Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes:

(a) that the unemployment rate in Australia has barely fallen from immediate post Global Financial Crisis levels;

(b) Treasury projections that the unemployment in Australia is unlikely to improve in the next three years under current policy settings; and

(c) significant labour market indicators such as rate of under-employment and levels of long term and youth unemployment, are continuing concerns within the community and amongst economic commentators, as is the comparative decline in the availability of full time jobs;

(2) further notes that:

(a) rates on unemployment in many Organisation for Economic Co-operation and Development countries have fallen significantly since 2012 while Australia's unemployment rate has remained stagnant; and

(b) Reserve Bank of Australia observations about the likely limited effect on economic activity of further interest rate cuts;

(3) recognises:

(a) the negative impact on the federal budget in continuing high levels of unemployment;

(b) the cost to individuals, the community and the economy in people not being able to find work; and

(c) the Government's failure to grow full-time employment opportunities; and

(4) urges the Government to give higher priority to addressing labour market stagnation and take whatever steps it can through fiscal policy and selective initiatives to address this ongoing blight on Australian society.

Last week, Australians woke to the news that wages growth had hit all-time lows and that the task of finding a job or even some extra hours was at least as difficult now as it had been during the global financial crisis. What was not news was that this government had simply no plan for the unemployed, unless that plan was to wait for something to turn up—like Charles Dickens's Mr Micawber in my favourite Dickens novel, David Copperfield.

Honourable Member:

An honourable member interjecting—

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

No, I have plenty of time on my hands to read—I always read. Providing tax cuts on the never-never to large foreign companies is not a labour market policy; it is not even a sensible variant of trickle-down economics. Last week's ABS data were, in short, as disappointing as those in the preceding months and for much of the last three years.

Yes, the number of jobs have been growing. It really takes a recession of disastrous proportions to totally kill off jobs growth. For the first time in about a year there was a small increase in full-time jobs. That was where the good news stopped. Wages growth is so slow and so at odds with the government's budget projections that it actually threatens a return to budget surplus. Australia's headline unemployment rate remained firmly stuck in a rut. In October 2012 our unemployment rate was 5.3 per cent; it is now 5.6 per cent. Employment measured by the number of hours worked—the total work effort—continues its decade-long decline.

All up, the Abbott and Turnbull governments have made no real net progress on unemployment and employment since the first half of 2013. That is despite wages being completely becalmed. The budget and subsequent estimates of unemployment continue, even if the world economy stays out of strife, at around 5½ per cent until 2019-2020. That is not great news if you are looking for work or looking for extra work hours. It is bad news too if you are one of the 160,000-plus Australians over 15 who have been looking for work for over a year—a figure that has worsened in the last two years.

Youth unemployment is substantially higher than it was in October 2014, and underemployment has risen from just over 800,000 in 2012, to over 1.1 million in August this year. Of the 400,000 jobs added between October 2014 and 2016, barely 30 per cent have been full-time. The only thing that has stopped the unemployment rate rising is the continuing decline in labour force participation. It is now down to levels not seen since November 2005. That is all despite being in our 26th year of uninterrupted economic growth, all-time-low interest rates, a small but significant improvement in our terms of trade, a more export-friendly dollar and a shift in the balance of economic activity away from much less labour-intensive industries.

While rates of unemployment in America, the UK and other OECD countries have halved in recent years, ours has stagnated and continues to stagnate. What is to be done? Policymakers must stop ignoring poor employment outcomes or treating unemployment as some sort of statistical residual, too hard to fix. The economic problems of this decade are different to those of the seventies and the nineties. The stagnation in real wages and the marked decline in the wage share, once seemingly almost unthinkable prospects, are part of a new reality that requires a rethink of priorities. By extension, continuing a fighting-inflation-first policy only make sense if you have in mind what you are going to do second, especially if unemployment remains at unacceptable levels and the inflationary risks are virtually abated.

