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Search Results for: John Haly

Turnbull’s reinvention of the 457 visa scheme does little to aid Australia

By John Haly

We are bringing the 457 visa class to an end”, announced Mr Turnbull after Easter, “…We will replace it with two new temporary skills visas.” With a quick slight of hand, Turnbull re-branded the much criticised 457 visa with two – as yet unnamed – programs to bring foreign workers to Australia. Though new rules and security checks were mentioned, he ensured that he would guard us from the impeding “threat of permanent citizenship” of intelligent and skilled foreigners whom our employers have sought out. Rest assured, Turnbull has proclaimed he will keep us safe from having people of this caliber, stay in Australia.

As Australia returned to work after the Easter long weekend, Malcolm Turnbull reminded us we were a nation of immigrants but we should not be overrun by too many more. With the Australian workforce apparently foremost on his mind, Turnbull told the nation (first via Facebook) that the 457-visa program was being scrapped for two new innovative temporary foreign worker schemes to tackle our unemployment issues. In restricting that program and although unnamed, he proposed two new visa programs with fewer job role options, new market tests, English language, skills and experience requirements.

The first reminder that comes to the fore concerning these new reforms that “put Australian’s first”, is a reference to similar policy I’ve previously heard. Didn’t Julia Gillard propose something similar herself in 2013? Didn’t Malcolm Turnbull criticize her for striking at the “heart of the skilled migration system”?

457 in decline?

Leaving Turnbull’s change of perspective aside, the numbers of 457 workers in Australia have been a subject of much speculation and false rhetoric by politicians seeking to introduce alternative facts and in some cases, outright bigotry. 457 visa numbers have been following a pattern of decline in the last few years but a significant aspect of that in the annual cyclic pattern.

In terms of the 2016 decline of numbers in Australia in any quarter – providing you limit your scope – it looks significant. The first quarter of 2016 (March) there were about 177,390 people in the country working under 457 visas.

Annual patterns of 457 workers in Australia

Since then it dropped slightly to 170,580 (June), up a little to 172,187 (Sept), and dropped significantly to 150,219 (Dec). Now, while these last figures may create the illusion of a significant fall, you need to look at the annual pattern of numbers over the last few years. Stepping back and reviewing the last seven years, a pattern emerges for every year. (Rising sharply, slight fall, slight rising, sharp fall). The pattern – as graphed here – will show you that it is about to jump back up again, so there is a deception inherent in quoting the last quarter’s figures of any year as indicative of where 457 figures are or will be. 457 visa figures have a predictable annual cyclical pattern. Turnbull’s timing made before the Department of Immigration released the last quarter’s figures creates the short-term illusion in media reporting that the coalition is indeed clamping down on 457 workers.

Workers come and go. Totals expressed in net movements of visa entrants – over periods such as a year – hide the significant seasonal change in numbers in the country. So when it is stated that 33,340 of the 40,100 primary applicants lodged 457 visa requests in the first quarter of 2016 were successful, and that this is a decrease from the same time last year, what is notably absent is how many 457 workers left. This is also dependent on which quarter you choose. So pointing out that – during the third quarter of 2012 under Gillard – that 35,452 foreign workers entered the country, ignores that only 14,665 entered in the last quarter of 2009. The coalition cherry picking numbers from specific quarters to disparage Rudd/Gillard’s record – that in actuality had both the highest and lowest intake of 457 Visa workers – is perhaps a tad disingenuous.

Annual cycle aside, it is still true to say the average number of 457 workers in the country since the coalition took power has been larger than the number of government recorded job vacancies in Australia. To keep it in the context of the last 457 worker totals released by the Immigration department, there were 165.9K vacancies in Dec 2016. 457 workers had done their customary annual December quarter drop to 150K, down from 172K for the previous quarter. Unemployment at the time (Roy Morgan’s figures) was at over 7 times that amount at 1,186K or 9.2%. If you added Morgan’s December underemployment numbers to the unemployment, then you reach a number nearly 16 times the vacancy rate at 2,584K. I am not going to entertain the ABS figures because of their inherent inaccuracy.

So even if you threw out all the 457 visa holders in December representing less than 1% of the workforce and made all their jobs available, it would have little impact on the 2.5 million both under and unemployed. This is particularly so as the presumption is there are no available Australians in the market who have the skills necessary to fill these roles. This begs two questions.

  1. Why is it so?
  2. Is it so?

Why 457?

