State and Territory Labour Market Programs 1996-97
Steve O'Neill
Economics, Commerce and Industrial Relations Group
24 June 1997
Contents
Introduction
The Commonwealth's employment agenda
Definitions and Background: Sources of LMP Spending
State and Territory Spending on Labour Market Programs
in 1996-97
NEW SOUTH WALES
VICTORIA
SOUTH AUSTRALIA
QUEENSLAND
WESTERN AUSTRALIA
TASMANIA
NORTHERN TERRITORY
AUSTRALIAN CAPITAL TERRITORY
Assessment and summary
Endnotes
APPENDIX
Regional Unemployment Rates, April 1997
The social and political consequences of unemployment have generally
been such as to make the solution of unemployment a priority concern for
governments at all levels. Governments have responded to rising levels
of unemployment by adopting strategies such as stimulatory economic measures,
make-work schemes and preparing those unemployed for work. The response
of governments has often depended on the particular failure evident within
the national or local labour market.
The purpose of this paper is to outline the unemployment response of
the States and Territories, evidenced in State and Territory labour market
programs (LMPs)-those which parallel Commonwealth LMP. These programs
are presented in tabular form with a brief description, their spending
allocations are identified and any relevant trends are noted. The evidence
is that State and Territory LMP spending has declined recently. The context
of this review is one of much change in the primary role of Commonwealth
unemployment assistance. The focus is now on reducing the level of resources
and using these resources more effectively. This change in the Commonwealth's
direction may have implications for employment assistance measures adopted
by the States and Territories.
The 1996-97 Federal Budget reduced future allocations to Commonwealth
LMPs by approximately $1.7 billion, or 24.2 per cent over the 1995-96
projections.(1) It is intended that the reduced costs of employment assistance
will be facilitated by introducing a predominantly privately provided
employment services market, funded by government, but which will largely
replace the various employment assistance services mainly provided through
the Commonwealth Employment Service.
A Ministerial Statement, Reforming Employment Assistance: Helping
Australians into Real Jobs, which accompanied the 1996 Budget, proposed
dramatic changes to the Commonwealth's provision of employment services.(2)
These changes have been canvassed in other Department of the Parliamentary
Library publications.(3) Briefly, it is proposed to form a Commonwealth
Services Delivery Agency (CSDA). The CSDA will provide most of the services
currently provided the Department of Social Security in respect of benefits
administration and those provided by the Commonwealth Employment Service
in respect of unemployment registration and job search functions (as well
as providing some services from other government agencies) in a 'one-stop
shop'. The CSDA legislation became effective in April 1997.
The current LMPs are to be 'cashed out' over 1997 and the funds used
to contract service-providers to provide training and other forms of assistance
to registered jobseekers as well as seeking employment opportunities for
these people. Private or community based enterprises are to be called
employment placement enterprises (EPEs) and a public employment placement
enterprise (PEPE) will also compete in this market. For the service, the
EPE/PEPE will be paid an agreed fee by the Government, depending on the
factors surrounding the placement. Legislation drafted to establish and
support the operation of the new employment services market also includes
the Social Security Legislation Amendment (Work for the Dole) Bill
1997, the Social Security Legislation Amendment (Activity Test Penalty
Periods) Bill 1997 and the Reform of Employment Services Bill 1996. The
start-up for the new system originally scheduled to commence from December
1997 has been put back to March 1998.
Forward estimates show that following the transition to the new system,
budget allocations for employment services should fall to approximately
$1.2 billion annually within three years. The 1997-98 budget for DEETYA
employment programs appears to be on track to meet this target, at $1.57
billion. However DEETYA's employment program (ie, Program 4) no longer
includes funding for the apprenticeship and traineeship subsidies/assistance
program, which in part may explain the smaller figure.(4) These allocations
have been transferred to Program 3, Vocational Education and Training.
One stumbling block to the introduction of the Commonwealth's legislation
is that some States have laws prohibiting the charging of potential employees
for job placement. This issue highlights the point that the policies of
the States and Territories can be relevant to the operation of the Commonwealth's
proposed employment service scheme. A related issue concerns how the States
and Territories will respond to this new employment assistance system,
and whether they will attempt to provide their own LMPs or be pressured
by local employment considerations to extend current programs or tie assistance
measures into the emerging private system of employment assistance.
