Brendan O'Connor (Gorton, Australian Labor Party, Minister for Employment Participation) Share this | Link to this | Hansard source

by leave—We are a resilient people. Our history shows that Australians can pull together in a crisis and come out stronger. The wild bushfires and floods across our nation in recent weeks have brought devastation, but they have also inspired courage, resilience and compassion. In the face of our tragedy and loss, our determination to ‘get on with it’ is extraordinary. These virtues and our strength of spirit will help us get through the great economic challenge of the global financial crisis.

Our key trading partners around the world, including China and Japan, are reporting sharp contractions in their economies, resulting in reductions in the demand for our exports. Many Australians are feeling the effects of the global economic downturn. There is no question that we face tough times.

While our unemployment rate is still low by international standards, it rose from 4.3 per cent last July to 4.8 per cent last month. The Updated Economic and Fiscal Outlook forecasts an increase in unemployment to seven per cent by June 2010. This represents 300,000 more Australians out of work than in December 2008.

Unemployment is not just an economic loss; it is a human tragedy that turns the lives of ordinary Australians and their families upside down. The Rudd government know that beyond the job losses, the reduced hours and the fierce competition for jobs, there are people struggling to hold on to their homes and their aspirations. Our commitment to the Australian people and to the nation is to act now and provide effective support to those affected by a turbulent and tough global economy. Under these conditions, the Rudd government continue to take action to support Australian jobs by stimulating our economy and investing in the skills Australians need for the future.

We have taken unprecedented action through our $42 billion Nation Building and Jobs Plan, which will stimulate economic activity in every local community across the nation and provide assistance to people and households on modest incomes. We are investing in training so that people can up-skill, giving them a better chance of getting or keeping a job and benefiting the nation in the long term. The training investment by the Rudd government will counter the likely reduction in business investment in training and skills development as many businesses feel the full effects of the global financial crisis.

While the global financial crisis is not within the government’s control, we can and must intervene early to reduce its impact. That is why the Prime Minister, the Deputy Prime Minister and I have announced that the government are committing a further $298.5 million to ensure that from today, for the next two years, newly redundant workers will be eligible for intensive employment services. Access to these services will become available from 1 April 2009. From now to 1 July, this early access will be provided through existing Job Network services, with redundant workers able to access Job Search training immediately, instead of waiting a minimum of three months. Providers will be able to purchase services and training for job seekers through a $550 job seeker account credit.

From 1 July, this assistance will be provided through the Rudd government’s new employment services, which are currently under tender. Workers made redundant will receive immediate personalised assistance, career advice, referral to available training places and Job Search help. They will have access to a personal employment pathway plan that will set out the services and training that they need to find and keep a job. The employment pathway plan is underpinned by a $550 credit to pay for the specific assistance that job seekers need.

In addition to early access to personalised employment services, we will also invest a further $75 million in 10,000 new training places at certificate III level and above in the Productivity Places Program. These additional 10,000 places will bring the total number of extra places for displaced workers to 20,000 and ensure those who are vulnerable have the skills they need to adapt to changing economic circumstances and meet the labour needs of employers now and in the future. The $2 billion Productivity Places Program is a major long-term commitment that will deliver more than 711,000 training places over five years. Training places will continue to be allocated to job seekers and existing workers wanting to gain or upgrade their skills.

While unemployment is rising, we still witness many sectors of the economy suffering from the lack of suitably skilled workers. These new training places will provide an opportunity for redundant workers to re-train in areas of skill need. In providing 20,000 extra, targeted training places, the Australian government is addressing the challenge of supporting those who may need to re-skill or up-skill following retrenchment. The government is committed to making a difference to the prospects of ordinary Australians by investing in their future.

Receiving assistance earlier will help Australians who lose their jobs get back into the labour market as soon as possible. We know that connecting people quickly with employment services makes a big difference to their chances of finding work. This early intervention will ensure that people stay work ready, that they retain or improve their skills and are well placed to find employment.

This new package will add to more than $4 billion that we are investing from 1 July in new, more effective, employment services. Today’s announcement clearly demonstrates that the new service can be adapted to changing labour market circumstances. We are offering demand-driven employment services that are timely, practical and flexible. We are also increasing skills and training opportunities. The new employment services will assist each job seeker commensurate with the level of disadvantage they face. It is critical, even more so in these difficult times, that we do not allow the most disadvantaged to be pushed further to the back of the jobs queue. In contrast with the current Job Network, the new services will provide streamlined access to assistance and more support for job seekers to gain skills needed to fill existing and future vacancies. Given the current employment outlook, the government cannot leave the Job Network as it is, even for the next four months, and will immediately make existing Job Network services more flexible and more effective.

The job seeker account has been underutilised for years because of the burdensome red tape attached to it by the previous coalition government. The existing job seeker account will have applied to it the new Employment Pathway Fund principles. The new rules will mean providers will be able to support job seekers in a broader range of vocational and non-vocational assistance, like counselling or rehabilitation, to address their individual barriers to employment. Employment service providers will also be able to move credits between sites when they need to and, to further remove red tape, will require only an invoice or receipt for purchases of less than $300. The Job Network quarterly service fee will also be adjusted to reflect increased job seeker case loads, recognising that job seekers should have access to quality services despite the failings of the outdated Job Network.

For many Australians, the experience of looking for work will be new. Indeed, some have never experienced unemployment in their working life. As a government, we know that strength comes from giving all Australians a ‘fair go’—a fair go at a great education and a fair go at decent job opportunities and training. The government’s investment in these key areas is an investment in the nation’s future productive capacity and will ensure Australian job seekers remain connected to training and the job market.

I ask leave of the House to move a motion to enable the member for Boothby to speak for 9½ minutes.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent the member for Boothby speaking for a period not exceeding 9½ minutes.

