Bills Digest no. 37,
PDF version [660KB]
Social Policy Section
10 November 2016
Purpose of the Bill
The Youth Jobs PaTH program
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
Australian Labor Party (Labor)
The Australian Greens (the Greens)
Position of major interest groups
Australian Council of Trade Unions
Australian Council of Social Service
Statement of Compatibility with Human
Parliamentary Joint Committee on
Key issues and provisions
Displacement effects and exploitation
of young workers
Participation—voluntary or not?
Will the Youth Jobs PaTH program
Australian work experience programs
Ireland’s JobBridge internship scheme
Date introduced: 13
House: House of
1 commences on the later of Royal Assent and 1 April 2017. Schedule 2
commences on the later of Royal Assent and 1 January 2017.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
All hyperlinks in this Bills Digest are correct as
at November 2016.
The purpose of the Social Security Legislation Amendment
(Youth Jobs Path: Prepare, Trial, Hire) Bill 2016 is to amend the Social Security Act
1991, the Social
Security (Administration) Act 1999 and the Veterans’
Entitlements Act 1986 to allow for:
payments made under the Youth Jobs PaTH program to be excluded from the income
test for social security payments and thus not affect recipients’ payments and
suspension for up to 26 weeks of a person’s social security payment where they
are employed by a business that is eligible to receive a Youth Bonus wage
subsidy in relation to them under the Youth Jobs PaTH program.
The Bill seeks to give effect to the Youth Jobs PaTH program
that was announced as part of the 2016–17 Budget.
The program forms part of a broader Youth Employment Package,
which includes: the expansion of the New Enterprise Incentive
Scheme (NEIS) and initiatives to encourage and assist young people into
self-employment; reform of wage subsidies to make them more flexible and better
suited to the demands of businesses; and, reform of Work for the Dole
arrangements to require the most job-ready job seekers (Stream A job seekers)
to participate in jobactive for
12 months rather than the current six months before moving to Work for the Dole.
The Youth Employment Package augments a number of measures
that were introduced as a part of the 2015–16 Budget in a bid to tackle the
problem of youth unemployment.
Jobs PaTH program
The following description is based on publicly available
information. In the absence of program guidelines, some aspects of the program
The Youth Jobs PaTH program is intended to provide job
seekers aged 17 to 24 years who have been in receipt of jobactive services
for six months with work experience, and to maximise their prospects of
subsequently gaining employment.
Under the program, which is to commence from 1 April 2017, young
people are first provided with pre-employment training of up to six weeks in
basic employability skills. The first three week block of training is intended
to help job seekers to understand and develop the skills that employers are
looking for, such as teamwork, communication, personal presentation,
reliability and digital literacy. This training will be delivered by training
providers appointed to an Employability Skills Training Panel.
In order to try to ensure the relevance and efficacy of the
employability skills training provided under the program, the Department of
Employment sought stakeholders’ views via a consultation
In particular, the training is being developed with business and employment
service providers to make sure that it is tailored and will meet the
requirements of employers. The Department has responded to the feedback
and made some adjustments to the design of the program in line with the
It should be noted that it is not just Youth Jobs PaTH
program participants who will be undertaking the first three weeks of training.
All 15 to 24 year olds who have been receiving jobactive services for
five months will be required to complete the employability skills training.
The second three week block of training is to focus on
advanced job hunting skills, job preparation, career development, interview
skills and industry awareness experiences.
The second part of the program, which is also envisaged to
commence from 1 April 2017, consists of a work experience placement (also
described as internships), under which a job seeker will work for 15 to 25
hours per week for between four and twelve weeks. Participation in this part of
the program is to be voluntary. To be eligible for participation, a job seeker
must have been registered in jobactive services for at least six months.
Job seekers who choose to participate will receive an
incentive payment of $200 a fortnight in addition to their income support
payment. This is a flat-rate payment; that is, a job seeker will receive $200
irrespective of the amount of hours they work between 15 and 25 hours. The
amount of hours to be worked by the job seeker is to be agreed between the
employment service provider and the employer.
Businesses that take on a job seeker will receive an
up-front payment of $1,000.
If the host businesses (or any other employers of job
seekers aged under 25 years and in receipt of jobactive services for at
least six months) offer young job seekers a job, they will be eligible for a Youth
Bonus wage subsidy of up to $6,500 for job-ready job seekers and up to $10,000
for disadvantaged job seekers. Under the changed wage subsidy arrangements
introduced as a part of the 2016–17 Budget the subsidies will be paid on a
flexible basis over a six-month period.
At the time of writing this Bills Digest the Bill had not
been referred to Committee for inquiry and report.
Standing Committee for the Scrutiny of Bills
The Committee had no comments on the Bill.
of non-government parties/independents
Labor Party (Labor)
Labor has been highly critical of the Youth Jobs PaTH
program, arguing that it will exploit interns, depress wages and displace jobs.
Because the program is intended to match job seekers with
existing or prospective job vacancies, Labor maintains that it will not create
additional jobs, but simply substitute subsidised interns for employees:
Well Labor totally opposes using taxpayers’ money to fill
existing vacancies. Labour market programs are there to ensure that we add to
the labour market.
