The Howard Government has expanded the work for the dole scheme, making it mandatory for all people aged 18 to 24 who have been unemployed for more than six months. The move have fairly widespread support among voters, and that is perhaps why the Government has done it. The plan also includes $383 million over four years to provide programs to help young people. They include a literacy and numeracy program and a program to help young people forced back in to education. On its face that spending, especially on numeracy and literacy, seems quite worthwhile. So the Government has appealed to some immediate concerns on a superficial way and will get applauded for it. It is almost the nature of government these days: the quick fix and appeal to populist ideas.
Looking a bit deeper, though, Mr Howard’s announcement this week has the danger of becoming a sad pattern. In its first Budget it cut spending on labour-market programs and education, just as it cut spending on the Australian Federal Police and just as it cut information staff in the Department of Foreign Affairs and Trade. Less than a year later, Mr Howard has to make a series of spending “”initiatives” that in effect are patch-up jobs to repair some of the short-term damage the original spending cuts did.
The Government appears now to be spending on labour-market programs and on education in numeracy and literacy. It has also restored some of the AFP’s Budget as part of its drugs initiative in the face of the Government’s pitiful blocking of the ACT heroin trial after screams in the Murdoch press. On a lesser scale, but still fitting the pattern, the Government decided on an information program in Asia to counteract the Hanson factor, shortly after it had cut DFAT’s information section out — a section that was devoted to giving Australia a positive image overseas. And on this score it did not learn. It cut the Radio Australia transmitter in northern Australia. How long will it be before some other program will have to initiated to repair that damage to our image and trade in Asia?
On the work-for-dole-scheme, there are some worrying elements. The Government proposes that some young people would be forced to relocate to areas where there is a better chance of work. That has a potential to be very destructive for some families, particularly in rural areas. A young person living at home, even if formally unemployed, might be contributing more to society in help other family members, than if he or she were forced to the city for work.
The essential trouble with the work-for-the-dole scheme is that it blames the victim. The restructuring of the Australian economy in the past decade and a half has radically altered prospects and expectations of many young Australians. That restructuring was forced upon us by international forces and by government. It has resulted in higher levels of unemployment as employers demand much more educated workers and demand for unskilled workers has fallen dramatically. The answer, as Mr Howard himself so was ford of repeating in Opposition, is the creation of real full-time jobs. That has to be attacked from both the supply and demand end. It means increasing the educational standard of Australians in the long term across the board. It means creating the right environment for employers to employ people.
To achieve this requires courageous decisions for the long-term good. It means a broader commitment to education, not just vocational education because many of the children in education today are likely to do jobs that do not exist now. The Government needs to fundamentally reform the tax and industrial-relations system to remove the disincentives to employ. This will mean reform of the federal-state mix so payroll tax can be cut; reform of the steep effective tax rates that apply as people take up part-time work while on benefits; and a recognition that there were too many compromises made with the Democrats over the Workplace Relations Act.
At present the Government’s decisions are reactive and treating symptoms not causes.