Introduced by John Howard in 1996, the 457 Visa program has been beset by concerns about fraud, corruption and need. Fraud, we will get back to, but the need for it is still a failure of policy. Howard claimed it was to enable employers to address labour shortages in the Australian market and yet after 20 years, we still need to address skill shortages? You’d have to wonder after 20 years, about an economy and a national policy framework that has so failed to raise the skill levels in Australians, that we still need 457 visa workers. How is that “in the national interest” as Mr Turnbull so frequently repeated? A medical degree takes 6yrs, engineering 5yrs and a commerce degree 3yrs. So what has the government been doing in the last two decades? Why have we been unable to educate and upskill our population? Why is this foreign labour market even necessary? To answer that, we need to go back initially to Howard and ask how he began to prepare our children.

As a western nation which once boasted of free education for it’s population, the growing restriction of education to the people has had consequences for our labor market. Howard changed how education was funded by allocating considerable funding to private schools and undercutting public schools. Students drifted away from public schools to the better-funded private schools, where they could afford the luxury. The public school system was left with a community of poorer demographics with less time or capacity for higher education and an increasing inequality of educational results. The social class division between the affluent and the underprivileged then began at school for children. Two decades later the Program for International Student Assessment (PISA) survey shows Australian children falling behind in education. Segregating our schooling system by either academic or social class boundaries have been largely to blame for our children’s poor performance. Our ranking for investment on the OECD league tables for education is 22 out of 37 1n the OECD. Low expenditure is followed by low results.

Whitlam onwards

Leaving high school for TAFE or University has done little to revoke the class distinctions established by Howard’s redistribution of school funding. Whitlam abolished fees for TAFE and university students and provided support for apprenticeships through the National Apprenticeship Assistance Scheme (NAAS). Hawke reduced funding and re-established costs to students as well as changing labour market programs around apprenticeships and introduced traineeships as a major response to rising youth unemployment. Trade apprenticeships flourished as the government focused on traineeships. Mr Keating started governments down the neo-liberal path of privatising the public sector. The problem with privatising the public sector was that these were the main generators of apprenticeship training such as electricity utilities, telecommunications, defence industries, rail, roads, and Australian airlines. Howard also continued to undermine the public sector which contributed to a reduction in skills training – via public sector apprenticeships. Howard quickly consolidated apprenticeships and traineeships under a single umbrella and wrested it away to unions and into the hands of employers. Skewing support for apprenticeships heavily in the interests of employers was followed by a decline in training delivery, apprenticeship completions, pay and conditions. None of which was aided by the further dismantling of the industrial relations system, through the introduction of enterprise bargaining.  While Rudd and Gillard dismantled Howard’s “work choices”, they still followed the traditions of the Hawke/Keating legacy by “make[ing] concessions to the big mining companies, reduc[ing] corporate tax, and restrict[ing] unions rights and push[ing] through spending cuts to maintain a budget surplus.” The decimation of manufacturing under Abbott destroyed yet another training base for trades, and reduced the intake of apprentices.  The budget cuts of his administration also severely impacted apprenticeships.  Tracking the causes, consequences and level of damage to our employment economy have been made all the more difficult by Abbott’s savage dismantling of expert advisory panels as compiled by Sally McManus.

The combination of factors including the dismantling of education, expert advice, the industrial relations system and the public sector meant that a four year apprenticeship in the building trade gets replaced by a shallow sixteen week CBT course as the bare minimum for that specific role. The results have been described as “a disaggregation of skill which is ‘modularised’, ‘flexible’ and ‘atomised’ … [that] will ultimately leave skills ‘fragmented’ at their core.

Many apprenticeships as a means of training up in skills for increasing levels of youth unemployment have largely vanished by comparison. For example, Federal funding for NSW Tafe reached it’s zenith in 2011 and thereafter decreased. Deregulation of training provision meant funding to non-TAFE and private providers increased by 20%. The consequence of this produced the rise of dodgy private providers of vocational education and also the unscrupulous practices by some private providers which have become a scandal in Australia.

No matter the skill training, your always schooled in Finance!

Add too, what Abbott euphemistically referred to as “Fee Deregulation”. Attempts to rectify the class based education system via Gonski funding were scrapped and the vocational education sector simply received new student loan systems, all of which has done little to encourage Australians to “buy” education. The end result has been a drop-off in education in Australia as students fall by the wayside, get ripped off or – even if they do complete their degrees – are faced with indexed debts that limit their employment capacities in a market of decreasing full-time jobs, low vacancies and enormous competition from other under and unemployed members of the workforce. Skills shortages have been a function of deteriorating access to Education driven by political policy.

Is there a skills shortage?

The distribution of 457 visa workers (image from The Guardian)

It is, of course, true to say we do have skill shortages. The question as to what extent any occupation is genuinely suffering from a skill shortage – is problematic. Questions arise as to whether the request for that skill simply represents an opportunity for an employer to take advantage of a compliant, cheap and deunionised workforce. Most reports whether from Flinders University or the National Institute of Labour studies have all rather reflected the opinion of the Flinders University report that “Despite the attention paid to skill shortages, the evidence used to evaluate their incidence and the causes and responses by firms remains thin.

