Jun 1, 2004

Appropriation Bill (no.1) 2004-2005 Cognate bills: Appropriation Bill (no.2)

APPROPRIATION BILL (NO. 1) 2004-2005 Cognate bills: APPROPRIATION BILL (NO. 2) 2004-2005 APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL (NO. 1) 2004-2005 APPROPRIATION BILL (NO. 5) 2003-2004 APPROPRIATION BILL (NO. 6) 2003-2004: Second Reading


1 June 2004


Mr ALBANESE (Grayndler) (5.00 p.m.) —I rise to speak on the Appropriation Bill (No. 1) 2004-2005 and cognate bills. This is without doubt a budget that continues the government’s efforts to dismantle universal social entitlements, redirect national wealth up the income scale and run an economic program for the benefit of a small elite in the vain belief that their wealth will trickle down to the rest of us. Under this government’s so-called reforms, public, Catholic and independent schools are being starved of funds while the country’s wealthiest schools receive a funding increase of up to 190 per cent. Universities are again becoming educational citadels accessible only to the children of the elite. Each year, more than 15,000 young people are being turned away from TAFE, despite meeting the entry requirements and at a time when the economy is experiencing an acute shortage of skilled workers. Access to quality and timely health care is becoming increasingly based on the ability to pay rather than on medical need. We face the very real prospect of Medicare becoming a second-class safety net solely for low-income Australians, with everyone else’s health care dependent on how much money they have in their pockets. The parents of 46,300 children are unable to find a place for them in long day child care while those who can are facing significantly higher fees.

What is more, despite the pre-budget expectations, only those earning more than $52,000 a year received a tax cut. It is outrageous that, while I will receive a weekly tax cut worth about $40, many of the people whom I represent in this parliament will receive not a single cent. However, they will pay more for their health care, pay more to educate their children and even pay more for having the phone line connected to their home. The ideological agenda within which the 2004 budget was framed will simply reinforce, if not widen further, existing social and economic inequalities. Many Australians will not receive a dividend from greater national prosperity.

One final general observation I will make with respect to the 2004-05 budget relates to the budgetary ramifications of an ageing population. At the time of last year’s budget the Treasurer asserted that it was fiscally unsustainable not to increase the prices of basic medicines. However, just 12 months later the same Treasurer is arguing that it is fiscally sustainable to deliver a $4 billion a year tax cut to the top quarter of Australian taxpayers. Either the Treasurer misrepresented the magnitude of the ageing `crisis’ in 2003 to justify making the lives of ill and disadvantaged Australians harder, or he has this year jettisoned long-term fiscal responsibility in the name of political expediency. I raise this contrast to highlight the hypocrisy and what is truly meant by so-called reform under the Howard-Costello government.

I turn now to matters related to my shadow portfolio responsibilities of employment services and training and, in particular, a program which this government considers one of its greatest achievements: the Job Network. Since the last budget, a new three-year Job Network contract, employment services contract 3, has commenced. According to the Howard government, ESC3 represents a revolutionary advancement in labour market policy. Over the past 18 months I have been travelling around the country, talking to not only the managers of Job Network providers but also, more importantly, front-line staff. The feedback I have received has led me to one conclusion: the reality has certainly not lived up to the government’s over-hyped rhetoric. In fact, a system which promised greater flexibility, a focus on individual job seekers and a priority for getting people into work has become mired in regulatory activity designed to manage unemployment rather than reduce it. [start page 29754]

Links between Centrelink and the Job Network are complex and bureaucratic, leaving job seekers confused and uncertain about what is required of them. The current combination of administrative Job Search tests and non employment focused mutual obligation requirements, followed by customised assistance that is non-intensive, has created a confusing and complex hybrid. No other OECD country has created such a complex and difficult to navigate service for job seekers. Job Network providers are themselves burdened by substantial administrative tasks and forced to devote a significant amount of time and resources to monitoring job seeker compliance rather than addressing and removing their barriers to sustainable employment. According to Jobs Australia, an organisation that represents not-for-profit Job Network providers, the highly prescriptive nature of service provision enunciated by the third Job Network contract limits the ability of providers to `respond innovatively and creatively to the needs of different job seekers and different labour markets’.

The work of providers has been further undermined by a financial crisis that has been of the government’s own making. Changes to the method by which providers are paid—namely, a greater emphasis on outcome payments, as opposed to fees for service—combined with fewer than anticipated job seekers entering the Job Network and requiring the services of providers, have left many organisations struggling to remain financially viable. Already, providers have collapsed and referred their contracts back. Job Network providers servicing rural and remote areas are under particular pressure, and this situation persists despite two government bailouts.

The job seeker account, championed by the government as a significant enhancement to the Job Network and intended for use by providers to purchase services and products that would help job seekers to find and maintain employment, has proven overly bureaucratic and has imposed significant administrative costs on providers. Just this week DEWR revealed in estimates that, more than 10 months into the current financial year, only 40 per cent of the available funds in this account have been used.

