH interns are trapped in a cycle where they are hired—for their thousand dollar bonus—kept on for three months—because they are free labour—and spat out at the end without a job or qualifications to show for it.
The government could fix this. They could set bonus payments or maximum hours. They could put restrictions on and provide additional incentives for employers to provide good training. All of this would limit the exploitation of young people. As it stands, this government is no friend of young people and this program is a rehash of the government's failed Work for the Dole and Green Army schemes. It is a lazy scheme from a lazy government.
This government has continually shifted the blame onto young people for not having jobs, and that is in the context of high youth unemployment. Young people do not necessarily lack the skills and experience to attain employment but there are a limited number of jobs that they are competing for. This program does nothing to increase the number of real jobs for young people, and that is where our focus should be. My fear is that there will be fewer paid jobs once this program gets underway, because there will be so much free intern labour available. It seems to seek only to remove the basic workplace protections that any parent should expect their young child, teenager or early 20-year-old to have.
Before this Youth Jobs PaTH begins, it needs deep scrutiny by the Senate so that many of the questions about its operation can be explored. I sincerely hope we see that, or the consequences could in fact be more than just changing the relationship between young people and their employers for another generation. It could absolutely undermine the fairly well-tested and well-supported system of employment that this side of the House has been trying to promote for many, many years.
I listened to speakers opposite, and it really does disappointment me that Labor members are totally resistant to trying new processes and new opportunities for young people. Listening to those opposite, it is clear they believe that all employers take advantage of their workers in some way. Those of us who are in business or who have a lot to do with small, medium and large businesses know that we cannot function without really great employees. Our businesses are dependent on great employees.
The Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016 is required to ensure that jobseekers are not disadvantaged by taking part in the Youth Jobs PaTH measures announced in the budget as part of the youth employment package. Early intervention can actually mean the difference between a young person taking their first steps—and it is first steps—into a productive working life and a young person entering a cycle of long-term welfare dependency. Australia, and young people themselves, cannot afford to see thousands of young Australians condemned to a lifetime of welfare dependency. We know that once a young person is long-term unemployed their chances of successfully finding employment actually decline drastically. In addition to the financial cost that goes with this, the social and human cost is far too great for our country to ignore—that is why we have to try different ways of doing things, like we are with this bill. We are committed to ensuring that young jobseekers find work as quickly as possible and avoid moving onto income support and into the welfare trap.
I looked at a program that is running in one of my senior schools, Bunbury senior high school, an independent public school in Western Australia. Their Shed Works program—a very good program—is a unique opportunity for students to engage in practical work outside the traditional classroom, which often does not actually suit every young person, particularly a group of young men. The shed is actually located in a light industrial area. It provides students with valuable trade and life skills, along with courses in English and maths. I went to their graduation recently, and these are the very young people for whom the traditional formal classroom is not a suitable or a preferred learning environment. But they do have talent and skills.
The Shed Works program involves families directly. The Shed Works team that works with these young people made sure that, in 2015, these young people helped out at a local primary school, the Cooinda Primary School. They were building, measuring, cutting and welding playground equipment together. They levelled sand and they positioned a series of pallets into place and secured them. They painted what was then a climbing pyramid. It was installed, and a seesaw was installed at St Josephs. They have built outdoor furniture for Koombana Bay and worked at Milligan House. I am referring to some of the great work that can be done by these young people. Several students, following their practical Shed Works experience, have found employment. Some actually go on to the South Regional TAFE to further their skills. However, should some of these students be unable to secure employment, they would be ideal for the Youth Jobs PaTH Program, as part of our youth employment package. The three-stage PaTH program would certainly assist them further into employment.
Students in the Shed Works program actually increased their employability during the young drivers education and training courses as well. They do road safety, driver training and basic mechanics. It is in a very supportive environment, which is what I hope they find through the youth program that is in this bill. They have far more confidence and actually are determined to learn, which is what we see. It is practical learning. It is hands-on and, for some students, it actually re-engages them in learning, which I think is what we will see through the youth program that is contained in the bill.
