Peter Strong: Why COSBOA likes the federal government’s internship program

The Youth Jobs PaTH program, including an internship, that was announced in the very recent federal budget looks good for employers and potential employees.

What stands out is this is not something driven by the ideological left or right. There is no rhetoric around “forcing unemployed” back into the workforce. There is no stepping back and mollycoddling people. The training is compulsory but the internship is not. Long-term unemployed young people can go looking for work with real intentions and not because they are forced to do so.

There have been outraged comments coming from some that this is an abuse of young people and that employers will rort the program continuously. We don’t believe this will happen. I note that welfare groups have also come out in support of the scheme. It will work.

Firstly, to participate the employer must be seriously considering employing a full time person. They don’t have to guarantee employment but they should be considering the option.

As part of this scheme the initial payment to the employer of an intern for the first 12 weeks is $1,000. That is not a lot of money to have an untrained employee underfoot and dealing with customers. Few small business people would pocket $1,000 just to put themselves through the difficulty of induction and dealing with a new person who unsupervised might scare away customers. Also as a result of the compulsory training the jobseeker should have a good understanding of what is required and expected in a workplace and the employer can have the opportunity to assess whether they will be a good fit. One of the big concerns we hear from our members is that they can’t find young people with the right skills, experience and attitude. No employer will rort the system for $1,000 for all the effort that would be needed.

As part of the program the unemployed person will receive $100 a week extra and will work for 15-25 hours a week for up to 12 weeks as an intern. This is a good approach. It is not uncommon for a business owner to be approached by an unemployed person who will seek to work for them ‘for nothing’ for a few weeks, hoping they can prove themselves and get a paying job. Not many employers would do this as it is illegal and creates problems, but the approach is common. Now the long-term unemployed young person can offer something besides ‘working for nothing’, including protection for the employer as the program is legal, despite what some lawyers may say.

Employers who hire an eligible job seeker as an apprentice will also be able to benefit from up to $10,000 under the program’s Youth Bonus wage subsidy in addition to other incentives of up to $4,000 under the apprenticeships incentives program.

When it comes to the fear of employers abusing this part of the system the facts do not match those fears. There will be some employers who try but the number will be low and we have a regulator – the Fair Work Ombudsman – who is performing very well in that role. The Ombudsman should regulate this and sort out the small number of rorters. We could also make some common sense decisions that limit or inhibit any abuse of the scheme. For example, a business might be limited to providing two internships a year.

The fear that an employer will not intend to employ the person but just keep the subsidy and then sack the person when the subsidy runs out doesn’t hold water. There will be some that try but they will be in the main larger businesses with pay teams to manage the rort. Once again it would become obvious if monitored properly and it can be shut down quickly.  Small business people don’t have the resources to somehow or other churn young unemployed through their business.

There is also the outcome for the interns who do not get a long-term job, for those where the employer can’t justify putting someone on full-time. They now have work experience in a real job. They will have a reference and their confidence should be higher.

The fact the internship is not compulsory also means employers hopefully won’t be annoyed by unemployed people seeking to satisfy requirements from Centrelink, rather than really seeking a job. Now small businesses will be visited by young people that really want a job – otherwise why would they visit the employer?

The real problem in this is the employment service providers who are supposed to administer the program. Employment service providers are government-funded private sector businesses that are paid to get unemployed people into work. The trouble is that many of them see the unemployed as a profit line not the human beings that they are. The staff of these employment agencies are in the main good and are dedicated to helping the unemployed. But they are often paid very poorly and have pressure placed on them from the owners to make more money, not get people into jobs.

This has to change if the internship program is to be successful. We hope that all political parties confront this issue as part of their election policies. Employment services needs fixing if government programs are to be successful.

Overall the internship scheme is a good scheme that should work with minimum problems. To say different is not helpful or constructive and of course is driven by the election – not by the needs of the unemployed.

Peter Strong is the chief executive of the Council of Small Business of Australia


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5 years ago

When I was long term unemployed out of Uni during the recession we had to have, I volunteered unpaid time to get work experience. I would do that again in a heartbeat if I am ever in the same situation again.

I’m sympathetic to those who are unemployed and will do anything to assist where possible, even if it’s just advice. But as the person who is now responsible for hiring firing staff, it’s Initiative and positive attitude I want to see. Not government handouts to employ individuals who are loathed to getting out of bed before the crack of noon.