Jobs Australia by kal9iyJ


									   “The image of the Jobs Australia logo has been removed. The image is included in the PDF version of this

23 July 2010

Professor Julian Disney AO
Jobseeker Compliance Review
PO Box 113
Darlinghurst, NSW 1300

Per email:

Dear Julian

Jobs Australia submission to the statutory review of
the Job Seeker Compliance System

Jobs Australia welcomes the opportunity to contribute to the review of the Job Seeker
Compliance System. The question of achieving the right balance between encouraging
active participation among job seekers and not being unduly harsh when people fail to
engage in this process is a matter of great interest to us and our members. We also wish
to ensure that the right mechanisms are in place to protect vulnerable job seekers from
unintended consequences of an arguably overly complex compliance system.

Jobs Australia is the peak body for over 270 nonprofit providers of employment and
related services. Our members have delivered a wide range of employment-related
services to the most disadvantaged people in communities around Australia since the
mid to late-1970s. Today our members deliver employment and training services to job
seekers in all the states and territories. The people they serve include many of the most
disadvantaged job seekers in our communities – people whose barriers and life
circumstances make them the most likely to face difficulties in fulfilling their participation

The breadth and depth of our members’ experience provides useful insights into how the
current system works in practice. We have consulted widely with them and their
comments and observations inform this submission.

As nonprofit organisations established to serve and assist the most disadvantaged
unemployed people, Jobs Australia members have always been concerned that the
compliance system should operate to encourage positive engagement and should not be
excessively punitive. Nor should it create severe hardship for people already surviving
on very low incomes. That ethos continues and it is not surprising that our members
support the shape and structure of the current compliance system with its higher level of
discretion, layering of financial penalties and checks and balances to ensure that the
most vulnerable people aren’t subject to harsh and potentially very damaging penalties.

We think it important to point out that the current compliance system was developed
and implemented by the Government in recognition of the need to reform the system
adopted and implemented by the former government. That system was deeply flawed,
as I observed in a submission to former Minister O’Connor in February, 2008:

        “We believe that, by rearranging and redirecting some of the available resources
       in the system, it will be possible for the government to target more resources to
       those people with significant barriers and disadvantage to help them to achieve
       truly sustainable and satisfying employment. We also believe that it is imperative
       that the macro policy settings of the former government – settings which impose
       too many requirements, provide insufficient incentives and not enough assistance
       – need to be substantially changed. Not only do unemployed and jobless people
       need more incentives and assistance, they also need a system which engages,
       enthuses, encourages and empowers them – one which focuses on positive
       engagement and which has a strong “engagement ring” about it.

       The obsession with jobseeker compliance reflected in the current system results
       in significant wastage of resources and some of the harsher aspects of the system
       amount to quite punitive and damaging treatment of some of our nation’s most
       vulnerable citizens. Some aspects of the policies and the practice and rhetoric of
       the previous government can reasonably be construed as a sinister and damaging
       vilification and punishment of people who need a hand up rather than being
       slapped down. It is sobering to reflect that we have witnessed the development of
       a system which has caused significant detriment and harm to some of our most
       vulnerable fellow Australians and which has left others on the wayside without the
       help they need. In some instances and hopefully not too many, it may well have
       been a contributing factor in some vulnerable jobseekers seeking to take their
       own lives as a compounding consequence of being denied income support for
       extended periods. One could be forgiven for thinking the citizens these policies
       and practices were directed at were regarded as nothing more than “bludging
       bottom dwelling scum suckers”.

       We have greater faith in the battlers and in their ability, with the right mix and
       sequences of assistance, to get to work in most cases. We also know that they
       need support and assistance to build their self efficacy and their self reliance and
       to deal with often complex and difficult barriers. This will only be achieved if they
       are treated with dignity and respect and given the opportunity to develop long
       run and trusting relationships with the people working at the front line of welfare
       to work. We think it imperative that a new and very different set of arrangements
       need to be developed for people who don’t have all the capabilities of the job
       ready and who need substantial and multi-faceted assistance. This will likely
       require a shifting of resources away from those people who have capability and
       are job ready or close to being so. For the latter group, a trimmed down version
       of the current Job Network model with its linear and largely one size fits all
       service model will likely continue to do the trick at a very reasonable price” (A
       copy of the full submission to Minister O’Connor is provided at Appendix C).

We are strongly of the view that the present design of the compliance system does not
need to be substantially changed and that there is certainly no need to revert to the
features and approach adopted by the former government. There is much to be done,
however, to improve the implementation of the system and, particularly, to improve
communication and dialogue between Centrelink and employment services providers.
It is likely to be the case that at least some providers and their people have learned and
adopted practices which focus on negative engagement of job seekers and are still
adopting those practices in a system which is designed to promote positive engagement
and to reduce the number of people not being engaged and being penalised. This may
well mean that the Department and providers themselves will need to invest in more
professional development which is designed to fundamentally change the attitudes and
approaches of the frontline workers.

There is also a pressing need to consider ways in which the almost impenetrable
complexity of the system can be wound back and to re-jig the system so that more of
the compliance effort is focussed on those job seekers at high risk of non-compliance
and with less effort and requirements being applied to the great majority of job seekers
who are compliant and are looking to the system to provide them with necessary help
and assistance to overcome their barriers so they can get and keep jobs.

Another aspect of the system which also warrants attention is the extent to which the
information technology which underpins it is in fact enabling and supporting positive
engagement and whether it might need to be adjusted to ensure it is delivering on the
Government’s policy objectives.

Our members do have several real concerns about the current operation of the system.
A persistent issue is the lack of timeliness in processing Reconnect Appointments and
participation failures by Centrelink and the need for more reporting from Centrelink
about the basis on which decisions (and especially decisions not to uphold Participation
Reports) are made. These concerns bear out our view that there remains much to be
done to improve training of and communication between Centrelink and employment
services personnel and more to be done to ‘join up’ the efforts of Centrelink and the
providers in their interaction with and delivery of public services to job seeker citizens.

Our central concern is to ensure that job seekers who are at the most risk of disengaging
from the system are enabled and motivated to participate and do not slip through the
cracks or suffer harsh or otherwise inappropriate penalties as a consequence. Our
submission offers some suggestions on how to improve the system to achieve this goal.

We would be happy to discuss any of these issues further.

Yours sincerely

   “The image of the signature of David Thompson AM has been removed. The image is included in the PDF
   version of this publication.”

David Thompson AM

Jobs Australia Limited ABN 17 007 263 916
708 Elizabeth Street Melbourne, Victoria 3000
PO Box 299 Carlton South, Victoria 3053
Tel 03 9349 3699 Free Call 1800 331 915
Fax 03 9349 3655
Who we spoke to

The feedback we have received has come from across the ranks of providers from CEOs
to regional and site managers and from several face-to-face conversations we have had
with frontline employment consultants. It has included providers of JSA, DES, the
Language, Literary and Numeracy Program (LLNP) and Youth Connections (YC).
Comments have come from all states and have included some JSA specialist providers
working with vulnerable young people, Indigenous people, homeless people and people
with disabilities.

The issues: What our members are telling us

Our members acknowledge and appreciate the greater flexibility and discretion in the
system as well as commending the government on softening some of the harsher
elements inherent in the previous arrangements particularly in relation to 8-week
penalties. Members have, however, consistently reported several areas of perceived
weakness in the way the current system operates. These include:

   extremely low uphold rates for Participation Report (PRs);
   problematic implementation by Centrelink of the Contact Request re-engagement
   inconsistent and insufficient Centrelink communication with providers, including some
    IT interface barriers, about the reasons for rejecting PRs;
   the bureaucratic, overly complex and time-consuming nature of the compliance
    system; and
   the adverse impact on and the over-representation of certain groups - particularly
    young people and Indigenous people.

Issues for consideration:

The context and development of the current compliance regime

The current compliance system refined for Job Services Australia (JSA) and Disability
Employment Services (DES) responded to concerns about the punitive nature of the 8-
week non-payment penalty that applied under the last Job Network (JN) contract (ESC 3
2006-09), and particularly the lack of opportunity for job seekers to re-engage with the
system once they had received a serious participation failure

Jobs Australia was directly involved in discussions about the need for a less punitive
system. The aim was to design a system that clearly supports the reciprocal relationship
between the receipt of income payments and the job seeker’s participation requirements
- and to do this in a way that encourages positive engagement rather than alienating job
seekers from the services they require.

The new compliance system is considerably different from that operating under the
former Job Network. It introduced the new Contact Request process and graduates the
financial penalties into lesser and greater categories. It also gives JSA employment
consultants a higher level of discretion on decisions about when to submit PRs. (This is
an element that employment consultants have repeatedly recognised as being a positive
one in our consultations.)

Because of the need to accommodate the range of people’s circumstances and the
complexity of the various trigger points for penalties it is a far from simple system. A
sense of this complexity can be seen by the number of reference documents available to
providers on the secure site of the Employment Services System (ESS) at Provider
Portal>Stream Services>Client Information>Compliance. Appendix A is a cut-and-paste
of the documents on that page. These total 94 separate documents - or 198 pages.

Notwithstanding this complexity, a reading of the central elements of the new system
clearly shows that it seeks to exercise care in dealing with job seekers and to afford
them various opportunities to re-engage in the process of looking for employment and
their receipt of employment assistance. While there is room to simplify and streamline
some of the processes and reduce the system’s complexity, Jobs Australia thinks that its
key features exemplify valuable principles and should be retained.

This view has been reinforced by comments from our members who have repeatedly
said that they think the introduction of Contact Requests has been a positive measure.
Where they have worked as intended this has been a quick and effective reminder to job
seekers of the need for engagement and active participation. Our members have also
appreciated the greater room for discretion in dealing with participation failures. Our
impression is that this discretion is used quite widely and wisely. They also see the
introduction of less punitive financial penalties as more reasonable even though it
appears that many employment consultants don’t fully understand all the complexities of
the system – e.g. the difference between the 1/14th and 1/10th penalties and the levers
for the various penalties.

Bedding-down issues and understanding of the system

Despite these strengths our membership report significant differences between the way
the system was designed and the way it is actually implemented. In our view there are
a number of implementation issues that need to be addressed so that the system can
work more effectively to achieve its purpose.

There is a clear need for better communication between ES providers and Centrelink on
the compliance system to ensure that both parties have common and consistent
understandings about the system and its intentions, and that they deliver consistent
messages for job seekers about the compliance system. 1

It is also clear that further training is required at the employment consultant level to
ensure they better understand the basics of the Social Security Act (and ‘The Guide’)
which underpin the decisions made in issuing and upholding (or rejecting) Participation

The first year of JSA

It is also important to place the current review and issues of concern within the context
of the first year of Job Services Australia (JSA) contract. For many providers the first
year has been characterised by lower than projected flows of job seekers and high
suspension rates. The Government can take considerable credit for its effective
management of the Global Financial Crisis and the stemming of unemployment and long
term unemployment which we have witnessed as a result. As a somewhat
understandable and inevitable consequence, providers have found the lower than
anticipated flow of jobseekers and the financial management of the new program
extremely difficult.