The PaTH program will, I am sure, offer a similar process to what is happening in the Shed Works program. They have even got down to the marketing side this year, and we have seen young people on Saturdays up early and going along to the local markets to sell what they are actually building. This is of course a non-school day and they front up because they are actively engaged. These are some of the skills I believe young people who have not had the opportunity to go through the Shed Works program will be able to access through our PaTH program.
We know that many young people are simply not suited to academic or university pathways, but they still have great skills—generally, very manually talented. I commend the Bunbury Senior High School for such a great initiative. It has been operating for some years very, very successfully, and I commend the very dedicated staff at Shed Works. It is literally changing young people's lives, particularly those who do not fit in to the traditional school environment. I also commend those great young people for making the most of the opportunity, for grasping it and going on to employment, further training or into apprenticeships. This is what I am hoping will come out of the PaTH program as well. These young people just want the opportunity to have a go.
When I spoke to a number of employers, I asked them what they were seeking from their potential new employees. I asked a local supermarket owner, 'What are the attributes and attitudes you would seek from a young person you were considering employing?' He said that he needed them to be polite in his environment, to display maturity, to have people skills, to be honest, to be on time and to have a learning attitude and want to work. That is what I hope that the PaTH program instils in our young people. He also said that simple things like maths, counting and basic writing skills were a problem. He said that you can tell whether they are keen very, very quickly.
One of the other employers I spoke to was in earthmoving, mining and logistics. I asked him what they would need out of their employee. He said energy and attitude, a commitment and work ethic and, again, basic maths and communication skills both oral and written to be able to deal with the compliance issues facing clients. I asked the local retail store what they would need, and they said confidence, capability and courage and, of course, writing skills and maths and to be able to do mental arithmetic and handle money—some very basic skills that are needed as a potential employer.
The Prepare-Trial-Hire Program will increase young people's employability—a bit like what I saw with the Shed Works program. It will give young people an opportunity to actually find out what it is like to be in real work experience in real time and to get the start they need in the workforce. These are generally great young people who just need an opportunity. They need an opportunity to prove to those employers that they are keen, that they will work hard, that they will learn and that they are prepared to have a go. This is a path into employment for them.
To encourage eligible young jobseekers to take up a PaTH internship, participants will be paid a $200 fortnightly incentive in addition to their social security payments. I suspect that many of these young people will really grasp this opportunity. For some it may be the opportunity they have been waiting for for a long time and, depending on their background and their circumstances, they will see this as a great opportunity. When I spoke to the young Shed Works people, I was told that all they were looking for was the opportunity. That is what Shed Works gave them, and I am hoping that, through the PaTH internship, more young people will get a similar experience and opportunity to that experienced by the young people at Shed Works.
The bill will ensure that the fortnightly incentive payments to young jobseekers undertaking these internships under the Youth Jobs Path are not deemed as income for social security and veterans' entitlements purposes. This of course means that the incentive payments will not affect those participants' other social security payments or veterans' entitlements. The bill also ensures that it is easier for young people to return to employment services and have their income support payments restored, without them having to make a new claim or serve relevant waiting periods, if their wage-subsidy-supported job is ended due to no fault of their own.
When I get back to the opportunity that young people are looking for, often in rural and regional areas, they face additional challenges. What I want to see out of this program is that more young people in rural and regional communities, especially the smaller communities, have an opportunity and a pathway. I am looking forward to this PaTH program providing the first step and a great opportunity for many more young people, both in my electorate and around Australia.
I rise to speak in favour of the amendment moved and to raise my concerns about the bill that is before the House, the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016, and the plan that the government is trying to roll out. Let us be clear from the beginning that this is not a jobs plan. This is not going to create jobs for young people. A common complaint that we have out in our electorates is that there are simply not enough jobs. This does not create jobs for young people. What this does is create an internship, which is likely, without proper safeguards, to be another exploitation program. What people on this side of the House have sought to do, whether it be in this place or through Senate estimates, is ask questions of the government about whether they have introduced the proper safeguards to ensure that young people engaged in this program will not be exploited.
