Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

Taking off from where I left off: from 1 January 2017 Australian employers will be eligible for a youth bonus wage subsidy if they hire a young jobseeker who has been in employment services for six months or more. Most job-ready young people will attract a wage subsidy of $6,500. A larger $10,000 wage subsidy will be available to businesses that employ jobseekers with barriers to employment. Businesses will have the flexibility to employ young jobseekers either directly, through labour hire arrangements or combined with an apprenticeship or traineeship.

As part of these reforms, existing wage subsidies will be streamlined making them easier for employers to access. Wage subsidies will be available to employers from day 1 of a young person's employment. Employers will choose how often instalments are paid—whether fortnightly, monthly or some other arrangement—and over what time period. Wage subsidies will be paid over six months and at a flat rate instead of pro rata instalments. Employers will have up to 12 weeks to decide whether to enter into a wage subsidy agreement.

In relation to youth innovation and self-enterprise: in our 21st century economy, opportunities are becoming open to people at every income level, and young people have the skills, knowledge and attitude to capitalise on this. The government will encourage young people to start their own businesses by fostering their innovation and interest in self-employment. Young people do not often look at a small businesses as being an option, but the Sunshine Coast—where the seat of Fisher is, where I come from—is becoming more and more known as the entrepreneurial small business capital of the country. This program will fit very neatly with that, because it will encourage young people to look at starting their own businesses.

In addition to creating the Youth Jobs PaTH, the government is investing an extra $88.6 million in supporting jobseekers, including young people, who wish to start their own businesses. This complements the government's National Innovation and Science Agenda and will help more Australians capitalise on the opportunities presented by Australia's economic transition.

From 1 December 2016, eligibility for the highly regarded New Enterprise Incentive Scheme will be broadened to allow access to self-employment training and mentoring for jobseekers who are not on income support. The government will provide funding for an additional 2,300 New Enterprise Incentive Scheme places each year, making a total of 8,600 places available annually. The New Enterprise Incentive Scheme will continue to provide eligible jobseekers with small business accredited training, mentoring and business advice for up to 52 weeks.

The government's National Innovation and Science Agenda recognises the importance of innovation and the ideas boom, especially for young Australians in the new economy. Australia's future growth and prosperity rely on having a sufficient workforce to fill the jobs of tomorrow. To do so, we need to increase workforce participation, especially by supporting young Australians to get and to keep jobs. The government will establish new 'Exploring Being My Own Boss' workshops to engage jobseekers to explore self-employment. To help young people to develop their innovative ideas into successful businesses, self-employment starter packs will also be introduced. These will contain information on the services available to support jobseekers to establish a business.

I remember the night that I decided to start my own first business. I spoke to my dad, who at that stage had been self-employed all his life. He started out as a motor mechanic at the age of 14. He told me that, if you start your own small business, you will never, ever get the sack because you will always be your own boss. They were words of wisdom from my dear old dad, because I basically spent the next 30 years working for myself, and I never got the sack!

Finally, entrepreneurship facilitators will be appointed in Cairns, Launceston and the Hunter Valley—locations with high youth unemployment. Facilitators will help bring together available services and programs such as jobactive, the New Enterprise Incentive Scheme, microfinance services and start-up incubators. They will also provide practical assistance, including help accessing local mentors, business partners, finance, office space, equipment and ongoing business development training.

It is worth pointing out at this point that I recently attended the University of Sunshine Coast's Innovation Centre, where many start-ups and young people look to start their own businesses with the assistance of the mentorship of more experienced businesspeople, and also gaining support and assistance from academics and other like-minded people. In fact, I spoke to one gentleman who had a multimillion dollar business and, yet, he was operating out of a small office at the Innovation Centre because, in his view, the Innovation Centre at the Sunshine Coast was such a fantastic incubator for small businesses that he would rather spend his days working in that environment, in a collegiate environment, assisted by those people, than operating in a flash office in his own business. I commend the government's Youth Employment Package. It will get young people ready and it will give them a go and get them a job. I commend the minister on the bill.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Far be it from me to wish anybody the sack—we will see how the member for Fisher will go in three years. Youth unemployment is a big issue in my electorate of Lyons. There are far too many young people not at school, not in training or not at work. In August, the Australian Bureau of Statistics stated Tasmania's youth unemployment rate was 18.7 per cent, and that compares to a national average of 12.7. Some parts of my mostly regional and outer suburban electorate suffer unemployment rates amongst 15- to 24-year-olds as high as 27 per cent. It is a crushing level of unemployment; a terrible waste of human potential.

All of us, in this place, agree that the scourge of youth unemployment needs to be addressed, but I think where we differ is how we get it done. On this side of the House, we believe a large part of the answer lies in addressing underlying issues that cause young people to be underemployed or unemployed in relation to other Australians. Better education, better training and more access to apprenticeships are the key. But these things require long-term government commitment and investment, and that does appear to be a stumbling block to those opposite.

