BILLS;Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016;Second Reading – 13 Feb 2017

What do you do when you cannot keep your promise to tackle youth unemployment? Well, this government opens young people up to exploitation to their mates in big business instead. This government has comprehensively failed the youth of Australia. At the moment, there are almost 300,000 young Australians between the ages of 15 and 24 out of work. That is a shocking statistic. Youth unemployment has climbed to 13.3 per cent—well over double the general unemployment rate. Many of these young people have been unemployed for more than a year and are understandably disillusioned by the act of looking for jobs that simply are not there. On top of this, 20 per cent of young people are underemployed—they want to work more hours but there are simply no opportunities to obtain extra hours.

This is just disgraceful and is indicative of a pattern of neglect by this government towards young Australians. They have a lot to be disappointed about from this government. Whether it is the Centrelink robo-debt disaster, $100,000 degrees, the unaffordability of housing or the bill we are debating today, the government has really let them down. The government knew that it had no policies to help young people. That is why they threw this rushed policy into the last budget. It was a hastily cobbled together program, announced at the time of the 2016 federal budget to make it sound like they are doing something for young people, but in reality it only helps their mates. It is a thought bubble that may look good at first glance, but has been terribly implemented.

The bill before us today is designed in part to support the introduction of the Turnbull government’s Prepare and Trial, Hire program or PaTH. PaTH is supposedly designed to prepare young people for work by providing jobseekers aged 17 to 24 with pre-employment training and placement in voluntary internships of four to 12 weeks. During that time, they may work between 15 to 25 hours a week. Jobseekers will receive payments of $200 a fortnight on top of their current income support payments, while they are participating in the PaTH program. Businesses will be paid $1,000 to take on an intern and then receive a wage subsidy of between $6,500 and $10,000 if they hire them at the conclusion of their internship.

The government is expecting the program will take effect from April 2017. I and my Labor colleagues and many others in our community have serious concerns about whether this program represents a fair deal for Australia’s young unemployed. The PaTH program is being introduced at the same time that other government job programs such as the Work for the Dole are hopelessly failing our young unemployed. In the case of Work for the Dole, even the government’s own figures show nearly 90 per cent of its participants are not in full time work three months after exiting the program. The sad truth is Australia’s youth are counting the cost of the Turnbull government’s failure to develop a real jobs plan for the nation.

Under the PaTH program, the opposition is concerned that young people will be forced to pay an even heavier price through the program’s apparent flaws. I will just take a moment to outline what the bill before us contains. The bill enacts the changes needed to provide support to participants in the program. It does this via two measures: first, a provision will be inserted in the Social Security Act and Veterans’ Entitlements Act so the $200 payment interns receive is not counted as income for social security or veteran’s entitlements purposes. Secondly, it amends the Social Security Act to allow young people to suspend their payments if they are employed. They can then restart them without re-applying if they lose their job through no fault of their own within 26 weeks.

Taken in isolation, the government will claim the measures in the bill are non-controversial. But the reality is they form part of a broader new program that the opposition is concerned about, which could see young jobseekers exploited and could undermine workforce standards. Chief amongst these criticisms is the fact that, unlike with Work for the Dole, for the first time participants would be placed in the private sector and would be paid below award wages. The opposition is concerned that PaTH could be used to displace jobs with cheaper labour.

There have been very real concerns raised that participants may be working for below minimum award wages. The national minimum wage is $17.70 an hour. But an intern who works 25 hours a week and receives only their Newstart payments plus the $200 payment will earn just $14.50 an hour. This program could very well see young Australians stacking supermarket shelves for less than the minimum wage. Australians have rightly been concerned about cases of worker exploitation when events like the 7-Eleven wage scandal come to light. Why would our community stand for a government program that undercuts the minimum wage?

This is something that is entirely within the government’s power to fix. The bonus payments could be set at a rate which is equivalent to the minimum wage, or the maximum hours could be reduced to ensure this is met. But this is a government that is constantly trying to undercut rights and conditions for workers through its attacks on penalty rates, its anti-union ABCC agenda and its unfair public service bargaining framework so we will not hold our breath for them to put this right.

At a time where wages growth is at its lowest rate on record, we are concerned that PaTH could be used to undermine wages across industries for all Australian workers. Despite repeated questioning by the opposition, there are few assurances that interns will be covered by appropriate workers compensation schemes in the event of an accident. That is because PaTH participants will be considered volunteers, not employees. In some jurisdictions this could affect the way workers compensation systems would treat participants in the event of an accident. This is simply not good enough. All workers should have the right to workers compensation should they be injured at work.

The program does not specify real areas job seekers will acquire skills. In Senate estimates last May the clearest outline of training and skill outcomes Minister Cash offered was, ‘We will give you the skills that employers tell us you just do not have.’ And while the program was announced in May 2016 and is scheduled to start in April 2017, the government can’t even tell you how it has defined what an intern is. The government has had trouble explaining what jobseekers will be doing in the internship phase of the program, even down to the basic level: whether they would be working or just observing. ‘

Large numbers of participants could be used within companies at any given time, with little sanction applied to employers that might churn through PaTH participants after the engagement concludes. Imagine what would happen if a major supermarket or fast-food chain decided it would employ tens of thousands of Interns. Large numbers of interns could also completely remove the need for existing employees in certain sectors, for example, hospitality to work at certain times. Imagine large numbers of PaTH participants being used over weekends, removing the need for regular employees at those times, and also removing the need to pay penalty rates for those employees. This program could be used in a systematic way to attack workers’ ability to access penalty rates.

