A Fine Balance: Restoring Social Entitlements Anthony Albanese - Shadow Minister for Employment Services and Training

Speech

Transcript - Jobs Australia 2003 National Conference, Hobart - 7 November 2003

INTRODUCTION

Thank you for inviting me to participate in your 2003 Conference – I am delighted to be back.

Last year's Conference in Adelaide was my first major speech, soon after being given responsibility for Employment Services and Training.

I'm sure if Adelaide seems a long, long time ago for me, it must seem a lifetime for you.

It's been a tough year.

I remember this time last year many of you were feeling a great deal of stress about the impending implementation of Job Network Mark 3 and how your agency would survive the transition.

Unfortunately many of the concerns raised at that time by organisations such as Jobs Australia have come to pass.

Perhaps tomorrow the Minister will explain why he was the only person in Australia who did not know that July 1 was the day after June 30.

I can't find any other explanation for why the problems identified by organisations such as Jobs Australia well in advance of the beginning of JSC3 were not addressed before July 1.

Labor shares your objective – we want the Job Network to deliver the best service possible to the unemployed.

The system has become the end in itself. Of course, the power point presentation approach to developing social policy was always likely to result in flawed outcomes. The Government has forgotten that the Job Network is a system run by real people, such as yourselves, for the benefit of real people.

What's worse – the Government has actually blamed the people the system is meant to serve for the fact that its "model" doesn't work!

You know too well about the problems:

• There were only 500,000 people in the Job Network, not the 720,000 that the model was based on;
• The automated referral system from Centrelink was confusing and didn't work;
• The IT system was in the words of one provider "a dog";
• The jobseeker account required more bureaucratic accounting measures than the original GST BAS statements;
• A JobSearch database that has matched clients with jobs in escort agencies and as money launderers, and as the Herald Sun reported last week the case of Graeme King who has been offered jobs 800 kilometres from his home in Gippsland.

These flaws have combined to lead to a cash flow crisis and a great deal of stress.

Instead of addressing the structural flaws in the system, all we get from the Government is consistent attacks on the unemployed.

Many of you were at the NESA Conference in August at which the Minister said:

"more than 60,000 Australians who have received unemployment who you have made numerous attempts to get through your doors, who have had phone calls from you and from Centrelink. They're had their doors knocked on. Who have had no valid reason."

This was the line spread around the country. Steve Ciobo, the Member for Moncrieff, claimed that there were 40,000 "dole bludgers" on the Gold Coast alone.

This is Government spin gone mad. It also happens to be a lie.

Centrelink Agency Executive Minutes of 8^th September chaired by Sue Vardon contain the following extraordinary direct repudiation of Mal Brough:

"There have been some statements about 60,000 job seekers did not attend a Job Network appointment without a valid reason. Centrelink analysis of this information has found only 3,000 job seekers slipped through the net".

What an embarassing indictment!

As you know the behaviour of the unemployed didn't change on the 1^st of July, the Job Network system did.

The overwhelming majority of the unemployed do want to work.

While the unemployed do have a responsibility to actively engage in job search activities and if necessary, improve their skills, so too does government have obligations.

Under this Government much of your activity is based upon checking on the unemployed, rather than helping them. We have a government that specialises in vilifying the vulnerable, whether they are asylum seekers or the unemployed.

Given the community sector's proud history of supporting the most disadvantaged in our society, it is essential that at this time you continue to advocate for them, without fear or favour.

The Government believes that because it funds services it also buys silence. Its intimidation cannot be allowed to succeed.

The Job Network will only work effectively when jobseekers, the community sector and government are all fulfilling their responsibilities to enhance social capital.

RIGHTS AND RESPONSIBILITIES

Today I want to take the opportunity to place the debate about the Job Network in the political context of the broader debate about Australia's future.

It is important that we debate the shift in the balance between rights and responsibilities that has occurred under the Howard Government.

