Unemployment is the biggest challenge we face. It is the biggest challenge governments face all round the world. In America, unemployment has almost doubled in the last 18 months and now stands at 9.4 per cent-the highest it has been in the last 25 years. Australia is doing better than most. Unemployment is lower here than in any other major advanced economy bar Japan, but there is a tough road ahead. Unemployment is projected to rise.
When workers lose their job it does not just hurt the individual and their family, it hurts our economy. We lose skills and experience-the skills and experience that we need to come out the other side of the global recession stronger and more competitive than before. We cannot stop the global recession hitting us, but we can reduce its impact. That is why the government is rolling out 35,000 job sites across the country over the next 12 months, providing tax breaks to small business and introducing this legislation, which is part of the Jobs and Training Compact announced by the Prime Minister in April this year.
The bill before us does two things. First, it introduces a temporary training supplement. This payment will be made to people who are amongst the most vulnerable to long-term unemployment: recipients of Newstart and the parenting payment who have not completed year 12 or an equivalent qualification or those who have a trade qualification that needs to be upgraded. The training supplement of an extra $41.60 a fortnight will be made to Newstart and parenting payment recipients without a year 12 or an equivalent qualification who start an approved course of study or training between 1 July 2009 and 30 June 2011. It is estimated that 50,000 people will benefit from this. Second, the bill changes the participation requirements for youth allowance (other). To obtain youth allowance (other), young people without year 12 or equivalent qualification will now need to participate in education and training. The purpose is to encourage young people to remain in study or training until they complete a basic educational or training qualification-to make sure young people are learning or earning.
The logic behind these reforms is simple. Unemployment hits some communities and some groups harder than others. Young people and workers with low skills are particularly vulnerable. Since September last year unemployment amongst young people aged 15 to 24 has grown at a faster rate than it has amongst the rest of the population. The more skills and education people have, the more likely they are to be employed and the more they are likely to be paid. The former Minister for Employment Participation made this point in his second reading speech:
By age 24, only seven out of 10 young people without a year 12 or certificate III or IV qualification are in further training or employment. By contrast, nine out of 10 young people with such a qualification are in further training or employment.
In other words, skills count. Qualifications are important. The lesson from the recession of the early nineties is that youth unemployment rises quickly and can take a long time to fall. Then, one in three young people who had not completed year 12 were unemployed. They were three times more likely to be unemployed than someone who had completed year 12. These are the facts.
The long-term consequence of this is entrenched disadvantage. Long-term unemployment has a devastating impact on individuals and on families. It also has a long-term impact on the productivity and competitiveness of our economy. That is why this bill is important. It is part of a comprehensive strategy to reduce the risk of long-term unemployment and build the skills that we need to compete in a world beyond the global recession; to keep Australia working. I commend the bill to the House.