THE service sector is at risk of losing more than one million jobs during the next two decades as a result of big business outsourcing work overseas, a union report predicts.
One in 10 service jobs could be sent offshore, the report prepared for the Service Unions of Australia reveals today.
The service sector accounts for four out of five jobs and 80 per cent of economic activity in Australia and includes banking, insurance and finance, telecommunications, media and retail, as well as government services such as education, health and welfare.
“A worst case scenario could see Australia losing 1000 of these jobs every week offshore over the next 20 years,” Finance Sector Union national secretary Leon Carter said today. That could lead to a loss of 1.04 million service jobs during that time.
Just over 10.7 million Australians are currently employed in the labour market.
Qantas, Telstra, ANZ, National Australia Bank, Westpac and St George have been identified as the top six companies that have already outsourced work in data processing, IT and call centres.
Banks in firing line
The idea that consumers benefit from a banking job being done more cheaply overseas is just not true, Mr Carter said.
“That hasn’t reduced anybody’s banking fees, it certainly hasn’t brought down anybody’s interest rate.
“I can tell you it hasn’t led to anyone getting paid any more in the finance industry. The only thing that it has resulted in is bigger profits and less jobs.”
IT jobs were likely to suffer the most under a push towards offshoring, but as bigger departments were sent overseas it would also take in myriad other jobs, even down to low-level general clerks.
Mining boom not enough
Michael Spencer from the National Institute of Economic and Industry Research, which prepared the report, said Australia could not just rely on the mining boom continuing for ever.
“You can’t only be reliant on digging stuff out of the ground,” he said.
“Prudent management means managing the risks in a balanced rounded economy.”
Linda White, assistant national secretary of the Australian Services Union, said Australia should not become too reliant on China to boost the local economy.
“If we put all our eggs in the China basket, that is a false economy. There will be booms and busts in mining.
“What we need is a long-term plan that sees Australia as a service sector hub.”
Action needed, says union
Stephen Jones, national secretary of the Community and Public Sector Union, is calling for the establishment of a service sector taskforce, bringing together trade, investment and industry policy. “This is the only way to address this dire prediction,” he said.
The report also recommends country-of-origin legislation for services to match similar requirements for manufactured goods, which would allow consumers to make decisions on which service providers they chose to support.
The report says free trade agreements need to be re-examined to ensure level playing fields for the service sector.
The recently announced tax system review should consider new incentives to retain jobs in Australia, it also said.
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