One thing that we do not do on this side of the House is blame the unemployed for being unemployed. The vast majority of young people want to work. Some lack the skills for the jobs they want, some lack the ability or the resources to find work. Many others apply time and again and are simply unlucky, because the simple truth is, there are many more young people looking for work than there are jobs available. Sure, we all know someone, or at least a story or an urban myth of someone, who is capable of working but chooses not to. In my state of Tasmania, there are many fruit-picking jobs available. It is so difficult to source labour locally, despite high unemployment, that farmers rely overwhelmingly on backpackers. In 2013, those opposite did try to force young Tasmanians to pick fruit by seeking to remove unemployment entitlements for lengthy periods. That vicious plan was abandoned when it dawned on the government it was simply unworkable, because, of course, fruit picking is seasonal; it is not permanent; it is not secure. It is perfect work for young, fit people who seek a short-term job but it is far from a permanent, secure option. It is a job ideally suited for working holiday-makers—backpackers—and that is why Labor is keen to attract backpackers to this work and not price ourselves out of the international market. But that is a debate for another time and in another place, if the other place ever manages to bring on the debate.

If we want young people in permanent work, we must as a nation create more opportunities for permanent work. And we, in this parliament, have our role to play. For example, by offering support for Australian industry such as an Australian shipping industry, that will help keep and create jobs here. Australians, like Andrew, who was in the public gallery at question time today, can get a job in Australian shipping and plan for a secure future. Addressing what appears to be a proliferation of foreign workers in traditionally entry-level jobs at service stations, construction sites and aged-care homes is also part of the solution. Addressing this has to be part of the debate because these are exactly the sorts of entry-level jobs that give young Australians a start in life.

When it comes to jobs in Australia, we should look local first. Fast food outlets, pubs, supermarkets, restaurants, service stations, these are the sorts of jobs that are ideal for young people and which already employ thousands of them. Unfortunately PaTH could actually make things worse, not better, because it incentivises employers to put on free labour—temporary interns—over full-wage employees. Employers basically get a worker for free for 12 weeks, the wages are paid by the government plus the employer gets $1,000 for the burden of putting somebody on.

Under the coalition's rules, there is nothing stopping employers using cheap youth labour, so-called interns, to displace real jobs and churning through new interns every 12 weeks. Treating young people like they are disposable should not be part of any decent youth employment solution. But of course, it is my fear that the Youth Jobs PaTH program is not really about young people. PaTH is about providing employers, particularly big corporations, with easy access to a pool of free labour; it keeps wages down. If PaTH was really about making young people job-ready, it would include proper training and skills pathways. It would require more of employers, not less.

Instead, there is nothing in this program to stop an employer sticking a PaTH employer on a deep fryer and getting rid of them after 12 weeks and then starting again with somebody else and collecting another $1,000 for every new intern they put on. Worse, it appears these interns can be told to work weekends and nights—times when paid workers would receive penalty rates. 'Register now to host an intern' says the PaTH application form. Businesses will receive an up-front payment of $1,000 to help cover the costs of hosting an internship placement. All the form requires is a name, organisation, ABN and email—that is it. There is nothing about training, nothing about mentorship, nothing about the potential for ongoing work.

These young people are perversely called 'interns'. I have worked in private enterprise most of my working life. At the newspaper I worked at, we supported university intern programs. We would offer four- to six-week placements for senior journalism students and graduates. They received on-the-job training, mentorship and the chance to build a portfolio of published work. And we in turn received a warm body to give extra jobs and research to. Sometimes we would get an absolute ace of an intern and they would be given more complex stories to cover. It was in the main a win-win for both parties. Sometimes interns—desperate interns—would offer to stay on the job for free for months on end. But we always turned them down because there comes a time—and it is different for everyone—when it stops being an internship and it simply becomes sweatshop labour.

Most reasonable people would think of interns as students or graduates gathering on-the-job training in the profession of their choice such as journalism, law, politics or something similar. Few would consider a kitchen hand or a check out operator or a cleaner to be an intern. And of course every free or cheap person on-the-job is one less paid employee that you need—less superannuation, less workers compensation, and less annual leave to pay. Free youth labour might be nirvana for employer groups but it is a direct assault on the Australian culture of a fair go.

I hear the arguments of those opposite, who say a so-called internship will get young people job ready because it gives them experience, it gets out of the house and it gets them used to getting up early and dressing neatly. I do strongly believe that work develops character. I recommend it to every young person whether at school or not. My first job was at 14, at Hungry Jacks, and I stayed there for 14 years—and I have kept the kilos that I put on them. But if the entry-level job market is saturated with interns, what jobs are young people expected to get? What I can see happening is young people ending up on a never-ending treadmill of free internships and traineeships, never able to crack a real job because the jobs that used to be properly paid are filled by free interns.

I want young people in work, but I want them in decent jobs and not exploited. I want a job market where the disgraceful goings-on at employers like 7-Eleven are the exception not the norm. Our national character and identity are built on the notion of a fair go. There is nothing fair about treating young Australians like second-class citizens who are somehow unworthy of the pay and conditions that working men and women have fought for generations to create and protect. I have an obligation to the communities, families and young people in my electorate to ensure they are given decent opportunities to find meaningful ongoing employment.