What should have been the case is employers are provided
incentives to add to their workforce and governments willing to provide that
We don’t believe you underpay workers in a so called
internship using taxpayers’ money which will displace the opportunities for
people to have real jobs. That’s what economists call dead weight loss. You are
effectively paying employers to do something they would have done anyway—that
is fill existing vacancies. Labour market programs must be about adding to the
In response to concerns about the exploitation of interns
that it maintains the program highlights,
Labor indicated in the lead up to the 2016 federal election that it intended to
tackle the problem, should it gain office:
Labor will work with business, employer groups, unions and
Interns Australia to develop a definition of what constitutes an internship,
ensuring people who are working in real jobs are being paid real wages, whilst
retaining real opportunities for on the job training.
Labor will also provide $22.9 million of additional resources
to the Fair Work Ombudsman, $2.4 million of which is specifically to the Fair
Work Ombudsman’s Young Workers team to ensure young people working as interns
are not being ripped off.
Labor also proposed an alternative pilot program—Youth
Jobs Connect—under which 3,000 young people at risk of life-long employment
disadvantage would complete an intensive six month program of employment
Employment Minister, Senator Michaelia Cash, is reported
to have criticised Labor’s position on the Youth Jobs PaTH program as being
hypocritical, given that a number of Labor members have used interns in their
Senator Zed Seselja is said to have made similar comments.
Greens (the Greens)
The Greens have indicated that they do not support the
Youth Jobs PaTH program.
Following the announcement of the Youth Jobs PaTH budget
measure, Greens employment spokesperson, Adam Bandt indicated that he was
concerned the program could breach international labour rights, and would be
asking the UN’s International Labour Organisation (ILO) to look at it.
Subsequently, Senator Rachel Siewert argued that young
people should not be working for as little as four dollars an hour, and
insisted that the $751.7 million over four years allocated to the program
‘would be better spent on other programs such as community driven employment initiatives
that are consultative and play to the strengths of the individual’.
The independents do not appear to have publicly expressed
a position with regard to the Bill.
major interest groups
Council of Trade Unions (ACTU)
The ACTU is strongly opposed to the Youth Jobs PaTH
It has argued that the program:
... poses a serious risk to young people and inexperienced
workers, and could also undermine Australia’s entire wage system with interns
earning only $4 an hour—potentially dragging down pay and conditions for all
Among other things, ACTU President, Ged Kearney has stated:
It is particularly concerning that the Employment Minister is
saying business must demonstrate a ‘real vacancy’ exists before putting on a
PaTH intern. This lays bare their intention to undermine the foundations of our
wage and employment systems by allowing employers to access a pool of free
labour rather than offering proper wages and conditions. Youth unemployment is
an issue that must be addressed, but we need real investment in training,
apprenticeships and education—not a hastily cobbled together free labour supply
scheme for big business.
Council of Social Service (ACOSS)
ACOSS has been cautiously supportive of the program. Following
the announcement of the Budget measure, ACOSS expressed the view:
The shift away from the ineffective Work for the Dole program
towards a new approach is welcome. However, the Government must ensure that the
PaTH program is well targeted, prevents young people from being exploited and
leads to real employment outcomes. This applies especially to the internship
To this end, ACOSS has prepared a policy briefing in which
it outlines a number of policy settings that it believes should be implemented
in order to ensure that the potential benefits of the program are maximised and
the risks kept to a minimum.
As ACOSS sees it, compulsory training under the program
should be linked to work experience; payment during internships should be the
equivalent of the national minimum wage or the National Training Wage;
internships should be genuinely voluntary; the risk of exploitation or harm
should be minimised; and, adverse impacts of the program on the labour market
should be minimised.
Issues raised by stakeholders in relation to the Bill are
discussed in further detail in the ‘Key issues and provisions’ section, below.
The Explanatory Memorandum estimates that the changes to
the Youth Bonus wage subsidy arrangements enabled by Schedule 2 of the Bill
will cost $5.7 million over the forward estimates period (2015–16 to 2019–20).
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.
Joint Committee on Human Rights
At the time of writing this Bills Digest the Parliamentary
Joint Committee had not published any comments in relation to the Bill.
The income test is used to determine a person’s rate of
income support. Subsection 8(8) of the Social Security Act 1991 lists
those amounts that are not treated as income for the purposes of the income
test, and the Act in general. Similarly, subsection 5H(8) of the Veterans’
Entitlements Act 1986 lists amounts not treated as income for the purposes
of that Act.
Schedule 1 inserts proposed paragraph 8(8)(tc) to
the Social Security Act list of amounts that are not treated as income and
proposed paragraph 5H(8)(xad) to the Veterans’ Entitlements Act list,
ensuring that internship payments made to participants in the Youth Jobs PaTH
program are not treated as income under either of those Acts. This ensures that
the extra payments will not affect the participants’ continuing eligibility for
assistance under these Acts.
