Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Industry) Share this | Hansard source

In one of the recent sittings, I spoke of a constituent, Rebecca, who emailed me about her deep concerns about the dire state of the job market. Rebecca is well educated and, like many Australians, is doing everything humanly possible to find work, particularly stable, secure work. She attached an email she received in relation to a job she applied for which said that there are currently 1,178 applicants for the position. Rebecca added: 'Thought you might be able to use this as proof of how bad the situation is on the jobs front. The LNP have no plan in place to improve the situation.' Just this weekend The New Daily reported on the state of the jobs market and included a similar example: 2,792 applicants for a job.

It's been clear to those on this side of the House since the onset of this crisis that there was an urgent need for government intervention in the labour market to protect jobs and keep as many employees as possible attached to their employers. It was Labor that called for wage subsidies at the beginning of the pandemic to support vulnerable workers, businesses and communities, and we have been calling for broader labour market programs to encourage job creation and kick-start the recovery. We understand the importance of these programs, having implemented our own in response to the nineties recession and the GFC. It is important to note that the government initially was not going to have a wage subsidy in response to the economic shock at all. It was going to rely solely upon JobSeeker and closed the parliament until August.

It did change its collective mind, and we welcome that. Labor welcomed that change of mind and change of heart by the government. But we pointed out the deficiencies in the JobKeeper subsidy and continue to do so. Too many people, including casuals, are left out and left behind, and it's been cut too deep and too soon. We don't want these Australians to continue to miss out. The government's budget was an opportunity to set out a plan for recovery and reform, but, unfortunately, what we got was a wasted opportunity. The budget racked up $1 trillion of debt but failed to include a comprehensive plan for jobs and locked in damaging cuts to JobKeeper in the face of rising unemployment. Australians can't afford a slow, jobless recovery caused by a government too eager to rip money out of the economy before the recovery takes hold. It is crucial that the government develops a comprehensive plan to get Australians back to work.

The JobMaker hiring credit was one of the Morrison government's key budget policies. While we welcome the concept of wage subsidies, federal Labor are concerned the government will rip away substantial support for businesses and workers by ceasing JobKeeper and JobSeeker, replacing them with insufficient measures in the form of the JobMaker hiring credit. For reasons I'll outline later, under this new policy too many Australians are left behind.

But, first, I want to make an important point. This bill does not create or implement the JobMaker hiring credit. Sure, 'JobMaker hiring credit' is in the bill title, but Australians are become increasingly aware of the market based approach of our Prime Minister. He's there for the photo-op, not the follow up. With this PM, a bill by any other name would be just as much spin. Not one single detail of the JobMaker hiring credit as announced on budget night is in this bill. The legislation does not specify any of the parameters or safeguards the government has publicly stated apply to the subsidy in the budget papers, the budget speech or the Treasury fact sheet. Instead, the legislation makes an amendment to the Coronavirus Economic Response Package (Payments and Benefits) Act 2020. This is also the JobKeeper-enabling legislation that authorises the Treasurer to make rules to provide payments for financial support to those directly or indirectly affected by the coronavirus. This bill, as drafted, allows the Treasurer to create payments—not just the hiring credit scheme but any new scheme—with the stroke of a pen. The only constraint on such amendment payments is that they are 'primarily for the purpose of improving the prospects of individuals getting employment in Australia' and 'increasing workforce participation in Australia'.

Unsurprisingly, the opposition, businesses and stakeholders have not been presented with a copy of the draft regulations. Whilst similar powers were conferred on the Treasurer to create JobKeeper, those powers were narrowly time limited and were reasonably argued for on the basis of imminent economic collapse at the onset of the pandemic. The proposed two-year blank cheque for undefined employment and workforce participation programs under the same legislation is incongruous to the budget claims about an economy in recovery. The Prime Minister's press team have been busy nonetheless providing background information to The Australian and Sky News, demanding the bill be passed this week. Never mind the reality that the bill has been referred to the Senate Economics Legislation Committee to report on 6 November and that Senate estimates is happening this fortnight. And never mind the fact that the Senate doesn't reconvene until 9 November. There's probably a good reason for that. This is a Prime Minister that loathes scrutiny, a Prime Minister that cut funding for the office that uncovered sports rorts and uncovered a payment to a Liberal donor for land at 10 times the market value, a Prime Minister who does everything in his power to avoid implementing a federal anticorruption watchdog with teeth and a Prime Minister who wants to give this government a two-year blank cheque to use taxpayer money up to and beyond the next election with no parliamentary scrutiny.

