ALBANESE: Yesterday the Department of Employment and Workplace Relations Deputy Secretary Bob Correll wrote to Job Network providers providing details of the $2.1 billion bailout which was announced by the Minister on 22 August to the NESA Conference. This bailout is an extraordinary event in Australian politics which is unprecedented. $670 million per year has been guaranteed to Job Network providers, each and every year over three years.

Essential with this bailout you have a situation whereby the Job Network was justified as being a competitive market-based system in which they have removed the market. It is also suppose to be an outcome-based system in which for the majority of payments they have removed any outcome payment.

In the letter to Job Network providers I think the Government stands condemned by its own words, and that letter says: “Notably there’s nothing in these changes that alters the planned balance between service fees and outcome fees, but rather ensures that Job Network achieves what was modelled.”

Here you have an extraordinary admission that the Job Network process for Job Network 3 which began on July 1 with a model that was flawed but then changes made so that the outcome meets the flawed model. This is a policy process which is extraordinary.

The fact is there are three problems with the Job Network:

The first is that the modelling was wrong. It estimated that there would be 720,000 people in the system and the real figure is under 500,000. So whilst the Minister tries to blame the number of unemployed people not turning up to interviews, which he himself says is around 60,000, for the problem with the system, the fact is that 220,000 people which were included in the business plan were never meant to be part of the system and the Minister from day one got that wrong.

The second problem is that of the automated referral system where people are receiving letters to go to Job Network providers without the personalised service and it being understood what their obligations are. It has been shown to be a failure and when a trial period of direct Centrelink personalised referrals was made, the fact is that over 90% of people did turn up to the interviews.

The third problem of course is with the disastrous IT system which Job Network providers have described as a “dog” of a system.

These changes leave all those structural weaknesses in place. The changes consist of two main elements. The first is up front quarterly advances of cash to Job Network providers. This turns on its head the whole reason for the Job Network coming into being and is simple about keeping the doors of Job Network providers open. The second change is that 40,000 people will be added into Customised Assistance. What that means is that people are having their risk of being long-term unemployed defined not by the reality of their situation but by the needs of Job network providers to receive the upfront cash payments of between $800 and $1,200 for each Customised Assistance client who’s referred to them.

You now have a situation whereby the Job Network is being driven not by the needs of the unemployed, but by the needs of Job Network providers to keep their doors open. Labor believes very strongly that employment services should be driven by the needs of the unemployed to get into work. In particular the needs of the long-term unemployed not to be left behind. The fact is Minister Brough in his statements continues to blame the unemployed when it’s his incompetence and maladministration of this system which is to blame. Job Network providers know that, the unemployed know that and it’s about time the Minister took some responsibility.

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