 This is by no means a new issue: In 2005 a survey of frontline workers identified lack
of information on outcomes, inconsistent decision-making and the PR over turn rate as
key issues of concern. (Jobs Australia Frontline Workers Survey: 2005)
It is possible that under these conditions there has been considerable pressure on
frontline staff to maintain the highest possible numbers of job seekers in their caseloads.
Some people have indicated that this may have resulted in employment consultants
going in harder against job seekers who have not been actively participating than might
be the case in a more favourable financial environment.

Comparison of current Participation Report uphold rates against the old Job Network is
also complicated by the mainstreaming of PSP and JPET jobseekers into the new JSA
system. It needs also to be recognised that, for some organisations, this new and more
difficult cohort will present new challenges, particularly for organisations not experienced
in engaging these groups.

The data shows that 75% of participation failures are related to non-attendance at
employment service provider interviews. Given the widespread concern about jobseeker
flows, it is to be expected that providers will be very conscious of the proportion of their
caseload which is inactive due to a failure to engage – and very sensitive to the way that
this is managed by Centrelink.

Job Seeker Engagement

There is an overrepresentation of Indigenous and young job seekers (under 30 years) in
the data. A further analysis of the data is required (by DEEWR) to ascertain if there is
over-representation of other vulnerable groups of job seekers.

Whilst much of the discourse in relation to the compliance system has been taken up
with debates about the operation of the system and the degrees of penalties to be
applied, there has been little discussion about the capacity of Centrelink and JSA
providers to engage job seekers, particularly at-risk groups in ways that might prevent
the need for a Participation Report in the first place. Clearly the compliance system
should not be the only mechanism for engaging such groups.

Research undertaken by a consortium of universities led by Melbourne Universsity and
financially supported by the Australian Research Council and Jobs Australia on the
experiences and the views of service users (150 low income Australians) supports the
view that many employment services and Centrelink users experience the system as
harsh, punitive, disrespectful and lacking any real service ethos. And yet there is a body
of evidence that the initial engagement process in critical in the transition into
employment services and then employment.

Part of the difficulty for providers is that they are not adequately resourced to develop
and enact adequate engagement processes, particularly for Stream 1 and 2 job seekers.
Further, the referral to commencement KPI encourages a quick fix Participation Report
response, as distinct from taking a little more time to locate and engage difficult to
contact job seekers.

We recommend that the Department conducts some best practice pilots in job seeker
engagement and seeks further consultation with, and recommendations from, JSA
providers who have low PR rates and high referral to commencement ratios.

Centrelink implementation of the Contact Request re-engagement process

Our members consider the introduction of Contact Requests as being one of the best
features of the new compliance system. Some report this as their primary tool for
ensuring job seeker engagement and compliance. This reflects a desire to achieve re-
engagement rather than to punish, but it may also have become a pragmatic response
given the futility many providers feel about using Participation Reports at all.

Despite this good ‘press’ there is considerable frustration about the way Centrelink
administers Contact Requests. The effectiveness of the Contact Request lies in
Centrelink’s capacity to use its authority as the paying entity to make job seekers attend
a re-engagement appointment. While the system requires that Contact Requests are
actioned within 2 days, providers report that it can take 3-4 weeks. Although Centrelink
has recently spoken of a backlog with these requests our members report that this has
been a longstanding problem. Whether Centrelink has been allocated sufficient
resources to undertake all that it must to and to do so in a timely fashion may well be an
issue in this context.

Providers report that Centrelink frequently fails to contact job seekers and fails to book
re-engagement appointments. When this happens, no action is generally taken by
Centrelink until the job seeker’s next lodgement day. This is generally two weeks away
but in the case of job seekers with longer lodgement schedules can be as distant as 3
months. As the breakdown of possible lodgement options below indicates 2, this can
result in significant delays before Centrelink has the opportunity for a face-to-face
conversation with a job seeker.

The knock-on effect is that there is a considerable time-lag before the employment
consultant once again has an appointment with the job seeker – a period of time during
which that person has been receiving income support but has not been actively looking
for work and is likely to have lost the motivation to actively participate.

A further complication is that once a Contact Request is in train the employment
consultant cannot make another appointment with the job seeker until the Contact
Request has been resolved by Centrelink. This means that if Centrelink is slow in
actioning the Contact Request then the consultant’s hands are tied until Centrelink
completes its part of this process.

We recommend that providers be encouraged to continue with efforts to contact job
seekers even after a Contact Request has been lodged, and that if contact is made the
Contact Request be withdrawn.

Low uphold rates for Participation Reports

Members report that since the outset of the new contract PRs have been rejected in
large numbers. This is generally referred to as the uphold rate. We have observed a
high degree of frustration among providers at what is, from their perspective, a great

  Job seekers from 1st July 2010 will have the option to report using online services, phone or over
the counter contact with Centrelink. In addition, job seekers are now required to attend a
Personal Contact Interview (PCI) every 2, 4, 6 or 12 weeks depending on their circumstances.
This may be in addition to their participation reporting schedule.

There are numerous conditions around the PCI requirement. Some of the common elements:
  2-weekly PCI, for anyone currently on weekly reporting (rare)
  4-weekly PCI, anyone in their first 13 weeks of income support, VLTU (unemployed greater
   than 5 years) with job search requirements, Early School Leavers, Under 25 with job search
  6-weekly PCI, in Stream 1-3 undertaking approved activities, job seekers aged 25-55 not VLTU
  12-weekly PCI, mature age 55 + unemployed less than 5 years, Stream 4 25-50 less than 5
   years unemployed, DES program participants, Principal Carers, job seekers on extended
   exemptions, job seekers not in Stream Service and undertaking other approved activities.
deal of wasted but unavoidable effort, and a lack of support from the system in helping
them to work productively with a group of job seekers who, their frontline experience
shows them, persistently fail, for a variety of reasons, to fulfil their participation

In the context of uphold rates providers generally don’t differentiate and use the term
Participation Report (PRs) to refer to one of the several financial penalties available
under the system: Reconnection Failure (potential loss of 1/14 th of income support), No
Show No Pay failures (potential 1/10th of income support) and Serious Failures and 8-
week Preclusion Period (potential 8-week non-payment).

Providers believe that they understand and exercise the discretions which exist within
the system and that they don’t apply PRs without justifiable reasons. As nonprofit
providers the explicit mission of these organisations is to work to support disadvantaged
people in their communities. Therefore, we think it is reasonable to presume that the
culture within most of our member organisations places considerable emphasis on the
need to consider the personal factors that can mean that a job seeker does not fulfil his
or her obligations, and that their employment consultants provide reasonable latitude
and support to the job seekers on their caseload before resorting to harsher penalties.

Providers speak of the need for an effective tool – ‘not necessarily a negative one’. They
speak of the need for an effective way to re-engage with job seekers. While there may
be some frustration towards job seekers who are perceived to be manipulating the
system the employment consultants we talked to spoke of wanting a way to re-engage
these job seekers.

In addition, the providers’ own contractual obligations to DEEWR require that once a
particular set of participation circumstances applies they are obliged to lodge a failure
and to provide the considerable supporting material to substantiate this. Furthermore,
in a range of situations the IT system’s check boxes remove the latitude for discretion
from providers. Employment consultants must truthfully record when someone did or
did not attend an appointment and indicate whether adequate reasons for a failure to
attend an appointment existed. This must be supported with evidence.

The evidence of the compliance data

DEEWR has released data for three quarterly periods from July 2009-March 2010. This
data has not been accompanied by any explanation or analysis. This is disappointing
because on the face of it the discrepancy between what providers report they are
experiencing and what the data indicates appears to be substantial. At this stage a
comprehensive explanation for the discrepancy is not immediately apparent. Given the
consistent and widespread nature of the provider comments about poor uphold rates it
may be too simple just to say that they have got it wrong.

It would be useful to have additional data comparing the numbers of Contact Requests
and Participation Reports lodged with the outcomes for these. This would give a better
sense of how providers are using the various parts of the system and where the
problems chiefly sit. Regular reports to providers of the number of reports lodged and
their outcome would also help providers to monitor their perceived and actual record. It
would also mean that anomalies and patterns could be more easily identified and
Provider perceptions about uphold rates

The Department is aware of the general view among providers that Centrelink has ‘gone
soft’ on job seekers who don’t participate and that the uphold rate is far lower than it
was under JN. This was acknowledged in comments made during the Senate Estimate
hearings on 31 May 2010:

       Ms Parker—Some providers have said that while they have been putting in
       participation reports for job seekers, as in when job seekers are not connecting or
       reconnecting for appointments for example, that there has been, in their view, a
       high rate of rejection of those from Centrelink. The department has been working
       very closely with Centrelink and the providers to ensure that they understand the
       system, the IT requirements, and that they provide the right reasons . . . (p20)

The Department has pointed to its 6-month comparison with 2008 to rebut the view that
there has been a substantial easing in the way that penalties are imposed. And as the
quote above indicates, it considers that where large numbers of PRs are being rejected
the problem may lie with a poor understanding among providers of the system and how
they should use it.

Inconsistent and inadequate Centrelink communication with providers

Consultants report high levels of inconsistent advice and information from Centrelink in
relation to various aspects of the compliance system.. For example, the treatment of
medical certificates is highly variable. Another example cited was an instance in which a
job seeker who had voluntarily left a job which required no special skills or experience
had the PR rejected on the grounds that the job was unsuitable.

While it is not relevant to examine the specifics of such anomalies here they do reflect an
environment in which the two parties, who share the joint task of working to ensure a
job seeker actively participates, don’t appear to share a common understanding about
the way the necessary evidence will be treated.

This point is underlined when employment consultants repeatedly state that a Centrelink
decision to overturn a participation failure appears to have ignored the documented
history of poor participation by the job seeker – or when the additional information
provided by the employment consultant does not appear to have been taken into

A source of further frustration for employment consultants is the limited nature of
information they receive about the outcome of a PR. While the ESS screen shows
whether or not the PR was upheld it gives little further detail so that the consultant is
frequently unclear about how the participation failure has been handled and the reasons
for any rejection (See Appendix B). This makes developing a clear and accountable
relationship with the job seeker difficult.

Without creating too much further administrative burden for Centrelink staff it would be
useful for employment service providers to be able to see the rationale for a PR not
being upheld. This would in turn improve performance in future lodgements by the
same provider.
Bureaucratic, overly complex and time-consuming nature of the compliance

The bureaucracy and complexity that surrounds the compliance system is cumbersome
from a number of perspectives.

