Address to the National Employment Services Association Practitioners Conference. Sebel Albert Park, Melbourne

Speech
  • Minister for Employment Participation
  • Minister for Child Care

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Good morning.

I would like to thank NESA for inviting me and am delighted to be here to have the chance to speak directly with the individuals who are at the front line of delivering employment services to job seekers.

This is a really important time for us and we are presented with amazing opportunities to truly transform the lives of thousands of jobless Australians. So I want to talk to you today about our vision and about the supports that we are giving you to make it a reality.

As you know, we have been holding consultations over the past months, to seek your input on the future of employment services.

I want to acknowledge the important leadership role of NESA, and in particular of Sally Sinclair, who has been an important voice on your behalf throughout this process.

The 2011-12 Budget brought the outcomes of this process to fruition.

The Building Australia’s Future Workforce package — worth $3 billion over 6 years — is a centrepiece of the 2011-12 Budget. This funding will improve the skills, training and job opportunities for young and mature age people, families without jobs, people with disability, and the very long-term unemployed.

It is a package that focuses on those who may need additional support to find and keep a job – the people that you work with every day in the course of your jobs.

Our Government will make an $8.5 billion investment over the next four years to deliver improved employment services to give unemployed Australians a better chance of finding a job.

This is because we recognise the critical importance of the work that you, as employment service providers do, in giving unemployed Australians the support they need to find a job.

We also recognise the challenges and opportunities of the current employment market.

Our Government is proud that more than 700 000 jobs have been created since we came to office in 2007. We’re pleased that over the next two and a half years we expect to see another 500 000 jobs created.

As we head towards a projected unemployment rate of 4.5 per cent, our country is faced with a unique chance to transform the lives of the very long term unemployed.

The mining boom is straining our labour market, compounded by the demands of the recovery from natural disasters.

We need more workers for today and into the future.

Many people need work today and into the future.

We have a unique chance to break the cycle of welfare dependency that plagues too many Australians families and to extend the benefits of work to more of our citizens.

Help for the very long term unemployed

The statistics show us that once a job seeker has been unemployed for one year they have a 54 per cent chance of being unemployed for at least one more year.

All of you know and have experience with people who have then been unemployed for a longer period of time - people who often have difficulty finding employment because they don’t have the necessary skills and work experience that employers are looking for.

In Australia today there are around 230 000 very long-term unemployed job seekers – people who have been out of work and relying on welfare for more than two years.

This cohort of job seekers are more likely to be Indigenous, more likely to have a disability, or to suffer from mental illness and more likely to be homeless.

Many are locked in a cycle of intergenerational unemployment, where their parents before them and their parents before them have lived lives on welfare.

They have become ‘invisible’ and our Government is determined to provide focus to them so that they do not become the fall-out of a society rich with promise and opportunity for most but not all.

Our aim is to leave no-one behind.

Through the Budget we are investing some $227.9 million in measures specifically targeted to the very long term unemployed.

This includes an additional $94 million wage subsidy to give 35 000 very long term unemployed Australians the opportunity to work.

This wage subsidy will begin from 1 January 2012 and equates to the rate of Newstart Allowance a job seeker receives for six months.

It is designed to give you, the practitioners in the field, as much flexibility as possible. The subsidy amount will be paid for at least six months but that could be spread out for longer based on the needs of the job seeker and employer.

This will help transform the lives of some 35 000 Australians who have been living lives defined by their unemployed status.

You should take pride in the fact that through the delivery of this wage subsidy you will be working to make a real difference – a life changing difference – for some of the most disadvantaged people in our community.

Participation requirements

To improve the chances of the very long term unemployed to get into work, including with support from wage subsidies, we’re providing an additional $133 million to fund training, Work for the Dole and other supports through the provision of a new $1000 Employment Pathway Fund allocation for all job seekers that are with services for 24 months.

The Employment Pathway Fund was one of the innovations that accompanied the introduction of Job Services Australia. It gives you, the practitioners in the field, more flexibility.

Under previous arrangements we know that very long term unemployed job seekers only had to meet activity requirements for 6 months each year. This lack of activity is detrimental to people’s health and wellbeing and also undermines job readiness.

