…in my experience, the main outcomes of the jobactive system is generating income and employment within service providers, rather than outcomes for unemployed workers…
This chapter examines the services and supports available to jobactive participants. The chapter is structured according to the following topics:
Overview of service requirements
Meeting the needs of diverse participants
Spending on employment services
Place-based and local approaches
Restoration of public service delivery of employment services
Mutual obligation requirements, annual activity requirements (including training and Work for the Dole) and the Job Plan negotiation process are considered in Chapter 7.
The committee's recommendations are set out throughout the chapter.
Overview of service requirements
The following section provides an overview of existing service requirements under jobactive. The extent to which these services meet the needs of participants is considered below under 'Meeting the needs of diverse participants'.
Providers are required to deliver services to participants under the jobactive deed. During an initial interview with a jobactive participant, providers must:
explain the services that the provider is obliged to provide;
identify their strengths and any issues they may have relating to find employment;
for participants with mutual obligations, explain their rights and obligations under social security law and the consequences of not meeting their mutual obligation requirements; and
provide them with details of the current National Minimum Wage, the Fair Work Ombudsman website and contact details for the Fair Work Ombudsman.
Providers must provide the following basic services to participants:
access to suitable vacancies;
advice about the best ways to look for and find work;
advice about local, regional, or national employment opportunities;
assistance, as required, to apply for jobs;
access to free Wi-Fi facilities at each site;
information about skill shortage areas; and
where appropriate, assistance with preparing a resume.
Providers must also ensure that, at all times, participants who have mutual obligations have a current and up to date Job Plan.
The government has set out the minimum level of service it expects of providers in Service Guarantees. Compliance with the Service Guarantees is required under the deed. The Service Guarantee for participants receiving income support states that participants can expect that their provider will:
work with you to develop your Job Plan. This sets out the services you will receive and the minimum requirements you need to meet while you are on activity tested income support
identify your strengths and any challenges you face to increase your job readiness
refer you to suitable jobs
match you to a suitable Work for the Dole placement (where appropriate)
reassess your needs if your circumstances change
help you with wage subsidies or relocation assistance (where appropriate)
keep in contact with you and your employer once you have started a job
provide the services that are set out in their Service Delivery Plan
treat you fairly and with respect in a culturally sensitive way.
Volunteer job seekers can access jobactive services for up to six months. The Service Guarantee for volunteers states that the volunteer participants can expect that their provider will:
help you build your résumé
provide advice on job opportunities in your area
help you understand the skills local employers need
provide the services that are set out in their Service Delivery Plan
treat you fairly and with respect
provide services in a culturally sensitive way.
Providers are required to prominently display the Service Guarantees in all offices and sites and make the Service Guarantees available to participants. Providers also have Service Delivery Plans, which set out any additional services they will provide. Providers are required to act in accordance with their Plan and upload a copy of their Plan to the jobactive website.
As mentioned previously, jobactive participants receive different levels of support depending on their assessed relative disadvantage. Participants in Stream A are considered 'job ready' and receive fairly basic support from their provider, such as access to facilities to apply for jobs. The timing of services for Stream A participants is as follows:
Following their Initial Interview, Stream A (General) Participants generally enter a Self Service and Job Activity Phase for six months… Stream A (General) Participants who have not already commenced in the Stream A Work for the Dole Phase for the first time will, after the Self Service and Job Activity Phase, move into the Stream A Case Management Phase for six months …unless the Provider moves them into the Work for the Dole Phase earlier… They then generally move into the Stream A Work for the Dole Phase for six months, then into a Stream A Case Management Phase for six months and then back into the Stream A Work for the Dole Phase for six months. They then continue on this alternating six monthly pattern until they move into another Stream or Exit.
Participants in Steams B and C receive increased support compared to Stream A. Stream B participants 'need their Employment Provider to play a greater role in making them job ready'. Participants in Stream C often have multiple barriers to employment, such as homelessness and addictions. The timing of services for Stream B and C participants is as follows:
Following their Initial Interview, Stream B (General) Participants and Stream C Participants generally enter the relevant Case Management Phase for 12 months …unless the Provider moves them earlier… They then generally alternate between six months in the relevant Work for the Dole Phase and six months in the relevant Case Management Phase until they move into another Stream (if in Stream B), or Exit.
Providers are required to provide additional services to participants aged less than 30 years who have mutual obligation requirements ('Stronger Participation Incentives' or 'SPI Participants'). This includes monthly appointments to discuss job searches and referrals to jobs that the provider has identified. SPI Participants can be Stream A or Stream B. The timing of services for SPI Participants is as follows:
…all SPI Participants who have not already commenced in the SPI Work for the Dole Phase for the first time will, following their Initial Interview, enter a Case Management Phase for a total of 12 months. They then generally move into the SPI Work for the Dole Phase for six months, and then back into the SPI Case Management Phase and so on until they are no longer an SPI Participant.
Future services and support
The report of the Employment Services Expert Advisory Panel recommends major changes to employment services:
Employment services providers will focus solely on helping those who need it most – ‘enhanced services’ job seekers and to a lesser extent ‘digital plus’ job seekers. Those job seekers who are job-ready — digital first — will no longer use the employment services provider network.
The Panel also recommended that the future system should be 'grounded in digital':
A digital and data ecosystem which is personalised, simple to use yet highly sophisticated behind the scenes. A digital ecosystem which constantly evolves, becoming smarter each time a job seeker, employer or service provider logs on… It will match the right candidates for employers — for free. It will reduce administration and red tape.
The proposed digital and data arrangements would match job seekers with suitable vacancies, recommend appropriate services to participants and include a digital toolkit 'using machine learning to recommend the best options and interventions to job seekers and providers'.
In this inquiry, submitters were broadly supportive of greater use of digital services; however this support was generally qualified by the proviso that digital services are not appropriate for all participants. The Centre for Policy Development pointed out that whilst digital services provide a range of benefits, they are not a complete solution to better employment services:
Data transfer from providers to government has been poor, and commonly for compliance, not to learn more about what works.
Dr Travers McLeod, the Chief Executive Officer of the Centre for Policy Development, emphasised that many job seekers do not have digital literacy:
…there can't be an assumption that everyone who interacts with the system is going to be able to satisfy their needs, and particularly their complex needs, through digital smart phone access.
According to Ms Imogen Ebsworth, Director of Policy and Research at Anglicare Australia, the digitisation of services creates problems for more vulnerable participants:
…the assumption that people had the digital literacy to navigate the system, and the very deliberate reduction of face-to-face time with people trying to navigate the system, was resulting in many more suspensions of payments and a huge amount of stress on people who were unable to make the system work for them and who were having the experience of turning up to Centrelink offices, asking for help and either being turned away or being forced to use a computer when they didn't have the skills to do so.
According to the Panel's report, the future system 'will allow more than half of all job seekers to get on with finding work themselves'. This implies that more than half of participants would be classified as 'job ready'.
The government is conducting an Online Employment Services Trial to inform the development of future employment services. The trial of online self‑servicing involves 10 000 participants who have been assessed as 'job ready'. The online self-servicing includes approval of the job plan, self‑managing mutual obligations and reporting job search contacts. According to the Expert Advisory Panel's report, less than 10 per cent of participants have decided to opt-out of the trial to instead receive services from a 'physical' provider.
