Interview with Steve Price on 2GB

  • Leader of the Government in the Senate
  • Minister for Employment
  • Minister Assisting the Prime Minister for the Public Service
  • Senator for Tasmania

SUBJECTS: Youth unemployment; Government employment programmes; tertiary education; backpackers; penalty rates; Senate Budget negotiations.

STEVE PRICE: Many times on this programme we've talked about the false hope official jobless figures give the unemployed. I think true unemployment, and we all feel this, is higher than the latest number from the Bureau of Stats. It sits at a 12-year high – 6.4 per cent. Definitions of what constitutes work, I think, make that figure look a lot better than it is.

Australia is now going the opposite direction of the US, and the Federal Government has signalled it intends to make access to the dole tougher – an election promise and something I happen to agree with. But it's the rate of youth jobless that's got everybody worried.

Defining youth as 15- to 24-years-old, the jobless rate has hit 15 years highs in many states. There are regions of young jobless approaching what you would have to say are emergency levels. State by state, the picture is grim. Not surprisingly, Tasmania and South Australia are the jobless black holes, sitting at 17.7 and 14.7 per cent respectively.

New South Wales is not that far back on 13.7 per cent. If you're young and you want a better chance of a job, it would appear Western Australia and the Northern Territory are the hot spots. But it's when you drill into individual areas that the story gets pretty bad.

The Minister for Employment is Senator Eric Abetz, himself a Tasmanian. Good evening. Nice to speak to you again.

MINISTER ABETZ: Good evening, Steve. Good to be on the programme.

STEVE PRICE: Words like social disaster are being thrown around today. Are you worried to that degree?

MINISTER ABETZ: It is an individual disaster for each and every person that is unemployed, especially if they're young, and when you start getting the sort of figures that we're talking about, like in the South Australian outback youth unemployment is 21.3 per cent, in Cairns it's 20.4 per cent, so huge figures.

And we can describe it how we like, but it's a scourge; it's unacceptable. And that is why the Government is so committed  to getting the economic parameters right because that's what's needed to create jobs. In the meantime, we have to actively engage young people so that they don't become socially isolated and become distracted from what they need to be, and that is job ready.

STEVE PRICE: We're not a mobile nation. It doesn't seem to me that people are willing to move to work – and that's a generalisation, but in the main that's the case. So you have areas like the northern suburbs of Adelaide which are being hit hard by manufacturing downturns, the western part of Victoria was quoted today.

We've got parts of Western Sydney. Your state itself is bereft of opportunities for a lot of young people. How are you going to force people, or encourage people is a better word, to move to work?

MINISTER ABETZ: Well, one of the encouragements we've got is called the Relocation Assistance Programme, which offers eligible job seekers financial assistance of up to $6000 if they move from where they are to where they can get an actual job. And the test for relocation is if you live more than one-and-a-half hours from the potential place of employment.

We've also got the Job Commitment Bonus, which encourages the young and the long-term unemployed to stick with a job and, if they do for a period of two years, then they get a payment from their fellow taxpayers of six-and-a-half thousand dollars.

So, we do have programmes to assist but, can I say, Steve, to you and your listeners, it is very clear employers will only employ if it is an economically viable proposition. Therefore, Government schemes only assist if the employer is making a line ball decision – “will I or won't I?”

That is when Government assistance encourages employment. If there's no prospect of a sustainable job, no matter what the Government assistance is, the employers won't be taking on new employees, and that's why we've got to fix the economy.

STEVE PRICE: We're talking to Senator Eric Abetz, Minister for Employment. Do we have to also make sure that we're not pushing school-leavers into tertiary courses that are going to lead them down a dead end? I mean, there was a statistic, I think quoted by Kerry Stokes out of Western Australia, that there was something like 400 law graduates a year in Perth, with only jobs for 200. I mean, what's the point of that?

MINISTER ABETZ: Lawyers or law graduates, they can undertake a number of tasks and I would just encourage all young Australians before embarking on a particular course to ascertain, whether they want to be employed in that area and whether they think they will be able to get gainful employment at the end of their training. If I might say in general terms, a law degree is a relatively flexible degree. You don't only have to take up law with a law degree. You can become a researcher, a journalist and so the list goes on.

So there is a variety of employment opportunities available but, look, it is important that we don't get into training for training's sake because it can become very dispiriting. But we do want to say to young Australians, in particular, it's not an option to leave at grade 10, 11 or 12 and go straight onto welfare. We expect you to either earn or learn and get yourself more job-ready.

And that is one of the things that we as a Government are very anxious in encouraging young Australians to ensure that they don't accept welfare is, sort of like, part of a rite of passage on which you can stay for the rest of your life.

STEVE PRICE: Well, indeed. What you're going to do up to the age of 30 is – requires someone to either leave their tertiary education or their high school education and get a job or you will have to wait six months to get the dole. You will have to go on a Work for the Dole scheme. Are you intending to go ahead with that? I mean, given how high these figures of 17, 14, 13 per cent of youth unemployment are?

MINISTER ABETZ: Look, the figures on youth unemployment are staggering. They are concerning. They are a genuine social problem. But, if I might say, I was in the city of Sydney the other night dining out and a backpacker from Argentina served me and then a backpacker from Canada came along with the drinks, and so it went on. And as we speak, there are 167,562 working holiday makers in Australia and that was at 30 April 2014. It doesn't...

STEVE PRICE: [Interrupts] But you wouldn't call that a career. I mean, it may be a career in some communities in the world, but you wouldn't call being a drinks waiter in a restaurant in Sydney a career.