These job seekers will now be required to undertake activities like Work for the Dole, volunteering, skills based work experience or job training for 11 months of the year in order to continue to be eligible for income support.

Work for the Dole

As I mentioned, Work for the Dole will be one activity option for job seekers to undertake under these new arrangements.

Work for the Dole – the program that in his Budget Reply speech last week, Opposition leader Tony Abbott accused our Government of abandoning.

Perhaps unsurprisingly, Tony Abbott and the Opposition have got their facts wrong again in this regard.

The fact is that since July 2009 there have been over 57 000 placements in Work for the Dole activities. Communities across Australia have benefited from Work for the Dole activities over many years, and continue to do so. While we continue to support Work for the Dole, this Government’s focus is rightly on getting people off income support and into jobs.

Rather than doing Work for the Dole for its own sake, employment service providers now have the flexibility to place job seekers in the activities that will most help them get paid employment – with Work for the Dole being one of those options.

The positive results of this shift are already clear.

December 2010 data indicates that over 60 per cent of job seekers who have undertaken education and training activities are in a job or studying three months after completing the activity. By comparison, only around 35 per cent of job seekers who’ve participated in Work for the Dole have moved into work or further study.

When it comes to workforce participation it is time for Tony Abbott and the Opposition to start coming to the table armed with facts, rather than yelling from the sidelines with only fiction to support their arguments.

Learn or Earn

As Minister I have heard from those of you working on the ground with young job seekers that you believe you needed more funding to support our Learn of Earn commitment.

So I’m pleased to let you know that the Budget includes a new Transition Support for Early School Leavers measure to assist eligible job seekers aged 15 to 21 years through an additional $500 allocation into the EPF. The Budget provided an additional $67.6 million for this measure.

So, together with the very long term unemployed payment, in total more than $200 million in additional funds will flow into the EPF.

The Compliance System

As we all know, while most job seekers are genuine in their efforts to find work – there are a minority who are not. They are a minority who are content to accept their fortnightly cheque and who, despite your best efforts, are not getting serious about finding a job.

As we increase our investments in programs to support Australians back into the workforce, it is fair that this minority also increase their responsibilities.

You tell us that there are unemployed people who repeatedly miss appointments.

Last week the Australian Government secured passage of the Job Seeker Compliance Bill through the House of Representatives.

That Bill delivers on our election commitment to introduce tighter measures that will mean more unemployed people are actively involved in seeking work. It introduces suspension of income support payments for job seekers following a failure to attend an appointment or participation activity with the employment services provider.

If the person fails to reengage and does not have a reasonable excuse for missing their appointments, then there will be a penalty deducted from their next payment.

This Bill is about placing a set of expectations on jobseekers – that in return for the support, that we give them help to find employment that they will meet their responsibilities and show up at appointments. It is about ensuring that we’re not wasting your time and not wasting taxpayer’s money.

Many of you will be aware that the Government commissioned an Independent Review of the Job Seeker Compliance framework, which was headed by Prof Julian Disney.

This Budget has provided $49.8 million to implement key recommendations of the Independent report. That is, to intervene early and to prevent vulnerable job seekers from being the subject of penalties and to focus on ways of engaging non-compliant job seekers before they are at risk of the harshest penalties.

The compliance system is complex and we’ll improve on that. IT systems don’t share needed information well and the system will be simplified. Through this new funding we will reduce paperwork burdens so that you can spend more time working with job seekers and less time fighting your way through red tape.

Future employment services arrangements

On Budget night Minister Chris Evans and I announced a way forward for procurement of DES and JSA services.

In December 2010, I wrote to stakeholders seeking their views on future directions for employment services. I received over 150 submissions.

The consultation process told me that stability of service models is important in providing employment services but so too is the Government’s commitment to ensure that taxpayer dollars go to the highest performing organisations.

Job seekers simply must get access to the organisations with the best prospects of helping them get and stay in a job.

