Creating job opportunities for Indigenous Australians

The critical question isn’t how to create more job opportunities for Indigenous people but how they take up the opportunities already there.

 

Speech by Nyunggai Warren Mundine AO to the Jobs Australia National Conference
20 October 2016

What can we do to create more employment opportunities for Indigenous people and communities? 

Economic Strategy 2I’m pleased to be here at the Jobs Australia National Conference today. And I would like to welcome you all to Bundjalung country which is my people’s country. I’m a member of the Bundjalung First Nation of Australia and was born in the Western Bundjalung region in South Grafton. I pay my respects to Bundjalung elders past and present, including my own. And I also acknowledge my Gumbaynggirr and Yuin elders, my mother’s people.

I’m speaking to you today on what we can do to create more employment opportunities for Indigenous people and communities. Employment is one of two priorities that are by far the most important for Indigenous Australians. The other is education. If every Indigenous adult had a real job and every Indigenous child got an education, the gap between Indigenous and non-Indigenous Australians would close. It’s that simple.

This is true for all Australians. Over the past few months there’s been a debate in this country about the need to move people from welfare to work. I’ve been a very vocal participant in this debate. And I’ll continue to be. Welfare is another name for poverty and disadvantage. And it’s the worst kind of poverty. It’s poverty with nothing to keep people busy. It’s poverty with no motivation. It’s poverty where a person’s natural instincts to survive and aspire are dampened.

The only solution to poverty and disadvantage is a job.

Those opposed to welfare reform will often say there aren’t enough jobs; that we can’t expect people on unemployment and other benefits to find work because there aren’t enough opportunities out there for them. We hear this a lot when it comes to Indigenous unemployment and you should expect to hear it a lot more now that the government is getting serious about moving people from welfare to work.

I don’t agree with this claim and I’ll explain why. But even if were correct, even if there aren’t enough jobs for everyone who is unemployed, that’s no reason to resist policies to move people from welfare to work. No government, organisation or person who claims to care about inequality can stand by and accept people languishing in poverty and disadvantage and that’s what welfare dependence is. So if there aren’t enough jobs we have to create more jobs. That means firing up the economy and creating the economic environment that encourages innovation and investment. And not standing in the way of initiatives that will achieve that.

But I don’t agree with the assertion there are no jobs. I don’t agree with it when it’s trotted out in the welfare reform debate. I don’t agree with it when it comes to Indigenous people and communities. I don’t even agree with it when it comes to remote Indigenous communities.

The truth is there are plenty of jobs in Australia. In fact, the biggest challenge for Australia isn’t a shortage of jobs but a shortage of skills and labour. That’s the case in remote Indigenous communities. It’s the case in some of our largest industries. And it’s even the case in our largest cities.

Consider these facts:

