Release type: Speech


National Employment Services Association Leadership Forum


The Hon Kelly O’Dwyer MP
Minister for Jobs and Industrial Relations
Minister for Women

*Check against delivery*


Thank you Sally for the introduction.

Good morning everyone. I am really delighted to be here today to talk Australia’s employment services.

I would like to start by acknowledging the role that your organizations play, the critical role, in helping connect Australian people with their jobs.

The importance of helping those that need assistance to find a job, and to keep a job, cannot be underestimated.

I am very pleased to have recently been given the opportunity with my new portfolio to have direct responsibility for jobs.

Like all of you, the satisfaction of seeing people get their first job or breaking into the job market, is immensely rewarding because getting a job is such a life-changing event.

For some Australians, however, it is a real struggle to land a job or to stay in a job.

And this is where we all have a part to play in helping those people who are able to work, to find a job.

This is because we know a job does so much – it gives people choices about the direction of their life, it gives people dignity, it gives people social connectedness, it is a pathway to better financial future, and it is good for your health, both mental and physical.

One of the most important things that Government can do is to get the economic settings right - to keep the economy strong and growing - because a growing economy provides the opportunity to create more jobs.

Our Government is doing just that.

Jobs and growth was a promise we made at the last election and a promise I’m proud to say we have kept.

Since we came into government in September 2013, more than 1.1 million jobs have been created.

As Minister for Jobs I want to see these opportunities shared by all Australians.

This means jobs in both our cities and in our regions.

Jobs for our young people.

Jobs for parents, returning to the workforce after caring for young children, particularly women.

And jobs for people who are suffering disadvantage and who need someone to give them an opportunity.

It means continued work for older Australians so they can enjoy the benefits of living longer, healthier lives.

But this is not a role just for Government.

Industry, businesses and service providers have a critical role to play as well.

In thinking about the future of employment services, it is worth considering where we have come from.

The world of work has changed, it continues to evolve and our employment services model needs to be adaptive to the new environment.

For anyone who knows me I am a strong believer in good public policy and it is worth looking at some of the turning points – both good and the bad – in employment services across recent decades.

Federal governments have been providing employment services for people looking for work for more than 70 years.

In the aftermath of World War II the Federal Government created the Commonwealth Employment Service, which opened for business in May, 1946.

This CES set the framework – matching job seekers with jobs, but also pursuing training for the unemployed.

Unemployment remained very low for the post war decades – rarely surpassing two per cent.

But in the 1970s and early 1980s, a number of factors led to higher unemployment not least of which was significant social change. This stemmed from the Women’s Liberation movement of the mid-1960s creating a shift in the job seeker demographic.

Up until that point unemployment was measured as a percentage of working age men, with women expected to leave work when they married.

The Whitlam Government introduced the National Employment and Training Scheme – providing an allowance for study and skills upgrading. It also introduced the Regional Employment Development Scheme (the RED scheme).

This was a controversial scheme but much loved by local councils who were given workers paid at the minimum wage to undertake important local works.

The Fraser Government dropped the RED scheme, but introduced the Community Development Employment Projects scheme where members of participating Aboriginal and Torres Strait Islander communities were able to forgo income support benefits for a wages grant paid to the community.

Later as unemployment rose to 10 per cent, the Fraser Government reversed its opposition to public job creation by funding the Community Employment Program.

The Hawke Government commissioned the Kirby Report in 1985, which concluded that labor market programs made only limited improvements to the overall employment profile. The exception it noted was in the most disadvantaged in the labor market.

The Hawke Government began supporting longer term skill development over short-term job creation, and commenced a closer working relationship between welfare and labor market policies, introducing the concept of reciprocal obligation.

This still exists today as mutual obligation.

It is a principle this Government remains committed to.

The Keating Government brought in Working Nation at a time when unemployment levels were at their highest for 50 years.

This policy included case management and the Job Compact – guaranteed employment or training but with job seekers obliged to accept such offers or forgo social security benefits.

Working Nation had mixed results, and the incoming Howard Government argued that it had failed to make any significant or lasting difference in getting unemployed people into regular work.

In 1996 the Howard Government announced the privatization of employment services with the establishment of Job Network. Centrelink became responsible for providing welfare payments and basic employment services.

The Job Network ushered in the biggest single policy shift in Australian history from a public employment service delivered directly through the Commonwealth Employment Service (CES) to a system of contracted-out services, with contracts awarded to private and community sector providers through a competitive tender.

The Job Network was also a world first.

And the reason you are all here today is because of those important changes.

And I am advised that Australia is the only country that has outsourced the entire delivery of its publicly funded employment services.

The Howard Government also introduced Work for the Dole.

