Release type: Speech

Date:

Jobs Australia Conference

Hilton Hotel, Brisbane

10:30am, Monday 8 September 2008

Acknowledgements

  • I would like to acknowledge the traditional custodians of this land, the Turrbal (pronounced Tur-a-bal) people.
  • David Thompson AM, CEO Jobs Australia

Introduction

  • It is my great pleasure to be here today, at this important gathering of not-for-profit providers of employment services.
  • The opportunity for you all to meet, to exchange ideas, and to hear from such an impressive array of speakers over the next few days is, I think, particularly important this year as you prepare for fundamental change to the delivery of employment services in Australia.
  • I emphasise that the change is to how employment services are delivered. Because as you and I both know, the heart of what you do will remain the same – helping Australians on their pathway to employment.
  • The changes the Rudd Government is making to employment services are about trying to make it easier for you to do that.
  • To provide the flexibility you need to find a solution for the person sitting before you.
  • To help you focus on sustainable employment by giving you the time to train people and the access to training places through the Productivity Places Program.
  • To reduce the administrative burden, so you can spend more time on the job seeker.
  • And to guarantee you work more closely with employers to provide more job seekers with a clear line of sight to employment opportunities.
  • These changes are in large part, your changes.
  • Over the past several months I have undertaken extensive consultation to ensure we can deliver better, more responsive employment services targeted at those who need the most help.
  • Many of you here today have helped to inform our approach and I would like to sincerely thank you for working with us to develop the reforms that everyone—job seekers, employers and providers—agree are long overdue.
  • The new employment services are close to being finalised. Last week we received the responses to the exposure draft of the request for tender, and we are currently considering those comments.
  • By the end of this month, the $3.9 billion tender process will begin.
  • I know many of you will have spent considerable time over the last month poring over the exposure draft of tender, so I thought that rather than talking in general terms about the new employment services, I would focus on a couple of key elements: work experience and performance management.

