APPROPRIATION BILL (NO. 1) 2003-2004: Second Reading

3 June 2003

Mr ALBANESE (Grayndler) (7.04 p.m.) —I think it is commiserations for the Treasurer rather than congratulations today. I wish to make a contribution to this debate on the Appropriation Bill (No. 1) 2003-2004 and point out that the member for Lindsay—similarly to the Treasurer and the Prime Minister—has spoken up the so-called economic miracle. Such comments are nothing short of gratuitous self-gratification. Whilst this attitude by the government may give Treasury economists a warm inner glow, it insults the 620,000 Australians who are currently languishing in unemployment queues, it offers little hope for the nearly 400,000 people who have been relying upon the dole long term and it provides little comfort to the 860,000 children who now live in families where no parent has a job. These Australians have a right to know why they are not benefiting from the prosperity being generated by the economy.

Unfortunately, the budget before us today fails to rescue the unemployed and their families from being permanent members of a deprived underclass. This budget sentences the unemployed to another period of suffering and hopelessness. According to the budget papers, employment growth will fall from 2½ per cent this financial year to 1 per cent next year and to 1½ per cent in the following out year. In short, these figures translate into many fewer new jobs. Despite predicting slowing employment over the next four years, this budget makes no additional investment in the labour market, training and regional development programs that would improve the employment prospects of jobseekers.

In eight budgets all the unemployed have got from this government is a privatised employment service that recycles them through endless programs with little chance of meaningful employment at the end, mutual obligation programs that are more about demonising the jobless than providing them with employable skills and a traineeship and apprenticeship system that is being increasingly exploited by employers as a source of cheap labour rather than as an opportunity to skill up our work force and improve the productivity of the Australian economy. The end result of these policies is that the number of long-term unemployed is higher today than when the Howard government was first elected to office. According to the latest data from the Department of Family and Community Services, 382,176 people have been on the dole for more than a year, 60 per cent of all unemployment benefit recipients. However, this rise in long-term unemployment should not come as a surprise. Under the Howard government, not only has funding for labour market programs been slashed, but they consider these cuts an achievement.

Back in March, the Minister for Employment Services boasted to the Financial Review that his government had cut $2 billion from labour market programs over the past five years. Under the Howard government, funding for employment assistance has declined from 0.67 per cent of GDP to just 0.39 per cent of GDP. On an international comparison, Australia invests 43 per cent less than the OECD average in help for the unemployed. However, Minister Brough does not always emphasise this. He has one message for the Australian Financial Review and another message for commercial radio. When I debated him last week on radio 720 from Western Australia he emphasised how much support the government is giving the unemployed.

This budget continues the legacy of underfunding labour market programs. Even in the context of higher long-term unemployment and slowing employment growth, the only new investment contained in this budget for the unemployed is motivational classes for young people aged 16 to 24. However, this $12.5 million initiative is clearly dwarfed by seven years of cuts. A lack of substantial new investment in this budget will ensure that the government's cornerstone labour market program, the Job Network, continues to perform poorly in reducing entrenched joblessness in our community. The most recent data produced by DEWR shows that only 18 per cent of those who participated in intensive assistance found full-time employment. In the case of the most disadvantaged job seekers, only one in eight, or 12.5 per cent, found full-time work upon completing intensive assistance.

The underfunding of the Job Network was first exposed in a report completed last year by the Productivity Commission. The commission found that the most disadvantaged long-term unemployed were being `parked' in intensive assistance, receiving only the `pretence of aid'. Inadequate funding meant that those who did gain access to IA did not get the help they needed. Only five per cent of participants got any form of work experience and only 14 per cent received vocational training. In its submission last month to the Senate inquiry into current and future skill needs, Jobs Australia, the national peak industry association for not-for-profit Job Network providers, stated that none of the three Job Network contracts provided resources for vocational training for people who have been unemployed for less than 12 months unless that person has been identified as highly disadvantaged. Until they reach the 12-month benchmark the training available to most job seekers relates purely to searching for a job, not equipping them with the skills that improve their attractiveness to employers.

As well as not providing the type of assistance that would most enhance their job prospects, the government, through its restructuring of the Job Network, is making it increasingly difficult for the unemployed to access the limited support on offer. Specifically, under Job Network mark 3, 53 per cent of Job Network sites are earmarked for closure between now and 1 July. This translates into the loss of 691 regional sites and a further 410 metropolitan sites. In total, of the current 2,087 sites, 1,101 will close permanently.

