Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Hansard source

I rise to speak about the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. This is a bill designed, in part, to support the introduction of the Turnbull government's Prepare, Trial, Hire program or PaTH. PaTH is supposed to prepare young people for work by providing jobseekers aged 17 to 24 with pre-employment training and placement in voluntary internships for between four and 12 weeks. During that time they may work 15 to 25 hours a week. Jobseekers will receive payments of $200 per fortnight, on top of their current income support payments, while they are participating in the PaTH program. Businesses will be paid $1,000 to take on an intern and will receive a wage subsidy of between $6½ thousand and $10,000 if they hire them at the conclusion of the internship.

This bill will give the government the ability to do two things that will help get PaTH off the ground. First, a provision will be inserted in the Social Security Act and the Veterans' Entitlements Act so the $200 payment interns receive is not counted as income for social security or veterans' entitlements purposes. Secondly, it will amend the Social Security Act to allow young people to suspend their payments if they are employed. They can then restart them, without reapplying, if they lose their jobs through no fault of their own within 28 weeks.

The government is going to argue that the measures in this bill are noncontroversial. They will argue PaTH is needed to fix youth unemployment. But, make no mistake, the opposition—like many in the community—have serious concerns about whether this overall program represents a fair deal for Australia's young unemployed. The reality is, these proposed changes form part of a deeply flawed program, something drawn up in a rush, as the Turnbull government retreats from other long-running employment programs that are failing under their watch, victims of this government's incompetence. As they scramble and pivot to the Youth Jobs PaTH Program the bigger story is this: the Turnbull government is failing to provide a plan for new jobs across the nation, particularly for young Australians.

During the election, the Prime Minister who promised us the end of three-word slogans came up with one of his own and used it endlessly: jobs and growth. They might not have had a concrete plans for jobs, but at least they had a concrete plan for slogans. This is cold comfort for unemployed Australians, especially young Australians, who are worried about being locked out of the job market. Despite promising it would tackle youth unemployment, an incompetent Turnbull government has failed to deliver.

On the Turnbull government's watch, youth unemployment has climbed to nearly 13 per cent, double the national average. According to their own figures, there are nearly 300,000 unemployed young people between the ages of 15 and 24. On top of this, the Department of Employment acknowledges there are another 170,000 people who have been unemployed for more than a year, who are disillusioned by the act of looking for jobs that are simply not there. It is a disgrace. This government has left young Australians high and dry, unable to come up with a real plan to find jobs for our young people.

Let us look at how the Turnbull government has tried to 'help' young unemployed Australians. Here is one of their ideas to help young unemployed get to their feet: they made them, potentially, wait for one month before they could access income support. Some help. Here is another: pushing young unemployed onto the Work for the Dole program when 90 per cent of the participants are not in a full-time job three months after finishing the program. Only 9,460 people managed to get a full-time job through Work for the Dole. That is a shade over 9,000. While it is great that those 9,000 found full-time work at a cost of $28,000 per person, there are another 78,000 young people who need the Turnbull government to get its act together and improve the program to help them get into full-time work.

Overall around $300 million was shifted in this program in the last financial year and yet again this government could not get nearly 90 per cent of the Work for the Dole participants into full-time work. When quizzed about the performance of the Work for the Dole program, what was the response of the government? At last month's Senate estimates the Secretary of the Department of Employment said:

The purpose of Work for the Dole is not necessarily to lead … to a full-time job.

What a jaw dropper. I will repeat what the government's own department said about Work for the Dole:

The purpose of Work for the Dole is not necessarily to lead directly to a full-time job.

With an attitude like that there is no wonder this program is floundering. Make no mistake: because of the incompetence of this government that program is failing badly. It is one of a range of measures that are supposed to get people into work, and yet this government has turned it into an expensive failure.

What has been the response of the Turnbull government to this failure? You would think they would focus on fixing the flaws and getting the program, which has run successfully I might add under both coalition and Labor governments, back on its feet. Not a chance. Instead, it has rushed in this PaTH program in this legislation. It is a poorly considered attempt to divert attention from the failing Work for the Dole program. It has taken millions out of Work for the Dole. It has shifted over to PaTH nearly $800 million—$752 million, to be precise.

Again, taken in isolation, the government is going to tell you that the measures in this bill are non-controversial, but you simply cannot take these measures on face value without considering the concerns that exist about PaTH, and there are quite a few. Under what is being proposed every year PaTH will take in 30,000 young Australians, turn them into interns and place them in businesses around the country. That might not sound like a big deal, but this is a massive shift. Previously the Work for the Dole program was aimed at not-for-profits or government bodies like councils. This was done for a very important reason. It was to ensure young unemployed Work for the Dole participants were not used as cut-price labour, displacing existing workers from their jobs. The Turnbull government does not care about this. It does not understand the significance of the change it is about to make—or it does and it is not letting on. It is quite relaxed about the fact that for the first time it will provide big businesses with a pool of cut-price young unemployed people, who will be working at a rate that is less than the national minimum wage.