There are many unanswered questions about PaTH. What happens if an intern sustains an injury at work? Are interns covered by workers compensation? The government has not addressed this important question. Will the base $200 a fortnight include the possibility of being made to work on public holidays and weekends? Does a penalty rates regime apply for these times? I suspect it does not. Will interns be expected to do the same work as someone earning a full-time wage? The government has not clarified this either.

For $200 a fortnight, on top of Centrelink entitlements, a young person can be expected to work up to 25 hours a week—eight bucks an hour. Is that our measure of what a young person is worth in Australia in 2016? What qualifications will an intern have earned after four to 12 weeks in a workplace working 15 to 25 hours a week? Will they have a recognised certificate or qualification to assist them with getting a proper paid job? I doubt it.

With PaTH scheduled to start in May, the government has many questions still to answer. It still cannot even tell us what and intern actually is. Labor intends to refer this bill to a Senate inquiry because the Australian people deserve these answers. Australians have fought for too long to win decent pay and conditions to see them undermine with reckless, lazy legislation. The bedrock of our society is 'a fair go for all'. We must never be a nation that applauds exploitation. Yes, we want young people in work. But we on this side of the House know the way to achieve this is through more support for education, training and apprenticeships, more support for Australian industry and more robust oversight of working visas to ensure that young Australians get the first crack at Australian jobs.

Trevor Evans (Brisbane, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. I was very interested to hear some of the comments from the member for Lyons. I note that he commended schemes like this in terms of how they would work in the industries with which he has experience and that he has concerns about how the scheme might play out in a range of other industries. I would say two things in response to that. First of all, the parameters of the scheme will not allow many of those fear-mongering claims to occur in practice. Secondly, it reveals maybe a lack of understanding about the number of unemployed youth and the number of firms and businesses in the industries he listed that would be perfect for finding jobs for unemployed youth. As I will discuss a little later, there are over 400,000 shopfronts in this country that fit the description of the industries that the member for Lyons listed. If they were all to attempt the sort of churn that he described, the churn would last for the first tranche of 12 weeks and then all the unemployed youth in Australia would have work experience, opportunities and things on their CV, which would be a fantastic result.

We do have a serious and lingering problem with youth unemployment in some parts of Australia. While unemployment is relatively low in my inner Brisbane electorate due to the economic opportunities that are present there, we can and must do better to address it. In particular, I think it is worth noting the contribution of the Hon. Grace Grace, a state MP in Brisbane, who is supposed to be the Minister for Employment in the Queensland Labor government. I think it was earlier this year that she said, 'There's not much that you can change.' Truly, that was not a heartening moment for the tens of thousands of young people looking for work around Queensland, especially in areas like Cairns and Townsville, where youth unemployment really is a crippling problem.

I do not think it is a case of saying youth unemployment is nothing new or that it is good enough to bury your head in the sand, or to put this problem in the too-hard basket. I think there are things that we can change to help reduce youth unemployment and I am willing to support proposals such as this bill to try to help. I have played a role in providing training to job seekers, creating traineeships and work experience, and fostering new jobs. All of that experience suggests that this proposal is likely to make a real difference. That is because I understand how sometimes, especially for many entry-level jobs that are available right now, recent experience and a foot in the door of the job market can contribute as much to someone's prospects of getting a job than to any formal qualification.

When I worked with the retail sector, I used to conduct regular experiments everywhere I went around the country—in conference halls, boardrooms and conventions—where I asked people about their first step into the job market, where they got their first experience and first opportunities from. It was always remarkably consistent how over half of the room had got there foot in the door of the jobs market through businesses like retail and hospitality, and more often than not a small business, that had given someone a go, given them some work experience, something to put on their CVs and, most importantly of all, some job-ready foundation skills like customer service or sales that they could then apply for the rest of their careers wherever those careers took them. Experience and opportunity were the key to many of those stories and it is experience and opportunity that we are trying to create with the proposals in this bill.

Employing youth provides self-esteem and self-worth and it provides financial independence and dignity for youth unemployed. The Turnbull government's national plan for economic growth and jobs will facilitate this economy's transition to broad-based growth over the next decade and beyond. The $840 million youth employment package provides an enterprising new approach to youth employment and we aim to help up to 120,000 vulnerable young people over four years to take advantage of job opportunities as the economy diversifies and transitions. The youth employment package will help get young people ready, give them a go and get them a job. Before I dive into the specifics of the bill, I would like to speak to the timely nature of this bill for my home state of Queensland.

The next tranche of Queensland's lockout laws will begin by February. Labor's lockouts are costing Queensland the equivalent of 6,000 jobs, mainly for younger workers and at a time when the Queensland economy obviously does have some lingering and local problems in some areas with high youth unemployment. The cost to the Queensland economy is estimated to be around $150 million a year and many of the young people who work in our pubs, clubs, live music venues and the night-life economy have already found their hours and their shifts reduced. Many will suffer further cuts to their hours and their take-home pay when the next tranche takes effect. So I suppose I want to make the observation that while the Turnbull government is getting on with its job of fostering employment and empowering our youth, our state Labor counterparts appear to be doing the exact opposite.

