Speech to the 2016 NESA National Conference
Grand Hyatt, Melbourne, Victoria
9.30 am Monday 1 August 2016
• Ms Rowena McNally, Independent Chair NESA
• Ms Sally Sinclair, CEO NESA
• Mr Gordon Cairns, Chairman Woolworths and Origin Energy
• Mr Colin James
• Ladies and gentlemen
It’s a pleasure to be with you today in my continuing role as Minister for Employment and as Minister for Women in the Turnbull Government.
I look forward to building on the progress already made and I am excited by the opportunities ahead for the nation.
We all should have good reason to be confident about what we can achieve moving forward:
• The Australian economy is growing at 3.1 per cent a year.
• Employment grew by around 300,000 people last calendar year, which is the strongest growth in employment since calendar year 2007.
• Since the Government came to office in September 2013, employment has risen by 472,000 (or 4.1 per cent).
• Since the start of jobactive 13 months ago, providers have recorded around 350,000 placements into jobs across Australia and there have been over 105,000 12-week and 40,000 26-week outcomes.
• 110,000 people have participated in Work for the Dole since July last year.
• We also know wage subsidies under jobactive are encouraging employers to take on people.
• And young people at risk of long-term welfare dependency are now receiving intensive services through Transition to Work and Empowering YOUth Initiatives, with more opportunities to come through the Youth Employment Package announced in the Budget.
Before I talk about youth employment in more detail, I want to note we are now in the second year of the operation of jobactive, and I am keen to know how it is going for everyone here.
I’m excited that there have been over 350,000 job placements since jobactive started on 1 July last year – that is quite an achievement.
But if we dig a little deeper into the data, there are some worrying signs emerging that these job placements are disproportionately skewed towards Stream A job seekers.
Nationally, around 18 per cent of job seekers on your caseloads are in Stream C, but roughly only 13 per cent of job placements are for Stream C job seekers, who also account for just 11 per cent of 26 week outcomes.
A similar situation can be seen for Stream B job seekers, who make up almost 35 per cent of your caseloads, yet account for just 25 per cent of job placements, and 23 per cent of 26 week outcomes.
This is in contrast to Stream A job seekers, who represent around 46 per cent of your caseload, yet account for over 61 per cent of job placements, and around 66 per cent of 26 week outcomes.
I don’t for a moment want to suggest that the Government is unhappy with the number of Stream A job seekers being placed into employment—quite the opposite—however the fact remains that placements for Stream B and C job seekers are not where we all would have liked them to be.
I’ve spoken before about the job active model representing a fundamental shift in the design and delivery of employment services in this country.
This is not simply rhetoric – this model is deliberately designed to direct funding to those job seekers who need the most support.
The payment structure of jobactive is more clearly tied to achieving sustained employment outcomes, with outcome payments heavily weighted towards placing the most disadvantaged people into employment.
We all know, however, that this is not easy – many of you have been delivering services since the Job Network days, so I don’t need to tell you that the most disadvantaged people have always been the hardest to place.
They require a significant investment in resources to make them job ready.
But this is an investment we must all make.
The financial viability of the jobactive model has been raised with me throughout the first 12 months of the new contract, and the simple reality is that the model is geared towards significant financial rewards of Stream B and Stream C outcome payments.
The model provides greater incentives and rewards in this regard, which many of you have been able to embrace. It is imperative that you look to improve and innovate in the way that you both engage with and service disadvantaged people.
To that end I am encouraged to note several items on today’s program dealing with this very topic, including the ‘License to Innovate: Investing In Vulnerable Job Seekers’ and ‘Indigenous Employment’ workshops.
Youth Employment Package
This is the first opportunity I have had to talk with NESA members about the Youth Employment Package announced in the Budget, which will be rolled out progressively over the next year.
I am very excited about its potential to assist young Australians.
The Government is investing just over $840 million over four years in the package to give young people under 25 years the employability skills and real work experience they need to get a job.
The core of the package is the new Youth Jobs PaTH (Prepare-Trial-Hire) initiative, involving three flexible stages:
The Prepare phase includes Employability Skills Training to help young people understand the behaviours expected by employers in the recruitment process and in the workplace.
The training will help young people better understand what employers expect of them and give them the skills, attitudes and behaviours required to be successful in a job. Training of this kind is already commonplace amongst the services you provide.
In the Trial phase, internships will give young Australians a chance to show what they can do in a real workplace.
Up to 30,000 young people each year will be eligible to undertake an internship placement of 4 to 12 weeks.
The internships will be voluntary and provide incentives of $1,000 upfront to a business to host an intern and a $200 fortnightly incentive to young people on top of their income support.
And then in the Hire phase, a new Youth Bonus wage subsidy of up to $10,000 over six months will be available to businesses who take on an eligible young job seeker.
You will be aware the internships have attracted some media attention and it is important to note, they are voluntary.
It is a work experience opportunity that gives young people the chance to demonstrate their suitability for their future employment.
