Monday, 13 February 2017
Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016; Second Reading
I rise to speak in opposition to the latest government attempt to reduce wages and conditions and set up a system that exposes young workers to exploitation and exposes existing employees to unfair competition from exploited workers. Young Australian will be denied award wages and conditions. They will be classified as interns and not employees in a not so subtle expression of coalition contempt for decent wages, decent conditions and health and safety on the job.
The latest iteration of the government's antiworking agenda is this bill, the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. It continues the coalition tradition of attacking worker protections. This bill sits comfortably in the tradition of Work Choices and the ABCC.
The bill is designed to give effect to so-called internships and provide wage subsidies, which were elements of the Youth Jobs PaTH measure announced in the 2016-17 budget as part of the youth employment package. The Youth Jobs PaTH program is being marketed as providing job seekers aged 17 to 24 years who have been in receipt of jobactive services for six months with work experience and to allegedly maximise their prospects of subsequently gaining employment. The reality is that it will expose them to unscrupulous employers with no access to workers compensation, no award wages and no union protection.
This bill will amend the Social Security (Administration) Act 1999 and the Veterans' Entitlements Act 1986 so the miserly $200 payment that interns receive is not counted as income for social security or veterans entitlements purpose. Secondly, it will amend the Social Security act to allow young people to suspend their payments if they are employed. They can then restart without reapplying if they lose their job internship through no fault of their own within 28 weeks. How this no fault of your own will ever be analysed and determined, I do not know.
These job seekers will be placed into so-called voluntary internships, working for between 15 and 25 hours a week for between four and 12 weeks. For this they will receive payments of $200 per fortnight—not a week, a fortnight—on top of their income support payments. For many this will not be sufficient to cover the cost of travelling to work and the extra expenses associated with work. Businesses will be looked after; they will be paid $1000 to take on an intern and will receive a wage subsidy of between $6500 and $10,000 if they have participants at the conclusion of the internship—with an offer of a job that is expected to be ongoing and for an average of 20 hours a week over the six-month period. So they get well rewarded for exploiting young workers. That is the reality.
Instead of tackling the real issue of youth unemployment, the government has come up with a hastily cobbled together scheme that offers no solution to the problem of youth unemployment. Minister Cash was completely at sea during the estimates hearings when asked for details of how this bill would operate in real life. This bill, if passed, creates a pool of cut-price young workers who will be working at a rate that is less than the national minimum wage. The government is arguing that PaTH is needed to fix youth unemployment. 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 13.3 per cent, double the overall rate of unemployment. According to their own figures, there are nearly 300,000 unemployed young people between the ages of 15 and 24. More than one million Australians are underemployed. On top of this, the department acknowledges there are another 170,000 people who have been unemployed for more than a year and who are discouraged from seeking jobs that are non-existent.
This government has left young Australians high and dry. It is unable to come up with a real plan to find jobs for our young people. In the meantime they are trying to sneak through changes in their Omnibus bill which will see young unemployed people left without any form of income for a month when they come to the government seeking assistance to survive. This mob has an absolute contempt for the unemployed, an absolute contempt for working-class kids and an absolute contempt for fairness and reasonableness in their dealings with young people.
This will simply be another failed coalition policy where they push young unemployed people into programs that do nothing to assist them into real, meaningful employment. You only have to look at the Work for the Dole program, where almost 90 per cent of the participants did not get a full-time job three months after finishing the program. Remember the Work for the Dole program and all the great speeches we had from the other side of the chamber? What a great thing Work for the Dole is! What a great program—just get these kids into some work and everything will be okay. It has been a massive failure in similar terms to this government as a failure.
What has been the response of the Turnbull government to this failure? They have taken over $752 million out of Work for the Dole and shifted it into PaTH—that great successful program, let us take $752 million out and try and do something else. That is the reality: you fit one failed program into what will be another failed program. The very serious risk is that PaTH will displace people who would otherwise be employed to fill genuine vacancies. PaTH will take in 30,000 young Australians, classify them as interns and place them in businesses around the country in an already weakened labour market. Young people trying to get into entry-level employment will be competing with the people in the PaTH program, operating as cut-price labour for government subsidised employers.
The Turnbull government's definition of an intern is not going to match the public's idea of what an intern is. These young people will not be working in the white-collar roles with which interns are typically associated; in professional services or law firms. I do not think there will be any movies made about these interns. I do not think Hollywood will be looking at all the glamour for these young workers forced into below award wages, below poverty line wages. There will be no movies made about these interns. This is another example of an uncaring government with no answers for the unemployed, no answers for young Australians.
What we will see are these interns working as waiters, working as shop assistants and even working as builders' labourers—areas where young people would get a chance, get an opportunity to get an award wage and maybe even a bit better than an award wage if they happen to have a good union like the CFMEU. But what are we going to get here? We are going to get young kids put into an area where there is already massive exploitation so more intern waiters, intern shop assistants, intern builders' labourers—the traditional employers of young people looking for their first full-time job. The fast food chains, the big retail stores are going to be supplied with a steady stream of interns, who will be working at a rate that is less than national minimum wage. The national minimum wage is $17.70 an hour but a PaTH participant, who works 25 hours a week and who receives all of their Newstart payments plus the $200 payment, will earn just $14.50 an hour. This is simply exploitation of young people.
People have rightly been concerned about the cases of workers exploitation when wage scandals come to light. Can you imagine being an intern at 7-Eleven? Can you imagine being an intern at Pizza Hut? Can you imagine being an intern at Baiada Poultry? Imagine the exploitation that will go on there under this proposal. Cleaners working in Myer stores are exploited yet young people are going to go in there as interns and Myer is going to get paid by this mob to rip young workers off; that is the reality. Most recently we have seen Dominoes Pizza. How many young people have started off in Dominoes Pizza to go into their first job? We have seen Dominoes Pizza are ripping off young people yet they will be eligible to get this PaTH payment. It just beggars belief.
There are examples of apprentice exploitation. Even when legally established wages are in place, employers exploit young workers. The Fair Work Ombudsman, in response to the constant flow of complaints received from the domestic building industry and in response to the vulnerable nature of apprentices working within the industry, audited Victorian building firms between 2011 and 2012 and found that 94 per cent of the 164 employers broke laws covering apprentices. Fifty-seven per cent of them failed to pay apprentices properly. And an ombudsman's random audit in 2013 of 142 businesses in Western Australia, South Australia and the Northern Territory found that more than half breached workplace laws and almost a quarter had underpaid their apprentices by a combined total of $67,180. These are apprentices who would have a contract for employment and a contract for training yet what we are seeing is systematic exploitation of these young workers.
What we are hearing from this mob on the other side is that they want to put some of the most disadvantaged young kids into a situation where there will be even more exploitation even more on vulnerable young Australians. Why would our community stand for government program that sanctions undercutting the minimum wage?
The Australian Chamber of Commerce and Industry has made a submission to the Senate inquiry into the PaTH program stating that the industry has the places to meet the demand of the program. I say to the Australian Chamber of Commerce and Industry: why are you not filling these places by hiring the many young jobseekers who need the work right now? I can tell you why, it is because the biggest advocates, the biggest cheerleaders for PaTH—big business—can see a pool of young unemployed Australians working at cut-price rates below the national minimum wage being used in a way that could potentially undercut jobs and undercut wages.
What happens to interns who are involved in a workplace accident? Will they be covered by worker's compensation? According to the government, that will depend on the worker's compensation regime that operates in the particular state or territory in which these interns find themselves. Are you kidding me? You cannot make workplace safety in a program you devised someone else's problem. You cannot push 30,000 young people out into internships earning below the minimum wage with no guarantee of a job after the internship and palm off the fundamental issues of protecting young workers to the states. In some states and territories, an intern may be considered a volunteer, not actually an employee, and therefore unable to access worker's compensation. And it is not just Labor that has these concerns. ACOSS were damning in their assessment of participant protections.
There is no legislative assurance that the health and safety of participants in the internships will be adequately protected.
That is what they told the Senate inquiry. This is an issue that cannot be ignored but the government is not really stepping forward with clear assurances.
There is the more 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 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. They said:
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 were real vacancies. That is the way it was described when this program was announced. But since announcing PaTH the Turnbull government quickly watered down this pledge to 'a reasonable prospect of a job'. There is genuine concern that young Australians participating in PaTH could be used and discarded every four to 12 weeks. For all they may deny it, this government share these concerns. Why else would this legislation provide a fallback position where the jobseeker payments are only suspended in cases where they lose their job through no fault of their own from the business that receives a youth bonus wage subsidy in relation to them under the Youth Jobs PaTH program? Interns Australia noted to the Senate inquiry:
… we have concerns this provision may encourage employers to hire an employee to receive the subsidy, terminate their employment, then hire another employee to receive the subsidy again.
How is the government going to test or sanction employers that might churn through a PaTH participant after the engagement with an intern concludes and the wage subsidy ends?
