Detailed Portfolio Reviews
4. EMPLOYMENT, EDUCATION, TRAINING AND YOUTH AFFAIRS
4.1.1 General Assistance
4.1.2 Targeted Assistance
4.2 Higher Education
4.3 Vocational Education and Training
4.3.1 Training Reform
4.3.2 Australian National Training Authority
4.4 Employment
4.4.1 Jobseeker Registration, Assessment and Referral
4.4.2 Employment Participation
4.4.3 Employer and Industry Servicing
4.4.4 Case Management Services (EAA)
4.4.5 Aboriginal Employment and Training Assistance
4.4.6 Case Management Processes (ESRA)
4.5.1 Education Assistance and Income Support
4.5.2 Youth Policy and Support
4.5.3 Aboriginal Education
The abolition of the New Schools Policy for non-government schools from the beginning of 1997 means that, from that time, those wishing to establish new schools will only have to satisfy minimum State/Territory registration requirements. As well, the current policy that restricts new non-systemic schools to Category 6 recurrent funding is to be removed. Under the new arrangements non-systemic schools will be able, if eligible, to access funding from the full range of categories. To help offset the additional cost to the Commonwealth that an increase in non-government school enrolments will cause, the Budget introduces an enrolment benchmark adjustment for schools. This will enable the Commonwealth to recoup some of the savings that State/Territory governments receive when there is an increase in enrolments at non-government schools in their respective jurisdictions.
One possible consequence of the abolition of the New Schools Policy may be the re-ignition of the 'state aid' debate that characterised the late 1960s. This is likely to happen if there is a rapid increase in the level of enrolments in non-government schools and if current budgetary patterns are maintained. For a full discussion of this and related issues see State Aid for Non-Government Schools: The Emerging Debate (Greg McIntosh, Current Issues Brief No. 2 1996-97-Parliamentary Research Service).
Whilst maintaining the real value of capital works funding for government schools the Budget provides for an extra $30 million for capital works funds for non-government schools over the next three years.
The funding provided ($23.4 million over 4 years) for schools section of the Modern Australian Apprenticeship and Traineeship System (MAATS) is to help the State and Territory schooling systems provide vocational education, including an adequate supply of properly trained teachers of vocational education.
The National Literacy and Numeracy Strategy, beginning in 1997, extends the existing Early Literacy program and aims to improve outcomes for students through the development of their literacy and numeracy skills.
A major issue relating to the above two strategies is the degree to which they can be successfully accommodated and administered in the schools themselves. Schools have increasingly been asked to teach and cover a host of curriculum areas and the imposition of additional curricular responsibilities will only add to the 'crowded curriculum' problems that schools already face. This view is confirmed by the Director of Melbourne University's Centre for Applied Educational Research, Professor Peter Hill, who maintains that the curriculum in schools is being 'overcrowded' and that they 'were being forced to cut the time spent on the basic skills to fit in other subjects such as languages, music and physical education' (The Age, 26 August 1996).
Another concern is the effect that an increasing concentration on vocational and work related courses in schools may have on the more non-vocational courses, particularly those in the liberal arts areas. A strengthening of the vocational focus, which has occurred to a large extent in recent years, may skew the curriculum too far towards the vocational side of schooling.
It should be noted that a streamlining of previous targeted programs has been mooted and it is proposed that there be now five main areas of targeted programs-literacy, school-to-work programs, languages, students with special learning needs and quality outcomes.
The higher education system is funded in calendar year programs on a triennial basis under the provisions of the Higher Education Funding Act 1988. The same legislation covers the operation of the Higher Education Contribution Scheme (HECS). The financial year figures contained in the Budget papers are thus composites, comprising half of each relevant calendar year program and do not correspond to the figures contained in the funding legislation or in the annual Higher Education Funding Reports, which express the grants in terms of particular prices levels determined according to indices maintained by DEETYA.
The National Commission of Audit recommended that the Commonwealth assume full responsibility for higher education as well as vocational education and training, introduce a voucher system of funding for both sectors, and permit institutions to charge and set fees. It did not recommend any particular level of funding. The Government has indicated that it will establish a major independent review of higher education policy.