The government will argue changes to regulations are disallowable by a Senate vote. However, the process of passing a disallowance motion in the Senate gives the government an extra vote, in effect, compared to normal legislation. A disallowance vote requires an additional vote to pass, like an amendment. In this bill, there's nothing stopping the government handing itself a blank cheque to distribute to whatever businesses in whichever electorates it sees fit. A two-year blank cheque for undefined employment and workforce participation programs under this legislation does raise serious concern. What is to stop the government from directing payments to specific and politically favourable companies, donors or electorates? We know the government has a terrible track record when it comes to doling out taxpayers' money. I remind you again of the sports rorts. It is important that this new wage subsidy scheme is designed properly and with integrity, and we will continue to ask to see details of the proposed scheme from the government.

The Senate committee and Senate estimates processes will delve into the detail—or lack thereof—in this legislation. Even without details on the legislation, without seeing the draft rules, let's discuss the hiring credit as it is announced in the budget. The government will provide $4 billion over three years from 2021 to accelerate employment growth by supporting organisations to take on additional employees through a hiring credit. The JobMaker hiring credit will be available to eligible employers over the 12 months from 7 October 2020 for each additional new job they create for an eligible employee. Eligible employers who can demonstrate that the new employee will increase overall employee headcount and payroll will receive $200 per week if they hire an eligible employee aged between 16 and 29 years or $100 per week if they hire an eligible employee aged between 30 and 35 years. The JobMaker hiring credit will be available for up to 12 months from the date of employment of the eligible employee, with a maximum of $10,400 per additional new position created. To be eligible the employee will need to have worked for a minimum of 20 hours per week averaged over a quarter and to have received the Jobseeker payment, youth allowance or parenting payment for at least one of the three months prior to when they were hired.

The Treasurer's budget speech stated that Treasury estimates that this will support around 450,000 jobs for young people. This is a misrepresentation. Of course it is spin: Treasury has not actually done any modelling on the number of jobs this makes. Where did the number come from? If this figure is anything like other budget announcements—a big-dollar headline and no delivery—then Australia will almost certainly be disappointed. What we have been advised is that the 450,000 is those who are eligible for the scheme; it doesn't necessarily mean they will receive a job. There is a view within the media, and certainly among stakeholders, that there will be 450,000 jobs created. On a closer look, that is not what is intended by this legislation. If this figure is anything like other budget announcements—a big-dollar headline and no delivery—then Australia will almost certainly be disappointed. One need only ask bushfire victims about the promises that were made to them and the lack of follow-up.

The Senate process will get to the bottom of this, we hope, and demonstrate that 460,000 is not the total number of jobs created, just the number of jobs that could receive the credit. Again, we'll obviously pursue that in Senate estimates and then, if there is a good reason to do so, propose potential amendments to the bill to provide an improved set of options available to the government if they take up those amendments.

We need to see the Treasury's modelling—should it exist—of the distribution of types of jobs. For example, are they full-time jobs, part-time jobs, casual jobs? Is it more likely, because of the way the scheme is developed, that there will be more part-time jobs? The fact is that if you employ two people aged 29 or under, on 20 hours a week each, then you are going to get twice as much money as you would if you employed a full-time worker. Is that a deliberate provision that acts as a disincentive to employ full-time staff? We should hear from the government as to their intentions on these sorts of things. There is nothing wrong with casual, full-time or part-time work. But what is the government's expectation of what will be delivered in the labour market for businesses and workers by introducing this legislation? That's not really understood fully and it's something the government should consider explaining to businesses and the many other stakeholders. We need to see Treasury's modelling of how many people will lose their jobs at the end of the 12-month credit period. What is Treasury's modelling on the number of businesses overall, and by entity size, that will be eligible? How many workers who are currently on JobKeeper, which expires in March, are let go by these struggling small businesses while big businesses, who have done well through the crisis, continue to collect a large number of hiring credits?

