Multimillionarie Australian Prime Minister Malcolm Turnbull's 'churn & burn' path for unemployed, low-skilled youth

Set out below are the official bare bones of the Youth Jobs PaTH  internships for unemployed 17-24 year olds that the Turnbull Government is offering from 1 April 2017.

What these bones both reveal and conceal is that in 2017-18 an est. 30,000 young people jobless for six months or more will be set to work between 15-25 hours a week for 4 to 12 weeks in mainly low skilled jobs in supermarkets, cafés,  newsagents or other businesses in order to receive an additional $100 a week in Centrelink benefits - while the erstwhile ‘employer’ pockets $1,000 upfront for so generously offering to accept free labour arranged through JobActive employment service providers.

Given the minimum wage is $17.29 per hour, a business would save $432.25 if the job seeker was employed as an intern for 25 hours a week rather than as a minimum wage employee. Interns would receive $68.45 per week below the minimum wage and not receive sick leave, superannuation and penalty rates.

With 'churn and burn' already suspected in existing JobActive Australia employment programs, what could possibly go wrong?

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The Government will provide $751.7 million over four years from 2016‑17 to establish a Youth Jobs PaTH program for young job seekers aged under 25 years to improve youth employment outcomes. The new pathway is designed to enhance young people's employability and provide up to 30,000 young people each year with real work experience. The pathway has three elements:

Industry‑endorsed pre‑employment training (Prepare) — from 1 April 2017, training for up to six weeks will be provided to develop basic employability skills, including those required to identify and secure sustainable employment.

Internship placements of up to twelve weeks (Trial) — from 1 April 2017, up to 30,000 internship placements will be offered each year to enable businesses and job seekers to trial their employment fit. Job seekers will receive a $200 fortnightly incentive payment and businesses will receive $1,000 upfront to host an intern. Placements will be voluntary and will be organised by employment services providers. Job seekers must be registered with jobactive, Disability Employment Services or Transition to Work, and have been in employment services for at least six months to be eligible for the internship program.

Youth Bonus wage subsidies (Hire) — from 1 January 2017, employers will receive a wage subsidy of up to $10,000 for job seekers under 25 years old with barriers to employment and will continue to receive up to $6,500 for the most job‑ready job seekers. Job seekers must be registered with 
jobactive orTransition to Work, and have been in employment services for at least six months for employers to be eligible for the wage subsidy. Funding for this component will be provided from within the existing funding for wage subsidies.

The program will include an employer mobilisation strategy to encourage participation in the initiative by all employers.

As part of this measure, the Government will also achieve savings of $204.2 million over four years. The design of wage subsidies available through jobactive will be improved to reduce red tape for employers, including by simplifying payments and enabling employers to choose more flexible payment arrangements.

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So how is the Coalition's 'supadupa' Jobactive Australia scheme going?

This is an excerpt from a Prime Minister Tony Abbott, Minister for Employment Senator Eric Abetz, MP for Cowper and Assistant Minister for Employment Luke Hartsuyker joint media release on 31 March 2015:

In 1998, the Howard Government introduced the Job Network and revolutionised the delivery of employment services to job seekers.

Unfortunately, the Rudd-Gillard-Rudd Government changed the employment services system to reward process over results and encourage training for training’s sake.

The system became mired in red tape, letting down job seekers and employers.

The new jobactive system will be focused on results and reward performance not process.

From 1 July 2015, 66 organisations will deliver one or more jobactive services to job seekers and employers across Australia.

There will be clearer incentives to ensure employment service providers are focused on better preparing job seekers to meet the needs of local employers and helping people to find and keep a job.

Service providers will no longer receive ‘job placement’ payments.

The rules around training have also been tightened to ensure that job seekers are not being sent to training for training’s sake, as is currently the case.

There will be less red tape so that providers can spend more time doing what they do best – helping job seekers find and keep a job.

The new employment services contract will also be extended from three years to five years.

A new regional loading for providers in selected regions will be introduced, recognising that labour market conditions vary across Australia.

The new model encourages young job seekers to take up a job and employers to take on new employees.

The Job Commitment Bonus programme will encourage young, long-term unemployed job seekers aged 18-30 to find and keep a job.

Setting up Jobactive Australia cost an est. $6.756 million according to the Dept. of Employment.

In the first two months it was operating (1 July 2015 to 30 September 2015) those approved service providers billed the Employment Fund General Account a total of $6.170 million predominately for professional services, training, clothing & presentation.

On 17 September 2015 Employment Minister Eric Abetz boasted that Jobactive Australia had reached 50,000 job placements since the start of the scheme. However he was careful not to qualify what comprised a 'placement'.