MINISTER ABETZ: But it is a great job opportunity. It allows you to be self-reliant, understand the work ethic and, if you've got a job, it becomes the platform to get the job of your choice. I recall when I was at university, I was a taxi driver of a night and a farm hand during the summer holidays and, can I tell you, that taught me self-reliance.

It also taught me that there were some jobs I have to do along life's journey which I didn't like doing, but it was the platform for preparing me for the job that I actually did want. And the issue I suppose is, Steve, do we say to our young Australians, you can rely on your fellow Australian to pay more taxes so you can live on welfare because you don't want to work as a drink waiter for 12 or 18 months until you get the job of your choosing?

STEVE PRICE: I do have a suspicion, though, and I'm not suggesting about the place that you were eating at, that there is a bit of a black economy still going on with some of these backpacker workers where they're not in the tax system and they're just taking a cash salary.

MINISTER ABETZ: Steve, I think that is a fair comment, and whenever I stumble across that or constituents alert us to that, these matters are referred to the Fair Work Ombudsman because that sort of black market economy is absolutely unfair to our young Australians that are desperately seeking work, and that is why we will do everything we can to stamp out that black market. And if any of your listeners are aware of that occurring, I would invite them to ring the Fair Work Ombudsman with the details.

STEVE PRICE: Currently, you are required to apply for 20 jobs a month. You're going to increase that by double to 40 jobs a month. Do you intend to go ahead with that?

MINISTER ABETZ:  Steve, the 40 jobs a month suggestion was part of our draft request for tender. Consultations on that finished yesterday. It would be fair to say that there has been a degree of community reaction, to try to put it in a neutral sense, to that suggestion. And it is clear that, overwhelmingly, people say that if you're unemployed, your full-time job should be job seeking.

On the other side, there is the view – and I think it's a legitimate view and it's a view that has been expressed a number of times – that getting people to apply for 40 jobs in a meaningless way will achieve no purpose and, what's more, be a real burden to small businesses especially in regional areas. So, we are factoring in all that community feedback as we speak to ascertain what the right way forward is, but we are very conscious of the community feedback.

STEVE PRICE: Our small-business audience that listens to us at night often rings and says, I'd love to employ a young person. I would like to employ two or three of them, but the rates of pay, the penalty rates on weekends, the whole structure of how we're paying people in this country at the moment means I can't. I will exist on the workforce I have until that changes. That is something you have to reform, although you seem a bit gun-shy to going back there..

MINISTER ABETZ: Steve, what we as a Government have said is that the level of pay should be determined by the independent umpire, the Fair Work Commission. If Government starts legislating what the rate of pay is, we could be doing that all day, every day.

STEVE PRICE: We shouldn't have triple-time at weekends for people serving coffee in a coffee shop.

MINISTER ABETZ: Well, interestingly enough, the restaurant and caterers ran a relatively robust case with the Fair Work Commission on the loading for casuals, and the Fair Work Commission came to a determination that for casuals in categories 1 and 2, the penalty rate on weekends would be reduced from 75 per cent to 50 per cent.

Now, that was a relatively historic decision. It was the first time, to my understanding, that the rate of pay has been peeled back to a certain extent, and they accepted the argument that it was actually costing jobs.

And so I would encourage the Fair Work Commission in making its determinations for wages to keep in mind the injunction of a former Labor treasurer, Frank Crean, that one man's pay rise is another man's job.

And you have to balance that, and that is why we have an independent umpire to make those determinations. But I have heard and sympathise with the small business sector that often do say, we would love to employ somebody else, especially a young person, but the rates of pay make it prohibitive.

STEVE PRICE: Just before I let you go, George Brandis and yourself in the Senate are corralling the crossbench Senators to try and get some agreement on parts of your Budget. Are you disappointed that Clive Palmer's has come out again, again, today and said that he won't support even one cent of a co-payment to a doctor's visit?

MINISTER ABETZ: Look, it doesn't please us that he has made that statement, of course, but let's wait and see what the votes in the Senate actually are. And can I say that to get something through the Senate, we either need Labor support, Green support, or six out of the eight crossbenchers, and that is where the Palmer…

STEVE PRICE: [Interrupts] It's like herding cats.

MINISTER ABETZ: That is where the Palmer United Party plays a role. But, as I said in question time today, in fact, to the Labor Party, Labor's greatest ever Prime Minister, Bob Hawke, suggested a co-payment for Medicare. Labor's current shadow  assistant treasurer, Dr Andrew Leigh, an economist, also proposed that whilst in Opposition, saying it was good public policy to have the price indicator or a co-payment.

And so it is part and parcel of Labor Party thinking in this area, from Bob Hawke through to Dr Andrew Leigh. And we will still press ahead with our proposal. But at the end of the day, the Parliament will determine the success or otherwise, or indeed, compromise of that proposition.

STEVE PRICE: Finally, any indication that the Palmer United Party Senators are not going to act as a block?

MINISTER ABETZ: I think at the moment, at least, the Palmer United Party are sticking together, and it will be up to each individual Senator to determine his or her own approach. But we're happy to deal with them as individuals or as a group. I've said that from day one. Nothing's changed, as far as I'm concerned.

And to be able to brief three or four Senators together at the one time, of course, makes it easier for myself and my fellow Ministers, rather than having to brief each one individually. But we will do whatever we can to prosecute the case for the Government's economic reform agenda, because that is what we need, to reform the economy, get it humming again, because if we achieve that, we can help get rid of the scourge of youth unemployment.

STEVE PRICE: Which is what we started talking about, and everyone would like that to happen. Senator Abetz, always a pleasure. Thank you very much for your time.

MINISTER ABETZ: Thanks a lot, Steve.

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