The Turnbull government recognises that one critical aspect of the youth unemployment issue is that youth can often be a proxy for experience. Young people, often due to a lack of experience in the workforce, can face higher difficulties getting the start they need in the workforce and more can be done and more must be done to help young people who are finding it hard to get into the workforce. Young Australians need the right assistance and encouragement to learn new skills, become job ready, get a job and keep the job. In formulating this bill, the Turnbull government has gathered feedback from businesses all around Australia, large and small, and the preliminary findings of that investment approach analysis, international best practice and domestic experience have all been taken into account to design an innovative Youth Jobs PaTH program that will truly make a difference. The pathway will encourage employers to hire young people by enhancing their employability, providing them with real work experience and increasing incentives for employers to take them on. The program will also help to incentivise and instil confidence amongst vulnerable young people to make the transition into employment.

The government's innovative Youth Jobs PaTH program will help young job seekers to move off welfare and into employment. I truly believe that. The three stages of the Youth Jobs PaTH are (1) to prepare—with detailed employability skills training; (2) to trial—an internship placement of up to 12 weeks with financial incentives to participate for both the businesses and the job seekers; and, finally, (3) to hire—including more accessible and increased wage subsidies for youth.

For the first part, we will help young people gain a foothold in the labour market by providing intensive, pre-employment skills training within five months of registering with jobactive. The first three weeks of training will focus on skills such as working in a team, presentation and appropriate IT skills, for instance. A further three weeks of training will centre on advanced job preparation and job-hunting skills.

Next, the government will introduce up to 120,000 internship placements over four years to help young job seekers who have been in employment services for six months or more to gain that valuable work experience. Job seekers and businesses, with the help of employment service providers, will work together to design internships of four to 12 weeks duration, during which time the job seeker will work 15 to 25 hours per week. Participation in an internship will be voluntary for both job seekers and businesses.

In addition to gaining valuable hands-on experience in a workplace, young people will receive $200 per fortnight on top of their regular income support payment while participating in the internship. Businesses that take on interns will receive an up-front payment of $1,000, as the previous speaker mentioned, and will benefit from the opportunity to see what a young worker can do and how they fit into the team before deciding whether to offer them ongoing employment, in much the same way as the former speaker described in his former industries and career.

Stage 3 of the new jobs path provides increased and streamlined wage subsidies for youth. From 1 January 2017, Australian employers will be eligible for a youth bonus wage subsidy if they hire a young job seeker who has been in employment services for six months or more. The most job-ready young people will attract a wage subsidy of $6,500, and a larger $10,000 wage subsidy will be available to businesses that employ job seekers who face real barriers to employment. Businesses will have the flexibility to employ young job seekers either directly through labour hire arrangements or combined with an apprenticeship or traineeship. As part of these reforms, existing wage subsidies will be streamlined, making them easier for employers to access.

In addition to creating Youth Jobs PaTH, the government is investing an extra $88.6 million in supporting job seekers, including young people, who wish to start their own businesses. This is an exciting and timely initiative which complements the government's National Innovation and Science Agenda and should help more young Australians to capitalise on the opportunities presented as Australia's economy transitions. The government's National Innovation and Science Agenda recognises the importance of innovation and the ideas boom, especially for young Australians, in this new economy. Australia's future growth and prosperity relies on having a sufficient workforce to fill the jobs of tomorrow. To do so, we will need to increase workforce participation, especially by supporting young Australians to get jobs.

In closing, I want to make the point very, very strongly that sometimes experience and an opportunity can make all of the difference for our young unemployed. While many people think first about the industries and the jobs where specific qualifications or tickets are needed to perform various jobs or roles, in fact many of the opportunities and jobs being created right now are in the services industries like retail and hospitality. These are the industries where experience and skills can play as big a role in earning you work and a foot in the door as any specific qualification. For the most part, qualifications are not needed to get a foot in the door or a promotion in these industries. These service industries like retail and hospitality, which are capable of creating all of the new starts and the opportunities for so many young people, are predominantly small businesses. These industries are already doing more than any other sector to provide jobs, opportunities and prosperity for the young, for women and for the least skilled, and we will be relying on them even more than ever as some of the so-called fast lanes of the economy have slowed.

As I have previously mentioned in this House, there are roughly 400,000 shopfronts, cafes, food outlets and stores around our country. About 10,000 of them are in my electorate of Brisbane. The majority of them are family-owned small businesses. Collectively, they are the biggest source of jobs and opportunities for Australians. More than one in 10 Australians work in them right now. If every shopfront, as I mentioned, could be encouraged to employ two more workers tomorrow, our unemployment rate would be zero and our youth unemployment rate would be zero, meaning that the majority of young people, as well as our mature-aged Australians, Indigenous Australians and the disabled who are looking for work, would find the dignity they want and deserve. While I do not believe that this bill will be able to achieve all of that, I do genuinely believe that this is a step in the right direction to achieving it—that it can help some of those businesses to have the confidence and the support to employ a young Australian.