Unemployment Projections
The dimensions of unemployment show little sign of amelioration. Certain
economic forecasters including the Canberra-based economics consultancy
firm, Econtech, estimate the unemployment rate to fall to approximately
7.5 per cent by 1999 and thereafter rise to 8 per cent into the new century.(5)
The actual numbers of unemployed will also be determined by the growth
in the labour market over the next few years; indeed, the initial combined
impact of the aforementioned Bills is likely to be an increase in labour
market participation since the opportunities for receipt of benefit without
active jobsearch should be severely limited. The size of the labour market
is estimated by the Australian Bureau of Statistics to rise to 10 million
by 1999 (currently it is about 9.2 million). The May 1997 (trend) unemployment
rate was 8.7 per cent, or 809 200 people.
Over the next few years it can be assumed that the numbers of unemployed
will remain close to the current level, even allowing for a possible small
fall in the future unemployment rate.(6) In short, these projected unemployment
levels suggest that States and Territories are likely to face pressures
to extend their LMPs, particularly in view of regional unemployment levels
(see the Appendix for May 1997 regional unemployment data).
Minister Vanstone's 1996 Budget Statement called for community responses
to the detail of the new employment market proposal. A report of these
consultations has now been produced.(7) One of many concerns noted is
the difficulty of effectively delivering assistance to those in remote
and rural areas, where the incentives for private service deliverers to
provide job placement services may be outweighed by the costs of assistance
and the lack of employment opportunity.(8) Thus some States and Territories
may be obliged to expand (or re-commence) employment assistance projects
due to a perception that the new Commonwealth system may not be as effective
as originally envisaged. It is therefore helpful to review those LMPs
provided by the States and Territories.
The States and Territories often seek to enhance regional employment
opportunities through their budgets. However stimulation measures cannot
necessarily be classified as programs to assist the unemployed. A useful
guide as to programs which can be classified as labour market programs
can be found in a companion volume of background papers to the 1993 report
of the (former) Prime Minister's Committee on Employment Opportunities
Restoring Full Employment (see background paper 4A, 'State and
Territory Government Labour Market Programs').(9)
'State and Territory Government Labour Market Programs' included as
LMPs those which had the following characteristics:
- employment programs, including subsidies to employers to hire unemployed
people, support for unemployed people to start their own businesses
and direct job creation
- training programs for the unemployed
- job search, relocation and structural adjustment programs.
It was estimated that in 1993-94 State and Territory spending on LMPs
would amount to $60 million. By comparison, in that year Commonwealth
spending on these programs amounted to almost $1.3 billion.
The main element of LMPs is that they are targeted at unemployed people.
The States and Territories (and the Commonwealth) spend considerable sums
on VET. While VET programs may be accessed by unemployed persons, they
are in the main not the key beneficiaries. Thus, the issue of classifying
measures as LMPs would seem to rest on whether these are targeted to assist
unemployed persons. Subsidies to employers to take on apprentices and
trainees are in this paper treated as LMPs, although these arrangements
can also be seen as VET programs.(10) Similarly, schemes to assist with
employment retention or with the costs of apprentices/trainees to travel
to attend TAFE courses would not be counted as a labour market program,
yet the costs of such schemes are often regarded as 'employment assistance'
measures.
As the States and Territories can determine their own LMP and set out
criteria for assistance, problems of identifying assistance measures as
LMPs become complex - an issue identified in the 1993 background paper:
Because of definitional differences it is difficult to determine total
State and Territory government expenditure on LMPs. However it seems unlikely
that State and Territory governments would provide more than about 10
per cent of total funding for LMPs for unemployed people in Australia.(11)
This statement also represents an important qualifier to the 1993-94
paper's estimate of State/Territory labour market program outlays totalling
$60 million. Ten per cent of labour market program funding for 1993-94
amounts to over $130 million, significantly exceeding the $60 million
figure. Thus, the authors have allowed for the possibility that some spending
may have been provided for unemployed people in measures which States
and Territories did not include within their LMP allocations, and this
would appear to be still the case.