At a broader level, Australia’s system of employment assistance is one of the most fragmented in the world. Partnership arrangements between the government and non-government sectors are weak, and there are few linkages between federal and state programs. Furthermore, the implementation and operation of the Job Network has been marred by turf wars between the two responsible departments: the Department of Family and Community Services and the Department of Employment and Workplace Relations. It is important to note that concerns about the Job Network have not come just from the Labor Party. The Productivity Commission and DEWR in the recent past have conducted detailed evaluations of the Job Network’s performance, and both assessments provided strong evidence that Job Network providers are provided with too few resources and too few incentives to invest in particularly disadvantaged job seekers.

More recently, the Australian National Audit Office has commenced an audit into the Howard government’s handling of the transition to the third Job Network contract. It will also assess whether the Job Network is delivering high-quality services to job seekers. This audit will, no doubt, shed further light on the integrity of the financial model underpinning the system and on the IT problems that have so frustrated staff and will test the government’s repeated assertion that the Job Network delivers value for money to taxpayers and superior assistance to job seekers. Nonetheless, given the structural problems we are already aware of, which I outlined earlier, it is not surprising that the number of people receiving benefits for more than 12 months is higher today than it was when the Howard government was first elected. The average duration of unemployment for mature age workers is twice that of younger workers. [start page 29755]

Unemployment amongst our Indigenous communities is currently running at six times the national average. Communities in areas such as Wide Bay in Queensland, the Tweed and the Illawarra in New South Wales, and northern Tasmania have unemployment rates of over 10 per cent; and 860,000 children now live in families where neither parent works. The government’s gratuitous self-gratification over the headline unemployment rate conceals growing levels of welfare dependency. If further inroads into welfare dependency, particularly in the forms of long-term unemployment and workless households, are to be made and sustained then the Job Network’s structural deficiencies need to be acknowledged and then addressed. In this respect, the 2004 budget was a disappointment and reflected Minister Brough’s ongoing state of denial.

I want to outline what the Labor approach will be. To avoid the botched big-bang approach associated with this government’s handling of the transition to the third Job Network contract, a Latham Labor government will adopt a very different approach with the next Job Network contract, due to commence on 1 July 2006. In particular, Labor’s efforts to strengthen the effectiveness of Australia’s system of employment services would be guided by the following key principles: (1) an employment-first focus, where the pace and intensity of assistance will be maintained from day one, with the purpose of getting job seekers into sustainable employment or full-time job-specific training at the earliest possible opportunity; (2) a rights and responsibilities regime that balances the obligations to participate with the right to substantial and meaningful assistance; (3) a clear delineation of responsibilities between the government and non-government sectors; (4) a collaborative partnership not only between non-government organisations and the public sector but also within the non-government sector; (5) recognition and reward for high-performing individuals and organisations within both the public and non-government sectors; (6) consistency and certainty in the delivery of employment services assistance, with reforms rolled out over time to avoid the sudden major changes which inevitably undermine performance and create confusion; and (7) a commitment to timely and independent evidence based evaluation and continuous improvements based upon what works.

In addition to these key principles, Labor from the outset will ensure that providers and their industry bodies are partners in the reform process, not the victims of it. During his budget reply the Leader of the Opposition announced Labor’s Youth Guarantee: Learn or Earn. This initiative represents Labor’s initial enhancement to Australia’s employment service system and will target early school leavers aged 15 to 18. Labor’s youth guarantee will be a preventive program which will aim to ensure that no 15- to 18-year-olds leave school early and move onto unemployment benefits. To accomplish this goal, the youth guarantee will provide additional in-school support for at-risk young people. Labor will abolish TAFE fees for VET in Schools and will expand outside school opportunities by providing 7,500 more TAFE places, 7,500 new apprenticeship places and a jobs gateway which will allow young people to gain accredited training while working for a regular employer for up to two years. [start page 29756]

Whichever option a young person decides on, they will receive one-on-one support, advice and encouragement from a training mentor to ensure they stick with it. This intensive level of support is what distinguishes the youth guarantee from current programs. To assist today’s teenage job seekers, the youth guarantee will also enhance the Job Network in areas with very high unemployment. The labour market disadvantage confronting early school leavers cannot be overstated. Research reveals that, seven years after leaving school, only seven per cent of all year 12 leavers are unemployed. By comparison, 21 per cent of young men who left school early are unemployed and for young women the unemployment rate hovers around 60 per cent.

To date the government’s critique of the youth guarantee has varied. Some in the government have complained that it is not being introduced soon enough, while others deny there is a youth unemployment problem. For the benefit of government members, I would like to spend a little time addressing some of the more uninformed assertions coming from ministers. Assertion No. 1 is that the youth guarantee is just Work for the Dole by another name. This assertion was made by the Treasurer on the ABC’s AM program on 14 May 2004. For the record, the youth guarantee is very different. First, to qualify for Work for the Dole an early school leaver must be claiming unemployment benefits for at least six months. The youth guarantee will intervene to ensure that early school leavers never have to claim unemployment benefits in the first place. Second, under-18s are not required to participate in Work for the Dole. It is voluntary—something some in the government do not seem to understand about their own program. The youth guarantee will assist all 15- to 18-year-olds who leave school early or are at risk of doing so. Third, Work for the Dole provides two days a week of work experience in a community based project, with participants receiving little formal training. A Work for the Dole placement is for only six months. Under the youth guarantee, young people not in full-time education or training will be given accredited training or industry recognised skills while working for up to two years in a mainstream workplace.

