Opinion: Federal Budget’s PaTH program ripe for rorting by employers

OPINION: A student, a part-time working mum and a government-supplied “intern” walk into your bar. Which one do you hire?

Government “interns” are a compelling choice for business – and therein lies the danger.

PRETEND you are a business owner, running a small bar and bistro on the coast. Holiday season is coming up and you’re likely to have a couple of junior positions that need filling to cope with the lift in trade – extra bodies to clear tables, work as kitchen hands and so forth.

Being a good financial manager, you want value for money. So who do you take on, the student or part-time working mum looking for some cash at minimum wage of about $17 an hour before weekend and night penalties?

Or do you get the Government to give you an “intern” – where they receive the government’s Newstart allowance plus $4 an hour for the privilege of learning on the job, and you get a $1000 bonus from the taxpayer for hosting the kid for 12 weeks? Oh, and no need to allow sick leave, holidays or superannuation entitlements.

Not really a mathematically demanding question, is it?

And herein lies the potential problem with the Government’s PaTH (Prepare, Trial, Hire) program revealed in last week’s Federal Budget.

You have to ask why, in a labour market where there are about 170,000 job vacancies but nearly 740,000 people unemployed, we are introducing this scheme at the same time as continuing to issue tens of thousands of 457 immigrant work visas each year?

No, it is not that the acronym is so tortuous that it left stretch marks as it was being forced out, but that the scheme potentially creates a churn and burn market for unskilled labour which risks undermining wider wages and conditions and locking other potential workers out of paid employment.

To its credit the PaTH policy, which aims to place up to 30,000 job seekers each year, is better than the Work For the Dole scheme. That is not saying much though, given the latter is more a punitive measure that plays to the “dole bludger” myth than any real program aimed at generating lasting and rewarding work.

Even assuming the Government’s intentions are honourable and this is not just another way to erode working conditions by stealth – “yes mate, you will come and do a shift on your day off or I’ll replace you with an intern” – there are serious questions surrounding its design.

For starters, despite a government press release trumpeting it as a $750 million scheme, the Budget papers put the cost of the package out to 2020 at $250 million. Given those same Budget papers also list close to $500 million in savings over the same period by axing the Work For the Dole scheme, it is hard not to suspect a sleight of hand here.

If the Government is re-elected and proceeds with the PaTH program, it needs to refine the detail and the safeguards considerably.

There are merits in internships, particularly for those people about to enter the job market in skilled or semi-professional employment. A couple of weeks learning what working life in a newsroom was like didn’t do me any harm at all; and there are federal Labor MPs who offer internships in political offices.

Those arrangements work on an ad hoc, unsubsidised and volunteer basis, rather than through a formalised structure that sees taxpayer subsidies potentially distorting the existing jobs market. That is what tends to happen in the US where internships are used by some firms as little more than a way to exploit unpaid youth labour with no promise or even real prospect of paid employment at the end.

It would be hoped that most Australian employers would do the right thing and view the scheme as an opportunity to give a kid a chance through hands-on experience.

Sadly – and with revelations of the endemic ripping off of workers at the 7-Eleven retail chain still fresh in the mind – as it is currently structured you have a pot of free money just begging to be rorted by the more mercenary among us.

It is also concerning that key details of PaTH (seriously, it hurts my head even typing that name) seem to be a work in progress, with key issues such as worker compensation insurance not finalised yet.

You also have to ask why, in a labour market with about 170,000 vacancies but nearly 740,000 unemployed, we are introducing this scheme at the same time as continuing to issue tens of thousands of 457 immigrant work visas a year?

Then there is the question of why we are subsidising what is, in effect, cheap labour for business at the same time as ripping hundreds of millions out of training programs such as TAFE and carving back support for apprenticeships?

On-the-job experience is vital to securing long term, well-paid employment; no argument there. But programs that promote this must do so without creating a framework that is ripe for exploitation.

That means investing in skills training, higher and technical education and apprenticeship support schemes, not throwing money at the private sector to provide a solution (which hasn’t exactly been a towering success in the VET sector).

If the Coalition is re-elected and proceeds with PaTH, it must refine the detail and safeguards or Malcolm Turnbull risks ending up with his own ill-thought-out roof insulation scheme.

Originally published as Opinion: Federal Budget’s PaTH program ripe for rorting by employers