There are so many holes in the program that it cannot be taken seriously unless the government can demonstrate how they will fix them. That is why Labor is calling for the legislation and the PaTH program to be deferred until those concerns are addressed. To wave PaTH and this legislation through, without demanding a better deal for young Australians, would not be fair to those young jobseekers.

The Senate Education and Employment Legislation Committee has conducted an inquiry into the bill at Labor’s referral.

There were concerns with this bill by many bodies that made submissions to the inquiry. I noticed Senator McKenzie could not quote anyone from the inquiry but I can. A number of the submissions made to the committee highlighted serious deficiencies in the PaTH framework. I would like to spend a while outlining some of the evidence given to the inquiry to highlight the flaws in the legislation. Interns Australia, the peak support and advocacy body for interns and students undertaking work placements in Australia said: ‘Interns Australia does not support the… bill.’ That is a pretty blunt assessment from the peak body for interns in Australia. Perhaps the government should have consulted them before the policy was announced?

Another submitter, Jobs Australia, drew the committee’s attention to the way exploitation and displacement could take place by asking vulnerable young Australians to work during unusual hours, or during times, when penalty rates would apply:

… to ensure that times of “work” or unpaid work experience are restricted so that interns are not required to “work” during times which would attract penalty payments under relevant awards—(the risks of exploitation and displacement of existing workers are extremely high in these circumstances and particularly in industries with highly variable levels of employment and of casual work—where it could be difficult to discern whether displacement is occurring).

The ACTU put up the best possible scenario for the 120,000 young jobseekers who could take up the program:

When these concerns have been raised in the past, much has been made of analysis which will be done to detect employers who are abusing the program and prevent them from hosting further intern placements. It seems that the absolute best outcome such a system could achieve would be that thousands of vulnerable young people are only exploited, for profit, once.

I do not think that is good enough. I do not think it is good enough to wait for young workers to be exploited before acting; we should act before the program begins to ensure exploitation does not happen at all.

Anglicare Australia also gave a stunning rebuke of this program within the context of the current jobs market that continues to deteriorate for young Australians under this government:

In the context of a serious shortage of entry-level vacancies, we do not accept that internships alone will help many people overcome structural exclusion from the workforce. We can see no evidence that this program will do anything to ease the existing pressures created by the decreasing number of entry-level jobs. In this respect we also hold serious concerns that introducing up to 30,000 government-subsidised interns to this market will make an already grim situation worse.

ACOSS made a point, seemingly clear to everyone except the government, that legislation is needed to protect young jobseekers:

There is no clear legislative protection against exploitation of interns to the extent that they are not classified as employees. Either participants should be classified as employees (with a wage subsidy) or the program should not allow work beyond standard working hours (averaged over a fixed period) or a times that would attract penalty rates of pay if the person was employed (such as weekends).

As I said earlier, I am concerned about the protection of the workers’ rights for these young interns.

The Children and Young People with Disability submission shares my concerns about the vague definitions which leave it unclear what protections participants would receive. They said:

CYDA has some concerns regarding the internships component of the Youth Jobs PaTH initiative. ‘Internships’ have not been clearly defined within the Bill, aside from being referred to as “unpaid work experience” within the Explanatory Memorandum. It is therefore unclear how appropriate protections will be afforded for young people with regard to working conditions.

Further to this:

Jobs Australia noted that legislation is needed to ensure participants receive all the relevant protections that employees get, whether they are officially recognised as employees or not:

Other aspects of Youth Jobs PaTH internships, in addition to those set out in the Bill, should therefore be the subject of legislation which can be considered and scrutinised by the parliament, rather than being implemented by administrative means which might seek to exempt interns and the employers providing placements from the provisions of the Fair Work Act and other relevant legislated workplace protections and requirements.

I believe, rather sadly, that young people may be pressured into taking these ‘internships’ without understanding what their real rights are.

ACOSS told the committee that clear requirements are needed for explaining the rights and expectations of a participant before they begin a placement, saying:

Employment services providers (or better still an independent mentor) should be required to explain to participants their rights in the workplace before an internship commences (both verbally and in writing), and offer advice and assistance in the event that those rights are at risk.

Finally, Jobs Australia noted that the voluntary nature of the placement phase of the program must be made extremely clear:

Incorporate a clear stipulation that participation in internships is voluntary and that there will be no income support penalties as a consequence of failure to attend or participate or for ceasing a placement (to ensure there are no subsequent adjustments to administrative arrangements which would result in participation being mandatory and relevant job seekers being subject to penalties).

Unfortunately, the government has not made any real attempt to address these problems during the debate in the House or the Senate inquiry process. Many of the issues raised in the Senate inquiry process should be addressed by legislation or regulations tabled in parliament, rather than relying on assurances from government that they will do the right thing. This program the government want to implement is vague and has not been thought through properly. The only details they have released are in the flimsy glossy brochure from budget night. That is no basis for a program of this scale or importance.

In summing up, we can and must do more to help young Australians. However the government’s PaTH program is a desperate and cynical attempt to divert attention away from their poor record in generating jobs for young Australians or preparing those young Australians for work. Their Work for the Dole program is evidence of that failure. From what we can see at this point, PaTH is poorly planned, full of holes and ripe for exploitation. As we can see from the now defunct green army debacle, this government has absolutely no idea about creating policies that help young people enter the workforce. It could leave thousands of young Australians working for below the minimum wage before being thrown onto the scrap heap to be replaced by another cohort of below-minimum-wage labour. It could see injured young workers unjustly left with no recourse to the compensation entitlements that other workers enjoy. The Turnbull government has failed to address the concerns the community has about this hastily put together PaTH program that, as I said, has more holes than the Midland Highway. I call upon the Senate not to pass the legislation at this time.