The Government announced its higher education budget decisions in the Higher Education Budget Statement of 9 August 1996. The major decisions were as follows:
Reductions in operating grants
These reductions are equivalent to 1% in 1997, a further 3% in 1998, and a further 1% in 1999 (a cumulative 4.9% reduction by 1999). It should be noted that these reductions are to the forward estimates, rather than to the current grants, and that the 1997 operating grants will actually be higher than those for 1996. The estimated reductions to outlays will be $23.4 million in 1996-97, $118.5 million in 1997-98, $215.5 million in 1998-99 and $266.2 million in 1999-2000. The reductions will be applied through a fixed proportional reduction to the forward estimates of the operating grant of each institution. The impact of these decisions on particular institutions will vary according to previous decisions on the distribution of growth. The range of projected institutional operating grant variations for 1996 to 1998 is from -4.1% (Australian Maritime College) to +9.8% (Central Queensland University), with an average of -1.2% over the system. Institutions will be able to renegotiate their student load, although the Government has indicated that it wishes undergraduate load to be maintained with the cuts being applied to postgraduate coursework places.
Introduction of an increased, differential rate of HECS
The new charges will only apply to students undertaking a new course after 1 January 1997. The new HECS rates for different courses are based on a combination of the cost of courses and the earning capacity of graduates. The rates are $3300 (Arts, Humanities, Social Studies, Behavioural Science, Visual / Performing Arts, Education, Nursing); $4700 (Mathematics, Computing, other Health Sciences, Agriculture, Architecture, Sciences, Engineering, Administration, Business and Economics); $5500 (Law, Legal Studies, Medicine, Dentistry, Veterinary Science). The HECS rate for 1996 is $2442. The reductions to outlays from this move are estimated at $22.6 million in 1996-97, $66.1 million in 1997-98, $101.1 million in 1998-99, and $123.5 million in 1999-2000.
Lower repayment thresholds for HECS
The new repayment levels will apply to all those with an existing HECS debt as well as new students. The reductions to outlays from this change are estimated at $229.9 million in 1997-98, $269.7 million in 1998-99 and $317.8 million in 1999-2000. The following table compares the existing and proposed HECS repayment thresholds as they would be for the 1997-98 income year.
|
EXISTING RATES |
PROPOSED RATES |
|||
|
HEC repayment income ranges |
% rate to be applied |
HEC repayment income ranges |
% rate to be applied |
|
|
$20594-$28494 (voluntary ) |
2.0% |
Below $20701 |
nil |
|
|
Below $28495 |
nil |
$20701-$21830 |
3.0% |
|
|
$28495-$30049 |
3.0% |
$21831-$23524 |
3.5% |
|
|
$30050-$32381 |
3.5% |
$23525-$27288 |
4.0% |
|
|
$32382-$37563 |
4.0% |
$27289-$32934 |
4.5% |
|
|
$37564-$45335 |
4.5% |
$32935-$34665 |
5.0% |
|
|
$45336-$47718 |
5.0% |
$34666-$37262 |
5.5% |
|
|
$47719-$51292 |
5.5% |
$37263 and above |
6.0% |
|
|
$51293 and above |
6.0% |
|||
Sources: DEETYA, HECS information line (Ph.2409732), 12 August 1996; Higher Education Budget Statement 9 August 1996, p.10
Removal of the prohibition on tuition fees for Australian undergraduate students
This will only apply to students above the target number of Commonwealth-funded places, with the number of fee-paying Australian undergraduates being limited to 25% of the total enrolment of Australian undergraduates in any one course. This measure will require amendments to the Higher Education Funding Act.
End of Discretionary Funding Program
The Quality Assurance Program and the National Priority (Reserve) Fund were merged into the Discretionary Funding Program in December 1995 following decisions in the 1995-96 Budget. This was justified on the basis that the objectives of the programs-supporting quality and innovation across the higher education sector-had converged in recent years. Funding for the former programs totalled $116.4 million in 1995, which the former Government reduced to $100.8 million in 1996 with further reductions projected for the remainder of the triennium. The 1996-97 Budget has ended the program (for an estimated saving of $84.6 million in 1996-97).
Increase in research funds
According to the Statement, targeted higher education research programs will increase by $22.4 million in 1997, and by a further $27.6 million in 1998. Under the previous Government's triennial program, funding would have increased by $8.7 million in 1997 and $4.2 million in 1998. The Budget Papers show Sub-program 2.2 (Targeted Research and Scientific Development) as increasing from $356.5million in 1995-96 to $406.4 million in 1996-97. Around $41.5 million of this increase is the result of existing arrangements, rather than decisions of the new government.