According to the Dept. of Employment Budget Statements 2015-16 Jobactive Australia was allocated $1.459 billion for that financial year. This budget expense is expected to rise to $1.778 billion in 2016-17, with total employment services expenses expected to total $1.932 billion.

For that amount of money the Abbott-Turnbull Government expects the Jobactive scheme to have placed 380,000 jobseekers in often wage-subsidised employment in 2015-16, at a cost of est.$2,500 per placement covering Employment Fund expenditure, service fees and outcome payments.

Unfortunately 68% of these placements are likely to last only 4 weeks before the person is unemployed once more. I suspect the percentage of temporary jobs is so high because this allows service providers to bill the government again and again for ‘helping’ those same job seekers find other temporary jobs once the initial placement dissolves into thin air and, via the $1.2 billion national wage subsidy pool potentially allows employers to 'churn' new employees on short term contacts so that employers receive financial benefits from the pool but employees are unemployed at contract's end.

None of the departmental employment sustainability measures encompass positions lasting longer than six months, so it is unclear as to whether there is a genuine expectation that job service providers will assist in finding permanent employment for anyone.

In July 2015 when Jobactive Australia commenced, the real national unemployment rate was probably running at est. 8.7% and by March 2016 it had climbed to est.11% according Roy Morgan Research vs ABS Employment Estimates (1992-2016).

In November 2013 the Australian Bureau of Statistics (ABS) seasonally adjusted combined unemployment and underemployment rate (underutilisation) was 13.5% and by February 2016 this combined rate was 14.2%.

In September 2013 the average number of weeks an unemployed person spent looking for a job was 39, with an est.134,400 people looking for 52 weeks and over.

Under the Abbott-Turnbull Government by March 2016 the average number of weeks had risen to 46.2, with an est. 181,700 people looking for 52 weeks and over. [Australian Bureau of Statistics, Labour Force, Australia, Detailed - Electronic Delivery, Mar 2016] 

In June 2014 an est. 123,800 15 to 24 year-olds were looking for full time or part-time work. By March 2016 the number of young people in this category had risen to 133,000. [ibid]

The Brotherhood of St. Laurence reported on 14 March 2016 that some rural and regional areas weregrappling with youth unemployment rates above 20 per cent.

Richmond-Tweed (including Tweed Heads, Byron Bay, Lismore, Mullumbimby) in the NSW Northern Rivers region had a youth unemployment rate of 14.5% in January 2015 and by January 2016 this rate had risen to 17.4% [Brotherhood of St Laurence, Australia’s Youth Unemployment Hotspots: Snapshot March 2016, p. 3]

Yet on 1 May 2016 Treasurer Scott Morrison was telling The Courier Mail that there had been 50,000 youth jobs created in the past 18 months across Australia. He also was offering no supporting proof for this bold statement covering November 2015 to April 2016 and, as neither ABS labour force nor job vacancy data tracks jobs growth it is hard to see where he finding his figures.

Somehow these statistics engender little confidence that the Liberal-Nationals Coalition has taken a genuinely constructive approach to unemployment since winning government in September 2013 – despite that gung-ho media release announcing “jobactive services”.

Social media, advertising, trust and dollars

Excerpt from the Australian Newspaper History Group Newsletter No. 87 May 2016:

87.2.1 Reach and effectiveness of social media

British marketing and branding specialist Mark Ritson will give a series of lectures to the Australian Association of National Advertisers that will challenge some thinking about the reach and effectiveness of social media over established media platforms, such as print. Professor Ritson, who is head of Marketing at Melbourne Business School, will conduct four talks over six dates in Sydney and Melbourne, from 24 May. His first lecture is titled "Marketing Deconstructed: Communications – the death of the digital/traditional divide". Prof Ritson believes the likes of Twitter, Facebook and Instagram are over-rated by some marketers, who choose to ignore the proven engagement of traditional media. Prof Ritson says the belief in social media as an advertising platform has become fashionable among some marketing executives who blindly denigrate television and print. To back his position on the strength of traditional platforms, Prof Ritson cited data from Nielsen's global trust in advertising survey published last September. The report showed 63 per cent of people trusted TV advertising, and 60 per cent trusted print ads, but only 46 per cent trusted ads served on social networks (TheNewspaperWorks, 18 March 2016).

