Aug 27, 2003

Government cashes in on failing system

GOVERNMENT CASHES IN ON FAILING SYSTEM

MEDIA RELEASE: Anthony Albanese – 27 August 2003

It has now been revealed that even before last Friday’s $2.1 billion bailout of the Job Network, the Howard Government was well aware that the system was significantly under-performing.

In an answer to a question put by Labor during the Senate Estimates process the Government concedes that the number of jobseekers placed into work by the Job Network has been significantly lower than what they had budgeted and hoped for.

Between 2000/01 and 2002/03 the Job Network’s failure to place the unemployed into jobs at the rate anticipated, resulted in under-spends totaling $323.6 million, or a massive 10% of its budget.

As most of the Job Network’s expenditure is the payment of money to providers following the successful placement of jobseekers, the fact there has been such a significant under-spend shows that the number of jobseekers assisted into jobs fell far short of the Government’s own expectations.

Responding to these under-spend figures, the Department of Employment and Workplace Relations (DEWR) admitted as much. DEWR itself conceded:

"Under-spend can be attributed to lower than anticipated levels of outcome fees being achieved and paid to providers."

Senate Employment, Workplace Relations and Education Legislative Committee, Question Number W078-04

Put simply, the Government’s experiment with privatised employment services has failed to achieve even the targets they themselves set.

These under-spend figures confirms other data released by DEWR showing that only 19% of those who participated in Intensive Assistance – the highest level of help available through the Job Network – found full-time employment.

Labour Market Assistance Outcomes, Issue 12, p4

Given the past performance of the Job Network it is not surprising that the number of people on unemployment benefits long-term is higher today than when the Howard Government was first elected to office. While the Government has banked its $323 million in savings, an increasing number of jobseekers are left to languish in long-term unemployment.

The $2.1 billion the Government is now throwing at the Job Network may go some of the way to addressing the financial problems being experienced by providers, but without significant structural reforms the system will continue to fail those it is meant to serve – the unemployed.