You are here

Jobs Guarantee

Cassy O'Connor MP  -  Wednesday, 23 September 2020

Tags: Jobs, Employment, Economy, COVID-19

Jobs Guarantee, Cassy O'Connor MP, 23 September 2020


Ms O'CONNOR (Clark - Leader of the Greens - Motion) - Madam Speaker, I move -

That the House -

(1) Acknowledges the economic shockwaves from COVID-19 will continue for years.

(2) Notes that unemployment and underemployment were already significant, ongoing issues prior to the pandemic.

(3) Recognises intergenerational inequality has resulted in poor economic, health, and educational outcomes for thousands of Tasmanians.

(4) Accepts the majority of unemployed and underemployed people are in unfortunate circumstances through no fault of their own.

(5) Understands access to a reliable and liveable income is essential to meet basic needs like food, housing, healthcare, transport, bills, and education.

(6) Further recognises that providing more work opportunities benefits individuals, society and the economy as a whole.

(7) Further accepts that dealing with the colliding challenges of the climate emergency, long-term disadvantage and the impact of coronavirus will require ambitious Government action.

(8) Further notes in the decades following the Second World War, the Australian Government was committed to a policy of full employment.

(9) Further notes that since the full employment policy was abandoned, the private sector has never employed all willing labour participants, even in economic booms.

(10) Calls on the Gutwein Government to investigate how a Jobs Guarantee program could be adopted in lutruwita/Tasmania to strengthen our COVID-19 recovery and support economic transition to tackle the climate emergency.

The last time Australia had genuinely full employment was in 1975. That was also when our income inequality was the lowest in our modern history. We are in a very different place today. Obviously the coronavirus pandemic has had a devastating impact on employment in Australia and in Tasmania and there are the profound social flow-on consequences as a result of that.

In the last Australian Bureau of Statistics data we checked, there were 35 000 Tasmanians received JobSeeker as of 24 August, an increase of 61 per cent from December last year. The federal government estimates there will be thousands more on JobSeeker by December this year. There are 63 000 Tasmanians on JobKeeper as of June this year and, as we know, the JobSeeker coronavirus supplement will be cut from Friday and JobKeeper will be cut from Monday.

The impacts of the pandemic on Australians and Tasmanians is devastating and it will have generational impacts. The power of having employment, of having a job and the dignity of work, cannot be overstated. What the pandemic has taught us that we need a new deal in Australia, we need a green new deal for a more productive, happier and healthier country.

For our young people, we need to give them genuine hope for the future and we need to comm it to them that we recognise there is no going back to normal, because normal was not working. It was not working for them, it was not working for the economy, it was not working for our society and it most certainly was not working for nature.

We know that unemployment and underemployment were already significant issues before the pandemic hit. We need to look at the fact that a huge, untapped human potential exists in our society and it is a failure of economists and governments that we have not tapped into that human potential and recognised the enormous capacity it has to lift the nation's productivity as well as tackle those entrenched cycles of socioeconomic disadvantage in Australia.

Dr Stephen Hail from the School of Economics at the University of Adelaide estimates that under-utilisation, which is both unemployment and underemployment, is currently at about 20 per cent in Tasmania. We know that number would be much higher and there would be many more people who would be under-utilised without JobKeeper. Prior to the pandemic, the under-utilisation rate in Tasmania was about 16 per cent to 17 per cent.

There is an excellent paper on a job guarantee that has been prepared by Dr Stephen Hail and he notes that we have had in this nation full employment. We have had low-income inequality, but since then generations of policy-makers and opinion-formers have taken it for granted that unemployment and underemployment are inevitable characteristics of a modern economy. As Dr Hail points out, consequently generations of the unemployed, underemployed and insecurely employed have faced severe financial hardship and distress. Unemployment has also been shown in dozens of studies by economists, psychologists and other social scientists to have a wide variety of non-financial costs for the individuals concerned, their families and the broader community.

The experience of unemployment has a permanent impact on the wellbeing of most people and a prolonged period of unemployment makes it more difficult to get back to work and particularly damaging to the future employment prospects of younger workers. It is young Australians and young Tasmanians who have been kicked hardest in the guts by this pandemic but they were being kicked before, because the entire system was set up in a way that worked against them. They are acutely aware that they are dealing with a system that is designed to fail them and accelerating climate impacts that make them deeply fearful for their future.