Let us stop blaming the victim when we talk about unemployment. If there are six or seven times as many people looking for work as there are jobs to go around, unemployment is inevitable. It is not a choice. Unemployment and underemployment have a real human cost, especially with young people. The government needs to stop fooling itself that all is well with the Australia's labour market. It is not. Shying away from an aspirational unemployment target speaks more to political management than economic management. Selective government investment in infrastructure and investment in our people and our future would be timely and welcome. Giving tax cuts to big business will not, in any substantial way, improve unemployment, and it would be much better spent on infrastructure investment. Repeating a mantra of jobs and growth is not an excuse for action. It is time to act on unemployment.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

Is the motion seconded?

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

It is great to have the two docs talking about job creation—specialist docs at that, but whether they are experts on job creation is another matter! I think it is fair to say that both sides of politics have taken this area of jobs very seriously. Both have reasonably good claim to have negotiated tough periods. The GFC was a significant test on any Australian administration and the results were reasonably good, although there is some debate about how that was achieved. Even now we have even more significant but more subtle challenges for the economy.

If there is one thing to remember in a debate about jobs, it is that you cannot ever afford to clear the larder of surplus for investment in the economy when you think things are really desperate and dire because, sure enough, five to 10 years later there will be other challenges. We will need to have money in the drawer for those needs as well, and for the needs of our children. But that is a debate for another day.

Today I want to make two or three points about jobs. It is an important issue and I know a lot of people will be listening to this debate, and I congratulate the member for bringing this motion today. The first point is the sense that there is a bit of a jihad against part-time work. I think that is quite unfair. Secondly, we need to remember that in absolute terms Australia, even by OECD measures, is performing very well. But the member has chosen specific measures that are relative and show that Australia is not competing as well in job creation as some other countries. But, remember, that many of those are coming back from a far larger fall post-GFC and now look relatively good in their movement. We accept that. But it is always tempting in these debates to just chop and change and top and tail the element that suits your purposes and your numbers. But over a longer period Australia's low unemployment rates, though concerning youth unemployment rates, are still the envy of most of the OECD.

With respect to the speaker on the other side if there were to be really good comparison it should be with Canada, and equivalently-sized, resource-based economy. I will pause and look at Canada for a moment, which, under a left-wing government is genuinely struggling with unemployment—this year ticking off at seven per cent. That represents hundreds of thousands of Canadians, who would probably be engaged in work if they were living in an Australian system. Canada has genuine problems with youth unemployment, with an almost equivalent economy to Australia, where we are rolling along in the mid-5s. The story post-GFC is really how a resource economy like Australia lost so much—and here is a member who knows exactly what we have been through. No, we did not raise the coffers to solve this commodity crisis problem. But the OECD stepped forward and said, 'We know that you did not have money in the hopper, because it all went in 2009 and 2010.' They said: 'The fall in commodity price has been a break on wage growth, but it may well have helped to limit job losses and the otherwise rising unemployment that we see in other countries.' So you have this value judgement about whether you really want wage growth or broader employment. Most of us would agree that the social protection in being connected to employment is incredibly important. The OECD talks about non-educated, employed jobseekers—they call them NEETs. Australia is performing better than the OECD on the proportion of our potential workforce that is actually educated and trained and job ready. They agree that we have the most aggressive in the world efforts to connect, through big investments in jobactive services and Work for the Dole. It is worth remembering, and the member should take this back to his electorate, that under the hegemony of Rudd and Gillard Work for the Dole withered and atrophied away to about 15,000 people. That vestigial remnant of Work for the Dole is now systematically being brought back to 10 times that size—150,000 Australians.

I want to pose this last question, which concerns this almost jihadic approach to part-time work. People move between the two. It is way more important to note simply how many hours are worked in the economy, and that has gone up by about 3 million hours or 0.2 per cent, which is very small but steady and trending upwards. Most of that is population, I agree; not much of it is participation, regretfully, and, definitely, we will both agree that not much of it is productivity.

