Sharan Burrow: Pathways to recovery: securing the jobs and incomes of working Australians

Address to the ACTU Jobs Summit, Sydney NSW


Up to 5,000 Australians a week, every week for the next 6 to 12 months will lose their job if the Treasury forecasts come true. Thousands more Australians will face cuts to their hours of work.

These people are the local victims of the Global Financial Crisis which was driven by corporate greed and an economic model based on unsustainable debt.

It is essential that we focus on the loss of jobs and the impact of the crisis on the real economy and the actual lives of working Australians. Employment must be a central benchmark for economic recovery. Green shoots which constitute stock market gains or the profit take of major financial houses are a false dawn if the employment lag of previous downturns is repeated.

A jobless recovery is no more acceptable than the complacency of a return to ‘business as usual’ and the practices which led to the Crisis in the first place. 

Likewise, jobs must be good jobs - decent work. After each of the previous two recessions we have seen an increase in precarious employment. With more than three million Australians now engaged in part time work there is a tale on underemployment that goes far beyond personal choice for flexible or fewer hours.

Australia acted fast and the Government’s stimulus package has arrested the impact on employment relative to international economies but the social and economic impact is still significant. Unions believe more can be done in three areas.

1.    Ongoing targeted investment in jobs;
2.    Entitlements protection and timely support for working families; and
3.    Consideration of a modern system of flex security for workers.


Targeted investment in jobs
Sustainable growth requires sustainable employment.

There are two pieces of legislation in the Parliament for vote in the next month. Both the Carbon Pollution Reduction Scheme (CPRS) and the Mandatory Renewable Energy Target (MRET) laws will unleash major investment which will drive a start on the one million jobs that can be created in clean energy jobs. It will trigger the motivation to up-skill the three million workers in existing industries where change will be necessary.

An update of the ‘Green Jobs’ analysis in the ACF/ACTU publication The Green Gold Rush details that in six sectors alone – Australia’s ‘best bets’ - we can generate one million jobs if we invest in the industry policy necessary.

•    Renewable Energy
•    Green Buildings
•    Energy Efficiency
•    Manufacturing of Biomaterials
•    Waste and Recycling
•    Sustainable Water Initiatives

And this does not touch on other areas of opportunity including the Green Car Initiative, forestry, agricultural ecosystems, new technologies in generation and clean coal technologies, the synergies that can be generated between broadband and the smart grid, and much, much more.

There will be a six trillion dollar global trade in green products within years and we can have up to half trillion dollar share of that if we get going. You don’t win a global race by starting last.

The ACTU has always rejected the economic deficit analysis that is paralysing the political debate. The investments on clean energy jobs in China, the US, Korea, Europe are serious and we must be in the mix if we are to build a sustainable future in all aspects of that concept.

The stimulus measures and the infrastructure spend by the Federal Government have and will continue to make a significant difference. The multiplier effect of the various education and schools investments alone are significant.

Consider the analysis done by the Education Infrastructure Fund (EIF) of its spend. The EIF was not originally set up for stimulus but nevertheless has a significant multiplier effect applicable to other areas of infrastructure and construction expenditure. If there is a three billion boost to the economy for every million spent in construction, the EIF current spend with  co-investment of $7 billion will result in a $20 billion plus injection into the economy, some 15, 000 jobs per year or 60,000 over four years in construction and 160.000 jobs indirectly over four years.

The EIF is but one example of a proactive approach to necessary infrastructure, jobs and economic growth. On this basis the planned stimulus spend and the broader infrastructure investment is indeed optimistic for both employment and growth.

We do however need to monitor investment to see if there is equal opportunity in both direct and indirect employment and skills for women as well as men. In particular we need to ensure future infrastructure investment should be prioritised on the basis of an audit of both social and physical infrastructure needs.

The groundwork must be laid so that if another stimulus package is necessary the Government can act. The posturing of the Liberal and National parties concerning debt is alarming. When the choice is employment - secure jobs for working Australians and security for their families - versus affordable debt what choice is there? To endorse continued unemployment is to sacrifice the futures of thousands of Australians and that is not acceptable nor is it necessary.

We are in a much better position than other economies but we have both the responsibility and the opportunity to drive a strong domestic economy aimed at full employment and decent work.

China has a target of 70% growth in its domestic economy as like other nations it plans to rebalance internal and external demand.  Other nations will do the same.  We can likewise adopt sensible procurement or national industry procurement principles that maximise opportunities for companies in Australia and Australian jobs.

