Social Security Amendment (National Green Jobs Corps Supplement) Bill 2009: Second Reading

Jason Clare, Member for Blaxland

I thank all members who participated in the debate on the Social Security Amendment (National Green Jobs Corps Supplement) Bill 2009. In a moment I will address some of the issues that have been raised, but first let us remember the purpose of this bill. This bill will provide a National Green Jobs Corps supplement of $41.60 per fortnight for participants in the National Green Jobs Corps who receive Newstart allowance, youth allowance (other) or the parenting payment. The reason for this supplement is to give job seekers an incentive to participate in this program and to support them as they work on National Green Jobs Corps projects. Up to 10,000 young people will participate in the program over the next two years, starting on 1 January 2010. Participants in the program will receive 26 weeks of accredited training and work experience as they work on projects that make environmental improvements now and develop the green skills that Australia needs for the future.

The lesson from previous recessions is that in an economic downturn it is young people who suffer the most. Youth unemployment accounted for over 40 per cent of the increase in unemployment between August 2008 and August 2009. Many of these young people have not completed high school. These are sobering statistics, but they would be a lot worse if it were not for the government’s economic stimulus package. There are a lot of young people now working in retail stores and on construction sites who would have been unemployed if we had adopted the opposition’s strategy of doing nothing and letting the market take its course. Our strategy is very different. It is based on the lessons of past recessions.

In the 1990s young people who had not finished school were three times more likely to be out of work and not studying than those that they once shared a classroom with. Today, the situation is very similar. That is why we have introduced the Compact with Young Australians based on the policy principle of learn or earn. ‘Learn or earn’ means that young people under the age of 21 without a year 12 or equivalent qualification must be in education or training in order to qualify for youth allowance. The National Green Jobs Corps is an important part of this policy. The National Green Jobs Corps is targeted at young people who have not finished year 12 or an equivalent qualification, because skills count. The opportunity to undertake accredited training while participating in the National Green Jobs Corps will help give young people the skills that they need.

Another lesson from the recession of the 1990s is that, when times get tough, apprenticeships and apprenticeship opportunities dry up and it can take a long time for them to return to prerecession levels. In 1990, 35,000 people started an apprenticeship in a traditional trade like carpentry or plumbing. In 1991 this dropped to 23,000, a drop of 35 per cent. It was 2004, 13 years later, before we again recruited more than 35,000 traditional trade apprentices a year. It is this great gulf in new apprenticeships that contributed to the skill shortages that we faced in the past few years and that the Liberal Party when in government did nothing about.

The shadow minister has correctly pointed out that apprenticeship numbers have dropped by about 20 per cent over the last 12 months. For the last few months I have been on the road with Lindsay Fox and Bill Kelty. Employers we have met from south-west Sydney to south-west Perth have all told us the same thing-that they were struggling with the effects of the global recession and they needed more support and help from government to put on apprentices at the moment. That is why the government has tripled the first year incentive paid to employers who take on an apprentice from $1,500 to $4,850. This is called the Apprentice Kickstart and will support as many as 21,000 apprentices entering a trade this summer. Kevin Cohen from Co-Wyn Building Contractors told yesterday’s edition of the Canterbury-Bankstown Express:

It’s a tremendous incentive for businesses and young people. It gives them an opportunity to get their foot in the door …

That is right. Apprentice Kickstart has also been endorsed by the Group Training Association; the Housing Industry Association; Skills Tasmania; Skill360, which is based in Northern Queensland; the Australian Chamber of Commerce and Industry; and the shadow minister. Mr Peter Andersen, the New South Wales Chairman of the Group Training Association and the General Manager of the Wagga based apprentice and employment specialist GTES, said:

For some months we have been saying that extra incentives are needed for the employment of apprentices in order to overcome the financial issues currently plaguing Australia as well as helping correct the skills shortage.

The program will go a long way to playing a positive role in achieving these outcomes.

That is from the Daily Advertiser of 19 October. On 20 October in the Maitland Mercury, Shane Goodwin, the Deputy Managing Director of the Housing Industry Association, said:

The extra payments to employers taking on an apprentice in the period of December to February, when there will be a jump in the number of school leavers, is well timed.

Not only is there an additional payment up-front for employers taking on an apprentice, but the offer of a further $2,500 at nine months should be helpful in addressing retention in the first year.

While demand for apprenticeships has been affected by the downturn in building and construction, the time to be investing in apprenticeships is precisely now so that we might soften the impact of skill shortages when the industry moves into recovery.

The additional apprenticeship incentives are well-targeted on traditional trades and represent good value for money.

Mark Sayer, the General Manager of Skills Tasmania, said:

Incentives often work and this is a good one.

I believe it will prompt employers to take people on.

Troy Williams-whom I met only a couple of weeks ago-the Chief Executive of Skill360, which is based in Northern Queensland, said:

Not only does it do the right thing by 21,000 young people, it provides our economy with the skills that it will require when the economic recovery gets fully under way.

Many companies are finding it difficult to recruit qualified trades people, even in the current economic climate.

Peter Anderson, the Chief Executive of ACCI, said:

Initiatives like these are practical and responsive to our labour market needs. They minimise the risk of skill shortages arising from the shortfall in apprenticeship enrolments during the current economic downturn.