Certainly, Labor does not want to see anything other than increased employment growth. If we've got businesses that are fully recovered, or that haven't been impacted by the pandemic, it is absolutely a good thing that they could employ young people, people under 35, if it's additional. But I think one of the real potential weaknesses of this bill, given its initiative is seeking to stand in the stead of JobKeeper, is that many businesses currently using JobKeeper as their wage subsidy will not be in a position to employ additional staff when they're in recovery. Take, for example, a business that might have 10 employees, seven of whom may be on JobKeeper. They are not eligible for this new initiative until they've removed JobKeeper. By removing JobKeeper it's very hard for them to maintain the employment level at 10, let alone add an extra headcount, to 11, and then get any support from the government. So what Labor sees as possible here is that, once you strip away JobKeeper, many, many businesses that are in recovery are not going to be in a position to have a net additional amount of employees in their business. That's just not feasible for many businesses in recovery. For that reason, our fear is that replacing JobKeeper as the main support for many small businesses and medium enterprises, and indeed larger businesses, will not be fit for purpose for recovering businesses, whilst it might be perfectly suitable for those businesses who can add, in net terms, to their workforce. I think that's something the government should explore.

Our concern is that businesses are going to fall between the stalls here, between a subsidy that goes direct to them when they're in need of recovery, as in JobKeeper, and then the new initiative, which really means that you have to be able to increase employment beyond what you had in September this year. I think it really is a great leap of faith to assume that the businesses who could recover would be sufficiently recovered to be able to employ a net increase in headcount of their staff. The government should (1) explain why they believe it would work; and (2) identify the businesses that are in recovery that will not get support as they will not be able to add to their headcount because of the design of this initiative vis-a-vis the design of JobKeeper. And I don't see any modelling or explanation by the Treasurer about that fundamental intersection between JobKeeper and this initiative, the so-called JobMaker hiring credit. It's something I think is really fundamental to the efficacy and effectiveness of this initiative that the government has to explain for Labor to be confident that this in any way will provide sufficient support for recovering businesses, whether in Victoria or across the country, in the many sectors of our economy that have been absolutely adversely affected by this pandemic.

It's true to say that Melbourne has gone through harder times dealing with the second wave and that more businesses have been affected. But you only have to go and look at the tourist precincts of every other state to know that many of those areas are very badly affected too. Not being able to have people from Sydney and Melbourne go to Far North Queensland has meant those economies have been really affected. So, when people think it's just all about Victoria or Melbourne, that's not true. It's about sectors that have been damaged—aviation, hospitality. Even now they're damaged in a number of ways, because the restrictions have eased but haven't ended and because, even when consumers are in a position to patronise a business, they still do not go there, because they are going to be very cautious, even if we allow them to go there. People are not just going to return to certain businesses, certain cafes and restaurants, just because the restrictions ease.

I think it's fair to say that there are sectors in our labour market that have been very hard hit. We don't believe JobKeeper did enough to support them, paradoxically, because the sectors most affected have a high proportion of casuals who hadn't worked 12 months, and yet those sectors didn't receive the commensurate support. So, too, we're worried about the way this initiative will operate and whether it has been thought through. Looking at the design of JobKeeper, there are flaws. It has been critical for so many businesses, without a doubt, and that's why we support it going forward, at least for a temporary period, beyond March next year. But because we saw the failure of the government to even think of a wage subsidy, then a government who excludes people and then a government who had some design flaws with JobKeeper, we are sceptical that they've got it right here. There needs to be a proper examination of those matters, which we'd expect to happen through Senate estimates and the Senate committee that will be considering the bill—which, by the way, will not delay one day the enactment of this legislation, because the reality is it can only be enacted when the Senate reconvenes in the second week of November. This whole charade today has been a stunt by the government. We're happy the matter's brought on. We moved the procedural motion to do so, but, again, we say to the government: stop playing games. If you put more effort into looking at the design of an initiative for businesses and workers, rather than playing stunts in the parliament, frankly, I think we'd all be better off.