The problem predominately is that the labor market testing for skills shortages will still be conducted by employers – not by an independent panel. This will do nothing to affect the corruption at the core of exploitation of 457 workers.

Turnbull has announced that 216 job roles will no longer be covered by the renamed 457 visa scheme. The problem is that Turnbull’s new visa jobs list would affect just 9 per cent of the current 457 visa holders. So essentially he has cut an already redundant list of skills requirements – at least a quarter of which have never been applied for in the last year. Turnbull has not addressed the issue of employer rorts because the determination of a genuine skills shortage has been so easy to defraud. Underpaying 457 workers has been pervasive amongst dishonest employers.

In the absence of a plan to rectify education, the public sector, independent labour market analysis, unemployment, jobs and growth Malcolm Turnbull’s reinvention of the 457 visa scheme does little to aid Australia out of the economic malaise. Without attention to these issue now, we’ll be obsessing over skill shortages and “temporary” foreign workers in another twenty years.

 

Centrelink debt: Guilty until proven innocent

 

By John Haly

Centrelink has been fraudulently issuing debt notices to people who owe no money. Persons so identified are then harassed and threatened to the point that they pay this un-owed debt rather than being penalised by a system, which they already know actively disparages them.

Labor’s Anthony Albanese, while being concerned about this government’s debt collection said, “No one would argue [against] that if someone has a debt from Centrelink, had payments to which they were not entitled, then it should be repaid“. I would argue to the contrary.

The Poverty of Welfare

Centrelink’s services exist to ensure the disbursement of social security payments whether that be for unemployment, or aid for families, carers, the disabled or indigenous. That financial aid in many cases has rarely increased, and in some has decreased in terms of CPI value. In the case of the baseline unemployment benefits, though indexed to the CPI, “there have been no legislated changes to real Newstart rates in over 20 years”, in fact since 1996.

Image from tai.org.au

This has raised legitimate concerns that the Newstart allowance is well below the poverty line,  which is an issue championed by:

Rorters! From Welfare or Multinationals?

These inadequate payments entrench poverty, inhibiting rather then aiding workforce participation. Mobility, presentation, education, literacy, and skill acquisition all cost money.  Financial stress adds to social marginalisation. Bullying by the job networks and policy victimisation generates social ostracisation in the community, and also limits possibilities for the unemployed and disabled.  So sorry  Anthony, but I am very much inclined to believe that if anyone got a little more money out of this dysfunctional system than the government was prepaired to provide, then they deserve to keep it.  Any extra money would only increase their chances of improving their lot, including their ability to contribute to the economy and to finding work.  Instead of attempting to recoup $3.5 billion in alleged “welfare debts”, why is the government not energetically recouping $6 billion from the tax dodging multinationals? 

What about getting a job?

The divergence between the Government’s unemployment numbers and Roy Morgan’s (image from roymorgan.com)

Numbers don’t lie but as the ABS knows, how they get presented matters. Apart from the financial constraints, there is the statistical improbability of finding work in any way. Roy Morgan demonstrates unemployment figures in December 2016 were 9.2%, which involves 1.186 million people. In fact, when you take into account underemployment, which has risen another 10.8%, the pool of potential job seekers rises to 2,584 million. All of these job seekers are competing for approximately just 163,100 jobs Australia wide (Nov 2016 Dept. of Employment IVI stats.). In the worst-case scenario, there are at close to an average of 16 people for every single job in the market and that doesn’t take into account the following:

And now, just to add to the psychological and financial pressures inherent in looking for work, the government has come up with a new strategy to inhibit your search, by occupying your time with digging up old payroll records. The news of this new tactic is ever-present. Twenty thousand people a week receive notices of debts – allegedly to recoup incorrect welfare payments. All of which are triggered by an automated debt recovery system, which is under intense criticism because of what is essentially, the (intentionally?) flawed logic of a computer algorithm.

Erroneous mathematics

Centrelink’s computers (IBM machines in case you were wondering) are attempting to match tax office data with Centrelink records to determine if there are discrepancies between Centerlink financial information and Tax office records.

But an inherent incompatibility exists between these two data sources, and it is a matter of timing. Centerlink has information about its payments made fortnightly, and possibly data relevant to jobs which clients were offered and accepted. Centerlink is unlikely to be aware of the continuing circumstances of that job or subsequent ones found independently in the course of any given financial year. The tax office has only an annual summary of income. There is no breakdown into weeks, fortnights or months. There is no breakdown of pay rates, when it was specifically known they earned it, or what changes to income streams occurred in the course of the year. The tax office data is therefore incompatible with Centerlink’s data. The government is comparing apples with oranges.