I move the following amendment:
At the end of the motion, add:
", but that further consideration of this Bill be an order of the day for the first sitting day after the Government has tabled a statement outlining how it intends to ensure that, under Youth Jobs Path: Prepare, Trial, Hire:
(1) jobs will not be displaced by cheaper labour;
(2) wages will not be undercut and participants will not be paid below minimum award wages;
(3) participants' safety will not be compromised and adequate insurance arrangements will be provided; and
(4) small to medium enterprises will be prioritised in 'Prepare, Trial, Hire' as they have a demonstrated track record of employing more job seekers through their jobactive program.
Labor is opposed to this bill. This is a bill that is simply about exploitation. As I have said, this is a bill that stands alongside the Work Choices and ABCC bills as bills that are designed to exploit workers and vulnerable people and are about denying workers access to decent union representation and decent rights and conditions on the job. There is no convincing or effective argument that I have heard for this bill.
This is the Turnbull government again in failure mode. Everything was going to be rosy when they had bills that would force young workers into work. But, when that failed, they had to move to this approach. This approach is really concerning because it exploits young people and advantages unscrupulous employers. No-one can convince me that this is going to work effectively, and the government should hang their heads in shame for exploiting young Australians.
Unfortunately, unemployment in our nation is an issue that disproportionately impacts on young people. Youth unemployment is at double the national unemployment average—that is, nearly 300,000 young people across our nation are unemployed. We all know that this is an unacceptable statistic and, sadly, it is rising. But the primary cause of this unemployment is a lack of economic growth. Low-skilled and inexperienced young people are particularly vulnerable to these conditions in the job market. There are poor economic growth in particular pockets around our nation where this is a problem.
It is a particular problem in my home state of Western Australia, where youth unemployment, I am sad to say, is reaching crisis point. The unemployment rates are still above global financial crisis levels. In some parts of Western Australia, unemployment is more than double the national average. All over my home state of WA, people are feeling it, from our southern metropolitan suburbs like Pinjarra, Mandurah, Rockingham and Kwinana right up to northern suburbs like Yanchep, Wanneroo, Joondalup and through our wheat belt region. This, I believe, is because the Barnett government has squandered our mining boom. It has hollowed out our economy. It did not invest in jobs and training for the future, and young people in WA are now, very sadly, paying the price for that.
This is very much why I am glad to see the work that Labor has done, with Bill Shorten and WA opposition leader Mark McGowan announcing in Perth earlier this month that they are working together on that job creation. It is about diversifying our economy and ensuring that we have jobs for the future. What we have seen under the watch of the coalition, both at a state and at a federal level, is a complete lack of commitment to diversifying the economy and looking to the industries of the future. My good colleague Senator Doug Cameron's remarks really highlight that.
What we want to see in our nation is an opportunity for people to go to university or TAFE being confident that they will have a high-skilled, well-paid job at the end of it. What we have seen in our nation is a government in Western Australia that has been very focused on making sure that these jobs, frankly, go offshore. Each year they send a list here to Canberra promoting overseas workers into Western Australia in traditional trades where we already have large numbers of unemployed people back home. The Liberals are continuing to send these jobs overseas. The latest example is the Malaysian footbridge. That bridge could and should have been built in Western Australia, and the fact that the WA Liberal government contracted for that bridge to be built overseas is a disgrace. I cannot really fathom why the state government would do that when workshops in our home state are empty and young people are in desperate need of work. So I am really pleased to highlight the state Labor commitment to putting local jobs, training and apprenticeships at the heart of everything we do.
This stands in stark contrast to the legislation before us tonight. What we really want to see are commitments like making it law that government departments, including health, education, transport and housing are required to provide more apprenticeships for local people; and putting in place Western Australian industry participation plans that require as a part of all bidding processes for construction work across government a consideration of apprenticeships and traineeships. These are the commitments that state Labor has made in Western Australia and these are where you will find solutions to youth unemployment nationally, not in the kind of misplaced legislation that we have before us tonight. These are the real solutions to unemployment in our nation. They are the right approach. This is the approach that you should be taking at a national level.
But, sadly, where is the Turnbull government on this question? In our country we need a solution to unemployment that is much better than the lazy policy approach that simply provides employers with free Labor. That is the solution you have put forward in this place. We need a solution that goes beyond your mantra of jobs and growth. We keep hearing this from a government—that their priority is jobs and growth—but, sadly, you are failing on this front. You are failing to tackle unemployment, which is why you are creating in the legislation before us these proxy jobs that are not real jobs at all.
Our nation is desperate for solutions to unemployment. I meet young people all the time in Western Australia who are extremely concerned about their future. This bill is not providing a solution for them. The introduction of a 12-week internships for jobseekers is a major change to employment program arrangements, and it is one that needs to be scrutinised very carefully by this place. It is a major change that should not be introduced until the concerns of the community have been resolved, as Senator Cameron outlined.
We have before us a really poor attempt at resolving the issue of youth unemployment. It will not improve outcomes for jobseekers. It is unlikely that it will make a difference to the unemployment rate for young people in our country.
The government is claiming that the measures in this bill are non-controversial, but in actual fact they form part of a much broader new program design that undermines the workforce standards that we here in Australia hold dear. A similar program in Ireland has been discontinued and one in the UK has been the subject of much controversy.
In theory, what we have before us is something that is supposed to prepare young people for work by providing young job seekers aged 17 to 27 with pre-employment training and placement in voluntary internships of between four and six weeks. In this time they may work from 15 to 25 hours a week and will receive bonus payments of up to $200 a fortnight on top of their current income support payments. If you do the maths on that, an intern who works 25 hours per week but receives only their Newstart payments plus an extra $200 payment will earn just $14.50 an hour, and that is $3.20 less than the minimum wage. This means that young people participating in this program will be paid less than the minimum wage. Young people who are working, providing value to employers, contributing to a workforce and contributing to our economy will be paid below the minimum wage. This is simply not good enough.
If someone is working they should be paid properly for that work, regardless of the circumstances. If a young person is going to be making any meaningful contribution to an employer they should be fairly remunerated. This has been and should be a basic tenet of workplace rights in our country. What we see here, sadly, is a classic race to the bottom attitude. It is an attitude we have seen time and time again from this Liberal government and the ones who came before them.
What we also see here in the race to the bottom and the displacement of wages is the displacement of young people who would be paid properly to do those jobs. As Senator Cameron highlighted, there is nothing in this legislation that provides any guarantee that what you are putting forward is just providing a cheap labour subsidy to employers while displacing real people from real jobs. So this is not a fair deal for young jobseekers. In fact, it could make the situation much worse. It opens the door to the exploitation of young people who are already vulnerable and often in desperate circumstances. There are no restrictions on the times that interns will be required to work, leaving them open to working beyond ordinary working hours, with no penalty rates in recognition of evening or weekend work.
Interns under this program will not be classified as employees and, such being the case, will not be covered by occupational health and safety laws. What an appalling part of the legislation before us. This puts their safety at significant risk. It means there is no guarantee of a right to workers compensation should an intern injure themselves at work. It also seems that there are no provisions for checks to ensure that workplaces hiring interns are meeting health and safety requirements. We should not be allowing our young people to enter into the workforce without adequate protections for their health and safety.
This program also provides little protection from unfair dismissal. Increasingly, we are seeing people in our country, especially young people, feeling less and less secure at work. This is something that government should be addressing by providing more secure employment. There has been no detail from the government on what the work will actually entail. They cannot even tell us whether the participants will simply be observing the workplace or actually working.
There are also no assurances that employers will not be able to take advantage of the program. What is to stop employers cycling through young interns every 12 weeks to make the most of free labour and incentive payments from the government? We will see young jobseekers across the country stacking supermarket shelves or washing dishes in restaurants for below the minimum wage, gaining no skills, and with no extra incentive for the employer to keep them on long term or provide them with any training. Is this what this program will see? And, whilst the program opens up the potential for these kinds of exploitation, there is no provision for advice or support for young jobseekers going through the program. It does not outline how participants will be supported to get to and from their internships or the required training. Travel costs have the potential to be a huge burden on young jobseekers, particularly from our outermost metropolitan or rural areas and the areas that most need that support. Other additional costs such as appropriate workwear or safety gear are also a consideration for how they will be able to meet the costs associated with the program. I am looking forward to an explanation from the government on these issues.
What we want is a fair deal for young jobseekers in the legislation before us, but I do not believe that is what we have. It is putting existing jobs at risk, with the potential for existing workers to be replaced with cheaper labour. While the government claim that internships will be monitored to ensure that this churn will not happen, it is not clear how they are actually going to do this. There is no limit on how many participants can be used in any one company, so there is nothing stopping employers from using interns to complete their work rather than using permanent employees. This has the potential to undercut the workforce and force even more people into unemployment. We have no sanctions for employers who do this. What is to stop employers using this legislation and this program from using free labour instead of their existing workforce? Why would an employer pay their existing workforce weekend or night time penalty rates when they can use an intern under this program who is being paid by the government not only below the applicable penalty rates but below our country's minimum wage? The PaTH program could allow all of that to happen.
