SPEECH
Ms Renée Leon PSM
Secretary of the Department of Employment
National Employment Services Association
2014 National Conference
Grand Hyatt Hotel, 123 Collins Street, Melbourne
12.10pm, Monday, 28 July 2014
Well, thank you for that introduction, and I hope that by the end of this conference you’ll all feel you’ve got a silver bullet of your own to deal with the challenges of finding employment for the job seekers of Australia.
I’d like to thank Sally Sinclair for welcoming me here today, and all of you for having me and the other people of the Department of Employment here at this conference today.
Before I start, I’d like to acknowledge the traditional owners and custodians of the country on which we meet.
I recognise their continued connection to the land and pay my respects to their elders – past and present.
So, our Assistant Minister, Luke Hartsuyker, this morning provided a pretty good overview of the new employment services model, emphasising that it’s designed to pursue the Government’s objective of getting people into work and off welfare.
In my time today, I’d like to place the new model partly in a larger context by touching on the labour-market outlook and on the current Job Services Australia system, as well as just talk a little more about some of the specific design features of the model and the other employment measures that the Government’s introduced recently.
And then, at the end, I’ll just talk about some of the practicalities, where we go from here, and how you and other providers and potential tenderers can get more information about the tender process.
So, first to the employment outlook.
As many of you would know, labour-market conditions in Australia have been rather soft over the past year.
Employment in the 12 months to June 2014 only increased by 100,300, which is 0.9 per cent.
And the unemployment rate has been slowly creeping up.
It rose by 0.3 percentage points to stand at 6.0 per cent in June this year.
There has been, as I said, a little increase in employment.
It’s been mostly due to part-time employment over that year, and some modest increases in full-time employment.
But there is some more encouraging news in the first half of this year.
Employment over that six-month period has risen by 1 per cent – 110,000 jobs – and a significant part of that being in full-time employment, which was 1.2 per cent so far this year.
Despite those slightly encouraging signs, I think it’s true to say that the labour market still remains fairly soft at the national level.
And, as you would know, that impacts on quite a number of what was called this morning “the precarious end”, but certainly the more vulnerable groups, such as youth and the long-term unemployed.
We are expecting that employment will continue to expand over the near term.
The latest Budget forecast has employment rising by 1½ per cent in 2014-15, and by 1½ per cent again in 2015-16.
And there are key industries that are expected to record strong employment growth.
I agree with one of the speakers this morning – it’s hard to predict where the jobs are going to be 10 years out.
But we do do a reasonably good job of predicting where work is going to be in a slightly shorter timeframe.
And so my Department does do employment projections over a five-year period.
And the areas that we expect to be key growth areas for employment are:
•Health Care and Social Assistance;
•Education and Training;
•Retail Trade;
•Professional, Scientific and Technical Services;
•Construction; and
•Accommodation and Food Services.
So, clearly, there are going to be opportunities in the labour market, and these are sectors that have a broad range of jobs, from skilled to lower skilled that, I think, can be helpful to the people at that more vulnerable end.
So the new employment services model’s been designed to help you take better advantage of those opportunities.
As the Minister said this morning, you’ll have greater flexibility in the way you engage with employers and service job seekers.
And you’ll have less red tape, so you’ll be better able to focus on helping the unemployed into jobs.
If there was one thing that we heard throughout the consultations, it was that you felt the amount of prescription in the system was taking up time that you could otherwise spend getting people in to work.
The new model also has measures that are designed to activate the job seekers and help them into the labour market.
The increased focus on Work for the Dole, for example, provides an opportunity to get job-like experiences, particularly where the places are in hosted organisations.
And there’ll be targeted wage subsidies and other measures, that I’ll come to in a moment, to support disadvantaged job seekers, particularly, into real jobs.
The Federal Government outsourced employment services in 1998.
And, ever since, as I’m sure many of you know, other countries have seen Australia – and many have come to Australia to see the model – because it’s been a leader in providing employment services to job seekers.
Since July 2009 when the current JSA contract started, you, the providers of employment services, have placed more than 1.9 million people into jobs, and achieved nearly 1.2 million payable employment outcomes, of which 480,000 were 26-week employment outcomes – a measure that we say is a durable employment outcome.
