G20 Labor Ministers Meeting, Washington

Speech
  • Minister for Employment Participation
  • Minister Assisting the Prime Minister for Government Service Delivery

Preparing the Workforce for the Post-Crisis Economy Disadvantaged job seekers and the Australian perspective

E&OE TRANSCRIPT

Thank you Madam Chair.

When framing our response to the crisis the Australian Government kept front of mind two goals – the need to protect jobs as well as to develop the skill needs for the future economic growth of our country.

The Australian Government’s estimates are that our stimulus is expected to support 200,000 jobs. That is two percentage points less than the unemployment rate we estimated we would have experienced without the stimulus package. But the Government recognised from past downturns that the impact of the crisis would not be uniform across the country nor population groups.

While our national unemployment rate is 5.3 per cent there are parts of Australia where unemployment is up to 24 per cent while others as low as 2 per cent.

As I said this morning young people were hit hardest by the downturn. Also suffering are our long term jobless. Over the past 12 months long term unemployment has risen significantly, by around 30 per cent and now accounts for some 17 per cent of total unemployed.

So what are the lessons I can usefully draw out for colleagues and ministers?

Obviously there is not one solution. In fact what we’ve seen is that you must attack this issue at every level possible. For the vulnerable unemployed a well targeted and highly functioning government employment service is the key. In Australia our employment service is contracted to the non-government sector.

Our Federal Government after it’s election in 2007 set about renewing the employment service contract prior to the global recession and the new Jobs Service Australia network came into being at the height of the global recession; July 1 2009.

It’s characteristics are simple. It’s demand driven and provides a personalised individual service in a one stop shop facility.

Providers are required to service all comers including the most disadvantaged job seekers. In fact the greatest financial incentives are to place long term unemployed into employment. Specialist providers have also been kept to deal with indigenous job seekers, migrant communities, the homeless and people with a disability.

Over the first six months of operation the new service has shown the benefit of our changes by finding jobs for 18 per cent more job seekers than the first six months of the previous less integrated contract.

The goal in my mind for an employment service is to get unemployed people back to work as quickly as possible. The longer a person is unemployed the harder, much harder, it is to get them back into employment.

There are also a number of other specific lessons that we’ve been reminded of.

Young people in the long term unemployed face multiple barriers to employment. These barriers for many have unfortunately included a lack of foundational skills in literacy and numeracy. We get that feedback from employers that these barriers along with other barriers including work ethic, communication and so on are key barriers for disadvantaged job seekers.

This points to a number of other strategies which we have accelerated. It is crucial to try and keep non-academically inclined young people at school. To this end we’ve committed to increasing the availability of vocational education programs in school to keep young people engaged and teach them basic skills in a more conducive environment.

For children who do drop out we’ve instituted new rules that require them as a condition of receiving youth income support to engage in 25 hours a week of education, training or activity. It’s called our Compact with Young Australians.

This policy and all our employment and income support policies are based on the principles of mutual obligation and reciprocal responsibility to ensure job seekers are encouraged to fully reintegrate with the labour market.

Early in the crisis and as part of our national stimulus we created active employment programs, a national green jobs core, a jobs fund which has funded 600 projects and will create 16,000 jobs. 100 of these 600 projects have been new social enterprises.

These social enterprises operate on business models that involve energy efficiency, recycling, food preparation and service, property maintenance and other activities with subsidy to provide psychological health and educational support for employees.

Many of these enterprises target very disadvantaged job seekers to provide intensive support to get these job seekers ready for more mainstream training and other job activities.

Our Government is also interested and pursuing with the private sector micro-financing options and we run a program to help job seekers to establish their own small businesses. This program provides a year's extension of income support plus business mentoring and minor financial support for unemployed people. Positively 80 per cent of those job seekers who graduate this program do not return to welfare.

None of these strategies are a cure all. No one solution works for every community or for every group.

Like a number of other countries represented here Australia has a very disadvantaged Indigenous population with low educational results, poor health, high levels of social distress and the disastrous combination of high unemployment and low participation. We’ve intensified our work with these communities and recognised tailored solutions are required.

The interesting feature here is since the Prime Minister’s apology to the stolen generation business from across the board have worked with Government providing jobs at every level.

We are now coordinating these activities with employment providers, Indigenous communities and also with our training providers and we are seeing good gains.

At the same time as putting these initiatives in place to cushion the impact of the global recession we’ve been conscious, as the ILO Jobs Pact reminds us, that it would not be acceptable if a recovery excluded working people already negatively impacted by the downturn. For this reason in the last part of last year we worked on a skills agenda for Australia with even more urgency.

We need to pay attention to both the needs of highly skilled workers, to compete in international and green markets of the future and for the basic skills that the unemployed and young people need in order not to be left behind. Our skills agenda operates at both levels.

During the next five years rapid growth is expected in our health care and education sectors, our professional scientific and technical services also and our mining and renewable energy sectors.

There are jobs in these industries. We must provide the skills and the training that matches these jobs. That’s a critical role for training providers but also for our employment providers.

We’ve also worked critically with business. Industry skills councils have been established - a partnership between business, union and training organisations which develop training and will assist our job providers and ensure that we have the training required to meet the needs of enterprise.

We have fast tracked apprentices, as I talked about this morning, with our Apprenticeship Kickstart program which is having great results. So Australia is engaged in many of the active employment strategies of the G20 and we share much in common.

Now there has been some discussion today about the role of employment policies in macro-economic policy and I don’t disagree. Australia supports the ILO Jobs Pact, the role of the ILO directly with G20 leaders and a number of positions advocated by the social partners but at the heart of employment growth is economic growth.

Since the early 1980s it has been accepted policy in Australia that economic development requires promotion of enterprise and market based solutions. Open trade as well as social protection and dialogue involving the social partners. Australian governments do not see a choice between these elements. That would be a false dichotomy as they are really mutually reinforcing strategies.

The current Australian Government, I would argue, has a fairer workplace relations policy than its predecessor and we’d make a strong claim that we are better at the human capital agenda - education from early childhood through lifetime learning.

Nonetheless it is fair to note that governments of either major political party in Australia would agree that a commitment to promoting trade markets and commerce is essential, as well as strengthening labour markets, are a key to growing prosperity.

As are many in this room, we are a trading country and we’ll continue to work for freeing up trading markets, We also have strong traditions of universal service and social protection.

We realise also that investing in the skills of our workforce is essential to our economic growth and prosperity. Indeed all of these elements are crucial to the harmony of our community.

Thank you.

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