I will walk you through some of the issues associated with the PaTH program that this bill is going to help support. The Turnbull government has decided to call the program participants interns. They will have their income payment topped up by $200. That is provided for under this legislation. Most people outside of this place would think of an intern as being a young person working in largely a white-collar role—for example, in professional services firms like law firms. You can be pretty confident that the general public's idea of what an intern is will not match the Turnbull government's likely definition of an intern. That is because six months after announcing this program the Turnbull government still has not even defined what an intern will be. This should not be a hard thing to do.

The Turnbull government are trying to find a way to win over the general public to their new term of 'intern'. For example, it will be quite conceivable that we will see intern waiters, intern retail assistants or intern construction aides. Most Australians will see right through this. The Turnbull government will be slipping in a dodgy definition of what an intern is, and it will not benefit young Australians. The big concern about PaTH is that it will be used to displace workers. Ordinary young Australians trying to get their foot into an entry-level job will be fighting with 120,000 people in the PaTH program, who represent cut-price labour subsidised by this government. Remember that this program is not attempting to create jobs. It is creating an incentive for businesses to take government funded jobseekers.

Here is another grey area. What will these interns, undefined, actually do while they are in the workplace? We still do not know if they will simply be observing what is going on or be expected to perform as intern waiters or intern retail assistants. Again there is no detail from this government. How will workplace standards be monitored and audited across the 30,000 internships? What is the standard of supervision required for an internship to go ahead?

All of these important questions are unanswered, yet we are expected to support this bill, which will give effect to that program.

Another question: what happens to those interns who unfortunately experience a workplace incident or accident? Will they be covered by workers compensation? According to the government, that will depend on the workers compensation regimes that operate in the particular state or territory in which these interns find themselves. But in some states and territories an intern may be considered a volunteer, not an actual employee, and therefore unable to access workers compensation. This is an issue that cannot be ignored, but the government is not really stepping forward with clear assurances.

But here is the most important question: after being used for up to three months at a rate below the national minimum wage, will these interns actually get a job? Interns Australia recently wrote in The Sydney Morning Herald that unpaid interns are only offered employment with the same organisation 20 per cent of the time. Their conclusions about the PaTH program are absolutely scathing:

It creates an Australia where exploited interns are widespread but entry-level jobs are scarce, where business either flagrantly exploits its newest workers or doesn't know whether to hire them, and where the rights of interns are more confused and muddled than ever before.

PaTH interns were supposed to be placed into businesses where there was a 'real vacancy'. That is the way it was described when this program was announced and as what this legislation supports. But, since announcing PaTH, the Turnbull government quickly watered down this pledge to 'a reasonable prospect of a job'. It went from 'real vacancy' to 'reasonable prospect'—again, not a small issue. There is a concern that PaTH could cause wage deflation across entry-level positions as businesses use interns instead of hiring someone full time. Alternatively, there is a concern that young Australians participating in PaTH could be used and discarded every four to 12 weeks. There is little in the way of testing or sanction for employers that might churn through PaTH participants after the engagement with an intern concludes.

The review and monitoring process that will supposedly stop churn from happening is laughably thin—something along the lines of 'trust us, it will be fine,' which is not good enough when it comes to setting up Australia's next generation of workers. How will the government's 'trust us, it will be fine' checks and balances be implemented? The answer is that once again the government have washed their hands of the hard work and will ask employment service providers to do the heavy lifting. Employment service providers will be carrying the increased burden of risk assessments for waves of new interns, and the government have also admitted that employment service providers will do the up-front checks to try and weed out job displacement or churn. But they will not be paid any extra for these tasks. If I am wrong, I am happy to be corrected. Employment providers are supposed to find the resources to check whether larger companies, potentially with operations all over the country, might be hiding job displacement tactics and taking subsidised interns from the government instead. There could be as many as 18,000 to 20,000 companies required for 30,000 PaTH placements every single year. The government have outsourced the checking of the placements at all of those companies to the employment service providers without funding the process. Again, I am happy to be corrected, but that does not look like what is going to happen. The government's own up-front checking will not go much further than cross-referencing intern placements with company ABNs, hoping to catch out sneaky displacement tactics. This is the flaw with the government's 'trust us, it will be fine' approach. There is nothing to earn that trust.