If the government can keep coming up with solutions like this, we will have done more than any other recent governments to overcome the potential long-term welfare traps associated with youth unemployment. A few weeks ago I emailed the details of this proposal to small businesses all around Brisbane, and I am very, very pleased to say that the response was overwhelmingly positive and encouraging. I support this bill, and I commend it to honourable members.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I rise to speak to the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. The responsibilities of this parliament are to deliver economic growth which is inclusive, to create work that is rewarded, and to have a decent social safety net for those left behind. The failure of the current government to deliver on those three fronts is nowhere more acute than when it comes to our labour market in Australia. We do have some very serious challenges when it comes to jobs in this country. We have underemployment, which is people looking for more hours but are unable to find them, at record highs. For those people in the workforce we have wages growth at record lows. We have pockets of high unemployment around the country, including in parts of my own state of Queensland. And, for the purposes of this discussion today, we have an extreme issue, an extreme problem, an extreme challenge, when it comes to youth unemployment, with something like 260,000 young people looking for work and unable to find it.

As confronting as these figures are—record underemployment, record low wages growth and 260,000 young people looking for work—they do not completely and properly paint the picture of the devastation that is rort on a young life if they look for a job and do the right thing and are unable to find work. Colleagues in the parliament, on all sides of the parliament, will know that this time of year is graduation time. I am sure the member at the table opposite me goes to a lot of school graduations—as do I; as does everyone in this place—and talks to these impressive young people graduating from high school, who have already probably dipped their toe into the labour market and are trying to work out where they might fit if they are not going on to further study, or even if they are.

When you talk to these young people, you hear the stories and the real angst they feel about what their future will hold for them—when they finish grade 12 and they get beyond schoolies week and recover from that—in the jobs market, a jobs market which is remarkably tight, remarkably difficult and remarkably uncertain for people like them. As the graduation ceremonies break up—and all the selfies are happening and there is all the happiness of the graduating class—in the high schools in my community, I really do think about the prospects for them. I also talk to the families, largely the mums and dads, about where their kids might end up, and at that level, too, there is an extraordinarily amount of anxiety about whether their young people can find a job in the uncertain economy that they find themselves graduating into.

The jobless figures also do not properly paint the picture of the psychological damage done to people who are looking for work for a long time—the long-term unemployed who are unable to find work in this economy—and they also do not speak to the intergenerational vandalism that is done to communities like mine, in Logan City and the southern suburbs of Brisbane, when you have multiple generations of families who, for a combination of reasons, are unable to find work.

Our task in this parliament, as I said, is to deliver growth which is inclusive, work that is rewarded and a safety net for those left behind. Our responsibility to people in my community and, indeed, right around the country is to do what we can to invest in those three pillars of economic policy in this country. I have seen too much unemployment in my community. I spoke about it in my first speech and I have probably spoken about it in one way or another during most of the parliamentary weeks that we have been here. Ideally, both sides of the parliament should share this most important concern for unemployment—youth unemployment in this case—long-term unemployment, intergenerational unemployment, underemployment and, for those in the labour market, that record low wage growth.

That is why we need to really think about this task in two ways. Firstly, there is growing the economy—not as a slogan; we actually need to grow the economy. In my local community that means getting a proper NBN. It means fixing the M1. It means getting our slice of the action when it comes to renewable energy jobs. It means not cutting apprenticeships, so that we can train the trades men and women of the future. That is one part of it. Secondly, we also need active labour market programs. We need very intelligent, well-targeted, well-considered labour market programs. Notwithstanding all of the things that I am about to say about the bills before us—the legitimate and genuine concerns that I do have—at the very least, we are talking about active labour market programs. That is the second element.

Apart from boosting growth in our local communities and making sure that growth is fairly shared, we also do need programs like the ones that we are talking about today. We have our issues with what we are talking about today, but at least we are having the conversation—and a very welcome conversation, if I may say so—about how we specifically help young people in communities like mine get the jobs that they need to eventually buy a home, provide for a family and save for their retirement. These are all of those sorts of things that we cherish in this country and that we should cherish in this parliament.

But we need to make sure that we do not have just any kind of active labour market program. We need to make sure that we get it right. From my point of view, that means five things. We need to get value for money. We need to make sure that young people are not excluded. We need to make sure that wages for people in the workforce are not undercut by some of the programs we are thinking about now. We need to make sure that young people are gaining real skills. Most importantly, we need to make sure that there are real jobs available for them at the end of it. If I am honest, as much as I welcome the attention paid to this crucial issue, I am not confident that we can tick all five of those boxes when it comes to the legislation that we are discussing today.