A couple of weeks ago I was listening to Treasurer Peter Costello wax lyrical about the growth in private sector wealth. According to the Treasurer, in the past 7 years private sector wealth has more than doubled from $2.125 trillion $4.325 trillion.

Given this significant increase in national wealth, I believe now is an appropriate time for us to reflect on the type of society Australia has become, and whether this greater prosperity has been used to improve the security and living standards of all our citizens.

The Government talks a lot about security.

However, security must extend beyond the threat of terrorism, to encompass economic and social security. At the core of this extension is the security that comes with a permanent, full time job.

Citizenship in a modern society is about universal rights and responsibilities. While responsibilities, namely acceptance of the rule of law, respect for others and the payment of taxes, have remained by and large consistent, the ongoing struggle for more than a century has centred on the issue of rights.

The not for profit sector have a proud history of advancing social capital in our local communities as part of this historic struggle.

When I speak of "rights", I mean more than the democratic right to participate in the election of a government. I mean more than civil rights such as equality before the law, freedom of speech and freedom of association. Importantly, citizenship rights also include the right to a minimum standard of living guaranteed through the creation of social entitlements.

It is only by removing from people's day to day lives the struggle to secure the basics – housing, healthcare, quality education and employment – will their potential ever be fully realised, not only for their personal satisfaction but as contributors to society.

At the core of this is the right to work.

Despite fervent opposition from the political right, Australia, particularly in the post war years, successfully built an extensive array of social entitlements such as the basic wage; progressive incomes taxes; workplace health and safety; the aged pension; unemployment benefits; free public hospitals; Medicare; universal superannuation; affordable childcare; and a public education system free at the point of use.

Many of these social entitlements were only achieved after decades of bitter struggle and repeated setbacks. It is with much pride that most were delivered by Labor governments in partnership with the broader labour movement and community sector.

Once secured these entitlements largely became established elements of our society, enjoying overwhelming public support to the point where past Conservative governments have shown a strong reluctance to change or dismantle them.

However, the election of the Howard Government changed all that.

On 2 March 1996 John Howard and his Coalition parties were elected to the Treasury benches on a commitment that they would govern "For All Of Us".

Seven and a half years later, I believe enough time has now past for us to be in a position to judge whether they have fulfilled the spirit of their 1996 commitment, whether under their stewardship opportunities are being enjoyed by the many and whether the benefits of greater economic prosperity have been shared fairly across all regions and all sections of our society.

Put simply, have they maintained and strengthened social entitlements?

As I will illustrate in my speech today, the Howard Government has governed for the few not the many and through this process marginalised many in the community, particularly the long term unemployed. They have started the process of dismantling universal social entitlements and reallocated significant public resources away from those most in need.

This ideological agenda has reinforced, if not widened, social and economic inequities and today its tentacles reach into every aspect of public policy – education, health, childcare, industrial relations, housing and of course employment.

More than ever the family you are born into or the neighbourhood in which you live determines your lot in life and the opportunities you enjoy.

Opportunity and social justice must be at the core of Australian values - not just for some, but for everyone.

EDUCATION AND TRAINING

Take education and training.

Here we have witnessed the running down of the universal public system and a massive redistribution of resources to non-government schools. Specifically, under this Government funding to public schools has increased in real terms by 12%, or $168 million, while funding to private and independent schools has increased by a massive 80%, or $1.5 billion.

Furthermore, $100 million of taxpayers' money is handed over each year to elite private school such as Kings and Scots College – schools which only a very small number of Australian children will ever see the inside of.

Justifying this policy the Minister for Education, Dr Brendan Nelson, recently told Parliament:

"One thing that this Government strongly believes is that every Australian parent should be free to choose the kind of education which he or she feels best suits the aspirational needs of their children"[1]

But the choice the Minister speaks of is a cruel hoax. I challenge the Minister to find me a low-income family that can afford $10,000 plus per semester per child to send their kids to an elite private school. For the one million families on weekly incomes of less than $500 and the 860,000 children living in families where neither parent works there is simply no choice – for them the only option is and always will be the public system.

