jobactive CEO Forum, Melbourne 20 March 2019

Speech
  • Minister for Jobs and Industrial Relations
  • Minister for Women

Good morning everyone.

It is great to be here with you today to talk about something that is important to all of us, jobs.

I am proud to be the Jobs Minister in a Government that has, and continues to, create job opportunities for all Australians.

Over my period as a Minister I can look back proudly on the work I have done enacting a plethora of superannuation and financial services reforms, on my work in helping women, and in gaining marriage equality in Australia. 

But for me the part of my job that brings the most tangible and immediate benefits to people is helping them get a foothold in the jobs market, because after you complete school nothing opens up more opportunities in your life than getting and keeping a job.

A job helps build financial security. It brings confidence and experience. When someone moves off welfare into a job it benefits the individual, their family, the broader community and helps our nation to prosper.

And I know that every one of you is driven by the very same focus here today. That first job, or that first job after a period of unemployment, can be hard, but it can also be transformative in terms of self-worth, connection with people, and long-term physical and mental health.

It is critical that our employment services system keeps pace with the changing world in which we live and connects unemployed people with job opportunities.  Like all of you, I want to ensure that we have an effective, responsive service in place to help Australians who need a hand up to get a job. 

So today I want to announce a major change to the model that the Government has in place to help people find work.

But before I do, I want to reflect on some recent achievements.

Under the Coalition, a record number of Australians are in work. Employment is now at a record high of more than 12,700,000.

Full-time employment is also at a record high of more than 8,700,000, with almost 90% of the 271,300 jobs created in the last year alone being full-time jobs.

As Minister for Women, I am particularly pleased that our strong economic management has resulted in more women in work than ever before, more women in full-time work than ever before, and the lowest gender pay gap on record - down to 14.2 per cent - significantly lower than the 17.2 per cent gender pay gap when Labor left office.

Since we came into office in September of 2013, we have seen the creation of more than 1.2 million jobs. This compares with the additional 206,000 people Labor left languishing in unemployment by the time they left office. And the one in eight manufacturing jobs which were lost during this period.

Since the current employment services model, jobactive, was established in 2015 you have helped to make almost 1.3 million job placements. 

The stories of people whose lives have been turned around after using our employment services are many, and they are truly inspirational.

There’s Mohammad from Lithgow, who was struggling to support his five children and was desperate for a job. Mohammad’s jobactive provider set him up with a job providing security on trains. 

Mohammad says that this opportunity has changed his life. He says that he can now support his family, take them out, and has even bought a new car. Mohammad now has eyes on starting his own security business. 

And there is young Adam from Broome, who was able to turn a passion for photography and media into a job. He did an internship under the Youth Jobs PaTH program with the Broome Aboriginal Media Association, and they took him on as a Screen and Media Trainee.

These are wonderful outcomes – but we know that if we want to continue to achieve outcomes like these in the future, our employment services model must keep pace with the changes that are all around us.

Employment services must be fit for the future

It has now been 20 years since the most significant reform to Australia’s employment services system. The world of work is changing, with new jobs, new industries and new technologies emerging at an extraordinary pace.

Our employment services model must also evolve to meet the challenges and opportunities presented by these changes, so that all Australians, regardless of background, location or circumstance, may have the opportunity to enjoy the dignity, financial independence and choice that work brings.  

While jobactive has performed better than predecessor services, we can still do better - for both long-term unemployed Australians and for employers.

Too many Australians are trapped on welfare, with one in five job seekers in employment services for more than five years. The financial impact of welfare dependency is significant, with the total lifetime cost of working age welfare recipients estimated at $411 billion or around $315,000 per person.

Intergenerational welfare is also a significant issue, with 39 per cent of children from families who are heavily reliant on income support in receipt of income support themselves by the age of 20.

We need to achieve better outcomes now to help future generations have a better chance in life.

We have also learned through our recent consultation process that only a small proportion of employers actively use government employment services and that the current system generates too much red-tape for business.

We now have an opportunity to effect a once in a generation reform to our employment services system. To create a system that’s even better at achieving meaningful, long-term work for more Australians and which boosts the productivity of business rather than detracting from it.

In January last year, the Government appointed an Employment Services Expert Advisory Panel to provide advice on how best to reshape and deliver employment services in Australia. 

We asked that they ground their work in evidence and to place job seekers and employers at the centre of their thinking.

I would like to thank the panel, and especially panel chair Sandra McPhee, for their work and acknowledge those of the panel who are here with us today.

The Panel undertook the largest ever consultation process for the design of an employment service system, engaging with more than 1,400 stakeholders.