Going back a step on this, we need as many households as possible having at least one person working in some form. So don't begrudge part-time work for the role it plays in the first step back into the workforce, because Australia, the UK and New Zealand have the highest proportion of households that have no-one working at all. That is our common challenge. But part-time work is playing a big role in that. What we are seeing at the moment is that part-time work as a proportion of our economy is from 31 to 32 per cent. We have seen, particularly for males, a fall in full-time work and a move across to part-time work. But the overall hours are increasing. What does that suggest? It suggests a better spread of employment opportunities across the population. The enemy in this debate, we both agree, is households that have no work at all.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I have the ABS figures in front of me. It is interesting to note that since December 2013, a few months after the coalition was successful in the previous election, close to 500,000 new jobs have been created in our economy—half a million jobs under this coalition government. We would have liked to have created more. We would have liked to have seen greater wage growth, but you have to put that in the context that we have seen one of the largest declines in our terms of trade in the nation's history. If we are getting less for our major exports—for our coal, for our iron ore—of course that puts downward pressure on wages, yet despite that, there are 500,000 new jobs under this coalition.

I would like to compare that to the previous six years of Labor government, where we saw the unemployment queues in this country increase by 200,00 people, despite a deficit. The government was spending an extra $300 billion of borrowed money to pump into the economy, and still the unemployment queues of this country increased by 200,000 people. Compare that to what happened under the previous coalition government. When we are looking at what policies we should take forward to get that unemployment down, how about we look at the lessons of our recent history to see what happens? We know under the previous Liberal government, the Howard-Costello government, we took 300,000 people that were on the unemployment queues and put them into work. We reduced unemployment. The queues were 300,000 people shorter, and yet under Labor those queues increased by 200,000. We could fill the MCG twice with the number of people that Labor added to the unemployment queues of this country.

Why is it so? Do you know what happened? During that period of time, I remember one of the things that the coalition government did. They lowered the rate of company tax. They lowered that rate from 36 per cent down to 30 per cent. I can hear members on the Labor side saying, 'Oh, that's terrible. They gave all this money, all this extra tax revenue, back to the big businesses. Isn't that terrible?' Do you know what history actually shows? Companies were paying more tax, not just in gross terms, but as a percentage of GDP. The tax revenue flowing into the Treasury was greater at 30 per cent tax than it was at 36 per cent. In our history, every single time we have lowered the corporate rate of tax, we have simply got more taxation revenue. Going back to when our taxation rate for companies was previously 49 per cent, we were only getting 2.5 per cent of GDP as tax revenue. When we lowered it down all the way to 30 per cent, we were collecting over five per cent of GDP as tax revenue.

It is quite simple. What we have to understand here is that government does not create jobs. It is government policy, it is government interference in the marketplace that takes away jobs, that creates deterrents for companies going out there and investing and employing. That is what we have to get back to. We have to get back to making sure there are incentives for a person that wants to be an entrepreneur and has their own capital on the line to say, 'You know what? I'm going to take a risk. I'm going to give this person a job.' That is what creates jobs in this economy, and that is why we need to look at what our corporate tax rates are. The Labor side say it is for big business; above $1 million or $2 million worth of sales is not a big business.

An honourable member: Many family businesses.

Many family businesses are not going to get that tax cut. That is what we need to incentivise, because unless we have private individuals in this economy prepared to go out and take a risk and say, 'I'm going to give this person a job and employ them,' and to add value to the economy, we will never get the unemployment rate down in this country. That is something, unfortunately, the Labor side simply does not understand. They think you can get in there, and government can spend more money and borrow here, and every single time we have seen the results: more and more people on the unemployment list. With that, the coalition so far has a very proud record on jobs, and we are prepared to stand on that record. (Time expired)

Madeleine King (Brand, Australian Labor Party) Share this | Link to this | Hansard source

I would like to thank the member for Macarthur for raising the important issue of the Australian unemployment rate, which is having a detrimental impact on communities across Brand, the electorate which I represent in Western Australia. It is a most timely to raise this motion because only last week the Australian Bureau of Statistics reported that Western Australia has the highest rate of unemployment in the country. It is quite a record for Liberal Premier Colin Barnett to have presided over. While Australia's national unemployment rate is 5.6 per cent, WA is dealing with an unemployment rate of 6.5 per cent. In fact, just this morning Rio Tinto, the mining giant, has confirmed it is cutting more jobs across its iron ore division in WA. It looks like 500 more jobs will be lost, and that is in addition to the 170 jobs Rio Tinto cut in its Pilbara operations in March.