While changes were made to the system post-1998, the basic structure and administrative arrangements of the system remain essentially the same.

Job Services Australia replaced Job Network in 2009 under the Rudd Government. New contracts gave providers greater flexibility in service design, aiming at more personalized help.

However, there was criticism that Job Services Australia was overly bureaucratic and encouraged training for training’s sake so in 2015 the current Coalition Government overhauled Job Services Australia and introduced the current employment services model you are all familiar with, which of course is known as jobactive.

The aim of jobactive is to focus on meeting employer needs and assist more job seekers transition from welfare to work.

From the beginning of jobactive through to 30 September 2018 — 318,399 individuals have achieved a 26-week outcome through jobactive.

And in 2017-18 alone — 44.1 per cent of job seekers moved off income support or significantly reduced their reliance on income support six months after participating in jobactive.

By cataloging this history and the changes that have been made by successive governments we can see that the system tends to evolve to meet different times and different economic circumstances.

We need to keep what works, we need to build on experience, and we need to improve what doesn’t work as well.

Under the Coalition Government we have introduced new and innovative programs such as Empowering YOUth Initiatives and Transition to Work that represent a shift away from traditional employment services and emphasize the need to deliver novel and other targeted meaures.

Programs like ParentsNext are showing the positive impacts of early intervention.

Privatized employment services arrangements have served the Australian public well for more than two decades.

But it is now time to take stock and consider what a future employment services model should look like.

We know that the nature of work is changing and will continue to change into the future. As a Government we must provide people with the opportunity to make informed decisions about their future work opportunities.

As I said, the current employment services model, jobactive, was introduced in 2015. It has achieved significant results.

jobactive is performing better at getting job seekers into sustainable employment than all of its predecessors.

Post program monitoring survey data shows that 49.5 per cent of job seekers who participated in jobactive between January 2017 and December 2017 were employed three months later.

This compares to 42.5 per cent for the last three years of JSA.

This survey data also shows that 81.8 per cent of jobactive job seekers are still in employment three months after a recorded job placement. This is compared to 70.6 per cent under the last three years of Job Services Australia.

Additionally, jobactive Providers reached the significant milestone of one million recorded job placements in April 2018 – this is clear evidence that the Government’s employment policies are working.

At the end of September 2018, the number of recorded placements of job seekers had exceeded 1.16 million.

And there are great success stories – like Janaya Paul, a young Indigenous woman from the Gold Coast, who completed Employability Skills Training, undertook an internship and has landed a job as an apprentice mechanic with the help of the Youth Jobs PaTH program.

I recently had the pleasure of meeting Mary Jane Gibbs, an inspiring woman who started her own business during a period of unemployment. With determination and drive, and the support of her local NEIS provider, Mary Jane’s business, Waxiwraps, is thriving. Mary Jane is now improving the financial security of others as a small business owner and employer in Albany, Western Australia.

But it isn’t always good news, it isn’t a perfect system and there is always room for improvement.

Despite an improving labour market, those who have been out of work for a long time are continuing to have very great difficulty in getting a job.

There are still too many people who have been in the system for far too long, and more must be done to assist these people.

As you are well aware, current contracting arrangements under jobactive cease in 2020.

The Government is committed to developing an effective ‘next generation’ employment service system to meet the needs of employers and people looking for work and to provide value to the taxpayer.

As part of this, an Employment Services Expert Advisory Panel was set up under my predecessor Senator Michaelia Cash in January 2018 to advise the Government on the design of a future employment services model.

The panel was chaired by Mrs Sandra McPhee and included representatives from employer and welfare groups, providers and labour market economists, and I know had the great input of Sally as well.

The panel received more than 450 submissions. As you know, there was also extensive consultation with employment services providers, users of the employment services system and other key stakeholders.

I want to extend my thanks today to all of you here who took the time to submit your views and ideas as part of the process.

Only last week I received a report from the Employment Services Expert Advisory Panel, outlining its recommendations for a new employment services system.

I want to especially acknowledge and thank Sandra McPhee and the panel, and the Department of Jobs and Small Business, for their hard work over the past 10 months.

It’s important to note that this report is a report to Government, not a Government report.

The Government’s approach to employment services recognizes that an individual must take responsibility for actively seeking work.

This is absolutely key. All Australians who have the capacity to work should be working, or working towards working.

And we have a strong social safety net in place for those that cannot.

But we also need to do our bit to break down barriers to employment.

We want to see more unemployed Australians move from welfare to work. This will fill more labour shortages and reduce the social and economic costs of welfare dependency.

The Government currently invests around $1.4 billion a year through the current employment services system to help job seekers find and keep work and reduce their reliance on welfare.

