NESA Working Communities International Congress

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Thank you Glenn [Capelli] for that introduction.

I was in the Illawarra this morning, about an hour’s drive south of Sydney running a Jobs Expo. The idea is pretty simple. We put employers with jobs in the same room as people looking for work. It’s one of more than 20 I’m running in the regions that have been hardest hit by the global recession. Six thousand people turned up, two thousand in the first hour. Up to 500 went home with a job.

Last month I ran one in Elizabeth in northern suburbs of Adelaide. About 300 people got a job that day. One of them was a young woman named Mary Edwards.

Mary had been out of work for a year. Some weeks she would apply for 30 jobs. She’d check the paper everyday. She came along to the Expo in search of work. BP was there. Mary approached them and they offered her a job. Her first shift was last Monday and BP has signed her up to do a Certificate 3 in retail services.

This is why I became a politician. To make stories like this possible. And I know it’s the reason you do what you do – it gives us a chance to really make a difference. It’s one example of what the Rudd Government is doing to Keep Australia Working.

Sally asked me to talk today about Keep Australia Working. Keep Australia Working is our employment strategy to help the parts of Australia hit hardest by the global recession. It’s just one part of our plan to keep unemployment as low as possible. But like everything else we are doing it’s based on evidence – based on the lessons of the recessions of the 1980s and 1990s.

The first lesson is to keep unemployment low you have to act quickly. That’s why our economic stimulus package was so important. The cash payments we injected into the economy kept more than a million retail workers in a job. And the classrooms, school libraries and housing we are building are protecting tens of thousands more.

According to Master Builders Australia the stimulus is protecting about 50,000 jobs in the building industry that would have otherwise been lost. The economic stimulus stopped us going into recession when the rest of the world did and protected hundreds of thousands of jobs.


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Just look at this slide. We have the lowest unemployment rate of the major advanced economies except for Japan. About 27 million people around the world lost their job last year. More than five million Americans. In the Euro Zone, the unemployment rate has almost hit 10 per cent. Spain now has an unemployment rate of close to 19 per cent. Here in Australia, unemployment is 5.3 per cent. To put all of this in perspective, have a look at this slide.


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This is unemployment in Australia and the US. Two years ago the unemployment rate in both countries was under five per cent.


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We are now 5.3 per cent. The US is almost double that. If the same thing happened to us as happened to America – a quarter of a million more Australians would now be out of work.

This isn’t just the stimulus – it’s also the work of some smart business decisions. A lot of businesses kept workers on part-time rather than putting them off. The drop in hours worked in the past 18 months is equivalent to about 260,000 full time jobs. If business had cut jobs instead of hours, unemployment would be over 7 per cent now.

Business hasn’t done this out of the goodness their heart. It made sense. They remembered the skills shortages of the last few years and that they would be back.

A good example of what I’m talking about is Broens Industries, a high-tech engineering company based in Western Sydney. They turnover about $25 million a year and employ about 200 staff. I caught up with the Managing Director Carlos Broen last year. He told me the global recession meant exports were down. He had two choices: cut staff or cut hours.

He chose the latter. He told me: “my employees are my business – without them I am nothing”. I spoke to Carlos again a few months ago. The entire workforce is now back to five days a week. No one lost their job. The same thing is happening around the country.

Last month’s jobs figures showed a jump of 11,400 in full time jobs and a drop of 11,000 in part time jobs. People are going back to work: full-time.


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Why is all this important? It’s important because we know unemployment goes up quickly and it takes a long time to come down. In the ‘80s it went from 5.4 per cent to 10.4 per cent in three years. It took six years to come down. In the ‘90s it increased by a similar amount in just two years. It took 11 years to come down. That’s why it’s important to protect jobs during times of economic crisis.

Some jobs and industries never come back. The longer you are out of a job the more skills you lose. That means the economy loses skills too. And we become less competitive. That’s why what we are doing is so important. It’s keeping workers in jobs and families together. It’s keeping companies afloat and skills intact.


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Experience tells us young people and the jobs they tend to do are particularly vulnerable when the economy slows down. The green line in this graph shows general unemployment rates. The blue line is the teenage full-time unemployment rate. In the early ‘90s you’ll notice the blue line goes up faster and steeper than general unemployment. The teenage full-time unemployment rate increased from 15.4 per cent in February 1990 to 34.5 per cent in July 1992. More than double.