And you’ve also displayed enormous flexibility, with contract variations to reflect changing Government policy as we’ve gone along.
In the most recent contract variation, the Government asked you to implement the Restart wage subsidy, Relocation Assistance and – for some providers – the new Work for the Dole arrangements and, in Tasmania, the Tasmanian Jobs Programme.
So all of that – the record of placement over the years and the flexibility to deal with new policy – is an impressive performance from a very vibrant sector.
The new employment model that we’ll be introducing from July 2015 continues to build on these successes and the Government’s new initiatives, as well as addressing areas that we think – and that you thought – were areas for improvement.
For example, the number of employers who are aware of, and are using, the Government-funded employment services is lower than it was under Job Network.
We think that improved information technology, less red tape, a greater employment focus and the wage subsidies the Government’s funding will help address that situation.
They’ll help providers to engage with and attract employers, and employers will be encouraged to hire and retain the unemployed.
For your part, it’ll be really important that you have good post-placement support to ensure that a job sticks, and so that the employer will come back for future access to the job seekers you have.
And in the field of Indigenous employment – which is something of great priority to our own Prime Minister – the gap in outcomes between Indigenous and non-Indigenous job seekers appears to have widened in recent years.
And so the new model – which I think the Assistant Minister mentioned this morning – will include a stronger focus on supporting Indigenous job seekers, including employment targets for Indigenous job seekers that every employment provider will have and be accountable for.
Given the Government’s desire for a more effective system and some of those challenges that I’ve mentioned, the new model does involve changed priorities and requirements.
And I’ll just touch on a few of those now.
Provider payments have been re-balanced to reward achievement of job outcomes, principally.
While there will be outcome payments available for education for 15- to 17-year-olds, all other education and training participation will achieve an outcome payment only when it leads to a job.
Under the new model, working proactively with employers to meet their needs for staff – for hiring, training and retaining job seekers – will be vital to sustaining jobs and, therefore, achieving outcomes.
Providers will be expected – and, in fact, will be free – to innovate, to deliver tailored options for employers, including collaborating with each other to meet the needs of large employers or major projects.
And as Minister Hartsuyker would have said this morning, there won’t be training for training’s sake.
Providers will need to work with employers to identify the skills that those employers need, and then use their judgement to support training that will lead to a real job.
They’ll also be able to support employers in delivering specific on-the-job training and mentoring that directly leads to and then supports a job seeker into that workplace.
I spoke – and some of you may have heard – at a conference in Sydney earlier this year about the value of providers forging links with community-service organisations that have particular expertise.
And this will be especially important for job seekers who need specialist support, such as people with mental-health issues, drug or alcohol dependency, or people who don’t have a stable home.
Obviously, you’re not in the business of getting people into homelessness or mental health services.
But addressing those problems will help the job seekers on your books become more readily available for work.
And liaising with community organisations that can provide that kind of support will help you achieve the job outcomes that will be funded under the tender.
As well as that collaboration, you will need to liaise with the Work for the Dole Coordinators that will be appointed across Australia for the coming year.
In the model, we won’t be prescribing how you do that.
We will require you to identify in your tender response how you propose to collaborate with other groups to help job seekers find and sustain employment.
And then you’ll be held accountable against what you said you would do, rather than against a checklist of what the Department’s been telling you to do.
Let me just talk a little about the common elements to the services across what, as you now know, are three streams of employment services.
There will be a comprehensive initial interview with the job seeker, and for all of the streams you’ll need to help job seekers manage their mutual-obligation requirements.
But you will have the flexibility to deliver the kind of support from which that job seeker would most benefit, instead of what currently is required under the more prescriptive approach.
You’ll be encouraged to use a range of methods – including through web and mobile technologies – to engage with job seekers.
And we will move people to new providers if they remain unemployed after a certain period of time with their initial one, in order to ensure that the focus remains on helping job seekers into work.
People in Stream A will be moved to another provider after two years, and those in Streams B and C will move after three years.
I know that having good information technology systems is vital to your providing a high-quality service.
And Stephen Moore from the Department will be speaking to you in more detail about this later in conference.
I can say just briefly, though, that the new model will provide improved functionality for the two software packages you use – the Employment Services System and Australian JobSearch.