Question agreed to.

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

I am very pleased, on behalf of the opposition, that the government has taken up the concerns of employment service providers, peak groups, other stakeholders and the opposition about the lack of early intervention for the newly unemployed under Labor’s employment services model. The opposition have been highlighting the lack of early intervention in the Rudd government’s new employment services since August last year. Shortly after seeing the exposure draft, we identified this problem. In a media release on 7 August last year, the opposition highlighted that under new employment services there would be nothing more than assistance in writing a resume and information on the local labour market for the majority of new job seekers for the first three months of unemployment.

Almost six months ago, in the last ministerial statement on employment services, we demonstrated that only 12.8 per cent of resources for employment services would be provided for stream-1 job seekers, who are the majority of new job seekers. We now know that 61 per cent of new job seekers will be stream 1. We said that reducing the early intervention for employment services was risky, inflexible and showed a lack of foresight. Unfortunately, there are now 80,000 more Australians who are unemployed since August, when we first warned of the problems with Labor’s new employment services. In question time the minister talked about his decisive action, but we all know that the action could have been more decisive. It has taken almost seven months to get to this point.

How did we get here? The Minister for Employment Participation took the job at a time when the unemployment rate was 4.2 per cent and there were 493,600 Australians unemployed. Now unemployment is 4.8 per cent and there are 540,200 Australians out of work. If you look at some of the research done by former senator John Black, you can see that regional unemployment has risen by more than 1½ per cent over the last 12 months in a number of regions across Australia, especially in Cairns, Townsville, Mackay and Rockhampton in Wide Bay and the Gold Coast. As Saul Eslake said, unemployment rising by more than 1½ per cent is indicative of a recession.

In 1998, the previous government introduced the Job Network. It was highly successful. It reduced unemployment from 7.7 per cent in May 1998 to below four per cent in February this year. Not even a year ago, the minister, in a foreword on a discussion paper on the future of employment services in Australia, said:

The Job Network ... is no longer suited to a labour market characterised by lower unemployment, widespread skill shortages and a growing proportion of job seekers who are highly disadvantaged and long-term unemployed.

In a nutshell, the government designed an employment services model for a period of full employment. They made an assumption that people who were job ready would be able to find employment themselves. They were quite proud of putting the resources towards the people who would find it hardest to have a job and of addressing issues like creaming and parking. They were responding to the job market of 18 months ago. The problem is: we have an employment services system which is delivered by a mix of private sector and not-for-profit providers. That means that it is absolutely critical that the government get the balance right in the investment in job seekers and in the incentives for employment services providers. So, Minister, you came up with the wrong model at the worst possible time. It has been very obvious to employment service providers, to the opposition and to everyone except the minister—until now—that this model would not work in a climate of rising unemployment and weak or negative jobs growth.

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Employment Participation) Share this | Link to this | Hansard source

Mr Brendan O’Connor interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The minister should be aware that general warnings stay in place.

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

The $298.5 million extra into employment services is welcomed by the opposition. This will help to address the problems with the new employment services model. However, it is almost exactly the amount which was ripped out of employment services in last year’s budget, where the Rudd government cut funding to employment services by $279.8 million. So they cut it last year and they are having to put that money back in. They are putting back in what they were planning, only last May, to pull out.

I would like to speak briefly on the measures for apprentices, worth $155 million, which were announced by the Deputy Prime Minister last Thursday. During the recession of the early 1990s we saw the numbers of apprentices fall from 161,000 in 1990 to 120,000 by 1993. We do welcome the incentives being paid to employers and group training organisations. We think they are the right people to pay the incentives to. We also think they are focused on the right place—on the completion of apprenticeships and also on the out-of-trade period. The main issue that we have is the small amount. There is a real contrast between $42 billion, which we are told will support 90,000 jobs, and $150 million, which we are told will support 60,000 apprentices. This is either extremely well targeted or it will not work. But the opposition are prepared to give the government the benefit of the doubt, and we will monitor its effectiveness closely.

The government have not, to date, introduced any specific youth unemployment initiatives, and it is very disappointing that they have not. In the last 12 months, we have seen 57,400 jobs for 15- to 19-year-olds lost from the Australian economy. This has been a silent tragedy. We hear nothing about this from the Rudd government. We hear nothing about this from the Minister for Employment and Workplace Relations and we hear nothing about this from the Minister for Employment Participation. Anyone who is old enough to remember the last recession will recall the devastating impact unemployment had on school leavers and on teenagers looking for their first job. University graduates would complete their courses and then find that there were no jobs available. Parents were desperate to find or even pay for an apprenticeship for their children. There were hundreds of applicants for every job advertised. We saw the unemployment rate for 15- to 19-year-olds looking for full-time work rise from 14.2 per cent in July 1989 to a high of 34.5 per cent three years later. Having more than one in three teenagers unable to find work was a national tragedy.

In the last recession it was younger workers whose jobs were most vulnerable. Sadly, those who were born during the last recession may become casualties of the next one. To avoid this generation being locked into a jobless future, it is critical that the federal government is proactive in addressing youth unemployment. There are already some ominous signs. We are already seeing falls in the number of teenagers in jobs and rises in teenage unemployment.

In the package that has been announced, there is nothing specifically for school leavers and there is nothing for young people who have never had a job. It is critical that the government provide more early intervention and work experience opportunities for job seekers in their teens and early 20s to help them make a successful transition from school to work. Without early intervention for those who are out of work, the social cost of inaction may well be a lost generation of school leavers who have never known work and will struggle to maintain continuous employment. I seek leave to table my media release of 7 August 2008, ‘Too little too late’, which highlights these very problems.

Leave not granted.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Before we proceed with the MPI, could I remind members that a general warning was given at question time and it does carry until the end of the day.