Work Experience

  • The previous Government told the community that Mutual Obligation was all about job seekers participating in Work for the Dole - even though less than half of job seekers undertaking a Mutual Obligation activity actually did.
  • What was missing from the previous Government’s idea of mutual obligation was their side of the bargain: to provide the requisite skills and experience to get people into work
  • The facts speak for themselves. Only 1 out of every 3 participants in Work for the Dole was employed three months after completing their activity.
  • This Government believes in Mutual Obligation. The community legitimately expects that in exchange for income support, people should be required to take whatever steps are necessary to find a job. This is why the new employment service requires every job seeker to comply with their employment pathway plan.
  • But there is also an obligation on government to provide the help people need to get off income support and into sustainable employment. We are providing that assistance through the Employment Pathway Fund, and the 238,000 training opportunities in the Productivity Places Program.
  • What was also missing from the previous Government’s approach was recognition that not all job seekers are alike.
  • For some people, the pathway to employment is pounding the pavement, knocking on doors, and looking for vacancies.
  • For others, it might be re-skilling in an area of skills shortage.
  • But for the most disadvantaged job seekers the assistance they need will have to be tailored to their personal circumstances.
  • Work experience in the new employment services can be tailored to the personal circumstances of each job seeker.
  • A job seeker will be able to participate in work experience at a time that suits their needs. For some that will mean within days or weeks of unemployment. For others it may mean after 12 months. It won’t mean after 6 months, ready or not.
  • That is why work experience like Work for the Dole can commence earlier or later than currently allowed.
  • A job seeker will also be able to participate in work experience activities that reflect the needs of the local labour market, the community and their own skills.
  • A wide range of work experience activities will be available including: volunteer work, work in social or community enterprises, work experience placements in the private sector, Drought Force farm-based activities or part-time or casual paid employment.
  • Two key work experience activities from the previous employment services system will be retained and improved – and I expect that around half of job seekers who undertake Work Experience activities will participate in these two activities alone – Work for the Dole and Green Corps.
  • There is undoubtedly widespread community support for Work for the Dole. I’ve attended many Work for the Dole projects since becoming Minister and communities have told me that they value the contribution such activities make and want it to continue.
  • Job seekers have also told me that they appreciate the opportunity to experience doing something worthwhile and making friends with work mates.
  • They feel useful and wanted
  • A young woman in Melbourne told me her life before Work Experience was sitting in front of the tv all day smoking dope.
  • She had lost all her real friends and told me she could not see a way out.
  • The Work for the Dole program got her out of bed in the morning, out of the house and helping to build a community park with new found friends.
  • Her mother at the graduation cried when she told me that this turnaround of her daughter was nothing short of remarkable.
  • But her journey must not end there as she was still unemployed and looking to start a second Work for the Dole program.
  • We need to ensure people get work beyond the Dole!
  • As I indicated previously, there is room for improvement in the outcomes to be achieved from Work for the Dole and I am making two key changes to the way it currently operates.
  • The first is providing job seekers the opportunity to undertake training within the scope of their Work for the Dole activity.
  • The second is that we are linking Work for the Dole and assistance to find employment and building better incentives into the new services.
  • By paying outcome fees to the same organisation with responsibility for designing and delivering the Work for the Dole activity, we expect a greater focus on the activity delivering a stronger pathway into employment.
  • Green Corps activities will retain their focus on environmental and heritage principles, and will continue to provide the opportunity for work experience integrated with training. But it will now be available to job seekers of all ages.
  • As is the case now, job seekers will also be able to take part in a range of activities as an alternative to Work for the Dole. This might mean pursuing self-employment through the New Enterprise Incentive Scheme; education or training under the Productivity Places Program; participation in the Language, Literacy and Numeracy Program or the Apprenticeship Access Program; or countless other opportunities, including participation in non-vocational programs such as drug and alcohol rehabilitation.
  • The range of activities a job seeker can pursue is reflected in the funding model for Work Experience – which is very different to the existing payment model for Work for the Dole.
  • Previously Community Work Coordinators were funded per Work for the Dole place, in which there could be more than one person serviced over the course of the activity – in fact on average about 1.8 jobseekers are currently serviced in each allocated Work for the Dole place. Most of the other so called mutual obligation activities were not funded at all. Outcome fees for jobseekers who obtained employment during a Work for the Dole placement were paid to the Job Network provider not to the Community Work Coordinator. And Work for the Dole service fees were paid on a separate basis to the Community Work Coordinators.
  • The new system will see regular service fees and outcome fees continue to be paid to employment service providers for the duration of a job seeker’s unemployment. Additional service fees and additional employment pathway funds will be paid at 12 months (or 18 months in the case of Stream 4) as job seekers enter the Work Experience phase of their Stream.
  • It is expected that around half of job seekers undertaking a Work Experience activity will, as they have done previously, participate in Work for the Dole or Green Corps activities.
  • As is also the case now, it is expected that other job seekers will participate in other activities which would have significantly lower cost impact. For example I can see many job seekers in the Work Experience phase being placed in education or training, including those under the Productivity Places Program. These are funded separately. Still others will attract the fees upon commencing in the Work Experience phase but as is the case presently, because of their personal circumstances will be exempt from participating in an activity.
  • The bottom line is that providers will have the resources to deliver a range of Work Experience activities, including Work for the Dole and Green Corps – but with a different funding framework. A framework which we believe offers more flexibility than the current funding model.

Performance Management

  • As I indicated previously, the other aspect of the new employment services I wanted to focus on today is the performance management system.
  • A simple and transparent performance management framework is an essential element of a well-functioning employment service. Unfortunately, the current system falls well short of these basic goals.
  • Over the course of consultations, providers have consistently criticised the current performance management framework. You have told us the system is overly complicated and lacking transparency; that it does not really apply like for like comparisons; that it has a short-term focus and discourages the skilling and training of job seekers; and that it leads to unnecessary business uncertainty.
  • To provide advice on a new way of driving performance, I established an Expert Reference Group to shape a robust performance management framework that would support sustainable employment outcomes from the new employment services.
  • The preliminary advice from the Group was reflected in the Exposure Draft of the RFT.
  • We would devise Key Performance Indicators that reflect the Government’s priorities for the new employment services.
  • We would no longer have fixed distribution of star ratings.
  • We would recognise social outcomes for Stream 4 job seekers.
  • And we would provide more timely and frequent information to providers.
  • The Expert Reference Group has done a fine job, within a very short time frame, and I thank them all for their work, including your own David Thompson, and Megan Lilly, who I believe is speaking after me today.
  • Last week the Group provided me with their report, and I am in the process of considering their recommendations. But I thought today I would briefly take you through some of the highlights of their report: social outcomes, speed to placement, and the distribution of ratings.