This is not about a threat to WTO rules global trade. Global trade has collapsed and can only be enhanced by greater equity in the global economy if we see a rebalancing of external and internal demand.

Australia can and must invest in both a strong domestic economy to maximise both domestic growth as well as the opportunities of global trade.

The United States has an even bigger challenge as it seeks a different economic base to the current debt-fuelled model. Unemployment in the US is forecast to peak at more than 11% and there is massive underemployment as well.

Almost 70% of US GDP-based consumption is fuelled by incredible personal debt and there is a risk of massive credit default, with more than eight million workers with mortgages unemployed and unable to meet their payments.

All of this underlines the need for a drastic transformation of the economic base in the US. Not only are the vulnerabilities of the US economy still a risk to the global economy but we need to ensure that our economy is not now or ever in that position.

Investment in infrastructure, industry policy, the transition to a low carbon economy, public and community services, skills,  R&D and commercialisation of R&D, innovation and productivity – all drivers of growth and employment – all tools we can deploy in the battle against unemployment.

Australian unions cannot and will not accept a jobless recovery.


Entitlements and timely support for working families
Workers bargain for and have struggled over decades for the redundancy pay and protection of entitlements that afford them some security in the event of their worst fears of unemployment. Thousand of workers are not receiving those entitlements and company directors should be held to greater account for the failure to make provision for such.

The safety net of the Government scheme (GEERS) does not cover the field and in a more responsible corporate world taxpayers should not have to pick up the bill for corporate mismanagement.

More than 30% of casual workers and contractors have no redundancy! This must be an issue for all of us as we go into a period of forecasted higher unemployment.

The statistic that now demands action on both jobs and income support is the average period that people are out of work. In January the average time out of work was 26 weeks – today it is 33 or more than 8 months and growing.

For those Australian working families who lose their job or suffer large cuts to their hours of work as victims of the GFC, the assets that they have built up over decades are now at risk with their homes and security in retirement threatened

The mortgage deferral lifeline offered recently by banks is welcome but does nothing for the tens of thousands of workers who lose hours of work and must be applied to part time workers, not just the jobless, on a pro-rata basis.

Then there is the inadequacy of support for unemployed workers and the conditions and barriers to unemployment benefits and other support measures for workers and their families.

It is not acceptable that if you lose your job, you lose your savings.

While there is a temporary measure that protects $5,000 of savings, why should workers saving for a house, retirement, or family needs lose all that because of a financial crisis not of their making? Surely we can agree on a modest savings base that can be protected?

Why should workers forced into unemployment be prevented from paying off some of their mortgages or other loans or have to spend all their entitlements before they can access unemployment benefits? Again why can’t we agree on a reasonable but modest buffer for a safety net from entitlements to assist workers through an increasingly lengthy period of unemployment before another job is secured and still access basic support.

Then, where workers get no entitlements there is most often a time lag before they can access the Government safety net – GEERS, and then again expend it before they can apply for support. We can, as a nation, set more humane criteria than this.

Working people should not have to become impoverished to access social protection and the ACTU will work with ACOSS, the Welfare Rights Network and other community organisations to develop and advocate for more humane criteria.


Consideration of a modern system of social protection or flex security
We have allowed Australian systems of social protection to fall behind the highest standards in the world and to maximise both economic stabilisers and jobs ad income security for workers we must look to make advances.

If you are a worker in Germany or the Netherland you would not necessarily lose your job where production is downsized. There would be a subsidy to allow wages to be paid and workers would be productive in retooling and reskilling in the down days.

If you lose your job in Denmark or in Sweden you would receive 70 – 90% of your income for twelve months or so, have a training guarantee and be assisted back into work.

In Australia, average workers taking home a wage of $1,000 a week that lose their jobs fall to an incredibly low unemployment benefit of just $220 a week. After years of paying their taxes and making a contribution to the economy this is not acceptable.

As I said at the recent ACTU Congress, this issue is a major priority for unions and the ACTU is currently preparing an options paper including options for paying for better security for workers. This is urgent work for the future. It will guarantee better economic stabilisers to protect economic demand, ensure greater social stability, protect labour force cohesion and guarantee dignity for workers and their families in a modern democracy.


Conclusion
We all have work to do, with the central challenge to make sure that the jobs and incomes of working Australians are made more secure and that the central benchmark of economic recovery is sustainable and growing employment.


More information
Job Summit warns recovery is a long way off: unions urge action to protect workers’ entitlements