There are those questions that I have asked. I hope the Treasurer and the other relevant ministers consider some of the questions that I'm putting on this second reading speech, including: how many workers who are currently on JobKeeper, which expires in March, will be let go by their struggling small businesses while big businesses who have done well through the crisis will continue to collect a large number of hiring credits? As I mentioned earlier, what is the interaction between JobKeeper ending and the hiring credit?

Buried near the end of the Treasury fact sheet is the caveat that you can't receive both JobKeeper and the JobMaker Hiring Credit. That's an important point, because in the six page brochure it took the last page in the second last paragraph for me to find the fact that they were not eligible if they've got JobMaker. So I imagine there will be a lot of small businesses who will listen to the announcements by the Treasurer on budget night, and the comments subsequently by the Prime Minister, about this initiative and not fully understand that they're not going to get a cent unless they get off JobKeeper. Then they're not going to get a cent unless they can employ additional staff or indeed increase their payroll. So the fact is these are tight conditions. Frankly, additionality in normal circumstances is absolutely critical. To that extent I think that's a conventional approach, but are we in a conventional situation? I would always push additionality as critical. But I'm worried that there will be those businesses who will not be able to get to that point. They'll be consigned to the dustbin, because they will not be able to recover, and yet with support they would.

The fact sheets then detail an illustrative example of a firm that was struggling in one quarter and was eligible for JobKeeper. In the next quarter he's part of an economy going gangbusters, growing at such a rate that they not only keep their staff who were on but expand to get a hiring credit—all the while unemployment is forecast to rise to eight per cent in the government's budget forecasts. This week Deloitte estimated it will peak at 8.6 per cent. The government either doesn't care or doesn't want to know how many firms, if any, will one quarter go from struggling and needing JobKeeper to actually be able to expand their employment. They don't want to know about the firms that will face a cliff in March as JobKeeper is ripped away.

The Prime Minister also needs to explain why there are 928,000 Australians who have been deliberately excluded from the Morrison government's new hiring subsidies in a move which will keep the unacceptably long jobless queues even longer. If Scott Morrison, the Prime Minister, was serious about driving down unemployment and kickstarting the recovery he would not be excluding almost one million Australians aged over 35 on unemployment payments from this new wage subsidy scheme.

There are many questions about the operation and integrity of the scheme that need to be answered by the government. The eligibility criteria raises questions, including: narrow eligibility, for social security recipients below 35 there's no requirement for employment to be secure or permanent and the potential for contrived arrangements and unfair dismissals to maximise the credit. Australians over 35 are rapidly approaching the JobSeeker Christmas cliff with no certainty about the future of their support payments and will now find themselves competing with the subsidised, young workforce. That's not an easy thing to avoid, but our concern is that you'll have people over 35 possibly sacked unfairly and replaced by younger, subsidised workers. We want to know what the government is doing to ensure that doesn't happen and what would happen to a company that did that to workers over 35 who were working for them that couldn't be subsidised.

As we did with JobKeeper we will work through the detail of the hiring credit through the upcoming Senate committee. We'll want to constructively point out the problem areas with the legislation to ensure Australians get bang for their buck. The government has a consistent approach to policy: give a big announcement and get the headline but fall on the detail and then forget to follow up on the program. It's a bit like the spin today about Labor stopping the debate. We moved the motion to actually bring on the debate, and the government took about 15 minutes to work out what they wanted to do because they didn't really want to do what they said to the gallery over the weekend that they wanted to do. That's the way this government operates.

This government has a terrible track record when it comes to labour initiatives and employment programs, including the failed and exploitative Youth Jobs PaTH program. That program is widely criticised for a lack of outcomes, with little to no training and with it delivering wage subsidies to firms like Coles and Hungry Jack's, I might add, without additionality in those circumstances.

The government seems to have just discovered young people. The hiring credit will not make up for all the damage done to them over the seven years of this government, with their cuts to TAFE and universities, cuts to penalty rates and exclusion of casuals, predominantly young workers on JobKeeper. And there's the damage done by early access to super—that is, people's retirement incomes.