The other point that I wish to highlight is how the government is simply handing out wage subsidies to companies who already have jobs to offer. The clearest example of how we talk about this is what some have nicknamed in the media 'the four-dollar-an-hour-supermarket internships'. Let's talk through what we mean by that. We are talking about a government who will see that jobseekers will receive a payment of $200 per fortnight on top of their income support payment—so about $4 an hour. The business will be paid $1,000 on taking on an intern, then receive a wage subsidy of between $6½ thousand and $10,000 if they hire them at the conclusion of the internship.
What it means for Coles and Safeway is that they were already going to hire young people, but they can now enter into this situation. They can now have interns and get a wage subsidy. So we are essentially handing taxpayers' dollars over to companies like Coles and Safeway, who were already going to hire young people. The government has not denied this at all. In fact, during the Senate estimates process the government needed to show that the PaTH program was not just a thought bubble. It was an opportunity for them, through that process, to answer and outline how they are going to provide vital safeguards for young jobseekers who are engaged in this program. They should have shown how PaTH will not depress wages or displace jobs. But they could not answer the senators' questions. They also should have shown how PaTH would have provided vital access to workers compensation and workplace health and safety, but they could not. They also should have provided a definition of what an intern is and what sort of activity they will doing on worksites, but they could not do that either.
So serious questions are being asked of this bill and this program. 'Trust us' is not good enough. Given this government's track record, given what is happening in our employment and labour market at the moment, we cannot leave it up to the market. We cannot leave it up to employers. We cannot leave it up to this government with simply 'trust us'. This bill and this program do need proper scrutiny.
This program, as demonstrated by one of the government's own senators in his questions at estimates, highlights that the people employed under this program will not be treated the same as other workers in a workplace. You cannot go past that. These young people are being set up. They will not be treated like the rest of the workers in their workplace; they will be treated differently. They will be seen as volunteers. There is no definition of what an intern is, under the Fair Work Act. The government senator asked at estimates:
… I guess one potential advantage for a business is that if an intern does not work out, they are not going to be subject to any unfair dismissal claims or any costs in that respect.
I cannot think of a more arrogant statement for a member of the Liberal Party to make. What they are essentially saying is, 'Well, the good news is, if the young person does not work out, the company will not be subject to any unfair dismissal claims or any costs in that respect.' They are always thinking of the company, the bosses and the bottom line. They are not thinking about the health and wellbeing of that young worker. They are not going to ask what happened that saw that young person dismissed. It is just trial, use, send out the door—treating our workers like they are Kleenex: 'Let's just use them and throw them away.' These young people looking for work are our future. Essentially, this government is creating another program which will churn through workers. Where are the safeguards to stop employers from churning through workers? There are none.
The government already has its own problems with the Work for the Dole program, as we on this side of the House have also tried to highlight. We have seen the death of somebody on the Work for the Dole program, and there has been a stunning and spectacular silence from this government about doing anything to address those issues. It is tragic that one person lost their life, but I have to say I am surprised there have not been others, from the reports that I have heard in relation to the Work for the Dole program in my own electorate. Organisations that have taken on Work for the Dole participants have complained that they have not received occupational health and safety guidelines. They have complained, when they have tried to get support from the department, that it is completely lacking in support for supervisors. I have spoken to young people engaged in the Work for the Dole program who have had their payments suspended through no fault of their own. The supervisor did not turn up, so they got marked as not being there and then they had their payments suspended.
Right now, Centrelink, because of this government's cuts to staffing and the way it has restructured the Department of Human Services, cannot cope with another program currently. While the government want to lump another ill-thought-out program onto our Centrelink team, onto the hardworking people at Centrelink, they have not committed to employing more public servants to administer this program. They are not talking about that. They are just looking to add more work onto a department that is already stressed and already struggling with its workload.