We have to recognise that intergenerational inequality has resulted in poor economic health and educational outcomes for thousands of Tasmanians and it has trapped people in cycles of intergenerational poverty. As elected representatives of communities, every day we come into contact with people who are being mistreated or neglected or smashed by the system. We come into contact with people who are the product of generations of disadvantage, of not being given a fair go. At the heart of a job's guarantee is fairness and respect for human dignity and the value of work to an individual's wellbeing as well as to a society's wellbeing.

Of course, intergenerational disadvantage is all linked with health outcomes and it impacts on public services in health and housing. It leads to low educational attainment, and creates mental health issues, addiction and poor life choices. When you are on the end of that cycle of intergenerational disadvantage you will make poor life choices because you think you are not valued by the society that you are part of.

We need economic justice in this country. We need a country that is not run by the likes of Gina Rinehart. We need a country that works for people, for place, for nature, and is underpinned by the principle of the fair go which for so long has been part of a cultural identity but which in modern Australia is no longer a reality. It is no longer a reality for young people, for single parents, for the long-term unemployed. There is no fair go for those Australians.

We need to accept that the majority of unemployed and underemployed are in unfortunate circumstances through no fault of their own. The evidence tells us that the private sector has never employed enough people, even though they should be able to, but you have billionaire corporations that are pocketing profits and tax cuts and not reinvesting that money into people, into human capital, into lifting the nation's productivity, happiness and health.

We have had wage stagnation in this country for the past 25 to 30 years, so the system by design keeps wages low as prices go up. A third of all workers prior to COVID 19 had to live with their wages not growing at all. We need to understand and accept, instead of paying lip-service to this, access to a reliable and liveable income is essential to meet all the basic needs like food, housing, healthcare, transport costs and other bills as well as accessing education and training. What we know in Tasmania today, and it is not that different around the country, is that according to the last of Australian Bureau of Statistics survey there are around 1500 Tasmanians who are without a home.

Elective surgery waiting lists are ballooning, meaning those who cannot afford private health insurance are suffering more and more compared to those who can. Because of changes at the federal level to the GP arrangements under the Abbott government, accessing bulk billing doctors is now impossible for too many Tasmanians.

As we have heard today, there is pressure on our emergency food support services because more and more Tasmanians are being pushed to the breadline and going to organisations like Foodbank, to the Neighbourhood Houses, and accessing food that way.

Of course we know that petrol prices are going up, electricity prices are going up and inflation for essential items has been going up much faster than luxury items and of course this disproportionately impacts on the poor.

We need to recognise that providing more work opportunities benefits individuals, societies and economies as a whole. It takes the pressure off people to search for every cent and there is plenty of research to show that if you are so poor that you do not know where you next loaf of bread is going to come from, your system floods with cortisol which is a stress hormone. That leads people to make poor choices too. It is enormously stressful to be poor.

To get your latest electricity bill before the kids have come home from school and to wonder how on a single parent's pension you are going to pay for it, the stress affects you as the single parent and as soon as the kids walk in the door the stress hits them too. In some families the stress is so great that when the power bill comes in mum will crack open a bottle of wine. These are the hard truths of intergenerational poverty and a system that is shafting too many Australians and too many Tasmanians.

We need to accept and embrace the fact that dealing with the colliding challenges of a climate emergency, long term disadvantage and the impacts of coronavirus will require ambitious government action. It will require heart from government as well as a strategic eye on the future of this country and its incredible creative human capital.

We can tackle the climate crisis and recover from the pandemic through a reset of our economic and social system. We need a jobs guarantee in this country. We need to make sure that every Australian who wants to work can work, instead of casting people off onto the welfare system and making them go through humiliating mutual obligation meetings when there are no jobs available. We can do better than that.

We can invest in repairing our landscape, in better preparing for bushfires. We can make sure that those 10 000 jobs that we need in the aged and disability sector are filled. That leads to greater dignity of work for those people who are going into those sectors but it also tackles the need to provide a caring and compassionate and responsive society as people age or if they are living with a disability.

In the decades following the Second World War the Australian Government was committed to a policy of full employment and the experience of the Depression and World War II made it clear that no-one was safe from the risk of unemployment or under-employment. So outdated distinctions between the deserving and the undeserving - or as former treasurer Joe Hockey called them, the 'lifters and the leaners' - were abandoned in favour of a comprehensive commitment that no-one should be left out of shared prosperity which has been made possible by progress. Full employment became a bipartisan policy goal throughout the decades following the war. The Department of Post-War Reconstruction set the full-employment policy, establishing the Commonwealth Employment Service to match workers with jobs, and also overhauling the social benefits system and creating the Pharmaceutical Benefits Scheme.

