We Should Be Cautious of the Government’s PaTH Scheme

Last nights business-heavy budget didn’t really address many of the problems that Australian millennials are worried about, or facing right now.

There was an ominous silence around university deregulation and housing affordability is still a glaringly absent from the Turnbull Government’s list of priorities. We are, however, looking forward to both of these becoming pertinent topics in the upcoming federal election.

But there was one proposed program geared towards youth employment that while beneficial, has the potential for abuse by employers.

It’s called Young Jobs PaTH (Prepare, Trial, Hire) and it aims to help 120,000 young Australians enter to workforce.

The idea is that people under the age of 25 that have been out of work for six month or more can opt in to an internship program which includes six weeks of “intensive pre-employment skills training.” Available to job seekers from April next year, the program will focus on developing their ability to work in a team, their presentation and computer literacy.

This is the first stage of the scheme, the second involves a workplace trial.

“Job seekers and businesses, with the help of jobactive providers, will be able to work together to design an internship placement of 4 to 12 weeks duration, during which the job seeker will work 15 to 25 hours per week,” said Treasurer Scott Morrison during his Budget speech.

Applicants are paid $200 each fortnight in addition to their regular welfare payments. The workplace is not required to pay the job seeker and in fact, receives $1,000 for taking them on. When it all boils down, $200 a fortnight over 50 hours of work equates to $4 an hour. A little rough, don’t you think?

The third and final stage of the program is Hire… hopefully.

If the company is happy with the worker’s performance, they can choose to hire them. In return, they are eligible for a “Youth Bonus wage subsidy” between $6,500 and $10,000 depending on their “job readiness.”

The big question is; what measures will be put in place to protect vulnerable job seekers from being taken advantage of? While I understand that there needs to be incentives for businesses to take on the risk, it seems overly generous from that perspective. The business is being paid to accept free labour with no commitment to hire.

It is, however, pleasing to see the Turnbull Government taking an active role in minimising the high youth unemployment rate in Australia. Whether this program will be an effective remedy may not be known until it kicks off next year.

Peter Strong of COSBOA agrees that more should be done to address the needs of job seekers, rather than employers.

“The Youth Pathways outlined in the budget go some way to helping focus on our needs and the needs of the unemployed person, but more needs to be done in VET (Vocational Education and Training).”

Furthermore, this program is unlikely to benefit university graduates that are struggling to find work in their chosen field, with only 60% of graduates able to do so.

Providing adequate measures are put in place to protect young job seekers, this could be a decent first step towards lowering youth unemployment, but I’m not sold on it just yet.