The idea that all young jobseekers have barriers to work is also not fair. Yes, there are some people in our community who are caught in the intergenerational unemployment cycle, and, yes, there are complex barriers to them entering the workforce. But that is not every young person, and I meet lots and lots of young people, and their parents, who simply want a start. They just want a job. But at the moment there is no focus from this government on creating good, secure jobs that these people can count on—people like Leigh. Leigh is 25, unemployed and a jobseeker. He has had very little paid work since he left school. He has been receiving Centrelink payments since finishing his diploma in interactive media about 18 months ago. Leigh volunteers at the Red Cross Blood Service in Bendigo, and he is keen to get paid work in his career of choice. However, he would be happy to take any job. He is currently living at home with his parents and he does not want to be at home. He wants to get out and start the rest of his life.
In Bendigo we do lack job opportunities for young people. Bendigo's youth unemployment rate is high, but it is not as high as it is in areas like Townsville and Cairns, where it is in the double digits—there is 20 per cent youth unemployment in Cairns—and in areas to the north of Bendigo, like Shepparton and Mildura. Lots of areas have high youth unemployment.
But this program is not going to help all of those young people. This program seeks to exploit a small group of young people. It does not have safeguards in place to make sure that young people involved in this program do not have a horrible, bad, exploitative experience but have a good experience of work.
Leigh is not alone. He is not the only one in my electorate who is looking for work. Amanda, who is a mum, contacted me about her son being out of work for years. She says that he applies for everything he can. He drops his resume into industrial sites and simply cannot get work. No Centrelink will mean that he will be homeless again. Lots of places insist that people have a drivers licence and their own car, but they can barely afford to pay rent, utilities and food. There is nothing left to be able to afford a vehicle to drive to and from work or to and from interviews. This is the reality for young people who are trying to break into the job market. This program does little to help change that situation. The $200 on top of Newstart will not help resolve the issues Amanda's son will be facing. Not to mention that, if Amanda's son were to get a job under this program, he will have displaced another young worker who would have had that job anyway.
Finally I want to highlight another area. We have had a lot of talk in here about backpackers and the backpacker tax, yet we have not talked about the fact that backpackers are also young workers. They are workers from overseas coming to this country. There are genuine workforce shortages in ag and in the regions, but there is not a workforce shortage in hospitality in places like Bendigo, Thomastown, Eltham or other major regional cities where youth unemployment is in double digits.
The government are not telling the Australian people that, aside from the changes to the tax, they have expanded where backpackers can work. Young backpackers on the 462 visa can now work in hospitality to get their second year visa. They have expanded the age up to 35. So at a time when youth unemployment is really high in this country the government are encouraging in more backpackers, who will not go out to the farms where there are labour shortages. In fact, only one in five backpackers work on a farm. That means that four out of five backpackers do not ever step foot on a farm. Where are they? They are competing against young Australians who are trying to get a job.
The government do not understand the youth unemployment crisis we have in this country. They are ranting and raving over a backpacker tax. They have put forward a program that does not have the necessary safeguards to protect young people if they engage in this program. They are not dealing with the really obvious factor—most young backpackers from overseas work in industries in Australia that young Australians want to work in. They work in the cities. They work in construction, hospitality, mining and beauty. They even work as social workers. They are the people Leigh is competing with. We also know through the Fair Work Ombudsman's report that about one-third of those backpackers are being underpaid and mistreated. That is putting downward pressure on wages.
As I and other speakers on this side have said, Labor are calling on the government to support the amendment. Help us save you from another disastrous program that will put pressure on wages and that will displace jobs that already exist. Labor want to help the government avoid another death in a workplace as a result of this program. If a young worker is employed, they should be recognised as an employee. They should not be treated as an intern or a volunteer; they should be recognised as an employee. The government's idea about changing a job into an internship is disastrous for young people and our local job community. This government is completely devoid of any job creation program. They are not working with industry to create good secure jobs that people can count on. They are coming up with programs that are thought bubbles they think will distract the community and suggest they are creating real job opportunities when they are not.
People in regional Australia and people in areas like Bendigo have had enough with a government that talks a lot of talk about jobs and growth but only puts forth programs that will see people in our community be exploited. Unless there are safeguards in place, we will see young people's first experience of work be a horrible experience. It is time the government got serious about youth unemployment and looked at the expansion of the backpacker visa. They have created direct competition with young people. It is time they worked with industry to rebuild and recreate the apprenticeship scheme. One hundred and twenty thousand apprentices have been lost. We do not see that being put forward by this government. Instead, we have the PaTH program that will just depress wages, displace jobs and put young working people into very precarious workplace conditions.