Despite this, Centrelink’s algorithm takes your yearly income as reported to the ATO, and averages it over each fortnight of the year. As any primary school age statistician would recognise, an annual “average” apportionment cannot measure individual fluctuations and is a flawed measure in any given fortnight. To assumes absolute consistency for all fortnights is absurd on a number of levels. The only group that may get close to this pattern are the fully employed and even then, there are allowances, overtime, uneven hours, holidays, sick leave, RDOs, wage rises, wage falls, changes of roles, and any manner of occurrences that will alter the payroll for any individual over any given week/fortnight. Certainly, the most unstable employment group and the most likely to have variants are the unemployed. It is common sense that if you are dealing with people who move in and out of employment in any given year where they may move from poverty one fortnight to sufficiency (or if lucky, excess) the next. It is common sense that averaging their yearly income will produce inaccurate results by which to measure any given actual fortnight.

Guilty before proven innocent!

So what does Centerlink do? They take the ACTUAL fortnightly records held by Centerlink along with any limited volunteered data and try to cross-reference it against a fortnightly averaging of annual taxation income data. The normal presumption of statistical probability would tell you the likelihood of such figures matching for this demographic, is extremely unlikely. You would have to presume the mismatches will be the most common occurrence. Any programmer (and I worked as one for most of my career) would tell you such a matching is deeply flawed. Therefore clients should be approached with the assumption of innocence. In the absence of specific information in Centerlink’s internal records for discrepancies, inquires should be made tentatively as to why there might be a prima facie case for a mismatch in numbers. The onus of proof should also be on Centerlink (and not the client), as the process is so obviously flawed. Something fully recognised internally within Centerlink, if not by the political policy makers. In the face of the inherently flawed logic of this approach, innocence till proven guilty would be the legally prudent course of action.

Debt assessment is followed in 3 weeks with debt claims (image from auswakeup.info)

So what does the government decide is the best course of action? To implement a process that presumes people to be guilty (of debt) till proven innocent. Twenty thousand welfare recipients a week have been receiving notices that they have 21 days to prove their “innocence”, or be hit with penalties. These include a 10 per cent debt recovery fee, jail time, a restriction on travel. The event for which they are being investigated may be anywhere up to six years in the past. Some recipients are paying up, not because they accept that they actually owe the debt, but simply because they can’t locate evidence from past years, or because they fear the repercussions of a punishing government bureaucracy. If you have ever had to deal with Centrelink or any of its private job network partners you will be well aware of how punitive they are. Surprisingly to the government – apparently – this is producing a backlash.

Flaws and error rates

Human Services Minister, Alan Tudge, insists the automated process is not flawed and despite protests to discontinue the letters he is forging ahead with gusto. For Trudge to declare, “he wasn’t aware of anyone who was completely convinced they don’t owe money but have been given a debt notice” is either grotesque wilful ignorance or a lie in the face of a growing body of evidence otherwise.  When even “Liberal Senator Eric Abetz acknowledged there seemed to be problems with the system“, then you know it has to be disastrous.

The one aspect of this (that nobody appears to be talking about) is the sheer workload this must be creating for Centerlink. Let’s assume Alan Tudge is correct that the error rate is only 20%, which is contrary to what centerlink whistle-blowers reveal is the case.  Giving him the full benefit of the doubt, 20K letters a week represents 4K fraudulent claims a week. Which is 16K a month and 192K a year. After 1.04 million data matching discrepancy letters in a year, they will not even cover all the numbers of unemployed in this country (1.186 million), let alone all the other welfare recipients for other reasons. Alan Trudge expects the system to “generate 1.7 million compliance notices”, which by his own estimates means at least 340,000 letters in error. Of course, the Centrelink compliance officer whistle-blower that spoke to the Guardian suggests the percentages of errors are vastly larger. Given that all of this was not only easily identifiable but unavoidably self-evident prior to the system being switched on, how is any of this not fraudulent?

Tudge’s apparent ignorance (image from Peter Martin on Twitter: @1petermartin)

Voters and workers affected

At the current letter-writing rate (if they can maintain it) this will take over a year and a half to complete, although Mr Trudge thinks it will take 3 years. By then Australian Lawyers will be in a feeding frenzy of class action suits with minimally 340,000 clients with legitimate grievances with the government. This will presumably still be an ongoing issue by the next election. According to 2014 Centerlink data there were 14.459 million Social Services payments made in the March 2014 Quarter to 50% of the population – interestingly, a reduction from previous numbers. There are only 13.5 million voters – according to AEC – who voted in the last election. This is not a vote winner.  But presuming you are not expecting to win the next election, leaving this mess on another party’s door to cleanup provides a damaging handicap. The amazingly short-term memory of the public, gives the coalition an advantageous opportunity to disparage what the next government will have to do to rectify the situation.

