Release type: Speech


NESA National Conference, Sydney - Wednesday, 26 August 2009


Senator the Hon Mark Arbib
Minister for Employment Participation
Minister Assisting the Prime Minister for Government Service Delivery

Ladies and gentlemen, I would like to pay my respects to the traditional owners of this land, the Gadigal people, elders past and present. Ms Sally Sinclair, Chief Executive Officer NESA and to my parliamentary colleague Jason Clare, the Parliamentary Secretary for Employment. providers, ladies and gentlemen, distinguished guests.

It’s a great honour to be here today. Thank you for the opportunity to speak to you. Of course, I am here on behalf of the Prime Minister who sends his apologies.

The Cabinet was in Port Macquarie last night and the Prime Minster continues on his mid north coast tour and he’s visiting hospitals and infrastructure projects. So he does send his apologies.

It seems like a very short time since I last addressed some of you at the NESA Practitioner’s conference. That was two days after I became the Minister for Employment Participation. The last two months have been a whirlwind. It feels like a lifetime. In the last eight weeks a lot has happened and I have a lot to report to you on.

Sally, I did say to you at that last conference that my first priority was to outlaw the hundreds of acronyms in the portfolio. On that basis I have to admit that I have been an abject failure. Even my office staff have adopted, as I call it, ‘employment speak’. So I make this commitment to the conference today: I commit to redoubling my efforts. Hopefully at next year’s conference I will have good news to report on the war against acronyms!

Friends, this is an annual event and as Tracey said and I’m sure all of you will be reflecting on the events of the past 12 months. I don’t think it is overstating things to say that the employment services world of today is profoundly different to that of a year ago.

One year ago, the global recession was still only the US sub-prime loans crisis and the NESA conference was considering the Government’s proposed tender arrangements for the new Job Services Australia model. I’m told there was a lot of excitement and discussion about the much needed reforms. In particular, the fact that the new model focused efforts and funding towards the most disadvantaged and long-term job seekers. The job seekers who were being left behind in those good economic times.

But in the space of a few months, we have entered a period of change and uncertainly. Since the collapse of the Lehmann Brothers last September and the descent into what we know as the global financial crisis, we have experienced change on an unprecedented scale.

As a Government and as a country, we faced the possible collapse of the financial system and a crisis of confidence globally. The financial crisis quickly turned into a global recession affecting all of our trading partners and sending millions of people across the globe into unemployment.

The Rudd Government didn’t wait around to see how bad things got. It took unprecedented and aggressive action to try and cushion Australians from the global economic tsunami that was approaching. And so far, we have been successful.

Australia has the fastest growing economy of the OECD and thankfully we have the second lowest unemployment for the advanced, major economies.

Through all this, you have been through major change in the employment field. You have been through a tender process and I know it was difficult and stressful. You have been on the frontline helping people feeling the brunt of the economic crisis. And at the same time you’ve had to adapt to a new employment services system.

So the first thing I would like to say on behalf of the Government and on behalf of the Prime Minister is thank you. Thank you for your efforts. Thank you for all the important work you do and the way you have managed what is a massive challenge in times of great uncertainty.

The work you do to help Australians find work and help working Australians remain employed through ongoing support and training is truly exceptional.

We also want to thank NESA. Sally and her team played a vital role in representing your interests to the Government, relaying your concerns, your issues and your feedback. In turn NESA has worked constructively with us to assist with the implementation and delivery of a new employment system. I’m sure I don’t have to tell you how big that task has been. If fact, it’s been the biggest shake-up of employment services in over a decade. Despite the size of the task, I am please to say the transition is so far going smoothly. I won’t say there haven’t been issues. And I can’t guarantee there won’t be issues to come. But given the size of the transition and the difficult economic times we’ve been in, the transition has been nothing short of amazing.