  • The hospitality industry is estimated to have a shortage of around 10,000 staff, expected to rise to 30,000 by 2020. There are also some labour shortages in the retail sector which expects to need another 90,000 people in next 10 years.
  • The Australian Tourism Labour Force Report produced by Austrade in 2015 concluded there’s a shortage of around 38,000 positions in the tourism sector. Around 123,000 new workers will need to be sourced by 2020. The skilled labour shortage is expected to be 30,000 workers and an additional 63,000 unskilled workers will also need to be found. Across the entire visitor economy, an additional 150,000 workers will be needed to close the gap between labour demand and labour supply.
  • The Commonwealth Department of Employment publishes a list of skilled occupations for which there are shortages or other recruitment difficulties. The most recent data shows 25 occupations which have skills shortages – that is, where employers can’t fill vacancies or can’t meet significant specialised skill needs. Shortages are across a wide range of occupations including bricklayers, hairdressers, glaziers, locksmiths, panelbeaters, arborists, chefs and even pastrymakers. A further 12 occupations have recruitment difficulties or regional shortages.
  • Around 50,000 457 visas are granted annually to fill positions for which there are no suitably qualified locals. Around two thirds of these come from 5 industries:
    • Accommodation and Food Services. The largest single occupation group that 457 visas have been issued to is cooks. As at 30 June 2016 there were over 6,500 cooks holding a 457 visa. The next largest three are Cafe or Restaurant Manager, Marketing Specialist and Chef.
    • Health Care and Social Assistance
    • Information Media & Telecommunications
    • Professional, Scientific and Technical
    • “Other Services”.
  • We’re also importing lots of unskilled workers. Australia grants 200-250,000 working holiday maker visas every year. Holidaymakers are relied on by the agriculture industry in areas where there are supposedly no jobs – like remote mainland Australia and Tasmania. The main reason the government had to backflip on the so-called “backpacker tax” is because it made it very hard for the agriculture industry to find labour.
  • Just last week the Northern Territory Mango Industry Association said that NT mango farmers are flying 30 industry representatives to Timor to urgently recruit workers because they can’t find local workers. 85% of the NT agricultural labour are backpackers. The Northern Territory population has the highest percentage of Aboriginal people of any Australian state and territory. Indigenous communities up there are suffering from high unemployment, chronic welfare dependency and massive socio-economic problems including a family violence epidemic. Employment provides a pathway out of poverty and disadvantage. So why does 85% of NT agricultural workers come from overseas?

The lie that there aren’t enough jobs is easily debunked.

During the recent welfare reform debate, News Corp Australia started a campaign to get 5,000 jobs in 50 days, jobs that would be suitable for young Australians struggling to get their first job. It asked employers to nominate jobs they’d be prepared to offer to inexperienced jobseeker. It found the 5,000 jobs in just 5 days. By the end of the 50 days it had over 10,000 jobs.

I wasn’t surprised. A few years ago Andrew Forrest put out the call to Australian employers to identify 50,000 jobs for Indigenous people who didn’t have work. He ultimately had more than 60,000 jobs committed under the Australian Employment Covenant. This came off the back of Fortescue Minerals’ own concerted campaign to hire Indigenous employees and increase the number of Indigenous-owned businesses in its supply chains. What we saw from the AEC initiative is that finding the jobs isn’t the hard part. The hard part is finding job-ready and willing people to fill those jobs.

Most of the effort required to implement the AEC initiative wasn’t in finding the jobs but in developing the model that would get Indigenous people able to start those jobs and stay in them for at least 6 months. The 6 month retention period is critical. It’s the threshold point between someone falling into unemployment versus staying in the workforce for the rest of their life.

The learnings from the AEC initiative spawned the VTEC model – Vocational Training and Employment Centres. VTECs target Categories 3 and 4 jobseekers – the ones with least skills and greatest barriers to employment – and train them for a guaranteed job.  Participants receive intensive case management addressing all the barriers to employment in each case-managed by an expert in dealing with those issues. VTECs were adopted by the Federal Government in its Indigenous employment strategy.

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When we talk about Indigenous communities often the first picture that pops into people’s heads is the image of a remote, deserted area somewhere in the outback or up north.

Get this picture out of your mind for a minute. We’ll come back to it.

The vast majority of Indigenous Australians – nearly 80% – live in urban and regional areas around the eastern and south-western coasts. Areas with viable populations and real economies. Two thirds of all Indigenous people live in the eastern states, with 59% living in NSW or Queensland.

There are 3 times as many Indigenous Australians living in New South Wales as in the Northern Territory. Around a third of Indigenous Australians live in or around the major cities. The regions with the largest population clusters of Indigenous Australians are Sydney, Brisbane, the Central/North coasts of NSW and Perth. In fact, the region around this venue here in the Gold Coast has one of the largest populations of Indigenous people in Australia.

There are plenty of job opportunities in these areas. There are plenty of opportunities to start up small businesses in these areas. The solutions for Indigenous people who are unemployed in these areas are the same as for other people in populated areas stuck in the welfare trap. Moving them from welfare to work.