Finally, in the Bendigo Advertiser on 17 October, Andrew Southcott, the shadow minister, said:

We think it’s targeted in the right area.

We thank you for that contribution.

Several speakers in this debate spoke about the former government’s Green Corps program. I think it is important to make a couple of points here. There are three important differences between the new National Green Jobs Corps and Green Corps. First, the National Green Jobs Corps is larger than Green Corps. Green Corps funded about 1,700 places a year. This new program will fund up to 5,000 a year, or 10,000 places over the next two years. Second, the National Green Jobs Corps is targeted at young people most at risk of being unemployed. Unlike the previous government’s program, it is targeted at young people who have not completed year 12 or an equivalent qualification. Third, a key component of the National Green Jobs Corps is accredited training. While Green Corps had a training component, this was not always accredited or at a level equivalent to a year 12 qualification. The National Green Jobs Corps provides 130 hours of accredited training at the level of certificate II, with the flexibility to adapt to certificate I if required by the participant’s needs. As the member for Gippsland noted earlier in this debate, ‘This is a step forward for program participants,’ and I welcome his contribution.

The shadow minister was very critical in this debate of what he called ‘training for training’s sake’. No-one wants training for training’s sake. That is why I made a number of changes to the National Green Jobs Corps draft request for tender. The member for Dunkley will be pleased to hear this. He can tell the providers he met down in the greater Frankston-Mornington Peninsula area that, as a result of feedback I have received, the draft request for tender was amended. I will give you two examples: (1) if a program participant gets a job after completing 13 weeks of the program, their provider will receive the full financial benefits of a place completion-one of the concerns raised by a number of people who gave me feedback as part of the draft request for tender and an issue of concern raised by the member for Dunkley, which has now been addressed; and, (2) if a participant enters the National Green Jobs Corps from stream 1 of Job Services Australia and does not get a job while on the program, they do not go back to the start of stream 1. Instead, they will re-enter JSA at the 13-week mark, meaning they will get immediate access to skills assessment from their provider. The provider will then be able to arrange intensive activity matched to the job seeker’s needs. The provider will also update the job seeker’s employment pathway plan. This was not something raised in the feedback we received to the draft RFT but it was something which I thought was important-to ensure that people who participated in this program did not go back to the start of stream 1 and have to wait 13 weeks before they got access to this support and assistance. These changes are designed to help the transition from training to work. These changes, along with a number of others, have also been endorsed by the employment services industry.

This debate is not the first time the shadow minister has spoken about ‘training for training’s sake’. He will know, because we were there together, that he also made this point at the National Employment Services Association Conference in Sydney back in August. He referred there to the research of James Riccio from the MDRC centre in New York from 1994 and argued that work programs were more effective than training programs and, therefore, that the government should move away from supporting training.

The only problem with this research is that it is out of date. A succession of more recent studies has shown the need for a mix of training and work programs. I refer here to research by Hotz, Imbens, and Klerman in 2001; Gueron and Hamilton in 2002; Ochel in 2004; and Huber, Lechner, Wunsh and Walter this year. All of those pieces of research reach the same conclusion-that is, that the best results come from a mixture of job search and work focused education or training. That is what the research says and that is exactly what we are doing. That is why we have developed the National Green Jobs Corps, the Apprentice Kickstart and the reforms to Job Services Australia.

I note the opposition have gone a little quiet about Job Services Australia since July. Earlier this year they predicted turmoil. They said that JSA was convoluted and ill-conceived. The fact is the implementation of Job Services Australia has been a lot smoother than anyone predicted. Over the last few months I have been talking to JSA providers across the country-from Bankstown to Burnie and, as the Parliamentary Secretary for Western and Northern Australia, Mr Gray, will attest, from Caboolture to Kwinana. They all say the same thing-that is, that the transition has been a lot better than in 2003 and a lot better than in 1998. The Chief Executive Officer of the National Employment Services Association, NESA, Sally Sinclair, said:

… we are in the midst of the most successful transition in Australian employment services history with Job Services Australia.

In reflecting on the long winding road we have traversed to this point in Job Services Australia’s existence, there is little doubt that the partnership approach adopted by Government and industry has been a major factor in the success of implementation thus far …

We congratulate DEWR and the Government for adopting this partnership approach in the development of the framework and transition.

Already more than 100,000 job seekers have been placed in work. An important point is that 37 per cent of those 100,000 are people with major barriers to employment, coming from streams 3 and 4 of Job Services Australia. We are off to a good start but we are still operating in a very difficult economic environment. Unemployment is predicted to continue to rise over the course of the next nine months. This government will continue to work hard to make sure there is the right mix of training and work options available to all job seekers. And the National Green Jobs Corps is an important part of this work.

The National Green Jobs Corps will start on 1 January next year. Tenders to deliver the program have now closed and successful tenderers will be announced shortly. I would like to thank the employment services industry for their assistance in structuring this program, for the feedback they have provided in putting the scheme together and for the enthusiasm they have applied to deliver the National Green Jobs Corps. Again, I thank all members for their contribution to this debate. I commend the bill to the House.