It’s a testimony to the sound transition and implementation procedures and arrangements that were put in place and I say we’ve all learnt a lot from the mistakes of the past. It is also of course, due to your commitment, your skills and the skills of your workforce. There were many people who said there was no way you could make it work. Many I fear hoped it wouldn’t work.

But you all worked so hard to make it happen. You defied the doomsayers. I’d also of course like to acknowledge the great work of the department—particularly Melissa Golightly, Graham Carters and their team who have done some wonderful work—despite all their annoying acronyms! The department has worked tirelessly to ensure the important transition has been as successful as possible.

I’ve visited and so has Jason [Clare] visited numerous job service providers and the one that than has really stood out is the I.T. system. Now we all know that I.T. systems often don’t work, take time and adjustment. But this system has worked flawlessly and it’s a great credit to the department and the people involved who have been able to put it together so well. It’s a tremendous achievement

So, what’s the progress? What have we been doing over the past two months? There are some very good statistics. Of the job seekers who transitioned into Job Services Australia from previous employment programs, more than 84 per cent have commenced, or haveappointments scheduled with providers.

More than 17 000 work experience activities have been established, most of which involve some form of accredited training. And on top of this, there have been more than 20 000 job placements including a high percentage of placements for Stream 3 and Stream 4 job seekers.

There’s more. More than 2100 job seekers have been referred to NEIS providers (New Enterprise Incentive Scheme). Almost 42 000 Employment Pathway Plans have been approved. More than 90 000 job seekers have been referred to Job Capacity Assessment to assess barriers to employment and work capacity. And $7.8 million in employment pathway funding has been committed to help about 26 000 job seekers including purchasing training, interpreters, transport, licensing assistance and wage subsidies. They are remarkable figures for a transition this big. And that’s only in eight weeks.

I look forward to seeing the transition continue to work for the many people in this room. We’ve always enjoyed as a Government a highly consultative partnership with NESA and the industry more broadly. We believe that you are the best placed people to advise us. As you know we talked to you very seriously about the new employment services model and we want that to continue.

There are so many challenges that still confront us, and the work of Job Services Australia is only just getting underway.

Going forward, the one area we’d like to see improvement and hear your ideas on is the importance of cooperation and collaboration between job providers. I know you’ve all been through a competitive tender process, which I appreciate is somewhat of a disincentive to the sharing of great ideas. But I believe if we are going to be successful we must work together with the interests of job seekers first.

If you have an innovative idea, a particular program, or way of doing something that is achieving great results, please share those ideas. Working cooperatively we can improve the way we operate providing a better service to the people who need it most.

So over the coming months I will be consulting providers and talking to NESA about ways we can foster long-term and productive cooperation in the sector.

You may have noticed in the last couple of days there have been some changes in terms of disability employment and I announced a new tender.

On coming to the portfolio I was briefed on plan for the new disability employment services. I was excited by the significant improvement to the model, especially uncapping services. Importantly, I know it was a hard-fought victory for the sector. It makes access to these key services fairer and more equitable. Importantly, uncapping services means we can now commit to early intervention partnerships, including contacting school leavers providing them with a pathway to employment.

In my initial briefing the department described the current system and I have to say, it was eye watering. It was so complex and it took a great deal of time, I have to admit, to get my head around it. So I was immensely relieved that we are simplifying and streamlining the program into two very distinct structures. Program A and Program B. We’re also reducing funding streams from a staggering nine to three. But there are still some issues that concerned me.

First, you would use what I consider to be a limited star rating system as a way of determining which organisation would be offered an invitation to treat for Program B services and which organisations would therefore have to participate in a tender service process.

I want to make it clear that at this point I strongly support a competitive tender process to ensure that job seekers are receiving quality services from the organisations we fund. But the means by which we decide who’s in and who’s out should be based on a sound performance assessment. Not just on a relative ranking of performance based on a fixed distribution system. Which means of course that a certain proportion of providers must be rated at each of the star levels regardless of their performance.