To go to the detail of it, the bill seeks to implement parts of the government's Youth Jobs PaTH (Prepare-Trial-Hire) program. We all know that was announced in the 2016-17 budget and is intended to take effect from April next year. It is all about providing jobseekers between the ages of 17 and 24 with some pre-employment training and some voluntary internships for from four to 12 weeks. Jobseekers receive $200 a fortnight on top of their current income support payments. Businesses will be paid $1,000 to take on an intern. The businesses get a wage subsidy of $6½ thousand to $10,000 if they hire jobseekers at the end of those internships. Specifically, the bill addresses small parts of the overall program that cannot be dealt with by the department. There are some provisions inserted into the relevant acts—for example, to allow young people to suspend their payments if they find work and restart them within 26 weeks if they lose their job through no fault of their own.

As I said, I am pleased at least that, as a foundation for this discussion, there is a recognition that we do have a serious problem with employment in this country. It really is a symbol of the sense that people in communities right around the country have that the economy is not necessarily working for them and that there are changes going on in the economy that are leaving people behind. We can debate the political consequences of that, we can debate all kinds of aspects of that, but I think we can all agree that there is an issue where people think that the link between wanting to work hard and the reward for that has been severed in this country, and that is what is driving people to look for political alternatives.

One of the issues with that, if I can respectfully say it, is that being told by the Prime Minister, the Treasurer and others that the economy is going gangbusters at a time when people are finding it tough to find the working hours or the jobs or the wages they need to provide for their families does grate with people. This sense that there has never been a more exciting time to be alive may be true for some, but it is certainly not true for all, and I think that language is unhelpful.

On the surface, if you look at the headline figures of some of the economic indicators, yes, there are some numbers that we would traditionally considered to be pretty good. The headline GDP growth figure of 3.3 per cent and the fact that we have just racked up a quarter-century of continuous economic growth are things to be proud of. When you think about that quarter-century of growth and the fact that we made it through the GFC without the massive skills destruction and capital destruction that so many other countries went through, that is something we should be particularly proud of.

So there are some things in the economy that we should be upbeat about, at least on one level, but below that there are a whole bunch of very troubling indicators and statistics before we get to those stories that I mentioned. Wages growth is the lowest on record, as I said. The statistic that we use as a proxy for living standards in this country, which is real net national disposable income per capita, is still 1.9 per cent below the level it was at the 2013 election. For lay people, that means that our living standards have actually declined over the last three and a bit years since that election. That is a very troubling statistic. If you look at the October jobs figures, which were released quite recently, employment growth slowed to just 0.9 per cent over the year, less than half the two per cent rate the government predicted in its budget. We have lost 89,900 full-time jobs since Christmas. The participation rate has dropped to a decade-long low. Youth unemployment fell again, to 12½ per cent—still more than double the national average, with 260,100 young people unable to find work—but it only fell because the youth participation rate plummeted to the lowest level in the history of the labour force survey. It has never been below 66 per cent before. When we talk about youth participation in our labour market, it is a very worrying statistic. Underemployment was at 8.7 per cent. The Treasury officials at the most recent estimates said that that is the lowest it has ever been and the worst it has ever been since the records began in the year of my birth, 1978.

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

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Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

The member for North Sydney likes that! That means 1.1 million Australians cannot get the hours that they want. The RBA's statement on monetary policy also talked about their underlying concerns about the labour market. Part-time work accounted for all the increases. Growth in part-time jobs was more likely to be driven by weakness in the labour demand than by changes in employee preferences. That means people are forced into part-time work when they really would prefer not to be in part-time work. The RBA also talk, along the same lines as I have been, about their concern about this serious underemployment challenge we have in the economy.

As I said, we welcome the attention paid to this issue of youth unemployment, but we do have our concerns about the program. We are worried about exploitation and about undercutting of wages. We are worried people could churn through participants, leaving them with little prospect of a job at the end. We are worried about young Australians working for less than the minimum wage. We are worried about replacing existing jobs with these jobs paid at the cheaper rate. We are worried about people in sectors like the hospitality sector being replaced by interns so that companies do not have to pay the penalty rates. There is no firm definition of an intern or what they will be doing—whether they will be working or observing, with all of the health and safety implications of that. There are a whole range of issues that we are genuinely concerned about. We all want to get to a good outcome here, but we are very concerned about what this means for the labour market and particularly for young people's place in it.

There are quite a few deficiencies in the policy, and the most important parallel we can draw is probably to the Work for the Dole program. When the Work for the Dole program is explained to people in the abstract, it seems like a good idea, but, when you delve into the detail of Work for the Dole, you find that 90 per cent of participants do not actually get a job at the end of it—which is the main stated aim, at least, of the program. So we need to be very careful, when it comes to things that sound okay on the surface like 'try before you buy' and these sorts of slogans that people use about young people in the labour market, that we actually understand what they mean and whether they have the capacity to work. If we are really genuine about fixing this problem with youth unemployment as a way of beginning to address some of the broader concerns around unemployment in our community, we need to make sure that what we are talking about will actually work.

