I still remember the day my father came home and told us he had been retrenched. It was the early 1990s and recession had snatched the jobs of tens of thousands of Australians, but I never thought my old man would be one of them. He had been a draftsman at the same manufacturing company for 23 years. I’ll never forget the shock and the feeling of insecurity that ricocheted through my family.
That’s why our work is so important. Because a job does more than pay the bills. It builds self esteem, for many of us it defines who we are and how we see ourselves. Losing your job is a devastating experience. If you can’t get back into the workforce, the long-term effects are crippling.
So the first thing I want to do this morning is say thank you. Thank you for the leadership that Jobs Australia provides to the employment services industry. Thank you for the work each of your organisations does, day in and day out, to help people get jobs.
And I’d like to thank you personally, for using your professional lives to help people who are struggling to find work. For signing up to help people who may feel like they are on the margins of the community. Your work is so important; to individuals, families and our country and it is recognised and appreciated by the Australian Government.
In the past three and a half months, in the middle of a global recession and during the transition to a new employment services system, you have helped to register 680,000 job seekers. About 80,100 of these job seekers have been placed in jobs.
The transition has been smoother, and a lot more successful than the transition in 2003 or 1998. That’s largely due to your hard work and involvement. Thank you for your participation in the consultation process that helped structure Job Services Australia and for your hard work during the transition.
I know there is still a lot of work to do. Our task has been made tougher by the global recession. In the past 12 months about 169,000 Australians have lost their job. We have weathered the global recession well, with one of the lowest unemployment rates in the developed world, but that’s no comfort for those who have lost their jobs. With them in mind, it is important that we learn the lessons of past recessions and recoveries.
1. Unemployment goes up quickly but takes a long time to come down
The first lesson is that unemployment goes up quickly but takes a long time to come down. In the 1980s, the unemployment rate jumped from 5.4 to 10.4 per cent in two and a half years. It took another six years to come back down.
In the 1990s, unemployment increased by a similar amount in the space of two years, and then took the next 11 years to come back down. That’s why keeping unemployment as low as possible is so important.
Key to this is the Economic Stimulus Plan. It is protecting tens of thousands of jobs all around Australia.
Business also deserves a lot of credit for their actions during the downturn. Many have gone to great lengths to keep their staff on, moving staff to flexible working arrangements like part-time work.
A good example of this is Broens Industries. Broens is a high-tech engineering company based in Ingleburn in Western Sydney. They have revenue of about $25 million and employ about 200 staff.
I caught up with the Managing Director of Broens, Carlos Broen, a couple of months ago. He told me that in response to the global recession he was faced with the choice of reducing staff, or reducing their hours of work. He chose the latter, and has been able to keep his entire workforce on – working four days a week.
I spoke to Broens again yesterday, and found out that three months on, no-one has lost their job. The entire workforce are back to five days a week. This is a great example of the flexible response of employers to the global recession.
But unemployment has still gone up, and will continue to rise in the months ahead. Many are still working fewer hours than they would like to. Remember, the lesson from past recessions is once unemployment goes up it takes a long time to come down.
One of the great challenges we will face is the risk of a jobless recovery as employers increase hours of work before putting more people on. It takes a lot of hard work to drive unemployment down and we need your help. Just to keep the unemployment rate static, the economy has to create about 18,000 jobs a month.
As the economy recovers from the global recession you are going to play a major role in helping to drive unemployment down. That’s why the discussions today are important, to make sure Job Services Australia delivers what we want it to.
2. Young people without skills and qualifications suffer the most
The second lesson from the recession of the 1990s is that it’s the young people without skills and qualifications who suffer most. Then, young people who hadn’t finished high school were three times more likely to be out of work or study than those they once shared a class room with.
Today the situation is similar. Almost two thirds of job seekers aged under 21 on the Job Services Australia caseload have not finished year 12 or earned an equivalent qualification. Of the 169,000 Australians who have lost their job in the past 12 months 35 per cent are young people (under the age of 25).
The hardest hit are in my own electorate. In Canterbury/ Bankstown the teenage full time unemployment rate is 47.7 per cent. So I take this issue very seriously. That’s why I’m focused on this, and why the government has implemented a policy of ‘Learn or Earn’.
As you know, ‘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. To help young people meet these requirements we have also developed the National Green Jobs Corps.