The government are actually closing more offices than they are keeping open. These closures will leave many smaller towns without any Job Network provider and the unemployed in those towns having to travel further to get the help they need to find a job. For job seekers in larger towns and metropolitan areas, these closures will mean less choice. The figures are clear. This dramatic cut in employment services comes at a time when many communities, particularly in regional areas, are still enduring unemployment rates of more than 10 per cent and youth unemployment rates stuck at over 30 per cent. The government are effectively putting these high unemployment regions into the too-hard basket. Back in 1999 when the government announced a significant increase in the number of sites as part of Job Network mark 2, the then Minister for Employment Services, Mr Tony Abbott, proclaimed:

Job Network 2 will mean very positive outcomes for regional Australia. There will be more than 2,100 Job Network sites across Australia, which is a 50% increase in the 1,400 sites under the first contract. This means better service coverage for job seekers and employers across Australia, including those in rural and regional localities.

The government cannot have it both ways. When it expanded the number of sites, it said it was better. Now it is halving them so there are fewer than there were under Job Network 1. Given that the number of sites has been slashed, the member for Warringah, the former minister, must now concede that the result will be substantially reduced service coverage for job seekers and employers alike. The deficiency in the Job Network is obvious: not enough is being invested to improve the job outcomes for disadvantaged job seekers, particularly for those lacking either recent work experience in a mainstream job or relevant skills. This budget has failed to rectify this situation, leaving the unemployed and their families facing a bleak and dismal future.

The 2003 federal budget also missed the opportunity to reform the New Apprenticeships scheme so that it can more effectively address acute skill shortages in the economy and provide young Australians with the qualifications that will improve their long-term career prospects. The latest data shows that in the December quarter of 2002 only 6,000 people began apprenticeships in the traditional trades. This is the lowest number of commencements since the June quarter of 1998. This decline in commencements comes at a time when the latest national skill shortage list produced by the department has identified skill shortages across a range of traditional trade occupations, including carpentry, plumbing, cabinet making, panel beating and metal fabrication.

In its submission to the Senate skills inquiry, the Australian Industry Group reported, `Over half of the businesses surveyed face skill shortages.' At a time when many communities in this country are experiencing high levels of unemployment, we have businesses crying out for skilled workers. This situation is nothing short of irrational. While the Minister for Education, Science and Training, Dr Brendan Nelson, regularly boasts in the parliament that under his government the number of people undertaking apprenticeships and traineeships has doubled, he fails to point out that most of this growth has occurred in short-term training in industries such as retail and fast food. In addition, this growth in numbers appears to have come at the expense of quality training outcomes for both the individual as well as the Australian economy.

Between 20 and 30 per cent of those undertaking traineeships are receiving inadequate training. In a study undertaken by Mark Cully from the National Institute of Labour Studies and Richard Curtain from Curtain Consulting, it was revealed that almost half—47 per cent—of those who did not complete their apprenticeship or traineeship did so because they felt they were `being used as cheap labour'. This is an indictment of the government's system. This emerging skills crisis is a complete failure of government policy. This crisis has been caused by the financial incentive structure put in place by the Commonwealth government, and this budget does nothing to rebalance these incentives towards the traditional trades and other areas of skill shortages.

On top of this failure, the budget also abolishes a program—the Enterprise and Career Education Foundation, ECEF—that was proving successful in bringing schools and industry together to provide young people with the skills that will improve their long-term career prospects.During hearings of the VET in Schools inquiry being conducted by the House of Representatives Standing Committee on Education and Training, of which I am a member, we heard praise for the ECEF.

The Prime Minister's Youth Pathways Action Plan Taskforce also endorsed the ECEF, which arose from the Australian Student Traineeship Foundation, established under the previous Labor government. The task force found that ASTF made:

... a particularly strong and practical contribution to achieving a broader approach to schooling. In particular, it has encouraged partnerships between schools, industry and the community to provide a range of opportunities for young people to develop employment skills. The Taskforce believes the ASTF—

or ECEF—

would be an appropriate organisation to drive the shift in thinking needed to create an effective and integrated system of transition for young people from school to the wider world.

So what did the Howard government do with this program that its own task force was praising? It abolished it in this budget, with no advance notice and in the middle of an inquiry being held into this very issue by the House of Representatives standing committee, to save a pittance—a miserable $4.1 million over the next four years.

