BILLS;Social Security Legislation Amendment (Increased Employment Participation) Bill 2014;Second Reading – 14 May 2014

Youth unemployment is a very big issue for Australia and for young Australians. I regret to say this is particularly the case for my home state of Tasmania. According to the latest figures from the Australian Bureau of Statistics our unemployment rate for 15- to 24-year-olds is 17.4 per cent compared with a national average of 12.2 per cent. The situation is even worse when you get into the north-west of Tasmania where in some areas the unemployment rate is as high as 21 per cent. That is one young person out of a job for every five seeking to participate in the workforce. This is a serious challenge for government as we need to ensure that our young people have a stable future and that the next generation is job ready.

The Social Security Legislation Amendment (Increased Employment Participation) Bill is the government’s attempt to put in place incentives to assist young job seekers. The bill establishes the Job Commitment Bonus. Young Australians aged from 18 to 30 who have been receiving Newstart Allowance or Youth Allowance, other than as an apprentice or a full-time student, for a period of at least 12 months will be eligible to receive a tax-free payment of $2,500 if they remain in gainful work and off income support for a continuous period of at least 12 months. Recipients will also qualify for a further tax-free bonus payment of $4,000 if they remain in continuous gainful work for an additional 12 months. That is a continuous period of 24 months in total.

The bill also establishes the Relocation Assistance to Take Up a Job program. This program provides financial assistance to long-term unemployed job seekers with participation requirements who have been receiving Newstart Allowance, or Youth Allowance, other than as apprentices of full-time students, or parenting payment for at least the preceding 12 months to relocate for the purposes of commencing ongoing employment. The program is demand driven and will provide up to $6,000 to support eligible job seekers who relocate to a regional area, either from a metropolitan or another regional area, or up to $3,000 to support eligible job seekers who relocate to a metropolitan area, either from a regional area, or, in certain circumstances, another metropolitan area. Families with dependent children will be provided with up to an extra $3,000. The non-payment periods for participants who leave their employment without good reason within six months after receiving a relocation payment will be 26 weeks under this bill rather than the 12 weeks which currently applies to relocation payments made under Labor’s Move 2 Work program.

I question the government’s financial impact statement accompanying this bill. The government’s figures assume that the relocation program will operate as a savings measure due to job seekers remaining in employment rather than receiving unemployment benefits. There are a couple of reasons why I believe this assumption is questionable. Firstly, relocating for work does not mean that long-term unemployed job seekers are more likely to remain in employment. Secondly, Labor’s Move 2 Work program, while not as generous as the government’s relocation program, was similarly intended to increase workforce participation but had a very low take-up rate. While Labor will not be opposing the bill, we do have a serious concern about one of the provisions. The non-payment period for participants who leave their employment without good reason is extended to 26 weeks, up from the 12 weeks which currently applies under Labor’s Move 2 Work program. We believe that 26 weeks is unduly harsh. I understand that my colleague Senator Cameron has already tabled amendments to deal with this provision which will be considered in committee. I understand that the hardship provisions, which waive the non-payment period, continue to apply. But the hardship provisions are about access to the essentials of life such as health care, housing or sanitation. What we need to consider carefully is the impact of extending a non-payment period on a job seeker’s ability to find work and to maintain a reasonable lifestyle. Labor would like to see the government commit to reviewing the impact of this measure on job seekers because we do not accept that a person can be job ready while receiving no income for six months.

Perhaps we should be thankful that this is not the worst to come considering the announcement in the budget last night that people under the age of 30 applying for Newstart Allowance will have to wait six months before receiving a payment. The changes to Newstart announced in the budget seem to be at odds with the Treasurer’s statement in his budget speech which said, ‘As Australians, we must not leave our children worse off,’—but I digress.

As I said earlier, Labor will not be opposing this bill. After all, it has some provisions which have the potential to be useful. The measures in the bill are about providing young people with incentives to look for work and to remain in work. Incentives are important, but they will not work unless there are jobs to go to and job seekers have the right skills for those jobs. The fact is that the overwhelming majority of young people are willing to work but face a number of barriers that are beyond their control. The government needs to realise that a lot more is needed to tackle the pervasive problem of youth unemployment. There needs to be a job creation agenda.