Up to 10,000 young people will participate in the National Green Jobs Corps over the next two years, which starts 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, and develop the green skills we need for the labour market of the future.
I’d like to thank David Thompson and Jobs Australia for your comments on the exposure draft of the request for tender. As a result of that feedback I made a number of changes to the National Green Jobs Corps to including:
• allowing 17 year olds to participate;
• allowing providers to promote the National Green Jobs Corps to potential participants;
• paying providers a replacement fee when they replace participants who have exited the program;
• recognising a participants’ move to a job or further education after 13 weeks as a completion; and
• allowing smaller regional organisations to deliver the program as a sub-contractor
These changes are designed to make sure the National Green Jobs Corps is effective. Giving young people the training they need, and getting them into work. As you know, tenders to deliver the program have now closed and successful tenderers will be announced in the coming weeks. The National Green Jobs Corps will kick-off on 1 January 2010.
3. Skills shortages can quickly re-emerge as the economy recovers
The third lesson is that skills shortages can quickly re-emerge as the economy recovers from a downturn. As you can see in this slide, apprenticeship commencements peaked in 1990 and then fell dramatically in 1993. It took another decade for apprenticeship commencements to reach their pre recession level. That gulf in apprenticeship commencements contributed to the skills shortage the Australian economy experienced in the middle of this decade.
Over the past three months I’ve been travelling around the country, hosting 21 Keep Australia Working forums. At every one of these forums employers told me the same thing; that they need more help to put apprentices on.
I checked the data, and found out what they were saying was right. Apprenticeship commencements in traditional trade occupations fell by 20 per cent in the year to March 2009, ten thousand fewer apprentices commencing than the year before.
As the economy recovers, this has got the potential to contribute to a skills shortage. That’s why Minister Arbib and I recommended in a report to the Deputy Prime Minister, the Keep Australia Working Report, that the Government triple the first year incentive paid to employers who take on a young apprentice – from $1,500 to $4,850.
The policy is called Apprentice Kickstart and it will support up to 21,000 young Australians entering traditional trades this summer. Trades like butchers, bakers, bricklayers, carpenters, electricians, plumbers, hairdressers and pastry cooks.
I’m going to be spending the next few months travelling around the country to make sure employers of apprentices know about the Apprentice Kickstart program, so they can and take advantage of the scheme by hiring new apprentices this summer. You can help by making sure employers of apprentices in your areas know about this program and take advantage of it.
4. Some regions are hit harder by downturns than others
The fourth lesson we can learn from previous recessions is that some regions are hit harder by downturns than others. Prior to the recession of the 1990s the difference between the region with the lowest unemployment rate and the region with the highest unemployment rate was 8.5 per cent. By 1992, this difference had blown out to 15.9 per cent. It took around six years for the difference in unemployment rates to return to pre-recession levels.
This is happening again. In September last year, the difference between the region with the highest unemployment rate and region with the lowest unemployment rate was 6.6 percentage points, compared with a difference of 9.7 percentage points in September 2009. What this shows is some regions are hit harder than others.
That’s why the government has identified twenty employment priority areas around the country. In these areas the government has appointed local employment coordinators and held Keep Australia Working forums; to develop regional employment strategies.
We are also offering targeted assistance through the Jobs Fund, and running Jobs Expos where employers will promote hundreds of jobs available to job seekers in that region.
Last week the first of these Expos was held North of here in Launceston. It was a great success. About 2,000 people went through the turnstiles, submitting more than 1,000 job applications on the day. The expo created more than 200 jobs on the spot.
I’ll be at the next Jobs Expo in Liverpool in South West Sydney tomorrow. I hope each of you, and your organisations, get involved in these Expos in your areas.
The purpose is exactly the same as the aims of your organisations – to get people into work. To keep Australia working.
As you can see, the government is pretty busy. As the economy recovers, there are plenty of challenges ahead.
The challenges I talked about of; avoiding a jobless recovery, tackling youth unemployment and rebuilding apprentice numbers.
There are also other challenges like; helping mature-aged workers who have been made redundant return to the workforce and developing the skills we need for the jobs of the future
To do this best, we need to work together. The employment services industry. The community sector. The Commonwealth Government and individual job seekers. I look forward to working with you in this important task.
In case you’re wondering, my father was one of the lucky ones. He got another job, and is still working hard, looking forward to a well earned retirement (if my mum lets him).