At a time when Australia is experiencing acute skill shortages, the abolishment of the ECEF is a retrograde step and highlights the fact that the government is not committed to the integration of vocational education and training into our school system. I asked a question of the member for Macquarie under standing order 143. It is little wonder that we did not get an answer from the member, because the abolition of this program is simply indefensible. One wonders why we are bothering to have a committee inquiry into this very issue, given that some $16,901,000 has been allocated in this budget to run committees so that they can make inquiries into programs.

Of equal concern, particularly in the light of current skill shortages, is the defunding of the New Apprenticeships Workforce Skills Development program. Amongst other things, this program enables government and industry to work together to identify and address the skill needs of industry. In addition, the program funded projects that promote and generate new apprenticeships in difficult, challenging or underserviced areas through group training arrangements.

Turning to the other key component of our VET system, we find that the Minister for Education, Science and Training has used smoke and mirrors to conceal the fact that this budget contains no new money for TAFE. On budget night, Minister Nelson stated in his press release that he had written to state and territory training ministers offering them an additional $218.7 million between 2004 and 2006 under the new Australian National Training Authority agreement. The fact is that the budget papers for increased spending allocated to ANTA show, for this year, zero and, for each of the out years, zero, zero and zero. The analysis conducted by the state training ministers when they examined this and thought they might have been getting some new money has found that Minister Nelson's offer contains no new real funding. In fact, base recurrent funding remains at 2000 levels, and the `growth' funding on offer barely keeps pace with indexation. In their letter of response to Minister Nelson's offer, the state training ministers have written:

We note your offer of $220 million for the period of the next Agreement and the objectives you wish to see included. While agreeing with you on some of the objectives which should be contained in the next Agreement, the fact that your proposal contains no new funding is a matter of considerable concern.

In the lead-up to the meeting between state training ministers and Minister Nelson on 13 June in Darwin, the minister must put some new funding on the table if he is to have any credibility on these issues. Because, as well as stagnating Commonwealth funding, Minister Nelson is proposing to expand the competitive training market through the user choice mechanisms. This proposal has the potential to undermine TAFE as the public provider, making it yet another successful public institution at risk of being dismantled by the market-driven ideological agenda of the Howard government. [start page 15889]

While the government refuses to acknowledge the growing body of evidence showing that Australia is not adequately planning for its current and future skill needs, Labor has instigated a Senate inquiry into the issue. Given the quality of the submissions already received by the Senate inquiry, some 95 in total, I look forward to the tabling of its report later this year.

If Australia is to address skill bottlenecks and remain fully competitive in the global economy, raising the skill level of our work force is absolutely essential. But this will not be achieved if the Commonwealth government is unwilling to invest in our human capital, fund our public TAFE institutions adequately, ensure that our apprenticeship system readies young people for the current and future skill needs of our economy, and integrate vocational education and training into our school system. On all four of these tests, this budget has failed to make the necessary reforms and investment.

There is a very clear choice facing Australia. The choice is to continue with this government's ideological obsession, undermine TAFE and public institutions, undermine wages and conditions and have a fight over further deregulation of the labour market or invest in our human resources and in skilling up the nation and become a high-wage, high-skill economy. The choice is up to Australia, and I believe that this government is failing that test.

The broad theme of this budget is on security. However, when it comes to providing the financial security that only a job can bring, this budget contains no strategies, no reforms and no new investment. This budget, like its seven predecessors, contains no steadfast commitment to full employment. It contains only predictions of a deteriorating employment outlook.

Already 2½ million Australians are not getting the social and financial security that comes with having enough work. This budget only makes their predicament worse by increasing the cost of basic social services such as a visit to the family doctor and a university education. At the same time that this government is a record taxer, it is also arguing that Australians should pay more for basic needs such as health and education. This budget prioritises $700 million in superannuation tax cuts for the wealthy and $500 million in tax cuts for big business. At the same time, it is doing nothing to invest in expanding support for the Job Network or in the apprenticeship and training system.

The contrast, I think, exposes the true agenda of the Howard government. The Treasurer said, quite rightly, on budget night and since that the budget is about priorities. This is a budget that exposes once again that the Howard government governs for the few rather than for the many. That is why Labor's plan to save Medicare and reform higher education to encourage participation has been so well received. I believe that a strong economy is one which combines economic strength and raw data with social justice and with spreading the benefits of economic growth. This budget fails to deliver on that objective, and one group that will be left to suffer is the unemployed and their families.