When a job seeker gains full time employment they
typically no longer qualify for income support because of their employment
earnings. As such, under sections 93 and 94 of the Social Security (Administration)
Act 1999, their income support payment is automatically cancelled when they
inform the Department of their change of circumstances. Section 85 of the Act
allows for the resumption of a person’s income support payment after the
payment’s cancellation or suspension.
Schedule 2, item 3 inserts proposed section 95C into
the Social Security (Administration) Act. The effect of proposed subsection
95C(1) is to allow for a person who is employed by a business that is
eligible to receive a Youth Bonus wage subsidy in relation to them to have
their payment suspended for a 26-week period, rather than cancelled.
Under proposed subsection 95C(2), the person’s
income support payment will be automatically cancelled at the end of the 26
week period if they do not qualify for the payment as a result of still being
However, if the person loses their employment and the Secretary
determines that this is as a result of their own voluntary act or misconduct,
their income support will be cancelled from the day that they lost their
employment, under proposed section 95C(3).
The labour market for youth aged 15 to 24
years deteriorated substantially after the onset of the Global Financial Crisis
(GFC) in 2008 and has only recently shown signs of recovery. Australian Bureau
of Statistics (ABS) data show that the youth unemployment rate rose sharply
from its most recent low of 7.6 per cent in August 2008 (in seasonally adjusted
terms) to 12.2 per cent in May 2009.
The youth unemployment rate then rose to 14.5 per cent in November 2014 but has
since fallen to 12.6 per cent in September 2016 (in some parts of Australia the
rate is significantly higher). This compares with an overall unemployment rate
of 5.6 per cent.
In developed countries such as Australia young people tend
to bear the brunt of economic downturn, suffering greater job losses and higher
unemployment rates than adults. This is because ‘they are far more vulnerable
than adults in a tight labour market: a lack of relevant skills and experience
mean a greater risk of unemployment for recent entrants to the labour market’.
Because young people typically have little or no labour
market experience, businesses face higher costs of investment and lower costs
of termination when employing young workers.
This situation is exacerbated by the fact that young people
who are making the transition from school to work tend to learn about their
abilities and preferences by ‘job shopping’.
This results in higher rates of turn-over and more frequent periods of
unemployment for young people.
It is also the case that emerging technologies and
structural changes in the labour market mean that many of the full-time
manufacturing and industrial jobs that young people with limited skills and
experience would have held in the past no longer exist.
At the same time there has been a corresponding growth in service
and technology industries and part-time and casual employment. This has resulted in an
increased demand for what are termed ‘soft skills’—interpersonal people skills,
social and communication skills—as well as self-management skills and problem
solving abilities, and literacy and numeracy skills.
A recently released Anglicare jobs
availability snapshot illustrates the nature of the problem. Based on an analysis of
job advertisement numbers in May 2016, Anglicare found that only 13 per cent of
jobs available were suitable for disadvantaged job seekers—that is, job seekers
with lower skill levels, education and experience. This equates to more than
six disadvantaged job seekers for every vacancy at the entry skill level across
Australia as a whole, with the situation in South Australia (more than nine)
and in Tasmania (ten and a half) even more difficult.
The combined effect of the abovementioned
structural changes is that many young people experience complex and difficult
transitions to their first full-time job. They are likely to switch between
states of joblessness and training and working, and are more likely to enter
temporary or precarious types of employment.
The overall age at which young people are
transitioning into full-time work has been getting higher. At the time of the
Global Financial Crisis (GFC) in 2008 the average age at which young
Australians transitioned into full-time work was 21.8 years; in 2013, it was
Where young people are not fully engaged in education
or work (or a combination of the two) for extended periods, they are at greater
long-term risk of unemployment, cycles of low pay and employment insecurity.
The OECD has identified two groups of young people that
face persistent difficulties in gaining stable employment after leaving school.
The first is those young people who are left behind—they
simply do not make it in the labour market because they lack qualifications and
come from disadvantaged backgrounds. The research suggests that possible risk
factors for poor labour force attachment among young people include early
school leaving, young motherhood, disability and non-English speaking and
The second group is young people who may have received
training and hold qualifications but nevertheless struggle to find stable
employment. Instead they cycle between temporary work, unemployment, and
periods out of the labour market. The OECD and other researchers refer to this
group as ‘poorly integrated new entrants’.
effects and exploitation of young workers
A number of commentators have expressed concerns that
without appropriate safeguards the program could be used by businesses to
replace existing workers or as an alternative to recruiting young workers at
the appropriate wage.
In response to these concerns, the Department has indicated
that it has in place a number of safeguards. In the Senate Estimates hearings
of 6 May 2016, a Department representative stated:
As part of the process, as we have with the current work
experience programs that we run, we will monitor placements. Our system is able
to record ABNs and will be able to monitor how many job seekers undertake
internships with particular businesses. We will be able to monitor how many of
those job seekers end up in employment and we will be able to identify if
businesses are utilising a large number of job seekers as interns and not
ending up employing them. So we will have our standard monitoring processes in
place where we see reports. We will not permit job seekers to be placed into
internships if there is evidence that an employer is misusing the process and
that interns are not ending up with employment on a regular basis.