The 1996-97 data on State and Territory labour market spending has been
compiled for this paper with the assistance from State and Territory administrators
of employment assistance programs. Without their help it would be very
difficult to provide the following tables. Nevertheless, there remain
problems of ensuring that all programs administered by the States and
Territories have been reflected in these tables. Costs of administration
are generally not included. The 1993-94 State and Territory labour market
program allocations shown (for comparison purposes) in the following tables
have been taken from Restoring Full Employment: Background Papers.
Program Objective Nature of Target Group Budget 1996-97
Assistance
Local Employment Training and Funding for small Disadvantaged *
and Training employment projects run by persons
Projects opportunities for community
disadvantaged organisations
persons
Disability To improves equity Information and People with *
Support Programs of access recruitment disabilities
assistance for
positions in
government
agencies and loans
to acquire
furniture and
other aids
Aboriginal To increase Placement Persons who *
employment and Aboriginal and opportunities identify
training schemes Torres Straits sought in the themselves as
Islander (ATSI) private and public ATSI
representation in sector
all areas of NSW
employment
Landcare and To administer LEAP Place persons into *
Environment projects LEAP and (New Work
Action Program Opportunities
(LEAP) (NWO)
Adult Migrant Language and Provision of Newly arrived *
English Service literacy training English language immigrants and
(AMES) courses through job seekers
AMES centres,
includes
'Skillmax'
Community-based To provide access Total all
employment to counselling, programs
programs vocational, skills 1996-97:
and personal $19.95m
development (Total
1993-94: $31.8
million)
Source: Annual Report 1995-96 NSW Department of Training and Education Co-ordination
and NSW Budget Estimates Vol 1 Budget Paper No 3, 1996.
Note: * denotes that all programs listed are funded from the overall allocation
shown at the foot of the table.
Program Objective Nature of Target Group Budget 1996-97
Assistance
Community To increase Pre-employment Young unemployed *
Business employment services, adults (18-24);
Employment outcomes for employment unemployed mature
(CBE) unemployed youth, placement and post aged persons (40+).
mature-aged placement support unemployed people
persons and from a nonenglish
migrants speaking background
Target To develop and Provision of Community based *
Innovation establish one-off seed organisations
Program innovative funding to
projects which community-based
address the organisations
results of local
needs of local
labour markets
StreetLIFE To revitalise Harnessing a Rural and *
shopping centres partnership between metropolitan street
and public places local government, shopping centres
to generate local traders, community
employment organisations and
opportunities stake-holders to
help create
sustainable jobs
Ethnic To coordinate Multicultural Victorians from *
Services matters affecting Employment diverse cultural
Unit Victorians from Information backgrounds
diverse cultural Campaign and
backgrounds and overseas
their access to qualifications
the workforce assessments
Labour To foster Provision of labour Victorians and *
Market employment market information, overseas business Total
Advisory opportunities by recruitment considering 1996-97
Service helping business assistance expansion and all programs
link into the relocation into and $10.3 million
range of within Victoria (Total
government 1993-94:
employment and $9 million)
training
services/assistance
Source: Labour Market Branch, Victorian Department of State Development
Note: * denotes that these programs are funded from the $10.3 million allocation.
Program Objective Nature of Target Group Budget 1996-97
Assistance
Regional Address seasonal Information/Advice Casual workers. $150 000
Labour labour shortages in 50% youth target
Exchange rural areas
DOME Don't To place mature age Funds 1 000 places mature age $150 000
Overlook unemployed in jobs in 1996-97 through unemployed
Mature community-based
Expertise brokers
Job Shop To find employment A community based 15-25 year olds $150 000
opportunities for employment
young unemployed brokerage scheme
targeting young
unemployed people
and school leavers.
Operates through
service clubs and
similar
organisations
Community at Assist local Grants to local Local $100 000
Work communities to communities communities,
create innovative emphasis on new
employment schemes business creation
and economic
growth
IT Skills To improve skills Funding for Training in base $140 000
Advantage competitiveness of initiatives which level IT
unemployed people develop IT skills functions for
in industries which targeted
are likely to be positions
major users.