The main budget measures under this program are the introduction of the Modern Australian Apprenticeship and Traineeship System (MAATS) and wage top-ups for apprentices and trainees. These measures are to be paid for by reductions in other components of the program, as shown above, with the net result of the budget measures only being reductions, in both nominal and real terms, in funding. Increases in the funding of the program overall, both nominal and real, are being achieved by retaining other commitments made by the previous government, made more feasible because the program was underspent in 1995-96.
The Modern Australian Apprenticeship and Traineeship System (MAATS) and wage top-ups for apprentices and trainees employed under Australian Workplace Agreements and Certified Agreements are introduced under this Sub-program, partly funded by a reduction in labour market programs funds (mainly in the pre-vocational places program area, which will also be replaced, by the Access Program which is for disadvantaged clients). The jobs pathway guarantee is being fully funded by some of the reduction in labour market program funds and a saving in the cost of the review into establishing it. Differences between Program and Sub-program estimates for the same item are because of changes made after the 1995-96 budget and before the federal election. There is a net reduction in funds, in both nominal and real terms, being allocated under this sub-program in 1996-97.
MAATS is intended to be an industry-led system operating under a refined national training framework, building on the successful features of, and subsuming, the Australian Vocational Training System (AVTS).
Wage top-ups will apply to apprentices and trainees whose wages fall below a national level because of the training provisions of the workplace or certified agreements under which they are employed. They will apply only if the apprenticeships and traineeships involve a full-time combination of work and training and are approved for the purposes of the program. The arrangements will not apply to National Training Wage, Career Start, Australian Traineeship System or AVTS training arrangements or to current apprenticeship arrangements.
The Government intends to reduce vocational education and training (VET) grants to States and Territories, abolish the 5% real growth on base recurrent technical and further education (TAFE) funding introduced by the previous government, apply an efficiency dividend to parts of this sub-program and reduce cash balances held by statutory bodies in order to (partly) fund commitments of the previous government. Other commitments made by the previous government are being met, the task being made more feasible because of underspending in 1995-96. On the basis of the 1995-96 budget allocation plus additional estimates the 1996-97 budget funding of this sub-program overall represents only the change due to estimated inflation.
Program 4 is affected by some 15 Budget measures most of which significantly reduce outlays, particularly in labour market program spending. Measures which increase outlays include the tightened job search test and the Forests-Native Forest Industry Structural Adjustment Package which add to outlays by a total of $26 million over four years.
Statements accompanying the Budget contain proposals to terminate the current infrastructure for delivering labour market programs (and many of the current labour market programs) and replace the predominantly public provision of unemployment services with services operated by private providers using public funds under contract arrangements between DEETYA and private employment agencies termed employment placement enterprises (EPEs). The Government's proposed framework involves three key sets of changes:
DEETYA will let tenders and manage contracts for the delivery of employment placement services; provide infrastructure support to the market, including a national vacancy database; monitor performance and evaluate outcomes achieved and report to the Government regularly on performance and effectiveness issues.
The Ministerial Statement Reforming Employment Assistance: Helping Australians into Real Jobs (AGPS, August 1996) sets out a timeframe for introducing these measures, which it hopes will be fully functional by December 1997.
Programs to be terminated include JobSkills, Landcare and Environment Action Plan, New Work Opportunities, JobTrain, elements of the program for Aboriginal and Torres Strait Islanders (TAP) SkillShare, JobClubs and Mobility Assistance. The Formal Training Assistance program will be returned to the Department of Social Security.
Programs which will continue are grouped under Support for Indigenous People, Entry Level Training, Regional Assistance (Office of Labour Market Adjustment), and other programs including the New Enterprise Incentive Scheme, Workplace English Language and Literacy, Advanced English for Migrants and Bridging Courses for the Overseas Trained.
Government Service Delivery Agency
The Government service delivery agency will provide the following CES functions:
The agency will also provide access to:
All other employment placement functions will be contracted out to EPEs, including the corporatised public EPE, in a fully contestable market for employment placement services.
Tender specifications would be prepared taking account of expressions of interest received. This may involve differing specifications and contractual models for different markets or regions.
It is proposed to assist about 630 000 clients (731 000 1995-96) with about $1.3 billion from 1998 onwards, and of this, about $1 billion annually will be available for employment placement activities. The funding for these activities will come from 'cashing out' the funding for current programs.
Residual role for public employment services
There are two main circumstances in which special arrangements may be required:
Current providers
Providers of labour market assistance (eg JobSkills brokers) will need to make major adjustments. There will no longer be a guaranteed level of dedicated funding for particular labour market programs, such as the training programs conducted by SkillShare organisations, TAFE institutions and a wide range of private training providers.