It is inappropriate to compare our internships to paid positions as they offer a work experience opportunity, like a number of previous and existing programmes.
Safeguards will be in place to prevent employers from abusing the program.
In addition, employers that participate in the internship program must be able to show real prospects of a job, and there will be safeguards to ensure that existing workers are not displaced.
Australia needs innovative programmes such as PaTH to ensure that our next generation is not confined to a life on welfare. This is a cutting edge programme. It encapsulates the best new thinking from Government and providers about how to create opportunities for young people. It addresses the key concerns that we constantly hear – young people who want to work but can’t get a foot in the door because they don’t have experience; and employers who want to take on young people, but are reluctant to try people who haven’t yet had their foot in the door.
My hope is that over the next three, we as Government and providers will be able to point to the tens of thousands of young Australians who will have been given the opportunity to enter the world who otherwise would not have done so.
The Youth Employment Package also includes an investment of more than $88 million to encourage young Australians to start a business and create their own job.
The highly successful New Enterprise Incentive Scheme will be expanded to offer an additional 2,300 places per year.
Eligibility for the scheme will be broadened so that more job seekers, including those not on income support, have the opportunity to participate in the program.
And ‘Exploring Being My Own Boss’ workshops will be delivered nationally to assist people interested in establishing a small business to understand what is required.
The workshops will be followed by a work experience opportunity to find out first-hand what it’s like to run a small business.
Young people keen on creating their own jobs will be able to access Entrepreneurship Starter Packs that bring together this information, helping them to find the services and assistance they need.
This is a comprehensive package of initiatives and reforms to assist young Australians and I look forward to working with you to fine-tune the package and listen to your feedback on its delivery.
Work for the Dole changes
We also announced in the Budget that, from 1 October this year, the most job ready people will enter the Work for the Dole phase after 12 months, instead of after six months as per the current arrangements.
The new Work for the Dole arrangements provide greater scope for providers to deliver individualised services to this cohort.
This change takes into account that a large proportion of the most job-ready job seekers tend to exit employment services within the first 12 months of service.
Regional Jobs and Investment Package
Our election commitment of a $200 million Regional Jobs and Investment Package will also provide a boost to local businesses and regional communities to upgrade local infrastructure and deliver new skills and training programs.
The regional package will complement the Youth Employment Package in boosting job opportunities for young Australians in the regions.
Increasing women’s labour force participation
As Minister for Women, I am looking forward to building on our previous work to deliver much greater women’s participation in the workforce.
There is no simple solution to achieving our goal, but we do have in place important building blocks to support women into work including;
• access to quality child care
• paid parental leave provisions
• the right to request flexible work arrangements
• access to employment services
• a range of programs such as ParentsNext – which is helping parents with young children prepare for work, and
• wage subsidies to support people moving into the workforce.
I want to highlight with you today the importance of flexible working arrangements for all workers.
It is essential that we support both men and women to balance caring responsibilities with their careers.
As jobactive providers, I ask you to be aware of this need and do what you can to encourage flexibility and diversity in workplaces, both in your own organisation and in your role placing people into the nation’s workplaces.
We are also focusing on supporting women to pursue careers in industries in which they have traditionally been underrepresented.
The jobs we do shouldn’t be defined by our gender and all people should be encouraged to enter career paths regardless of their gender.
Earlier this year, I joined the Prime Minister and Wilhelm Harnisch from the Master Builders Association to announce a pilot mentoring program which matches female senior building and construction industry leaders with female industry newcomers to support them in their pursuit of long-term and rewarding careers in building and construction.
This reflects the fact the ground is shifting quite quickly on breaking down stereotypes which restrict both women and men from enjoying non-traditional career choices and I encourage you to do what you can to further this important trend.
Another great programme that I announced earlier this year was the expansion of the Springboard project. For those who aren’t aware of the Springboard project, it involves jobactive providers partnering with aged care and community sector groups to identify vulnerable women and men, they are trained, mentored and placed into a job.
We really need jobactive providers to get involved with this project, to partner with aged care and community sector groups, especially UnitingCare to roll this project out nationally.
Springboard not only gets women and men into a job but also guarantees jobactive providers outcomes.
I am excited by the opportunity to build on our successes to date through our continued collaboration with NESA and its members during our second term in Government.
I have focused today on the youth employment measures we announced in the Budget, as tackling high youth unemployment must be a major focus for this Government. This is a targeted effort, on top of our existing measures to help all Australians get off welfare and into a job.
jobactive remains a key part of the Government’s employment strategy to reduce barriers to employment and promote workforce participation.
We share a common aim of growing the economy and giving employers and prospective employees the best opportunities we can through jobactive and our other programs.
There is a huge amount we can do, working together, to fulfil this aim and I know NESA and its members represented here today will be making significant contributions across policy discussion, program delivery and innovation.
Thank you for the work you do and I look forward to working with you once more.