The Department has also stated that jobactive
providers will be expected to attempt to ensure that there is a real prospect
of employment for participants. Employment service providers will also be
required to make sure that businesses are not using interns as a substitute for
Host organisations will be required to sign an agreement
with the Department under which they commit to not displacing existing workers
in order to create a Youth Jobs PaTH program position. The Department will also
rely on its national tip-off line to identify instances where the program is
being exploited. Any employer found to be misusing the program is to be banned
from using it in the future.
Brotherhood of St Laurence Executive Director, Tony
Nicholson is reported to have been highly critical of claims that the program is
The Brotherhood of St Laurence has an ongoing campaign on the issue of youth
unemployment. For some time, it has championed the need for programs that
support young people to become competitive in the labour market, and especially
those young people at risk of long-term unemployment. The Brotherhood has
consistently advocated for governments to stimulate the availability of
entry-level opportunities for young people in need of work experience and work.
In response to criticisms of the Youth Jobs PaTH program, Nicholson has said:
The debate has been hijacked by those who are concerned only
with the interests of the privileged and tertiary-educated people, but they are
not the target of this program or the people we are concerned about ... when I
have read the criticism, it comes from academics who spend their time
salivating over spreadsheets and scatter graphs or from lobbyists who spend
their time policing their ideological rhetoric, but they don’t talk to long-term
unemployed people, their parents or employers—we do ... I’ve heard some of the
criticism, that this will displace workers. But that displays a fundamental
misunderstanding of who we are working with here. These are young people who
are not employed by employers because they don’t have the skills in the initial
period. The majority are early school leavers, some only scraped through Year
12, they are relatively poorly educated and they are not equipped for the jobs
that are available in areas of the economy that are growing.
A number of commentators have criticised the program on the
grounds that participants will only be paid $200 a fortnight in addition to
their existing income support payment. Given that participants are to work
between 15 and 25 hours per week, the payment thus effectively amounts to a minimum
of four dollars per hour and a maximum of $6.67 per hour.
Even when paid at the maximum rate, the payment is substantially less than the national minimum adult wage of $17.29, as
well as being less than junior minimum wages for a 17 year old.
The Australian Council of Social Service
(ACOSS) has argued that ‘participants should be paid the hourly equivalent of
the minimum wage, or where appropriate training is provided, the National
ACOSS suggests this could be achieved ‘either by capping the weekly hours of
the internship or by increasing the proposed $100 per week payment for
CEO of Jobs Australia, David Thompson has
similarly argued that all participants in the program should be provided with
formal training, and that their hours should be capped so that they receive at
least the trainee wage.
As Thompson sees it ‘if people are doing real work in real jobs, then it’s only
fair that they receive a payment that is equivalent to a real wage, regardless
of whether that payment comes from the employer or comes from Centrelink’.
Such proposals appear to be premised on the
notion that participation in the Youth Jobs PaTH program is or should be
treated as employment. Based on this reading, the Australian Council of Trade
Unions (ACTU) has obtained legal advice from the law firm, Maurice Blackburn
which reportedly indicates that the program is ‘illegal’ and in violation of
the Fair Work
If the program’s arrangements are to be treated as an
employment arrangement, then the provisions of the Fair Work Act would
apply to it and workers engaging in the program would be entitled to earn the
minimum rates and conditions spelled out in the Fair Work Act. However,
Minister for Employment, Senator Michaelia Cash and Department representatives
have made it clear that the program’s arrangements are for work experience and
Job seekers are currently able to participate in work
experience activities similar to those proposed under the Youth Jobs PaTH
program without being paid any more than an allowance on top of their regular
income support payment.
Under existing arrangements, a young job seeker may
participate in Unpaid
Work Experience and Volunteer Work
or the National
Work Experience Programme
(NWEP) as a means to satisfy their mutual obligation requirements, enhance
their vocational skills and gain experience in a work-like environment. As is
the case for the Youth Jobs PaTH program, Unpaid Work Experience, Volunteer
Work and the NWEP are not classified as employment or training, an
apprenticeship or other similar scheme.
In the case of the NWEP, placements can be for a maximum 25
hours per week and may last for a maximum of four weeks. Participants in the
program are paid an approved program of work supplement (APWS) of $20.80 per
fortnight to assist with any additional costs associated with NWEP participation.
The supplement is taxable, but exempt from the income test, which is used to
determine an income support recipient’s payment rate. Hence, payments under the
Youth Jobs PaTH program represent an improvement on the current situation for
As suggested above, one of the main barriers to the
employment of young people is the fact that they have little or no skills or
work experience, especially if they are disadvantaged. This results in
employers being unwilling to take them on, based on the assumption that they are
likely to be unprofitable—initially, at least. Emeritus Professor Phil Lewis has
described his reading of the situation as follows:
Young people are unemployed because, given their lack of
skills and/or training, firms can’t find anything profitable for them to do at
the institutionally set wage firms must legally pay. It may also be the case
that the wage that firms would be willing to pay (in the absence of minimum
wages) in order to profitably employ them would not be attractive enough for
the unemployed given the level of unemployment benefit they would get if they
As Lewis sees it, then, ‘the beauty of Youth Jobs PaTH is
that it addresses both the demand side by reducing labour costs significantly
and the supply side by providing an incentive for young people to work’.