The committee strongly supports the potential for digital services to improve the accessibility of employment services. Participants who are unemployed for a short period that do not require assistance to find a job will benefit from being able to self-service online, provided that the online systems are effectively implemented, able to be tailored to meet individual needs and also user‑friendly. There is also the potential to open up digital services to more job seekers, not just those on income support.
As noted previously, 40 per cent of Stream A participants are long-term unemployed. Additionally, 25 per cent of Stream A participants are very long‑term unemployed. The committee received substantial evidence about incorrect assessment of participants. The committee is therefore concerned that the future system will mean even lower levels of service for many participants, particularly for those participants who would only have access to digital services. This is not an argument against the provision of effective and personalised online services, but instead about the appropriate assessment and Stream categorisation of jobactive participants.
In the move towards greater digital servicing, the committee is concerned that people who lack basic digital literacy or that do not have reliable access to the internet may be forced into using digital services. Currently, 86 per cent of Australian households have access to the internet. Certain cohorts such as First Nations people and homeless Australians are much less likely to have an internet connection. Employment services participants that do not have access to the internet or that lack basic digital literacy should be able to access face-to-face services. The committee considers that participants with mutual obligations should have the right to opt-out of online self-servicing (see Chapter 4).
The committee is also concerned about the adequacy of transition arrangements for moving to a new employment services system. The existing jobactive deed ends in 2020. The Expert Advisory Panel has however concluded that it would be 'unrealistic to expect full digital and data ecosystem functionality by this time'. The Panel has recommended that the future system should be fully operational by 2021, including the digital and data ecosystem.
Meeting the needs of diverse participants
Jobactive participants are as diverse as the broader Australian population. Each participant has different needs and requires different levels of service. In its submission, the Department of Jobs and Small Business notes that 'the assistance job seekers need to find work can vary considerably':
While many job seekers who are assisted through jobactive are able to find work quickly, others face significant barriers to finding and sustaining a job.
In its submission, the Department of Jobs and Small Business contended that jobactive participants are generally satisfied with the quality of jobactive services:
More than half of surveyed job seekers (56.9 per cent) reported being ‘satisfied’ or ‘very satisfied’ with the quality of services they received. Job seekers in Streams B and C (the more disadvantaged), report higher levels of satisfaction (63.0 and 61.5 per cent respectfully) with the overall quality of services.
Mr Nathan Smyth, Deputy Secretary, Employment, from the Department of Jobs and Small Business, acknowledged that 'not every jobseeker's experience with employment services is positive'. The extent of dissatisfaction with the quality of service provided to participants is illustrated by the Department's survey results which imply that approximately 40 per cent of participants are dissatisfied. The level of dissatisfaction reported by participants increases to approximately 60 per cent when asked the more important question regarding the level of satisfaction with the help they received to find a job.
Mr Smyth stated that the Department of Jobs and Small Business continually works with providers to ensure services are delivered in a manner that is responsive to the needs of users. Mr Smyth pointed to low numbers of complaints as an indicator of participant satisfaction:
In 2017-18 the national customer service line received just over 13,600 complaints, noting that participants may make more than one complaint. In a caseload of around 1.1 million jobseekers a year the proportion of jobseekers who made a complaint was, therefore, small.
However, evidence given to the inquiry painted a very different picture. The committee heard that despite the streaming process, jobactive has a 'one-size-fits-all' approach to assisting participants. The committee heard that even in the correct stream, there is insufficient support to meet the needs of participants. The caseloads, qualifications and training of employment service providers which were also raised as concerns are considered separately in Chapter 6.
Mr Marcus Liddle, a jobactive participant from Victoria, described the minimal assistance he received from his provider:
I had just graduated from university, and was trying to find a job. I found one working as a web content writer/developer, but it fell apart in under a month. Unfortunately this was not long enough and in Centrelink's eyes it was as if I had never had a job, and was therefore required to undertake the "intensive" phase.
This phase involved me having to sit alone in front of a computer in a small grey room in the jobactive provider's office.
I was literally given the yellowpages and told to start cold-calling businesses.
The only resume advice I was given was to take my recently completed degree off my resume as it made me appear "overqualified". The jobactive employee attempted to help me do this, but was unable to use Microsoft Word to an appropriate level, and I ended up showing her how to do it instead.
Similarly, Ms Rozie Hart, a jobactive participant, questioned the value of jobactive services:
My new job plan now states I must “take responsibility” for finding my own work & to report (online) my attendances at all required activities.
This begs the question. “What is the provider being paid to do?”
Mr Brendan Taylor, a long-term job seeker and jobactive participant from New South Wales, submitted that the wording of the jobactive deed means that providers do not actually have to help people with their barriers to employment:
The jobactive deed does not state how JSP's [Job Service Providers] should go about focussing on barriers and only says they need to consider barriers which gives them a way out. At my current JSP the business manager told me that they only have to consider barriers and that means they don't have to help deal with them.
Overwhelmingly, submitters considered that the jobactive program did not provide long-term solutions to joblessness or meet the needs of unemployed people. The committee heard that this was particularly the case for unemployed people with significant barriers to employment. According to the Edmund Rice Centre WA, a not-for-profit community service provider, jobactive has 'a very limited ability to provide long term solutions':
…Jobactive staff and caseworkers are not qualified or trained to interact successfully with people from diverse cultural and religious backgrounds or those suffering trauma and mental health issues. Clients are often confused about what they are expected to do when they attend appointments and why they should attend appointments in the first place.
The National Employment Services Association (NESA) suggested that the ability of employment services to address joblessness was hampered by changes in policy:
The sector however also attributes some of the rise in LTU [long-term unemployment] to program changes implemented with the introduction of Job Services Australia [in 2009] which included greater controls to restrict movement of job seekers between Streams and which have continued in jobactive. Amongst these changes was the removal of the contribution of duration of unemployment to the JSCI score affecting Stream eligibility and an increase in hurdles to obtain an Employment Services Assessment (ESAT).
A number of individual submitters told the committee they did not have faith in the jobactive program. Mr Rod Shehan, a jobactive participant from Western Australia, submitted that there is 'no focus on the needs or aspirations of the unemployed'. Another name withheld submitter argued that jobactive was not designed for unemployed people:
Jobactive is not designed to meet the needs and aspirations of unemployed workers, it is designed to discourage people from applying for Newstart. It is also designed to appeal to a certain part of the electorate that believe all unemployed people are rorters, liars and cheats and undeserving of support.
The committee also heard that the accountability framework for jobactive services may contribute to poor servicing of participants. Good Shepherd Australia New Zealand (GSANZ) was concerned about the lack of accountability to provide services to participants:
There is little to no accountability to provide quality services to the client; rather the accountability resides between the jobactive provider and the government.
According to the Australian Unemployed Workers' Union (AUWU), the government fails to enforce the jobactive code of practice and service guarantee. However, the Department of Jobs and Small Business informed the committee that it has taken a number of actions to address deed non-compliance, such as requiring providers to deliver targeted training to staff and imposition of additional reporting requirements.