As we have already indicated the background documentation for the compliance system
is very substantial. Given its quantity, it is inevitable that consultants will overlook,
misinterpret or ignore some of the material. We recommend that significant pruning and
consolidation of the documentation is undertaken. What is needed is a succinct
statement of the way the compliance system works that is unambiguous, straightforward
and contains consistent information for both employment service providers and
Centrelink staff.

A second layer of bureaucracy relates to the documentation employment consultants
must provide when lodging a participation-related request to Centrelink. While some
actions are done by checking boxes there are many points at which the employment
consultant will have to obtain evidence and record this. The typical work flow is:

Action                                                          Outcome
Employment consultant (EC) books appointment with job Job seeker fails to
seeker                                                          attend without good reason
EC makes 2 attempts to notify job seeker (statutory             Job seeker does not
requirement): Lettermust allow 2 weeks, phonemust             reconnect
allow 2 days
EC records all this on ESS, makes file note on own
internal system
EC lodges Contact Request or Participation Request              May have conversation with
depending on situation: this is done on ESS screen using        Centrelink about the
tick boxes but EC needs to assemble all information and         evidence
evidence before (10-20 mins)
Total time: over 2-3 week period phone, paperwork and data entry=40-60 mins BUT
longer in case of PR for leaving a job voluntarily or other failure requiring follow-up with
employer or Work for Dole Host etc.

Delegation of authority to Employment Services Providers (ESP)

There has been some suggestion in the consultations to date that in order to address the
communication and information inadequacies of the current system providers should be
delegated the authority to issue participation failures.

Jobs Australia does not support this proposal as it contradicts the core function of
providers, which is to engage and support job seekers along a pathway to employment.
The current blending of enforcement and assistance roles already gets in the way of
provision of the most effective assistance. We therefore believe it would be highly
counter-productive to extend the enforcement roles and responsibilities of contracted

If providers were to be delegated the authority to apply participation failures the conflict
of interest could potentially see some providers adopting a harsh and punitive approach
in order to improve their performance results under the star rating system. The current
system of reporting and checking and administrative decision-making in accordance with
the law by Centrelink provides a necessary balance and impartial assessment that in our
view should not be removed.
The adequacy of non-vocational support services in regional areas

Our members delivering DES and those working in regional areas report a shortage of
key services to support job seekers with serious non-vocational barriers. This is a
particularly acute problem for people with mental health problems and those who are
homeless. The lack of adequate supports for job seekers facing these barriers directly
impacts on their ability to fulfil their participation requirements and slows the
engagement process.

In regional areas not only are non-vocational services spread thinly but distance and
situations where services are only provided on an occasional or intermittent basis make
it even more difficult for providers to provide the continuity of service and regularity of
contact that job seekers may need. Providers note the shortage of drug and alcohol
services with 6-month waiting lists and similar delays for mental health services with
Casualty offering the only means of accessing help quickly. Emergency housing is often
not available and the reality of stigma in small towns can have a significant impact on
people seeking help for any crisis or support services.

In this vein the question of defining vulnerability and hardship needs to keep in mind the
impact of locational factors. Providers in regional and remote areas note that something
that may constitute a moderate level of vulnerability in a metropolitan context can
present as a severe vulnerability or hardship in a regional area where support services
are few, distances great and communities small.

The impact of the lack of support services in remote and regional areas on job seekers
capacity to participate needs to be a factor in Centrelink’s considerations on whether to
uphold PRs.

The adequacy of information and education provided to new and existing
clients about the compliance system

Providers indicate that job seekers do not seem to get a clear and consistent message
from Centrelink about their participation requirements, and the nature and reason for
penalties that may be, or have been, imposed. This, combined with delays in the
reconnection process, can mean that when job seekers do re-engage with the provider
there is not a clear understanding of cause (participation failure) and effect (financial
penalty or need to attend reconnection appointment). This in turn weakens a key aspect
of the compliance system: its ability to quickly send the job seeker a clear, unequivocal
message about the need to actively participate in job search activities.

The adequacy of resources for Centrelink to implement the new arrangements
and deal with related complaints

The general reports about the delays in implementing the Contact Request process
within its required timeframes suggests that Centrelink’s Participation Solutions Teams
may be inadequately resourced. The frequent comments about inconsistencies in the
way information and evidence for Contact Requests and PRs are handled suggests that
additional training resources are needed to address this problem. More consultation
between Centrelink and providers could be undertaken to achieve a well-founded
common position – one which both understand, accept and can implement and which will
be viewed as reasonable by the broader community and make sense to job seekers.
The new pilots under the Local Connections to Work initiative, the first of which opened
in June in Frankston, Victoria, offer a possible model for addressing some of the issues of
Centrelink/provider communication and consistency. Under this pilot not only will
employment services be co-located with Centrelink but an employment consultant and a
Centrelink customer services consultant jointly undertake the initial interview with a job
seeker when the Job Seeker Classification Index (JSCI) questions are asked.

A Jobs Australia member involved in this process at Frankston reports that this approach
has been extremely beneficial and that Centrelink officers have commented on the much
greater level of detail and knowledge that providers get from job seekers than Centrelink
itself does when undertaking the JSCI. In this environment it seems likely that both
parties to the process will be able to develop a better understanding of the knowledge
each has of job seekers, as well as greater respect for their mutual roles.

The provider anticipates that the joint services delivery approach will, over time, have a
significant and positive impact on improving the implementation of the compliance
process. However, this pilot is only targeting vulnerable youth and VLTU >5 years and is
being rolled out quite slowly. If it does provide a better model additional resources
would need to be made available before it could be rolled out to more categories of job


Jobs Australia recommends that the DEEWR:

1. Seek ways to simplify the system making it easier for Employment Services Providers
   and job seekers to understand and navigate.

2. Improve the communication between providers and Centrelink so that both parties
   present clear and consistent messages to job seekers.

3. Produce an online training package for providers on the basics of the Social Security
   Act so that providers better understand the framework for Centrelink decision-

4. Provide further data detailing the level of participation failures issued to job seekers
   who have vulnerability flags on their Centrelink file.

5. Conduct a series of best practice pilots that includes practice strategies from
   providers who have low reconnect and Participation Reports yet have good referral-
   to-commencement ratios.

6. Clarify the arrangements by which providers can continue with attempts to contact
   job seekers following the lodgement of a Contact Request and that if the job seeker
   does connect with the provider the initial Contact Request be withdrawn.

7. Provide more detailed data and analysis to shed light on the discrepancy between
   providers lodgement of PRs and the uphold rate by Centrelink.

8. Require Centrelink to provide additional feedback to providers on the reasons for not
   upholding PRs.

9. Supports the proposition that Centrelink retain the responsibility for the assessment
   and issuing of participation failures, and that this not be delegated to providers.

10.Monitor the impact of the ‘Local Connections to Work Initiative’ on PR and reconnect
   lodgement rates at local Centrelink offices, document the practice initiatives it
implements in relation to job seeker engagement and distribute this information to

The information in this section is a cut-and-paste of the documents available to
employment services staff on DEEWR’s ESS site at Provider Portal > Stream Services >
Client Information > Compliance


This section contains information on job seeker Compliance and arrangements including
Comprehensive Compliance Assessments, Compliance Activities, notification, monitoring
job seeker participation and compliance action.

>>   Job Seeker Compliance Framework
>>   Re-engagement
>>   Vulnerability Indicators
>>   Comprehensive Compliance Assessments
>>   Compliance Activities
>>   Notification

Job seekers in receipt of Income Support Payments are required to actively look for work
and undertake activities to become job ready in order to continue to receive payments.
Where a job seeker is not attending appointments or participating in activities, a
provider should take steps to re-engage the job seeker as soon as possible. The
documents below provide an outline of the compliance process and the major compliance

        Introductory Compliance Presentation
        Job seeker Compliance Guidelines
        Compliance Glossary Advice
        Compliance NESA Practitioners Conference 2009 Presentation
         (Excerpt from the Stream Services - An Overview Part 1 Workshop for publishing

The Job Seeker Compliance Framework

The job seeker compliance framework supports participation and engagement. It has
been designed to re-engage job seekers who have failed to meet a requirement so that
they can continue working with their providers find sustainable employment. The
compliance system offers providers a number of options for re-engaging job seekers. For
example Providers can request Centrelink's assistance via the submission of a Contact
Request where they have been unable to contact a job seeker or allow job seekers to
make up any time missed in a program or activity. Where this is not considered suitable,
providers can report potential failures to Centrelink via the submission of a Participation

        Failure Types Fact Sheet
        Connection/Reconnection Failures Job Aid
        No Show No Pay Failures Job Aid
        Serious Failures Job Aid
        Checklist for Quality Participation Reports Job Aid
        Reasonable Excuse Fact Sheet
        Centrelink Contact Request Processing Fact Sheet
        Best Practice Tips for Job Seeker Engagement and Compliance Fact Sheet
        Compliance Codes Fact Sheet
Unemployment Non Payment Period

      Unemployment Non Payment Periods Fact Sheet


Re-engagement is the process by which Centrelink re-engages a job seeker who has
failed to meet a requirement with their Employment Services Provider.
This section provides information on how to re-engage job seekers after a failure to
participate has occurred.

      Re-engaging the job seeker Fact Sheet
      Provider options for re-engagement Job Aid

Vulnerability Indicators

This section provides information on what a Vulnerability Indicator is, who determines if
one is necessary and how indicators are applied to a job seeker’s record.

      Vulnerability Indicators Fact Sheet
      Vulnerability Indicators Advice

Comprehensive Compliance Assessments

Comprehensive Compliance Assessments are undertaken by Centrelink to determine if a
job seeker needs additional assistance in order to meet their participation requirements
or if a job seeker has been persistently non-compliant. This section provides an overview
of Comprehensive Compliance Assessments and outlines the roles of providers and

      Comprehensive Compliance Assessment Overview Advice
      Determining persistent non-compliance Advice
      Triggering or Requesting a Comprehensive Compliance Assessment Advice
      Issues to consider before requesting a Comprehensive Compliance Assessment
      Outcomes of a Comprehensive Compliance Assessment
      Comprehensive Compliance Assessment (CCA) Process Job Aid

Compliance Activities

A job seeker who incurs a serious failure and an eight week non-payment penalty can
undertake a Compliance Activity in lieu of serving the non-payment period. This section
provides information on Compliance Activities and the role of providers in arranging,
commencing and monitoring a job seeker’s participation in a Compliance Activity.

      Compliance Activities Overview
      Compliance Activity participation requirements
      Arranging and Commencing a Compliance Activity
      Participating in and Completing a Compliance Activity
      Process for Compliance Activities Job Aid

It is important that job seekers are fully aware of their participation requirements and
the details of specific activities and appointments. This section gives an overview of the
Providers’ role in formally notifying a job seeker of their requirements and links to
appropriate letter, appointment slip and email templates as well as notification scripts for
verbal contact.