This WA unemployment rate may shock some people in the eastern states who consider WA a rich mining state, but it did not shock or surprise us members from the west who are seeing the impact of a faltering economy and the end of the construction boom which has enabled great mineral exports. I must add that the end of this construction boom in WA was utterly foreseeable. There has been a failure on behalf of the Barnett, Abbott and Turnbull Liberal governments to look ahead and plan for how governments could help build Australian jobs through the initiation of nation-building infrastructure projects, which only governments can get off the ground, despite what others might think.

We are seeing in our electorates the impact that rising unemployment is having on local families, local youth and local businesses. We are seeing the impact that underemployment is having on communities. Although people are in work they are not receiving enough shifts or hours to pay the bills or to put food on the table. There is just not enough work to go around. The people in Brand want meaningful jobs. They want to be able to access training that leads to real employment opportunities. They want their children who are finishing school to have a better future to look forward to than the one currently on offer.

The youth unemployment rate in Brand is more than double the national average at 13.6 per cent. That is an absolute shame. What is also an absolute shame is the government's failure to address this stagnation in the labour market and its failure to grow full-time employment opportunities. I see the costs regularly that this is having on people, on communities and on the economy. It is leaving vast numbers of people with little hope of gaining employment because the jobs just do not exist at the moment and there is little hope of them emerging in the future.

Without sound investment and without strong government leadership and vision—again, for large infrastructure projects—these jobs will not exist for some time to come. Our young people deserve better than this. Our young people are still applying themselves to be the best they can be and they deserve to be able to find a job to start their working lives. Nowhere was this application more visible than on Friday in Orelia where I had the good fortune to be at the opening of the Peron Trade Training Centre located at Gilmore College in Kwinana. This process and plant engineering centre is a very special initiative that is supported by local industry. Here students will gain invaluable experiences through the vocational education and training in many aspects of the oil, gas and chemical engineering industries.

It was also an initiative of my predecessor. The Hon. Gary Gray AO was instrumental in setting it up. Gary pushed hard for this facility to be built at Gilmore College in Kwinana because he saw how important it was to give local students the skills that they need for the workforce. The facility allows local students to believe in themselves. It shows them that they have the right to first-class training opportunities and with that the right to work. It must be said that these training opportunities and facilities have been denied to this area for many years. The proud students and the families at the college who I spoke to are optimistic of a bright future. We need to provide them with employment opportunities in order for them to avail themselves of that right to work and to realise their optimism.

Gilmore College is only minutes from the Kwinana industrial strip, an area which delivers billions of dollars to the WA state economy. It has historically employed many people from the local area. It could also be home to a new outer harbour. This would be a long-term, nation-building project that would create much-needed jobs and economic opportunities for the people living in local communities, for WA and for the country. The government is failing to consider the need for this project and its importance to WA and the nation. It is failing to invest in a project that is estimated will create 25,000 new direct jobs and will help grow local, state and national economies. The government is instead pursuing an outdated road toll and freeway project that will smash through the suburbs and wetlands of Fremantle. In an unbelievable piece of shocking planning the Perth Freight Link will end two kilometres short of the freight destination of the port of Fremantle. It truly beggars belief.