Dealing with complex needs
The committee heard that jobactive was not well placed to address more complex barriers, including by linking up with other services. Mr Michael Clark, Director of Corporate Strategy for SYC, a jobactive provider, advised that services were not always available for people with complex needs:
…any jobseeker in stream B and C, which currently comprise about 60 per cent of the people on the jobactive case load nationally, has complex needs and yet there are not always service responses outside of employment services to meet their needs.
My Pathway, another jobactive provider, reported that they often work with participants that have 'education and skills gaps, or they're the second or third generation in their family to be unemployed'. My Pathway submitted that the jobactive program is 'equipped to overcome these types of barriers through training, work experience, motivational and confidence-building activities'. However according to My Pathway, the jobactive program was not equipped to deal with more complex issues:
In circumstances where a job seeker is dealing with problems such as substance abuse or mental illness, the support they require is more complex. Non-vocational assistance to improve health, wellbeing, living arrangements or literacy aren’t reflected in the jobactive performance framework and only a few services are eligible for funding. In some cases, addressing social or personal issues may conflict with a client’s job search requirements.
Submitters provided the committee with information about issues experienced by particular groups under jobactive. These groups are discussed below. The below discussion is non-exhaustive and does not cover all disproportionately disadvantaged groups.
The committee heard that jobactive does not adequately meet the needs of young people. According to Youth Action, the peak body for young people and youth services in New South Wales, youth are not well served under jobactive’s universal approach:
There is a history of programmes using contracted employment providers that, while each may have their merits, have missed the mark for young people. Most recent iterations, Job Services Australia (JSA) (ended in 2015, replaced by jobactive) and jobactive, provided very little support for young people to achieve positive education and employment outcomes. Most significantly, in the move from JSA to jobactive, targeted support for young people was lost in favour of a universal approach. Complimentary programs such as Transitions to Work were able to provide some level of support, but were limited in scope, and limited cohort support.
The Youth Affairs Council of South Australia (YACSA) surveyed young people to identify which of the functions and services they had received from their provider. YACSA reported that:
Respondents to the survey were broadly damning of a sector that is focussed almost solely on ensuring compliance with Centrelink activity requirements rather than supporting and addressing the individual needs of young people.
YACSA advised that survey respondents reported low levels of service provision in each of the key employment services functions:
Most responses centred on Centrelink obligations and indicated that providers had assisted them in developing a job plan (37%), gaining access to computers (29.6%), and helping respondents look for up to 20 jobs per month (25.9%). Only 18.5% of survey respondents reported employment service providers assisting them with referrals to job vacancies.
Respondents to the YACSA survey reported particularly low levels of service related to personal and professional development:
Functions such as developing skills to get a job (11.1%), providing work related items, professional services, relevant training and support (11.1%), preparing for job interviews (11.1%) and, the provision of intensive support services such as counselling, homelessness services, mental health services, and other medical assistance (3.7%) all received a shortage of responses from young people.
Youth Action pointed out that often young people are vulnerable members of the workforce and submitted that they need 'additional pre- and post-employment support, as well as education and training, to access career opportunities and remain engaged in employment into the long term’.
The committee heard that a number of different youth-specific programs were delivering better results for young people, compared to jobactive. Mr Michael Clark, Director of Corporate Strategy at SYC, informed the committee about the Sticking Together project, which uses personal coaching:
The Sticking Together Project attaches a coach to a young person for 60 weeks. We partnered with the Australian Centre for Social Innovation to go through a co-design process with QUT to do our baseline data assessment. The program involves personal coaching of young people aged 18 to 24 who have been classified as stream B and C jobseekers…
What we were testing through the pilot was whether we could get a greater proportion of that pool of available hours worked by those young people who have the coach working with them, compared with a controlled trial who did not and who only received standard jobactive servicing.
The Sticking Together project resulted in increased average hours worked for its participants:
The participants on average had been unemployed for 2.1 years before commencing the project. Sixty-seven per cent were classified as long-term unemployed—that is more than 12 months unemployed. Twenty-seven per cent had been unemployed for more than three years. Most of those young people have never participated in work. Eighty-six of the 100 young people who started in the trial experienced work, with 96 jobs started. We had 50 young people in work at the end of the coaching period. The hours worked…increased on average from 11.9 hours per week at the beginning of the project to 26.3 hours at the project's end. Hours worked is not a measure that is looked at in jobactive.
Mr Clark advised that 42 of the 100 participants in the Sticking Together pilot are now working and no longer receiving a Centrelink benefits.
The committee also heard about the Transition to Work program. Transition to Work is a ‘program for young people who are experiencing disadvantage in the labour market’. The program is available to 15–21 year olds who meet certain criteria. The program provides ‘intensive, pre-employment support to improve the work-readiness of young people and help them into work (including apprenticeships and traineeships) or education’. Ms Sally James, Head of Youth Programs at the Brotherhood of St Laurence, advised the committee that Transition to Work was achieving better outcomes for its participants, compared to jobactive. The Brotherhood of St Laurence recommended that the program be expanded to cover young people aged up to 25 years.
Migrants and culturally and linguistically diverse Australians
The committee heard that the jobactive program was particularly unsuited to the needs of migrants and culturally and linguistically diverse Australians. The Edmund Rice Centre WA highlighted the difficulties experienced by participants who are not proficient in English:
We have many clients who have no English but attend their monthly appointments where they are talked at in a language they don’t understand, sign agreements they can’t read and given job diaries that they can’t complete.
The Edmund Rice Centre WA reported that a number of providers in their area require participants who do not speak English and who cannot read and write in English to complete job diaries in English:
…this is compulsory policy and if not competed fully and in English they will have their payments cut. When reminded that the person cannot read or write the advice given is to get someone "to do it for you". This indicates that the process is not legitimate because filling the diaries by a third person is misrepresentation.
Harmony Alliance, a women's alliance, suggested that jobactive is not equipped to help migrants and refugees, who often have additional barriers:
The one-size-fits-all approach of the current jobactive model is ill-equipped to overcome the additional barriers faced by many migrants and refugees, including conflicting demands on time posed by setting up a new household, navigating a new job market and learning English.
Research conducted with women from migrant and refugee backgrounds by Harmony Alliance found that many were dissatisfied with the assistance they received:
…a high proportion of those who have used Centrelink or an employment agency to search for work in the last twelve months were dissatisfied with the services. Problems noted by users included experiences of discrimination based on ethnic or cultural backgrounds, insufficient understanding by staff when dealing with non-citizens, and insufficient assistance provided for writing applications or building networks.
The committee heard that jobactive can be particularly problematic for refugees. According to the Refugee Council of Australia, refugees experience a number of problems with jobactive and are often incorrectly streamed. A report by the Refugee Council and Fairfield Multicultural Interagency found that 'providers often miscategorise the support needs of migrant and refugee job seekers with little opportunity for reassessment, leaving them with insufficient support'. Ms Shukufa Tahiri, Policy Officer from the Refugee Council, advised that refugees experience a number of issues with jobactive, including:
lack of specialised service;
choosing between learning English and looking for work;
streaming and job seeker classification instrument issues;
issues with compliance measures and implications that arise from that;
limited support with resumes and interview skills;
issues with job plans and lack of understanding of their rights and responsibilities;
underuse of interpreters and lack of translated materials;
inappropriate Work for the Dole placements;
overreliance on and lack of support for the use of technology to look for work; and
being mistreated and treated with disrespect.