The Panel’s work has been critical in informing the Government’s consideration of the scale and scope of the change required to ensure that Australia continues to have a world-class employment services system fit to meet the challenges and opportunities of the future. 

Our vision

We want to preserve what is best about our current system and improve those areas where it isn’t working as effectively as it could for users. 

The new employment services model will be underpinned by a number of key transformative changes:

  • digital self-servicing for job-ready job seekers (called Digital First), with dedicated support for those who need help with the digital system (called Digital Plus);
  • re-investing digital service savings into more extensive support for disadvantaged job seekers to reduce long-term unemployment (called Enhanced Services);
  • more flexible job seeker activity requirements that maintains our commitment to mutual obligation but also at the same time reduces unsuitable job applications to business;
  • a licensing framework that makes it easier for providers to enter and leave, more effectively drive quality outcomes and reduce the cost and disruption of procurement processes; and
  • more support for business through smart, interactive digital tools to better connect employers with the labour that they need, when they need it.

These changes will reduce the red tape which is currently preventing many employers from engaging with the current system. It will make it easier for employers to use the services on offer. And it will reduce red tape for providers, freeing them up for enhanced service delivery.

Harnessing digital technology for the job ready

Job seekers have told us that they want more autonomy and choice and more visibility over the system. We will harness the benefits of digital technology to help job ready job seekers to self-service.

Those who are capable of finding their own job have told us they want us to get out of the way, that they are capable of looking after themselves but want supportive technology that helps them on their employment path and helps them to better connect with job opportunities.

Under the new model, more job ready job seekers will be able to access a seamless, integrated digital system that allows them to:

  • take the lead on their own job seeking activities;
  • access tools to assist with efficient and effective job search, including sophisticated job matching and training services online to help them to find the job that is right for them; and 
  • report their job search activity online.

Importantly though, there will be a safety net, so that job seekers can speak to someone if they require advice, guidance or technical support. Where appropriate, they will also be able to access funding to undertake any training or obtain licences they may require to increase their employability and receive financial help with other barriers to work.

The digital system will also mean that job ready job seekers will no longer have to attend regular appointments with a provider, giving them the flexibility to fit their mutual obligation requirements around the other commitments in their lives.

Critically, we don’t want anyone to be left behind under the new model. I particularly don’t want anyone to be placed into a service they can’t or don’t know how to access. 

That is why the new model will have a more comprehensive assessment system to better determine the level of support that job seekers need.

The initial streaming process will explicitly assess a job seeker’s digital capability and access to digital technology. This will ensure that job seekers are receiving services that they are able to benefit from. 
Job seekers with digital access issues will be identified and given the support they need, and may be reassessed to use face-to-face services instead.  

The new system will also have in-built safeguards to ensure that job seekers get the support they need including regular reassessments to ensure the level of the support they receive changes when their circumstances also change. 

Re-investing savings to provide more intensive services

Everyone deserves respect and the opportunity to work. And we know that, for the most part, people do want to work.

That is why the new model will offer the most disadvantaged job seekers an individualised service that directly addresses their barriers to employment.

We are reinvesting the savings from the digital services to provide a more intensive, targeted and tailored face-to-face service for those who need extra help in addressing their barriers to securing and finding a job. 

Long-term unemployment has negative impacts on individuals, families and communities. It is critical that we do everything that we can to provide the assistance that job seekers need to successfully transition to employment.

Indeed, taxpayers rightly expect that their money is invested in ensuring meaningful employment outcomes for those who most need support. 

Payments to employment services providers’ will encourage employment outcomes and ensure providers are actively addressing the challenges which are keeping job seekers from securing a job. The fee-for-no-service aspect of the current model, where providers receive ongoing payments regardless of the level of service they provide, will be removed.

A system which works for employers

Our new employment services model will offer employers a seamless, integrated way to tap into the entire job seeker community and filter and search candidates for free. 

The reality is that only four per cent of employers actively use employment service providers to fill vacancies. 

Employers have told us that the current system delivers inappropriate job seeker referrals, a lack of coordinated outreach by providers, and resource-intensive processes around accessing incentives. 

A new model will reduce this burden, making it easier for employers to find the right staff, with the right skills and support, at the right time.

We are creating new online tools to help employers search for candidates, enabling them to meet skills shortages faster. We will provide easier access to the range of support available to assist them with employing a job seeker. We are also creating incentives for providers to build better relationships with employers and service their needs.

The model will reduce risk for employers, by giving them easy online access to: 

  • work experience programs; 
  • recruitment advice; 
  • post-placement support; 
  • targeted wage subsidies; and
  • data insights into local and national labour markets. 