The government's wage subsidy for workers over 50 is just as much of a failure. In order to cover for their failure to include any support for older Australians in their budget, the government touts this failed program as a signature policy. But let me reiterate: the program has been an utter failure in getting older people into work. Not only has the program been unsubscribed but the federal government has spent less than half what it wanted to on this program. And it doesn't effectively help people into employment, with 40 per cent of workers under the program without work within three months—far from long-term, sustainable jobs. Only $254 million was spent to help 51,190 mature-aged people into work, despite the coalition promising in 2014 to spend $520 million to help 30,000 older Australians find a job every year. That has not happened.

We don't want to see the same flaws in the hiring credit program. It's vital that this new wage subsidy scheme be better designed, better implemented and better monitored than JobKeeper, Youth Jobs PaTH, Newstart and many other programs. The hiring wage subsidy does nothing to encourage secure jobs, particularly at a time when we're facing record-high underemployment. The design of the subsidy encourages a company to double their subsidy by hiring two workers for 20 hours instead of one full-time employee, encouraging more casual and part-time work. The Prime Minister and the Treasurer need to assure the Australian workers that they will not be sacked and replaced by younger workers or have their working hours cut so that an employer can access the hiring wage subsidy. There are no new reporting requirements to prevent wage theft and other endemic exploitation that does disproportionately affect younger people.

To date, proper regulatory oversight and integrity measures have not been made clear. We don't trust the government to put workers' interests first in this instance. The government has presided over insecure work and underemployment for too many years. The Prime Minister is leaving Australia with $1 trillion of debt, but unemployment and underemployment will remain too high for too long, with the jobless rate not expected to get back to pre-crisis levels even after four years.

As I mentioned previously, anyone aged over 35 will now find themselves competing with a subsidised younger workforce. There are no plans there. This competition comes in the face of a deepening jobs crisis, with the government forecasting another 160,000 Australians expected to join unemployment queues by the end of the year. That's 160,000 workers and their families facing a very bleak Christmas. That's the government's forecast: an additional 160,000 workers losing their jobs.

This government has a track record of making an announcement but failing to substantiate it. We have concerns there are major design flaws with the JobMaker hiring credit policy that will prevent businesses even taking it up. For that reason, we are glad for the matter to be brought on. We want this debate. This should be a matter of urgency. It should be about what we can do now that the government has announced the end to the cuts to JobKeeper. I'm not suggesting for a moment that this is the right initiative. We're going to support the government making the lives of businesses and workers better, even if the plan of the government is imperfect.

Our job is to suggest improvements to a scheme that is deficient or to point out facts about the scheme if we do not believe, on evidence, that it will lead to the things the government says it will. That's our job. With JobKeeper and other initiatives of this government, yes, Labor have been constructively critical and at times we've disagreed with the government, but during this pandemic we have always supported Australian businesses and Australian workers and we'll continue to do that. In the meantime, we'll also do the job of holding the government to account, making sure they are doing what they say they're doing and making sure they're providing sufficient support for our economy—businesses and workers—in an unprecedented time. The worst recession since the Great Depression requires a lot of investment and a lot of dedication to tasks that we don't see the government exhibiting, frankly.

Enough of the games! We have this matter before us. We should debate it today. It should be examined by a Senate committee. It should be examined rigorously in Senate estimates. We'll have another debate in the Senate, but what we won't do is put this on the backburner. This is a priority for Labor because it's about looking after working people and businesses. We just want to hold the government to account, improve their policies if possible and make sure there's sufficient support and succour for businesses and workers doing it very, very tough at the moment.

I'll just finish on this, even though I might be repeating myself: the government has said there are 160,000 workers and families who are going to be lining up in unemployment queues before Christmas. That's tragic, and we in this parliament should be doing everything we can to make sure that we prevent that happening where possible and provide opportunities so that we can improve our economy and get out of this recession as quickly as possible. It doesn't have to be deeper than it need be or take a day longer, but it requires the government to focus on the issues, not play stunts as they've done with this matter.

See this speech in context