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

by leave—I move opposition amendments (1) to (7):

(1)    Schedule 1, page 3 (line 2) to page 27 (line 19), omit the Schedule.

(2)    Schedule 4, item 2, page 61 (lines 8-9), omit the item.

(3)    Schedule 4, item 3, page 6 (lines 10-11), omit the item.

(4)    Schedule 4, item 4, page 6 (lines 12-26), omit the item.

(5)    Schedule 4, item 5, page 6 (lines 27-28), omit the item.

(6)    Schedule 4, item 8, page 7 (lines 3-15), omit the item.

(7)    Schedule 4, item 9, page 7 (lines 16-29), omit the item.

In addressing the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 it is important to remember the role of employment services. Employment services are the oil which reduces the friction in the labour market. In Australia we have a system of contracted employment services involving a balance between the incentives for employment service providers, support for job seekers, compliance measures and ultimately, as a last resort, sanctions. What we have seen over a 10-year period is that the Job Network has been highly successful. It reduced unemployment from 7.7 per cent in May 1998 to a low point of just below four per cent in February this year. But that is not the view of everyone, because the Minister for Employment Participation will always be famous as the guy who said in May 2008:

The Job Network is no longer suited to a labour market characterised by lower unemployment …’

That was the quote from the Minister for Employment Participation in May 2008 in a discussion paper—and his colleague is looking very grim. And that is actually the central problem. The massive elephant in the room in this discussion is that the model that the minister is proposing was designed for a strong labour market. It will not work in a labour market that is characterised by rising unemployment. It will not work in a labour market that is characterised as a soft labour market. So the minister’s quote ‘The Job Network is no longer suited to a labour market characterised by lower unemployment …’ will be remembered in the future as like the IBM executive saying that there was only a market for five personal computers or the guy at Western Union saying that the horse and buggy days were here to stay and Ford was no threat.

The central problem here is that there is a complete lack of early intervention in their new model. Under Labor’s proposed replacement for the Job Network, 12.8 per cent of the funding for employment services will go to the vast majority of job seekers—61 per cent of new job seekers—who will be classified as stream 1. Frank Quinlan, the Executive Director of Catholic Social Services Australia, has said:

The Government is not prepared for this influx of job-seekers at all. Their scheme and their funding is premised on new job-seekers being easily able to find another job, but jobs won’t be so easily available now, and it is not clear how they intend to cope with that.

He can see the problem that is obvious to everyone in employment services: the new model will simply fail in an environment of rising unemployment. The Job Network was successful in dramatically reducing unemployment.

There are a lot of other aspects of the new employment services model. Community, Work for the Dole, team based projects will be a thing of the past under Labor’s replacement for the Job Network. Green Corps, as a youth development program, will be a thing of the past.

This bill deals mainly with the compliance measures for the new employment services model. The purpose of these compliance measures is to assist and encourage job seekers to move from welfare to work. For example, in the Netherlands temporary benefits sanctions have been found to substantially increase the transition rate from welfare to work. My question to the Minister for Employment Participation is: what evidence is there that the no-show, no-pay model will see improved employment outcomes and improved transition? We do not want ideological arguments; we want the actual analysis. We want objective analysis to show us that the new system proposed by the government will see improved rates of transition from welfare to work.

Compliance measures and sanctions have been a feature of the Australian welfare system since the unemployment benefit was introduced in 1945. The no-show, no-pay failure will be the lightest sanction ever applied by any Australian government. (Time expired)

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