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May 2005   
F E A T U R E S

Interview: Fortress NSW
NSW IR Minister John Della Bosca on how to win the battle for workers rights - and save the state system.

Unions: Fashions Afield
With new anti-sweatshop creations being paraded at this year's Australian Fashion Week, is equity the new black and are sweatshops the new fur? asks Tara de Boehmler.

Industrial: Pay Dirt
John Burgess argues that the flow-on effect from changing the minimum wage could be more than we bargained for.

Politics: Infrastructure Blues
With much attention given belatedly to the shortage of infrastructure, little attention has been given to the structure of infrastructure, writes Evan Jones

History: Big Day Out
Neale Towart looks back on the events that created the May Day heritage.

International: Making History
Hundreds of aid organisations, charities, trade unions and religious groups have formed a global alliance called “ Make Poverty History”.

Economics: The Fear Factor
The solution to skill shortages is intelligent planning, argues John Spoehr

Review: The Robots Revolt
New kids flick Robot uses our electronic friends to teach audiences that inbuilt obsolescence is just a state of mind, writes Tara de Boehmler

Poetry: The Corporation's Power
The idea of a corporations power that could cure any ill has inspired our resident bard, David Peetz, to verse.

C O L U M N S

The Soapbox
May Spray
Unions NSW secretary John Robertson delivered the annual May Day Toast - and warned it is no time to be comfortable and relaxed.

The Locker Room
A Rucking Good Time
Phil Doyle reveals many things, some of them useful

Parliament
The Westie Wing
Our favourite MP, Ian West, is back to regale us with inside goss and intrigue from the Bearpit.

E D I T O R I A L

Rights and Wrongs
Something unseasonal and hitherto untoward has been occurring up at Macquarie Street in recent weeks, a flurry of legislative activity around workers rights.

N E W S

 Harmer FACS Families

 Brats Drive Bus Row

 Harsh Reality – Bella Turns Pink

 Rev Kev Blesses Bosses

 Workers Online Legit

 Howard Rides Kiwi Model

 Della Opts for Gaol

 Feds in the Dock

 Carr Race to Bottom

 Bosses Walk on Water

 Govt Gets Claws into Nurses

 Ion Faces Legal Probe

L E T T E R S
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Economics

The Fear Factor


The solution to skill shortages is intelligent planning, argues John Spoehr

To push forward its radical welfare reform agenda the federal government is using familiar political fuel - fear. It warns of dire economic consequences if skill shortages are not addressed and advocates reform of Australia's income support system as one key to solving the skill shortage 'crisis'. Despite the fact that current skill shortages are limited to a number of occupational areas and driven by the soon-to-end housing and construction boom, the government is not aggressively dispelling fears that Australia is in the grip of a generalised skill shortage crisis.

While skill shortages certainly exist, there is no generalised skill shortage crisis in Australia at the moment. This is set to happen next decade, when the rate of retirement of the baby boom generation accelerates and the entry of young people into the workforce slows. Most of the skill shortages currently being experienced are not demographically driven but rather the product of sustained economic growth and a boom in the housing and construction sector. This boom has acted like a skilled trades vortex, sucking electricians, plumbers, builders and carpenters from a range of sectors. Skilled tradespeople have been lured by the high pay that is on offer in the building and construction sector. It is this set of temporary dynamics which are creating shortages of skilled tradespeople.

Those with long memories will remember that the housing and construction sector is prone to boom and slumps. While there may not be a dramatic downturn in the sector this time around, it appears set to slow down significantly over the next twelve months as interest rate rises dampen investor exuberance. As this happens, the skill shortages that have emerged will recede. The policy debate will then shift from concern about skill shortages to alarm at rising unemployment.

In the meantime the government is not focusing sufficient attention on the need to overcome skill shortages through longer term planning and investing more in education and training. Rather it has created scapegoats for current skill shortages - people in receipt of Disability Support Pension (DSP) and Single Parenting Payment (SPP). It is politically convenient for the government to link the lower workforce participation rates of these groups with the current skill shortage debate as it allows the government to pursue its welfare reform agenda under the guise of a skill shortage strategy. This is creating the false impression that a large proportion of the 700,000 Australian's on DSP and 450,000 Australian's on SPP is a work-shy reserve army of labour that should be compelled to work.

The federal government appears determined to use the current irrational debate about skill shortages to drive its broader radical welfare reform agenda. It suggests that one of the solutions to skill shortages is to increase the workforce participation rates of people on DSP and SPP. People on DSP have often been unemployed or under-employed for long periods of time and lack the necessary skills, capacity and experience to secure and retain regular employment. It is unrealistic to expect people who have a marginal attachment to the workforce to help solve short-term skill shortages, particularly ones that require qualifications, high level skills and extensive experience. It normally takes up to four years to complete a skilled trade qualification. An extensive program of support, including pre-vocational training and access to a range of employment and other support services, is necessary to help people on DSP who have been outside the labour market for long periods of time, make successful transitions to paid work.

The government wants to compel single parents receiving SPP to work as soon as their children are of school age. Single parents on SPP are not likely to be in a position to undertake significant amounts of paid employment given that they often shoulder the burden for family care and home duties. There is no talk of a package of assistance to make this possible, just the threat of loss of benefits. This does not accord with the government's commitments to family-friendly policy.

The irony of the current push by the federal government to compel many people on DSP to work is that it has done the opposite for many years. Over the early years of the decade when jobs were scarce it shifted thousands of people from unemployment benefits to disability support pensions. Having hidden thousands of unemployed people behind the disability support pension, they now expect them to actively look for work. Many of these people have experienced long periods of time out of the workforce and have neither the experience, skills or qualifications necessary to fill current skill shortages.

The government looks set to impose new job search requirements on both DSP and SPP recipients in the May federal budget. The effect of these changes will be to place an unfair burden of responsibility on groups that are particularly disadvantaged in the labour market. These people need supportive policies that make workforce participation a realistic option, rather than punitive policies, which blame the victim while ignoring the real causes of skill shortages.

Current skill shortages will not be solved by compelling people on DSP and SPP to participate in the workforce. What is really needed is a comprehensive national workforce development strategy, which intelligently distinguishes between the multiple causes of skill shortages and facilitates rather than compels workforce participation. The solution to skill shortages is intelligent workforce planning backed by increased investment in education and training by business and government. •

John Spoehr is executive director of the Australian Institute for Social Research, University of Adelaide. This article first appeared in the Adelaide Review.


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