The Kwinana outer harbour project goes beyond providing employment during its planning and construction phase and will provide trade, industrial and business development opportunities for decades to come, which of course will lead to significant employment opportunities in the future and the future of young people of Kwinana and Brand. I urge this government and the Barnett government to have a go at looking at the future.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

This gives me great pleasure. I thank the member for Macarthur for moving this motion because it gives us an opportunity to advocate for a strong economic growth agenda as the most effective means to address unemployment. The coalition wants job growth because, in the end, job growth provides the opportunities for Australians to stand on their own two feet, to be independent in their own financial affairs and to be able to help support themselves as well as their family. But one of the most important things about people standing on their own two feet is not just that they are able to help themselves up but that they are also able to help others.

More importantly, we want strong job growth as Liberals because we want taxpayers. We want people to share the burden of managing the cost of our society so that we can help people who are most vulnerable—to be able to assist those people who are not in a position to change their circumstances, such as people with a disability or pensioners, or to be able to underwrite and support the important health services that people need across the country. That is why we believe in job growth. That is why we stand for liberalism and everything else that we believe in. That is why we are achieving it under the Turnbull government. The role of government is to create the environment for economic freedom so people can go on in enterprises, invest and offer opportunities to Australian jobseekers.

The reform era of the past 30 years has enabled unbroken economic expansion, and that is an exciting thing. It has enabled the opportunity to create jobs for the 21st century so capital can be directed to opportunities to create jobs for the people who need them and so we can always stay ahead of the pack—rather than the reactionary mindlessness of protectionism, which has previously existed in this country and is being dismantled, where we saw shipping, telecommunication and airline industries which were deregulated and enterprise bargaining superseding centralised wage fixing. The tax system has also been modernised.

What that has allowed is business and enterprise to move capital to invest into the future, and that is what we should want. As a result, only a dozen economies are bigger than Australia's and only one country has reached our per capita wealth. We must continue this economic progress, advocate for economic openness and remain firm against the growing antiglobalisation sentiment which, frankly, we are starting to see from the other side as they seek to replicate Donald Trump's sentiments because they think it will give them some sort of political leg-up—something that I am very concerned about. The justification for economic rationalism is to protect or, to quote, 'save local jobs', but history shows it does exactly the reverse. When are they going to learn the lessons of history? Protectionism will do little more than entrench unemployment in Australia, favour those who have invested in the past, and support and protect their industries at the expense of exactly the same people that Labor claim they want to get jobs for.

The difference between us and them is that they are interested in protecting the interests of those people who are members of unions; we are interested in creating the opportunities for people who do not have jobs. The quality and quantity of the jobs in the future rely on access to overseas markets, allowing us to export our competitive services alongside our natural resources and value-added manufacturing. That is right—the economy is built from the bottom up; it is not just delivered by some government bureaucrat in Canberra. We are about community control, not about Canberra control.

Honourable Members:

Honourable members interjecting—

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

Order! Order!

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

Unproductive areas in the economy will always attract technological disruption. We are producing more with less, which requires flexibility in the labour market. We know that high unemployment protection has a negative influence on youth unemployment levels. While it is true that there has been growth in underemployment, economist Tom Kennedy stated that 'employers were increasingly seeking working arrangements with the flexibility to adjust hours', rather than have positions bound on them. Over the past year, the number of full-time jobs dropped by 0.4 per cent while part-time employment increased by 4.6 per cent. That means more people are being employed in diverse sectors and meeting modern lifestyle flexibility arrangements.

Full-time work, of course, is preferable for many people, but not everybody—particularly for women, who are balancing challenging circumstances around family arrangements. We should stand up for them, create the opportunities for them and not try to dictate to them how they live their lives. While many people are engaging in multiple part-time jobs, those who argue for inflexible industrial relations are now the enemy of worker security, because when you do not have a situation where people can get jobs and they are bound only to do it based on what the Labor Party and the trade unions think, they will not get jobs in the first place. (Time expired)

Mr Snowdon interjecting—

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Lingiari is not allowing the chair to proceed with the—

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Sorry.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned, and the resumption of the debate will be made an order of the day for the next sitting.