Budget 2016: Without Safeguards, Internship Program Risks Being A 'jobs Destruction Scheme' - The Age & Sydney Morning Herald

The Youth Employment Package introduced in the 2016-17 budget has raised multitude of concerns from business professionals. McDonald Murholme Managing Director Alan McDonald discusses the need to protect small businesses and vulnerable workers from exploitation.

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Budget 2016: Without safeguards, internship program risks being a ‘jobs destruction scheme’

A new internship program introduced to combat youth unemployment is at risk of becoming a “jobs destruction program” unless safeguards are introduced to prevent exploitation, workplace experts have warned.

Andrew Stewart, professor of law at the University of Adelaide, said the $752 million federal budget program to help job seekers under the age of 25 get a job appeared to be a “rebadged and ramped up version” of the national work experience program introduced last year, but without the same safeguards. Those safeguards included ones preventing a business from accepting people for work experience if they have downsized in the previous year or if they proposed to take on a work experience person instead of a paid employee.

“I would have thought there was a need for similar safeguards in this new program otherwise it potentially becomes a job destruction scheme,” Professor Stewart said.

“If you allowed businesses to use government-paid interns instead of paid workers you are reducing employment, not increasing it.”

Professor Stewart said the new initiative was a “worthwhile idea to explore” if the right safeguards are put in place.

This rested on an assumption that work experience made job seekers more employable.

“It is actually hard to find studies that verify that assumption,” he said.

The federal government said businesses such as a cafes, newsagents and supermarkets could take interns under the new program.

“A major challenge for this initiative is how do you stop businesses using this program to replace paid employees,” Professor Stewart said. “How do you stop cafes not giving work to casuals and using a government-sponsored intern instead?”

Alan McDonald, managing director of employment law firm McDonald Murholme said the youth employment package could turn out to be “a gift to big business”, offering only superficial assistance to smaller businesses and young people.

“Government subsidies to small businesses to encourage employment of young people is a good thing but that is very different from forcing young people to provide extremely cheap labour, without the protection of the Fair Work Act 2009 (Cth),” he said.

“Those employers who are not serious about the scheme can use this as an opportunity to use and abuse interns as cheap, short-term casual labour – receiving a $1000 incentive as a reward.”

Lawyers and ACOSS said they were relieved the Treasurer had finally admitted the work for the dole scheme had failed.

Cassandra Goldie, chief executive officer for ACOSS, said the new program had a greater “likelihood of success in helping young people into paid employment”.

ACOSS supports the belief that work experience can improve job opportunities.

“Of course there are risks. The employer that uses this program to displace a job is real,” she said.

Careful monitoring and protections were therefore needed, Ms Goldie said.

The ACTU has warned the initiative to give a young person 12 weeks of work experience paid at $200 per fortnight in addition to unemployment benefits after six months of being jobless was open to exploitation.

“They come up with an internship program where taxpayer dollars can be used to potentially exploit our kids,” ACTU president Ged Kearney said.

“There is a perverse incentive to churn kids through the program so they get a wage subsidy.”

The ACTU said the Youth Jobs PaTH (Prepare-Trial-Hire) program meant that interns would be working for an extra $4 per hour, which is much lower than the national minimum wage of $17.29.

But federal employment minister Michaelia Cash dismissed this claim as “a blatant lie”.

“The ACTU should issue an apology for shamelessly trying to mislead Australians,” Senator Cash said.

“Under the innovative Youth Jobs PaTH plan, the payment of $200 per fortnight is on top of the existing income support that the job seeker already receives.

“Department of Employment program assurance and monitoring to ensure displacement does not occur,” she said.

“Importantly, employers that exploit the program or job seekers will be banned from using it.”

Former ACTU official Tim Lyons, who now works as a research fellow at the think tank Per Capita, said: “Schemes like this have been tried overseas and simply replace workers who now have a job and force others to work for virtually nothing”.

Reference: Budget 2016: Without safeguards, internship program risks being a ‘jobs destruction scheme’ – The Age, Sydney Morning Herald, 5th May 2016