      Using Notification templates Advice
      Notification Job Aid (includes verbal notification scripts)
      Notification Fact Sheet

Templates for Notification - ESD4

      Initial (Stream 1) (Compellable) - Letter Template
      Initial (Stream 1) (Compellable) - Appointment Slip
      Initial (Stream 1) (Compellable) - Email Template
      Initial (Stream 1) (Voluntary) - Letter Template
      Initial (Stream 1) (Voluntary) - Appointment Slip
      Initial (Stream 1) (Voluntary) - Email Template
      Initial (Stream 2-4) (Compellable) - Letter Template
      Initial (Stream 2-4) (Compellable) - Appointment Slip
      Initial (Stream 2-4) (Compellable) - Email Template
      Initial (Stream 2-4) (Voluntary) - Letter Template
      Initial (Stream 2-4) (Voluntary) - Appointment Slip
      Initial (Stream 2-4) (Voluntary) - Email Template
      Contact (Compellable) - Letter Template
      Contact (Compellable) - Appointment Slip
      Contact (Compellable) - Email Template
      Contact (Voluntary) - Letter Template
      Contact (Voluntary) - Appointment Slip
      Contact (Voluntary) - Email Template
      Skills Assessment (Compellable) - Letter Template
      Skills Assessment (Compellable) - Appointment Slip
      Skills Assessment (Compellable) - Email Template
      Skills Assessment (Voluntary) - Letter Template
      Skills Assessment (Voluntary) - Appointment Slip
      Skills Assessment (Voluntary) - Email Template
      In-House Servicing (Compellable) - Letter Template
      In-House Servicing (Compellable) - Appointment Slip
      In-House Servicing (Compellable) - Email Template
      In-House Servicing (Voluntary) - Letter Template
      In-House Servicing (Voluntary) - Appointment Slip
      In-House Servicing (Voluntary) - Email Template
      Job Interview (Compellable) - Letter Template
      Job Interview (Compellable) - Appointment Slip
      Job Interview (Compellable) - Email Template
      Stream Services Review (Compellable) - Letter Template
      Stream Services Review (Compellable) - Appointment Slip
      Stream Services Review (Compellable) - Email Template
      Stream Services Review (Voluntary) - Appointment Slip
      Stream Services Review (Voluntary) - Email Template
      Re-engagement Appointment (Compellable) - Letter Template
      Re-engagement Appointment (Compellable) - Appointment Slip Template
      Re-engagement Appointment (Compellable) - Email Template
      Re-engagement Appointment (Voluntary) - Letter Template
      Re-engagement Appointment (Voluntary) - Appointment Slip
      Re-engagement Appointment (Voluntary) - Email Template
      Work   Experience   Activity (Compellable) - Letter Template
      Work   Experience   Activity (Compellable) - Appointment Slip
      Work   Experience   Activity (Compellable) - Email Template
      Work   Experience   Activity (Voluntary) - Letter Template
      Work   Experience   Activity (Voluntary) - Appointment Slip
      Work   Experience   Activity (Voluntary) - Email Template
      Work   Experience   (EPP) - Letter Template
      Work   Experience   (No EPP) - Letter Template
      Work   Experience   Appointment (Compellable) - Appointment Slip
      Work   Experience   Appointment (Voluntary) - Appointment Slip
      Work   Experience   Appointment (Compellable) - Email Template
      Work   Experience   Appointment (Voluntary) - Email Template


      JCA Appointment Contact (Compellable) - Letter Template
      Contact Appointment (Compellable) – Appointment Slip
      Contact Appointment (Voluntary) – Appointment Slip


      Are Contact Requests on the Compliance screens? Can providers send requests to
       Centrelink for them to contact job seekers?
      Is it the Department's preference to use Comprehensive Compliance Assessments
       if a provider feels a job seeker is not being truthful about their circumstances?
      Many job seekers currently feel disconnected as they change providers. This may
       mean that the number of no-shows may increase; therefore will CCAs be relevant
       at this time?

Archived Compliance Information

Related Information

Employment Services Deed 2009-2012
Clause 58 - Failure and Reporting
Clause 59 - Compliance Activities
Learning Centre
Level 1 - Module 11: Compliance
Notification Quiz
Re-Engagement Quiz
Compliance Action Quiz
Comprehensive Compliance Assessments Quiz
Compliance Activities Quiz
Portal Pages
Contacts and Servicing
Disability Employment Network (DEN)
Intensive Activity
JCA & JSCI Assessments
Participation and Engagement
Remote Services
Stream Services Review
Vocational Rehabilitation Services (VRS)
Work Experience – Drought Force Activities
Work Experience – Green Corps
Work   Experience   – Other Work Experience Activities
Work   experience   Phase
Work   Experience   - Unpaid Work Experience Placements
Work   Experience   – Voluntary Activities
Work   Experience   – Work for the Dole Activities

Page Keywords:
No Show No pay, Compliance Activities, Comprehensive Compliance Activities,
Reconnection, Reengagement, Serious failures, Non Payment periods, PRs, Participation

Screen shot of two PRs that have been upheld, demonstrating the level of information
available to employment consultants about the outcome of the penalty.

   “The image of screen shots of PRs has been removed. The image is included in the PDF version of this

   “The image of screen shots of PRs has been removed. The image is included in the PDF version of this

The document appears on the following page.
   “The image of the Jobs Australia logo has been removed. The image is included in the PDF version of this

13 February 2008

The Hon Brendan O’Connor MP
Minister for Employment Participation
Parliament House


Dear Minister

Thank you for your invitation to contribute our views on how employment services can be
improved. As you note, we and others made submissions to the previous Government on
similar issues in June 2007. We also made a submission to the Treasurer in the context of his
call for submissions on the forthcoming federal budget. Many of the observations and
suggestions we offered then remain pertinent today and I have touched on some of these in
recent discussions with you and your staff.

As the peak body for more than 250 nonprofit organisations delivering employment and related
services, we have sought and incorporated many of the views of our members on the many
important issues which your review needs to cover. Our suggestions about ways to achieve the
objectives of the government’s social inclusion, employment participation and skills policies are
not based on calls for additional spending in these areas. We believe that, in keeping with the
Rudd Government’s strong emphasis on fiscal responsibility, these important policy objectives
can be achieved through more efficient use of currently allocated resources.

I also point out that we have endeavoured to be quite frank and candid (and far more so than
became the norm under the former government) in relation to many of our views about
aspects of the present employment and related services system because we believe such
frankness and candour to be necessary if we are to provide the government with the best
advice about ways in which the system can be improved. The former government actively
and systematically stifled and prevented critical debate and airing of problems in the system
to the ultimate detriment of the system itself and those it was intended to serve.

Jobs Australia Limited ABN 17 007 263 916
708 Elizabeth Street Melbourne, Victoria 3000
PO Box 299 Carlton South, Victoria 3053
Tel 03 9349 3699 Free Call 1800 331 915
Fax 03 9349 3655

We note that many unemployed citizens and the great majority of service providers want to see a
quite revolutionary approach to the design of the future employment services system and would
be disappointed if this does not happen. There are significant and systemic flaws that need to be
addressed in the current program and policy arrangements and substantial efficiencies that can
be found to enable redirection of resources where they are needed.

We believe that, by rearranging and redirecting some of the available resources in the system, it
will be possible for the government to target more resources to those people with significant
barriers and disadvantage to help them to achieve truly sustainable and satisfying employment.
We also believe that it is imperative that the macro policy settings of the former government –
settings which impose too many requirements, provide insufficient incentives and not enough
assistance – need to be substantially changed. Not only do unemployed and jobless people need
more incentives and assistance, they also need a system which engages, enthuses, encourages
and empowers them – one which focuses on positive engagement and which has a strong
“engagement ring” about it.

The obsession with jobseeker compliance reflected in the current system results in significant
wastage of resources and some of the harsher aspects of the system amount to quite punitive
and damaging treatment of some of our nation’s most vulnerable citizens. Some aspects of the
policies and the practice and rhetoric of the previous government can reasonably be construed
as a sinister and damaging vilification and punishment of people who need a hand up rather than
being slapped down. It is sobering to reflect that we have witnessed the development of a system
which has caused significant detriment and harm to some of our most vulnerable fellow
Australians and which has left others on the wayside without the help they need. In some
instances and hopefully not too many, it may well have been a contributing factor in some
vulnerable jobseekers seeking to take their own lives as a compounding consequence of being
denied income support for extended periods. One could be forgiven for thinking the citizens
these policies and practices were directed at were regarded as nothing more than “bludging
bottom dwelling scum suckers”.

We have greater faith in the battlers and in their ability, with the right mix and sequences of
assistance, to get to work in most cases. We also know that they need support and assistance to
build their self efficacy and their self reliance and to deal with often complex and difficult barriers.
This will only be achieved if they are treated with dignity and respect and given the opportunity to
develop long run and trusting relationships with the people working at the front line of welfare to
work. We think it imperative that a new and very different set of arrangements need to be
developed for people who don’t have all the capabilities of the job ready and who need
substantial and multi-faceted assistance. This will likely require a shifting of resources away from
those people who have capability and are job ready or close to being so. For the latter group, a
trimmed down version of the current Job Network model with its linear and largely one size fits all
service model will likely continue to do the trick at a very reasonable price.

In the context of the implementation of the government’s social inclusion agenda, it will clearly be
necessary to tailor combinations and sequences of services and interventions to meet the needs
of widely differing individuals and locations in ways which will not be possible using the one size
largely fits all and linear Job Network model. The government will also need to explore ways in
which relevant services can be more effectively integrated into the communities they serve and
the other services and programs relevant to the needs of the excluded citizens being assisted.
The former government attempted to achieve some degree of integration by mandating and
requiring partnerships and, somewhat misguidedly, through the conduct of Better Connections
workshops in many locations across Australia. Real integration and joining up of services will
require high levels of local involvement, engagement and creativity and will necessarily require a
much more bottom up approach.

Another crucial issue in this context of your review is the critical need to reform the system so
that is designed around the needs of the many hundred of thousands of people it affects, rather
than a ridiculously complex set of contractual and other rules and business process

models and information technology systems which constrain the people working at the front line
and limit their ability to exercise their judgement and use discretion in the practice of engaging
and working effectively with disadvantaged people. Much more attention needs to be given to the
crucial role the front line workers at Centrelink and employment and related services play. We
need to ensure the information technology cart is behind the program horse and not in front of it.
The information technology system needs substantial and radical trimming down and
simplification which needs to be undertaken with a primary eye on the human interface end of the
system and not the contracts and program architecture. This will require a much greater
emphasis on and attention to the ways in which unemployed citizens experience and navigate
the system and the ways in which they and the front line workers interact.