The same sort of thing happened last year. Nationally the teenage full-time unemployment rate is 23 per cent. In the early ‘90s many young people who lost their jobs took a decade to get back to work. We don’t want this to happen again.

That’s why we have introduced Learn or Earn. This means that if you’re under 21, haven’t finished high school and are unemployed — you can’t get youth allowance unless you are in some form of education or training. As part of this we set up National Green Jobs Corps. This is giving six months accredited training and work experience to up to 10,000 young people – targeting kids who have dropped out of school and haven’t finished year 12.

Now why are we doing this? Why are we targeting young people who haven’t finished high school?


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We are doing this because we know that the more qualifications you have the more likely you are to get a job. The top line of this graph shows the unemployment rate for people who haven’t finished high school. Below that is the rate for people who have a year 12 or equivalent qualification. Below that is the rate for people who have vocational qualifications. And the lowest rate is for people who have finished university.

In the ‘90s people who hadn’t finished high school were three times more likely to be unemployed than someone who had completed Year 12. That’s why we have introduced Learn or Earn. And that’s why we have set ourselves a target of increasing the percentage of students who finish high school in Year 12 from 75 to 90 per cent in five years. It’s a big ask. It won’t be easy. But it’s important we do it. Not just because of what the past tells us – but because of what the future holds.

Our workforce is changing. The jobs of the future will require more skills and the proportion of low and unskilled jobs will fall. Three out of every four new jobs now being created require not just the HSC – but post secondary qualifications.

An important part of getting the skills we need is getting the basics right – reading, writing and arithmetic. Believe it or not, about six million Australians don’t have the basic literacy and numeracy skills needed in the workplace. That’s about half the Australian workforce.

As the economy recovers skills shortages will inevitably emerge. But in some parts of the country really high levels of unemployment will be hard to budge. Place like Western Sydney which I represent – the unemployment rate is 10 per cent. Teenage full-time unemployment is 45 per cent. When I ask local employers why local unemployment rates are so high – they tell me it’s because of a lack of literacy and numeracy skills.

That’s why we are investing $2.5 billion in literacy and numeracy and extra help for disadvantaged schools. It will fund extra classroom teachers so primary school classes can break into smaller groups and practise reading, writing and maths. It will fund extra personalised assistance in literacy and numeracy for children who fall behind. And it will pay our best teachers more to work in the areas they’re needed most.

In a place like my electorate the Government is investing more than $80 million in 42 schools. To put this in perspective, this is about 10 per cent of the funding for the whole of NSW invested in just one electorate. This is good public policy in action – putting money and resources where they are needed most. And on a scale never seen before from a federal government.


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We also know that when the economy slows down apprenticeships dry up. Last year new apprentice numbers dropped 27 per cent. The same thing happened in 1991. In 1990, around 35,000 people started an apprenticeship in a traditional trade. By 1991 when the recession hit this dropped to 23,000 – a fall of 35 per cent.

What is surprising is that it took another 13 years before we recruited more than 35,000 traditional trade apprentices a year again. This is one of the reasons we had a skills crisis before the global recession. That’s why we developed a program called Apprentice Kickstart. We tripled the bonus employers received to put on a teenage apprentice over the summer. It worked.


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We have recruited more than 21,000 teenage apprentices over summer, bringing us back to the level we saw before the global recession. And we have done this in one year – not 13.


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Now here’s the crux of it — regions are affected differently. During the 1990s recession the difference between the unemployment rates of the best performing regions and the worst almost doubled. The same thing is happening again. That’s why we put Keep Australia Working together. We identified 20 priority employment areas – the areas hit hardest by the global recession.


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Places like Cairns. Cairns has the highest unemployment rate in the country. Last year the unemployment rate there hit around 12 per cent. As I said in Western Sydney the unemployment rate is about 10 per cent. Here, in South Eastern Melbourne, it’s over 7 per cent.

Regions like Western Sydney and South East Melbourne rely heavily on manufacturing that has been hit hard in the last 12 months. Others like Cairns rely on international tourism, construction and mining that have all taken a hit. But the common thread, in all these areas with high unemployment is lower education levels. Fewer people finish high school than the Australian average. Even fewer have vocational qualifications or university degrees. This is what is pushing up unemployment here and entrenching social disadvantage. And it’s why the reforms we are making in education are so important.