Contracts and purchasing guidelines will focus on desired outcomes, avoiding prescriptive input controls. Detailed programme guidelines will be a thing of the past.
EPEs will report to the new service delivery agency any breach of activity test requirements They will also be responsible for determining activity test requirements for individual jobseekers who are receiving intensive employment assistance and for monitoring compliance with those requirements. The agency will determine appropriate sanctions for activity test breaches.
Success in the new market will depend on EPEs' performance in placing their clients into real jobs. Payment arrangements and incentives will be designed accordingly. A schedule of fees has been suggested as indicative of the remuneration need to provide 'labour exchange services' (ie chasing employers for positions). These commence at $250 with an upper limit of $10 000 for hard to place clients.
Commonwealth Employment Staff
Some staff employed in the CES and its case management arm, Employment Assistance Australia, might become employees of the new public EPE. Some CES staff might transfer into the proposed service delivery agency. Some would remain with DEETYA and some might seek placements in the new EPEs.
The Employment Services Regulatory Authority (ESRA) will cease operations by the end of 1997.
Staff entitlements
Public servants affected by these changes will have rights and entitlements in accordance with legislation and applicable awards and agreements. This will include a right of return to DEETYA of any of its staff who are transferred to the public EPE and are then made redundant.
Current APS staff recruited by the service delivery agency will continue to be employed as public servants. Staff of the public employment placement enterprise will be employed outside Pubic Service conditions, in order for the public EPE to operate on equal terms with its private and community competitors. Current APS staff who take up employment with the public EPE will have rights and entitlements in accordance with legislation and applicable awards and agreements
Costs and benefits of change
Most of 1996-97 will be involved with forming the service delivery agency, corporatising the Commonwealth Employment Service and investigating the potential size of the employment placement market. It is not clear to what extent the unemployed will seek, or be required to seek employment placement through an EPE. Current legislation does require an activity test to be satisfied. There is also the potential for EPEs to assess the unemployed so as to seek as clients those easiest to employ, thus leaving a core of unemployed to perhaps the public sector. On the positive side the scheme intends to assist a large number of clients, when fully operational, with about half 1995-96 expenditures.
The main functions of the sub-program are Commonwealth Employment Service operations, including job-brokerage and client servicing functions, general labour market intervention, the Disability Reform Package and the Jobs, Education and Training program. Some of these functions will be delivered through the new government service delivery agency from mid-1997, while other functions will be delivered through the new employment placement market. Thus significant functions of the Sub-program will either alter or be wound up over 1996-97.
Of the 15 Budget measures affecting Program 4, 10 measures apply to Sub-program 4.2, with the reduction in labour market funding measure alone, reducing outlays of the Sub-program by $469.7 million in 1996-97. The sub-program is the main delivery mechanism of labour market program placments.
It is forecast that due to the 32% reduction of funds, placements under the Sub-program should number 439 745 (672 545 in 1995-96) and that the focus in future will be on providing the best job results, principally through traineeships, apprenticeships and wage subsidies for business. Wage subsidy placements are expected to increase while the brokered 'work experience' programs will be reduced by 70 000 places.
The program provides employer incentives to take on new employees, specifically through apprenticeships and traineeships. It provides regional assistance packages to assist employment in remote / depressed areas and it operates the NEIS scheme which allows people to start up new businesses.
The sub-program also provides certain high quality cost-effective recruitment measures for employers. Funding for the Training and Skills (TASK) program, Regional Employment Strategies, and Entry Level Training (ELT) schemes has been reduced. The Group Employment Program will be abolished. Area Consultative Committees will be replaced by Regional and Community Employment Councils under a pilot program.
Apprentice subsidies under ELT will be reduced to $2500, as the current completion bonus will be abolished. NEIS will be retained although it is expected to assist 7000 people into small businesses, down from 10 190 in 1995-96. Although the budget for the program shows an increase, the Portfolio Budget Statement attributes this to cash flow decisions taken by the former Government. Staffing is expected to decline.
The sub-program provides case management services to unemployed people through approximately 2000 case managers. In 1995-95, 457 000 people were assisted. Case management is delivered through Employment Assistance Australia, located within the CES. Savings from other programs have been applied to this sub-program to provide for some additional staffing in certain functions, however staffing overall has been reduced this year by 20%. The DEETYA report Working Nation: Evaluation of the Employment, Education and Training Elements (July 1996) observed that case management services were increased under Working Nation (1994) to tailor employment-related program assistance to the needs of individuals providing better linkage to employment opportunities. Due to a number of pressures on case managers, the report was unable to conclude that case management had been effective.