Now let’s talk about the other 20% who live in outer regional and remote areas.

Indigenous people make up a disproportionate percentage of the population in these areas. And although the focus is on the gap between Indigenous and non-Indigenous Australians, there is also a growing gap between Indigenous Australians who live in remote areas and Indigenous Australians who live everywhere else.

So let’s go back to that picture of the remote, sparsely populated Indigenous community in the desert or the tropical north. Most people imagine that picture and see a community with no jobs. That’s wrong. Take another look at that picture. What do you see? There’s a lot more there than a few people sitting in the dust and a few dogs.

You see people – several hundred to several thousand. You’ll typically see a school, a police station, a health centre, houses, and public buildings. There’s probably an airstrip which could have commercial flights or charter flights or both. There may be an art centre. There’ll be at least one shop. Bush taxis will come and go. You’ll see satellite dishes, cars, air conditioners, generators, sewerage systems, water tanks, roads, fences, and other infrastructure. There’s probably a Centrelink office and a JSA provider. A community centre. Not far from the community will be a rubbish tip, probably poorly serviced by the local council if at all.

You’ll see wide open spaces. Fertile and resource rich land. Rivers, beaches, waterholes. Beautiful landscapes. Within the region surrounding the community there will be agriculture, mining and tourism going on. Drive anywhere from 1 to 3 hours and you’ll find more of these types of communities. You might even find a larger town with more people and more facilities.

Can you see the jobs now? I can.

Let me list some of the people who are paid to work in, around and for that community. Teachers, police officers, gardeners, road grader, plumber, electrician, builder, carpenter, repairs & maintenance and all sorts of other tradesmen. Cleaners, community development workers, health workers, doctor, dentist, dental hygienist, driver, pilot, air steward, midwife, nurse, waste management, council workers, public servants, mechanic, vet, store manager, retail workers, truck drivers and delivery companies. Not to mention all the jobs in mining, agriculture and tourism available in the region.

Now imagine all the things people currently have to drive to a big town to do but would prefer to be able to do closer to home – like visit a hairdresser, buy clothes, buy a takeaway meal, have a decent cup of coffee.

There may not be enough jobs for everyone in this community. But that’s not the immediate problem. The immediate problem is most of the jobs that do exist are done by people from outside the community – often at great expense because they have to be transported in especially.

The reason local Indigenous people don’t have jobs in remote communities is the same reason there are more than half a million Australians who’ve been unemployed for more than a year despite chronic labour and skills shortages.

It’s not a lack of opportunity. It’s people unable to take up the opportunities.

The sad fact is, most people who’ve been on unemployment or other benefits for more than a year – whether they are Indigenous or not – are unemployable if left to their own devices.

There could be any number of reasons for this.

  • Some have significant barriers to employment such as health problems, addictions, legal problems (which could be anything from driving disqualification to criminal records), low literacy or numeracy, or low skills. These are usually in the Category 3 and 4 jobseekers I mentioned earlier.
  • Some have attitude problems — they don’t want to work, whether due to ­defiance, laziness or a collapse in motivation. Don’t underestimate the collapse in motivation. When I was a young man I was out of work on workers compensation for nearly a year following an accident. When doctors cleared me to work, I was physically OK but mentally I was a mess. I didn’t want to work anymore. I was lethargic. I took lots of sickies. It was a daily struggle and I had to force myself to get to work every day. It took me months of working and hating it before I was happy to be working again.
  • Some won’t get work ­unless they broaden what they’re willing to do. For people who have skills but can’t find work they might need to retrain in something completely different like in a starting an apprenticeship in a trade where Australia has a shortage. It might mean taking an unskilled job like working as a labourer. It might mean taking a seasonal job picking fruit. Even seasonal work is better than not working. It demonstrates that you can hold down a job and be relied on for a start. It provides experience. Its gets you into the habit of working.
  • Some face structural disincentives that make it impractical for welfare recipients to work, through no fault of their own. For example, losing housing entitlements can leave people worse off if they take a job. This can be a big issue for Indigenous people living particularly if they rely on Indigenous housing or other social housing and in remote communities that is often the only housing available. Another problem is that taking a job can mean your overall income reduces and you’re worse off once you take into account lost benefits. I know governments have been looking at structural disincentives. They must continue to do so.