Access issues for Centrelink online facilitates debt being levied (image from theguardian.com)

Putting aside the legal costs, consider then the other real cost in man-hours for Centerlink to resolve each erroneous issue when there are minimally 4000 cases a week. To keep on top of the “erroneous” case load – if Mr Trudge is correct – requires the equivalent of 105 Centerlink officers processing each claim within an hour in a 38 hour week. This presumes the ability for each officer to address, research, confirm and redress an error on each letter in one hour and do no other administrative work. There appears to be mounting evidence it takes much more time. Plus that does not factor in the equivalent of the 421 Centerlink officers devoting a single hour in a 38 hour week, that you’d need to process the claims – and not fall behind – which Mr Trudge believes are valid. But these figures are conservative. As I previously explained, the error rate is far larger according to the Guardian’s Centerlink whistle-blower. The backlog of work is just going to be extraordinary, if it isn’t already. No wonder it is so difficult to get through to Centerlink on the phone. It was nearly impossible to get Centerlink on the phone when there was only 20,000 debt recovery letters sent in a year but now that they are doing it every week …. ? As for other means of communication, even compliance officers are complaining they cannot access the Centerlink online system efficiently, let alone customers.

Opportunities or Overload?

In truth, even if Alan Trudge did put an end to it; Centrelink will probably still be spending thousands of man-hours dealing with the consequences of this flawed and fraudulent system. The same would be true if the Commonwealth Ombudsman began investigating Centrelink’s debt recovery system and put a stop to it – disregarding the costs in legal redress, which are sure to follow.  Nothing about this course of action makes any logical sense, except to see this as class warfare against our vulnerable and easily disparaged citizens.

Well at least, it will probably increase employment opportunities in the community at Centerlink that will giving a few folk some extra, well sought after work. But wait, isn’t there a public service full time employment freeze?

This article was originally published as ‘Debt Collection’ on Australia Awake.

 

The myth of jobs growth

Turnbull’s “Jobs and Growth” campaign inspired many in Australia to vote for whom they believed were the better economic managers of our economy. Yet in the first quarter of their second term in office, Australia is showing declining growth in the economy and similar decline in full-time jobs, reports John Haly.

The slave trade

The Hebrews and Greeks regarded work as a curse because slaves and the underclass performed “work”. Placing a positive moral value on “work” is a relatively recent invention emerging out of the Protestant Reformation. Max Weber, a German economic sociologist, wrote the book, “The Protestant Ethic and the Spirit of Capitalism coining the term the “Protestant work ethic“. The concept of the religious work ethic became secularized to support the rising new industrial system which required workers who would accept long hours and poor working conditions.

The unionism of the 19th century reshaped much of the makeup of “work” as we know it today. Consider ‘fair and reasonable’ wages (the 1907 Harvester Decision), better wages for women (as high as 54% of male wages by 1930), weekend penalty rates (from 1947), shorter working hours (down to 40 hrs in 1948) and four-week holidays (from 1973). Work health and safety reforms (commencing in 1984) and more consultative supervisory styles & policies (Industrial Relations Reform Act 1993) continued to transform working relationships.

In 1996 Howard introduced the Workplace Relations Act, which was later amended in 2005 (known as Work Choices). Workplace industrial relations began to change, but not necessarily for the better.  Anti-union rhetoric accelerated despite as Greg Jericho noted the lack of “strong evidence that changes to the IR system will actually improve economic growth or productivity“.

Diminishing working day

Image from tradingeconomics.com

The problem for many Australians is having access to paid work in the first place. A full day’s work (38 hr/weeks established in 1981) for a full day’s pay is a diminishing luxury in Australia. Full-time worker numbers are diminishing in preference for part-time work. The “fair day’s pay” principle suffers as wages are increasingly stagnating.

Image from tradingeconomics.com

The economy’s poor performance has been reflected in the September Quarter GDP’s figures, contracting by .5%. Australia has not experienced a contraction in GDP that severe since the GFC of 2008. This result was predictable, despite the Treasurer’s rhetoric talking up the economy.  While there are a number of factors that affect failing economies, our poor employment record is one, as Victoria University Senior Research Fellow Janine Dixon said, “Fixing unemployment would boost production, incomes and living standards.” Into this environment came the Coalition mantra proclaiming they were the party of “Jobs and Growth” that we voted for at the beginning of this contracted quarter.