We need to ensure we remove the myriad of unnecessary and unproductive bureaucratic
intrusions and controls which have iteratively been accreted onto the system since its inception
nearly ten years ago. If perchance the architects of the original Job Network “radical market
experiment” were demised, they would be turning in their graves about the extent to which the
fundamental pillars of their design have been so distorted and corrupted in the name of
bureaucratic command, control and Senate estimates hearings posterior protection (so to speak).
Not only does all the present nano-management of the system impede its success, it imposes
significant and unnecessary costs to providers and to the taxpayers. Doing away with large
swathes of inappropriate and unnecessary regulation and control of process and administration
can be achieved without losing necessary levels of accountability for the level of expenditure of
public funds involved.

Another aspect of the system which requires fundamental reform is the governance of the
system. Current contracts are onerous, one-sided and ridiculously complex and prescriptive.
Contract management and performance management processes are in many ways oppressive
and difficult for providers to manage and respond to and load significant and often unnecessary
costs and impositions on providers. Investigations have been sometimes very heavy handed and
conducted with little regard for legal rights of those under scrutiny, and funds in dispute
unilaterally recovered without due and just process. The purchaser has used its purchasing
power to silence dissent and debate about the system and its governance and management.
Providers have been frequently required to spend inordinate amounts of time and money
justifying expenditures which have amounted to far less than the costs of justification.
Consultation often seems to be conducted in name rather than reality and opportunities for frank
and respectful dialogue and debate about ways of improving and enhancing the system are less
frequent. The pursuit in various tribunals and courts of tighter and tighter interpretation of income
support laws has been arguably oppressive and unconscionable and may well have caused
serious harm and injury to some of the recipients who were the subject of an over zealous and
obsessive approach taken or at least endorsed by the former government. The glowing rhetoric
of partnership of the former government’s Reforming Employment Assistance manifesto is but a
distant memory in terms of present (or at least immediate past) realities.

The government should consider the adoption of regulatory and consultative best practice such
as that promoted and developed by the UK Department for Business Enterprises and Regulatory
Reform ( and the consultative practices of the UK Department of Work and
Pensions ( In a similar vein, we think there is considerable merit in
exploring the benefits of more independent and external research and evaluation of the various
programs and the system overall. No system is perfect and all systems can be improved and we
think more external and independent scrutiny of the system will be of benefit to the government,
to the citizens the system is there to serve and to the taxpayers. Like you Minister, we aspire to a
system that is the best it can be and not one that is less than optimal in part because a belief has
developed that we have world’s best practice in Australia and have nothing to learn from the
experience of others.

We appreciate that the time available to consult and decide on new policy parameters to allow
releasing a Request for Tender later this year is quite limited. Timing pressures will

have a bearing on what is possible for the period from 1 July 2009 but changes need to be
substantial rather than minor tweaking of existing policy settings and program architecture. If
we use the analogy of each program being a car (as I have been known to do from time to time),
a minor tweak and service will not suffice – they need a major stripping down and a rebuild.
There is also a need for more detailed knowledge and understanding about how the government
proposes to implement its social inclusion agenda so we can better understand how best to
arrange and position employment and related services to best effect. We know employment
participation is an important ingredient in the social inclusion cake and that different people and
locations will require different cakes but it’s difficult at this juncture to know how the various
ingredients will be mixed and baked.

In an ideal world it would be highly desirable to take more time so that the government has the
opportunity to frame the new arrangements, which will operate until June 2012 and which will
impact on the lives of so many people, families and communities, over a lengthier time frame.
We appreciate that various legal strictures relating to the Australia-US Free Trade Agreement
may well prevent this. We therefore make two suggestions about the design process.

The first is that you, to the fullest extent possible, engage and collaborate with and seek the
views of relevant consumer representative bodies, trade unions representing the front line
workers, providers’ representatives and social and other policy experts during the course of the
review and before the heavy duty tarpaulins of budget confidentiality and purchasing probity are
cloaked over the governments plans and decisions. The system is so very complex and has so
many interlocking and interdependent parts that it is not possible to anticipate and contemplate
all the possible sequences, combinations and permutations which could be involved in
developing a more targeted and effective system. For that reason, those who have hopefully
good advice to offer you will need ongoing and iterative opportunities to do so.

The second suggestion which we make is that you could settle the broad and minimum
necessary number of parameters of the new and reformed system as is necessary to frame
budget submissions and inform other government decisions and that you leave as much of the all
important detail for consideration over a longer time frame. To the extent that many details will
not have a bearing on financial or contractual arrangements, it should also be possible to further
tune and refine the system after tenders are released and contracts are executed – including
over the life of the next contract. In making this point, however, we do not encourage the
government down the path of the contract variation proliferation which is a pestilence on holders
of current Job Network contracts in particular.

Our views on the matters you specifically identify in your letter on the present review are set out
in the attachment to this letter. There are, however, a large number of other issues which should
be considered in the context of a comprehensive review of the forms of Commonwealth
assistance to help unemployed people get and keep jobs and in implementing the Government’s
social inclusion and skills policies. In the interest of brevity we have only outlined many of these
additional matters and would be happy to provide more details should you wish.

The complex system of Commonwealth assistance for unemployed people needs substantial and
fundamental change. Free up service providers to deliver more flexible services and encourage creativity.

Most of the desire for substantial change arises from serious concerns about the growing
contractual red-tape burden on providers and their strong belief that they need far more flexibility
and discretion about the nature, timing and sequencing of assistance they provide, especially to
more disadvantaged unemployed people.

The current suite of programs has differing objectives for different target groups requiring a range
of service delivery modes and skills sets to effectively deliver these programs. To varying
degrees program settings have been adjusted over the last decade in line with government
policies. The Welfare to Work changes and the work-first (or “work-foist” as we prefer to describe
it) approach to employment assistance have been major factors in the way programs are
structured currently and the conditions associated with participation. In our view the existing
policy settings are not an ideal fit with the make-up of the labour market of today where there
now exists a higher proportion of difficult to assist job seekers. The settings also do not do
enough to positively engage with and encourage back into the labour market the large number of
disillusioned job seekers who have withdrawn and who frequently have significant barriers which
mean they are not job ready, the underemployed people who want more hours and those job
seekers who lack the skills employers require.

Each program has its own performance and payment parameters but some seemingly set up a
conflict between the interests of participants and those of service providers. As an example, it
can be to a provider’s financial benefit to invest more in a job seeker with better job prospects
than to put more than minimal effort into job seekers with relatively low employment prospects.

As a recent research paper from the Australian Parliamentary Library summarises:
         problems with the performance-linked payment structure of the Job Network, along with the limited
          fees paid to Job Network providers, have resulted in many difficult-to-place job seekers being
          given little or no employment assistance, and limited employment outcomes for this group
         changes made to the Job Network in order to deal with emerging systemic problems have resulted
          in substantial administrative and compliance demands being placed upon Job Network providers
         increased Government monitoring and regulation of Job Network providers have impacted on the
          ability of these providers to furnish the flexible and tailored support necessary to improve the
          employment outcomes of long-term unemployed and difficult-to-place job seekers
         the above findings indicate the need for changes to be made to the Job Network to ensure its
          capacity to meet the needs of job seekers in the current economic and labour market environment

If the Job Network is to be reconfigured to meet these needs, while also potentially meeting skills in
demand and tackling workforce shortages, then this may first require the reassessment of the work first
focus of this system. A ‘life-first’ approach to employment assistance for disadvantaged job seekers, one
that addresses non-employment-related barriers alongside the provision of employment assistance, may
need to be adopted if the Job Network is to achieve better and more sustainable employment outcomes.
(Parliamentary Library, A review of Developments in the Job Network: 24 December 2007, no. 15, 2007–08,
ISSN 1834-9854)

We agree with the observations in the paper and note that these findings apply to more than just
the Job Network.

Some of the complexity of contract and program design has arisen as a consequence of
numerous contract variations. Some variations were introduced to give effect to Government
policy and program decisions and others have been in response to emerging problems and
opportunities identified to iteratively tune the performance of the Job Network system in

particular. The combination and accretion of these factors is reflected in more and more complex
contracts, guidelines and rules, and in the information technology systems which underpin the
operations and management of the whole system.

little appreciated side effect of the shift toward greater micro-management is that service
providers have tended to adjust their staffing profiles as a consequence of these pressures.
Where the key skill for staff had been a capacity to work with people, the ability to manage within
a highly regulated, computer driven system has become critical. Front-line workers with well
developed human service skills have chosen to leave employment services because they do not
have the discretion to work in ways their professional training and experience judge to be in the
best interests of the client. Paradoxically this shift has been occurring as the proportion of more
difficult to assist job seekers has increased so people with system or process skills are
attempting to assist complex client needs resulting in heightened levels of frustration for all

The economic and social imperatives for increasing employment participation and productivity
mean that providers of employment and related services have a crucial role to play in reducing
dependence on income support and in assisting those people of workforce age with capacity to
work to realise their potential and to share more equally in the proceeds of national prosperity
and growth. Given the uneven employment opportunities that exist throughout Australia, the
Government should consider the provision of sufficient, relevant and flexible mobility assistance
to enable people who want and are able to move to take up employment in low unemployment
regions and localities.

A key step in the design of the post June 2009 system should be a comprehensive process of
review and simplification which may need to involve revisiting government authorities and
decisions to achieve a more congruent, coherent and efficient set of program arrangements.

Reduce micro-management and transaction-based focus of contracts. Move to a more efficient risk-based
approach where outcomes, rather than process, are the business of the purchaser.

When the Job Network was established, a major part of the rationale was that private and
community organisations were deemed to be better able to assist unemployed people than was
the extant public provider. Over the last 10 years program guidelines have become more
prescriptive and rigid as the degree of micro-management has grown and innovation has been
stifled. Contract management has increasingly focused on the fine detail of service providers’
processes in contrast to the original premise of relying on the skills and innovation of the private
and community sectors. The financial cost of this excessive prescription and reporting is borne
by government and providers and is obvious. Less tangible but equally important is the limitation
on the overall effectiveness of employment services attributable to the throttling of innovation.

The introduction of the Active Participation Model with its strong emphasis on activation of
jobseekers and associated and continuing improvements in the congruence, consistency and
integrity of the monitoring and compliance system, has significantly increased the level of job
search activity and the active engagement of many jobseekers. We consider, however, that the
resources being devoted to compliance and monitoring functions being undertaken by
employment service providers and Centrelink could be more effectively and efficiently used.

A more calibrated risk management approach which would ensure that more resources are
devoted to those groups of jobseekers at high risk of non-compliance and fewer resources and
less compliance effort is targeted at those groups who are active and compliant. There is also
scope to examine and rationalise the compliance roles and functions of Centrelink and
employment services providers. A new and more tailored approach to compliance would then
enable more resources to be devoted to provision of more assistance to those very
disadvantaged groups who will require much more than activation and compliance in order to
overcome their barriers. The government should continue to be assiduous in terms of its

monitoring of the compliance and penalties system to ensure that vulnerable jobseekers are not
subject to harsh payment preclusion period penalties.