However, there is always scope to ask: ‘Can the system be improved? Could we perhaps adopt a new approach to deliver better outcomes for people without jobs? Could a new approach better respond to the future of work and our changing economy? How can our services better connect job seekers with employers?’

I know many of your organizations are asking the same questions and looking at innovative ways to improve your businesses.

Our goal continues to be getting people into jobs and keeping them employed, so they can support themselves now and into the future.

We do not want to see people being churned through the system again and again. We want to see meaningful and sustainable outcomes for job seekers.

The Government recognizes the changing world of the future of work and the need to move with the times in relation to servicing job seekers.

Advances in technology mean we have an opportunity to modernize employment services and refocus our resources on those with the greatest barriers and those with greatest needs.

We need job seekers to stay engaged — to take part in work programs that give them the skills, education or experience they need to find work.

People, as a general rule, do want to work.

They want to find a vocation and develop a career.

But sometimes they don’t know where to start.

We need a system that delivers the help job seekers need when they need it and in the form that best works for them.

It is important that you — the employment service providers — have the time to work with job seekers who need your help to find work.

We absolutely need a system that gives you the time to find out what job seekers’ barriers are, give them the assistance they need to overcome these, and then work to help them get and keep a job.

We need to reduce red tape to free up time to focus effort where it is most needed.

Employers have told us that they need a system that is easy and quick for them to engage with — a system that supports them to give unemployed people a chance.

Reforming employment services to deliver better outcomes for job seekers, employers and taxpayers is one of my key priorities in my new portfolio.

As you are aware, the Government is already trialing new ways of delivering services.

We are currently testing online delivery of some employment services through the Online Employment Services Trial. This trial commenced on 1 July 2018 and is looking at how technology can be harnessed to transform service delivery.

Recognizing that some regions face challenges in terms of employment opportunities and growth, the Government is trialing a new approach to supporting job seekers in 10 disadvantaged regions across Australia.

The Regional Employment Trials program empowers local communities to design and implement local solutions to unemployment in their regions.

The program recognizes that partnering with local communities in designing employment solutions which reflect their distinct local needs can lead to stronger engagement and more effective employment outcomes.

We continue to see successful outcomes for young people being assisted by the Government’s Youth Jobs PaTH initiative.

We have expanded the ParentsNext program so that it can help more parents prepare for employment by the time their children reach school.

Evidence shows long periods of disconnection from the labour market increases a person’s level of disadvantage, making it more difficult for them to return to work, and it can have profound impacts for their families as well.

We expect about 68,000 parents of young children will receive assistance from ParentsNext each year. Importantly, this program also helps to increase female participation as the vast majority of participants are in fact women.

Further, the program also contributes to the Closing the Gap targets as about 10,000 of the parents assisted each year will be Indigenous Australians.

I previously mentioned new and innovative approaches this Government is already taking to the delivery of employment services.

Empowering YOUth Initiatives is just one example which supports new, approaches to help long-term unemployed young people to improve their skills and move toward sustainable employment.

A great example of how Empowering YOUth Initiatives is helping young unemployed Australians is Recycle Your Dreams.

This initiative offers young people at risk of long-term unemployment the chance to learn work skills while recycling industrial waste into furniture.

Young people get the opportunity to develop their entrepreneurial skills, including business planning, product design, product making and product distribution.

Transition to Work is another example of new, innovative approaches this Government is taking to create opportunities for unemployed Australians.

This service provides intensive pre-employment assistance to disengaged young people who are not in education or employment and are at a high risk of becoming long-term unemployed.

It has already helped more than 64,000 young people since its introduction in 2016.

You will also be aware that the Government’s approach to help meet the workforce needs of Australian farmers by matching harvest labour demand with local job seekers is one that is being pursued with vigour.

With the harvest season fast approaching, growers need to be able to access the workers they need in regional and rural areas.

This increase in demand represents an opportunity for local job seekers to benefit from the experience of working in the agricultural sector, a sector that is so vital to our nation’s prosperity.

Employment service providers are critical to the success of this approach.

I urge you to actively identify suitable job seekers and refer them to appropriate jobs with Australian farmers.

There are already great things happening in the provision of employment services in Australia, but there is still work to be done to ensure that those that need help to get a job receive that help.

I intend to continue consulting and engaging with the sector to help shape our future of employment services.

Your input into how we intend to navigate the next stage of this journey is extremely valuable.

I want to thank you already for the contributions you have made to date and the tremendous efforts that you have made and the innovation that you have shown in your businesses in helping to get young Australians and older Australians working.

It is critically important and vital work. You lift up the people of our nation each and every day and you do that in the advancement of our national interest. I want to thank you for the work that you do.