Two programs deliver labour market programs to Aboriginals and Torres Strait Islanders. This program is one and is known as TAPS. The Aboriginal and Torres Strait Islander Commission (ATSIC) administers the Community Development Employment Projects scheme (CDEP) which tends to be a more narrowly focused 'work for the dole' scheme, compared to training and employment programs available under TAPS.
Of the $8.1 million reduction, $6.4 million is attributed to overriding the cash flow decision of the previous Government, however the overall allocation of $45 million correlates to earlier forward estimates for the Sub-program. About 12 000 Aboriginals and Torres Strait Islanders are assisted through the Sub-program with positive outcomes (50.5% in 1995-96) being on par with other mainstream programs.
The Employment Services Regulatory Authority regulates the case management between the private sector (contracted case managers) and the public case management service provider Employment Assistance Australia. ESRA has benefited from cost supplementation and indexation arrangements so that its budget will increase, however the Ministerial Statement Reforming Employment Assistance states that ESRA will cease operations by the end of 1997 as DEETYA assumes its role as purchaser in the new employment market.
This sub-program provides assistance to students through AUSTUDY and the Assistance for Isolated Children Scheme (AIC). The major changes to AUSTUDY were as follows:
These changes will require amendments to the AUSTUDY Regulations under the Student and Youth Assistance Act 1973. Such amendments are disallowable instruments.
The budget also proposes to increase the levels of the non means-tested Correspondence Allowance and Basic Boarding Allowance available through the AIC. The former will rise from $523 to $1000 (primary students) and from $1046 to $1500 (secondary students). The Basic Boarding Allowance will increase from $2500 to $2900 p.a. These measures will cost $2.4m in 1996-97 rising to $4.9m in 1999-2000.
The Government has proposed a rationalisation of income support programs for young people (ie. Youth Training Allowance, Job Search Allowance and AUSTUDY). It will make a decision on the shape of the Youth Allowance following consultation with the public and interested community groups. In conjunction with the Budget papers, the Government has released Youth Allowance: A Community Discussion Paper which deals with issues raised by the proposed rationalisation and which will provide a basis for consultation.
The Job Placement, Employment and Training (JPET) program, which was wound up by the previous Government in June 1995, is to be re-established at a cost of $11.3 million per annum. JPET, which will be fully operational by 1 January 1997, is designed to assist young people who are homeless or who are at risk of becoming homeless. The program is expected to assist approximately 4000 young people via some 80 to 100 community sector providers.
Another significant Budget measure under this sub-program is the proposed establishment of the Green Corps (Young Australians for the Environment) at a cost of $41.6 million over three years. The Corps is designed to give young people aged 17-20 years a full-time job of between six months to a year on community based environmental projects in rural and remote areas. All young Australians in the relevant age range will be eligible for placement under the program and it is envisaged that approximately 3500 people will participate over the three years for which it is currently funded. Participants in the Green Corps will be paid a training allowance of between $149 to $246 per week depending on the number of school years completed and time since leaving school. The program is expected to commence in December 1996 and its funding is not dependent, as are some other environmental programs, on the partial sale of Telstra.
A longer term proposal mentioned in the context of the Budget is plans for a Youth Allowance. The Youth Allowance, planned for introduction in January 1998, would consolidate the main existing allowances (for example, AUSTUDY, Youth Training Allowance, Job Search Allowance and ABSTUDY) applying to 16-20 year olds and for full-time students up to 25 years of age. The Government has released Youth Allowance: A Community Discussion Paper on the proposal for the Allowance and full details of its operation and effect will be released after consultation with the wider community.
A further youth measure (Youth Homelessness Pilot Programmes) is described at Health and Family Services (Sub-program 4.2).
Part of the increase in funding in this area derives from a decision to follow through with the previous Government's decision to increase spending on the Aboriginal Education Strategic Initiatives Program (now called the Indigenous Education Strategic Initiatives Programme or IESIP) and another part of the increase derives from a Government commitment in mid-April 1996 to support the funding increase for the period 1995-96 to 1998-99 which the previous Government had made as part of its response to the 1994 National Review of Education for Aboriginal and Torres Strait Islander Peoples.
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