In addition to all of those issues there is no evidence that the program will even work. There is no provision for evaluation or review—no standards by which to measure the success of the program. The program also does not specify where or how participants will acquire the necessary skills to gain long-term employment. Evidence shows that formal training providing skills and knowledge is the key to better outcomes for jobseekers. In order for a program such as this to be successful, the training provided must be meaningful and linked to jobseekers' work experience. There are many such programs that have proven their worth in our nation's history, but it is an area that has not been adequately considered in this program.
As I have already said, in the UK a program similar to this was introduced in 2013. Fewer than half the estimated placements were made, and, I am sad to say, there was no identifiable increase in real job placements as a result of that. I really do not see how, as result of adopting a failed program here in Australia, there will be a different outcome. What we see is a program that has been put together quickly and without the thought or consultation that is required. Rather than quickly putting together a program with no long-term plan for its success, the government should be delaying the implementation of the program and be clear about the program's objectives, as well as providing proper evaluation and review processes. These elements are captured in the motion that Senator Cameron moved this evening.
The program we have before us looks like it has been designed to be a quick-fix solution to cover up the government's failure to fix unemployment in our country. It is being used as an excuse to cover up the failing of other government job programs, such as Work for the Dole. Work for the Dole programs required young people who were unemployed for more than six months to participate in an approved activity for up to 25 hours a week for six months of the year. These programs, which paid participants only $10.40 a week on top of their income support payments, have demonstrably failed at getting people into paid employment. The government's own figures show that 90 per cent of Work for the Dole participants are not in full time work three months after finishing the program. Irrespective of whether participants have been in or out of the program, their employment prospects are probably much the same. What we lack is real training, real engagement and real jobs for these people.
While this program shows some improvements on the Work for the Dole disaster, such as increasing the wage bonus to $200 a week, it is not ready to be implemented and it does not adequately protect the rights of young jobseekers in our country. This program is diverting funding from one ineffective program to another ineffective—and potentially exploitative—program. The government could fix some of these issues by increasing the rate of the bonus payment to meet the minimum wage, by decreasing the maximum hours worked, by ensuring that workers are covered by workers compensation, and by making the objectives clear. These are all things that Senator Cameron has called on the government to do.
This all really does beg the question: why has the government refused to do this? I guess it comes down to the government's appalling record on jobs. They are a government that time and time again have attempted to undercut the rights and conditions of workers. We saw this with their attacks on penalty rates, we saw it with their anti-union ABCC agenda, and we saw it in their unfair public service bargaining framework. Again we see it here tonight in our chamber. The government show complete disregard for young people and a complete misunderstanding of the complexities of youth unemployment. Indeed, it was this government who were considering cutting all benefits for jobseekers for six months while they were looking for work. What an appalling thing to do. Here in question time today we had a rush to come to the aid of farmers in need but not a rush to come to the aid of young jobseekers facing unemployment. It seems like the government have a framework for the worthy and unworthy poor in our country, and it is one that I very firmly reject. It is a disgrace for this government to say that young people have an obligation to look for work, whilst taking no obligation themselves to create jobs so they can find that work.
In conclusion, this Youth Jobs PaTH Program is an ill-considered, ineffective and potentially exploitative response to the growing issue of youth unemployment in our country. Young people in our country deserve better than this. Labor is demanding a better deal from this. Labor is calling for the PaTH program to be deferred until the issues we have raised and the issues the community have raised have been squarely addressed. Continuing with this program despite its obvious flaws is doing a disservice to those people who are in desperate need of a real solution to unemployment in our country. This program, introduced by Prime Minister Malcolm Turnbull, is not creating jobs. It does not give young jobseekers the skills and opportunities they need for long-term work. This program is simply subsidising employers to place jobseekers into cheap work with no protection.
I rise tonight to also contribute to the debate on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill that was introduced in 2016. This bill contains two measures that relate to the Youth Jobs PaTH Program, announced in the 2016-17 budget. These include the exemption of the fortnightly incentive payment of $200 from being counted as income so as to not affect the income support payments of the internship participants and the suspension of income support for up to 26 weeks for young people hired under a youth bonus wage subsidy so that they are not required to reapply if they find themselves unemployed through no fault of their own within the 26-week period. I will come back to that through-no-fault-of-their-own clause.
The Greens will not be supporting the passage of this legislation. We have a number of concerns with this legislation. Our key concerns with the PaTH program are related to: the limited remuneration the internship participants would receive; the possibility of existing employees being displaced and 'interns' being churned; the limited protections provided to the internship participants; and whether the internships are genuinely voluntary. We are also concerned that much of the PaTH program is not covered by the legislation. The bill is lacking a lot of detail. That is a key concern, as well. For example, the fortnightly incentive payment of $200 is not provided for in this bill. The Department of Employment, in answer to one of my questions on notice during the inquiry into the bill, said that this measure would not be included in legislation. This should ring alarm bells for everybody as it means that a future government, or this one, for this matter, at some point in time could decide to reduce the amount of incentive payment to be paid to internship participants.
Given we have concerns that internship participants may receive less than the minimum wage—in some cases as little as $4 an hour for their labour under the proposed parameters, the amount participants would be paid without the incentive payment or with a reduced incentive payment would not be acceptable. Because the incentive payment is not included in the legislation there is also no provision for it to be indexed over time. This means that the real value of the payment may not be maintained into the future and young jobseekers will be expected to live off even less. It would be even lower than the minimum wage.
The legislation also does not prescribe when a business hosting an 'intern' can ask the young jobseeker to work. This means the business may require an intern to work outside standard hours without having to pay them any prescribed penalty rates. This could lead to businesses overlooking existing employees for overtime or for work outside standard powers and, instead, require an intern to work. This will lead to employees conditions being undermined and interns being exploited. It could also lead to existing employees being displaced for interns, as the business will be in receipt of a youth bonus wage subsidy of up to $6,500 for intern participants that they offer an employment position to. For more disadvantaged jobseekers, this subsidy goes up to $10,000. The possibility of such displacement increases in workplaces where levels of employment fluctuate frequently and where there are a large number of casual workers, as these factors make it difficult to identify where displacement is occurring.
There is also concern that instead of a business filling a vacancy in the workplace following an internship placement, they may just continue to engage interns under the trial stage of the PaTH program, receiving $1,000 for each intern they engage. If this happens, businesses will be abusing the public purse in order to save a few pennies. It will also undermine the highest stage of the program, which is supposed to see young jobseekers employed by the businesses they intern with. We are not convinced that the checking processes will be adequate to identify this churn process. The bottom line is that youth unemployment should not be used as an excuse to provide cheap labour sources for business. This is a poor way to address the fact that there simply are not enough jobs for young people.
One way to ensure the participants are paid minimum wage would be to limit the number of hours internship participants could work in a fortnight. It is proposed at 50 hours. It would need to be kept at 30 hours to meet minimum wage standards. There should also be rules around when intern participants can work to ensure that they are not pressured into working non-standard hours.
The Australian Greens are deeply concerned about the lack of protections provided in the legislation and, otherwise, to intern participants because they are not classified as employees. The health and safety protections for the participants are, in our opinion, inadequate. Given the participants are not employees, it is possible they will not be covered by laws governing health and safety in the states and territories. There are concerns regarding insurance cover that will apply to the participants, including that it will not be to the same level of cover as is provided to employees under the schemes of the states and territories.
As ACOSS said in its submission to the inquiry into this bill:
The Department has its own scheme for participants in employment programs but we understand this generally providers lesser benefits than State Workers Compensation schemes, no periodic payments, and no entitlement to rehabilitation.
In this regard it is necessary that internship participants have access to adequate compensation cover in the event of an accident. The department's current cover for employment program participants is inadequate, in the view of the Australian Greens. We have seen the problems with Work for the Dole. As an aside, I am pleased the government has recognised that Work for the Dole has been an inadequate, unsuccessful program and cut it back quite a bit, but this program is not an adequate alternative.
There is also the question of whether the internships are genuinely voluntary. This is a really important point because it is a point that the government stresses. I have raised concerns about this previously, including at estimates last year. We are concerned that young jobseekers may be forced to include an internship placement in their plan. They would be required to do that by their jobactive service provider, meaning that the young jobseeker might face penalties if they did not comply with the requirements of their plan.
The government has legislation—one of its many pieces of legislation around jobseeker compliance—where people would possibly subject to further penalties if they did not agree to their job plan. If job service providers say something should be part of a job plan, what leg do young people have to stand on in the event that they disagree? There is nothing in the bill before us today to alleviate this concern. Nowhere does it state that placements are voluntary and there will be no penalties for failing to attend or withdrawing from a placement. This also rings alarm bells because it means a future government, or in fact this government at some later stage, could decide to make the trial stage of the PaTH program mandatory or dispense penalties to young jobseekers who fail to comply with the government's wishes.