Despite the fact that providers are obliged to provide access to an interpreter, the committee heard that interpreters are often not used and this underuse is contributing to participants being streamed incorrectly. The Edmund Rice Centre WA reported that some providers have been asking participants to bring a friend, rather than booking an interpreter. According to the Refugee Council, providers are not sufficiently incentivised to use interpreters:
It takes double as long because of going through the interpreting system. They might have to make a phone call to TIS [Translating and Interpreting Service] and wait on the line till they find the right interpreter. That all takes time as well. There's no incentive. There's also no reward for jobactive providers to recognise the additional work it takes to use an interpreter.
Another issue contributing to incorrect streaming relates to the common way migrants and refugees treat engagements with Centrelink or their provider as a job interview. Mr Nick Tebbey, Chief Executive Officer of the Settlement Council of Australia explained that migrants often 'put their best foot forward' and 'disguise or feel like they can't share all of the true issues that are underneath the surface'. The Department of Jobs and Small Business acknowledged that disclosure was a particular issue for refugees and advised that it is an area the Department is watching.
The committee also heard that reassessment was a problem for refugees. Ms Tahiri reported that providers were often not willing to restream refugees. This is compounded by the fact that people from refugee backgrounds often do not know that they can be reassessed.
The Refugee Council expressed concerns about the potential adverse impact of 'digitisation' of employment services for refugee participants. Computer literacy is not a requirement under early arrival programs, meaning new arrivals to Australia 'can leave these programs with little or no computer literacy'. The committee heard that refugees had been intentionally excluded from the government's Online Employment Services Trial. The Refugee Council was concerned that this will mean the trial 'will not pick up needs for interpreters for refugee and other jobseekers who are classified as Stream A or B'. The Refugee Council noted that face-to-face servicing would still be available, but pointed out that refugees are often incorrectly assessed as 'job ready'. The Refugee Council submitted that it was concerned that refugees would be forced to use a system they may not understand:
RCOA [the Refugee Council of Australia] is gravely concerned for refugee clients who will be forced to use the online streaming and compliance system, without any access to interpreters and translated materials, and without any requirements that they are digitally literate or support to ensure that they are.
The Refugee Council emphasised that there 'is no indication that the government has any strategy in place to prepare refugee jobseekers for their digital transformation and other digitalised services'. A number of submitters recommended specialised employment services programs for migrants, refugees and people seeking asylum.
The committee received evidence that jobactive is not delivering equal outcomes for women and men. For example, although 51 per cent of participants are women, only 44 per cent of participants assisted by the Employment Fund are women. Additionally, women make up only 40 per cent of employment placements.
Research by GSANZ found that the jobactive model was not suited to helping single mothers find work:
Single mothers are being forced into making decisions which often work against the financial security and wellbeing of their households. This includes being forced into precarious employment rather than being supported to create a viable pathway into secure, well-paid employment and/or to pursue individual goals. Further, onerous compliance requirements often forestall active engagement in paid employment and/or other activities that could lead to financial security.
According to GSANZ, the jobactive model is founded on 'erroneous assumptions' about participants, 'including that they are unemployed and/or disengaged':
Our research participants did not reflect this assumption, with less than one third (eight women) being unemployed. Of this group, six women felt unable to engage with paid employment for a range of viable reasons, while only two were between jobs and actively looking for work. Surprisingly over two thirds of our research participants were actively participating in paid employment, with seven in part-time and/or precarious employment, five starting up or operating a small business, and six employed in stable, career-oriented positions.
GSANZ also reported that many of the women participating in their research were referred to jobactive when they were not in a position to engage in paid work. The reasons for this included 'poor physical or mental health, past or ongoing experiences of intimate partner violence, intensive caring duties, disability, and clinical diagnoses'.
Many Australians with disability who receive of income support and that do not have access to Disability Employment Services are required to participate in jobactive. People with disability make up more than 30 per cent of jobactive participants.
The committee heard that the jobactive program is not tailored to meeting the needs of people with disability. For example, Aspergers Victoria contended that 'jobactive has no understanding of the specific issues faced by the Asperger population' and suggested that there are insufficient resources available. Additionally, Aspergers Victoria submitted that online platforms were 'not suitable for many Aspergers, without guidance and support'.
Ms Angela Gormley, an individual who provided a submission to the inquiry, described how her friend, who is hearing impaired, received inappropriate treatment from his provider:
My friend had to keep telling the Jobactive Provider he is hearing impaired and cannot talk on the phone. Being constantly pushed into unsuitable jobs was upsetting him. The staff from his Jobactive Provider…kept ringing him even though he said he has trouble hearing over the phone and wanted them to send him emails… One of the staff…said to him, "I want you to listen to me because I do not want to repeat myself."
Submitters also raised the concern that some people with disability were being referred to jobactive when they were not able to work. For example, an ex-consultant for an employment agency submitted that 'you can't enforce jobactive rules onto a client who clearly isn't able to work and yet this happens time and time again'. The ex-consultant reported that most of their job 'was focussing on people who I couldn't place or help because of their disability'. Another consultant, Ms Kylie Wright, submitted that she had a number of clients who 'should be on a Disability Support Payment':
These are people, who even if they were given jobs would be physically unable to perform them efficiently and would lose them shortly there after.
First Nations people
A number of submitters considered that jobactive has not been meeting the needs of First Nations people. According to Mr Matt Little, Chief Executive Officer of CoAct, a jobactive provider, First Nations people are being breached more frequently under the new Targeted Compliance Framework (TCF):
Under the TCF there seems to be a pattern emerging of Indigenous jobseekers being breached more frequently—a 25 per cent higher rate—for non-attendance of appointments.
Of the nearly 45 000 First Nations people in jobactive, 44 per cent received a demerit and 0.4 per cent received a penalty, in the first three months of the TCF. This compares to 32.6 per cent, and 0.2 per cent, for the general caseload.
Mr Kieren Kearney, General Manager of Operations at The Salvation Army Employment Plus, a provider, suggested that the removal of discretion for providers was a problem for culturally significant events:
So culturally significant events occur, and staff struggle to apply TCF appropriately in those situations. We have had situations where jobseekers will be on [cultural] business and staff don't know because the direct staff aren't necessarily across the happenings in the community, and so there are inadvertently penalties applied.
Mr Matt Little, Chief Executive Officer of CoAct, a provider, advised that a different approach was needed to better support First Nations people:
Greater success with Indigenous jobseekers means: having greater flexibility than jobactive currently allows; having the flexibility to find transport where Aboriginal communities are distant from labour markets; working with whole families, as our intensive consultants do; investing in deep culture competence; investing over time in partnerships with local communities that do not need to be rebuilt at every reallocation or tender procurement; and focusing on building and sustaining motivation as a primary outcome.
Mr Michael Kolomyjec, Group Executive of atWork Australia, a provider, raised the concern that the recent changes to the Wage Subsidy will have a detrimental impact on First Nations participants:
We are very concerned that removing the quarantined access to the pool for Indigenous wage subsidies and reverting this to providers needing to access their employment funds will have a detrimental impact on the success of many Indigenous jobseekers.
