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May 2005 | |
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Interview: Fortress NSW Unions: Fashions Afield Industrial: Pay Dirt Politics: Infrastructure Blues History: Big Day Out International: Making History Economics: The Fear Factor Review: The Robots Revolt Poetry: The Corporation's Power
The Soapbox The Locker Room Parliament
Rights and Wrongs
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Economics The Fear Factor
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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