That is why we want this bill to receive the proper consideration by Senate colleagues in the committee process. We do want to take the time to get it right. It is a pressing issue—it is an urgent issue, but that does not mean that we should rush in and get it wrong and undercut wages and all of those sorts of things that trouble us greatly. I know they trouble the member for Wakefield, who is in the chamber, greatly and all of us on this side of the parliament. We want to get it right. We want to ensure we do get that value for money. We want to make sure that young people, who are already doing it tough enough in the labour market, are not exploited. We want to make sure that, at the end of it, they have developed real skills that are useful in the workplace. We want to make sure that they have the capacity to get real jobs at the end of it.

There is arguably no more important task in this place than to create the conditions where young people can get ahead and prosper if they work hard and do the right thing. I am pleased to see the attention paid to this issue. I am deeply sceptical and deeply concerned about some of the ways that the government is proposing to go about it, but we will learn more about it in the committee process and we will continue to play a constructive role as we go forward.

Chris Crewther (Dunkley, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016. We can all appreciate the importance of the need to get young people into work and how hard it can be to obtain employment without experience or relevant training. Australia's youth participation in our workforce is critical to ensure we counter the problems of an ageing population and a diminished workforce. We are duty-bound to make sure that young people can access employment opportunities and are able to step into these roles and participate in meaningful employment.

As the electorate with the current highest economic growth in Victoria, central to Dunkley is its support for enterprise and localism. For the 12-month period ending September 2016, the unemployment rate sits at a regular level similar to other electorates, but when that data is narrowed down to the 15-to-24-year-old demographic, that figure more than doubles. And when we look at underemployment, it is even higher. This is a common theme across Australia.

There are many reasons why young people may be unemployed or underemployed—that transition period between study or work, or being committed to full-time education—but the concerning reason is being unable to find work or being ineligible for a job because of a lack of a foundation in industry. One of our biggest problems with bringing young people into the workforce is that many employers want experience in a successful job applicant, yet no-one is willing to give them that experience as that experience can only be gained through working in business or in industry. This makes it near impossible to enter the system, short of working for free in order to gain that foothold. That is the juxtaposition of needing experience to get a job but needing a job to get experience.

In Dunkley, we currently have over 6,500 people claiming youth allowance or Newstart payments. Many of these young people would like to work if they were given the opportunity. We, the coalition government, would like to give them that opportunity to work. Nationwide, we have over one million people claiming either youth allowance or Newstart. This number does not include those who may be on other payments related to this period in life, such as Austudy, ABSTUDY or the disability support pension, among others. Welfare dependence is a real risk for this cohort, and long-term unemployment cripples people's ability to avoid welfare dependency. Welfare dependency is a space that no-one wants to be in. It harms self-esteem and takes away independence.

This legislation aims to get 120,000 vulnerable young people out of that harmful cycle by helping them get ready, giving them a go and getting them a job—in this case, known as 'Prepare, Trial, Hire'—and I am proud to be part of a coalition government that is taking action in this area. Particularly as the youngest MP in the House of Representatives, I am personally very passionate about this issue.

Preparing young people for work is absolutely essential. We do not want to throw them in the deep end, especially when many may not have had the opportunity to experience the demands or expectations of a job. Things like working as part of a team or presentation skills tend to be acquired through the experience of actually being in situations where those skills are required. If you have not had the chance to learn these skills, it is unreasonable to expect those entering the workforce to display them. This demonstrates the thoroughness of this legislation, having the depth to make it actually practical. Assisting young job seekers to obtain employment without helping to provide the foundations to perform well and maintain said employment is irresponsible and can set people up to fail. We acknowledge this existing issue, and this aspect of the program addresses these problems.

Employability skills are not always expressly required; rather, it tends to be taken for granted that people entering the workforce will be in possession of skills, such as IT skills or personal presentation skills, or even that they will have had experience of working, or be competently able to work, as members of a team. So many of these abilities are transferable to many situations in everyday life, and the comprehensive preparation that the Youth Jobs PaTH provides young people is commendable.

Trialling an industry through an internship is an option for jobseekers who have been in employment services for six months or more. This internship, while voluntary for jobseekers and businesses, means that participants can gain valuable hands-on experience without feeling like they have committed to something or that they are being asked to undertake work for which they are unprepared. From the perspective of the employer, they have the advantage of seeing what a young person, a young worker, is capable of, especially when they are individuals who may not otherwise be part of the pool of prospective employees available to the business.

Further to this, the internship is designed not to hinder either the participants or the businesses financially. Those young people who take up the opportunity will receive an additional $200 a fortnight on top of their usual income support payments. This means not only that there is a financial incentive to participate but also that this kind of program is clearly linked to progress in jobseeking. In participating, young people actually feel that they are getting somewhere in a system which, thus far, has not been successful for them. Furthermore, businesses that do take on interns will be assisted by a singular up-front payment of $1,000 so that there is an incentive for both the employee and the employer to take this on. For businesses that may otherwise feel that they cannot afford the time required to sufficiently mentor or support these young people, the coalition government recognises and supports their goodwill in taking on an intern and provides the additional assistance they may need to enable them to participate in the internship program.