What do we have now? We have a privatised job-search sector that is not working for the unemployed and it is particularly not working for the long-term unemployed or people living with a disability.

The aim was to ensure that the standard of living for Australian people improved from what it had been pre-World War II. It was also an aim to avoid the poor conditions in which many World War I veterans lived after returning home.

We need to recognise that since the full employment policy was abandoned, the private sector has never employed all willing labour participants, even in economic booms. The national unemployment rate has averaged more than 6 per cent since full employment policies were abandoned. In the 30 years before that, unemployment only went above 2 per cent once.

A jobs guarantee helps to smooth out the expansion and contraction in the private sector and what we have learned through this pandemic is that when the chips are really down the private sector will not come to our rescue. It has been governments and even neoliberal governments like the Morrison Government that have had to insert policy to make those necessary changes to keep people from becoming homeless, from having nervous breakdowns and ending up in our health system.

We have had JobKeeper, which has helped people enormously, but the benefits in many ways went to business. We have had a lift to JobSeeker, but the cruelty of telling Australians it is only temporary is unfathomable. The rate of NewStart or JobSeeker has not been lifted in real terms for a quarter of a century. That is a punitive approach to providing economic support to people. It does not deliver economic justice. It leaves people on the scrapheap and tells them their country does not care enough about them to provide a liveable wage and the dignity of not being in poverty and having some work.

The problem we have is that we entered a period of neoliberalism where human beings became units of productive measure or not, and people were placed in the too-hard basket and you had an entire economic system that accepted large numbers of unemployed people in order to keep inflation down. It is no longer acceptable.

The work that is available and the whole employment space is changing, but the ones who are still missing out are young people and the long-term unemployed. We have to provide a better deal for them and tapping into that human potential when we have a climate emergency barrelling at us is not only desirable, it is absolutely necessary.

The Centre of Full Employment and Equity and the Cape York Institute have produced a paper arguing for a job guarantee. I will read some of this excellent paper.

The introduction of JobSeeker and JobKeeper in response to COVID-19 presents the Commonwealth Government with the unique opportunity to transition unemployed Australians from welfare into real jobs by establishing a job guarantee.

This scheme would see JobSeeker and JobKeeper recipients transition to permanent jobs at the minimum wage from January 2021, committing the government to one of the biggest productivity reforms ever undertaken in Australia to replace income support with entry level wages for work.

Some background:

Although COVID-19 provides us with an opportunity to replace welfare with work, the need for this reform long predated the pandemic.

The paper points out that:

Monetary and fiscal policy has been geared to keeping inflation low and to achieving fiscal surpluses respectively. There is a belief that if inflation is kept in check, then markets will deliver the necessary and sufficient conditions for the return to full employment, but the evidence does not support this supposition. Instead there has been a persistent shortage of work, a problem now exacerbated and highlighted by the current crisis.

The authors go on to say that in May 2020, so two months after the pandemic hit and most of the country was in some form of lockdown or another -

… there were more than seven unemployed for every job vacancy, and the problem of a lack of jobs intensifies if we include the 480 000-odd people who have dropped out of the labour force since March due to lack of work and the 1.8 million who are underemployed and desire, on average, an additional 15 hours of work per week.

What are the arguments for a job guarantee in simple terms? The benefits of a job guarantee include introducing a more effective control on wage inflation than current monetary policies by creating a pool of on-demand labour that the private sector can access in periods of growth; providing an important source of counter-cyclical spending in periods of contraction; disrupting the current pattern of entrenched disadvantage experienced by the long-term unemployed and ensuring the pool of long-term unemployment does not grow via passive welfare; increasing economic growth and productivity by maximising the use of our labour resources; providing workers with the experiential training necessary for participation in the private sector; and reducing the size of the welfare state by removing income passivity, labour under-utilisation and burgeoning cuts.

I note that the Cape York Institute and the Centre of Full Employment and Equity wrote to the Premier of Tasmania, Mr Gutwein, on 3 August this year with the briefing paper attached which they have presented to the Prime Minister arguing for a job guarantee. This letter simply encapsulates a job guarantee in this manner. It says:

This scheme would be federally funded but locally administered through councils. The councils would place workers in local jobs provided by state and commonwealth governments, local councils and non-government organisations. These jobs would deliver what are broadly understood to be public goods in areas such as community transport, education, environmental services, public works and community infrastructure.

