Opening address: NESA Working Communities International Congress

Speech
  • Minister for Employment Participation
  • Minister Assisting the Prime Minister for Government Service Delivery

***Check against delivery***

I acknowledge the traditional custodians of the land the Wurundjeri People of the Kulin Nation and pay my respects to their elders both past and present.

I also wish to acknowledge:

  • Sally Sinclair, CEO of the National Employment Service Association.
  • Our international visitors
  • Distinguished guests
  • Ladies and gentlemen.

I’d like to congratulate NESA for bringing us together and preparing such a comprehensive program to explore some of the key employment challenges we face today.

And I’d especially like to congratulate Sally Sinclair for her great selection of speakers- fantastic! I would love to be able to pull up a chair and stay for the whole conference.

This is a great opportunity to share new ideas about the work being done to tackle unemployment and disadvantage overseas and here in Australia.

It’s also a much needed opportunity to take a long term view point – to look beyond the day-to-day, reflect on our recent history and towards what can be achieved in the future.

Today I would like to talk from an Australian perspective about the strategies needed to deal in particular with long term unemployment and disadvantage.

During most of the last decade, Australia enjoyed unprecedented economic growth fuelled largely by a resources boom.

But not all Australians benefited.

In spite of our growing prosperity, too many Australians were being left behind— something out of character, I’d say, for a nation built on the foundation of a fair go for all.

The cycle of disadvantage among jobless families continued.

  • People with disability and mental illness faced obstacles to participation.
  • The employment gap between Indigenous people and other Australians remained unacceptably wide.
  • And long term and very long-term unemployment persisted despite the strength of Australia's economy that thanks to the mining boom has experienced almost 16 years of continuous economic expansion.

Prior to the recession of the early 1990s the proportion of unemployed who had been out of work for at least 12 months was one in five; it rose as high as one in three during the peak of the downturn. Twenty years later in 2010 we still have 151,500 long-term unemployed, accounting once gain for one in five of all unemployed people.

We averted the worst of the global financial crisis through early and decisive action, but we have not been able with all our economic growth and prosperity to make a significant impact on reducing long term joblessness and therefore disadvantage.

As I’ve said many times before – and I know many of you have heard me say this before – the key to fighting social disadvantage is employment.

This means that job and training outcomes need to be at the core of any assessment of policies, programs and services.

But as you all know there is no simple answer when it comes to the long term unemployed; it’s not just a job matching exercise.

As a Government we must address the complex barriers to employment- whether they are homelessness, mental illness, poverty or educational disadvantage.

And this certainly has not been the case when you have a closer look at how Australian Government’s have dealt with the issue of welfare.

Over the past few decades, successive Australian Governments have grappled with the perennial issue of reducing welfare dependency. Long term reliance on welfare is incredibly harmful to those who rely on payments and to their families.

Governments have pursued various policies and programs to include welfare recipients in the workforce—with mixed results.

In 1986 the Hawke Government commissioned the Social Security Review and began a reform of our income support, and associated service systems that continues today.

A shift in thinking how to deal with the problem had come about: that is from passive to active assistance. And requirements and supports to bring about workforce participation were central to this endeavour.

During the recession of the early 1990s, there was a strengthening of the compliance regime – penalties were put in place, and to give meaning to participation requirements, opportunities in employment and other services were created.

The Howard Government continued and expanded, in its own way, the participation requirements and compliance system.

It pursued an approach to penalties and breaches regarding unemployed people that can only be described as extreme. In 2001-02 the Howard Government imposed 386,000 breach penalties. 18 per cent of all unemployed people in that year were breached.

In 2006, the Welfare to Work policy was also introduced by the Howard Government. The main targets were parents with school-age children, people with disability, mature-age job seekers and the very long-term unemployed.

An evaluation by the Department of Education, Employment and Workplace Relations published a fortnight ago sheds some light on the effectiveness of Welfare to Work measures.

There were some increases in participation and reduced income support reliance for parents and, to a lesser extent, for people with disability who can do some work.