In their submission to the inquiry into the bill, the Multicultural Youth Advocacy Network Australia and the Federation of Ethnic Communities Councils of Australia raised concerns regarding the authority some migrants and refugees confer upon service providers acting for the government, and the potential for those migrants and refugees to 'regard the presentation of what is actually a voluntary option as a requirement that must be followed'. It is imperative that it is appropriately communicated to all potential internship participants that the trial stage of the PaTH program is voluntary and they can choose whether or not they wish to participate.
A number of other measures have been left out of the legislation. These include any details regarding the Prepare stage of the PaTH program, a definition of the term 'internship', any details about penalties for the displacement of existing employees and/or churn of interns, and an evaluation strategy for the PaTH program. All the measures outlined so far should have been included in the bill to ensure that they are scrutinised properly and subject to legislation. We need to be able to scrutinise those measures that have been left out but were clearly outlined by government as part of this program. By excluding them from the legislation, the government is keeping the details of the PaTH program hidden from the parliament, in the sense that we cannot scrutinise them properly. Nor can we ask questions, and the public are not able to comment on that process officially. Given its potential to impact young people significantly, this detail should be in the legislation and the information should be publicly available.
I note that the majority committee report of the inquiry into the bill says that the Department of Employment is adjusting the design of the Prepare stage of the PaTH program based on the feedback it received to its discussion paper on that stage. It is a shame that feedback was not requested on the other two stages of the PaTH program. Based on the submissions to the inquiry into the bill, I imagine a number of concerns would have been brought to the department's attention. The PaTH program focuses on the employability of young people, which demonstrates that the PaTH program is another example where the government is ignoring the real problem, and that is the lack of available jobs for young people.
We know from Anglicare Australia's jobs availability snapshot, published just last year, that there were 6.33 people for every low-skilled job available in May last year. The situation is even worse in Tasmania and South Australia, where there were 9.39 and 10.62 people respectively for every low-skilled job. This alone disproves the government's rhetoric that if jobseekers just tried hard enough they would be able to get a job. Jobseekers are disproportionately affected by the lack of low-skilled, entry-level jobs, as they often have limited work experience. Those from regional areas, migrants and refugees have it tougher still. The government's response by way of this PaTH program is unlikely to lead to the creation of the new jobs that are so desperately needed in order to provide ongoing employment opportunities for young people. This program employs people for less than the minimum wage in areas where there simply are not enough jobs. What example does it set for young people when we push them out into these so-called internships for below the minimum wage?
The PaTH program is not a novel idea either. It has been based in part on two programs from overseas: the UK YES scheme and the Irish JobBridge program. Both of these schemes have had significant problems, and the Irish scheme has been discontinued. I understand there have been significant problems with the UK scheme and significant changes. This does not provide us with much hope for the success of the PaTH program, particularly given the unfavourable outcomes of the Irish JobBridge program, where participants were exploited and existing workers were displaced. I personally had an example given to me of a young woman who was displaced from a job in the UK under the UK scheme. The Greens have raised concerns that the PaTH program is destined to experience the same outcomes.
The government has cut funding to genuine apprenticeships and is now putting in place this poor substitute to proper training. It should instead be investing in wraparound, individualised supports and quality training programs. Reinvesting the money cut from apprenticeships in the VET system would be a step in the right direction. It should also abandon its enduring plans to throw young people off income support for four weeks plus the ordinary waiting period, which is five weeks. This place has shown time and again that it does not support this policy, and yet the government still will not abandon it.
When the government talks about a young person leaving a job 'through no fault of their own', this is another poorly defined example of 'through no fault of their own'. Young people, if they are being bullied and harassed in work, if they are being asked to do unreasonable activities, if they are being asked to work non-standard hours, it is highly likely that they will be worried and scared and might leave that job, and will that be defined as 'through no fault of their own'?
The unfortunate part is that, the longer the government waits to act in relation to youth unemployment and to genuinely develop the jobs that young people can go into it, the worse it is going to get. Youth unemployment will continue to grow until policy settings are corrected to enable an alternative outcome. If the government does not act soon, they will be locking this generation out of secure work for a long time to come. More and more young people, and also as they grow older, are continuing in temporary, insecure, part-time work rather than secure, longer term work. That is what we are locking this future generation into.
We will have many questions in the committee stage because, as I said, this legislation only implements a part of the PaTH program. It also does not guarantee the $200 into the future. There is no indexation there. We are not convinced by the government's responses to the question of what they are going to do about addressing issues like churn, like ensuring that existing employees are not put off so that younger people—being paid less than the minimum wage while doing 'training' and getting work experience—can have a job.
If I was working in one of those areas that are likely to take on these internships, I would be very worried about my future employment, because, if an employer can get a younger person, get $1,000 and get a worker much cheaper, that is probably going to be incentive enough, for some of these businesses that will only take these people on, for existing employees to lose their jobs and be replaced by these interns.
It is good that the government is looking at how they can address youth unemployment and get experience for young workers, but this is highly likely to result in young people, young workers, being exploited and does not address the issue of jobs into the future. It does not develop new jobs into the future. When you have 6.33 people applying for each job, it is quite depressing, and this does not fix that.
I will be taking this into the committee stage. I am sure there are a lot of other senators who have a lot of other questions about this legislation.
I rise to speak on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. I want to say at the outset that I believe this legislation to establish the Youth Jobs PaTH program is, as many other speakers before me have indicated, poorly constructed, and I fear that it will place young Australian jobseekers at risk of exploitation.
Doing all we can to provide young people with opportunities to find work will always be worthy of our time and consideration in this place. Youth unemployment is a huge problem. In my home state of Tasmania we have among the highest rates of youth unemployment in Australia. In some parts of Tasmania the unemployment rate among 15- to 24-year-olds is as high as 27 per cent. We have a youth unemployment crisis.
We are failing our young people. The Liberals' youth PaTH program will put young jobseekers at risk and is fundamentally flawed in its approach to addressing youth unemployment. The program does not create additional jobs for young Australians. It merely places our young people on temporary internships without proper wages or conditions. Labor believes that the pathway to good, well-paid and secure jobs for young jobseekers is best done through investing in early childhood education, university and TAFE and genuine experiences that come from traineeships and apprenticeships. We want programs that genuinely help our young people find work. But this legislation that is before us here tonight does not provide sufficient safeguards for young people, who are among the most vulnerable workers in today's labour market. It has many, many deficiencies.
There is, as has already been said in the debate here tonight, very little detail on just how the Prepare Trial Hire program, the PaTH program, will operate in practice. While I understand the need for flexibility, too much is left to regulation and administrative discretion. You would think that the government would have tried to get such important legislation right. You would think that the government would have tried to get this legislation right. But, while they talk about jobs, they do not have a very good record on creating jobs. We know that the Work for the Dole scheme has not had much success. On the government's own figures, nearly 90 per cent of participants in the Work for the Dole scheme are not in full-time work three months after completing the program. We must not see a situation where young unemployed Australians are given false hope and work for under award wages. This program does not create additional jobs; instead, it will subsidise employers to hire interns who will not have sufficient protections. We have heard about that in this debate tonight.
These shortcomings and the many concerns from a range of community groups were outlined in submissions to the Senate's Education and Employment Legislation Committee received in the short amount of time the committee was given to look at this legislation. In their dissenting report, Labor senators noted that the government had not provided adequate legislative support to assure members or the community that this program will operate well. Labor's dissenting report made five recommendations, including that the bill not be supported in its current form until the genuine concerns about the overall program have been completely addressed. As I have said, there are many concerns about this legislation and, if it was to be passed in its present form, it would see a flawed program come into effect. We want to do everything that we can to improve the job skills of young people, but this program falls well short. We must take note of these concerns and act on them. The government wants to rush this program through this place, and that was highlighted when the Senate committee refused to hold public hearings into this legislation.
One of the major concerns about this program is that the payments that would be received by participants would be well below the national minimum wage. Participants would be paid an extra $100 a week on top of income support. This would mean they would be performing work in companies making a profit, but they would be earning less than the national minimum wage. As the submission to the Senate committee from the Australian Council of Social Service noted:
Payment rates and hours of work for the internships mean that many people will work for less than (the equivalent of) the minimum wage:
In its submission, the Australian Council of Trade Unions said that youth unemployment was one of Australia's biggest challenges and that the Youth Jobs PaTH program would be ineffective in dealing with it. The ACTU went on to say:
There must also be significant concern however that PaTH may serve to undermine the minimum wage system. The current program settings, hours worked and additional payments per fortnight, mean that the interns in this program are paid below minimum wage, potentially creating pressure on existing employees' wages or conditions. The ACTU is concerned that the scheme may encourage employers to replace existing minimum wage workforces with government sponsored interns or to reduce their wages or conditions. Interns are not paid superannuation or subject to worker's compensation and so represent a significant saving to employers when compared to regular employees.