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When I got this job last year the first thing I did was hit the road. I went to talk to employers, community leaders and Jobs Services Australia providers in these areas with a couple of blokes named Lindsay Fox and Bill Kelty.

Lindsay is a self made man. He started a company with one truck. Now he has six thousand. Bill’s a union man who convinced Paul Keating to introduce universal superannuation, one of the most important decisions we have ever made.

Bill and Lindsay visited a lot of these places in the early 1990s. They held town hall meetings, twisted arms and got local businesses to create thousands of jobs. They helped keep these places working. That’s why when the global recession hit Kevin Rudd asked them to do it again.

In each place we went we held a town hall meeting. It’s where we got ideas like Apprentice Kickstart and what convinced me of the importance of our education reforms. In the same room we had local employers, Jobs Services Australia providers, the local council, registered training and group training organisations. We nutted out a jobs plan and we set up a local employment committee.

These committees are led by Local Employment Co-ordinators. In every one of these 20 areas there is a Local Employment Co-ordinator on the ground. Their job is to maximise the impact of the economic stimulus, to get in there and help when local companies go bust and workers lose their jobs and implement a local employment plan.


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One of these Co-ordinators is Jane Robinson. Jane’s region is the Illawarra where I was today. The Illawarra is very reliant on heavy industry and manufacturing. Here’s just one story of the sort of work Jane is doing.

In October last year a yacht manufacturer closed its doors. This left 74 local people out of work including 4 apprentices. Jane acted quickly. She worked with local JSA providers to identify new jobs. She gave the workers information about job vacancies on the local stimulus projects. She worked with TAFE – NSW’s training provider – to get them training. She called other companies in the same industry to see if they were looking for workers. Within three weeks more than half the employees had found a new job- including all the apprentices. Today 51 are back at work.


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This is Keith Pimblett. Keith is based in South East Melbourne. Apprentice numbers took a big hit there last year. In the summer of 2007 – 664 teenage apprentices started work. In the summer of 2008 – 541 were signed up, a drop of 18.5 per cent.

As I said before that’s why we put Apprentice Kickstart in place. Keith wanted to make sure that South East Melbourne got its fair share. So, he hit the pavement, knocked on doors. He talked to businesses about Apprentice Kickstart and held information sessions. By the end of summer this year 681 teenagers had an apprenticeship. A jump of 25.9 per cent. And a lot of credit for this has to go to Keith.


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I mentioned Cairns earlier. We put Peter Doutre on the ground in November last year. We knew we needed to act quickly. The unemployment rate in Cairns, in Far North Queensland, jumped 150 per cent in 12 months from 5.0 per cent in September 2008 to 12.3 per cent in September 2009. And they were going into the low season for tourists up there.

Peter worked with me and others to put together a jobs plan. It includes:

– Giving foreign airlines better access to Cairns airport as a stopover;
– Fast-tracking stimulus projects;
– Investing in a new tropical innovation hub at James Cook University; and
– Sending in the Tax Office to tailor individual payment plans for local business.

The Prime Minister announced it in December. And now Peter is implementing it on the ground.

These are just three stories of three individuals doing some good things. But none of it is done alone. They are only getting results because there are part of bigger teams – made up of JSAs, training providers, local councils and employers.


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One of the best examples of this are the Job Expos, like the one I visited this morning. Earlier I told you Mary’s story. Last week I was in Lismore. About 300 people went home with a job from that Expo. Yesterday I was in Port Lincoln in South Australia where they’re suffering because of the downturn in the tuna industry. And next week I’ll be on the Central Coast of NSW. And after that in Rockingham in WA and then on to the Mid North Coast of NSW. We’ve held nine of these Jobs Expos and created about 3,000 jobs. And we are not finished yet – we’ve got another 15 to go.

This is what Keep Australia Working is all about. And I am very proud of the work we are doing together. We still have a long way to go. But it’s making a difference for people like Mary, for the workers at the yacht company in the Illawarra, for the apprentices in South East Melbourne, the tradies in Cairns and thousands of others like them.