KICKSTART Place people in Employment/training Unemployed, $1 800 000
employment at a assistance; particularly
local level operates through those from
regional disadvantaged
development boards groups
KICKSTART To enhance Employment and 15-19 year olds; $550 000
for youth employment training assistance focus on those
opportunities for from a
young South disadvantaged
Australians background
Employment To develop Labour hire Generally longer $450 000
Broker employment companies are term unemployed Program to
Scheme opportunities funded to provide cease 30/6/97
minimum of 20 hours
work for up to 52
weeks
Self Starter To assist in Training in 18-25 year olds $120 000
creating business skills and wishing to start Total 1996-97
opportunities for 'start-up' a business all programs:
self-employment financial $3.6 million
assistance (Total
1993-94 $1.5
million)
Source: South Australian Department for Employment, Training and Further
Education
Program Objective Nature of Assistance Target Group Budget 1996-97
Youth Employment To improve Employment Unemployed -
Service employment orientation, skill 15-21 year olds
outcomes training, placement
assistance
Community Jobs To improve Community-based Unemployed $510 000
and Training employment projects which offer people
Programs outcomes job placement,
training enterprise
activities and
preparation for work
Self-Employment To assist in Provides loans of $6 Unemployed $43 000
venture scheme creating 000 and advice; people Total all
opportunities complemented by 1996-97
for Commonwealth NEIS programs:
self-employment program $550 000
(Total
1993-94:
$4.9 million)
Source: Queensland Department of Training and Industrial Relations
Note: The 1996 Queensland Budget discontinued funding for future labour
market program spending. The 1996-97 expenditures represent funding commitments
to unemployed clients and community organisations incurred prior to the
Budget decision.
Program Objective Nature of Target Group Budget 1996-97
Assistance
State Employment To assist small Information, Unemployed $3.875m.
Assistance business and advice and grants people (Total
Strategy. industry to 1993-94:
operate more $6 million)
effectively by
efficiently
matching job
seekers to
employment
opportunities
Source: Western Australian Department of Training
Note: The WA State Employment Assistance Strategy has absorbed Employment
Equity and Youth Action Schemes and the Community Youth Link program no
longer exists.
Program Objective Nature of Target Group Budget 1996-97
Assistance
Tas Jobs for To foster Grants to Young $267 000
Youth to be employment employers to take unemployed
phased out (no opportunities by on eligible young
new applications encouraging people
accepted since employers to
July 1994) create additional
positions
Local Employment To promote Grants to Unemployed $500 000
Initiatives employment community based people in
generating organisations local areas
industries
Tasmanian To encourage the Assistance to Young people $567 000
Trainee and employment of employers of (grant
Apprentice apprentices and apprentices or component)
Incentive Scheme trainees trainees either $3.12m.
through payroll (payroll tax
tax rebates or one rebate
off grants component)
Restoration of To provide Funding Unemployed $350 000
Degraded Mineral employment people Total all
Lands Program opportunities programs
1996-97: $1.68
million, or
$4.8 million
for grants and
concessions
(Total 1993-94:
$880 000)
Source: Tasmania Development Resources
Note: the scheme to allow payroll tax concessions for employers to take
on apprentices (apart from grants) was introduced in July 1994
Program Objective Nature of Target Group Budget 1996-97
Assistance
Innovative Provide Employment Unemployed $100 000
Programs employment Assistance (Total 1993-94:
outcomes $250 000)
Source: Northern Territory Employment and Training Authority
Note: In May 1997, the Northern Territory had the lowest unemployment rate
of the States and Territories at 6.4% (trend)
Program Objective Nature of Assistance Target Group Budget 1996-97
estimate
Youth To create new Job creation and Unemployed young $165 000
Joblink medium to monitoring service. people under 25
long-term jobs for Joint endeavour with years of age
young people in the ACT Chamber of with a secondary
private sector, Commerce and group including
match prospective Industry women wishing to
employers to re-enter the
positions and workforce and
provide them with older men.