Mr Matthew Hall, the Chief Executive Officer of Sureway Employment and Training, a provider, agreed with Mr Kolomyjec:
…moving Indigenous wage subsidies back to a general pool of funds which competes with those training and support services and other specific safety needs and all sorts of things involved is actually counterintuitive to any closing the gap initiative. It's reducing funding for those critical services for Indigenous Australians.
Mr Rod Shehan, jobactive participant, described feeling that the jobactive system was not designed for a person like himself:
…as a person that identifies as part aboriginal, and lives away from most western culturally identifiable behaviours (television, sport, drinking, socialising) I do not identify well with other mainstream society values. The jobactive system seems to be aimed at people in neatly tailored pigeon holes that suit the norms applied from western society; where most people can be identified as a target group, while leaving a fringe of others behind. This is despite the system stating that it is tailored to individual circumstances; but providers do not use this to assess what is required to obtain an outcome for unemployed workers.
The committee heard that the jobactive program is not well equipped to assist participants who have a mental illness or mental health problems. Ms Mona Saeidavi, the General Manager of Employment Services at Advanced Personnel Management, a provider, informed the committee that mental health issues ‘are not currently being serviced appropriately’ under jobactive, which then creates further issues for the participant, especially in relation to the compliance framework.
A jobactive participant with mental health issues described feeling that these issues were 'swept under the rug' by their provider:
My mental health problems and recent diagnosis of sleep apnoea seem to be issues constantly swept under the rug, as case managers regularly refer me to roles that are completely unsuitable. Despite the uncontrollable nature of my mental and physical barriers I am treated as if I am making excuses.
The same participant considered that his Job Plan ignored the issues he faced. Another jobactive participant said they were ashamed to talk about their mental health issues with their provider because they were afraid that the consultants would 'continue to dismiss them as they previously have been'.
According to Ms Karen Rainbow, the Chief Executive Officer of Employment Services at Advanced Personnel Management, people’s mental health issues are not always identified in the jobactive assessment process:
…people with undiagnosed mental health issues end up in the system when they haven't been completely assessed properly. Therefore, when they come into a site, someone doesn't have the knowledge to know how to deal with them.
Mature age workers
The committee heard that mature age workers can struggle to meet the requirements imposed on them under jobactive. Additionally, submitters pointed out that jobactive services and mutual obligations are not always relevant to mature age participants who often have diminishing job prospects. For example, a 55 year old submitter with three degrees and 30 years of professional career experience, contented that his mutual obligation requirements did not improve his employability:
What, for example, is there about moving trees in planter pots, carving moss from paving stone joins, picking up litter from a park area, dusting and cleaning shelves, or hanging clothes on clothes hangers, that deserves the label ‘retail’ or ‘training’, and how does such manual labour make me more employable than my three university degrees?
Another submitter, who is in his early 50's, emphasised that jobactive does not recognise the age discrimination that mature age workers experience, which makes it harder to find work.
According to Dr Catherine Earl, Senior Policy and Research Officer from the Australian Human Rights Commission, there are few resources for providers to assist older workers:
…the jobactive staff don't have sufficient information. They're unaware of some of the programs. They don't have sufficient tools and resources and they potentially don't have sufficient training to manage these older jobseekers. One of the submissions mentioned they had training modules on disability, on mental health, and on culturally and linguistically diverse jobseekers, but not specifically on the mature cohort.
The committee also heard that older people eligible for the Age Pension are not eligible for jobactive services. Additionally, some mature age jobseekers not receiving income support are not aware that they can access some jobactive services as a volunteer.
Participants with tertiary qualifications
Some submitters considered that jobactive was not designed to assist participants who have tertiary qualifications. GSANZ reported that a woman in their study was told by her provider that she was over-qualified and 'while wishing her well, staff were unable to assist her in any practical way'.
Similarly, a researcher with a PhD submitted that their provider was unable to provide them assistance:
[the provider was]…either unable to understand the type of work I was looking for (when asked if I was qualified to be a Researcher, my qualifications were recorded as ‘Certificate IV in P.H.D. studies’) or were unable to support me in a career change by providing career counselling.
It is clear that the jobactive program has categorically failed to meet the needs of participants. Even in the correct stream, participants are not receiving adequate support. Unemployed people are not a homogenous group. They have different backgrounds, needs and skills. Jobactive's one-size-fits-all approach is not good enough.
The committee considers that employment services should have sufficient flexibility to allow tailored approaches to suit different cohorts. Of course, it would not be feasible or desirable to implement different programs for all cohorts. Nevertheless, a generalist employment services program should meet the needs of its users. The government should consider trialling new approaches and implementing complementary or replacement services, and options to improve baseline services.
The committee recognises that many participants need more support to get into work, or back into work. The committee considers that the government should examine the merits of providing career counselling and support services for those who may need it, such as people who are entering the paid workforce for the first time or returning after caring for a child or family member, and people who are over 40 years of age who are struggling to reset their careers.
To support the needs of young people, the committee considers that the government should continue to work with providers that have developed expertise in labour market programs specifically targeted towards young people. Furthermore, the government should consider appropriate ways to support these providers.
The committee notes that First Nations people and people with disability or mental or physical health concerns often do not receive the support they need under jobactive. The committee considers that the government should investigate how to ensure that generalist employment services can better meet the needs of these groups of people.
The committee recommends that the government consider appropriate ways to support providers that have developed expertise in labour market programs targeted towards young people, including mentoring programs.
The committee recommends that the government investigate options to ensure that employment services meet the needs of First Nations people and people with disabilities and other health barriers.
The committee recommends that the government examine the merits of providing career counselling and support services for those who may need it, such as people who are entering the paid workforce for the first time or returning after caring for a child or family member, and people who are over 40 years of age who are struggling to reset their careers.
Spending on employment services
The committee heard that inadequate investment by the government is contributing to inadequate support for participants. A number of submitters noted that current investment in employment services is well below Organisation for Economic Co-operation and Development (OECD) averages. Ms Sally Sinclair, the Chief Executive Officer of NESA suggested that current spending is inadequate:
We are less than half of the OECD average investment…and we've also seen…year on year, end on end, a decrease in investment in Australian employment services. So, we've tracked the investment. At $1,400, an average outcome, when even the forecasts were $2,500, that's got to be saying that maybe it's time to actually have a look at these services and to put in a proper level of investment to provide the right quality of services that people are, quite rightly, saying that they expect. Stream A, no matter how you cut it, is not an adequate investment for people who are long‑term unemployed, straight out of prison, homeless, with diagnosed mental health conditions, with drug and alcohol addiction—you name it.
According to NESA, the quantum of funding available is a significant determinant of the quality and effectiveness of services. In this regard, NESA suggested that service requirements are generally more ambitious than funding structures.
This was also the view of the Australian Council of Social Service (ACOSS), which considered that good quality employment services cannot be funded within the present resources allocated to jobactive. According to ACOSS, overall funding should be at least half the average OECD level as a share of gross domestic product (GDP) (an increase of approximately $500 million per annum in current dollars).