87.2.2 Online advertising nears $6bn

Australian online advertising spending climbed to $5.9 billion in 2015, a 24 per cent increase from calendar year 2014, according to the latest Interactive Advertising Bureau/Pricewaterhouse Coopers Online Advertising Expenditure Report. The fourth quarter report is a significant result for the online advertising industry which has achieved double-digit growth of at least 20 per cent since 2010. The report examines advertising expenditure across five advertising categories, each of which experienced significant year on year growth:

 Mobile grew 81 per cent this year to $1.5 billion

 Video grew 75 per cent to $500 million

 General display grew 46 per cent to $2.1 billion

 Classifieds grew 22 per cent to $1.1 billion

 Search and directories grew 14 per cent to $2.8 billion.

Outgoing chief executive of the IAB Alice Manners said, "When the IAB first started recording online ad expenditure in 2003 it was at $1.3 billion and today we are poised to break the $6 billion barrier," she said.

The Turnbull Government and multinational tax avoidance

On 2 October 2014 the Australian Senate referred the matter of corporate tax avoidance and aggressive minimisation to the Economics References Committee for inquiry and report by the first sitting day of June 2015 and, after repeated extensions, on 2 May 2016 the Senate granted the committee a further extension to report by 30 September 2016. 

The committee’s interim reports clearly indicated that the Australian taxation system was being gamed by foreign-based multinationals using aggressive tax practices such as avoidance of permanent establishment, excessive debt loading, aggressive transfer pricing, and the use of tax havens.

On 11 December 2015 the C’wealth Multinational Anti-Avoidance Law (MAAL) came into effect and, its provisions applied from 1 January 2016 to corporations with global annual incomes of AU$1 billion and over and consolidated groups with a parent entity having a global annual income of AU$1 billion and over.

MAAL was designed to counter the erosion of the Australian tax base by multinational entities using artificial or contrived arrangements to avoid a taxable presence in Australia, adding to anti-tax avoidance measures already found in the Income Tax Assessment Act 1997.

However, less than three months later on 26 April 2016, the Australian Taxation Office (ATO) discovered that some taxpayers are entering into artificial and contrived arrangements to avoid the application of the MAAL.

On 3 May 2016 the Turnbull Government released a consultation paper on its proposed Diverted Profits Tax (DPT).

The DPT will impose a 40 per cent tax rate on corporations and consolidated groups with global annual incomes in excess of AU$1 billion that reduce the tax paid on the profits generated in Australia by more than 20 per cent by diverting those profits to low tax jurisdictions. The government hopes to have this new law in place by 1 July 2017.

According to the consultation paper both the Multinational Anti-Avoidance Law and the Diverted Profits Tax are based on Britain’s diverted profits tax introduced on 1 April 2015.

One can only hope that both these laws will be more effective than the U.K. law on which they are based. Because less than eight months after that law was introduced it was found to be ineffective in stopping large multinationals from diverting profits to low tax jurisdictions. As an example, Google with its U.K. advertising revenue held in low taxing Ireland had not had to make payments under the new diverted profits tax.

There is no way that multinationals operating in Australia will not mount legal challenges if the ATO attempts to impose penalties under provisions in MAAL and DPT. 

To some extent the loser will always be federal government revenue because, successful or otherwise, the corporate millions spent in legal fees fighting the tax man are apparently tax deductible.

The Great Barrier Reef: black letter days

It’s time to ask incumbent federal MPs and senators what they intend to do to when faced with legislative bills or ministerial decisions which have the potential to negatively impact on The Great Barrier Reef and to make it very clear that their answers will decide votes in July 2016.

The Sydney Morning Herald, 20 April 2016:

Scientists surveying the mass coral bleaching on the Great Barrier Reef say only 7 per cent of Australia's environmental icon has been left untouched by the event.

The final results of plane and helicopter surveys by scientists involved in the National Coral Bleaching Taskforce has found that of the 911 reefs they observed, just 68 had escaped any sign of bleaching.

The severity of the bleaching is mixed across the barrier reef, with the northern stretches hit the hardest.

Overall, severe bleaching of between 60 and 100 per cent of coral was recorded on 316 reefs, almost all of them in the northern half of the barrier reef. Reefs in central and southern regions of the 2300 kilometre Great Barrier Reef have experienced more moderate to mild affects.

The mass bleaching event has been driven by significantly higher than average sea temperatures as a result of the current El Nino event, coupled with a long-term warming of the oceans due to climate change.

While the barrier reef has experienced mass coral bleaching events in the past – notably in 1998 and 2002 – Professor Terry Hughes, convenor of the bleaching taskforce, said the current event was by far the biggest.

Sky News, 24 March 2016:

*It could be too late to reverse the effects of coral bleaching in large swathes of the Great Barrier Reef caused by man-made climate change, a leading academic fears.