support during the
settling in phase
Annual To improve the Organisations in the Priority is $290 000
Employment employment and ACT are invited to given to short
Grants training options of apply for funding on to medium term
unemployed people a one-off annual unemployed,
in the ACT basis for projects those at risk of
where they have unemployment and
identified areas of people seeking
training need and to re-enter paid
have developed employment (or
appropriate programs undertake
training)
Apprentice- To lift the first Provides employers Building and $188 000
ship Wage year with a subsidy of construction
Subsidy apprentice/trainee 50% of the wages and trade employers
Scheme intake in the on costs ($7 500) of
building and taking on an
construction additional first
industry year apprentice in
the building and
construction
industry. Available
for 1997 calendar
year
New Future To provide older Provides 5 weeks Priority to $16 000
in Small unemployed people training in people 40+
Business who have been made management; a
redundant business experience
opportunity to and market research.
establish a 12 months mentoring
business is provided
Youth To develop Combines outdoor Unemployed young $21 000
Selfstart attitudinal change activities with job people (15-25)
Pilot in unemployed youth search training. who demonstrate
Program a commitment to
job finding.
Participants may
be referred to
the Youth
Joblink program
Youth To provide Employment for a Priority to $250 000
Traineeship temporary entry period of 12 months; teenagers 15-19
Scheme level employment in no guarantee of who have been
the ACT public employment unemployed for
service for more than 6
unemployed months
teenagers
Graduate To provide an entry on and off the job Unemployed $722 000
Administrat pathway to ACT training for 26 tertiary
ive public sector positions in the graduates
Assistant ACTPS.
Program
Entry-Level To provide entry On and off the job Long term $580 000
Training level training for training in clerical unemployed
program trainees and and technical areas people
apprentices (46 positions funded
in the ACT public
service)
Trainee To provide 5 one-year positions School leavers, $170 000
Ranger participants with have been funded graduates and an
Scheme forestry and ATSI specified
national park position
administration
training
Graffiti To provide general 60 part-time ACTPS Unemployed young $700 000
Removal skills training and positions have been people
Program maintenance work funded
Open To assist Centres provide All unemployed; $200 000
Access unemployed to write faxes, photocopiers, priority for
Centres applications, hone computers. training those unemployed
keyboard skills in standard business for less than 12
applications months
Working To provide clients Access to facilities Unemployed $60 000 1997
Connections with intensive job to assist with job people calendar year
training applications, and
job placement
service.
Youth To assist young Provision of a start Unemployed 18-25 $21 000
Business unemployed people up grant jointly years of age
Initiative to establish viable provided by the ACT
Grants businesses Government and the
ACT private sector
Women's To provide Provides 6 month Mature age women $141 000
Workforce vocational only employment who have been Total all
Development opportunities to placement in the ACT actively seeking programs
Scheme women to broaden public service work in the ACT 1996-97: $3.62
their work million
experience (Total 1993-94:
$3.25 million)
Source: ACT Department of Business, the Arts, Sports and Tourism
The purpose of this paper has been to assess and tabulate allocations
of the States and Territories for their LMPs. The evidence suggests that
State and Territory spending in 1996-97 has been reduced by about 25 per
cent in nominal terms from their 1993-94 levels. This outcome is not surprising
given the extra funding committed to similar programs by the Commonwealth
in 1995-96. Queensland especially appears to have taken advantage of the
Commonwealth's additional commitments. The exceptions appear to be South
Australia, Tasmania and the Australian Capital Territory to a lesser extent,
which have increased LMP spending, reflecting the two States' higher unemployment
rates compared to the national average.
However, the change in priorities of the States and Territories with
respect to LMPs possibly masks their commitment to making vocational training
and education a priority of 'employment' policy. Commitments in these
areas would divert resources from LMPs. As noted, schemes such as providing
apprentices with the financial assistance to meet travel costs of attending
TAFE instruction in remote areas would not be defined as a labour market
program, although the States and Territories have provided significant
levels of funding for assistance measures such as this (and others). 1997
is a transitional year in respect of the Commonwealth moving to its new
employment services market, and responses to the proposed system are still
preliminary. It would therefore be helpful to conduct a similar exercise
of assessing State and Territory LMP after the new system has been in
operation.
- Budget Initiatives - Budget 1996 Statement of the Department
of Employment, Education, Training and Youth Affairs, August 1996.
- Reforming Employment Assistance: Helping Australians into Real
Jobs, August 1996 Budget Statement.
- See Parliamentary Research Publication Budget Brief 1996 and
Budget Review 1997.