The measures of unemployment

So, are we putting our increasing army of eager workers, to good use to recharge our vitiated economy? The International Business Times claimed misleadingly, “From 5.7 percent in July, Australia’s unemployment rate further went down to 5.6 percent in August. It is the lowest joblessness rate since the Coalition government came to power in September 2013”. While some conservatives may claim we were back on track, it does not stand up to scrutiny. The workforce size when the LNP took power was smaller and of course percentages are relative to that size. Using percentages hides real numbers. These are:

In term of actual numbers unemployed 5.6% in 2013, is 8000 less than 5.6% in 2016.

Image from bloomberg.com

For the Australians that can acquire jobs, the makeup of that employment has changed. In September of 2013 full-time employment was increasing at a greater rate than part-time employment but this has been reversed. A trend, which has not escaped international attention. As Alan Austin has pointed out in November 2016, “Over the last three years, there has been a significant shift from full-time to part-time jobs“.

In order to keep this critique relevant to the GDP downturn the statistics herein are relevant to the September quarter unless otherwise stated. (October’s ABS stats for unemployment were the same and November’s worse).

September end of quarter stats

Image from lmip.gov.au

The Australia wide Dept of Employment IVI index for job vacancies for September was 161.5K. This was down from 163.5K in August. Ratio of vacancies to unemployed was 1:4.4. However ABS’s standard for measuring unemployment hides thousands of unemployed people as I’ve explained in a previous article. The more accurate Roy Morgan’s unemployed statistic is 1.101 million or 8.5%. The ratio is then 1:6.8! If you add their underemployment numbers, you reach 2.103 million or 16.2% and the ratio becomes 1:13.

How then do we consider the Australia residents, who are not significantly measured by ABS as part of our workforce because of the 12/16 month rule? For example, foreign citizens with reciprocal work rights (i.e. Canadian, British, New Zealanders and etc). On October 31, 2016, there were 1,472,640 potential temporary foreign workers in Australia, 660,000 of which New Zealanders, 486,700 of which were students. Then there is the much maligned 457 visas holders in Australia, which the Dept of Immigration September Statistics number at 172,178. (Primary & secondary applicants).

What else should be accounted for? Available vacancies were examined in a report by Anglicare’s Jobs Availability Snapshot. Leon Moulden reported on the nature of job vacancies showing that only 13.1% were for low skilled jobs. Applying the same maths Leon did to the vacancies available, this would represent only 21,000 vacancies Australia-wide are applicable to people without significant skill levels and education. The ACSF from the Board of Studies in NSW scores literacy and numeracy into 5 levels. The program for the International Assessment of Adult Competencies shows that 60% of people not in the labour force have competencies of less than Level 3. While people “not in the labour force” is a wider net than the unemployed, 60% of Roy Morgan’s evaluation of 1.101 million unemployed people is 660,000. While this is only a rough estimate with a significant error variant, 660K people competing for only 21K vacancies with low skill entry is a significant barrier to entry. Now to absorb any possible margin of error, I have not factored in under-employed and foreign workers.

Enough with the numbers!

Let’s now depart from the maths and discuss the sociological issues that prevent people from finding work. Some media love to amplify the perception that everyone who is unemployed is a dole bludger, or the latest putdown acronym, NEETS. It’s their predominant strategy to divide welfare from the working class without a single consideration of any other mitigating factors, such as:

  • location suitability (interstate travel, home locality, & costs/inconvenience of changing residence),
  • employer discrimination, (bigotry, racism & misogyny),
  • accessibility limitations, (limits of public transport, car, bus, train, disability ramps, etc),
  • limits of literacy, skill, experience, qualifications & education levels,
  • competition for jobs, (705K [smaller ABS nos. only] people writing 20 letters a month for 161.5K jobs = an average 87 applications a month per vacancy),
  • financial limitations (For many surviving off the dole puts you below the poverty line),
  • financial burdens (family, mortgage verses poor wage levels),
  • injury, health & pre-existing illness or disability issues,
  • occupational risks inherent in the job, (i.e. firemen, riggers)
  • your status as the principal carer of a child, (i.e. single parents or guardians)
  • security clearance issues (i.e. Defence Force, ASIO, child safety, commercial sensitivities),
  • illegal under award payment, shockingly poor wages or condition by employers.

In summary, there are not enough jobs and the majority of available jobs are only accessible to highly skilled, mobile, and versatile workers.

Back to the first principles – slavery?

This picture isn’t yet complete. The Australian workplace for low skilled work is notorious for underpayment of wages (see 7-Eleven convenience storesfood distributors, restaurants and cafes). These are just the ones we hear about when addressed in court. Consider also those where actions have not been taken, such as the Woolongong student’s vent on social media about employers paying far below award wages. But the apologists might cry, at least they are receiving some money!  If you’re still of that view, then you didn’t read the last link to the concluding line which said, “Not only are employers looking for free labour, young people are putting themselves forward for unpaid work trials in the desperate hope they lead to a job“. So what has been our government’s response? An institutionalization of the PaTH to slavery in a government underfunded internship program which I have criticised previously.