Following on from this, I point out another concerning scenario to the House, one where we test the ability of the Department of Employment to keep an eye on business misuse of PaTH. What about the situation where big hotel chains, for instance, with a fly-in squad of intern waiters, decide to roster those interns for 15 to 25 hours over a Friday, Saturday or Sunday? Would it simply be a coincidence—a sheer coincidence—that the usual penalty rates that would apply to an existing employee would not apply to those interns? It is not a coincidence. That is a real prospect, where both the interns and the existing employees lose out—especially those employees who suddenly find they are not required to work on weekends because an intern is doing their job. What have been outlined now are all serious concerns, and they have simply been glossed over by this government.

In responding to the debate over this bill, the government must provide concrete actual responses to these concerns. They should also tell us why they are so keen to deliver a rainbow right up the balance sheets of some of Australia's biggest businesses. Many of these businesses—the big businesses—have never taken a real and sustained interest in giving a substantive start to the nearly 800,000 Australians without work.

When you ask jobactive providers, as I do, who takes on jobseekers, is it small to medium enterprises or is it big business, the answer usually is small business. The government acknowledges this—they admitted as much in last month's estimates. In parlance that those opposite would well understand, there are definitely lifters and leaners when it comes to taking on job seekers. SMEs are definitely the lifters; big business put up a whole range of barriers to bringing on jobseekers off the jobactive network. They make it hard to bring them on. Now, all of a sudden, the biggest advocates, the biggest cheerleaders, for PaTH happen to be big business, who can see a pool of young unemployed Australians working at cut-price rates, below the national minimum wage, being deployed in a way that could potentially undercut jobs and undercut wages. It is simply unacceptable that this system might potentially be rolled out without the government providing any of the assurances necessary.

The opposition is very concerned about the potential for young job seekers to be exploited and whether this program could undermine workplace standards. Given all those concerns, the opposition will refer this legislation to a Senate committee inquiry for further consideration, and that is why we will reserve our position on this bill until the inquiry report is tabled and we will reserve our right to make further amendments in the other place. We are also moving an amendment to seek assurances in this place that we will get answers to the concerns we have continually raised—answers which have not been forthcoming—about the system design of the program that is being put forward in the legislation that we are about to debate. Frankly, can you blame us for being suspicious of the Turnbull government's motivations when you see the attractions of this program being singled out by their own backbenchers? Last month, during estimates, it was demonstrated through Senator James Paterson that you just cannot trust the government to make PaTH fair for young people. Senator Paterson showed how sidestepping unfair dismissal laws under the Fair Work Act was a 'benefit' of PaTH. In a big win to big business, Senator Paterson took the Department of Employment through a series of questions explaining how the Fair Work Act would be dodged using PaTH. Senator Paterson asked:

I guess one potential advantage for a business is that if an intern does not work out they are not going to be subject to any unfair dismissal claims or any costs in that respect?

The Secretary of the Department of Employment confirmed that, while they are PaTH intern, the young person would not be classified as an employee, meaning employers could take them on without risk of Fair Work proceedings. This creates the risk that employers will not use this program as a pathway to work but rather as a pathway to churning through workers. It begs the question: is the Turnbull government trying to help young Australians get a job or make it easier for them to get sacked? On top of that, the sheer volume of interns is going to increase massively.

You would think the government had a report or a review to underpin their assumption that this golden ticket for youth employment would exist, but they have not even evaluated an existing program, the National Work Experience Program. That is undergoing a review right now—not before the PaTH program was drawn up. After that sort of rigorous evidence-based approach, the government has decided to take the current program, which places between 3,000 and 6,000 people a year, at best guess, and a ramp it up to the 30,000 per year Youth Jobs PaTH Program.

I touched earlier on another program with PaTH, and it relates to safety. The safety and risk processes used in the failing Work for the Dole program are apparently going to be copied across to the PaTH program. Unfortunately in April this year a young participant in the Work for the Dole program suffered a fatality while on a placement in Toowoomba. The department has since handed a finished report into the management of Work for the Dole to Minister Cash to determine whether or not people who provide the Work for the Dole program are meeting the expectations on workplace health and safety as enunciated under the deed. The government has not said what changes have been made to the Work for the Dole program, or how it monitors safety in the program, since the report was completed. We have had a fatality, and we have not had the government say what changes have been made as a result of their own internal investigation.

I have been very grateful for the two meetings that I have had with this government, its representatives and the department over this internal review. However, I have asked them repeatedly, 'When are you releasing that report?' They indicate that they are waiting for the outcome of a workplace safety regulator incident report that is being conducted in Queensland before they release their report. Frankly, given that these are looking at different matters insofar as the internal government report is looking at the deed and the way that people who are undertaking the Work for the Dole programs for the government are adhering to the expectations of the deed, this report should be released, and it should be released in consideration of what is going to happen under PaTH, given that there are going to be parallels between the workplace safety arrangements under both the Work for the Dole program and PaTH.