Much needs to be done if the Australian employment services system is to achieve regulatory
best practice and achieve those levels of risk management and control which maintain necessary
levels of integrity in the stewardship of public funds, as well as reasonable levels of efficiency in
terms of the costs of regulation and contractual compliance. Uncontained regulation and
contractual compliance result in substantial cost burdens on providers, as well as contributing to
the growing costs of departmental contract management.

The compliance framework is based on punishment. It should be redesigned to encourage and reward
participation where income support recipients are responsible for the consequences of their actions and
financial accountability for public funding is not compromised.

As part of the process of design of Australia’s public employment service and related labour
market and other programs, the Government should review the current settings and design of the
Welfare to Work measures to ensure they provide the best policy underpinnings for the optimal
performance of the system. In that context, the Government should consider whether the present
mix of assistance, penalties and incentives is appropriate and whether it can and should be
adjusted to achieve even better results.

In 2002 the Pearce Review1 set out recommendations for the future direction of Social Security
Breaches and Penalties based on principles which recognise the obligations of jobseekers to
seek employment if they are in receipt of government welfare and the necessity of enforcing
sanctions if they fail to comply with those obligations. The review argued for the need for
compliance measures to focus on active engagement for jobseekers and that care should be
taken to avoid discouraging people from cooperating in a system that is intended to increase
their prospects of obtaining work2.

Jobs Australia agrees that penalties should apply if income support recipients fail to meet
obligations associated with their income support. However, we strongly disagree with the policy
that even if a job seeker incurring an eight weeks suspension of income support agrees to
comply with the conditions they are obliged to forfeit the balance of the eight weeks of income
support. This does not reinforce positive behaviour.

In our view, the Government should continue to improve incentives by further reducing effective
marginal tax rates so that people can see and gain more substantial financial benefits from
undertaking some and more work. This will be a major issue for people with low levels of skills
and education and limited work capacity who will not earn sufficient additional income to make
the transition from welfare to work truly worthwhile. The government should particularly review
the approach to people with disabilities in receipt of Disability Support Pension (DSP) to give
them more positive incentives to voluntarily participate in employment services assistance and to
ensure that they have the necessary degree of security of their income support and concessions
to enable and encourage them to do so. This should be a high priority in terms of the large
number of people on DSP who want to work and who have the capacity to do so.

Funding for assistance to unemployed people needs to be maintained at a level that ensures:
     disadvantaged, marginally attached and disillusioned job are encouraged back into active
         participation the labour market
     access to places in all programs dependent on need, not quotas (eg PSP, JPET, DEN Capped)
     each service is funded sufficiently to meet needs (eg ISca 2)

1 The Report of the Independent Review of Breaches and Penalties in the Social Security System (2002)
2 1.37 Pearce Review as above

The strong performance of the labour market presents significant opportunities for getting more
people to work and back to work. It also presents challenges in terms of the need to ensure that
the most disadvantaged unemployed people have access to the assistance they need to
overcome barriers and to develop the skills and other capabilities they need to be successful in
gaining and retaining sustainable employment.

Although the current workforce participation rate is high by Australia’s standards, there is scope
for more to be done to assist registered unemployed jobseekers, the disillusioned Australians
who are only marginally attached to the labour market and those who have withdrawn entirely. In
addition to these Australians, the Australian Bureau of Statistics records large numbers of
underemployed workers including more than 600,000 part-time workers wanting more hours.
Counted among this latter group will be young people who are not in full-time education or full-
time work and who the respected Dusseldorp Skills Forum assesses as at risk of long term

In terms of its overall approach to the strategies for increasing workforce participation and social
inclusion, the Government should continue to ensure that significant resources and effort are
targeted at those disadvantaged people and groups who are living on low incomes and to
continue to reduce the number of Australian children living in jobless households. The goal
should be not to reduce expenditure on income support but to ensure more disadvantaged
people and families have access to the higher incomes and better opportunities to be derived
from participating in paid and meaningful work.

In the attachment to this letter we address the need for programs to be funded to a level that can
accommodate all people that meet the criteria for a place. However, in addition to this we believe
that the decision to reduce the level of funding and thus the support available to very long-term
unemployed (VLTU) people completing two rounds of Intensive Support customized assistance
(ISca2) should be reviewed. More assistance, not less, is required if the most disadvantaged and
long term unemployed people are to get and keep jobs.

As Deputy Prime Minister Julia Gillard has said recently:
      The concept of social inclusion in essence means replacing a welfarist approach to
      helping the underprivileged with one of investing in them and their communities to bring
      them into the mainstream market economy. It’s a modern and fresh approach that views
      everyone as a potential wealth creator and invests in their human capital.

Differential terms of trade in contracts - business reallocation and provider certainty.

An issue requiring system-wide attention is the implications of the geographic bifurcation of the
Australian labour market. Although we are enjoying historically low levels of unemployment and
very long term unemployment, there remain significantly high levels of unemployment in many
regions and localities.

The government will need to consider offering different terms of trade for those employment
services providers operating in localities with very low and deceasing levels of unemployment
and consequent low flows of jobseekers – with those left in the queues with seemingly higher
and complex needs and barriers. This will be necessary if they are to remain viable and able to
continue to meet the costs of maintaining the infrastructure and other costs they incur in
providing the ongoing public employment and other services in such localities.

The commercial risk of service provision has shifted largely from the Government to service
providers as a result of contracts based on market shares of the flow of job seekers. In regional
and remote areas the risk is proportionally greater because of the lower number of job seekers,
the limited availability of allied service providers and other factors associated with distance and
the dynamics of local and seasonal labour markets. We note that in the most part these contracts
are taken by community based nonprofit agencies as they do not

offer a sufficient margin to attract for-profit agencies. While nonprofit organisations are prepared
to shoulder a high level of risk and draw upon their reserves to cover shortfalls in funding, they
need to have a level of certainty of ongoing income levels rather than having to manage in an
environment where they could lose all or part of their business at each six months review.

In the eleventh year of the operation of the employment services market, we suggest it is timely
to reflect on the overall approach to the management and development of the market; the nature
of the relationships between providers and the government as purchaser; the extent to which
innovation and creative approaches to service delivery are being fostered; and to consider
alternative approaches and refinements which might deliver even better results than those
achieved thus far.

Accordingly, we recommend that you consider commissioning an expert and independent review
of the overall approach to the management and development of the market, and of the
contractual and regulatory framework for the employment services system as matter of the
highest importance and priority.

In terms of assistance, we note and endorse the Government’s intent to review the “Work First”
(or “Work Foist” as we prefer to describe it) approach promoted by its predecessor. We support
the “mixed approach” advocated by the OECD and other commentators and experts - with more
emphasis and more resources for the provision of pre-employment education and vocational
education and training for those people who don’t have the literacy and numeracy skills, the
basic education and the current and relevant vocational skills they need to be employed in the
contemporary labour market. In that regard, we welcome the government’s announcements of
significant numbers of additional vocational education and training places which were made in
mid-January this year.

Significant numbers of sole parents, Indigenous people and other groups such as older male
former blue collar workers have not completed their basic education. These people do not have
the current and relevant vocational and other skills they need to be sufficiently attractive to
employers. Others who might be taken on in available low skilled and entry level jobs for short
periods will not have access to the training they need to retain employment and to move up to
higher levels of income without more and better assistance. The combination of resources for
vocational training which is now available through various training credits and accounts, Work
Skills vouchers and the Job Network Jobseeker Account could be enhanced from savings
achieved through significant reduction and rationalisation of provider and jobseeker compliance.
There is also considerable scope for better integration of the various sources of funds presently
available for vocational education and training. Importantly also, due attention needs to be given
to the need to ensure that the style delivery of education and training meets the needs of the
people receiving it – standard classroom style learning will not deliver the necessary results.

In the attached responses to the specific questions posed in your letter we have provided
feedback, comments and suggestions on some relevant key issues. The current public
employment service in Australia is significant in terms of its size, the diversity and capabilities of
its providers, its complexity and sophistication, its reach and coverage, the investment of public
funds and, importantly, in terms of the number of unemployed citizens it works with and assists in
a myriad of different ways.

Reforming and refining the system’s design, management and operations to enable it to most
effectively meet the future needs of disadvantaged unemployed people, the labour market and
the economy and to meet the imperatives of increasing workforce participation is a substantial,
complex and difficult task. The options and directions for reform and improvement and the
combinations and permutations of possible changes and improvements are numerous and
varied. We think it imperative that there be ongoing and open dialogue and consultation between
you as Minister and your department - on key strategic issues and
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principles and then on all the relevant details - with providers, relevant provider and consumer
peak organisations and with key employer groups in this important process.

Thank you for the opportunity to provide our initial views and comments on some of the relevant
issues. You will appreciate we are of the strong view that it is critical to get the settings right for
the next Employment Services Tender to achieve our common goals of social inclusion with
higher levels of workforce participation and employment and especially for those disadvantaged
Australians who remain unemployed despite the best of economic and labour market times in
recent history.

The task of steering and securing major improvement in Australia’s welfare to work and
employment and related services system is a major and difficult undertaking which has to be
undertaken in an extraordinarily short time. We are confident that you will succeed in this
important endeavour and enormously relieved that you will approach the review with a keen eye
and long overdue regard for the need for the system to invest in and to respect and treat with
dignity the disadvantaged and often vulnerable citizens it will serve. We’re ready to provide you
with good, well-informed, useful and constructive advice whenever you would like it. We share
the government’s goals and aspirations for the reformed system and look forward to playing a
part in helping you deliver a fairer go for the battlers who have experienced economic and social
disadvantage for far too long.

With very best wishes.

Yours sincerely

    “The image of David Thompson AM’s signature has been removed. The image is included in the PDF
    version of this publication.”

David Thompson AM
Jobs Australia Limited
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How Employment Services Can Be Improved:
Jobs Australia’s Submission to Minister O’Connor
13 February 2008

How we might achieve the objectives identified in the Government’s Social Inclusion and Skills
policies, including how to ensure:
     early interventions minimise the number of long-term welfare dependent
        Australians of working age (including a review of the Job Seeker Classification

There are a number of groups of working age Australians that need to be considered when
thinking about early intervention to minimise long-term welfare dependence. These include
registered job seekers, young people who don’t complete secondary schooling and don’t go into
full time education or training, new arrivals including refugees on various visas and people
lacking basic social and communication skills. Other potentially long-term welfare dependent
Australians that emerge from time to time are retrenched and redundant workers that become
displaced as industry adjusts to economic, technological and social change here and abroad and
those for whom accident and illness mean they are no longer able to work in their previous

Within this submission we will concentrate on the first two of these groups, registered job seekers
and early school leavers. We begin with a discussion of the Job Seeker Classification Instrument
before moving on to program options and youth issues

Job Seeker Classification Instrument (JSCI).
A substantial proportion of Australians seeking work will find employment quickly, particularly in
those parts of the country where unemployment is at very low levels. Because of this, and to
avoid ‘dead-weight’ losses, the Active Participation Model which underlies the continuum of
current employment services, offers little actual assistance to job seekers for the first three
months of their registration as unemployed. While this may be sound economically, it is
dependent on the capacity of the front-end of an assessment process to ensure that an individual
does not require more assistance at this early stage.

