The need for a jobs plan

15 June 2015

Dr CHALMERS (Rankin) (10:49):  I pay tribute to my friend the member for Charlton for moving this motion about jobs today, and I am pleased to be seconding it. Having said that, it gives me no pleasure to point out that our communities have a fair bit in common when it comes to challenges in the labour market: unemployment in Logan, in my area, is 9.4 per cent; it is 8.1 per cent in the member for Charlton's area and in both cases, unfortunately, it is well above average. And youth unemployment is much worse, as we know: it is 17.8 per cent in my community of Logan and something like 13.2 per cent in the member for Charlton's community, and the national average is bad as well at 13.4 per cent. These are very troubling statistics at the local level, and unfortunately the national numbers are worrying as well.

Despite a marginal improvement for May, we still have unemployment in this country with a six in front of it. It is has had a six in front of it since July 2014, and that is too high. We have not seen unemployment that high since the now Prime Minister was the employment minister in the early 2000s. On top of that, we now have a budget that has downgraded the forecast for unemployment and so we will have higher unemployment for longer, despite the government's promises that they would create all of these new jobs. In fact, on the contrary: we have had 56,500 more unemployed people since the government came to office. What makes this government's poor performance on unemployment so stunning is that unemployment is higher today than on any single day of the global financial crisis. We saw the sharpest synchronised downturn in the global economy and yet the unemployment rate then was still lower every day under Labor than it is today under the Abbott government.

The member for Charlton and I both played our role in the Labor government during the global financial crisis, where Labor managed to keep Australia out of recession and keep unemployment below six per cent. A million jobs were created during that time in office, despite the worst global conditions since the Great Depression, and now we are seeing a lot of Labor's good work being worn away by this government, which has a political strategy but not a strategy for jobs.

People in my community worry that unemployment will affect them or their family members, and they know the devastating effect that unemployment has on individuals and families. There is also another good reason to be concerned—that is, the effect that unemployment has on our growth prospects as a country today and into the future. Economists talk about three types of unemployment: frictional unemployment, which is the least worrying kind of brief periods where people are out of work as they are changing jobs; cyclical unemployment, which is the job losses that occur during recessions and economic stress; and structural unemployment, which occurs when people are out of work because of deeper, underlying problems in the national economy caused by things like mismatched skills, skills shortages, technological change and intergeneration disadvantage. What economists are really concerned about is that the higher unemployment we are witnessing in Australia could become this type of structural unemployment. This is a process that has a fancy economic term—hysteresis—which can have scarring impacts on the national economy, because when people are out of work for a period of time they lose employable skills and the labour market becomes harder to crack, resulting in an increase in structural unemployment. That is why the increase in the long-term unemployed is a real source of concern. It is not only hurting families, as I said, but it is also hurting the long-term growth prospects of our national economy, and that is what is so troubling about the numbers that we do see for long-term unemployed and the prospects of our young people not entering the workforce when they would like to. All of these issues combined are very troubling indeed.

The way we respond to these challenges is one of the starkest differences between this side of the House and that side of the House today. On this side, we want to invest in education, in training, in industry, in innovation and in employment, while those opposite are more interested in trashing these investments for short-term political gain. We need more investment in education and training in this country to develop the skilled workforce we need for the future economy. We do not need things like the coalition's $30 billion cuts to schools or their $100,000 degrees; we need more encouragement for small business and greater support for innovation. And we need a proper jobs plan to identify where the jobs of the future will come from, rather than the backwards-looking short-termism of those opposite. On this side of the House we defended Australian jobs during the global financial crisis, and we are more than happy to fill the vacuum left by the government when it comes to a proper long-term vision to invest in our workforce.