It might be argued that for some of the workplaces in which
program participants may end up relatively few skills or work experience may be
required and that, as a result, employers will effectively be gaining cheap
labour. However, the counter to this argument might be that, as Tony Nicholson
has observed, many participants are likely to have limited or no skills and
experience, and to be disadvantaged.
If Lewis is right and young people in the target group are
not productive enough to employ at the legal minimum wage, then to achieve an
impact that extends beyond the placement, participants will need to develop
their skills and experience enough to make hiring them at minimum wage profitable
As noted above, participation in the work
experience part of the Youth Jobs PaTH program is to be voluntary. Job
seekers will be free to choose whether or not they wish to take part. However, Australian Greens Senator Rachel Siewert has argued that while
participation in the program has been presented as being voluntary, it has the
potential to become compulsory, in effect:
... people shouldn’t be fooled by the rhetoric
that this is voluntary because if a job service provider puts it into a
person’s job plan it essentially becomes compulsory as penalties apply if
someone doesn’t support their plan.
In working with job seekers, jobactive service
providers begin by negotiating a Job Plan. The Job Plan is the document that
sets out the actions job seekers are required to undertake in order to satisfy
the requirements for receipt of income support, and, ideally, gain employment
as soon as possible. Once a Job Plan has been agreed, the job seeker is
required to meet the requirements set out in the Plan, or risk being penalised
Senator Siewert’s concern is that employment service
providers might pressure vulnerable young job seekers into including
participation in Youth Jobs PaTH work experience in their Plans in order to
secure an outcome fee.
The job seekers would then be obliged to participate in the program or risk a
penalty for non-compliance.
When Senator Siewert raised this possibility in Senate
Estimates hearings, Secretary of the Department of Employment, Ms Renée Leon
But the provider cannot insist on something being in a plan
that the guidelines require them to comply with our program requirements that
say the program is voluntary. The providers would be in breach of their deed with
us if they sought to force someone into an internship when we have instructed
them that internships are voluntary ... the program is voluntary for the job
seeker. If any job seeker were to say they were being forced to put that in
their job plan we would invite them to immediately call our tip-off line,
because the provider will be subject to guidelines from the department that
internships are voluntary.
ACOSS is of the view that the Youth Jobs PaTH internships:
... should be genuinely voluntary so that if a young person
decides that an internship is not useful for them, they can discontinue without
additional financial penalties (beyond the cessation of the additional $100 a
week payment for participation), even if the activity is agreed in their
Employment Pathway Plan.
Concerns were initially raised regarding the arrangements
under which participants will be covered for workers’ compensation. It is to be
assumed that these will be the same as for participants in the NWEP.
Under this program, the Department of Employment purchases
personal accident insurance and public and/or product liability insurance to
cover job seekers while they undertake their placements, including travelling
to and from the placement.
Youth Jobs PaTH program work?
work experience programs
The main source of ongoing data on labour market program
effectiveness in Australia is Labour
Market Assistance Outcomes reports which are generally released on a
quarterly basis by the Department of Employment.
Among other things, these reports provide details of the employment outcomes of
job seekers who participate in the individual programs that make up Australia’s
employment services system.
Based on the latest available data, 34.8 per cent of job
seekers who exited unpaid work experience in the 12 months to June 2015
were in paid employment around three months after their participation. This
figure is higher than that for vocational training (28.5 per cent), Work for
the Dole (23.1 per cent) and voluntary work (24.4 per cent).
While on the face of it work experience appears to be
reasonably effective in comparison to other forms of labour market assistance
program, it is not possible to read too much into these outcomes data. The
outcomes could be largely a result of selection biases and the differing
characteristics of program participants.
JobBridge internship scheme
In recent Senate Estimates hearings, Departmental
representatives indicated that they had drawn on the experience of the Irish
internship scheme, JobBridge in developing the Youth Jobs PaTH program.
The JobBridge National Internship Scheme was introduced in
2011 in response to rising youth unemployment following the GFC. Under the
scheme, unemployed people in receipt of qualifying payments or signing on for
credits for a total of three months in the previous six months are able to
participate in work experience for between 30 and 40 hours per week for six or nine
Participants continue to receive their income support payments and are paid an
additional €52.50 per week.
Where host organisations choose to employ participants
they may receive a JobsPlus employer incentive—or wage subsidy—of €7,500 for a
person who has been unemployed for more than 12 months but less than 24 months
or €10,000 for a person who has been unemployed for longer than 24 months.
Various requirements are made of host organisations,
including the demand that interns must not displace existing employees and that
the host organisation must have no vacancies in the area of activity where the
internship is offered.
The Irish Government also introduced a First Steps—Youth
Development Internship, which is ‘aimed at unemployed young people aged from
18–24 who may have lower levels of education, be long-term unemployed or face
other barriers to entering employment’.
The scheme is similar to JobBridge with the main differences being that the
internships: are not publicly advertised; may be for a shorter duration (three
months); are for four rather than five days a week; and, are accompanied by
extensive support including a work preparation course.