I welcome the opportunity to speak on these bills relating to the PaTH program, which is a very important program and one that I am very passionate about. I am very passionate about giving young people the opportunity to get a job. In the Abbott government I had the privilege of being responsible for the implementation of jobactive, and an important part of jobactive was getting young people off welfare and into work.
It was interesting to note the comment by the member for Bendigo when she said that we should be looking at more apprenticeships for young people. In the development of jobactive I talked to a lot of employers and employment service providers. In fact, when I was in Melbourne I went into one particular employment service provider and there was a list of apprenticeships on the board. There were positions for plumbers, there were positions for electricians and there were positions for carpenters. I said to the CEO of that particular organisation, 'Why is it that these apprenticeships have not been snapped up? Why is it that they are on a board and in significant numbers when youth unemployment is so relatively high?' The answer he gave was quite simple. It was that the young people who were presenting to that office did not have the skills and did not have the capability to take up an apprenticeship.
That is a very disappointing situation. I think it is indicative of the challenges that we are trying to overcome with the PaTH program because, if I put to one side the issue of higher skilled apprenticeships and look at even basic entry-level jobs, employers were saying to me, as I got around the country as the minister responsible for developing the jobactive program, that young people were presenting at the gates of their businesses without the necessary basic skills to hold down a job. They are skills that I would hold for granted and you, Deputy Speaker Georganas, would hold for granted, as people who have been in the workplace for a long time would, but they lacked the necessary basic skills—turning up on time, how you deal with your workmates and how you deal with customers. These are skills which are absolutely elementary but are skills which many young people, who perhaps have been in a household where they have seen intergenerational unemployment and have never seen anyone go to work each day, simply do not have.
The gem of the PaTH program is that it addresses the key barriers to those young people moving off welfare and those young people getting that all important start. Maybe it is not the job that they wanted as their dream job, but maybe it is the job that gets them off the welfare train onto the work train and the benefits that come with work—the financial benefits and the non-financial benefits. PaTH works in a number of ways. It addresses the issues of employability skills that I mentioned previously—those basic skills that are lacking. It also addresses the fact that many young people who have been on welfare for a long time have a fear of their own capability and have a fear of moving away from the welfare safety net. So a young person can stay within their welfare system, can have an exposure to the workforce, can learn new skills and, hopefully, if all goes well, move into a long-term sustainable job. That is a really exciting outcome.
The PaTH program firstly addresses basic employability skills. Young people will learn those basic skills that they need to hold down a job—turning up on time, how you dress and all those things. The next element is an internship of four to 12 weeks with an employer. Regrettably, many employers are reluctant to take on a young person who does not have the sort of experience they need. The internship will assist in breaking that barrier by giving employers a $1,000 payment to encourage them to take on a young person, and then we are giving the young person a financial incentive of $200 every fortnight to give them a financial reward, give them a return for their effort, give them a return for investing in themselves. The internship is an important part of this program—it allows a young person to fit into a workplace on a no obligation basis for that young person and a no obligation basis for the employer and hopefully if there is a favourable outcome the young person can progress further through the system. But we are overcoming that employer reluctance to take on a young person. One of the challenges I had in framing jobactive was that employers unfortunately had had unhappy experiences with putting on young people—young people who repeatedly did not work in their business. PaTH helps overcome that by providing the opportunity for an employer to have a look at a young person and for the young person to have a look at the employment landscape in that business and see if the mix is right for them, see if they are going to get on. I think that is a very important element.
The third important element of PaTH addresses another barrier to taking on someone that we hear about repeatedly from employers—the fact that a new employee, young or old, is not as productive in the early weeks and months as they may be when they have been in the job for a long time. Under PaTH we have wage subsidies of up to $10,000 to encourage employers to put on an eligible job seeker. So we have the basic employability skills, we have got the internship, where the employer and the young person can see how they work together, and then we have the third element which is the wage subsidy, which defrays the high costs in the initial weeks and months of putting on a new employee.