It struck me as somewhat arbitrary and worst of all not terribly fair.

This of course, is the same flawed system we replaced in the improved Job Services Australia contracts.

As the new Minister I needed to be convinced that the disruption that we would be putting the sector through, not to mention the thousands of job seekers with disability, their families and carers—was completely justified. I wasn’t.

I also wondered whether it might be worth spending a bit more time working with providers giving them every opportunity to get ready for a tender. I decided it was.

I know for some providers there is disappointment. They won’t be able to grow their business by tendering for additional business. I understand that. But in the interests of fairness and avoiding unnecessary disruption to the entire sector, I think this is the right decision. There will be an opportunity in the future to grown your business. In the meantime, I hope you will continue to provide these vital services to job seekers as you have been doing.

I’m also aware that there may be providers in the new service Program A who feel the invitation to treat should have been extended to them. Unfortunately, due to the nature of the existing contracts and Commonwealth Procurement Guidelines, that wasn’t possible. None of these were easy decisions. But I felt it was my responsibility and the responsibility of the Government to do what’s best and fairest for whole sector, not just a portion of it.

The good news is that we are on track to implement the new and improved uncapped disability employment services from 1 March next year. I look forward to working with all of you involved in the disability employment sector on the roll out of these critical services.

We’ve also listened to what you have said about better incentives for providers to refer participants to the Australian Apprenticeships Access Program. The Access program, as you know, provides job seeker who experience barriers to skilled employment with a unique suite of pre-vocational employment training and support services. I’m pleased to announce today that the Government will change the operation and rules to improve the pathways between Job Services Australia and the Access program.

The Government will implement a new incentive fee for Job Services Australia providers. The fees aimed at increasing the number of appropriate job seeker referred to the Access Program. The referring Job Services Australia provider will receive a $500 payment once the Access participant gains an apprenticeship or commences a Certificate III or above, in a priority occupation. This incentive fee will be available for all eligible job seekers including any Stream One job seekers who complete their pre-vocational hours and start in their Apprenticeship or Certificate course through the Access Program.

Job seekers participating in the Access program will be suspended from the Job Services Australia Stream services. This will encourage the participants to focus on working towards their career ambitions, achieve skills employment, via an Australian Apprenticeship pathway.

Now these changes will apply to new referrals made since 1 July this year and the department is working as we speak to implement the changes as soon as possible. You will be receiving further information and all of the technical details via the portal web site in the coming weeks.

You might remember last time I spoke, I spent a great deal of my speech talking about the economic stimulus and the projects that we were rolling out. Something like 35 000 separate projects will be underway in the next 12 months. And I was talking about the direct and indirect jobs that will come out of that through the multipliers. The interest to you in this room I hope has been the establishment of the 20 priority areas and the establishment of Local Employment Coordinators in these 20 areas. For those of you who are in the priority areas, the coordinators are there to assist and help you. Their job is to work with providers, work with training organisations, employers, and work with community organisations to come up with innovative ways to find jobs.

And one of the real eye-openers for me has been the lack of coordination on the ground. The coordinators’ job is to ensure that people don’t fall between the cracks, establish cooperative models and of course, maintain collaboration.

I strongly encourage providers to work with these coordinators, to seek them out and to ensure we’re getting the best results out of these structures.

In terms of the stimulus, last conference I spoke about the Energy Efficient Homes which most of you know is the insulation package with solar hot water program. The jobs opportunities here are immense.

Now the insulation sector was telling us that they think over the next 12 to 18 months, we’ll create something like 4000 jobs across the country. I think that’s an underestimation. Already 6500 business, mostly small businesses, have registered to provide insulation. I think we could be looking at close to 10 000 jobs the next 12 months and there is a big role for providers to play in this part of the stimulus. In July, Sally, representing NESA, and myself, were co-signatories to a memorandum of understanding with the Government, the Housing Industry Association, Master Builders and the CMFEU to ensure job seekers are connected to these new job opportunities.