The ACTU was also very fearful about the exploitation of vulnerable young people by unscrupulous employers. It feared that many young people may receive little or poor training on the job and that, when they finish their poorly-paid internship, they would be no more employable than they were when they started. The ACTU was worried that employers may take on many interns just to get the $1,000 sign-up fee. The union body also detailed a similar scheme in the United Kingdom, and we have heard about this in the debate that has thus far been held tonight. The United Kingdom scheme, launched in 2013, was ended 18 months later with fewer than half the estimated placements being made and with no clear increase in real job placements, but here we are in Australia with the minister putting forward a program that is clearly lacking. A number of concerns have been expressed by community groups and the labour movement, and this government is moving forward with no response to the concerns that have been put forward.
Jobs Australia also raised concerns with the minimal rate of pay. It pointed out that all Australian workers are legally entitled to receive the minimum wage and that, if this does not happen, young people in the program would be at increased risk of being exploited. Jobs Australia recommended that the payment should be legislated fully and not in the undefined manner of the legislation before us today.
I want to turn now to the inadequate protections in the bill. There are concerns that young people who take part in the Youth Jobs PaTH program may not be adequately covered by state workers' compensation and other legislated workplace protections. As I understand this legislation before us, interns will be classified as volunteers, despite the fact that they will perform work tasks, and this throws their protections into doubt. It is vital that a program designed to put 120,000 young jobseekers into workplaces has adequate protections for them. The Australian Council of Social Service said:
There is no legislative assurance that the health and safety of participants in the internships will be adequately protected …
… … …
The bill before us and the trial stage of the PaTH program seek to introduce government subsidised internships. Yet they fail to give legal definition to the term 'intern'. Labor, along with a number of organisations, believes this is problematic. Uniting Care Australia noted in their submission that they are concerned about how these internships will be viewed and treated in employment terms. Interns Australia were worried that, because the term 'intern' is not defined in Australian employment law, there would be great confusion about the rights of participants in the Youth Jobs PaTH program. This gives us nothing but uncertainty in regard to the legal rights and legal consequences that may affect young people and workforces. It fails to prescribe the standards and workplace protections that are offered to ordinary Australian workers. As highlighted in the submission made by Interns Australia:
If interns are to be considered as legally different to employees, their rights must be clearly stated.
Failing to give clear definition to the terms under the scheme creates an environment of great vulnerability for young workers.
Labor will not stand by while young interns may be required to undertake the same work as other employees for little or no pay, where there is no further skill, training or education on offer. Already, we have seen many employers and industries adopt the trend of offering young people internships that do not have clearly defined employment relationships. As parents and as members of this place, we should be incredibly cautious about this trend, which is fast becoming part of a widespread culture in Australian workplaces. Many of these emerging internships are unpaid and target vulnerable young people with little or no experience in the paid workforce.
As I said previously, the bill in its current form is poorly constructed. In particular, it does nothing to address the 'churn and burn'—which we heard about in previous contributions tonight—of young workers by employees and businesses, which allows them to exploit one worker after the other to milk the program for their benefit. Instead, it provides both financial incentives through subsidies, and vulnerable labour to workplaces to exploit. These concerns were highlighted by Interns Australia, who noted that many employers under the program would be encouraged to hire an individual and receive a subsidy, only to terminate their agreement in order to hire someone else and receive the subsidy again.
On top of this, the government has still failed to explain how they will prevent employers from churning through interns every 12 weeks. The Liberals' Youth Jobs PaTH Program may cause systemic, long-term and cultural damage to the job market for other young jobseekers. To allow this to happen would be a betrayal of our young people. ACOSS have made clear their concerns, saying that the 'internship positions created under this program are likely to displace paid jobs for other young people'.
Mr Acting Deputy President, I know you are very familiar with the Liberal Party policies at the last federal election. During the election campaign the government talked about the jobs and growth that they would create. Regrettably, it was all talk. They have failed dismally. The problem is not just unemployment but also underemployment. As the Australian Unemployed Workers Union pointed out in their submission to the Senate inquiry, it is not a matter of making young people more employable; it is about having the jobs for them. It said:
Currently according to the most recent data collected by the Australian Bureau of Statistics and the Department of Employment, there are 19 job seekers competing for every job vacancy. When you consider low-skill jobs— the sort of jobs young unemployed Australians will most realistically be considered for—this rate is even higher. Clearly, it is this dearth of low-skill jobs in the Australian labour market that has been the leading cause for Australia's youth unemployment crisis.
It is clear we have a youth unemployment crisis. The Liberals' Youth Jobs PaTH Program is a path to nowhere. There are over 260,000 young people unemployed in Australia. These young jobseekers need real support and real solutions. The creation of opportunities for young people in the workplace, however, is never achieved through exploitation. I doubt that this program will see any more young people getting full-time work. In fact, if you look at the record of the Abbott-Turnbull government, you will see programs that they have implemented or raised as an option that have not worked. They do not work. This, again, is a program that will not see any more young people getting full-time work. I fear it will put young jobseekers, who are already vulnerable, in positions where they will be exploited.
In drawing my contribution to a close, I will outline the main concerns the Labor Party has with the bill before us. There is no firm definition of an intern. The participant is likely to have only a reasonable prospect of a job. A large number of participants could be used within companies at the one time, with little sanction for employers that might churn through PaTH participants after the engagement concludes. Large numbers of interns could completely negate the need for existing employees in certain sectors to work at certain times—for instance, on weekends, which would reduce access to penalty rates for these employees. PaTH participants are considered to be volunteers in some jurisdictions, and I have talked about that, as have many other senators in this debate. They are considered to be volunteers in some jurisdictions, affecting the way worker compensation systems would treat participants in the event of a workplace incident. In concluding, I fear that this bill will put young jobseekers who are already vulnerable in a position where they will be exploited, and our young people deserve better than this bill that is before us.
Our entrenched high rate of youth unemployment is a social travesty, especially when it is a product of generational welfare dependency or leads to long-term unemployment. We can never rest in our efforts to tackle this. This Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill is a positive step in helping alleviate this by putting in place formal steps, incentives and protections. We are therefore supportive of it in principle, particularly given that the government could implement this program without legislative reform. If the government went down that path, it would mean the fortnightly incentive payments the scheme provides to participants will be treated as additional income and taxed accordingly. It would also potentially impact their Centrelink payments. This would undermine the intention of helping the jobseeker afford the costs that come with applying for or starting a new job.
As it stands, the PaTH program aims to give underskilled young people the abilities and confidence they need to approach a potential employer and secure a job. This is a modest ambition perhaps but one which, for some of these young people, probably seems unattainable. It is something other people can do, not them. The program provides eligible young jobseekers with intensive job-hunting and interview preparation training, followed by a short internship placement. It provides $200 a fortnight to offset travel and other job related costs, such as appropriate work wear, and it provides incentives for employers to take a chance and hire someone with no experience and little to recommend them other than a willingness to succeed. We think this is a very good start.
If it is well implemented and well used, the youth jobs PaTH program will also benefit businesses by linking them to enthusiastic young people willing to learn and who can grow with the business. These are all positives in our book, but we do have a few concerns and will seek assurances on these from the minister during the committee stage of the bill. For instance, the 26-week suspension of a young jobseeker's income support may become problematic as this is also how long the wage subsidies to an employer will run. We know that most employers will engage with this program for the right reasons, but we have also seen too many instances in recent times where major youth employers, such as Grill'd, 7-Eleven and Pizza Hut, have underpaid staff and appear to view young people not as a valued resource but as a source of expendable cheap labour.
Whatever safeguards we put in place, there will undoubtedly be employers who will be lured by the subsidy on offer and will be intent on exploiting it. This makes the 26-week period for both the duration of the subsidy and the young employee's income support suspension problematic in instances where the employer takes on an intern as cheap labour and then dumps them soon after the wage subsidy ends. To avoid disadvantaging young people who have entered these positions with the best intentions, we would prefer to see the suspension period for income support extended beyond 26 weeks. Nine to 12 months would be appropriate if they remain employed with the same eligible employer. This small change would avoid vulnerable young people having to reapply for their income support and serve out a waiting period should they lose their job through no fault of their own after the 26-week suspension period ends.
Given these jobseekers are not classified as employees and, in many cases, may be ignorant of their rights, there is potential for the jobseeker to be exploited in other ways too—for example, by being asked to work excessive or non-standard hours or undertake potentially risky tasks without sufficient training. We would expect that each jobseeker's training will include instructions on their rights as well as their obligations in the workplace and anticipate that the minister will provide a guarantee that this will be the case. We will also be seeking assurances that providers will work with young people to determine what industries or roles appeal to them, even in the face of a 'dunno', and steer them towards suitable internships that will spark their interest and keep them engaged in their new-found job.