However, there was little, if any, change for mature-age job seekers and the very long-term unemployed.

In fact the very long term unemployed fared particularly poorly under the Welfare to Work measures. “Off” benefit outcomes, mostly into jobs, went up marginally from 16% in the year before those measures to 20%.

At the same time the proportion of the very long term unemployed who were the subject of penalties rose through Welfare to Work from 8% to almost 16%.

They got the pain, but not the gain…

I want to make clear that the Rudd Government supports compliance measures; it was a Labor policy initiative going back to the 1980s.

But getting people into jobs should always be the goal of compliance, not compliance for compliance sake as was the case under the Howard Government.

And this is the philosophy that is driving the Government's policies in relation to welfare and participation requirements that are focused primarily on training for work and raising educational opportunities.

Early indications are that the new job seeker compliance framework introduced in July 2009 is working well.

We’ve retained the eight week non-payment penalties but also introduced triggers for more immediate engagement of job seekers through the “No Show No Pay” penalties.

Importantly, overall job seeker attendance rates are better under the new compliance framework.

The attendance rate for initial appointments with Job Services Australia providers is 59 per cent, compared to 56 per cent under the old system.

When the new job seeker compliance framework was announced the Government agreed to undertake a review after the first year of its operation.

I’m very pleased to announce today that Professor Julian Disney has agreed to chair a panel which will conduct this review. I’m sure Professor Disney is well known to many of you. He is currently a part-time professor and Director of The Social Justice Project at the University of Western Sydney.

Professor Disney's Review will help develop the future pathway for compliance and I am sure that everyone looks forward to his report.

I realise over these coming days you will discuss issues of best practice and ways in which service activities may be better integrated to deliver outcomes at the community level.

The report evaluating Welfare to Work measures includes a sobering message for all of us.

In particular the Personal Support Program, targeted at the most disadvantage among jobseekers, was assessed in terms of its net impact – the difference in terms of off-income benefits for those involved in the program and a control group that was not of similar disadvantage.

The long term outcomes for that program were negative by 4.5% over 28 months. That is, those disadvantage jobseekers in that program, were less likely to be off-benefits that those who didn’t participate in the program.

It’s not enough for programs and services to have good intentions; they need to be driven by good outcomes.

One-size doesn’t fit all, especially when we are seeking to support those who are most disadvantaged among jobseekers.

That’s why we must attack the problem at the macro and micro level, ensuring all relevant programs are designed to meet the needs of disadvantaged job seekers and integrated with other governmental programs tackling disadvantage.

And ladies and gentlemen that’s exactly what we’re doing.

When the Rudd Government was elected, we made one of the cornerstones of our foundation, a commitment to social inclusion.

For the first time since federation, the Australian Government had a Minister that would be responsible for this important issue.

The Deputy Prime Minister, Julia Gillard developed a set of core principles for social inclusion.

These principles are:

  • building on individual and community strengths,
  • building partnerships with key stakeholders,
  • developing tailored services,
  • giving high priority to early intervention and prevention,
  • building joined-up services and whole of government solutions,
  • using evidence and integrated data to inform policy,
  • using locational (community) approaches, and
  • planning for sustainability.

These principles are at the heart of every Australian Government portfolio.

This is because a core commitment of this Government is to make sure that no Australian is left behind.

We’ve made this our national ethos and the defining element of all our nation-building endeavours. It is the basis of our social inclusion agenda.

Through this agenda, we seek to build a stronger and fairer nation where all Australians can participate in the nation’s economic and social life.

We seek to build communities in which every individual can develop themselves and realise their full potential.

Our social inclusion framework is already paying dividends in regard to policy development and redesign and will help disadvantaged job seekers today and in the long run.

The main interface for unemployed Australians is of course with your members at the Job Services Australia level. And we’ve come a long way since July last year.

I believe that you, and the government, deserve to be proud of the changes that have come about in employment services.

The consultation leading to this new model was extensive and the changes great.