Professor Justin Marshall, from The University of Queensland's CoralWatch team, has just spent 10 days at the Lizard Island Research Station, north of Cairns, gathering data and images of coral bleaching in the northern part of the reef.

Prof Marshall said almost all of the coral in a 500km stretch of the reef was bleached and about half of that coral was dead because of the bleaching.

He said sometimes coral could recover from bleaching, where it becomes white after losing the symbiotic algae that brings it nutrients, but when there was large-scale coral death like in this situation, it was far less likely.

'The absolute figures are unknown and our research is ongoing to determine that,' Prof Marshall said.

'Over the next few months we'll be able to give you an answer, but to be honest I'm a bit pessimistic.'

Prof Marshall said the coral bleaching in the area was the worst he'd ever seen it.

'I have kids, I love to take them up to the reef, but to be honest, I would have been ashamed to take my children up there this time,' he said.

He said global warming was causing coral bleaching, which wasn't helped by El Nino conditions this year.

'There is an additional natural fluctuation, but that must not deflect our realisation that this is definitely a man-made, carbon-emission event, which is killing the Australian reef,' Prof Marshall said.....

ABC News, 28 March 2016:

An aerial survey of the northern Great Barrier Reef has shown that 95 per cent of the reefs are now severely bleached — far worse than previously thought.

Professor Terry Hughes, a coral reef expert based at James Cook University in Townsville who led the survey team, said the situation is now critical.

"This will change the Great Barrier Reef forever," Professor Hughes told 7.30.

"We're seeing huge levels of bleaching in the northern thousand-kilometre stretch of the Great Barrier Reef."

Of the 520 reefs he surveyed, only four showed no evidence of bleaching.

From Cairns to the Torres Strait, the once colourful ribbons of reef are a ghostly white.

"It's too early to tell precisely how many of the bleached coral will die, but judging from the extreme level even the most robust corals are snow white, I'd expect to see about half of those corals die in the coming month or so," Professor Hughes said.....

Professor Hughes said he is frustrated about the whole climate change debate.

"The government has not been listening to us for the past 20 years," he said.

"It has been inevitable that this bleaching event would happen, and now it has.

"We need to join the global community in reducing greenhouse gas emissions.

"For me, personally, it was devastating to look out of the chopper window and see reef after reef destroyed by bleaching.

"But really the emotion is not so much sadness as anger.

"I'm really angry that the government isn't listening to us, to the evidence we've been providing to them since 1998.".....

Australian Federal Election 2016: it couldn't happen to a more deserving multinational

The Australian, 28 April 2016:

Broadspectrum has entered a trading halt this morning as it seeks to clarify the impact of a potential closure of the Manus Island detention centre.

The detention centre operator’s Manus Island contract is highly lucrative and investors fear it may be taken away after the PNG Supreme Court labelled the detention centre “unconstitutional and illegal” this week.

That ruling preceded PNG Prime Minister Peter O’Neill’s assertion on Wednesday that the centre would “now be closed”, but there remains little clarity on the way forward with the Commonwealth insisting the asylum seekers will not come to Australia.

“The trading halt is requested following press speculation in relation to developments following the PNG Supreme Court decision and their possible impact on Broadspectrum,” the firm said in a statement.

It said it intended to release an update on Friday, April 29.

The action has come as an $800 million takeover offer for Broadspectrum appeared likely to fall over before Monday’s deadline.

In May 2016 Broadspectrum (Australia) Pty Ltd formerly Transfield Services (Australia) Pty Ltd has barely ten months left to run on its $2.189 billion contract with the Australian Government to provide operational, welfare and security services to asylum seekers on Nauru and Manus Island, so it is highly likely that there will be relatively low compensation payable to this multinational corporation flowing from the closure of the both Nauru and Manus Island off-shore detention centres.

Perhaps this is the moment that the federal government can finally begin to rid itself of a corporation plagued by allegations of human rights violations and violence.

Scott Morrison rearranging the on-board leisure activities schedule on the cruise ship Ostentatious Wealth in 2016-17

The Turnbull Government has announced it was not giving tax cuts to those with taxable incomes under $80,000 because these individuals had benefited for carbon tax compensation and tax cuts in the past but was giving personal tax cuts to at least 500,000 people with taxable incomes of 80,000 per annum.

Now let me get this straight – this was the basic scenario, right?

In 2012 the then Gillard Government decreed that there would be a lump sum payment to compensate for the so-called carbon tax. These lump sum payments of $250 for singles and $380 for couples were to cover the first 9 months of the carbon tax for pensioners and others on income support and, the first 12 months for those households receiving  Family Tax Benefit A or B:

Family Tax Benefit Part A recipients will receive up to $110 for each child.

