Sharman Stone (Murray, Liberal Party, Minister for Workforce Participation) Share this | Hansard source

In speaking to Appropriation Bill (No. 1) 2007-2008 and the related bills, I would like to begin with a quote from Treasurer Costello’s 1996 budget night speech which described the challenges that Labor left us. The Treasurer said:

Our predecessors had Australia on a path of deficit and debt to the next century.

Our Government could not stand back and ignore the problem. Although we did not create it, we will take the responsibility to fix it.

The problem that was left by Labor was successive huge government deficits, an unemployment rate at eight per cent, almost three-quarters of a million Australians out of work, over 800,000 working aged Australians dependent on debilitating welfare and a 10.5 per cent interest rate in March 1996. That was the interest rate we inherited, but not all that long before it had been running nearer 20 per cent, and many farmers will never forget what it felt like to lose their farm. Labor left $96 billion worth of debt to us. We had to deal with these problems so that we could set up a future for our great nation that was not a narrow, constrained future, which was the one left by Labor. The uncertainty created by Labor weakened families and businesses but Labor continued to mismanage the economy, digging themselves further and further into debt and fudging figures about real levels of unemployment by transferring people into non-vocational Mickey Mouse courses that led nowhere except to a further erosion of self-esteem and despair.

This budget announced this year by our Treasurer after his superb development and management of the economy demonstrates the benefits to the nation that sound and experienced financial management brings. This budget showed what is possible when, despite international and domestic shocks, you are able to manage a surplus. Only then is a government in the position to make investments in key services that address some of the most critical challenges of our times—for example, the ageing population, and welfare dependency.

As I have said, when elected, the coalition government took up the responsibility and challenge to fix Labor’s legacy. Let us look at what the Howard government has achieved since 1996-97. Economic growth has averaged 3.5 per cent per year over the last 11 years. Full-time employment is up by 1,177,500, or 18.8 per cent. Part-time employment is up by 863,400, or 41.8 per cent. Female employment is up by 1,040,900, or 28.9 per cent. The female participation rate has increased by 3.8 percentage points to 57.5 per cent, a near record high for participation for women. Since March 1996, the working age employment rate has increased by 4.7 percentage points to 72.5 per cent in March 2007. However, despite the overall workforce participation rates being at the highest levels ever, despite the creation of 1.9 million new jobs since 1996, despite over 10 million Australians now being in work, despite unemployment at over 30-year lows and despite our productivity being impressively up, the Australian government still aims to further increase the supply of labour. This is necessary because our ageing population and declining fertility are projected to have negative impacts on workforce participation and productivity in the future. As a nation we must deal with this. Like all developed nations we are now faced with the consequences of this ageing population. The proportion of the population over 65 is projected to nearly double from 13 per cent in 2004 to 24.5 per cent by 2045. Almost one-quarter of the Australian population will be over 65—up from only 2½ million over 65s in 2006, to some seven million senior citizens in 2045.

Despite the workforce shortages and the predicted shortfall of 195,000 workers within five years, we have around two million people of working age receiving welfare payments in Australia, a legacy of the previous welfare policies of Labor and times before. For example, supporting parents could remain on payments until their youngest turned 16, by which time they were so long out of the workforce their own skills had become rusty and their self-esteem shattered. People with a disability remained on the DSP, or disability support pension, until an age pension rolled around. Even if the individual had a part-time work capacity or could have been rehabilitated, they were left on the disability support pension. Now we say that if a person has at least 15 hours work capacity a week we will help that person with a disability into a job to give them a new life and the freedoms that come with their own income.

The balance between taxpayers and working age welfare claimants has shifted from the 1960s when three per cent of the working-age population was on welfare. Today it is around 17 per cent. In the 1960s there were 22 taxpayers supporting one person on welfare. Today this ratio had collapsed to five taxpayers for every one on working age welfare. Quite clearly, our government had to act, and we did. We acted precisely and carefully, protecting those who needed welfare as an income, like every caring nation should, but we have introduced Welfare to Work reforms which have created a better chance, a real chance, for our two million or so working-age people on welfare, who have a capacity to work.