Job Services Australia started in the heat of the global recession and there were some very nervous moments.

Importantly in the design – its demand driven nature meant that the capacity was built in to adjust to the higher flows of job seekers with a focus on job seekers with severe barriers to employment.

By mid March this year – just over eight months after it commenced – we, I should say you, had placed almost 240,000 job seekers, including more than 18,300 Indigenous job seekers.

Job Services Australia is performing strongly in comparison with the early days of the previous Job Network contract period.

An analysis by the Department indicates that, even with the Global Recession, the rate of employment outcomes in the six month start up for Job Services Australia has been greater than for the first six months of the old Job Network contract in July to December 2003. An improvement over the old model of 18 per cent.

Part of this success has been the innovations that lead to the Employment Pathway Fund.

So far through this fund, we’ve invested more than $126 million to help over 229,000 job seekers get employment. It’s given services much greater flexibility in meeting the needs of job seekers, especially those most disadvantaged.

Job Services Australia has also given much greater financial incentive to job providers giving them more incentive to place disadvantaged jobseekers.

To date 79,800 job seekers from either Stream 3 or Stream 4 have been placed in employment, a very promising start.

There has also been a sea-change reflecting the growing importance of job training. In December 2004 only 7.4% of Newstart and Youth Allowance recipients were in training.

By December 2009, this has almost doubled to 13.3%.

This is important because the share of employment going to unskilled or low skilled workers has been steadily declining for more than a decade.

If we don’t work to up-skill the jobless, we’ll just create a more vicious competition in the labour market for the declining number of low skilled jobs.

It is difficult to talk about employment trends in this country without making reference to the Global Financial Crisis.

Events have shown that Australia has emerged better than most countries around the world.

When the crisis first became apparent, the Government knew what was at stake: hundreds of thousands of jobs, thousands of businesses, the wellbeing of many families and communities, in particular those most disadvantaged.

But while a crisis brings challenges, it also brings opportunities and this is the case with the global downturn.

It led to the government to introduce substantial and well targeted labour market programs; in particular I am talking about the Jobs and Innovation Funds which will support some 16,000 jobs, 5000 work experience places and 5000 training places for job seekers.

So far the work is paying off. Over the past year youth unemployment – that is 15 to 24 year olds – has increased only marginally from 11% to 11.4%.

Whereas teenage unemployment – that is 15 to 19 year olds – has dropped from 25% to 23%.

These are truly great results, especially when contrasted with the turbulence of the global economy and compared to overseas unemployment rates.

Nevertheless I am still extremely worried by some of the statistics we are seeing especially in regard to the numbers of long-term unemployed who have increased from 74,000 to 110,000 over the past 12 months.

So we intend to do even more.

The Government is acting to drive up employment participation levels through this month's launch of the uncapped Disability Employment Services program and the new Mature Age Worker Package.

We are also working tirelessly on my personal passion to reduce Indigenous rates of unemployment through a comprehensive campaign with local communities, the corporate sector and job providers.

There is a long way to go, but through our social inclusion agenda, practical compliance measures, training and targeted labour market programs I am confident we can finally make inroads into long term unemployment.

Just to finish, can I say that Government cannot do this alone. It’s hard to envisage the successful development and roll out of these employment programs without the work and co-operation of NESA and its members.

I am truly indebted to Sally and her Board for all the support and advice they have given me and I look forward to working closely together over the coming years.

Your views are crucial in feeding into the changes that will be needed in the months and years ahead; the development of sustainable social enterprises and the opportunities that arise from climate change and the need for Green Jobs.

Clearly, the task of building a stronger and fairer Australia, where no one is left behind, is a big one—and one that calls for collaborative action.

This forum is another example of the concerted effort needed to ensure all can contribute to, and share in, the social and economic wealth of our nation.

I wish you all the best in your deliberations over the next three days and thank you for the work you are doing to keep Australians employed.

Enjoy the conference.

For more information

Media mailbox: media@jobs.gov.au