The agreement was aimed at maximising the thousands of possible jobs that will come out of the energy efficiency package. Please take the time to read this information on the Government’s economic stimulus website. This provides so many opportunities, especially for people who have been unemployed for the long-term.

The Government, as another stimulus measure, is also investing $94 million into new green jobs and training opportunities. The National Green Jobs Fund is designed to build a stronger, greener economy and at the same time help young Australians acquire the skills and training they need for the green jobs of tomorrow.

About 30 000 apprentices will be trained in green skills and some 6 000 new local green jobs will be created through the Jobs Fund, which is soon to be announced. There will also be an additional 4 000 training places available for insulation installers to complement the energy efficiency package. As part of the measure the new National Green Jobs Corp will give young unemployed people the opportunity to participate in environmental work experience and training, provide a training pathway to a job in the new low pollution economy.

The National Green Jobs Corps will commence on 1 January 2010 and run for 24 months. We’re investing $77 million to provide 10 000 places for young Australians ages 18 to 24. The program will target disadvantaged young people particularly those without year 12 in areas of high unemployment, particularly in the priority areas. Because it’s about investing in the future of young people, participants will be provided with accredited training so they can achieve a Certificate II level qualification while they are with the program. The department will run an open and competitive tender for the National Green Jobs Corps. My colleague Jason Clare will be overseeing the Corps and the process itself.

Today I am pleased to announce that the exposure draft of the purchasing arrangements for the Green Jobs Corps will be released on the DEEWR website at 10am. And tomorrow there will be a workshop to provide an opportunity for comment on program development and of course, proposed purchasing arrangements. And all this will be prior to release of the Request for Tender.

Comments, feedback on the exposure draft are welcome and must be received by the 7th of September.

Now we expect that the Request for Tender will be released later next month and the Department will be providing information sessions in capital cities in late September. I acknowledge that the consultation period and the timeframes for purchasing are extremely short but that is necessary to have the program up and running by 1st January next year. And of course as everyone in this room knows, there is no time to waste as youth unemployment continues to grow and there are thousands of young people who are relying on us to get this program in place.

There are many people, media commentators, many people on the other side of politics who are saying that the crisis has passed. That we should withdraw the stimulus measures, roll back the stimulus and let the economy recover on its own. I believe nothing could be more wrong. While the financial crisis may have stabilised, the lasting effects of the global recession will be with us for a long time to come. Unfortunately unemployment will continue to rise. The ripple from the stone thrown in the pond takes a long time to hit the shore. And so it is with unemployment. Many Australians will still be feeling the impacts of global recession after property prices have picked up, after the stock market has recovered and after the financiers return to their desks.

And we face some terrible statistics. Recently Jason [Clare] and I were doing a forum in Canterbury-Bankstown and I was stunned to find to out that the teenage unemployment rate in that region was 45 per cent. Anyone from Cairns will know that unemployment is now over 10 per cent. There are many regions that are suffering.

And we talk about the multiplier effect of the stimulus and all those positive multiplier effects. With unemployment I think about the multiplier effects that work in the opposite direction. When someone loses their job, the effect that has on their family, the effect it has on their friends and people around them.

And for me it provides one of the reasons why I’m so happy to be in this portfolio.

One of the saddest moments I’ve had was to pick up a newspaper, about a week in, and there was a story about a young man who worked at a major organisation and he was retrenched. He’d spent his life in that one organisation. He was in his mid 20s. And after he lost his job, he was so distraught he went out and held up a fast food business and he held many people hostage over many hours. And the thing that affected me most were the comments in the paper from his mother who said for his whole life he’s never been in trouble. Not once, but his job was everything to him. She said this will destroy our family.

That’s why the jobs that you are doing, the work that the Government is doing is so, so important. So thank you for the transition to Job Services Australia. I look forward to working with you in the fight against unemployment.

Thank you.