It’s very hard to transition people into work if they haven’t worked for long periods. And let’s face it there are Indigenous communities some people have never had a real job in their life and in some cases whose parents didn’t work. There’s no point just telling these people to keep ­applying for jobs. They’ll often be unqualified and usually be unsuccessful.

Even for unskilled work there are basic things that people need to demonstrate to be suitable for a job. They need to turn up on time every day. They need to be reliable. They need to engage effectively with their boss and their colleagues. Have social skills. Be used to the rhythm and routine of working. Be motivated and enthusiastic on the job.

If you’ve been out of work for a long time or have never worked at all, you will struggle with this. That was my experience after only a year out of work. So I can only imagine hard it is for those who’ve never worked at all and maybe who’ve never seen any adults in their lives work in a real job.

An intensive, case managed approach like the one I described earlier is the only way to help people in this situation. And it works best when there is a guaranteed job that the person is being readied for. Training for training’s sake is a waste of time. Including for the job seeker.

Governments also need to be prepared to breach people if they don’t meet the conditions for their benefits. There has to be a stick as well as a carrot.

Indigenous Australians think white people tell lies.  The whitefella says they’ll be evicted from their public housing if they don’t pay rent – but they never get evicted.  The whitefella says they’ll lose the dole if they don’t do community work – but they keep getting paid even if they don’t turn up. Welfare conditions are set by governments but administered by people at the coalface who exercise discretion.  In reality they give people multiple chances, whether from pity or concern for children or worry about the public reaction or whatever.

People aren’t stupid. If you tell someone there’ll be a consequence but never enforce that consequence they know that you probably never will. That feeds into the lack of motivation and other barriers to working.

Give people every encouragement and assistance, find them a guaranteed job and case manage them so they can take that job and succeed in it. Invest in them. But if there is no consequence for people who resist or refuse to work then those efforts will be in vain.

I don’t have any faith in work for the dole as a solution to unemployment. I understand the theory that it’s better to have people doing something than not. I understand the desire for mutual obligation. And I accept that governments like work for the dole as a means of enforcing compliance. But it isn’t an effective way to move people from welfare to work.

I didn’t like CDEP which was a glorified work for the dole scheme.  It was introduced to replace unemployment benefits for Indigenous Australians in areas where there were assumed to be “no jobs”.  In reality it was rolled out all over the country as a sort of special Aboriginal dole program. The intention of CDEP was for community members to participate in work activities and training by doing things to develop the community and culture in return for their welfare benefits which were also “topped up”.  However, participants had to work for only a couple of days a week and many of the activities undertaken were of no real value or had no expectation of a real outcome. Some activities were things that most people normally do in their communities without expecting or need payment.  Like cutting their own grass.

CDEP masked the true levels of unemployment in remote communities, entrenched the idea that people could get something for nothing and fostered the pretence that people were doing real work when they weren’t.  CDEP didn’t succeed in getting people from welfare to work.  Actually CDEP entrenched welfare dependence even more and discouraged entrepreneurship. I’m aware of examples where Indigenous people were discouraged or prevented from setting up small businesses of their own because it would compete with CDEP activities.

The previous Labor Government replaced CDEP with RJCP under which a single provider was contracted in each region to help people into jobs and build stronger communities. RJCP failed and was replaced with CDP and there are widespread concerns that this is failing too.

I don’t believe any of these programs will close the gap because they centre around welfare dependence and government managed activities. Jobs are generated by commerce and real economic activities. We need to move the focus from welfare centricity to economic centricity.