While the scheme will be voluntary, it is important that this does not become simply a placement program where jobseekers are just slotted into available positions without due consideration of their aspirations. While many people view employment as black and white, that a job is a job and that you should be thankful for anything you can get, the reality is people do not tend to stay in jobs when they are unhappy. We should not set these young people up for inadvertent failure by pushing them into training and a job in which they have no interest or desire to engage. To do this would be a waste of taxpayers' $752 million investment in the program. For this program to have the best chance of success, we must not only empower these young people with enhanced skills and confidence about their ability to win and keep a job but also importantly ignite their passion by helping steer them towards industries and jobs where they can see themselves in the long term. We want these jobseekers to feel inspired to keep building their skills and create previously unimagined career paths that ideally will keep them off benefits and help break the suffocating cycle of intergenerational welfare dependency that so often only serves to steal the aspirations and futures of our young people.
In closing, this bill has the potential to change the life path of young people for the better. That said, it is crucial that we do not take our eyes off the ball once the scheme is up and running. To that end, I indicate that I intend to move an amendment to have the program reviewed within two years to ensure there are no unforeseen and harmful circumstances.
It gives me great pleasure to rise tonight to speak on the government's Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. I think this is one of the hallmark aspects of our government's agenda in our commitment to reducing youth unemployment across this country. I think all submitters to the Senate inquiry are absolutely united in acknowledging the scourge that is youth unemployment, particularly for those young people located in regional Australia, where unemployment rates are much, much higher than they are in urban areas. And when you go out and speak to employers, when you speak to young people, when you speak to careers teachers in schools and across universities, one of the key reasons for young people finding it hard to get secure ongoing employment is the fact that they lack the requisite work experience in the particular area or industry in which they are seeking to set out a career path.
Indeed, that is what is key and at the heart of this particular policy initiative—ensuring that young people actually get the work experience they need in the area they are interested in and that employers are incentivised to take on that young person, who may not have the full skill set required to fulfil that task. Employers, equally, are supported so that the young person can get experience, because finding your way as a young Australian, or a young person anywhere, through the myriad study options and employment options can be a tangled path, a long and winding road. Many young people, as we have seen with our university data, think that a particular course is going to provide them with satisfaction and ongoing enjoyment. However, once they embark on that course they find that it is actually not for them and they go on to find another course that will fulfil their particular needs and interests.
So, too, it is for employment. Giving young people the opportunity to participate in industries and areas that they may not have come across in their particular region or school setting will I think lead to increased employability of all young Australians. So, I completely support the minister and really appreciate her bringing this initiative forward, because at least we are doing something.
You want to talk about apprenticeships—and Senator Cameron, I am happy to have that conversation anytime you like—but your government ripped millions out of apprenticeship programs and indeed in your own campaign documents actually had no budgeted forward estimates for what you had put back in. At least we are actually looking at creative and innovative ways that we can get young people right across the country those key skill sets they need to be employed and to contribute—and not just to contribute to the national economy and pay their taxes and go to work each day but to actually enjoy it. That is why getting out there and having a crack is important.
PaTH is about preparing young people, giving them the opportunity to trial different work options, and then hopefully that young person and the employer will have a meeting of minds and the young person will be offered an ongoing job, which this program supports employers to do—to offer a wage subsidy should that young person fulfil the employer's needs in an ongoing way. I find it quite disingenuous that the Greens are not supporting this initiative. They are out there trying to ramp up a $50-a-week increase to the Newstart allowance. This program offers a $100-a-week increase in the Newstart allowance plus valuable work experience that will assist that young person going forward.
When we were looking at preparing young Australians we were wanting to increase their employability skills training to help them understand the behaviours that are expected by employers in the workplace, which will provide tailored industry-specific training that will prepare our young people going into jobs. We are offering voluntary internships for up to 12 weeks to give our youth a chance to show what they can do in a real, live workplace. And then, as I mentioned, there is a new youth bonus wage subsidy to support the employment of young people. The government is committed to addressing youth unemployment by assisting vulnerable young Australians who are at risk of falling into the welfare trap at an early stage in their lives. You leave school, you are looking around for options, you are not quite sure where life will take you. This program is exactly designed to assist that young person who is not quite sure what the future offers them a pathway to ongoing, sustainable employment.
We recognise that some young people require additional assistance in getting those relevant work-ready skills that they need, and this initiative is backed by data and evidence. As I said, I chaired the Senate inquiry into this bill, and all 15 submitters are committed to addressing the scourge of youth unemployment and commented on our budget allocation of $850 million to the youth employment package. This package was developed by the department though a consultation process in which we went out to the community, to a range of stakeholders, and sought their comments on our program, and we incorporated that in the final package.
The Australian Chamber of Commerce and Industry submitted that it strongly supports the Youth Jobs Path initiative 'as an important avenue to secure jobs for young unemployed Australians'. And I think we all acknowledge that this program will give young people real-job work experience. It is not just some tick and flick. It is not just some tokenistic effort. This is about placing young people with real employers so that they can get that hands-on experience.
The Brotherhood of St Lawrence also supported the bill and made some key recommendations. They commented on how rapidly the modern employment environment is changing within Australia and across our economy. It is profoundly testing for a significant proportion of young people—around 30 per cent of young people. The youth unemployment rate sits at double the rate of overall unemployment. As I said, all submitters, including ACOSS, are committed to addressing the issue. The government is to be commended for putting something on the table for consideration.
I want to address a couple of the criticisms that those opposite have raised. One of them was that there is not a decent wage and that is primarily because interns are actually interns. They are not employed as Australian workers. I do not hear anybody opposite critiquing any of the universities in this country that have embedded internship programs in their coursework requirements. University see internships as a valuable opportunity for young people to gain skills and experience in their chosen industry. Why won't you accept that this is an opportunity for young people to trial something that may be of interest to them? I will clarify the payment issue: the $200 fortnightly incentive paid to PaTH interns is on top of their income support. The incentive is paid by the government and is not a wage. If a host organisation paid a PaTH intern, the internship would cease immediately because—you know what?—it would become a job; it would not be an internship. That is the difference.
Senator Brown mentioned the churn culture and the submission from the Department of Employment went exactly to the heart of that by setting out measures to protect against the churn in the PaTH program. They include:
… program guidelines, in combination with the jobactive Deed 2015-2020 and the Transition to Work Deed 2016-2020, to make clear to employment service providers the parameters of the program. Department of Employment monitoring activities will help ensure that host organisations appropriately use the program. … The department's program assurance strategy will be applied to PaTH internships.
In addition the department currently provides program assurance of employment services through a range of prevention, deterrence and detection and correction methods, and these will similarly be applied to the PaTH program.
I think it is quite disappointing when we look at what the alternatives may be. There has been a lot of brouhaha recently around the value or otherwise of internships. I would remind Mr Shorten that he does not mind the odd intern; the Greens, either internationally or here, at home do not mind the odd intern; Lisa Chesters and Brendan O'Connor do not mind the odd intern. In fact many parliamentarians—
There you go. Thank you for that interjection—I will take that interjection from the good minister. Not only do interns gain valuable experience, but they can also provide valuable support to employers or, in this case, the parliamentarians they serve. We have heard a lot about class warfare particularly from Senator Cameron earlier. It is a tired old argument by Labor. I don't know why it is okay for those who are in Young Labor and who are moving up in the world to get priority internships in ministers' or shadow ministers' offices in the Labor Party or are spokespeople with the Greens, but it is not okay for country kids to head down to their local manufacturer to get some decent work experience. It is not okay for other young Australians who are experiencing chronic unemployment in their regions to get the work experience that they need. It is okay for the political class if you are from the Left, but it is not okay for others across the economy.
I would call on both the Greens and Labor to support this innovative initiative by the government. I hope we are all troubled by the tragedy of youth unemployment in this country. We need our existing programs and we need to grow and develop our economy so that jobs are available locally. We also need to recognise that some young people in our communities need that additional support. This program goes to the heart of addressing that—what those young people need to go out there and secure job in what can be a very daunting scenario for them as they leave school. I commend the bill to the Senate.
What you do when you cannot keep your promise to tackle youth unemployment? Well, this government opens young people up to exploitation to their mates in big business instead. This government has comprehensively failed the youth of Australia. At the moment, there are almost 300,000 young Australians between the ages of 15 and 24 out of work. That is a shocking statistic. Youth unemployment has climbed to 13.3 per cent—well over double the general unemployment rate. Many of these young people have been unemployed for more than a year and are understandably disillusioned by the act of looking for jobs that simply are not there. On top of this, 20 per cent of young people are underemployed—they want to work more hours but there are simply no opportunities to obtain extra hours.
This is just disgraceful and is indicative of a pattern of neglect by this government towards young Australians. They have a lot to be disappointed about from this government. Whether it is the Centrelink robo-debt disaster, $100,000 degrees, the unaffordability of housing or the bill we are debating today, the government has really let them down. The government knew that it had no policies to help young people. That is why they threw this rushed policy into the last budget. It was a hastily cobbled together program, announced at the time of the 2016 federal budget to make it sound like they are doing something for young people, but in reality it only helps their mates. It is a thought bubble that may look good at first glance, but has been terribly implemented.