The committee notes that Australia's spending on employment services is low compared to OECD averages. The committee considers that the government should review the adequacy of funding levels for employment services.
The committee recommends that the government review the adequacy of funding levels for employment services.
When job seekers register for income support and are placed into the jobactive program, they are allocated a jobactive provider. Participants can change providers if they are unhappy with their current provider but this must be approved by the government. Giving participants choice over their provider is intended to improve competition in the sector. However, some participants reported not being able to change provider. Mr Thomas Studans, a jobactive participant, had his request to change providers ignored:
I advised their floor manager that they needed to action my request for a transfer of providers as instructed. I was told “I think I know how to do my job” and directly contradicted.
Changing providers under future employment services
The Report of the Expert Advisory Panel states that participants referred to enhanced services will be able to make an informed choice of provider based on provider expertise and performance:
Job seekers can choose and change their provider.
A simple ‘report card’ gives job seekers detailed information about each provider. This report card could include feedback from other job seekers or employers.
The report also states that processes for informed choice will involve greater scrutiny of provider performance by job seekers. This is intended to encourage greater competition between providers.
The committee is concerned by evidence that requests to change provider are being ignored. The committee is strongly of the view that participants should be able to change providers, and in this regard, is supportive of the recommendation of the Expert Panel to improve the ability of participants to make an informed choice. However, the committee notes that the Expert Panel’s report does not contain substantial detail about how the issues under the current system would be addressed.
The Employment Fund
The Employment Fund is a flexible pool of funds that can be accessed by providers for reimbursement of goods or services that assist participants to build experience and skills to get a job. When a participant is registered with a provider, the provider is paid an amount into the fund. However, this funding is not assigned to any individual participant and can be used as needed across the provider's client base.
The Employment Fund can be used for a range of goods and services, such as:
work-related clothing, hygiene packs and basic haircuts;
non-accredited employer-required training such as pre-employment food safety training;
Indigenous training and mentoring;
transport for the participant;
medical and health related expenses if health issues are inhibiting a job seeker’s capacity to find and keep a job;
professional services such as drug and alcohol counselling;
short-term rent and crisis accommodation;
tools, books, equipment, and basic mobile phones; and
cards and vouchers for food, phone calls or petrol.
However, providers are required to ensure that goods or services they purchase for reimbursement under the Fund are not specifically prohibited and also meet the following criteria:
provides eligible job seekers with the work-related tools, skills and experience that correspond with their difficulties in finding and keeping a job in the relevant labour market
complies with any work, health and safety laws that may apply
withstands public scrutiny, and
will not bring Employment Services or the Government into disrepute.
During the inquiry, one of the main concerns raised about the Employment Fund was that it is often not fully utilised. Many submitters to the inquiry reported not being able to access the fund. According to NESA, the Employment Fund is regularly underspent. The Department of Jobs and Small Business advised that as at June 2018, the national average usage of employment fund credits was approximately 58 per cent.
The committee heard that restrictions on the use of the Employment Fund have increased and the Fund is now more prescriptive. NESA submitted that the restrictions on access to the fund 'reduce accessibility to much needed resources to support service delivery'. This point was also made by Mrs Renae Lowry, the Executive General Manager of Employment and Training for genU (Karingal Inc—MatchWorks), a provider:
The increased complexity and administration around the employment fund makes it almost impossible to tailor an individual approach to working with one person whose barriers are multiple and complex.
An example of the restrictions on the use of the fund is that payments for employer required training to enable participants to take up specific roles must be approved by the Department in advance. NESA submitted that the time taken to write proposals and obtain approval from the Department 'reduces the responsiveness of the sector to employer needs and diminishes job seeker opportunity'.
The committee heard that a highly restricted amount is available for a participant to obtain a licence, and the amount does not cover the costs of driving lessons. The committee also heard that 'in regional locations, nothing enhances your employability more than a driver's licence'. However the Department of Jobs and Small Business advised that improvements have been made in this area:
…since the employment fund was established under this contract, a number of changes have been made in relation to licences. At the start of the contract, there was a limit of $330 that could be used for driving lessons; that was increased to $1,100.
The Department also advised that the restriction on access to funding to obtain a licence where people had lost their licence due to their own conduct had been removed. However the committee heard that the improvements are still insufficient to cover the costs of obtaining a licence.
The committee also heard that the administrative burden of using the Employment Fund was significant. According to Ms Annette Gill, Principal Policy Advisor at NESA, restrictions on the use of the Employment Fund have increased the administrative burden for providers:
There are a lot more restrictions on what you can use the employment fund for now, as well. Some of the investments that you may want make, you have to make extra applications to the department to do things. There is more paperwork and more hurdles.
Additionally, NESA advised the committee that use of the fund is low because providers are not incentivised to use it:
…providers do not receive compensation for the costs of arranging purchases or the significant administrative requirements in claiming reimbursement (which often exceed the cost of purchase). Since the introduction of the EF [Employment Fund] in 2003, through quarantining 20% of service funds, there has been a steady increase in restrictions of EF use as well as shifting funding for previously core service costs to the EF.
A number of providers informed the committee that consultants were cautious about using the Employment Fund in order to avoid an expense not being accepted by the Department. According to Mr Kieren Kearney, General Manager of Operations for The Salvation Army Employment Plus, consultants have a 'fear based approach' to using the fund because 'one wrong click or one wrong recording means that the organisation is at risk of recovery of funds and compliance action'. This point was also made by Mr Matt Little, the Chief Executive Officer of CoAct, who said that consultants used the fund cautiously in order to ensure any spending on participants was within narrow guidelines:
…if you do push the boundary of what that individual needs, the individual staff member and the organisation is at risk of recovery. Then you get into having to justify the decision of why that purchase was made and you're justifying it to someone who's not regionally based and understands what is required in a country town but rather someone sitting in Canberra who's making a subjective decision.
From 1 January 2019, wage subsidies are to be drawn from the Employment Fund, rather than a quarantined pool of funds. This change is discussed in more detail under 'Wage Subsidies' below. The change was a concern to providers in relation to the government's general unpredictable management of spending under the Employment Fund. It was pointed out by Ms Dianne Fletcher, the Chief Executive Officer of Sarina Russo Job Access, that providers had been spending the Employment Fund cautiously to ensure there were adequate funds for the duration of the contact, however, now additional costs have been moved into the Fund:
…we entered into it in 2015 with an expectation and a forward plan… as to how much funds could be credited to the employment fund over the five‑year period. We knew it was finite, so we were managing that. So, sometimes in the early parts, one spends more cautiously in order to ensure that one has more funds and sufficient funds at the end of the contract. But the rules have changed midstream and now, all of a sudden, more bills have been added to the employment fund. So, cautious management that may have built sufficient funds to manage and support the tail end of the contract where we knew we would have more challenging and more longer-term unemployed jobseekers requiring investment has actually worked against us all.
The committee also heard that funding for the Career Transition Assistance program has to come out of the existing funding in the Employment Fund. According to Ms Kathleen Newcombe, Group Chief Executive Officer of Sarina Russo Group, this means the Career Transition Assistance pilots are struggling to attract sufficient clients:
There were no ring-fenced dollars for the pilot. Where we find it sits at the moment is that the pilots are struggling to attract sufficient clients… [D]ecisions were being made about wage subsidies versus CTA [Career Transition Assistance].