CDEP, RJCP, CDP and whatever the acronym given to the next lipstick-on-a-pig welfare program – none of these create jobs or business opportunities. None help Indigenous communities to thrive and become sustainable. Indigenous communities need commerce, entrepreneurialism, small businesses and people working in local jobs instead of people from far away who are paid extra for the inconvenience of working there.

Government, bureaucrats and Indigenous controlled organisations that administer many of these communities and the infrastructure in them need to step back and allow people to own their own land, set up businesses that they choose to, allow investment by people from outside the community in local initiatives and activities, encourage competition and let entrepreneurship thrive. They also need to stop treating these communities and the people in them like dependent children; so fearful they’ll fail they give them no oxygen to succeed.  Our communities need to regain the resourcefulness mindset that enabled our ancestors to live self-sufficiently for thousands of years.

The Indigenous Procurement Policy has created massive opportunity for Indigenous people, especially in regional and remote communities. The IPP requires certain contracts be set aside for Indigenous-owned businesses. For these contracts departments must first identify if there is an Indigenous-owned business that can perform the contract at value-for-money. If so, they must offer the contract to the Indigenous business first and don’t need to go through a tender. The mandatory set aside rules apply to any goods or services supplied in remote areas and all contracts worth between $80-200,000.

The IPP is arguably the most effective Indigenous affairs policy enacted by any government in decades. It provides tangible benefits for Indigenous business owners through participation in the real economy; not handouts or sit down money but real income paid for goods and services supplied to government agencies and departments. And it involves no additional cost to government because it had to purchase those goods and services anyway. In the first 11 months of the IPP the Commonwealth awarded 1070 contracts worth $229 million in total. This compares to $6.2 million in 2012-13.

The IPP provides opportunities for Indigenous people in remote communities because so many of the activities that go on in these communities currently are paid for by government. And government is required to procure goods and services for those activities from a local Indigenous business who can provide the services at value for money. So Indigenous person could set themselves up as a sole trader or small business owner and ask government to award the contracts.

For example, if there are public servants or government agencies operating in the community and using the buildings, the government is – or should be – procuring goods and services like cleaning, security, supplies, deliveries and so on. Locals could set up a small business to supply those. And if they serviced all the public buildings within, say, a few hours’ drive of there may be enough to sustain a reasonable small business.

Sometimes people can’t see what they can’t see. Take a look at these communities with fresh eyes and some imagination. JSA providers should be helping people do just that.

The challenge is the capability gap – Indigenous Australians not being job-ready and not enough Indigenous businesses with the skills and experience to perform the contracts on offer. There’s a proven pathway to meet the challenge of Indigenous unemployment and welfare-to-work which I’ve talked about. There’s no proven pathway to meet the challenges for Indigenous businesses lacking skills and experience or as I like to call it “welfare-to-enterprise”.

One promising model is for established companies to partner with Indigenous companies to perform contracts, providing an operational base and skills transfer over a period of time. Both companies benefit; and the Indigenous business can learn, mature and grow.

I know there are many companies who are very keen to do this. And Indigenous people and JSA providers who are helping them find work should be seeking these partnerships out.

Recently someone suggested to me that employers and governments should forget about the Indigenous adults who are unemployable and just focus on the next generation. Get today’s kids to school and educated and they will find work and communities will change.

I only agree with half of this suggestion. Yes, it’s absolutely important that Indigenous kids go to school and get educated. But we can’t forget about the adults and it won’t help the kids if we do. Parents are a child’s first teachers. Children learn from their parents before they ever see the inside of a classroom. A child who sees their parent go to work thinks that is what’s normal and what’s expected of them. It’s never too late to start working.

The critical question isn’t actually how we create more employment opportunities for Indigenous people and communities. The critical question is how can Indigenous people and communities take up the employment opportunities that are already there.

Thank you for listening today. I hope I’ve given you some food for thought.

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