SUBJECT/S: Youth Internships.
GREG JENNETT: Brendan O'Connor, there are a quarter of a million youth unemployed in Australia, we're told by Michaelia Cash. What's wrong with trying anything and everything to train them up to get jobs?
BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: No, we should try more because, as you say, too many young people are unemployed. Twelve per cent of young people are unemployed in this country, double the national unemployment rate and more has to be done. We saw the Government abolish Youth Connections and other successful programs and last year they had no specific youth initiative, so of course we want to see re-investment. But the $750 million spend on so-called ‘internships’ is not even replacing the $1 billion taken out of apprenticeships. A 4-week supermarket internship doesn't replace a 4-year apprenticeship or a real job.
JENNETT: But this is part of an overall strategy, according to according to the Minister, to get people some soft skills, the really basic stuff that they can't apparently learn elsewhere. So it's worth trialling, isn't it?
O’CONNOR: I agree there are some jobseekers, particularly young jobseekers who may need those type of skills. I call them core skills, quite frankly, because if you can't present properly, engage with others, work collegiately, work under supervision, then you won't find work. So I support that approach. But the Minister suggested we would be filling only existing vacancies with tax-subsidised jobs that are below the award. Now, the concern I have is those existing vacancies would have been filled by award employees - young people.
JENNETT: So this is a displacement effectively?
O’CONNOR: Yes, see most labour market programs are looking to add to the labour market. You therefore have safeguards around additionality to make sure that you're not just subsidising existing jobs. I mean, economists would call this dead weight loss, that you are paying employers to fill jobs they would have filled anyway and that is actually a problem. Secondly there are no sufficient safeguards explained by the Government as to how young people would not be exploited. You've got underpaid jobs, subsidised by the taxpayer. They would have to be vacancies, so this is not increasing the jobs in the labour market. I don't think that's the approach we should be taking. Indeed the training itself, other than those presentation skills, is not sufficient training to equip them for the very fast changes that are occurring in the labour market.
JENNETT: We will talk about some of the safeguards in a moment, but just going to the key issue of if it's a vacancy, if it by definition can't be filled and that's why it would be a vacancy, what's wrong with trying to encourage and take a taste test of a young person who might be able to fill it?
O’CONNOR: That's not the point. They’re not offering it to someone in the labour market to fill under an award wage. What they are saying is you are going to fill a vacancy, rather than offer it to someone and pay them a minimum award wage -
JENNETT: They are saying they are existing vacancies aren’t they?
O’CONNOR: Yes, existing vacancies, so what that means is they need to be filled. What's not being said is that you are going to provide it to a prospective job seeker and pay them the minimum award wage. Most labour market programs are looking to increase the labour market. For employers to hire more people. Not to hire the same amount of people on a tax subsidy and underpay the actual employee in this case up to $70 less than the award wage. Now, I don't think –
JENNETT: But that's better than what they are getting on Newstart alone?
O’CONNOR: But most labour market programs going right back to the Red scheme 40 years ago, were to add to the labour market, to increase opportunities. There will already be many young people going for those jobs that are now in the labour market. The point was to add to those jobs, otherwise this is what an economist would call dead weight loss. You are using taxpayer money to fill a vacancy that would occur anyway as a matter of course. That's just subsidising an employee, it’s not growing the labour market. It’s underpaying the worker. There are all sorts of other questions about workers compensation, annual leave, which don’t apply to that particular participant.
JENNETT: On the safeguards, the Minister is saying a whole range of schemes exist currently that makes sure that this intern, to use the current example, is protected by OHS law and all the appropriate safeguards for workers apply to them as well?
O’CONNOR: We recently had a person die on a Work for the Dole project, tragically in Toowoomba. I know that is under investigation, my point is, that participant was not covered by workers' compensation. A tragedy. When you are dealing with young people in particular in workplaces, it is really important that we know what their safety arrangements are. There is an inquiry now into that tragic death. My point is that we should be looking at increasing, yes, opportunities for young people, but increasing the job opportunities by additionality, not by saying we would be subsidising existing vacancies with taxpayers' money.
JENNETT: For some of your concerns to be realised, there would almost have to be a rorting approach by employers in that they actively did not seek to fill the vacancy with an award wage worker and held it open in order to bring the intern in?
O’CONNOR: Well, I’m saying this from the point of view that this would take effect I think in April next year, if the Government was to be re-elected. If an employer is being told it is legitimate to pay people - well, in their case, not to pay anything, it is a strong incentive for an employer to get three months' work paid by the taxpayer and to have the employee paid up to $68 less than the minimum wage. Of course that is legitimising that approach. Now, labour market programs in the past under conservative and Labor governments have often ensured that you are looking to add to the employment market, not displace current jobs with tax-subsidised underpaid jobs. That's not the approach we should be taking. As for training, as I say, a billion dollars was taken out of apprenticeships by this Government. We need to make sure we have sufficient skills for the emerging demands in our labour market. This internship as it’s structured will not provide sufficient skills for employers to employ people in areas of emerging demand.
JENNETT: So if you're Employment Minister, in three months, what does it look like? You re-jig it? Keep most of it? Put extra conditions on it? What do you do?
O’CONNOR: We will announce exactly what we will do, but, yes, we will provide incentives for employing young people, there needs to be work there, of course, and we will announce what we will be doing in that regard. But we want to make sure the training is real, we want to make sure we are increasing jobs in the labour market, not just tax-subsidising existing vacancies, and we want to make sure that those young people that are in those workplaces are safe. We've seen this Government turn its back on safety, whether it's road safety or construction industry safety. We don't want to see safety being ignored, particularly when we're talking about young people entering the labour market.
JENNETT: Brendan O'Connor, thank you.
O’CONNOR: Thanks very much.
ENDS