The Department of Jobs and Small Business confirmed that funding for the Career Transition Assistance program now comes out of the Employment Fund. The Department estimates that the Career Transition Program will draw $296.7 million from the Employment Fund over three years from 2019-20 to 2021-22.
Despite these concerns, according to the Department, there are adequate funds in the Employment Fund to cover wage subsidies and the other items that have been added to the Fund.
Funding for goods and services under future employment services
The Expert Panel's report recommends a change from the existing Employment Fund arrangements to 'dedicated funding to solve local job seeker barriers which can be accessed without the red tape'. No further information is provided about how this new funding arrangement would work.
The committee notes that the Employment Fund can be administratively burdensome for providers to use. The committee further notes that the Fund is significantly underutilised, with just over half of available funds being allocated. In this context, the committee supports improving the accessibility of funding for goods and services as recommended by the Expert Panel, so that the sector can remain responsive to the needs of employers and participants. The committee is of the view that the government should examine options to improve access to the Employment Fund.
The committee recommends that the government examine options to improve access to the Employment Fund.
A wage subsidy is a financial incentive for businesses to employ certain job seekers. Different wage subsidies are available to encourage employers to employ disadvantaged job seekers. Businesses can receive a subsidy of up to $10 000 for employing participants who are 15–24 years of age, a First Nations Australian, or a person aged 50 years or over. Alternatively, businesses can receive a subsidy of up to $6 500 for employing participants who are 25–29 years of age, a principal carer parent, or a person who has been registered with an employment services provider for 12 months or more.
During the inquiry, the committee heard that wage subsidies are to be drawn from the Employment Fund from 1 January 2019. This was disappointing to many submitters. According to the Department of Jobs and Small Business, there is no reduction in funding. The Department advised that adequate funds were available in the Employment Fund to pay for wage subsidies. However the committee heard from some providers that this was not the case. Ms Christine Shewry, Chief Executive Officer of Joblink Plus advised that providers were not receiving a consistent message from the government:
…two years ago the government was saying, 'Please spend, spend, spend your employment fund on progressing your caseload and getting them educated,' and now the government is saying to us, now that it's encouraged us to spend it all, 'By the way, now we want you to use that employment fund that we encouraged you to spend two years ago to actually pay for wage subsidies.'
The Department of Jobs and Small Business acknowledged that 'some providers have spent more of their employment fund credits than other providers'. The Department however noted that the Employment Fund credits are topped up each time a provider takes on a new participant. Conversely, Ms Christine Shewry from Joblink Plus pointed out that her organisation was not getting a top up of the fund to support wage subsidies because they did not have many new people coming through.
Submitters expressed different views about the effectiveness of wage subsidies. Some strongly supported the use of subsidies to improve employment outcomes. Research on the use of wage subsidies in Australia and internationally indicates that they can have a positive effect on employment outcomes. Ms Christine Shewry advocated for greater use of wage subsidies:
Evidence proves that one of the single, most effective ways to improve employment outcomes is wage subsidies—certainly in our experience. Our experience at Joblink Plus shows that, with a wage subsidy, 72 per cent of placed jobseekers achieve a 26-week outcome—in answer to your question. Without a wage subsidy, that conversion rate reduces to 66 per cent. That is significant across the whole of the program.
The committee heard that wage subsidies were contributing to employment outcomes in the Youth Jobs PaTH program. Mr Nathan Smyth, Deputy Secretary, Employment, Department of Jobs and Small Business, advised that under the program, over 11 000 young people who received a subsidy have moved off income support for 26 weeks or more. For a discussion of the PaTH program see Chapter 3.
Others submitters emphasised that wage subsidies need to be well designed. For example, the Victorian Council of Social Service (VCOSS) suggested that wage subsidies must create genuine pathways to long-term employment, rather than 'merely subsidising short-term positions'.
The Brotherhood of St Laurence, a not-for-profit organisation, submitted that wage subsidies need to be part of a broader package of supports:
Our experience and research (both local and international) shows wage subsidies by themselves are not effective, but as part of a package of support, can open up opportunities for jobseekers experiencing disadvantage to secure and sustain employment.
The Brotherhood of St Laurence submitted that wage subsidies should be used alongside other supports, including:
Job-readiness training, particularly for jobseekers with limited previous work experience, such as young people, long-term unemployed, refugees and migrants (who may lack familiarity with Australian workplace culture), or skills updating (for mature aged)
Ongoing post-placement support to maximise the chances of a continuing employment relationship
A focus on positions that offer the real prospect of ongoing employment
The opportunity to participate in quality training related to the job
Clear expectations that employers will provide a supportive work environment and develop the skills of subsidised recruits.
Under jobactive, uptake of available wage subsidies has been low. The committee heard that organising a wage subsidy can be complex for providers. This is also an issue for businesses. According to Mr Luke Aitken, Senior Manager, Policy, from the New South Wales Business Chamber, red tape may be preventing uptake of wage subsidies by businesses:
Red tape can involve a number of different things: understanding your obligations, taking time to research what your obligations are, confirming what those arrangements need to be, calculating what the subsidies should be and checking that the requirements have been performed. A lot of that doesn't get costed by a business, but it does take time, money and energy for a business owner to comply with all of that.
Mr Michael Clark, Director of Corporate Strategy for SYC, a provider, suggested that the naming of wage subsidies could be improved: 'labelling a wage subsidy a very long-term unemployed wage subsidy puts employers off'.
Another issue raised during the inquiry relates to the accessibility of wage subsidies. Dr Catherine Earl, Senior Policy and Research Officer, Age Discrimination, Australian Human Rights Commission, questioned why jobseekers are required to wait on income support for six months before they can access a wage subsidy.
Wage subsidies under future employment services
The Expert Panel's report into the future of employment services recommends greater support for employers to trial job seekers, including through wage subsidies. In support of this recommendation, the report notes that wage subsidies have been shown to be effective interventions for highly disadvantaged job seekers under previous employment services contracts.
It is clear to the committee that wage subsidies must be well-designed to ensure that they do not simply result in the creation of short term employment opportunities. Additionally, they must be designed to ensure they are not used to fill positions that would otherwise go to another labour market participant. Furthermore, they must be straightforward for employers to access. In this regard, the committee supports the recommendation of the Expert Panel for greater support for employers to trial job seekers, including through wage subsidies, provided the support programs are well-designed and advance the interests of both employers and prospective employees.
During the inquiry, there was support for a greater emphasis on real work experience opportunities. Ms Christine Shewry, the Chief Executive Officer of provider Joblink Plus, recommended a 4 week paid work trial:
Seventy-nine per cent of Joblink Plus participants in the internship programs that we have offered—and we've been fairly successful in that—get employment. We are confident that most employers, with an incentive—it doesn't have to be a large one—will be in a position to make a decision to hire within a four-week time frame.
Similarly, My Pathway noted that real work experience may 'provide employers with more free hours in the short term but could lead to employment that reduces the reliance on welfare over the long-term'.