It's not that low-income families don't want to send their kids to a school like Sydney's Kings College with its 15 cricket fields, 12 tennis courts, 5 basketball courts, indoor rifle range, 50m swimming pool and low student-teacher ratio – they simply can't afford it.

We have a Prime Minister who has forgotten the motto of his old school, Canterbury Boys' High in my electorate - "Truth and Honour".

Funding to this disadvantaged school with over 90% NESB students will increase by $68,000 for the period 2001-2004. Just one kilometre away, the elite Trinity Grammar will receive more than $3.5 million extra for the same period.

"Truth and Honour" indeed. Clearly, Canterbury is not part of the view from Kirribilli.

After 7½ years Australia is beginning to see the consequences of this Government's approach to education. After more than two decades of growth, secondary school completion rates are again falling with the latest international comparison revealing Australia ranks 19^th out of 30 OECD countries.

As people here would know from their experiences with the unemployed, educational attainment fundamentally determines a person's success in the labour market.

Specifically, the unemployment rate amongst those who have not completed secondary school is currently running at over 10%, whereas amongst holders of a university degree the unemployment rate is just 3%.

And now Minister Nelson has turned his attention to higher education. Not satisfied with building a two tiered school system, Minister Nelson – a man who received his medical degree for free courtesy of the Whitlam Government reforms – has announced a policy framework that would turn universities from a social entitlement accessible by the many to a privilege for the few.

A strong vocational education and training sector is vital to improving employment outcomes.

Today the Senate Inquiry Report, Bridging the Skills Divide, has been tabled.

It found major skills shortages for plumbers, carpenters, engineers, nurses, motor mechanics, hairdressers and teachers amongst many other trades and professions.

The Australian Industry Group submission reported that more than half the businesses surveyed faced skill shortages.

Accordingly, the Report recommends that the capacity of the Job Network to provide for additional training to jobseekers with relevant competencies in areas of skill shortages needs to be improved. Labor supports this recommendation.

Surely it is irrational that there is currently little or no role for the Job Network in addressing skill shortages.

This Report also comes at a time when the new Australian National Training Authority agreement is being negotiated. Despite the level of unmet need the Commonwealth have not offered a single Dollar in growth funding.

HEALTH

Health is another area of social entitlements in which this Government has begun the process of dismantling. Like in education we are seeing the creation of a two-tiered system where access to quality and timely health care is not based on need but ability to pay. We face the very real prospect of Medicare becoming a second-class safety net solely for low-income Australians; with everyone else's health care dependent on how much money they have in their pockets.

And as with education, the government is actively supporting and promoting this erosion of the universal system through its policy and funding decisions.

Those of you who work on the frontline know only too well the link between health and employment prospects.

At a time when our public hospitals are under-funded to the tune of $1 billion; over 200,000 people are languishing on elective surgery waiting lists; the elderly are being forced to wait up to fours years for dental treatment; 20,000 additional aged care beds are needed; and the cost of visiting the local GP is increasing, the Government can find $2.4 billion to fund a tax rebate for those with private health insurance – half of which goes straight into the pockets of the top 20% of taxpayers.

Let's not be mistaken, every increase in the premiums of private health insurance, increases the cost of the rebate which in turn takes hundreds of millions of dollars away from Medicare and our public hospitals.

By stealth the Government is dismantling our universal health insurance system, taking us back to pre-Medicare days where 4 million Australians were uninsured left scrimping and saving to pay for their medical treatment. This is nothing but a redistributing of resources to private medicine.

I don't want a society where the middle class is fighting to get out of the public health system – I want them fighting to get into it.

There's a very practical reason for wanting this outcome. Only by keeping the well off in the public system can we safeguard standards and maintain quality of care. Not to level down but to level up.