Job seekers who remain unemployed after three months move on to Intensive Support where, as
the name implies, they begin to receive higher levels of assistance to find jobs. For those who
haven’t got a job three months of enthusiasm and optimism may be severely eroded and
unhealthy habits or attitudes may begin to develop.

The current assessment process for determining the level of employment assistance made
available to individuals is based on the Job Seeker Classification Instrument. The JSCI is a
screening instrument which does not purport to measure levels of job seeker disadvantage in
absolute terms. It classifies relative levels of disadvantage based on responses to a series of
questions. Centrelink is not funded to do more than an initial screening and job seekers will often
withhold critical information as they are not aware of, or do not accept, that it is to their
advantage to disclose fully all of their relevant information. Allowing more time to build rapport
and job seeker understanding would be a step toward improving the JSCI reliability.

At its simplest, the JSCI produces a score that is a relative measure of disadvantage.
DEEWR then determines what proportion of the job seekers should be regarded as highly
disadvantaged (HD). Job seekers with JSCI scores at or above an arbitrary level for HD are
immediately given access to Intensive Support customised assistance (ISca). Through setting
the cut-off score, DEEWR controls the proportion of HD eligible job seekers. In earlier Job
Network Contracts, the proportion of HD equivalent job seekers was as much as 33% while it is
now set at 10%. Although the rationale for reducing the proportion of job seekers deemed highly
disadvantaged may be that the job market is more buoyant now than
- 12 -

10 years ago, there is little argument about the fact that case loads today have a far higher
proportion of difficult to assist job seekers.

Options at the front end of the job seeker registration process when the JSCI is conducted
include intervention by specialist Centrelink officers (such as social workers), referral to a Job
Network member and referral to a Job Capacity Assessor (JCA). A review of the JSCI process
should include the JCA.

Job Capacity Assessments are usually triggered by answers to particular JSCI questions but are
also instituted by Centrelink officers. These assessments identify a person’s ability to work and
any barriers they face to getting a job and will directly connect them to employment support
services to assist in addressing those barriers. Job seekers whose circumstances prevent them
from working until certain barriers are addressed may be referred by the JCA to one of a number
of programs including the Disability Employment Network and the Personal Support Program

Although the higher category referrals can generally be accommodated with minimal delay,
waiting lists exist for PSP places in some parts of Australia. All the evidence supports the
importance of ensuring that people referred to a program like PSP are more likely to commence
participation and benefit from the program if the first meeting occurs quickly after the referral.

It follows that making someone wait for a place in the program is counter productive. We
understand that the waiting list for PSP places has been up to 25,000 people and waiting periods
sometimes exceed six months. A policy issue is ‘what job search obligations should be imposed
while a person waits for a PSP place?’ The reason someone is referred to PSP is that they are
not ready for the services available through Job Network to help them get and keep a job.

Youth in Transition
Early intervention is critical for young people who leave school and don’t go into full-time
employment or full-time study. It's Crunch Time: raising youth engagement and attainment is a
report produced as collaboration between the Australian Industry Group and the Dusseldorp
Skills Forum. Drawing on Australian Bureau of Statistics figures, the report reveals that in May
2007, 526,000 young Australians aged 15 to 24 years were neither in fulltime work nor full-time
study. This equates to one in six of our young people stumbling off a career path.

Further breakdown of the data shows that 221,000 of these young people are working in part-
time jobs and half of them want full-time work. Another 98,000 are unemployed and 173,000 are
outside the labour force. Integration within your portfolio of the youth programs managed by the
former Department of Education, Science and Training offers the opportunity for overlaps and
service gaps to be identified and more efficient and consistent transitions of school to on-going
training and work to be implemented. This could include further support for apprentices and
trainees to address high drop-out rates.

There is a need to ensure young people have the guidance and support they need to choose and
stay on a career path and complete the level of education and training appropriate to their
aspirations. At the same time it will be important to obtain the willing involvement and
commitment of industry, education and training providers, and governments to ensure that there
are opportunities for young people to prepare themselves for careers and jobs that industry
needs and values.

As is the case for adults, there should be learning options for young people that are consistent
with their learning styles and mechanisms to identify and intervene where there are indications
that a young person may not develop a positive attachment to the labour market and be at risk of
long-term welfare dependency.
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        employment services are relevant to the circumstances and needs of the
         Job seeker

The Active Participation Model (APM) which underpins mainstream employment services is a
continuum of services. Where a job seeker starts in the continuum depends on their assessed
circumstances. From commencement, people move along the time based continuum where they
are required to meet certain conditions associated with stages of the APM. While the rhetoric is
that the service should take account of individual differences, the reality is that the rigidity of the
APM compels people to fit the service model, not the other way around.

These built-in rigidities and the focus on outcome payments as the major source of income puts
in conflict to varying degrees what might be best for individual job seekers and the needs of
providers to maximize income and star ratings. A discussion paper from Catholic Social Services
argues that the current arrangements for the APM present a number of perverse incentives.
Among these are delayed service and placement to take advantage of higher subsequent
provider incentives and shorter term placements that achieve high provider rewards but lead to
earlier return of job seekers to unemployment and allowance dependency. If these assertions are
valid, it underlines how important it is for job seekers to receive the appropriate level of service in
which there is no conflict between the best interests of the job seeker and the service provider.

Under the APM, a typical job seeker completes 100 hours of Intensive Support job search
training beginning 3 months after registration as unemployed. If they don’t find a job by six
months after registration, most will be obliged to undertake six months of Work for the Dole. This
one size model does not fit everyone and we support broadening options for employment
assistance and the ways open for job seekers to meet Mutual Obligation, including appropriate
on- and off-the-job training.

Providing the most relevant service means giving providers of the various services more flexibility
than is afforded by the current continuum. This would allow them to tailor the timing, nature and
sequences of assistance provided to individual jobseekers, especially those who are most
disadvantaged and will enable more job seekers to gain and retain sustainable employment.

Shifting the overall emphasis of the present system from “work first” to a “mixed approach” and
provision of more resources (and better and easier access to currently available resources) for
education and vocational education and training for those job seekers with low levels of literacy
and numeracy, basic education and vocational skills and competencies should also be a major
priority. This might also involve adjustment of payments for education and training outcomes to
give more incentive and recognition of the need for them to be achieved as a realistic pre-cursor
to employment for relevant job seekers.

Consideration should also be given to adjusting the level of outcomes payments to place greater
weight on 26-week outcomes and the introduction of payments and performance recognition for
longer term outcomes. This does mean incentives based on staying in the same job for 26 weeks
as once employed and more confident, some people will move to better jobs.

The government might also consider the introduction of a new strand of activity, incentives and
resources to enable providers to provide more post placement support to secure sustainable
employment and career and pay advancement for very disadvantaged jobseekers who are
placed but who are at high risk of returning to unemployment.

The current and limited range of measures targeted at very long term unemployed people have a
strong and increasing focus on requirement and compliance and provide only very limited
numbers of these people with assistance (other than bi-monthly interviews) through the Wage
Assist subsidies for employers which are not being fully utilised even though
- 14 -

numbers are so very small. Contractual and administrative constraints on the use of these
subsidies should be identified and removed as a matter of priority and the government should
invest the additional resources needed to enable providers to provide education and training and
the other forms of assistance necessary to help them to overcome their barriers to employment.

It needs to be recognised that for limited numbers of very long term unemployed people, the
nature of their barriers is such that they may not ever be placed into employment in the best of
labour market conditions and that compliance measures are neither effective nor appropriate. We
need to find new ways of engaging them and allowing them to participate and make a
contribution to the community – perhaps through a benign and positively engaging form of Work
for the Dole which doesn’t tag or identify them as “work avoiders”. Work experience is an
important tool for developing positive work habits but there should be far greater flexibility in the
timing and duration of engagement in work experience to meet individual circumstances.

While the scope of employment services is greater than Job Network, the Brotherhood of St
Laurence criticism of the Job Network is relevant:

         Job Network, with its approach of getting people quickly into work, was designed for the labour
         market conditions of a decade ago … The Job Network works best for job seekers who are ‘job
         ready’ and don’t need extra help to compete for work. Its programs are fragmented and complex,
         the most disadvantaged job seekers are overwhelmed by compliance obligations and penalties,
         and the people with the greatest need are getting a falling proportion of the Network’s resources. It
         is well past its use-by date. (Brotherhood of St Laurence, Job Network past ‘use by’ date: fresh
         approaches needed, Media Release, Melbourne, 27 September 2007.)

Service providers are dealing with increasingly more complex, prescriptive and difficult contracts
and program arrangements, being stifled and burdened with rules and more rules, administration,
justification and the production and filing and archiving of evidence. The accretion of layer upon
layer of rules and requirements threatens the Job Network’s ability to do the very best it can in
getting people into work. Other programs which have been remade in the image of the Job
Network are suffering a similar fate. The current levels of prescription stifle creativity and put the
requirements of meeting contract parameters in conflict with meeting individual needs.

The labour market and the issues facing job seekers have changed considerably over the 10 or
11 years of the Job Network. Changes have included the skill requirements of new industries and
the introduction of measures to reduce the welfare dependence of groups of Australians and to
apply more stringent penalties for compliance failures. Those that are essentially work ready
have little trouble getting jobs and those lacking in skills, experience or attitude have either had
difficulty in finding jobs or have a succession of short –term marginal jobs that move them in and
out of unemployment. As mentioned earlier, the payment and incentive structure and work first
philosophy in Job Network encourages organisations to compel job seekers into any job
irrespective of its suitability and potential longevity.
        Job seekers with higher levels of disadvantage receive intensive Assistance

It is self-evident that the level of government assistance to help individuals find and keep a job
should meet their specific needs and be delivered at a monetary cost that is sustainable.
Assistance needs to offer more than a short-term fix and cycling through assistance programs.

To get a level of effective service requires appropriate investment in the front end assessment
phase as we have discussed earlier. Having determined the degree of potential disadvantage a
job seeker faces, the suite of services available needs to be able to address
- 15 -

the identified disadvantage and, crucially, provide for quick access to the service designed to
assist in overcoming the identified factors.