The bill before us today is designed in part to support the introduction of the Turnbull government's Prepare and Trial, Hire program or 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 between 15 to 25 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 PaTH program. Businesses will be paid $1,000 to take on an intern and then receive a wage subsidy of between $6,500 and $10,000 if they hire them at the conclusion of their internship.
The government is expecting the program will take effect from April 2017. I and my Labor colleagues and many others in our community have serious concerns about whether this program represents a fair deal for Australia's young unemployed. The PaTH program is being introduced at the same time that other government job programs such as the Work for the Dole are hopelessly failing our young unemployed. In the case of Work for the Dole, even the government's own figures show nearly 90 per cent of its participants are not in full time work three months after exiting the program. The sad truth is Australia's youth are counting the cost of the Turnbull government's failure to develop a real jobs plan for the nation.
Under the PaTH program, the opposition is concerned that young people will be forced to pay an even heavier price through the program's apparent flaws. I will just take a moment to outline what the bill before us contains. The bill enacts the changes needed to provide support to participants in the program. It does this via two measures: first, a provision will be inserted in the Social Security Act and Veterans' Entitlements Act so the $200 payment interns receive is not counted as income for social security or veteran's entitlements purposes. Secondly, it amends the Social Security Act to allow young people to suspend their payments if they are employed. They can then restart them without re-applying if they lose their job through no fault of their own within 26 weeks.
Taken in isolation, the government will claim the measures in the bill are non-controversial. But the reality is they form part of a broader new program that the opposition is concerned about, which 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 would be placed in the private sector and would be paid below award wages. The opposition is concerned that PaTH could be used to displace jobs with cheaper labour.
There have been very real concerns raised that participants may be working for below minimum award wages. The national minimum wage is $17.70 an hour. But an intern who works 25 hours a week and receives only their Newstart payments plus the $200 payment will earn just $14.50 an hour. This program could very well see young Australians stacking supermarket shelves for less than the minimum wage. Australians have rightly been concerned about cases of worker exploitation when events like the 7-Eleven wage scandal come to light. Why would our community stand for a government program that undercuts the minimum wage?
This is something that is entirely within the government's power to fix. The bonus payments could be set at a rate which is equivalent to the minimum wage, or the maximum hours could be reduced to ensure this is met. But this is a government that is constantly trying to undercut rights and conditions for workers through its attacks on penalty rates, its anti-union ABCC agenda and its unfair public service bargaining framework so we will not hold our breath for them to put this right.
At a time where wages growth is at its lowest rate on record, we are concerned that PaTH could be used to undermine wages across industries for all Australian workers. Despite repeated questioning by the opposition, 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, not employees. In some jurisdictions this could affect the way workers compensation systems would treat participants in the event of an accident. This is simply not good enough. All workers should have the right to workers compensation should they be injured at work.
The program does not specify real areas job seekers will acquire skills. In Senate estimates last May the clearest outline of training and skill outcomes Minister Cash offered was, 'We will give you the skills that employers tell us you just do not have.' And while the program was announced in May 2016 and is scheduled to start in April 2017, the government can't even tell you 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: whether they would be working or just observing. '
Large numbers of participants could be used within companies at any given time, with little sanction applied to employers that might churn through PaTH participants after the engagement concludes. Imagine what would happen if a major supermarket or fast-food chain decided it would employ tens of thousands of Interns. Large numbers of interns could also completely remove the need for existing employees in certain sectors, for example, hospitality to work at certain times. Imagine large numbers of PaTH participants being used over weekends, removing the need for regular employees at those times, and also removing the need to pay penalty rates for those employees. This program could be used in a systematic way to attack workers' ability to access penalty rates.
There are so many holes in the program that it cannot be taken seriously unless the government can demonstrate how they will fix them. That is why Labor is calling for the legislation and the PaTH program to be deferred until those concerns are addressed. To wave PaTH and this legislation through, without demanding a better deal for young Australians, would not be fair to those young jobseekers.
The Senate Education and Employment Legislation Committee has conducted an inquiry into the bill at Labor's referral.
There were concerns with this bill by many bodies that made submissions to the inquiry. I noticed Senator McKenzie could not quote anyone from the inquiry but I can. A number of the submissions made to the committee highlighted serious deficiencies in the PaTH framework. I would like to spend a while outlining some of the evidence given to the inquiry to highlight the flaws in the legislation. Interns Australia, the peak support and advocacy body for interns and students undertaking work placements in Australia said: 'Interns Australia does not support the... bill.' That is a pretty blunt assessment from the peak body for interns in Australia. Perhaps the government should have consulted them before the policy was announced?
Another submitter, Jobs Australia, drew the committee's attention to the way exploitation and displacement could take place by asking vulnerable young Australians to work during unusual hours, or during times, when penalty rates would apply:
… to ensure that times of "work" or unpaid work experience are restricted so that interns are not required to "work" during times which would attract penalty payments under relevant awards—(the risks of exploitation and displacement of existing workers are extremely high in these circumstances and particularly in industries with highly variable levels of employment and of casual work—where it could be difficult to discern whether displacement is occurring).
The ACTU put up the best possible scenario for the 120,000 young jobseekers who could take up the program:
When these concerns have been raised in the past, much has been made of analysis which will be done to detect employers who are abusing the program and prevent them from hosting further intern placements. It seems that the absolute best outcome such a system could achieve would be that thousands of vulnerable young people are only exploited, for profit, once.
I do not think that is good enough. I do not think it is good enough to wait for young workers to be exploited before acting; we should act before the program begins to ensure exploitation does not happen at all.
Anglicare Australia also gave a stunning rebuke of this program within the context of the current jobs market that continues to deteriorate for young Australians under this government:
In the context of a serious shortage of entry-level vacancies, we do not accept that internships alone will help many people overcome structural exclusion from the workforce. We can see no evidence that this program will do anything to ease the existing pressures created by the decreasing number of entry-level jobs. In this respect we also hold serious concerns that introducing up to 30,000 government-subsidised interns to this market will make an already grim situation worse.
ACOSS made a point, seemingly clear to everyone except the government, that legislation is needed to protect young jobseekers:
There is no clear legislative protection against exploitation of interns to the extent that they are not classified as employees. Either participants should be classified as employees (with a wage subsidy) or the program should not allow work beyond standard working hours (averaged over a fixed period) or a times that would attract penalty rates of pay if the person was employed (such as weekends).
As I said earlier, I am concerned about the protection of the workers' rights for these young interns.
The Children and Young People with Disability submission shares my concerns about the vague definitions which leave it unclear what protections participants would receive. They said:
CYDA has some concerns regarding the internships component of the Youth Jobs PaTH initiative. 'Internships' have not been clearly defined within the Bill, aside from being referred to as "unpaid work experience" within the Explanatory Memorandum. It is therefore unclear how appropriate protections will be afforded for young people with regard to working conditions.
Further to this:
Jobs Australia noted that legislation is needed to ensure participants receive all the relevant protections that employees get, whether they are officially recognised as employees or not:
Other aspects of Youth Jobs PaTH internships, in addition to those set out in the Bill, should therefore be the subject of legislation which can be considered and scrutinised by the parliament, rather than being implemented by administrative means which might seek to exempt interns and the employers providing placements from the provisions of the Fair Work Act and other relevant legislated workplace protections and requirements.
I believe, rather sadly, that young people may be pressured into taking these 'internships' without understanding what their real rights are.
ACOSS told the committee that clear requirements are needed for explaining the rights and expectations of a participant before they begin a placement, saying:
Employment services providers (or better still an independent mentor) should be required to explain to participants their rights in the workplace before an internship commences (both verbally and in writing), and offer advice and assistance in the event that those rights are at risk.
Finally, Jobs Australia noted that the voluntary nature of the placement phase of the program must be made extremely clear:
Incorporate a clear stipulation that participation in internships is voluntary and that there will be no income support penalties as a consequence of failure to attend or participate or for ceasing a placement (to ensure there are no subsequent adjustments to administrative arrangements which would result in participation being mandatory and relevant job seekers being subject to penalties).
Unfortunately, the government has not made any real attempt to address these problems during the debate in the House or the Senate inquiry process. Many of the issues raised in the Senate inquiry process should be addressed by legislation or regulations tabled in parliament, rather than relying on assurances from government that they will do the right thing. This program the government want to implement is vague and has not been thought through properly. The only details they have released are in the flimsy glossy brochure from budget night. That is no basis for a program of this scale or importance.
In summing up, we can and must do more to help young Australians. However the government's PaTH program is a desperate and cynical attempt to divert attention away from their poor record in generating jobs for young Australians or preparing those young Australians for work. Their Work for the Dole program is evidence of that failure. From what we can see at this point, PaTH is poorly planned, full of holes and ripe for exploitation. As we can see from the now defunct green army debacle, this government has absolutely no idea about creating policies that help young people enter the workforce. It could leave thousands of young Australians working for below the minimum wage before being thrown onto the scrap heap to be replaced by another cohort of below-minimum-wage labour. It could see injured young workers unjustly left with no recourse to the compensation entitlements that other workers enjoy. The Turnbull government has failed to address the concerns the community has about this hastily put together PaTH program that, as I said, has more holes than the Midland Highway. I call upon the Senate not to pass the legislation at this time.