Hiring these young jobseekers is, of course, ultimately the aim of the program. Stemming from the trial stage, businesses have the opportunity to keep on jobseekers who have already experienced their work. The option also exists to hire in combination with apprenticeships or traineeships. This program aims to ease the path to permanent employment for some of our most vulnerable young people, and the three-stage process of 'prepare-trial-hire' supports both jobseekers and businesses every step of the way.

Once employment is offered, the support does not cease. In the case of those young people who have been in employment services for six months or more, businesses who offer employment as of 1 January next year will be eligible for a wage subsidy starting at $6,500 regardless of the degree of employability of the individual. These are not one-off payments but ongoing over several months, maintaining involvement with the business and the jobseeker. In the case of those who still have barriers to employment, a larger wage subsidy of $10,000 will be offered to encourage businesses to help these young people in the system and not to let them continue to fall through the gaps.

The impact of the Youth Jobs PaTH program is such that it truly gives young jobseekers a chance to access employment, training and opportunities in a way that they may not have been able to before. The people who will be able to take advantage of this program are those who have encountered barriers and obstacles in their efforts to find work, whether due to health or socio-economic factors or because they have been unable to obtain the necessary experience for the job. For example, a young Langwarrin resident in my electorate of Dunkley was recently in the news for having applied for over 200 jobs without success due to an eyesight condition, with employers turning him away once they were aware of a disability. He is a perfect example of someone who wants to work—who wants to be able to contribute—but is struggling to find that opportunity. This program is designed to ease this path. Indeed, this program is about preventing welfare dependency before it starts—a crippling cycle which, for many people, is immensely difficult to get out of. By teaching employability skills and expectations of the workforce, this bill prepares our young people for the workforce, contributing to ensuring workforce sustainability, particularly with an ageing population.

Furthermore, an additional $88.6 million will be invested into promoting innovation and self-employment through the New Enterprise Incentive Scheme. Broadened access for people who are not receiving income support payments provides opportunities for training and mentoring for those who seek to set up their own businesses. The government's National Innovation and Science Agenda supports enterprise and the ideas boom, making our country's economic tradition something to be capitalised on, with new opportunities presenting themselves for innovative young Australians. Training and mentoring will again be available to eligible jobseekers, support which will continue over the first year.

With regard to employers, this bill is important as it works with businesses to bring a larger cohort of talent into Australia's labour force. The coalition government is partnering with businesses to bring these young people into the workforce and enabling these businesses to develop their own staff talent pools, with the aid of financial subsidies and streamlined programs. The jobseekers who come to them, through the internship or through the hire step of the program, are already prepared and equipped for their placements through their intensive pre-employment skills training. This makes it easier for businesses to accommodate or work through any of the barriers that these young people may have encountered previously when seeking employment. With government and business working side by side, we will help our young people become part of the workforce and facilitate the economy's transition to broad-based growth over the next decade and beyond.

This social security legislation amendment bill works to secure Australia's future growth and prosperity by boosting the workforce to provide for opportunities and industries of the future. It will achieve increased involvement in the workforce by catching those for whom the employment networks and services have not worked. The bill ensures that jobseekers are not disadvantaged by taking part in the program, with the supplementary payments complementing, not detracting from, their existing social security payments. It amends the Social Security Act 1991, the Social Security (Administration) Act 1999 and the Veterans' Entitlements Act 1986 to ensure that the Youth Jobs PaTH program is not in conflict with existing legislation and fulfils the youth employment measures announced in the May budget.

In not classifying the fortnightly incentive payments as income for social security and veterans' entitlement purposes, the bill does not penalise those already on payments, who are some of our society's most vulnerable people. This legislation is about protecting and helping to advance the situation of these individuals, not detracting from the little support they receive. The coalition government's commitment to a hand up, not a handout, is what this bill is about.

In Dunkley, we have some wonderful services that assist young people in seeking employment, and they all demonstrate the same story. For example, the Treasurer, Scott Morrison, visited my electorate during the election campaign to see the wonderful work that the Brotherhood of St Laurence do, and the amazing, energetic young people looking to create a career for themselves through the Brotherhood of St Laurence. The fact that these services exist demonstrates that many young people out there have a desire to work but are being failed by the system. The Youth Employment Package will help to get young people ready, give them a go and help them get a job.

This legislation is a fantastic part of the government's National Innovation and Science Agenda, providing opportunities to disadvantaged and vulnerable young people for whom barriers and circumstances make it difficult to access employment. Many young people experience difficulty in finding work, as I have said previously, because many employers require experience, yet few will offer it and still pay jobseekers while they gain that experience. This cycle continues to catch many young people and leaves a large number dependent on welfare.

This is precisely what this legislation aims to avoid. The government is committed to giving our young people a go. This bill provides for an enterprising new approach to youth unemployment, providing 120,000 young job seekers with opportunities for training, internship experience and a path to a job. We want to make it easier for young people to enter the workforce. Having a job boosts their independence, life experience, self-esteem and their own skills development. Everyone has something to contribute to our economy and the Australian labour force. This legislation only makes it easier for young people who, thus far, have been unable to participate. For these reasons, I commend this bill to the House.

Debate interrupted.