Those job seekers identified as unready for the forms of assistance to find and keep jobs
provided by Job Network, may be referred to other programs. An obvious and important aspect
of the current system which must be addressed and rectified is the capping of places in PSP,
JPET and Capped DEN. The current unacceptably high number of people in the waiting list for
PSP, in particular, is a matter of serious concern. The previous government’s rationale is that
demand driven places are provided for those people with activity and job search obligations. The
capping of places at lower than demand levels for PSP and JPET prevents or substantially
delays access to the assistance people with high levels of relative need and disadvantage need
to become job ready. These delays are likely to exacerbate their barriers and result in a need for
higher levels or longer durations of assistance to enable them to become job ready where that is

Other issues concerning the Job Network which impede the effective delivery of services for
highly disadvantaged job seekers under current arrangements include a number of elements of
the program which were adjusted as a consequence of compromises made in the early stages of
the design of the system. One issue in particular is the effective nearly halving of the resources
available for the second round of Customised Assistance – which resulted from the reversing of
the decision that only half of those job seekers who reached that point in the continuum would
actually receive substantial assistance despite the fact that their level of disadvantage grows with
the length of unemployment. Arguably, the resources available for assistance should grow rather
than diminish with longer periods of unemployment

Another issue is the need to codify in contractual arrangements necessary flexibility in delivery of
the 3 days per week of activity during Customised Assistance, for delivery of services in rural and
relatively remote regional areas and for delivery of services for Indigenous people in many areas.
Similarly in non-metro areas, it needs to be recognized that access to professional services may
be severely limited eg drug and alcohol counselling and psychologists as well as skilled case
workers. Without access to a full range of professionals employment service providers are faced
with making compromises in trying to assist high needs disadvantaged people to find and keep
jobs. This underpins our view that the terms of trade offered or negotiated in regional and remote
areas should not necessarily be the same as for metropolitan cities.
        Incentives for training which will improve the employability of job seekers (including
         incentives for long term training and education to address labour market needs)
        Job seekers receive appropriate training

With education, employment and training programs in a single portfolio the opportunity exists to
link a comprehensive range of education and training. It should be possible for people to move
between different forms of training in pursuit of different career paths and to allow participation in
multiple programs. It also brings into the portfolio the main programs addressing language,
literacy and numeracy skills shortages.

Australia has a shortage of skills and, in some locations, a shortage of labour. For high level
skills in short supply, a long term approach is required to skill people through schooling,
university or vocational training including traditional apprenticeships. A review of the conditions
for Austudy, apprentice and training wages (in particular living away from home allowances and
parental means testing) may help increase retention in longer term training.

An urgent discussion is about how to engage those people at the edges of the labour market who
lack basic skills and for whom formal education and training has not worked and a different form
of training may be appropriate. A review of Developments in the Job Network by the
Parliamentary Library offers the following:
- 16 -
         Addressing underlying barriers to employment while also meeting skills in demand and
         tackling workforce shortages would appear to demand a greater role for Community
         Work Coordinators and Work for the Dole providers. This could entail their either being
         brought within the Job Network itself, or being given a greater collaborative role in
         providing services to job seekers (p30).

However badged and revised, there is an important place for work experience in developing a
range of foundation employability skills. Employers have often made the call for people with the
‘right attitude’ saying they will provide the specific training themselves.

Experiential training delivered through work experience is likely to be more attractive to job
seekers with few relevant employment skills and for whom formal training has not worked.
The current Work for the Dole program puts job seekers in supervised positions for 6 to 25 hours
per week – this is far more than any other employment program. As a consequence, Community
Work Coordinators are able to identify and address employment barriers early while the job
seeker learns important skills including teamwork and punctuality. Relaxing the current terms
under which Work for Dole operates would offer more opportunity to tailor work experience to the
needs of individuals.

The Parliamentary Library paper goes on to discuss the introduction of more interim outcome
payment categories noting:

         it must be recognised that without Government assistance and recognition for providers’
         efforts to provide less measurable forms of personal support, including access to further
         education and training to meet current labour market demands, alongside employment
         assistance, quality and sustainable employment outcomes for disadvantaged people are
         not likely to be achieved (p31).

Employers must be intimately engaged in developing on- and off-the–job training that is relevant
to their future needs. Labor’s Industry Skills Councils are an important part of this process.

Jobs Australia members delivering Job Network and DEN and other services involving placement
of job seekers into employment have developed and are implementing a wide variety of effective
strategies for engaging with employers, identifying and matching suitable job seekers and

To varying degrees, providers will shape their processes to obtain results that ensure their
viability. For some this will have an element of investing in winners and thus they remain strongly
mindful of the need to ensure they continue to refer the right people if they are to continue to
secure vacancies from employers and rightly remain reluctant to refer unsuitable job seekers
simply to test their job seeking bona fides.

The freeing up of the system and allowing credit for training in both financial and performance
rating terms is critical to long term change that will make it equally rewarding in these terms to
assist job seekers to identify and undertake appropriate training.
        Performance management principles (including star ratings and business reallocation) that
         support sustainable outcomes and promote quality service delivery

Our response to this point covers two basic areas; firstly the validity and application of the Star
ratings; and secondly the principles of performance management and the current approach
which has been a fairly constant theme through out this submission and the covering letter.

Star ratings
- 17 -

It is appropriate for a purchaser to have a system to evaluate and manage the performance of
service providers. It is also important that services funded from public revenue are seen to be
delivering value for money consistent with the requirements of an open tender. A system based
on regression analysis which accounts for differences in provider and client characteristics is
inherently a valid means to compare different providers.

The development of Stars for Job Network and allied programs has been with the involvement of
academic institutions and experts. The Job Network Stars have been through several revisions
and a number of internal and external evaluations including an independent review by Access
Economics in 2005 (Jobs Australia’s CEO was member of the steering committee for the review).
Job Network Star Ratings are based on performance measures which identify those

members that are best in assisting job seekers to find jobs. They provide for comparisons
between organisations operating in different regions and Employment Services Areas. However,
the star ratings are ranked so that on a national basis approximately 70 per cent of Job Network
sites are rated at ‘3 Stars’ or better. Five per cent are rated at ‘5 Stars’, and four per cent at ‘1
Star’. On the basis of this distribution, the 30 percent of sites falling below 3 stars are subjected
to scrutiny for possible loss of business (expressed in a percentage of market share).

In the decade in which Job Network has been operating the number of Job Network providers
has fallen from 306 in 1998 to about 103 today. As the number of provider organisations has
fallen with the lower ranked providers losing business and/or dropping out of the market, the
application of the model inexorably means the bottom ranked 30 percent is still identified and
subject to possible business reallocation. Consequently even good providers are fearful of losing
business each six months. (It is noted that business reallocation for Job Network has recently
moved to a 12 months cycle in recognition of the disruption and other costs associated with the
shorter cycle.)

This process is difficult for suppliers who enter contracts for three years but where the possibility
exists of losing some or all of the business every 12 months.

While DEEWR may ague that the process drives performance, it places unnecessary pressures
on service providers and forces them to make decisions about what may be best for the Stars
and what is best for the job seeker. This conflict may manifest itself as a bias toward putting
someone into a short time subsidised job rather than spending longer to help prepare job
seekers to obtain more permanent and satisfying employment.
We believe much of this potential conflict and cost could be overcome by the application of
benchmarking performance rather than standardised relative performance as is the current case.

The Star Ratings approach is now being applied to other employment service programs. This has
brought to the surface questions about the validity and reliability of the components and
weightings used in the regressions that underpin the Stars systems. Factors that may be relevant
for Job Network where the focus is on finding employment may not be appropriate for programs
such as PSP where employment may not be a realistic option.

Principles of Performance Management
When the Job Network was established and the extant labour market programs were ‘cashed
out’, the then Minister explained the rationale was related to the capacity of private and
community agencies to achieve better outcomes for unemployed people.

Since that time departmental contract management has become more and more focused on the
minute details of process as opposed to outcomes. We believe a much lighter touch is needed
based on a risk management approach that focuses on the achievement of agreed outcomes
and allows providers greater freedom in how they go about achieving outcomes.
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        The minimization of time and money spent on administration

Consideration of ways to minimise the amount of time and money spent on administration of
employment services should cover macro shifts in the architecture of the programs and the roles
of public and contracted providers as well as the transaction and compliance costs.

The high and ever increasing focus and preoccupation on contractual compliance and
prescription of process has resulted in a diminution of necessary flexibility and the exercising of
discretion by front-line workers in terms of their ability to tailor sequences and combinations of
assistance to the needs of individual jobseekers. This prompts a need to consider a move away
from a transaction-based payment and contracting approach to an approach which aggregates
payment for and accounting for combinations of service provision, and which places far more
emphasis on accountability for outcomes.

As an example, the current emphasis in the CWC payment model and performance framework
on maximising utilisation of places (and the complexity which arises as a consequence of that
emphasis) should be substantially reduced to allow more focus and effort on the achievement of
the program’s objectives of provision of quality work experience and community benefit.

Much has been achieved in the 10 years of operation of the Job Network and the other programs
in terms of the efficiency and effectiveness of the system, its procurement and contracting
arrangements and information technology, a strong focus on outcomes and rewards for
outcomes for more disadvantaged jobseekers and so on. The integration of the former DFaCS
and DEST programs into the (now) DEEWR framework will be able to be further developed in the
2009 process when program contracts and arrangements will be able to be further aligned and

There has been and should continue to be consideration of the costs and benefits of
consolidating programs. There are efficiencies to be had through combining programs that have
to do with economies of scale, particularly as the viability of delivering some programs is being
adversely affected by the welcome lower levels of unemployment. There are also potential
savings for government in administering fewer contracts for multiple services. However, there is
a danger in consolidating programs in pursuit of efficiency that the quality and specialist expertise
that has built up over the years will be lost to the detriment of service recipients.

In any general consideration of the possible streamlining and consolidation of the current suite of
programs, the government should consider a number of factors including:
     the differing objectives, target groups, modes of service delivery and organisational
        capabilities – including specialist expertise, where relevant - needed for each of the
        different programs;
     the reasons for the creation of each of the programs;
     the desirable level and nature of consolidation and segmentation of providers and the
        associated desirable level of diversity of providers of different types and sizes of
        providers; and
     the risks, costs and benefits associated with integration of programs with different target
        groups, objectives and modes of service delivery and organisational capability.

While there may be a number of potential and perhaps significant benefits to be achieved from
the management, procurement and operation of fewer numbers of contracts in the hands of a
smaller number of larger providers, the government runs the risk of a loss of diversity, focus,
choice and specialisation in the employment services market and a transfer of complexity though
integration of different programs into single contracts with differing service types and streams.
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With regard to the architecture, there are issues around the number, timing and sequencing of
individual programs and of the roles of Centrelink and of contracted providers. In the first three
months of unemployment, for the bulk of job seekers there is little actual service provision as
many find themselves jobs relatively quickly. However, job seekers are required to report to
Centrelink to lodge forms and to their Job Network member to access services. This brings a
level of duplication that could be reduced if one or the other agencies took responsibility for all
contacts with job seekers during this period. At the end of an agreed period, if the job seeker is
still unemployed the more specialised and intensive services of contracted providers would be
brought into play.

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