Gordon Brown, the British Chancellor of the Exchequer, recently articulated most aptly the type of approach Australia needs to rediscover. Mr Brown told the Labour Party Conference:

"It is because we the Labour party understand what the Tories do not – that the town square is more than a marketplace, the city centre more than where people buy and sell, community more than a collection of individuals. And it is because we owe obligations to each other that go beyond calculation contract and exchange that we are proud of this Labour Party's unique and special contribution to British society – the National Health Service, health care determined not by your individual ability to pay in the marketplace but by something more than the material – your shared citizenship and your need."

INDUSTRIAL RELATIONS

Those people who you successfully place into work are likely to experience the full implications of the Government's 19^th Century approach to industrial relations.

In its latest attempt to marginalise the Australian Industrial Relations Commission, the Government has introduced legislation that would limit the Commission's ability to grant pay rises to the lowest paid – a total of 1.7 million workers.

At the same time they are attempting to restrict the pay rises of the lowest paid, the Government is refusing to regulate the audacious pay rises being granted to the chief executives and directors of some of our largest corporations.

For example, in the week the Commonwealth Bank announced that it would be axing 3,700 jobs its chief executive, David Murray, received a $175,000 a year pay rise – taking his base salary to $2.52 million. The head of Telstra gets $2.41 million, National Australia Bank $2.62 million, BHP Bilton $3.54 million, Westfield $13.39 million, and News Corp $25.7 million.

Over the past decade executive remuneration levels have grown from 22 times average weekly earnings to 74 times. In the past 12 months alone the executives of our top companies have granted themselves an average 38% pay rise or an extra $10,000 per week. In the same period the lowest paid received a pay rise of just $18 a week.

No wonder the average worker feels as though they are missing out. After all it's their labour that creates the wealth for the companies these individuals manage.

Whereas the unemployed are breached – often unfairly - and lose payments for failing to meet their obligations, corporate executives are rewarded for failure with multi million dollar payouts. This is the ultimate obscenity.

The Howard Government governs for the privileged few, while dismantling the social entitlements relied on by the disadvantaged.

EMPLOYMENT ASSISTANCE

Finally, and I'm sure the issue closest to the heart of most in this room, employment assistance. The most important social entitlement, and one that governments over the past 20 years have probably had the most varying of commitments to, is that of full employment – the guarantee that everyone who wants work can find it.

Since the early 1970s the maintenance of this social entitlement has by and large eluded governments, even those with an explicit commitment to it.

While the current Government basks in the glow of a headline unemployment rate of 5.6%, the true state of the labour market remains largely hidden from public debate.

On top of the 575,000 Australians officially classified as unemployed, more than 600,000 part-time workers want more hours and a further 1.16 million who at the moment are not actively looking for work would still like to have a job. In total, nearly 2.4 million Australians, or some 20% of the workforce, are not getting the financial and social stability that comes with having enough work.

Furthermore:

• 860,000 children now live in families where neither parent works;
• the number of very long term unemployed has doubled in the last 7 years to 281,300;
• the average duration of unemployment for mature aged workers is twice that for younger workers;
• unemployment amongst our Indigenous communities is currently running at six times the national average;
• communities in areas such Wide Bay in Queensland, the Tweed and the Illawarra in New South Wales and northern Tasmania have unemployment rates of over 10%; and
• 1,100,000 people of working age are outside the labour market and depended on benefits, including those with disabilities or health problems and sole parents.

But these statistics have a human face.

Recently, an unemployed South Australian woman contacted me in despair. In her letter she wrote:

"Well some of us are not stupid, or easily humiliated, but are just plain angry! We are sick and tired of being treated as a lot of bludgers who deserve to be caught out. I have about 1,000 job replies and have attended about 20 job interviews…. The long term unemployed, in particular, need to be treated with the compassion and sensitivity they desperately need and deserve, by recognizing that these people have simply tried their best, are exhausted and fed up."