Christmas hopes

It is nearly Christmas, and we have just had the largest fall in our GDP since December 2008. What budgetary measures can our Treasurer possibly come up with to stimulate our economy and it’s employment to save us from the official possibility of a recession.  The next quarter ends on the 31st of this month. When 2.9903 million live below the poverty line, what real chances do people have to find a decent job with a decent wage, in the new year?

About the author: John Haly is a freelancer writer and multimedia specialist. A beneficiary of a more egalitarian and tolerant political landscape in which he grew up, his observations of the changing harsher political posturing have prompted him to write articles on social justice and political issues.

Educated initially with a Bachelor of  Business, he followed these later with Diplomas in multimedia and graphic design as well as film studies at the now defunct Metro Screen. When not writing, he manages a freelance business, “Halyucinations Studios” in Sydney, doing work for clients in photograph, video production, design, IT support and web development and management. He is also the secretary of the film collaborative, NAFA, and a founding member of the Australia Arts Party.

Formerly a long time IT contractor for commercial banks (including the Reserve Bank), mining, transport, computer companies, government, university and a number of outsourcing firms, his introduction to the media was in two separate project management roles for the ABC. This developed an awareness of the need for advocacy for public broadcasting as well as providing a background in a diverse range of commercial and public service organisations.

A fifth generation Australian born son of an English teacher and an AICD Gold Medal Award winning  businessman – whose contributions to the finance sector were recognised with an Order of Australia. John has lived and worked here and overseas, although mainly around Australia and lately in Sydney, NSW.

You can follow John on twitter @halyucinations or on his blog at http://auswakeup.info/.

 

Is Turnbull about to end 25 years of growth?

Australia’s last recession was 25 years ago in 1991. As 2016 finishes, the previous quarter’s figures suggest that this 25 years of good fortune could be at an end, reports John Haly.

Australia’s GDP for the September quarter had a demonstrated contraction. Not a surprise when you consider a full range of economic indicators for the Abbott/Turnbull Government. The September quarter revealed a .5% shrinkage in our GDP, not seen since the Queensland floods affected the March 2011 quarter. Prior to that the last mitigating circumstance for a contraction had been the Global Financial Crisis. This time there is no clear alibi, except the coalitions inadequate financial management demonstrated by the low growth figures in each of the last year’s quarters. In June 2015 quarter it was our accounting standards that defer payment recordings that recognised a 41.5% jump in government defence spending that secured a tiny growth rate. There was no defence spending finalised to save us in September 2016.

Coalition excuses

The Coalition team were quick to allay fears of recession, as was the media. The Treasurer blamed the deterioration on the lack of opportunity to provide tax cuts for corporations. The same corporations that by in large provide little to no tax revenue to our country’s bounty and often relocate locally generated profits, overseas.

Construction failures

The largest contributor to the fall in GDP growth according to the Australian National Accounts was the reduced output of the construction industry. Construction work had continued to tumble for the 3rd consecutive quarter taking its biggest fall of 4.9% in September’s quarter. Some are blaming poor weather (i.e. rainfall) for a fall in building activity. Aside from the fact that we are now in the monsoon wet season meaning things will get worse, is the industry suggesting “construction” doesn’t make allowances for rain? To be fair, the Bureau of Meteorology had been reporting higher rainfalls than normal for July thru September. (You need to read the PDFs for each monthly weather review in the last link). Interestingly, it has also reported a longer term decline of rainfall of around 11 per cent since the mid-1990s in the April–October in the continental southeast and 19% in the southwest of Australia. Forgive the pun, but does rainfall as an excuse, hold water? Might there be other factors in the construction downfall?

Image from http://www.tradingeconomics.com/australia

Rising Chinese investments

An August News article showed foreign investment approvals have shown a sharp rises in Chinese nationals particularly in the last few years. The 2015 Chinese investment approvals segment almost exceeding all foreign investment for the previous year. Now the previous linked News article suggested the tightening of bank lending was unlikely to adversely affect Chinese enthusiasm for Australian real estate. But is this true?  Concerns about Chinese investors laundering money in the Australian real estate market was exposed by the Four Corners program “The Great Wall of Money” in late 2015. Three significant events occurred in the period after this program went to air.

  1. Despite much procrastination because of the economic risks to the banking system, the prudential regulator of banks, APRA began to enforce some of their own rules on high risk lending.
  2. Australian Banks uncovered evidence of numerous and sophisticated fraudulent income statements made by Chinese borrowers. To mitigate risks they have begun to restrict lending to offshore investors.
  3. The Chinese Government began cracking down on Money laundering corruption.