Through previous Ministers in this portfolio, Brendan O’Connor and Mark Arbib, the Government has publicly committed to conducting an open procurement process for DES. To give providers the opportunity to plan for the transition, contracts will be extended by 8 months and those that are performing above average will continue to be contracted until 2015. Those performing at or below average will face an open procurement or competitive tender process.

JSA providers with a performance rating of three stars and above will be offered a contract extension for three years until 30 June 2015 in non-remote Employment Service Areas (ESAs).

One and two star JSA providers in-non remote ESAs will be subject to a business review process. If they do not have exceptional circumstances to explain this poor performance, their business will be offered to other higher performing JSAs or be put to open tender.

We believe that thoroughly assessing the current outcomes, rewarding the high performers, and allowing the opportunity for new entrants to bid to deliver services, provide the necessary accountability.

I will continue to discuss these matters extensively with you and other stakeholders.

The administrative burden is something that you have raised in consultations. I am establishing the Advisory Panel on Employment Services Administration and Accountability to advise the Government on how we can streamline administration.

Procurement is a complex task which requires careful work. Within employment services there are hundreds of organisations with tens of thousands of staff supporting job seekers from thousands of sites. What is a burden to some is a positive feature of the system for others.

I encourage all of you to work within your organisations, with each other, with Centrelink, DEEWR, job seekers and the Advisory Panel to talk about better ways of doing business.

A patchwork economy

Australia’s recovery from the Global Financial Crisis has been remarkable — but it has also been uneven.

A ‘patchwork’ economy has emerged with some regions of Australia experiencing persistent and unacceptably high unemployment and where many job seekers have low education and job skill levels.

It is important that disadvantaged regions are provided with extra assistance to help break down these barriers so that all of Australia can contribute to strengthening the national economy.

When the Global Financial Crisis struck, the Government responded quickly and identified 20 vulnerable areas across Australia for extra support and attention. The Priority Employment Area initiative placed Local Employment Coordinators in these areas to work across programs, governments and organisations to support areas doing it tough.

The Budget extends these place-based initiatives, complementing measures that are universal.

Within the Employment Participation Portfolio additional funding has been provided to extend to Priority Employment Area initiatives, also in disadvantage areas, although regional and broader than the new disadvantaged communities’ initiatives.

In total $44.2 million has been provided for a 2 year (to 2013) extension of LEC’s, including an additional $20 million as part of a flexible funding pool for Job Expos and other activities, priorities for which will be determined at the local level.

At the last election our Government committed to a pilot program called ‘Connecting People with Jobs’ to provide assistance to long term unemployed job seekers who are willing to relocate for a job.

This initiative commenced earlier this year and is now worth over $29.2 million over two years, to support the relocation of up to 4000 job seekers.

Relocation is not going to be the best option for every job seeker but as employment providers it is another tool in your toolkit of opportunities to assist the people who come to you for help.

The Budget includes a measure to broaden eligibility under this pilot so that more job seekers willing move to take up a job can get support. The eligibility for support under this pilot will be 3 months duration job search through employment services.

Some of you have worked with and others heard of the joint work between DEEWR and Centrelink on Local Connections to Work. At present we have 9 sites that are improving the collaboration between employment and other community services with Centrelink.

The Budget has included an announcement to add another 16 new Local Connections to Work sites.

There has also been an allocation of $4.7 million to support 20 Job Services Australia providers that have demonstrated expertise in supporting Stream 4 job seekers into employment.

Conclusion

All of these measures — and all the Government’s new spending to ensure better outcomes for the unemployed, especially those who are disadvantaged and vulnerable —will give us a more flexible and more robust system.

It will be better for job seekers, and better for you. Without you, all our employment programs, our good intentions, our increased resources, would come to nought.

I thank you for your great work in helping Australia’s unemployed, especially those who are disadvantaged and vulnerable, enter the workforce.

The Australian economy needs more workers if we are going to successfully take advantage of the minerals boom and manage the challenges of our aging population.

This presents a great opportunity for Australians who have been out of work for a long time and who face significant barriers to re-entering the workforce.

I believe that the 2011-12 Budget lays out a strong plan to make the most of this opportunity and provide those Australians with the incentives and support they need to find and keep a decent job.

Thank you.[Ends].

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