As the Minister for Workforce Participation, I listened to the Leader of the Opposition Kevin Rudd’s budget reply very carefully. Naturally, I and other listening Australians wanted to hear Labor’s policy or plans to ameliorate the critical problem of our changing demographics—the ageing population. I wanted to hear how Labor intended to further increase workforce participation, as we must, and especially how Labor intended to create more jobs and so reduce the reliance of working-age Australians on welfare. Unfortunately, I, like so many others, came away extremely disappointed. Not once in his headline speech, when he knew Australia was listening, did Mr Rudd, the Leader of the Opposition, mention any plan to create employment or a strategy to help unemployed Australians to take advantage of the best labour market conditions in a generation—conditions which of course the John Howard government has created and maintained.

We are currently experiencing a once in a generation chance to break the cycle of intergenerational unemployment which blights so many Indigenous and other Australian families. However, the Labor Party failed to even acknowledge the problem or endorse our highly successful Welfare to Work strategy or come up with any alternative. Fortunately, the John Howard government is not about to rest on its laurels, having created over two million new jobs and dropping unemployment rates to a 33-year low. The Howard government is determined to help disadvantaged Australians—single parents and unemployed youth, mature age, Indigenous people and people with a disability—continue to take advantage of these times when workforce shortages are creating real opportunities for employment, opportunities like never before.

On budget night this year I announced an additional $76 million in funding for a number of measures in my portfolio to further help unemployed Australians find a job. This is in addition to the $3.6 billion announced in previous budgets to resource the new Welfare to Work reforms. These additional measures just announced include another 987 places in the Disability Employment Network and 1,480 vocational rehabilitation service places at a cost of $39.8 million over four years. These services will help the disabled to upskill and improve their job prospects. These newly employed people will then be mentored in the workplace. In the last 12 months, nearly 20,000 people with a disability have been placed into work through the Job Network and the Disability Employment Network. This has been an extraordinary achievement and I congratulate all those people with a disability who have wanted so much to stay in the workforce or move into a job or keep their job.

The second measure involves an extra $11.4 million over four years so that community work coordinators will be eligible for a $500 fee for each person on the Work for the Dole program who commences and completes an approved accredited training course either during or after their placement. Work for the Dole participants receive an $800 training credit and those on Drought Force—a specially created program to help unemployed in our drought ravaged areas—receive $1,600 in training credits. This additional incentive will ensure that even more Work for the Dole participants receive accredited training as well as on-the-job experience as they look for work.

I also announced an extension of the highly successful worker relocation program. There will be an additional over half a million dollars to help people move from regions of high unemployment to a job in an area where there is a workforce shortage. The pilot for this program saw job seekers in the Coffs Harbour, Shoalhaven and Nowra districts of New South Wales relocated to the construction industry and mine services sector in Perth. The program has been hugely successful. The demand for it has been overwhelming. The pilot provides up to $5,000 towards relocation costs per job seeker, who also continue to have access to the job seeker account for other costs associated with starting a job. There are also an additional 2,000 personal support program places provided at a cost of $15.8 million over four years. The personal support program helps some of Australia’s most disadvantaged who, for example, may be homeless, illiterate, drug or alcohol dependent or abused. We help these individuals to stabilise their lives and deal with their dilemmas so that they can get a job and remain independent and self-fulfilled. The Labor Party seems to have forgotten these people—perhaps it never cared.

We have also committed an extra $1.3 million over four years to expand our prisoner support program to help offenders with a disability who have access to a prison pre-release program and a program that allows them to work. We will help them get work on a part-time or full-time basis, and our Disability Employment Network and vocational rehabilitation service programs will help provide this special assistance. We know that the recidivism rates for ex-offenders is very high when there is no work to go to and no prospect of work once the offender is released. We intend to make a difference because we represent a caring nation. We do have the statistical evidence that shows our Welfare to Work reforms are making a difference not just for people like the ex-offenders but right across the board for those who have been unemployed, either long term or short term.

Between December 2004 and December 2006 there has been, on average, a 7.5 per cent decrease in the number of working-age people on income support, parenting payment, youth allowance and Newstart allowance. Since the introduction of the revolutionary Welfare to Work reforms, the number of welfare recipients has fallen from 2.48 million to 2.38 million, a reduction of 3.9 per cent. But this is not just about the budget bottom line or the fact that the pre-existing welfare trends were not sustainable in the near term or the long term, as the numbers reaching old age needing support increase exponentially. Most importantly, a long time on welfare is not a benign experience. Frederic S Mishken, a US Federal Reserve governor, accurately described in a recent speech the situation created by unemployment. He said:

... high unemployment—is associated with human misery, including lower living standards and increases in poverty as well as social pathologies such as loss of self-esteem, a higher incidence of divorce, increased rates of violent crime, and even suicide.