Distribution of Ratings

  • As announced in the Exposure Draft, there will be no fixed distribution of ratings. Instead I have decided and the group has recommended there be ratings bands measured by the distance from average performance. Performance will still be measured relative to your peers, but there will no longer be a fixed proportion of 1-star providers. In fact it is conceivable under the new ratings system that there will be no 1-star providers. Further work will need to be done to work out exactly what distance from the average is reasonable.
  • It has also agreed that DEEWR will work with providers, and with technical experts, to look at ways of providing benchmark targets over the life of the contract.

Speed of placement

  • Speed to placement is another issue which has been raised frequently with me. While we want to ensure that job seekers obtain employment as soon as possible, we don’t want it to result in job seeker churn at the expense of sustainable employment outcomes.
  • The Expert Reference Group recommends that speed to placement continue to be measured in the performance management system, but the weight that it is given within the overall framework should decline as the job seeker’s level of disadvantage increases. In other words it will have a greater weight in respect of stream 1 job seekers than stream 4 job seekers.
  • This proposed speed to placement indicator would also be very different from current measures, which are based on predetermined, essentially arbitrary benchmarks. The proposed new measure will reflect the average time to placement achieved by each provider for each Stream compared to the average time achieved in that Stream by all providers in a similar labour market.
  • Speed to placement will be balanced by stopping the clock when a job seeker participates in accredited training, and by the group’s recommendation that bonus outcome payments for training leading to employment be reflected in the performance management system. As a result providers will not be penalised when a job seeker is undertaking training. Indeed, the report's recommendations would allow for an additional reward for providers where a job is acquired as a result of training.

Social Outcomes

  • Social outcomes for Stream 4 job seekers will also be included in the new performance management framework. This recognises the steps that some job seeker may need to take before being ready for employment.
  • At the moment there are no well established comprehensive measures of progress for disadvantaged job seekers. The reference group has therefore recommended a two stage process.
  • As a first step, social outcomes would be recognised in Stream 4 using a proxy measure of the progress an individual has made towards work readiness
  • The group also recommends further work be undertaken to develop verifiable measures which better capture the distance travelled towards employment by individuals.
  • I am considering these recommendations to see how we achieve these objectives.
  • The aim is to develop a new model for measuring progress in reducing social isolation in parallel with job search and employment outcomes. I expect a more comprehensive approach can be developed and trialled which will provide a basis for better measures of social progress in the future.
  • This approach will be developed in consultation with providers and other stakeholders and in the context of the government’s broader social inclusion agenda, including the current work on homelessness.

Next Steps

  • My response to the Expert Reference Groups recommendations will be reflected in the Request for Tender to be released shortly. However, my Department will work closely with you, following the closure of the Request for Tender to develop the implementation detail of these new arrangements.
  • The focus of this ongoing work will be on the simplification of the regression model used to compare like with like, the development of a robust social outcomes framework and how we can continuously improve the performance information that is available to providers.
  • Improving the information we provide will assist you to drive performance in your own organisations.

Conclusion

  • This shared goal – to improve the services we provide to unemployed Australians – is what is behind this Government’s approach to employment services.
  • I can’t say often enough that we will continue to work with you to deliver for job seekers and employers.
  • Ensuring more Australians get into meaningful work is crucial to meeting the nation’s demand for skills and driving our economic growth.
  • But it is not just in Australia’s economic interests that we are pursuing these reforms.
  • As all of you here today will be aware, it is also in the interests of the individual.
  • It is in the interests of the job seeker with a mental illness forced onto a waiting list before they can access the services they so critically need.
  • It is in the interests of those who while desperately needing to find a job also need help to keep a roof over their head.
  • And it is in the interests of those recently jobless to have them avoid joining that growing list of long-term unemployed.
  • These changes are an opportunity to tackle social and economic disadvantage.
  • It is my hope that together we can seize this opportunity – to the benefit of job seekers and employers.
  • Thank you.