Three consequences have been reported in the media.

  1. Robert Gottliebsen reported in August that “The mass of Chinese property buyers who snapped up Australian apartments “off the plan” on the basis of a 10 per cent deposit have started to walk away from their agreements in Sydney”. Melbourne has larger volumes of Chinese buyers.
  2. To secure sufficient financial collateral and because banks consider development projects high risk ventures, developers depend of being able to provide evidence to banks of “off-the-plan” purchases of apartments.
  3. Risk avoidance by the banks is resulting in restricting or pulling finance on the Chinese markets. This means construction become nonviable and added to buyer pull out, it may likely be the greater cause of any given developer may ceasing or stalling construction.

Image from http://www.tradingeconomics.com/australia/

While not wanting to “rain” on anyone’s parade, a more likely reason for a drop in construction might be the exit – of what was last year a huge influx of Chinese Buyers. In fact, given the huge influx of Chinese buyers in the market in 2015, it could be hypothesised that Chinese buyers were keeping our economy afloat.

Image from news.com.au

So what hope is there left in the last month of this quarter for us not to discover some time in February that we are in a recession?  Because two depressed GDP terms is an official recession and we have less than one month to go of the 2nd term.

  • Manufacturing? – Ford is gone, Holden
 fired-up the final V6 motor at its Port
Melbourne plant on the 29th of November and Toyota is in palliative care expecting to pass away next year.
  • Renewable energy market? – The government is slashing support for that industry
  • Mining? – Mining investment fell for the twelfth consecutive quarter and the seasonally adjusted estimate fell 0.8%
  • Exports? – Net Exports of goods fell 0.3% which is a bit surprising given how cheap our dollar is.
  • Retail? – This is the first decline in over 3 years as the seasonally adjusted estimate fell 0.8% so perhaps that is just a glitch.
  • Real estate industry services? – which fell by 2.4% which is no surprise given the continued unaffordability of the housing market.

Industries such as education, health, power, hospitality, transport, professional and scientific services etc contributed virtually nothing. So where are our major economic booms?

  • Information Media & Telecommunications? – rose 1.6% driven by rises in telecommunications and internet services, so be thankful for Youtube, iView, Netflix and Facebook but how much can we rely on this given our lack of an innovative and internationally competitive NBN.
  • Agriculture, forestry and fishing?  – driven by rises in grains, cotton and livestock production it had a 7.5% increase. One of the larger beneficiaries of the TPP was the agricultural industry, its prospective dissolution by Donald Trump does not provide hope for the future.
  • Hotels, Cafes and Restaurants? – Up by 2.2%, as the cafe dwelling, latte-sipping hipster in inner city cultures put their money up to keep the economy going. Though given how disparaging the government are to this community, it would not be wise to tell them to stay home.
  • Insurance and other financial services? – Up by 1.3% as the insurance and finance salesmen of the country are proving their worth for their company’s bonuses.

What (or who) can rescue us …

Unless the government can quickly pay off a huge defence “lay-by” as they did last year, it’s in your hands people. Our consistently strong industries have been Retail and Services Industries driven by household expenditures which have been traditionally strong areas of our economy. It’s Christmas, the retail and services industry awaits your patronage, if you still have a job that pays a decent wage. You have only weeks left to buy us out of a recession. Buy up big for your kids, travel, eat out and stay in a nice motel. God help Australia, but is our last hope to avoid recession, “Santa Claus“?

 

About the author: John Haly is a freelancer writer and multimedia specialist. A beneficiary of a more egalitarian and tolerant political landscape in which he grew up, his observations of the changing harsher political posturing have prompted him to write articles on social justice and political issues.

Educated initially with a Bachelor of  Business, he followed these later with Diplomas in multimedia and graphic design as well as film studies at the now defunct Metro Screen. When not writing, he manages a freelance business, “Halyucinations Studios” in Sydney, doing work for clients in photograph, video production, design, IT support and web development and management. He is also the secretary of the film collaborative, NAFA, and a founding member of the Australia Arts Party.

Formerly a long time IT contractor for commercial banks (including the Reserve Bank), mining, transport, computer companies, government, university and a number of outsourcing firms, his introduction to the media was in two separate project management roles for the ABC. This developed an awareness of the need for advocacy for public broadcasting as well as providing a background in a diverse range of commercial and public service organisations.

A fifth generation Australian born son of an English teacher and an AICD Gold Medal Award winning  businessman – whose contributions to the finance sector were recognised with an Order of Australia. John has lived and worked here and overseas, although mainly around Australia and lately in Sydney, NSW.

You can follow John on twitter @halyucinations or on his blog at http://auswakeup.info/.

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