Yes, we intend to make a difference, and our Welfare to Work reforms in fact have.

Unfortunately, we have not had the support or the endorsement of the opposition. There was deafening silence from the Leader of the Opposition in his budget reply speech and that has to be very worrying for our unemployed in Australia, especially those who are of working age and are welfare dependent. Does the Labor Party not understand the need to give all Australians a fair go? Or, again, I ask: doesn’t it care? Why does Labor ignore some of the most disadvantaged in Australian society—the long-term and the short-term unemployed, Indigenous people, mature age people, disabled youth and single mums on pensions? And there has not just been total silence from the Labor Party’s hierarchy, or its leaders or deputy leaders.

This is what opposition members said about the Howard government Welfare to Work reforms in the debate of 30 November 2005 when they were first introduced. They were ‘put together by very mean people’ said Craig Emerson, member for Rankin. They were ‘all about punishment and not about reform’ and were ‘notoriously cruel, severe and uncompromising’ said Tanya Plibersek, member for Sydney. This ‘clearly shows that the Howard government is treating the most disadvantaged Australians with all the compassion of the Third Reich’ said Steve Gibbons, member for Bendigo—quite extraordinary. And then we had the crowning statement, from Julie Owens, member for Parramatta:

Will these welfare changes reduce the number of Australians already on welfare? The short answer is: absolutely not.

Well, I have just given the statistics to show that for the first time in the history of Australia, welfare-dependency trends for working age people have gone down. We have thousands of Australians, both young and mature age Australians, who can now give themselves and their children a chance to earn, to save, to lead financially independent lives and to have choices.

The John Howard government has put together a world-first innovative and highly successful strategy to create a network of private employment service providers who are paid on outcomes: if they do not get someone a job, they simply do not get paid. They have helped to achieve the lowest unemployment rates in Australia in 33 years and some of the highest workforce participation rates that Australia has seen. In the last six months our Job Network providers have placed more people in work than was achieved in the last six years of the Labor government before 1996, when it simply relied on the tired and moribund Commonwealth Employment Service. Given we are approaching an election later this year, the public has the right to know what Labor intends to do for working age people who are on welfare and cannot find work without special support, the sort of support our $3.6 billion program provides. How is the Labor Party going to address the ageing population issues, the destiny of our demographics? The silence from Labor on these very critical issues is deafening.

The 2006-07 Howard government budget not only delivered for the nation; there were also outstanding measures for the people of my electorate of Murray, where we are staggering under the worst drought on record, where families are looking each day to see whether they now sell up the remaining cattle in their dairy herds, what they will do with dying fruit trees, where they will buy fodder at the exorbitant rates it is now attracting, how they will survive this worst drought on record. I am very grateful that since 2003 over $100 million in exceptional circumstances drought assistance has come into the pockets of drought affected farmers in the Murray electorate, and more recently these funds have also flowed to small businesses who have equally shared the distress of the worst drought on record. In this year’s budget the Treasurer announced a further $688 million in drought assistance for the next financial year. Only an economy as well managed as this one can afford such an investment, and perhaps only a coalition government cares enough, because, again, Mr Rudd has remained silent in relation to supporting exceptional circumstances payments to farmers—or any other drought strategy, for that matter.

Also announced in the budget were a whole series of measures for rural and regional Australia which included an environmental stewardship program, which I have long advocated for. This recognises that 70 per cent of Australia’s private land is managed by farmers, who sustain the quality and integrity of everything from water to soil, to the air we breathe, to biodiversity. By our recognising this through this budget initiative, farmers will be able to both produce food and fibre and uphold the environmental values that the whole of our society depends on.

The budget that was produced by this government was a caring but also a highly rational and responsible budget, one that looked both to the next 12 months and to the long-term future of this nation. We do face extraordinary challenges, in particular the destiny of our demographics. We share that same challenge with other developed nations. At least now we understand how we can make sure that our industries are not constrained and constricted by workforce shortages. Already the Reserve Bank receive regular responses to their surveys from businesses saying they need extra workforce, and those shortages are the constraining factor in their expansion. The Australian government is meeting the challenge. We have literally two million Australians who now have the prospect of a job because this government cares and has made a difference.

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