A firm commitment to mutual obligation

Job seekers have a personal responsibility to do all that they can to find work and the new model will better be able to support them to do this. 

That is why the new model maintains mutual obligation, which has been a feature of the welfare system since the 1980s.

But we will be giving job seekers more choice over the activities that they undertake.

Our vision is that job seekers continue to look for work but spend more time preparing and applying for jobs for which they are better suited or undertaking activities that make them work ready, such as volunteering, training or work experience placements.

A new points-based approach to mutual obligation will require all job seekers to complete employment-related activities such as searching for a job. It will require job seekers to not only focus on job applications, but also on taking early action to improve their employment prospects.

This responds to feedback from business, particularly small business, that volume-based, job-search requirements impose significant costs and red tape on business in processing large numbers of unsuitable job applications.

The new Targeted Compliance Framework, which started in July 2018, will also help to incentivise job seekers to remain engaged, with penalties for willful non-compliance.

Licensing framework to increase competition

Finally, we will deliver a more contestable, flexible and diverse market, making it easier for employment services providers to enter and exit the system. 

We know that providers are pivotal to the success of any employment services system and play a vital role in helping disadvantaged job seekers find work. Many providers have strong connections with employers and other local stakeholders that are particularly useful in creating a pathway to work for disadvantaged job seekers. 

We want to be able to continue to reward excellence.

But we also don’t want to spend finite taxpayer resources on services which are not delivering for job seekers and employers. 

Under our new model, a licencing framework, and a tough new performance regime, will drive better outcomes and ensure providers are better meeting the needs of users. 

Providers who do not meet these standards will not have their licences renewed.

Transformational change

The changes we are proposing are significant. In fact, they are the most significant transformation of employment services for 20 years.

Our vision is ambitious, but it is also achievable. 

Given the scale of change we are proposing, it is important that we take care and time to get it right.

It is also worth noting that this particular government outlay is one of the largest procurements outside of the defence portfolio. 

With this imperative, I am announcing today that we will be testing key elements of the new model in two regions from July this year before implementing a new model on a national scale. 

Whilst we do this, all current jobactive contracts, which were due to expire in June of next year, will be extended until 30 June 2022. Complementary jobactive programs will also be extended until 30 June 2022. These include:

  • the Employment Fund
  • Wage Subsidies
  • New Business Assistance with NEIS
  • Career Transition Assistance
  • Transition To Work
  • Work for the Dole
  • PaTH Employability Skills Training and Internships
  • Launch into Work, and 
  • The Online Employment Services Trial

The pilot 

We recognise the immensity of the task at hand. Introducing transformative change requires careful and considered planning, design and implementation. With the future prosperity of hundreds of thousands of Australians on the line, we must not rush to failure. We must take the time and care to transition to the new arrangements that put users at the heart of employment services. 

We will therefore pilot key elements of the new model in Adelaide South in South Australia and the Mid North Coast in New South Wales from July 2019 to June 2022. 

In choosing these regions for the trial we have taken into account local labour market conditions and caseload characteristics to ensure these areas are representative of the general jobactive population.

The aim of the pilot is to test the structural elements of the new model, which will help inform its design and make sure that any refinements are made prior to the national rollout.

The pilot will test key elements of the new model including the points-based activation system, aspects of the Job Seeker Assessment Framework, the Digital Plus service, the performance management and payment structures and how employers engage with the new system.

Providers who participate in the pilot regions will be required to focus more on disadvantaged job seekers by directing all Stream A job seekers — the most job-ready job seekers — to self-service online.

Providers who participate will have funding redirected through a new payment model to meet the needs of job seekers in the Enhanced Service. 

Employment service providers participating in the pilot will be encouraged to strengthen their engagement with industry, including in the priority areas of NDIS and aged care workforces.

We will look to engage other stakeholders throughout this process through pilot region working groups, user-centred development and testing, and a national reference group. 

Conclusion

The new employment services model will better support people looking for work, especially the long-term unemployed, and ensure employment services remain effective in an environment where rapid technological change is creating new jobs and new industries.

I am proud of the Coalition Government’s strong track record on economic management and job creation. Our new employment services system will better harness the opportunities of economic growth to deliver a model which reduces the barriers between job seekers and job opportunities and works better for all users. 

We will continue to work closely to ensure the new model works for employers, providers and job seekers, because this will ensure our services continue to help get people off welfare and into a job. And that is good for all Australians.

Thank you. 

For more information

Media mailbox: media@jobs.gov.au