As a servant of the people of Queensland and Australia I want to lay bare this window-dressing. The more we tax and regulate things the less we actually get of them. Someone has to pay a tax for this subsidy to work. I can speak on the benefits of an internship to my own son when he was 21 years of age. He took the initiative to get an internship in the United States in a field in which he had done some study but had not actually worked. Because of that six months of study and the success that he gave that company a few months later they offered him a full-time job at a very good salary for someone with his qualifications. So, I get the concept of an internship. But what we need to understand here is that this is simply a subsidy to make work, and not a fulfilling job. My son Shane had a very fulfilling job and he went to work and did real work every day. Taxation, though, is killing employment in this country. So let's get away from the window-dressing and get to the core issues that we face.
Our constituents in Queensland and across Australia repeat this same comment: taxation is killing employment. Why do we tax payroll? We all know in this country that when we tax something we decrease its use. So why are we taxing payroll? It is bizarre. I had a meeting with Dave Oliver, the head of the ACTU, who seems like a nice bloke. We went round the room talking and I asked him what his main themes were and he talked about compliance and raising wages. I asked him in all sincerity if he was aware that when a person gets an increase in take-home pay it requires an even greater increase in gross pay and that, combined with regulations, is driving employment down. That is not to say that people do not deserve higher incomes, but they must be earned in a way that increases productivity. But the taxation system is killing productivity in this country. Every time Dave Oliver is successful in getting a gross pay raise it kills a job if there is not the matching productivity, and the taxation system makes it very difficult for people to be productive.
We have fine workers in this country. I know from my own experience being an underground coal miner and an open cut coal miner managing people in this country and overseas that our workers are among the best in the world. They are very committed, have a lot of initiative and take great pride in their work. But when taxation is killing their employer it is difficult to sustain work.
I am wondering what will be taxed next. PAYE tax is killing jobs and payroll tax is killing jobs. Will we tax the air that we breathe? Oh, I'm sorry, that's right: we are already taxing the air we breathe. The carbon dioxide in the air is being taxed, thanks to the Liberal/National coalition putting in place an emissions trading scheme by name. To those who deny its existence, if it quacks like a duck, waddles like a duck and looks like a duck, it is a duck. There is an emissions trading scheme in place in this country now. It started on 1 July last year.
At this time in Australia we are facing increasing competition from the United States. President Trump is going to cut tax. He is not just going to fiddle with it; he is going to cut company and personal taxes dramatically. Then we have the other side of the issue, and that is the waste of taxpayer funds. Here we are going to have a subsidy that is going to require more taxpayer funds, and that will increase taxes or cut back other services. How many jobs will be destroyed in this country to pay for this window-dressing?
Moving from the complexity of our taxation system, let's look at the complexity of our regulatory system. Again, we all know that the more we regulate things the less you get of them. We have red tape—the bureaucracy. Everyone is familiar with that. It is choking our industry and choking our employment. Then we have green tape—pseudo-environmentalism gone mad. And, yes, we see people agreeing and almost everyone understands what green tape does: pseudo-environmentalism and fancy campaigns dressed up—they are just political games.
Then, we have another colour emerging in this country. It actually has been underway for 20 years or more: blue tape. Blue tape is the bureaucracy that has been brought in by the UN. We have the UN pushing biodiversity, in which fungus, plants, critters, bunks and animals are treated as superior to humans and given priority to humans. And in the name of biodiversity farmers and coastal residents have their land and property rights stolen. That is a cost to industry. Just ask the farmers of Queensland who have had their farmers' property rights stolen. Then we have another form of blue tape from the UN: sustainability. The funny thing is that according to the UN their sustainability programs are sustainable only with subsidies, meaning they are not sustainable. That is how they get in place regulations to take control of people's lives: where we can live, what we can do, what we cannot do, how we can travel, how we can eat—almost everything is in their sights. Then we have the UN's climate change claims, never based on empirical evidence. The UN's latest report contains, just as the previous reports contained, one core chapter claiming warming and attributing it to human production of carbon dioxide. Nowhere in that chapter is there any empirical evidence that human sourced carbon dioxide affects the climate and needs to be cut. Nowhere in its key chapter is there any evidence—no evidence anywhere in their reports—and yet all the groups in this parliament have swallowed that myth. The RET is based on that myth—killing industry and killing jobs. More window-dressing so as to appear to be doing the right thing by our planet when it is actually harming the environment, harming the creation of jobs and harming people's lifestyles. Again, tens of billions of dollars have been wasted on window-dressing and people in this Senate know when I am looking at them that there is no evidence to support it. This window-dressing then creates pretend jobs.
Let's get back to basics. Let's look at our immigration quantity and cut it back so that we can increase employment through real jobs. We have people who are under-working—they are working for one hour a week and they are treated as employed. Then we have the issue of immigration, in terms of the quality—look at the 457 visas that are stealing people's jobs. Farmers across rural south-west Queensland, where I listened to people just a few weeks ago, see unemployed people in their regional towns and yet cannot get labourers—they cannot get workers. Worse, due to the taxation system and due to the regulations, mums and dads have to be the entire workforce for their farms. There is a massive investment in capital at risk in a variable market with variable weather and they have to do all the work. They cannot afford to hire anyone because of the regulations. People would love to hire people, but it just becomes too onerous with the regulations and too expensive with the taxation. And we are going to have a lot more to say about this in Pauline Hanson's One Nation as we march towards a Queensland election. Again, farmers are being hurt by window-dressing. All taxpayers are being hurt by window-dressing.
In this specific bill, where is the value for money? We have an apprenticeship scheme, which the leader of our party, Senator Hanson, will be discussing in more detail. But I ask now: where is the cost-benefit analysis for this bill? Why does the government expect us to merely pass this bill when it has given us no cost-benefit analysis, no financial and economic analysis, no financial and economic justification and not even some qualitative justification? We cannot even understand the thinking that goes on. How can they possibly convince people and sell people on this when there is no salesmanship going on? Where is the accountability that comes from having a cost-benefit analysis that not only justifies expenditure but then enables something to be measured against it? The government has rarely given any cost-benefit analysis, and yet that is its fundamental responsibility. The people in the Labor Party and the Labor Party and Greens coalition were even worse at this—again, window-dressing and no cost-benefit analysis. We need to stand up for taxpayers in this country, and that is what we are doing. We are calling out the government and the opposition parties for putting our country, after seven decades, in a deplorable position—more window-dressing. That is what we see: decades of window-dressing.
And then we come across the ultimate window-dressing. I touched on it a minute ago. We are wrecking energy in this country. We are wrecking the energy industry and that is wrecking all industries—service industries, manufacturing industries, rural industries and mining industries. On an app we can get the cost of electricity on any one day at any one time. Today we have Queensland, the state with the best quality coal reserves in the world, abundant quantities of coal, and it has an electricity price of $13,000 per megawatt hour. That is mimicking South Australia. And while we are doing that we sending electricity south to New South Wales because the pseudo-markets that have been created by both sides of politics in this country are destroying and enabling people to game the system. South Australia is being destroyed. Manufacturing is being decimated in that state. Victoria is about to shut down 20 per cent of its electricity supply. What will happen then to South Australia? What will happen then to Victoria when they come looking for power from New South Wales and Queensland? Our prices will go up in Queensland. It is a disaster and it is making employment highly expensive and unreliable and making industry unreliable. Why? Because we have subsidies piled on regulations piled on pseudo-markets piled on vested interests piled on renewable energy targets piled on renewable subsidies piled on political interference—destruction, destruction, destruction.
And this is a reversal of history, the secret to lifting billions. It has never happened before in the history of humanity. Billions of people have been lifted out of poverty by cheap energy. It started 167 years ago with the advent of the Industrial Revolution, and the key to that was hydrocarbon fuels: coal and later oil. They provided high-quality and high-energy-density fuels that dropped the price of energy. That dramatically increased productivity, and that dramatically increased prosperity. And from that came the protection of the environment. The whales, instead of being chased to provide lighting fuel, are now secure because we have coal to provide lights. We do not have to burn the timber in the forests, because we now use coal. We now have 30 per cent more forestry area in every major developed continent, thanks to coal and oil.
We need to go back to Sir Joh's days, when energy was amongst the cheapest in the world, when business flourished and employment flourished. Instead, we get the coalition government giving us window-dressing. There is no cost-benefit analysis, no accountability and no value for money—yet another churn with the money going from the right pocket of the taxpayer into the left pocket of the taxpayer, and we have increasing underemployment. It all comes back to tax. Instead of window-dressing, let's get down to the root cause of what is keeping people out of work long-term. Let's fix the tax system. We do not support this bill.