The committee notes international evidence that supportive programs achieve better employment outcomes. There is evidence that supportive policies get people into more stable employment. The committee also notes strong submitter support for a greater emphasis on work experience. Accordingly, the committee considers that the government should consider options to encourage greater work experience opportunities for employment services participants.
The committee recommends that the government consider options to encourage greater work experience opportunities for employment services participants.
Place-based and local approaches
During the inquiry the committee heard about the benefits of place-based and local approaches for improving employment outcomes. For example, VCOSS submitted that place-based approaches can create jobs in areas of concentrated unemployment. Place-based approaches 'use local knowledge to identify employment opportunities, barriers and linkages' not visible to departments. They also 'harness local resources across government, business, philanthropic and non-government sectors'.
Dr Peter Davidson, Senior Adviser from ACOSS explained that having local providers is more important for communities outside the major cities:
Not all providers should be small local organisations, but it really does help if the organisation has roots and connections in a local community, especially those communities outside of the major cities. We think they're likely to be better connected with other local services and employers and more understanding of the need of unemployed people, and in a way more accountable.
A large for-profit provider, for example, is accountable to its board and its shareholders to achieve financial returns, but, when you have the small local provider—or indeed providers who specialise in assisting a group that they care about and are concerned about—that's a different dynamic on the ground.
According to the Brotherhood of St Laurence, the jobactive model has pushed smaller community organisations out of employment services which has reduced 'opportunities for responsiveness to local circumstances and local collaboration'. The number of providers has reduced considerably over time. At the start of the Job Network program (1998) there were about 300 providers. There are now 42 jobactive providers. According to Jobs Australia, over time it has become harder for small community organisations to participate in the employment services system as 'efficiency of scale' is increasingly prioritised over 'flexibility and bottom-up innovation'.
According to Ms Petrass, Policy Manager, Workforce Skills, from the New South Wales Business Chamber, the jobactive program fails to integrate with local programs:
…there are often locally targeted programs—local initiatives—that can assist unemployed people to develop those skills, but they're not often well integrated with the jobactive program, and there are barriers to getting these programs aligned with—or not even aligned with—to getting these programs recognised by jobactive service providers and getting people into them. We had a great example down in our Illawarra region where there's a youth employment strategy. They run a number of programs which develop some of those pre-employment skills. They had great difficulty in the beginning—it's a bit better now—getting the job service providers to even look at those programs. They had candidates lined up and they had host employers lined up, and they couldn't get jobactive support.
Place-based and local approaches under future employment services
The Expert Advisory Panel considered that universal employment services should 'provide a framework which allows for local responses to local challenges and opportunities'. The Panel recommended a place-based approach of 'regional governance arrangements (e.g. local boards/structures) and facilitators [to] support links with employers and other submitters in local areas'.
The Panel recommended that the future system involve the following components:
Establish local groups to develop solutions to local employment issues
Provide local funds for these solutions e.g. community projects which create work experiences
Incentivise job seekers to work in seasonal employment e.g. fruit picking
Support job seekers who want to move outside of their local community to find work or take up a job.
Ensure that employment services provider funding reflects different regional circumstances
Seek local feedback into the employment service provider performance framework
According to the Panel, the local groups established to develop local solutions would not replace employment services providers, but would instead work alongside them.
From October 2018 to June 2020, the government is undertaking Regional Employment Trials in ten disadvantaged regions in Australia. Funding of $1 million has been allocated to each region. Under the Trials, 'locals work with employment facilitators and Regional Development Australia committees to develop solutions to local employment issues'.
The committee notes that jobactive is currently not well equipped to support place-based and local solutions for specific communities. The committee considers that the government should do more to facilitate place-based approaches in areas of high unemployment. In this regard, the committee supports the Expert Panel's recommendation for regional governance arrangements. The committee considers that place-based approaches must however stand alongside a high-quality, universal employment services program.
Restoration of public service delivery of employment services
Many submitters to the inquiry were supportive of the full or partial restoration of public service delivery of employment services. Broadly, these submitters considered that public delivery would better meet the needs of more disadvantaged participants, who can be left behind under a privatised system. In this context the committee notes that highly disadvantaged participants have particularly poor outcomes within the private service delivery model, with the average Stream C participant being with the program for five years. According to Per Capita and the AUWU, the full privatisation of employment services 'has undermined the public value of the system'. Per Capita and the AUWU provided the following testimonial from Jason, an unemployed worker in Adelaide:
I remember the old days of the CES [Commonwealth Employment Service] where you would sit down and talk to them for half an hour and they would get an idea of what you could do, what you’re about, where you would be suited and if you got a job, you probably be still in it two years later. Now you have to look for work and you have to attend your job network provider and they are two different things.
The Community and Public Sector Union (CPSU) recommended a single, unified public provider of employment services, to provide enhanced support to disadvantaged job seekers. According to the CPSU, the ongoing failure of private providers to deliver for the most disadvantaged 'only strengthens the case for Commonwealth provision of employment services to the most disadvantaged jobseekers'. The CPSU suggested that the public provider should be trialled first in regional areas.
Per Capita and the AUWU recommended restoration of some market share of the employment services system to public service delivery:
Restoration of a publicly funded and operated system, particularly to address the needs of the long-term unemployed and those with significant skills gaps and other special needs, would prove a more efficient and effective model of service delivery for those job seekers who experience significant difficulty in finding and retaining work.
According to Per Capita and the AUWU, this would 'ensure the necessary institutional supports for the training and development of staff, and restore a public service ethos that would focus on genuine assistance'. Similarly, the CPSU suggested that a public employment services provider would be more likely to be an employer of choice, attracting professional and well-trained staff. The CPSU also suggested that stronger integration with other services would be needed to help address more complex, non-vocational barriers to employment, such as homelessness and addiction.
The CPSU suggested that the example of Commonwealth Rehabilitation Service Australia demonstrates that a successful public service option can coexist alongside other providers:
CRS [Commonwealth Rehabilitation Service] Australia provided a good example of what the Commonwealth could do. According to an ANAO audit, over the period 1 July 2008 to 30 June 2010, 90 per cent of respondents indicated that they were satisfied or very satisfied with the support received from CRS Australia. Despite the quality of services, CRS Australia was dismantled with the outsourcing of the remaining 47 per cent of Disability Employment Services – Disability Management Service work that was delivered by CRS Australia. The past experience of CRS Australia also shows the choice of a public option can exist side by side with other providers and deliver for clients.
The CPSU also pointed out that restoration of public service delivery would ensure that policy development is informed by on the ground experience.
Other submitters supported complete restoration of public service delivery of employment services. Per Capita and the AUWU noted that restoration of public service delivery would eliminate issues of creaming and parking that occur under a privatised system.
Throughout the inquiry, the committee has received substantial evidence about the failings of the privatised jobactive model, particularly in regard to meeting the needs of the most disadvantaged in our community. A return to some public service delivery of employment services could have a number of benefits for job seekers and improve the professionalisation of the industry. The committee considers that the government must seriously consider the restoration of some public service delivery of employment services for certain cohorts of unemployed people.
The committee recommends that the government review the costs and benefits of restoring public service delivery of employment services for certain cohorts of unemployed people.