Jun 18, 2003

Appropriation Bill (no. 1) 2003-2004: Consideration in Detail

APPROPRIATION BILL (NO. 1) 2003-2004: Consideration in Detail

18 June 2003

Mr ALBANESE (Grayndler) (4.53 p.m.) —There are a number of issues I wish to raise today which I covered in more detail in my response to the appropriation bill. The first issue is the underperformance of Job Network. Funding to the Job Network is based upon placements of people into employment, in particular long-term employment. The Minister for Employment Services told the parliament last year:

What the opposition seems to forget is that there is no payment of these outcome fees unless the person is in employment for 13 or 26 weeks.

In the minister’s own words, there is no payment without outcome. This may explain why for every year since 2000 the Job Network has failed to meet budget estimates set by the department. In fact, since 2001 underspending on the Job Network has totalled $286 million. What that means in real terms is that money that was allocated to assist people into employment has not been spent and has gone back into consolidated revenue rather than being spent on employment programs to put people into work. This underspend is a direct product of the system’s failure to find jobs for the unemployed at a rate anticipated by even the government’s own figures.

Every year this government has tinkered with the Job Network system and every year there has been an underexpenditure. During the Senate estimates hearings earlier this month Mr Bob Correll, Deputy Secretary, Employment, of DEWR admitted:

… the outcome rates that were built into some earlier estimates were probably overstated.

In the department’s own words, the government has overstated the employment outcomes the Job Network has been capable of delivering. Having saved $286 million as a result of the Job Network’s failure to deliver, the Minister for Employment Services has the gall to crow loudly that the government will be spending an additional $375 million over the next three years on assistance for the unemployed. This money the minister talks about is not new money; it is mostly money that the government has failed to spend over the last three years.

The facts about Job Network’s performance are these. The number of long-term unemployed is higher today than it was when the Howard government was first elected to office in March 1996—and that is from the government’s own Department of Family and Community Services figures. Only 17 to 18 per cent of those who undertook intensive assistance, the highest level of assistance available under the Job Network, were in employment three months after completing the program. Only one in eight disadvantaged job seekers found full-time employment at the completion of intensive assistance.

Not only has the Job Network failed to live up to the government’s hopes but also its performance has not matched that of the labour market programs it replaced. In particular, the former Labor government’s Jobstart program achieved employment outcomes of 60 per cent, whereas intensive assistance has been achieving outcomes of just over 40 per cent. Assessing cost-effectiveness, the Productivity Commission found that the cost per off-benefit outcome for intensive assistance was $22,010, compared to only $9,700 for Jobstart. So much for value for money. In other words, Labor’s Jobstart program was achieving better outcomes at a lower cost to taxpayers than the Job Network’s intensive assistance. A lack of new investment in the 2003 budget will ensure that the government’s Job Network continues to perform poorly in reducing entrenched joblessness in our community.

The next issue I want to touch on is Job Network closures. Last year the Minister for Employment Services said:

Today there are some 2,000 Job Network sites right around Australia in people’s communities where they are unemployed. That is the Job Network and the government’s services coming to the unemployed …

They are leaving the unemployed now, Minister. As a result of the changes in Job Network 3, this government is closing more offices than it is keeping open. Fifty-three per cent of Job Network sites are earmarked for closure between now and 1 July. This translates into a loss of 691 regional sites and a further 410 metropolitan sites. In total, of the current 2,087 sites, 1,101 will close permanently. Again I emphasise that the government is closing more sites than it is keeping open. The number of Job Network sites offering intensive assistance services will be slashed by 12 per cent—from 1,119 currently to 986. (Extension of time granted) These closures will leave many smaller towns without any Job Network provider, and the unemployed in those towns will have to travel further to get the help they need to find a job. Members such as the member for Lingiari will outline exactly what impact this has in regional Australia.

On top of the reduction in face-to-face service, my office has received numerous complaints from job seekers, Job Network providers and Centrelink staff about the state of the much vaunted IT system. According to these complaints, the system that is supposed to facilitate the booking of appointments with providers, the posting and updating of resumes on the Australian JobSearch site and the sending of vacancy information to job seekers is continuously crashing, causing distress to providers and job seekers alike. The Minister for Employment Services has an opportunity here tonight to say that that is not the case—to say that the IT system is all working okay. But he will not do that if he is honest with this parliament, because the system is simply unable to cope with the demands being placed on it.

One job seeker who contacted my office said that it took her eight hours to gain access to the system simply so she could update her resume details. And when she finally did gain access, the system froze on her. This is a system the minister calls the world’s best IT. It appears that inadequate time has been allowed for the installation and testing of the multimillion dollar IT infrastructure that underpins the operation of the Job Network. In light of these complaints, the minister should now come clean as to the scale of the problem and give the parliament an assurance that all the bugs in the system will be fixed by 1 July. It is not just the opposition saying this; people on the ground are drawing attention to these problems. On 2 June 2003 the AASW, representing social workers around Australia, released a press release which said:

The closure of 1,000 offices around Australia established to help the unemployed obtain work will leave many unemployed Australians further disenfranchised. There is considerable hypocrisy in Job Network 3. The government increased the number of Centrelink offices in the last federal budget and now closes employment offices. How can it claim to encourage Australians from welfare to work, yet decrease services aimed to gain them employment?

That is the question that has to be asked. But the government has other work to welfare programs as well. If you work for Employment National and you are going to lose your job as of 1 July but you find another job within the federal public service then you lose your redundancy payout. Therefore, there is actually an incentive for people to find themselves on the unemployment queue as of 1 July. This is an extraordinary innovation by the Howard government: perhaps the world’s first ever work to welfare program has been introduced.

This budget talks big about the issues of security but, when it comes to providing financial security that only a job can bring, this budget contains no strategies, no reforms and no new investment. Like its predecessors, it contains no steadfast commitment to full employment, will do nothing to help the long-term unemployed and indeed contains predictions of a deteriorating employment outlook. This budget sentences the unemployed to another period of suffering and hopelessness; another period whereby the government will emphasise pejorative terms against the unemployed rather than trying to lift them up and give them an opportunity that a job provides.