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Issue #1732      May 25, 2016

$4 an hour

PaTH to slave labour

“Jobs and growth” is the parrot-like election campaign three word slogan of the Turnbull government. Bereft of meaning when seen in isolation (as it is meant to be) its real meaning when applied to the Coalition policies is $4-an-hour “jobs” and in turn a big “growth” boost for company profits.

Young recipients of the Newstart allowance will be handed over to businesses to work 25 hours for $100 a week on top of their benefit. That’s $4 an hour.

The Coalition says their latest plan is based on “internships”. It sounds like an opportunity to get a foot in the door of a legal firm or on a parliamentarian’s staff. But it’s not. It’s a scheme to deliver extra cheap labour to big business without the protection of the Fair Work Act. Young recipients of the Newstart allowance will be handed over to businesses to work 25 hours for $100 a week on top of their benefit. That’s $4 an hour. Critics point to the obvious problem – employers will churn these interns, get lots of cheap labour and put downward pressure on wages.

The Liberals wouldn’t have a problem with that. They have launched wave after wave of attack on the trade union movement to achieve the same end – cheap, disorganised and compliant workers. They have allowed the abuse of type 457 visas, destroyed Australian shipping and manufacturing and turned a blind eye to all manner of employer abuse. The young workers would be delivered to supermarkets, cafes, newsagents and all sorts of businesses small and large at well below the national minimum wage of $17.29 an hour.

The government admits the work-for-the-dole scheme has failed. It failed from the point of view of getting people work experience and entry into proper jobs but it succeeded in punishing those excluded from capitalism’s anarchic labour market. It prepared them to submit to the next phase in delivering very cheap wage slaves to big business. Treasurer Scott Morrison describes the new Youth Jobs PaTH (Prepare-Trial-Hire) program as “true work for the dole”.

History of free labour

The PaTH scheme joins a long list of plans to deliver cheap or free labour. In modern times the Liberals proposed the Work for the Dole concept while in opposition in 1987. They trialled it when re-elected in 1996 and imposed it in 1997. Like many of these violations of human and labour rights, it was first applied to Aboriginal communities. In recent times there has been the National Work Experience Program (NWEP), which involved purely voluntary work without pay. The PaTH scheme has fewer safeguards than NWEP, creates an employment contract and a whole new layer of second class workers in Australia.

The scheme is to cost $752 million dollars over the next four years. It is set to go into operation in April next year. Under 25s who have been unemployed for six months will be drafted into it. There is an upfront payment of $1,000 to the employer for providing the 12-week internship. If the business then takes the job-seeker onto the full-time staff, there is a wage subsidy of $10,000 a year. The temptation to churn gets bigger and bigger.

The government and the Department of Employment insist that an employer rorting the system will stop getting referrals but their credibility is lacking. The Coalition has gone to extraordinary lengths to strip away unfair dismissal protections. They are about corporations’ “rights”, not workers rights. Lower corporate taxes and pots of taxpayers’ money for big business are much more their style. An ongoing source of low-wage workers sits nicely with the government’s overall economic approach.

Other sources of slaves

Of course, there are already sources of virtual slaves out there in the labour market. There are backpackers, overseas students, the Airtasker website and others. The Fairfax media and ABC TV’s Four Corners program lifted the lid on the staffing practices of the 7-Eleven chain of convenience stores. Thousands of vulnerable workers were paid extremely low wages, some less than $5 an hour to work in the company in which Prime Minister Turnbull has a financial interest.

The exposure of the mistreatment of workers at 7-Eleven forced an independent inquiry to be established to work out compensation to the workers so shamelessly screwed over. The inquiry was headed up by former head of the Australian Competition and Consumer Commission, Professor Allan Fels. Half of the claims for back pay have been processed and $12 million distributed to ripped-off employees.

7-Eleven has just announced that it will be bringing the inquiry “in-house”; a move Professor Fels has described as “bogus” and a “triumph” for dodgy franchisees. It is worth remembering that Fairfax and Four Corners looked at 7-Eleven as part of widespread super-exploitative practices in one of the only growing parts of the economy. It was a warning that this could be the future for increasing numbers of workers in Australia.

Though the Australian Bureau of Statistics doesn’t keep statistics on the number of interns working in the economy, advocacy group Interns Australia claims their numbers have ballooned in recent years. The European experience, where workers serve as “interns” for years without pay, could be coming to Australia.


The Greens and Labor say they will fight the scheme no matter the outcome of the July 2 federal election. Labor is emphasising that, if the total payment under PaTH was lifted to the level of the minimum wage (a possible “compromise”?), the cost of the scheme would blow out by $478 million. Australian Council of Social Services chief Cassandra Goldie initially welcomed PaTH’s “new approach” but has since added that employers should be required to prove that they had a “real vacancy” before being allowed to access the scheme.

The Greens Adam Bandt is clearly opposed. “The scheme doesn’t just open up young people to exploitation, it may also drive down wages as employers use cheap labour,” he said. Labour market and legal experts agree. Professor Andrew Stewart of the University of Adelaide warned that “If you allowed businesses to use government-paid interns instead of paid workers you are reducing employment, not increasing it.”

“Internships” can be added to a growing pile of threats to wages and conditions. The re-establishment of the Australian Building and Construction Commission, the ongoing persecution of trade unions arising out of the trade union royal commission witch hunt and the stripping away of penalty rates and other measures to slash workers’ living standards are all in play right now.

Workers are resisting and communities must get behind them to defeat growing corporate dictatorship.

Next article – Editorial – Dutton’s desperate race card

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