In October 2016 the results of an independent evaluation
of the JobBridge National Internship Scheme were published.
The evaluation used econometric techniques to estimate the employment impacts
of the scheme for participants; survey response data from interns and host
organisations; and, a cost-benefit analysis, adjusted for levels of deadweight,
job displacement and the opportunity costs of work and public funding.
The evaluation’s main finding was that program
participants’ employment outcomes were improved by 32 per cent,
compared to a matched group of non-participants:
Specifically, our estimation suggests that matched
individuals on the Live Register had a 36.6% probability of securing employment
within one year in the absence of JobBridge. With the JobBridge treatment,
interns’ probability of securing employment within one year increased to 48.4%
(i.e., an 11.8 percentage point difference). The implication of this finding is
that the Scheme provides additionality, in terms of the probability of becoming
employed as a result of participating in JobBridge, of 32%. The results suggest
much more positive impacts for JobBridge than has been evident for many other
labour market activation programmes. This evidence demonstrates that the Scheme
has been effective in enhancing the probability of interns subsequently
obtaining paid employment.
The evaluation also found:
per cent of participants were currently employed either with their host
organisation or with another employer and just under 10 per cent were pursuing
further education or training
per cent of participants—around 38,000 people—had gained paid employment at
some stage since completing the program and
per cent of respondents felt that the program gave them new skills and provided
quality work experience.
Not all respondents were satisfied with the program, with
over 18 per cent feeling that the scheme had not provided them with new job
skills. Many respondents were also disappointed with the value of the top-up
payment—28 per cent were very dissatisfied and 23 per cent dissatisfied.
On the whole, a majority of interns (54 per cent) were
either satisfied or very satisfied with JobBridge.
However, nearly a third were dissatisfied or very dissatisfied. A majority of
host organisations (52 per cent of respondents) were very satisfied with the
work performance and engagement of interns, with a further 38 per cent stating
that they were satisfied with interns’ performance and commitment.
The scheme was determined to have had a positive economic
benefit, and it was felt that there were likely to be wider additional social
and health benefits as a result of the increased employment.
It should be noted that the scheme has attracted a great
deal of negative publicity since its introduction. Critics have expressed
concerns about the quality of jobs found by interns after their participation
in the scheme, the fact that the scheme has been widely used by multinational
companies and state agencies, and that the scheme may subsidise low-wage jobs
and displace regular employment.
In response to negative public perceptions and improved labour market
conditions, the Irish Government has closed the scheme to new applicants.
JobBridge is to be replaced by a new, smaller and more targeted scheme that is
‘more suited to the current job market’.
Many young people struggle to gain employment due to a
lack of employment experience and general workplace skills. There is some evidence
to suggest that the Youth Jobs PaTH program could help to provide young people
with such skills and experience.
A number of critics have argued that the program is inherently
exploitative. However, to the extent that it is closely regulated, participants
are furnished with relevant training and labour market experience, and there is
at least some prospect of employment as a result of program participation, then
it might reasonably be argued that the program is less exploitative than
existing work experience and Work for the Dole arrangements for young people on
Ultimately, the success or otherwise of the program in
terms of improving the employment prospects of young people will depend on the
state of the overall economy, and whether or not sufficient entry level jobs
are being created.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
Australian Government, ‘Part
2: expense measures’, Budget measures: budget paper no. 2: 2016–17,
. For a brief description and analysis of the measures see M Thomas, ‘Workforce participation measures’, Budget review 2015–16,
Research paper series, 2015–16, Parliamentary Library, Canberra, 2015, pp.
Government, ‘Part 2: expense measures’, op. cit., p. 85. For further details on
the program see Department of Employment, ‘Youth Jobs PaTH’,
Department of Employment website, last modified 25 October 2016.
of Employment, ‘Youth Jobs PaTH’, op. cit.
of Employment, Employability
skills training, Consultation paper, Department of Employment,
of Employment, Employability
skills training: response to stakeholder feedback, Department of
Employment, Canberra, 2016.
Education and Employment Legislation Committee, Official
committee Hansard, 6 May 2016, p. 18.
of Employment, ‘Youth Jobs PaTH’, op. cit.
Government, ‘Part 2: expense measures’, op. cit., p. 85, see also The Treasury, Sticking to
our national economic plan for jobs and growth
in a stronger, new and more diversified economy,
Budget statement, The Treasury, Canberra, 2016, p. 22.
Standing Committee for the Scrutiny of Bills, Alert
digest, 8, 2016, The Senate, 9 November 2016, p. 46.
O’Connor (Shadow Minister for Employment and Workplace Relations) and E Husic
(Shadow Minister for Employment Services, Workforce Participation and the
Future of Work), Youth
Jobs PaTH: six months on and still no answers, joint media release, 20
O’Connor (Shadow Minister for Employment and Workplace Relations) and L
Chesters (Member for Bendigo), Doorstop
interview: Bendigo, Victoria, transcript, 6 May 2016.
