Today I rise to highlight the importance of the Rudd government’s stimulus strategy to Western Australia. Since the global financial crisis began, unemployment has risen rapidly in my home state. In October of last year unemployment in WA stood at 2.7 per cent. Since then it has risen every month, including last month, and now stands at 5.7 per cent. There are more than 70,000 unemployed in WA, more than double the number of a year ago. As someone who has worked for a job service provider, and as someone familiar with the expert evidence on the impact of unemployment recently presented to the Senate Economics Committee, I take very seriously this rise in unemployment in my home state.
Unemployment has the potential to permanently scar the lives of individuals. They lose skills, lose the opportunity to gain experience, lose confidence and even lose hope. For young people, the impact may be particularly pronounced. The experience of unemployment at the start of their working lives can result in a feeling of worthlessness that affects the entire trajectory of their careers. Older workers, on the other hand, often find it difficult to retrain when they are required to shift jobs late in life. Older workers are also more likely to have dependants who rely on their employment. Unemployment puts pressure on household budgets and strain on personal relationships.
When unemployment is concentrated in particular communities, its impact is heightened. The flow-on effects can destroy local business and undermine community capacity. The longer the period of unemployment, the greater the impact. Communities scarred by high levels of long-term unemployment are often marred by intergenerational poverty. Consequences of such poverty include increased welfare dependency, drug and alcohol abuse, juvenile delinquency, family breakdown and high rates of chronic disease and mental illness. In addition to the human costs, the net result is increased expenditure on social security payments, on health services, on child protection, on policing, on courts and on prisons.
Long-term unemployment is defined as unemployment lasting longer than 12 months. On this basis, the next 12 months are critical. To minimise the negative impact of the global financial crisis we must minimise any long-term unemployment that results from this downturn. This will be a real challenge. We know from past global recessions that the number of long-term unemployed is likely to rise. There is a time lag between the recovery in the economy in terms of growth and the recovery in terms of employment. Following the recession of the early 1990s, unemployment rates took more than a decade to return to pre-recession levels. Let me repeat that: after the last recession unemployment took more than a decade to come down.
So, when the opposition argue that the stimulus should be wound back at the first sign of recovery, they either are economically illiterate or simply do not care about the unemployed. Signs of resilience in the economies of our Asian neighbours may be enough for the opposition. A recovery in business confidence may be enough for the opposition. A lack of a technical recession may be enough for the opposition. But it is not enough for Labor, because we care about those thousands of unemployed Australians. There are 70,000 of them in WA alone. I am proud that the Rudd government’s early and decisive action has helped to avoid recession and to protect thousands of jobs. I am proud that leading Australian economists and business groups, the IMF, the OECD and even the Liberal Premier of WA all recognise that the Rudd government stimulus strategy has cushioned Australia from the worst of the downturn.
I am even prouder that the Rudd government sees this as the beginning and not the end of the battle to ensure Australia’s prosperity and to combat the insidious effects of unemployment. That is why I want to highlight the critical role of our stimulus initiatives in securing employment in WA. The Rudd government stimulus strategy is designed to support growth and jobs now, while investing in physical infrastructure and human capital for the future. The aim is to minimise unemployment now, while preparing Australia for the opportunities that recovery will bring. The first phase of the stimulus involved targeted payments to low- and middle-income families, working Australians, pensioners and carers and drought-affected farmers. When I spoke on the Nation Building and Jobs Plan in February I said that the aim of these payments was to deliver an immediate stimulus to the whole economy, one that would bolster consumer confidence and reach into every community, however small or remote. The stimulus was vital to support jobs, especially in my home state of Western Australia, which has so many isolated, regional communities.
Now that the figures on consumer spending, business confidence and retail employment for the first part of this year are in, we know this strategy has worked. The second phase of the stimulus strategy involved funding for shovel-ready infrastructure, spending on investments in schools and housing, energy efficiency, roads and boom gates and community infrastructure. Once again, the stimulatory effect of this spending is dispersed throughout the nation, including the many far-flung communities of WA. For example, 183 WA primary schools received funding under round 1 of the P21 school modernisation program and 349 WA primary schools received funding under the second round. This represents an investment in WA local communities of some $930 million.
This spending is supporting local jobs and businesses now while ensuring that schools can provide our children with the education they need for future success. Similar investments are being made in the infrastructure of our secondary schools, TAFEs and universities, all targeted at equipping our young people to take advantage of future opportunities—investments like $4 million for the construction industry apprentices training facility at the West Coast TAFE in Clarkson under the Training Infrastructure Investment for Tomorrow program. The government’s $650 million Jobs Fund is the linchpin of its employment strategy. A wide range of local infrastructure projects have been funded through the Jobs Fund because a diverse industry base is critical to future prosperity. The $5.5 million being invested in WA heritage places, such as the Shark Bay World Heritage Area, will generate jobs now while enhancing the capacity of communities to attract tourists in the future.
A substantial proportion of stimulus spending is directed at developing more sustainable communities and at preparing for a low carbon economy. Geraldton was the first community in Australia to benefit from the Rudd government’s $40 million investment in cycling infrastructure. Their funding will provide for the construction of new bike racks, bike lanes and off-road bike paths and, once again, generate local jobs. Similarly, the Western Australian Council of Social Services is receiving $1.8 million to recruit, train and employ greenhouse auditors. It is particularly important that we take steps to address unemployment in areas of highly entrenched disadvantage, so I am delighted that the Rudd government is investing heavily in some of our most disadvantaged communities through the $180 million East Kimberley development package. The package will upgrade sporting grounds, recreational facilities and vital transport linkages while providing Indigenous locals with desperately needed jobs.
Nation building for recovery lies at the heart of the Rudd government’s stimulus strategy. This year’s budget included an $8.5 billion investment in critical economic infrastructure projects so that when recovery comes our ports, roads and rail networks will have the capacity to service a growing economy. These projects include the Oakajee Port common user facilities which will service the needs of WA’s growing iron ore industry. To maximise the employment generated by projects such as the massive Gorgon LNG project we will need skilled workers to grasp the jobs created. The $2 billion Productivity Places program, our major reforms to training and higher education and our Securing Australian Apprenticeships program will all contribute to this objective. Our recent announcement of a new national resource sector task force will ensure that training is targeted to meet the needs of such major projects.
WA is of critical importance to the Australian economy. It has the highest rate of population growth and accounted for 38 per cent of Australia’s exports last year. With ongoing demand for our commodities from the rapidly growing economies in our region, WA is well placed to help drive Australia’s recovery. The Rudd government’s policy settings have done much to keep Western Australia working, but we must continue to be vigilant, to support jobs and livelihoods, to protect people from the social harm caused by unemployment, to assist people who become unemployed to reskill and to invest in the infrastructure that will support our national recovery, unlock Western Australia’s full economic potential and create the jobs of the future. I call on the opposition to join us in supporting these important initiatives and to stand up for Western Australian jobs.