For the unemployed having a job is not simply about the money – it's also about the security, self-respect and hope that comes with being gainfully employed and making a contribution to their local community.

While the commitment of past governments to full employment has been patchy, nothing compares with the current Government – they refuse to set targets, they have no comprehensive employment strategy and for seven and a half years not one government minister has even uttered the words: full employment.

And if that's not enough, they have also cut funding to employment assistance and labour market programs in half and walked away from the provision of direct assistance to the unemployed with the winding-up of the CES/Employment National.

The Government openly argues its major employment policy is to change the unfair dismissal laws to make it easier for employers to sack their staff.

They dearly hope that the current economic growth in the private sector, underpinned by a booming housing sector, continues forever.

For the prospects of the long-term unemployed this is a triumph of hope over reality.

These policies are certainly no route back to full employment. In particular, while it's important to maintain strong and stable economic growth, past experience has shown that new jobs inevitably go to new entrants to the labour market and not to the long-term unemployed.

The experience from the economic recoveries of both the 1980's and 1990's is that long-term unemployment has a structural aspect that is immune to improvements in economic conditions.

Investment in labour market assistance must be ongoing in order to improve long-term job opportunities and should not be regarded as an arm of welfare compliance activity.

A LABOR APPROACH

Australia must adopt a different approach if we are to again restore full employment as a social entitlement. I want to briefly outline my thinking on this matter – it involves a three-prong strategy.

Firstly, government must have an explicit commitment to the attainment and maintenance of full employment. Labor has that commitment; it is enshrined in our platform.

Secondly, Labor will refocus the Job Network on the needs of those it is meant to service, the unemployed, and in particular those confronting significant barriers to employment.

It is a tragedy that there are more long-term unemployed today than when the Howard Government came to office.

While the current Government believes that simply keeping jobseekers active will lead to future employment opportunities, Labor recognises that without relevant skills and recent experience in a mainstream workplace, jobseekers will continue to find it difficult convincing employers to take them on. At the end of the day this will involve entrusting you, the providers, with additional resources and more options such as training, retraining and wage subsidies.

Furthermore, to ensure that you are able to devote your time and considerable talents to assisting jobseekers, the Active Participation Model's regulations and payment system, including those for the Jobseeker Accounts, must be streamlined and simplified. Given the collective experience and knowledge of people in this room, I would be grateful for your views as to how best this can be achieved.

And that leads me to this point: I guarantee that your voice, your concerns and your ideas will be very much at the forefront of the Job Network under a Labor government. I have no doubt that if the current Government had done this the transition to ESC3 would have been far less problematic.

Thirdly, just as economic growth without active labour market programs cannot secure full employment so too is the reverse true. There needs to be a recognition by policy-makers that government, through its fiscal policy, has an activists role to play in managing the macroeconomic environment, of smoothing out the boom-busts of the business cycle.

A crucial element of generating greater and more stable economic growth is greater public investment in infrastructure, particularly given that over the past 20 years such investment has declined to a historic low. Of course, the question remains how this greater investment should be funded.

I would assert that in an era where governments are reluctant to raise taxes, debt financing must be seriously considered. Australia has one of the lowest levels of public sector debt in the developed world and even the Australian Industry Group advocated this approach in this years' pre-Budget submission.

In their submission the AIG argued:

"Where governments can borrow at lower rates of interest than the private sector and where public sector ownership of projects can account for benefits that would be adequately captured by privately funded projects, public sector borrowing can represent the optimum policy response."

This strategy, and the economics underpinning it, is not new, but it is about time it was implemented by an Australian government.

Not only will greater public investment in infrastructure provide much needed jobs and social infrastructure now, but will smooth-out the business cycle while lifting the productive capacity of the economy and thereby our ability to repay debt in the future.

Australians should have an opportunity to invest securely in public infrastructure through bonds or other means.