- Portfolio Budget Statements 1997-98, Employment, Education, Training
and Youth Affairs Portfolio.
- Econtech: State Economic Outlook, 9/01/97: 27.
- The ABS in Australian Labour Force Projections 1995 to 2011 (1994)
noted that the labour force would most likely reach 10 million in 2000.
A 5% unemployment rate at that time would leave about 500 000 persons
unemployed.
- Reforming Employment Assistance: Helping Australians into Real
Jobs - Report on Public Consultations, November 1996.
- This possibility was canvassed in the report, but not reported on
in detail.
- Committee on Employment Opportunities, 'State and Territory Government
Labour Market Programs' Background Paper 4A in Restoring Full Employment
Background Papers (AGPS Canberra, December 1993): 173-174.
- In 1993-94 these programs were not included as employment programs
by the Commonwealth Department of Employment, Education and Training,
but rather as vocational training programs. Until 1997-98, these programs
were included with DEET's employment programs.
- Committee on Employment Opportunities, op.cit.: 173.
Regional Unemployment Rates, April 1997.
NEW SOUTH WALES Percentage %
Sydney 8.0
Inner Sydney and Inner Western Sydney 6.8
Inner Sydney 7.8
Eastern Suburbs 5.7
St. George-Sutherland 5.7
Canterbury-Bankstown 9.2
Fairfield-Liverpool and Outer South Western 12.4
Fairfield-Liverpool 16.7
Central Western Sydney 8.7
Outer Western Sydney 6.7
Blacktown-Baulkham Hills 5.4
Lower Northern Sydney 4.2
Hornsby-Ku-ring-gai 2.0
Northern Beaches 2.8
Gosford-Wyong 5.9
Balance of New South Wales 10.3
Hunter 11.0
Newcastle Statistical District 11.9
Illawarra and South Eastern 9.7
Illawarra 11.3
Wollongong Statistical District 9.9
Richmond-Tweed and Mid-North Coast 14.5
Northern, North-Western and Central West 8.8
Murray and Murrumbidgee 7.5
Total New South Wales 8.0
VICTORIA
Melbourne
Outer Western Melbourne 10.1
North Western Melbourne 10.2
Inner Melbourne 8.8
North Eastern Melbourne 9.9
Inner Eastern Melbourne 5.6
Southern Melbourne 6.6
Outer Eastern Melbourne 8.4
South Eastern Melbourne 7.3
Mornington Peninsula 8.4
Balance of Victoria 11.2
Barwon-Western District 12.9
Central Highlands-Wimmera 9.8
Loddon-Campaspe-Mallee 12.3
Goulburn-Ovens-Murray 8.1
All Gippsland 12.9
Total Victoria 9.1
QUEENSLAND
Brisbane 9.2
Brisbane City Inner Ring 7.1
Brisbane City Outer Ring 9.0
South and East BSD Balance 10.7
North and West BSD Balance 10.8
Balance of Queensland 10.2
South and East Moreton 10.7
North and West Moreton 14.1
Wide Bay-Burnett 15.8
Darling Downs-South West 4.7
Mackay-Fitzroy-Central West 10.9
Northern-North West 6.3
Far North 9.2
Total Queensland 9.8
SOUTH AUSTRALIA
Adelaide 10.0
Northern Adelaide 11.7
Western Adelaide 13.5
Eastern Adelaide 5.9
Southern Adelaide 8.6
Balance of South Australia 8.5
Northern and Western 9.0
Southern and Eastern 8.1
Total South Australia 9.6
WESTERN AUSTRALIA
Perth 7.2
Central Metropolitan 7.0
Eastern Metropolitan 7.7
North Metropolitan 7.0
South-West Metropolitan 6.6
South-East Metropolitan 8.0
Balance of Western Australia 6.0
Lower Western 8.7
Remainer-Balance 5.4
Total Western Australia 6.9
TASMANIA
Hobart and Southern 9.3
Hobart 8.5
Northern 10.0
Mersey-Lyell 11.1
Total Tasmania 9.9
NORTHERN TERRITORY
Total Northern Territory 5.6
AUSTRALIAN CAPITAL TERRITORY
Total Australian Capital Territory 6.8
(Source: ABS Labour Force Survey)
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