Members opposite have made some negative comments, but I hope they will give PaTH a chance. I hope they will support the thought that we want to give those kids who do not believe in themselves an opportunity; we want to give those kids a chance. There are many ways we can approach this and there will always be a range of views as to how things should be done, but I think the elements in PaTH address the key barriers effectively. It is a massive financial commitment, of some $750 million, but when you look at that in terms of the some 120,000 young people this program could help and the cost of them staying on benefits for an extended period, it is an incredibly good investment—a great investment in our youth, a great economic investment and a great community investment. The longitudinal studies that have been carried out on other nationalities are clear—if you are long-term unemployed at a young age you are about 70 per cent likely to be long-term unemployed when you are around 40. The imperative is huge. We need to get our young people off the couch. We need to get them believing in themselves. We need to give them the skills they need to be competitive in the workforce because, whilst in this country unemployment is relatively low in many areas, there are still some problematic areas, and youth unemployment is intractably high. Why is that? Because employers are choosing not to employ young people. We have to overcome the barriers. I believe PaTH does this. I believe it is an appropriate suite of measures. Is that the only solution? Clearly not, and members opposite have articulated a range of views on what this government should be doing instead, but certainly in the context of I think good policy the PaTH program ticks the boxes—the PaTH program has the capacity to get a great number of young people up off the couch into work, believing in themselves, setting up a financial future for themselves and allowing them to walk down the street with their head held high because they have a job and they do not have to depend on benefits.
I will draw my conclusion to a close. I believe in this program. I think that members opposite should carefully consider the elements proposed in this legislation. This is not about cutting entitlements; this is not about displacing other workers. This is about giving kids a chance. I commend the bill to the House.
It was about six months ago now that I was sitting at home, on budget night, tuning in and listening to the Treasurer and, like so many others, I expected the Treasurer to deliver for more Australians. The fact is, instead of there being lots of winners on budget night it became apparent, really quickly, that there were many losers from that budget.
Of those groups were young people looking for a job, because while this piece of legislation is pitched—in a bit of a glossy flyer—as giving young people a pathway to a career, it risks giving big business cheap labour to exploit. We know this because when it comes to creating jobs and growing the economy you just have to look at the coalition's track record of delivering. From goading our car manufacturers to leave our shores, to their underhanded attempts to cut penalty rates, the coalition has never had the interests of working Australians at heart. But what can we expect when there is no doubt that the Treasurer goes to sleep every night dreaming about his endless pursuit of workplace flexibility, which, for the Liberals, has always been code for stripping away the rights of hardworking Australians.
This proposal highlights the reality that those opposite continually fail to do their due diligence when it comes to developing a social policy. Labor has always supported meaningful investment and initiatives that give young people a pathway towards long-term sustainable and fulfilling employment. We understand that there is dignity in work and that young people should be given every opportunity to find a job. In my electorate of Longman, making sure young people have a job was the crucial message I heard on the doorsteps, on the telephones or at the school gates.
The point I would like to make about this proposal is that while the bill appears to be noncontroversial and well-intentioned there are several elements of the government's broader program that have the potential to undermine our country's hard-fought workforce standards. The first issue is that we all should be alarmed by any proposal that allows a business to pay workers below the award rate. I am sure many of you will remember Gina Rinehart's vision for the Australian workforce—an agile, flexible workforce, with workers being paid $2 an hour. While this proposal is not as extreme, it has the same irreversible effects of stripping away after our social safety net for low paid and vulnerable Australians.
Under this proposal 17 to 24-year-olds will participate in internships of four to 12 weeks, working up to 25 hours a week, while receiving $200 a fortnight. Theoretically, an intern under this scheme could be paid as little as $4 an hour, no matter what work they were performing. To me, this is wrong. I have always believed in the idea of a fair day's pay for a fair day's work. We have minimum wage and award rates in this country because as a society we believe that low-paid workers should have economic security and be protected from exploitation. This proposal contradicts that.
