Rudd can take a bow for growth in unemployment

THE bigger challenge is ensuring new generations of workers feel included in economic expansion.

WHILE Kevin Rudd has been busy trying to win state premiers over to his health and hospitals reform plan in the nation's capital, his right-wing factional hard man and Employment Participation Minister, Mark Arbib, has been attending the G20 conference for labour ministers in Washington.

The primary aim of the conference is to ensure that the global recovery isn't a jobless one. In this respect, Australia has a lot to crow about. For all the criticisms the government has had to endure for its stimulus spending, when it engages with overseas nations riddled with double-digit unemployment rates, Australia is seen as having got the balance right, between direct stimulus and spending on training.

An unemployment rate of 5.3 per cent, well below forecasts from this time last year, speaks for itself.

Politically Arbib is usually sewn to Rudd's hip -- one of his key strategic advisers and negotiators internally in the Labor Party. However the former NSW state ALP secretary wants to be seen as a policy wonk, as his ambitions increasingly focus on promotion to cabinet rather than back-room Labor Party control.

There is no question that Australian employers are hiring again. The share price for seek.com .au has risen dramatically. In February it was below $6; now it is running at more than $8.

Its price to earnings ratio suggests investors are pricing in future employment growth, supported by ballooning jobs advertisements in major newspapers.

But Australia, like other parts of the world, has to be careful to ensure that improved employment figures fit within the G20 aim of "quality employment".

This mantra was laid out at the G20 meeting in Pittsburgh in September last year. Australia's jobs growth has been dominated by part-time employment opportunities, which, while valuable to short-term recovery, are not conducive to long-term sustainable growth. Stimulus spending has given the jobs sector a boost, but the bigger challenge for the government is ensuring that in the long-term, skills training puts Australia's workforce in a position to take advantage of what looks like being a return to a commodities-driven boom.

That means ensuring new generations of workers feel included in the growth component of the economy.

"Most of the ministers attending the (G20) conference are deeply concerned about the global recession's effect on our youth," Arbib told The Australian from Washington. "Young people, and teenagers in particular, have been hit hardest by the crisis globally and without a co-ordinated effort could lead to extremely high levels of very long-term unemployment and inter-generational issues," he said.

If ensuring the recovery includes opportunities for the youth end of the jobs market, there are three factors worth considering: training opportunities, workplace laws and the benefits and pitfalls of immigration. The government deserves a pat on the back on the first score, a kick in the teeth on the second, and the jury is still out on its handling of the third issue, and probably will be until after the next election.

While most of the good and bad press on the so-called education revolution has focused on what is happening in schools -- laptops, MySchool website and the building program -- the most valuable movement has been in streamlining vocational education, opening up access to places, and commissioning the Bradley review into higher education.

A modern economy is driven by the skills of its vocationally and tertiary educated workforce.

On both fronts the Rudd government is improving Australia's position internationally. How it chooses to action recommendations from the Bradley review, presumably in its second term if re-elected, will allow a fuller assessment of how successful reforms ultimately are.

While the Labor Party was elected with a mandate to unpick Work Choices, it went further, winding back sections of industrial relations laws to 1990s standards with its Fair Work Act.

As a nation we were lucky that we went into the global downturn with no government debt and low unemployment. Because if we didn't, the risk to our economic position from sometimes inflexible new workplace laws could have been greater.

So the laws that at the moment give young workers certainty (and happily so) do carry major risks to employment growth if the recovery is not as strong as expected.

The final issue of how immigration impacts on youth employment prospects is politically sensitive and complex in terms of policy. It is sensitive in the current climate of rabble-rousing from the Coalition over immigration levels and refugee arrivals. The policy complexity comes from the disagreements among experts over the value of immigration, even skilled.

The majority view is that it is valuable to economic growth and therefore youth workers have their employment prospects enhanced by skilled migrants in particular.

But the alternative view is that if a nation looks to import workers to satisfy shortfalls in the employment mix, it discourages the youth pursuing training to similarly fill such gaps (something Arbib is trying to counter), and if assumed economic growth doesn't materialise, the influx of workers can quickly find their skills don't match the needs of the economy.

There is no easy answer to the policy script needed on immigration, and in an election year you can be sure any answers offered are going to target political, not policy, requirements.

It is good that Arbib has travelled to Washington for the G20 conference; it is more than Rudd was prepared to do when world leaders met there last week for Barack Obama's nuclear security summit.

But the way Australia is managing jobs growth compared with the rest of the world suggests that they have more to learn of us at this point in time than we do from them, notwithstanding Labor's new IR system.