Fair Work Act
2009 does not define ‘intern’ and is not clear on what constitutes a
Labor Party (ALP), Protecting
rights at work [and] Protecting rights at work fact sheet, ALP policy
document, Election 2016, p. 3.
jobs connect fact sheet, ALP policy document, Election 2016.
hits Labor’s interns as hypocrisy’, The Australian, 22 August 2016,
intern wrote key Labor policy while working in Bill Shorten's office’, Buzzfeednews,
2 November 2016.
Bandt (Greens Employment spokesperson), Liberals’
youth unemployment plan: lure them into work for below minimum wage,
media release, [5 May 2016].
Siewert (Australian Greens Senator), Greens
commit to dropping PaTH jobs program, media release, 25 June 2016.
Australian Council of Trade Unions (ACTU), Young people deserve real Working Futures not a PaTH to nowhere, media release,
20 June 2016; ACTU, Government must address serious concerns with unravelling PaTH scheme, media release, 5 May 2016; ACTU, PATH scheme should be abandoned after public support evaporates, media release, 15 June 2016; ACTU, Australians dangerously uninformed on reality of PaTH scheme, media release, 16 May
2016; ACTU, Still no answers on youth unemployment, media release, 25 August 2016;
ACTU, A PaTH to nowhere: Liberal Government’s jobs ‘plan’ in tatters, media release, 12 May
Australians dangerously uninformed on reality of PaTH scheme, op. cit.
Government must address serious concerns with unravelling PaTH scheme,
Council of Social Service (ACOSS), The
Youth Jobs PaTH program, Policy briefing, ACOSS, [Sydney], May 2016, p.
Memorandum, Social Security Legislation Amendment (Youth Jobs Path: Prepare,
Trial, Hire) Bill 2016, p. 2.
Statement of Compatibility with Human Rights can be found at page nine of the
Explanatory Memorandum to the Bill.
. Australian Bureau of Statistics (ABS), Labour
force, Australia, cat. no. 6202.0, ABS, Canberra,
September 2016; ABS, Labour force,
Australia, detailed—electronic delivery, cat. no.
6291.0.55.001, ABS, Canberra, September 2016.
for Young Australians (FYA), How
young people are faring 2011, FYA, Melbourne, 2011, p. 14.
Caliendo and R Schmidl, ‘Youth
unemployment and active labour market policies in Europe’, IZA Journal
of Labor Policy, 5(1), January 2016, pp. 1–30.
and polarisation in the Australian labour market: a simple analysis’, Australian
Bulletin of Labour, 37(2), 2011, pp. 191–216; Australian Bureau of
Statistics (ABS), Australian
social trends, cat. no. 4102.0, ABS, Canberra, December 2011.
base for state of the family 2016: the lived experience of jobseekers: jobs availability
snapshot, Anglicare Australia, Canberra, October 2016.
and Schmidl, ‘Youth unemployment and active labour market policies in Europe’,
young people are faring in the transition from school to work, FYA,
Melbourne, 25 September 2014, p. 5.
for Economic Cooperation and Development (OECD), Off
to a good start? Jobs for youth, OECD Publishing, [Paris], 2010.
Pech, A McNevin and L Nelms, Young
people with poor labour force attachment: a survey of concepts, data and
previous research, Australian Fair Pay Commission, Canberra, 2009.
Bell and K Benes, Transitioning
graduates to work: improving the labour market success of poorly integrated new
entrants (PINES) in Canada, Canadian Career Development Foundation,
Ottawa, May 2012.
A Patty, ‘Budget
2016: intern program risks being a “jobs destruction scheme”’, Sydney
Morning Herald, 5 May 2016, p. 6.
Education and Employment Legislation Committee, Official committee Hansard,
6 May 2016, op. cit., p. 20.
pp. 13–53. These safeguards are broadly consistent with those recommended by
blasts unions, academics on youth jobs’, Weekend Australian, 7 May
2015, p. 1.
minimum wages are paid at a percentage of the relevant adult
minimum wage. At 17 years of age this is 57.8 per cent; at 18, 68.3 per cent;
at 19, 82.5 per cent and at 20 years, 97.7 per cent. Fair Work
The Youth Jobs PaTH program, op. cit., p. 3. National Training Wage
amounts are specified in the National Training Wage Schedule of the Miscellaneous
jobs path to give young people real work opportunities’, Jobs Australia
Jobs PaTH program needs new legislation, ACTU claims’, ProBono Australia,
16 May 2016. See also G Sivaraman, ‘PM's
plan risks creating an underclass of workers’, Sydney Morning Herald,
13 May 2016, p. 18.
of Employment Secretary, Renée Leon has stated ‘these people are not being
employed. They are on income support. They are not employed by the host
organisation. They are still on income support. They are job seekers in the jobactive
caseload. They will be given an additional amount of money as an incentive to
participate in the program, but they are not employed, so the question of
minimum wage is not relevant to their circumstances. They are unemployed, they
are on the unemployment benefit and they are on the jobactive caseload’. Senate
Education and Employment Legislation Committee, Official committee Hansard,
6 May 2016, op. cit., p. 15.
. Department of Social Services (DSS), ‘Guide to Social Security Law: 220.127.116.11 suitable activity—voluntary work’, DSS website, last modified 1 July 2015.