The government have admitted that the safety monitoring and standards in PaTH will be modelled on those in the Work for the Dole program. The government want 120,000 young people to trust that their workplace health and safety will be protected under this program. If they want that trust to be earned, they should release the report into this fatality and demonstrate what tangible differences and changes are being made to workplace health and safety under the programs they run. It goes back to the fundamental issue of workers compensation. The government will not say how interns, who will be supported under this legislation, will be covered should an accident or death occur under the PaTH program. It is not good enough for a government program to not have that spelt out. You cannot make workplace safety, in a program you devised, someone else's problem.

Ultimately, as we have had concerns about the way in which the Turnbull government is failing young Australians in finding them work through the programs that they have set up, we remain concerned about whether or not PaTH will actually deliver. Its employment policies and results show that the government does not know how to address changes in Australia's labour market. In fact, a new report from Anglicare, Positions vacant? When the jobs aren't there, showed that there is only one job advertised for every six low-skilled jobseekers in Australia. The report warned that low-skilled workers are increasingly excluded from the workforce, and now, under PaTH, government subsidised interns could be competing for similar roles. A staggering figure from the report was that in May this year nearly 140,000 people competed for roughly 22,000 entry-level jobs advertised across Australia. It is proof that the Turnbull government is failing to create new jobs, and under the Turnbull government employment conditions have deteriorated to the point where they are worse than at any time since the peak of the GFC. In fact, things are worse than that. Underemployment in the August 2016 quarter was 8.7 per cent. The macro division of Treasury said that was the highest result since the series of data began way back in 1978.

Another change hindering the young people targeted by PaTH getting into work is that more people are staying in work longer than ever before. This means that the Turnbull government has to increase the pie and not just send young people off to compete for jobs that are just not available. In 1992, for instance, fewer than one in 10 people in the workforce were over 55, and today it is one in six. This is going to become a bigger issue as people live longer and stay in the workforce longer. There are fewer openings for younger people to get their foot into the workplace. The government should be focusing on creating jobs and training people for the types of jobs that are coming down the pipeline instead of erecting flawed programs that could displace jobs and depress wages.

Again, our big concerns about this program and what this legislation will enable are that it will potentially create 30,000 interns a year—interns whose role has not been defined, who could potentially displace people out of work or lead to falling wages at a time when wages growth is at its lowest on record, and whose safety has not been guaranteed; that there are some people within government ranks who have suggested that this will be an ideal way to circumvent unfair dismissal protections; and that those businesses that are doing the work of helping out in taking on more jobseekers will not be prioritised above bigger businesses who have failed to do the hard yards in providing work for the 800,000 or so that are seeking work, going through the government's own jobactive network and not being helped out by big business. But big business, without helping the unemployed, wants to help itself to a cut-price pool of young labour to be able to, as I said before, potentially displace jobs and displace wages. These are serious concerns.

PaTH, with so many flaws at the heart of the program design, is unlikely to help young jobseekers overcome these significant employment market barriers, and it is another flawed policy from a government without a jobs plan, running from some of the failed programs it has had under its watch and trying to put up new programs with some of these barriers to them. This is why we are moving a second reading amendment: to basically get assurances out of this government for things that we have been asking for ages. Tell us whether or not you are able to define what those interns are. Tell us whether or not they are going to displace people's jobs. Tell us whether or not they are going to lead to a cut in wages. Tell us whether or not the people that are involved in the PaTH program will have the protection of workers compensation or like arrangements. Tell us whether, for example, you are using this as a mechanism to circumvent the Fair Work Act when it comes to unfair dismissal protections. Tell us whether or not you are going to be fair dinkum in making sure that big business finally does what a lot of us expect, which is basically to start providing jobs for those people that are currently without work and are left to be dependent on government programs like Work for the Dole where, in some cases, nearly 90 per cent of the people that go through the program are without full-time work three months after they have gone through the program, a program which the government then says, through its department, is not there to provide work for people, which is simply staggering.

We expect better, young Australians expect better, and we expect answers from the government. It has taken six months to get those answers, and we have got nowhere.

I move:

That all the words after "That" be omitted with a view to substituting the following words:

"Whilst not declining to give the bill a second reading, the House notes that the Turnbull Government cannot guarantee that, under Youth Jobs PaTH (Prepare, Trial, Hire):

(1) jobs will not be displaced by cheaper labour;

(2) wages will not be undercut and some participants will be paid below minimum award wages;

(3) participants' safety will not be compromised and that adequate insurance arrangements will be provided;

(4) participants won't be used to help businesses sidestep unfair dismissal protections; and

(5) it will prioritise using small to medium enterprises in PaTH because they have a demonstrated track record of employing more job seekers through the jobactive programme".

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