Assertion No. 2 was made by the minister for youth, Larry Anthony, on the Channel 9 Sunday program on 23 May: `We were the government that introduced mutual obligation.’ For the record, this is completely wrong. Mutual obligation was first introduced in 1994 as part of Labor’s Working Nation program. However, the Howard government’s approach has resulted in the implementation of one-sided mutual obligation initiatives. The government now has a plethora of research which indicates that this punitive approach is actually hindering the ability of job seekers to find work. The youth guarantee will balance the right of young Australians to substantial and meaningful assistance, with the obligation on them to accept it. Under Labor, mutual obligation will no longer be a mechanism to punish youth welfare recipients but a tool to give them the support that they need to secure sustainable employment.

Assertion No. 3 was that the youth guarantee’s enhancement to the Job Network, the link-up program, would only help those living in selected regions. In a media release the Minister for Employment Services has claimed:

Now it’s time that they tell us who is in the A-list and who dips out. Then Labor can tell us what it would say to those 23,000 highly disadvantaged unemployed teens who would get nothing out of this policy because they live in the wrong area. [start page 29757]

This is one of the minister’s more bizarre statements. By making this statement, the minister is asserting that young job seekers who do not get access to Labor’s link-up program and have to rely on existing Job Network services are somehow missing out or receiving substandard assistance. I therefore welcome the minister’s acknowledgement that link-up is an enhancement to the Job Network. Again, for the record, despite more than a decade of employment growth there are many communities across Australia where youth unemployment is no longer the exception but the norm. Thirty-seven per cent is the youth unemployment rate in the northern suburbs of Adelaide. In many of these communities the situation has worsened since the last federal election. The Job Network in these disadvantaged communities will benefit from an additional investment of $49.4 million. Young job seekers in other areas will continue to receive existing levels of service from the Job Network determined by individual need. Furthermore, all young people will benefit from the other opportunities provided by the youth guarantee including additional in-school support for at-risk young people, removing TAFE fees for VET in Schools, 7,500 New Apprenticeships places, 7,500 new TAFE places, and the Jobs Gateway. The youth guarantee is a long-term vision to prevent today’s early school leavers becoming tomorrow’s long-term unemployed.

The 2004 budget contained no long-term plan to alleviate Australia’s growing shortage of skilled workers—a problem that, if not addressed, threatens the country’s future economic development. According to Group Training Australia, an organisation that has made a significant contribution to skilling Australia, there are currently national skills shortages in all key trades including all the engineering trades, vehicle trades, construction trades and food trades, as well as electrical, electronics, printing, wood, hairdressing and furniture upholstering trades. The Australian Industry Group, in its submission to the Senate’s skills inquiry, reported that `over half of the businesses surveyed faced skills shortages’. Unfortunately, the plight of these employers is likely to worsen. Over the next five years, 175,000 workers are expected to leave the traditional trades, with only 70,000 expected to enter. It is absurd that at a time when more than one in five teenagers are looking for full-time work, businesses are crying out for skilled workers.

This situation highlights a failure of government policy. Under the Howard government TAFE funding has been cut by $377 million, leaving more than 15,000 young Australians each year without a place. Furthermore, most of the growth in the New Apprenticeships system and in traineeships has occurred in areas where there are no skills shortages, such as retail and private security. 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 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. Once again the Minister for Education, Science and Training missed the opportunity to have growth funding for the ANTA agreement included in the budget, which remains unsigned, which remains outstanding. He has said that he will negotiate and talk to state and territory ministers in October, well after the election is held and well after he has ceased to be a minister. [start page 29758]

In conclusion, today 2.1 million Australians are living in poverty; 330,000 families are struggling to put a roof over their heads; one in seven children is growing up in a household with no breadwinner; our public hospitals are starved of funds and under pressure; our public schools are run down; tens of thousands of young people are unable to get into either a university or a TAFE college, despite having the marks; public transport desperately needs billions of dollars worth of improvements; and our rivers and farmlands are in urgent need of restoration. After eight years of conservative rule, Australia needs an alternative—an agenda of public sector renewal and of restoring social entitlements. I do not want a society where the middle class are fighting to get out of the public health and education systems. I want them fighting to get into them. Furthermore, I share the views of my Labor colleagues that social justice demands that tax relief be extended down the income scale. So never let it be said that political parties are all the same and that voting is a waste of time.

This year the Australian electorate will face a stark choice: either we can continue to move relentlessly down the free market route in the vain search for more and more material possessions and allow our system of universal social entitlements to be replaced by one of harsh competitive individualism or, through a Labor government, we can reclaim our collective strengths and renewed solidarity to build a society where power and opportunity are in the hands of the many, not a privileged few.