Family Tax Benefit Part B recipients will receive up to $69 per family.

Single pensioners will receive up to $250.

Pensioner couples will receive up to $190 per eligible member.

[Kirsten Andrews, 2 July 2012]

From 1 July 2013 the Labor Government awarded additional carbon tax compensation payments, including compensation payments for households with annual incomes of $160,000.

This compensation meant that:

*Households receiving Family Tax Benefit A received $87.60 "clean energy supplement" per year for each eligible child aged under 13. Those with eligible children aged between 13 and 19 gained $113.15 in carbon tax compensation.

*Those who qualify for Family Tax Benefit B received an extra $69.35 carbon tax compensation if their youngest child was aged under five, which includes $69.35 for the carbon tax. If the youngest child was aged between five and 18 their top up was a $51.10 clean energy supplement.

*About 281,000 self-funded retirees who receives the seniors supplement got about $350 a year for singles and $530 a year for couples with their next quarterly payment. 

*More than 360,000 students and young people with a disability looking for work or in training received a lump sum payment. The amount varied depending on individual payments but was worth up to $130.

*An est. 3.5 million pensioners received a further boost totaling $88 for singles and $130 for couples paid out through fortnightly installments. 

[Herald Sun, 21 June 2013 and Combined Pensioners & Superannuants Association, 2013]

The Labor Government also planned compensatory tax cuts from 1 July 2015 which went ahead because the Senate refused to allow the Abbott Government to remove them.

These tax cuts were; worth about $83 a year for people earning $25,000 to $65,000 and about $13 a year for people earning over $80,000 [The Australian, 9 July 2014].

Since then the Abbott-Turnbull Government budgets have whittled away at the real value of pensions and associated benefits and allowances, kept unemployment payments below poverty levels and restricted eligibility for Family Tax Benefits by lowering the FTB B threshold from 150,000 to $100,000 and removing FTB B from children 6 years of age and over.

Despite taxation receipts being revised down since the 2015‑16 MYEFO by $4.6 billion in 2016‑17 and $13.5 billion over the four years to 2018‑19. Excluding GST, tax receipts are forecast to be $4.6 billion lower in 2016‑17 and $14.2 billion lower over the four years to 2018‑19 ……In 2016‑17, tax receipts as a share of GDP are expected to be 22.2 per cent, lower than the 2015‑16 MYEFO estimate of 22.5 per cent and, with a current budget deficit of $37.1 billion in 2016-17 the Turnbull Government was determined to give tax cuts to above average income earners – even those who would have benefited from Labor's carbon tax compensation and/or tax cuts between 2012 to 2015.

In this 2016-17 budget Turnbull & Co are rewarding those currently earning $98,200 pa and over (of which $80,000 is considered taxable income) with a tax cut worth an est. $314 a year, with the possibility of this rising to $324 on 2 July 2016. While those with a taxable income of more than $180,000 will no longer have to pay the 2% Deficit Levy which for a person on $250,000 a year means a tax deduction of $1,400 over two years [Financial Review, 4 May 2015].

At the same time the 2016-17 budget allows those individuals in these income ranges to keep contributing to their superannuation post-retirement because the work test for superannuation contribution has been removed, i.e. the provision that the person must have worked for at least 40 hours over 30 consecutive days in the financial year you wish to make a contribution.

Negative gearing and capital gains tax advantages remain for those who wish to minimise taxable incomes between 80,000pa and $180,000 and over, however there are some changes to superannuation  including the amount of tax-free income which can be salted away in their superannuation funds - with a $1.6 million cap on the total amount of superannuation that can be transferred into a tax-free retirement account.

All this budget last measure does is give those with more than $1.6 million in their retirement account the option to either transfer the excess back into an accumulation superannuation account taxed at a low 15% or withdraw the excess amount from their superannuation. Which of course leaves these individuals free to purchase negatively geared property and further reduce their taxable incomes, or salt the excess away in investments registered in low-taxing jurisdictions such as the Cayman Islands.

As the budget papers assure the electorate that less than 1 per cent of those with superannuation accounts will be affected by superannuation cap changes, in all likelihood they will have little impact on wealth accumulation by the top 25 per cent of Australian income earners.

This whole exercise has been a political pea and thimble trick in which Scott Morrison has been careful to disguise as much as possible that he has merely rearranged the on-board leisure activities schedule for those travelling on the cruise ship Ostentatious Wealth and left the rest of the Australian population stranded on the shore.