The Prime Minister promised before the election that he would create one million jobs within five years and two million over the next decade. That is an average of 200,000 jobs a year so, by now, the government should have created more than 100,000 jobs. However, the pace of jobs growth has been well short of this target. In catching up to their aspiration, the government also need to make up for the announced 60,000-odd job losses in Holden, Toyota, car parts manufacturers, Qantas, Rio Tinto and Alcoa, not to mention the job losses in the public sector resulting from last night’s budget and all the flow-on effects of those losses.

Labor in government created 950,000 jobs, while 28 million jobs were lost around the world during the same period. In addition to this we saved another 200,000 jobs through our decisive action during the global financial crisis. We also put in place a $1 billion plan to support exports, grow small business and help local manufacturers win local contracts, and we investigated future export opportunities through the Asian Century white paper. By contrast, we have yet to see a plan from this government for job creation. Australians who are currently out there looking for work are rightly asking where the government’s plan is.

Another element that is needed to get young people into work is education and training so that they have the skills to match the jobs available. In government, Labor focused on supporting young people to finish school and to get the training and higher education they need for well-paying jobs. Between 2008-09 and 2012-13, Labor invested over $19 billion in skills funding—a 77 per cent increase on the previous government’s investment. Since 2009, the federal Labor government provided funding of $6 billion to support state and territory skills and workforce development under the National Agreement for Skills and Workforce Development. We also announced that all Australians would have access of up to $90,000 assistance though VET FEE-HELP and access to courses up to certificate Ill level though the National Training Entitlement. So, Labor has a proud record of investing in skills and training.

Getting young people into jobs also requires comprehensive support services, and this is an area where Labor also has a proud track record. We introduced a system which matched services to individual job seekers and prioritised resources to go to the job seekers with the greatest need. This resulted in outcomes for job seekers improving by 90 per cent. Labor initiated a further review of employment services in 2012. There was strong interest in the review with over 180 written submissions received, and 440 people from 300 organisations attended face-to-face consultations.

We announced, prior to the last election, that Labor would establish a new system, Jobs and Training Australia, which would integrate employment services and training systems for the first time and place job seekers, workers and employers at the heart of the system. The system was to be founded on seven key principles: (1) training and employment services will be integrated through a place based and demand-led model; (2) Jobs and training boards

will be established in around 42 regions across Australia to formally link employers, employment and training services, and health and community services. The boards will also ensure that services meet local needs and replace the artificial boundaries of the current employment service areas. (3) The up-front assessment of job seeker needs and employment barriers will be improved; (4) the jobs, training and apprenticeship guarantee will ensure that every job seeker gets the help they need to get back to work and that no one slips through the cracks regardless of whether they have low or high needs, or how long they have been unemployed; (5) there will be an increased focus on addressing long-term unemployment and youth unemployment, and on closing the gap in Indigenous employment; (6) incentive structures for providers will be changed to encourage sustained employment outcomes and reward investment in improving the capacity of job seekers to secure work; (7) an independent employment services regulator will manage job seeker complaints and service quality, oversee provider compliance and be responsible for reducing red tape. We are yet to see what the new government’s plan is for Job Services Australia. If they are serious about tackling youth unemployment, I would strongly encourage them to take up the principles enshrined in Labor’s pre-election policy.

Labor also wanted to provide a jobs, training and apprenticeship guarantee, which would ensure access to telephone and online career advice, skills appraisals, assistance with resume writing. It would be engaged with an employment service provider and start work on a return-to-work plan within two days.

So, to sum up, we are satisfied with the incentives provided in this bill, but we believe there needs to be a more comprehensive approach to tackling youth unemployment. This approach needs job creation, investment in skills and training, and investment in employment services which meet the needs of job seekers.

On that note, I commend the bill to the Senate, while highlighting the opposition’s concerns about the doubling of the non-payment period.