And there will be some other changes that you can expect to see:
•there will be mobile smartphone and tablet applications;
•there will be enhancement to the Job Seeker home pages;
•better job search functions;
•and the recording of job search efforts automatically for providers to monitor;
•a new job seeker performance diary that will record actions relevant to the Job Plan;
•and improved résumé functionality.
And I know that Stephen will have more to say about that in his session with you.
I do also want to emphasise, of course, that the new job services model is just part of the Government’s overall framework to increase workforce participation and reduce welfare dependency.
As well as the 2015 model, the Australian Government is introducing a range of new measures to help get more people into work and off welfare.
And these measures will give providers a bigger and better set of tools to use in their daily work.
The May Budget has already delivered on the Government’s election commitment to reinvigorate Work for the Dole and emphasise the concept of mutual obligation.
On 1 July this year, new mandatory arrangements for Work for the Dole were introduced, in 18 high-unemployment regions, for people aged 18 to 30 – six regions in New South Wales, five in Queensland, four in Victoria, one each in Western Australia, South Australia and Tasmania.
From July next year, these arrangements will be expanded to the entire country.
The other high-profile measure in the Budget was the introduction of Restart – a wage-subsidy programme designed to encourage more mature-aged job seekers into the workforce.
Under this scheme, employers can receive up to $10,000 in assistance if they hire an eligible job seeker aged 50 or older.
This programme also started on 1 July, and it more than triples the incentive payment previously announced for mature-aged workers.
The Government is implementing Restart because it believes the nation can’t afford to have older Australians excluded from the workforce when they have a desire to work and still have much to contribute.
I think it was a measure of the importance the Government places on older workers that it was the Prime Minister who launched Restart – together with our Assistant Minister for Employment – in Sydney just a couple of weeks ago.
Restart complements some other measures that were introduced by the Government and that are also already available.
The first is the Job Commitment Bonus, under which young, long-term unemployed Australians can receive $2500 or more if they find work and stay off welfare for a year.
Another is the Relocation Assistance to Take Up a Job scheme, which provides long-term job seekers with up to $6000 if they move to take up a job.
And the Tasmanian Jobs Programme provides subsidies to Tasmanian employers who hire an eligible job seeker.
Taken together, all the measures I’ve just mentioned support the effort of providers – the people in this room – to help people find and retain steady work.
So where to from here?
I’m sure that, for most of you, the key question on your minds at the moment about the future of employment services is: “What do I do now? Where do we go from here?”
The Employment Department will be purchasing new employment services to replace the Job Services Australia contracts from 30 June 2015, when the current contracts expire.
As well as the Employment Provider services that I have spoken mostly about, we’ll also be purchasing four other services:
•Work for the Dole Coordinators to source Work for the Dole places and projects;
•the New Enterprise Incentive Scheme for job seekers to start up and run a small business; and
•Harvest Labour Services and the National Harvest Labour Information Service that support the requirements of the horticulture industry.
The Exposure Draft is now available on the AusTender website and my latest information is we already have had 200 downloads of the tenders.
So it’s great to see how much interest there is.
I hope it wasn’t all of you in this room, instead of listening to the speakers before me!
Individuals and organisations have until Monday, 25 August, to provide feedback on the Exposure Draft that we have put out today.
We’ll receive and consider the feedback, and then we expect to release the Request for Tender towards the end of September.
As well as what you have heard from me and from the Assistant Minister today, there’ll also be a national series of information sessions being run by the Department in the coming week.
They’ll be held in capital cities and major regional centres, and you can find a full list of those sessions on our web site:
The first session will be conducted here at this conference, and I think an announcement will be made about where and when in due course.
And then others will follow, starting with Melbourne on Wednesday and then sessions in Brisbane, Adelaide, Sydney, Canberra, Perth and Hobart.
And also – given that we do operate nationally, including regionally – we’ll be holding sessions in Bendigo, Cairns, Coffs Harbour, Wagga Wagga and via videolink with Darwin.
There will be an online information session, and a recording will be placed on the Department’s web site in case you can’t get to any of those sessions.
You’ll also be able to submit your questions via a special hotline or through the Department’s website.