Together these proposals – an explicit government commitment, a refocused Job Network and greater public investment in infrastructure – represent an effective way of restoring full employment as a key social entitlement.

THE CONSERVATIVE WAY

As I have illustrated today, across the board social entitlements, including in the area of employment assistance, are being withdrawn and scarce resources used to fund middle and upper class welfare.

But that's the Conservative way – reward the privileged few and dismantle those institutions that strengthen solidarity and extends the rights of citizenship to all irrespective of birth, class, wealth, race or sex.

So never let it be said by anyone that political parties are all the same; that there is no difference; that voting is a waste of time; that there are no big choices left; that politics is no longer a clash of ideals; that there are no causes for which to struggle.

After seven and a half years of Conservative rule Australia needs an alternative, an agenda of public service renewal, of restoring our social entitlements. An agenda that places investment in our public education and health systems, childcare, housing and employment assistance, above further tax cuts.

Responding to renewed speculation that his Government was planning to again cut tax, the Prime Minister told ABC Radio on 17 September:

"It is our philosophy, if I can put it that way, that once you've attended to the things that need money spent on them, if you've got money over it's better to give that back by way of tax relief than to find something new to spend it on just for the sake of spending it. That's our philosophy."

Such a statement begs the question as to what world the Prime Minister lives in.

Today 2.1 million Australians are living in poverty, 330,000 families are struggling to put a roof over their heads, 1 in 7 children are growing up in a household with no breadwinner, our public hospitals are staved of funds and under-pressure, our public schools are run down, tens of thousands of young people are unable to get into either a university or TAFE college despite having the marks, public transport desperately needs billions of dollars worth of improvements, and our rivers and farmlands are in urgent need of restoration.

Given this overwhelming social need, is it the time to be reducing the Commonwealth government's tax take? In particular, is it really the time to be contemplating reducing the top marginal tax rate or raising the threshold at which it kicks in?

Such a policy would simply reduce the capacity of government to invest in our essential social services.

Furthermore, this policy would only benefit the top 18% of wage earners, creating greater inequalities. Already the total incomes of the top 5% of income earners are equivalent to the combined earnings of the bottom 45% of income earners.

Australia is one of the few countries in the OECD without a wealth tax.

As a society we need to get our priorities back in balance.

CONCLUSION

I for one believe that the test of a government that believes in society is whether it is willing to invest in its public services, whether it is committed to putting schools, hospitals and jobs first. To believe that the public sector has a critical role to play in our society is not to oppose the realities of our market economy. Paraphrasing economist Arthur Okun: while markets have a place, it is important they are kept in their place. Money should not buy everything.

However, the situation Australia currently finds itself in can be best summed up in the words of Geoffrey Barker:

"Coming generations of Australians may have to fight again many of the political and social battles that my generation naively assumed had been won years ago … the notion that Australians were entitled to minimum standards in terms of jobs, housing, education and public welfare when they need it … notion of fairness and equality for women and Aborigines, acceptance that the environment mattered … that discrimination on racial, sexual or other grounds was not acceptable in a civilised Australia … these values are now under challenge from a curious and often self-contradictory alliance of fundamentalists, free-market economists and renascent moral authoritarians."

After seven and half years of Conservative rule Australia is at a crossroad.

We can continue to move relentlessly down the free-market route in the vain search for more and more material prosperity and allow our system of social entitlements to be replaced by one of harsh, competitive individualism in which people get left behind.

Or we can take the progressive route, rebuild the public realm, restore our system of social entitlements and discover the value of solidarity in the self-interested consumer age. Not to cease to want the best for oneself but to wish it for all.

This is a challenge right across economic and social policy.

In no area is this challenge more vital than in employment services.

Labor wants to work with you to ensure that the Job Network delivers employment and training opportunities for all. Having a job is at the core of social inclusion.

[1] Hansard, 24 June 2003, p17280