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Howe is chairing an Australian Council of Trade Union (ACTU) inquiry into insecure work and will hand over its recommendations to the ACTU congress in Sydney next month.
Australia now ranks second behind Spain for the prevalence of non-permanent employees amongst the 30-member countries in the Organisation for Economic Co-operation and Development (OECD) group.
"Yet this was not always the case: Australia was once a model of fair workplace laws and conditions that underwrote a world-leading, equitable society," Howe told the National Press Club in Canberra on Wednesday.
Howe would not be drawn on whether the current federal Labor government had missed a golden opportunity to reverse that fact when it devised the Fair Work Act after scrapping John Howard's controversial WorkChoices regime.
But he agreed that reforms made by the Hawke and Keating Labor governments, of which he was a part, had opened Australia up to the global economy, driving the trend towards more insecure work.
"I must take my share of responsibility for the consequences," said Howe, who was deputy prime minister in the Keating government.
However, at the time Australia had no choice but to modernise and create a more open economy because "internationalisation was not a choice; it was a necessity".
Howe's inquiry has received more than 500 submissions and held hearings at 23 towns and cities in every state and territory.
His inquiries had revealed workers from Wollongong in NSW were shifting to fly-in, fly-out jobs on mines sites after losing their jobs in the local steel industry, separating them from their families for long periods.
Howe backed suggestions to develop of a significant city in north-west Australia, perhaps in Broome, to attract workers to mining areas.
"We're having a kind of narrow, political discussion which is all about scratching people rather than creating a better future," he said.
Australia's settlement patterns weren't ideal, with massive concentrations of populations in coastal areas.
"I think we've been extremely unimaginative," Howe said.
"I think we do have to think much more about the strategic settlement patterns that are appropriate for Australia's future."
Howe said a raft of insecure work - including the increased use of labour hire, short-term contracts, sham contracting and the casualisation of the workforce - was of great concern.
"If there is one story that cuts right across our economy - and it changes in the last 20 to 30 years - it is the story of the growth of insecure work, and of risk and uncertainty being shifted from employers to workers, from employers to taxpayers," he said.
His final report needed to strike a balance between regulating to give workers security and investing to ensure the most disadvantaged employees could meet labour and skills shortages.
Greens employment spokesman Adam Bandt has urged the federal government to support his bill to make job security one of the goals of its Fair Work Act.
"Insecure and precarious working arrangements are damaging lives and families," he said in a statement.