. Department of Employment, ‘National Work Experience programme’, Department of Employment website, last modified 4 December 2015.
of Social Services (DSS), ‘18.104.22.168
Approved Program of Work Supplement (APWS) – description’, Guide to
social security law, DSS website, last reviewed 7 November 2016. The
National Work Experience Programme was introduced on 1 October 2015. See M Cash
(Minister for Employment), Work
experience to help job seekers into work, media release, 5 October
2015. The Department of Employment is currently undertaking an evaluation
of the programme.
2016: Youth Jobs PaTH—paving the way for employment growth’, Committee for
Economic Development of Australia (CEDA), blog, 11 May 2016.
. K Silva, P McDonald and T Taylor, ‘Budget 2016: jobseekers weigh up internship program but experts fear
workers could be exploited’, ABC News, first published
4 May 2016, updated 12 August 2016.
section 42E of the Social Security (Administration) Act 1999 if a job
seeker refuses to enter into a Job Plan without good reason this may result in
their income support payment not being paid until they do enter into a Job
Plan, and penalties being applied.
Currently, failing to enter into a Job Plan results in a connection failure.
There is no immediate penalty for a connection failure, but the job seeker may
be required to comply with a reconnection requirement. In this instance, this
would entail the job seeker entering into a Job Plan. If the job seeker fails
to meet their reconnection requirement (enter into a Job Plan) without a valid
excuse then this amounts to a reconnection failure and sanctions apply. For
every day that a job seeker fails to meet their reconnection requirement, they
incur a penalty equivalent to their daily rate of income support payment.
In the course of the 44th Parliament, the Government introduced to the
Parliament a Bill—the Social
Security Legislation Amendment (Further Strengthening Job Seeker Compliance)
Bill 2015—that would have allowed for the immediate non-payment of income
support to job seekers who fail to meet their requirements under the Social
Security (Administration) Act 1999, including entering into a Job Plan, and
for penalties to be applied for the period in which they fail to comply,
without having a reasonable excuse. The Bill was before the Senate when
Parliament was dissolved and lapsed on prorogation of Parliament.
jobactive system arrangements, employment services providers are paid
outcome fees where a job seeker gains employment. Full outcome payments are
paid where a job seeker gains employment and moves fully off income support for
four, twelve and 26 weeks. Partial outcome fees are paid where a job seeker has
a job which reduces their income support payment on average by 60 per cent and
may be paid at four and 12 weeks only. Department of Employment, Request for tender for
employment services 2015–2020, Department of Employment, Canberra,
November 2014, p. 61.
Education and Employment Legislation Committee, Official committee Hansard,
6 May 2016, op. cit., pp. 24–25.
The Youth Jobs PaTH program, op. cit., p. 4.
of Employment, ‘National
Work Experience programme’, Department of Employment website, last modified
4 December 2015.
of Employment, ‘Labour
market assistance outcomes reports’, Department of Employment website, last
updated 13 October 2016.
Services Australia, Labour
Market Assistance Outcomes, Department of Employment, Canberra,
September 2015, p. 12.
net impact study would provide a more accurate picture of the program’s
effectiveness. The net impact methodology compares the employment outcomes of a
group of program participants with those of a control group of similar job
seekers who did not participate in the program.
Education and Employment Legislation Committee, Official committee Hansard,
6 May 2016, op. cit., pp. 43–44.
European countries’ main form of income support is social insurance. Under a
social insurance scheme, workers, employers, or government make contributions
to a fund. Workers who become unemployed, sick, disabled or reach retirement
age are able to claim benefits.
In Ireland, while a person is unemployed or ill and not contributing to an
insurance fund, they may be awarded credits. These credits are similar to the
contributions people make while they are working. Credits enable people to
qualify for income support while at the same time allowing their social
insurance record to remain unbroken. See Department of Social Protection, ‘Credit
contributions’, Department of Social Protection website, last modified 17
Citizens Information website, page edited 25 October 2016.
of Social Protection (Ireland), Varadkar
announces end to JobBridge, media release, 18 October 2016; Indecon, Indecon
evaluation of JobBridge activation programme, Report to the Minister of
Social Protection, JobBridge evaluation report, Indecon, Dublin,
14 October 2016.
loss describes those employment outcomes that are likely to have happened
without the provision of government incentives or assistance. The cost-benefit
analysis assumed a level of deadweight of 75.6 per cent and a job displacement
level of 29.1 per cent.
Indecon evaluation of JobBridge activation programme, op. cit., p. iii.
p. ix. Just under 25 per cent of interns were under 25 years of age, around 42
per cent were between 25 and 34 and over 30 per cent were 35 years of age and
for example F Gartland, ‘JobBridge
internship scheme to be replaced, says Varadkar’, The Irish Times,
22 May 2016; and Labour Market Council, Report
of the Labour Market Council: proposal for a new work placement programme
drawing on the lessons from JobBridge, Report to the Minister of Social
Protection, JobBridge evaluation report, Labour Market Council, Dublin, 2016.
‘JobBridge internship scheme to be replaced, says Varadkar’, op. cit.
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