It is not just Labor that sees the risks of worker exploitation under this proposal. We have Dr Amanda Elliot, an academic at the University of Sydney's Department of Sociology and Social Policy, who said this program was 'unlikely to be a good introduction to work for young people'. We have the head of Interns Australia, Dimity Mannering, who said the program would create 'huge opportunities for exploitation'.
As a parent it is concerning to think that my own sons could be working in any industry, no matter how dangerous, for as little as $4 an hour. I know those opposite will say that this scheme is voluntary but, regardless of that, we should not punish hardworking young Australians by allowing them to be exploited and paid wages that are below the standard of even a third-world nation. This is at a time when vigilance for ensuring that we protect the interests of young Australians going to work should be paramount.
We have all heard stories of worker exploitation within 7-Eleven, a company that thousands of Australians have probably visited at some time in their lives. It is a company that is marketed as a 'good call'. Today we know that many 7-Eleven franchise owners systematically exploited desperate young workers who were just trying to survive, and many of them had young families. They were underpaid, forced to perform weeks of so-called training and some were bullied and harassed. Yet, against this background, we have a government that wants to allow private sector internships that, in the 7-Eleven style, rob workers of the dignity of getting paid a fair wage equal to other workers performing the same work. I speak in such strong terms about the risks of worker exploitation under this proposal because I believe that it could potentially have the reverse of the outcome that is sought by the government. Instead of creating job opportunities, I can envisage that this scheme, were it to come into operation with no regulation, could potentially turn young vulnerable Australians away from work for life.
My second concern about this proposal is the very real risk of companies cycling through young workers and simply using them as cheap labour. Under this proposal, businesses will be paid $1,000 to take on an intern before receiving a wage subsidy of up to $10,000 if they hire the intern when the internship concludes. Those opposite consistently talk about business acumen and the need to keep government out of the way of business and individual enterprise. Yet you have to wonder whether any of them have any life experience actually running a business. When I look at this policy, I see the potential for rorting of dodgy employers out of cheap labour. What is stop a large company from simply employing an intern, using the wage subsidy until it is exhausted and then sacking the intern to replace them with another intern and attract more government subsidies? The fact is that, when you introduce schemes such as this, it creates a power imbalance between the employee and the employer. It takes way basic workplace rights and workplace conditions and you run the risk of companies and businesses exploiting young Australians in pursuit of profit.
I know better than most that there are many very good businesses around Australia. My family owns one of them—a small cafe at Brendale, which is just south of my electorate. Labor understands the challenges that businesses and business owners face. But, equally, we understand that, to run a small business, you have to invest in your staff, you have to give your staff appropriate training. That is what being a good employer is all about. Ronald Reagan said that nine of the most terrifying words in the English language were 'I'm from the government and I'm here to help.' The reality is that, for businesses in Australia, the 10 most terrifying words are 'I'm from the Turnbull government and I'm here to help.'
If those opposite really believed in the virtues of individual enterprise and entrepreneurship, they would recognise that training and paying for staff wages is fundamentally the responsibility of every business, because, ultimately, it is the business that will prosper from the skills and the hard work of their staff. But, instead, this proposal takes away the responsibility of businesses investing in their staff and moves that impost onto the Australian taxpayer, which can only be regarded as another example of Turnbullism corporate welfare.
My fear is that, while many good and honest businesses might use this program to hire a young employee who they may intend to keep for the long term, there is nothing to stop many other companies and businesses from churning through interns at the taxpayers' expense. This in turn risks placing young jobseekers in a continuous cycle of uncertainty, exploitation and poverty. If an Australian business wants to hire more staff, it should be encouraged to do so, but not through a thought-bubble scheme that creates a two-tier system of employment. Labor and I want to see more businesses hiring young people but we believe these positions need to be real jobs, and we will work with the business community and unions to make sure that our kids are given real jobs, real training and real security.
Another concern that I have with this proposal is that, while it is designed to give young people a job, it could in fact negate the need for existing employees to work at certain times in industry, like retail, hospitality or construction. In 2013 the Fair Work Ombudsman presented a report entitled Experience or exploitation.