The implementation model is based on the detailed findings of a joint report between the Centre of Full Employment and Equity, University of Newcastle and Jobs Australia entitled 'Creating effective local labour markets: a new framework for regional employment policy'.

The authors go on to say:

This proposal will also allow the Commonwealth Government to reform the much-maligned welfare system. For the past 40 years this system has done little to ameliorate disadvantage and social dislocation. In most places the welfare system has engendered passivity, exacerbated the breakdown of social norms and entrenched intergenerational dependency. Left unchanged, this system will exacerbate the scarring experience by a new class of Australians rendered unemployed by COVID-19 and put additional burdens on state services such as housing, child protection, health, education and criminal justice.

The authors sought a meeting with the Premier, who I understand is very busy, but in his response - and to his credit he did respond - the Premier talks about PESRAC and encourages the authors to make a submission to PESRAC but does not commit to a meeting. We will certainly be making another submission to the Premier's Economic and Social Recovery Advisory Council arguing for a jobs guarantee.

We acknowledge that a full jobs guarantee is not something the Tasmanian Government on its own could afford. It is estimated that it would cost the Commonwealth around $1 billion a year to have a full jobs guarantee but you have the offsets in the welfare system. There is no reason why Tasmania could not make a start on this.

I am certain that Australia will have a jobs guarantee one day. The imperative for this policy is unarguable and it is urgent. The private sector and the billionaires such as Gina Rinehart have failed us and they have failed our young people. We have such enormous challenges confronting this country even today. We need to make sure that every Australian who can do so roll up their sleeves and do some work to give something back to their country, to tackle the climate crisis, to restore our landscapes and look after people.

We need to make sure every Australian who is willing to work - and it would be a voluntary scheme - is able to do so and that they receive at least the minimum wage for doing so and some money goes into their superannuation, because that is another huge social and economic cost of the system that has been engineered for the billionaires and not for poor Australians. So many Australians have a zero balance in their superannuation and that entrenches the most terrible disadvantage. It consigns people to poverty in old age. As a wealthy country, surely we can do better than that?

What we have learnt through this pandemic is that the way governments spend money is about choices. It is not actually about how much money is really there; it is about the choices governments make. Suddenly we realised in March/April this year that the federal government could in fact lift JobSeeker and provide a living wage for people who had been made unemployed as a result of the pandemic. This is about political choices and there has been a series of political choices made by governments of both colours going back almost half a century that have led to a nation with deepening and scarring social inequality.

We must demand better for our fellow Australians. We need to be able to look young people in the face and say, 'We know you're stressed. We know you're frightened. We know you're worried about work and secure housing. We're going to change the system for you because you deserve it. We are not going to just tell you you are our future. We're going to come good on that and invest in your future by investing in you'. That is what a jobs guarantee is about - it is about investing in people.

We cannot tolerate any longer a system that accepts poverty and disadvantage as the norm. The pandemic has shown us that governments have choices and we need to demand of our governments that they make better choices that work for public good. In this period in Australia's history we need to harness every bit of human capital that we can. We need to invest in people. We need to provide the dignity of work and a living wage to make sure there is something there in their superannuation account for old age.

Of course we also need to be investing properly in aged care because the other thing the pandemic has exposed is how appallingly we treat our old people. What has happened in New South Wales and Victoria is criminal negligence. Again, it is a choice that a government made to prioritise the profits of the corporate aged care sector over decent pay for aged care workers and dignity for people in private or not-for-profit aged care facilities. There are broken hearts all through this country because state and Commonwealth governments made a choice about how to treat old people in a pandemic.

As a nation and as a decent, compassionate society we need to embrace a jobs guarantee. We are going to have to because we need to fix up this country's degraded landscapes and start properly investing in people's wellbeing. We also need to let young people know we believe in them and we are going to change the system so it works for them. It is the very least we can do as legislators and parliamentarians.

I urge the Premier to go back to that letter written by the Centre for Full Employment and Equity and properly read that paper. Stop thinking like a neoliberal and start thinking about people who deserve the dignity of work. Start thinking about how we can reshape our country so it is kinder, fairer, happier, healthier and more productive so we can reshape our country and tackle the COVID recovery and climate change.

Our choices are narrowing so we have to do things differently. Australia needs a jobs guarantee. Tasmania can make a good start on that and we strongly urge the Premier to be part of this important nation-changing reform. Madam Speaker, I commend the motion to the House.