'Earn or learn' while our tax dollars burn

Canberra's approach to shepherding unemployed youth into work or study faces a challenge in ensuring government subsidies won’t be rorted.

One aspect of the government’s ‘unfair budget’ that has not received much scrutiny is just who will manage the growing army of unemployed youth back into work or study -- that is, press them into the ‘earn or learn’ mould.

Once upon a time it was the Commonwealth Employment Service -- a government body established in 1946 to match workers with jobs or training.

One CES branch in Perth, for instance, got this columnist a job cleaning machines in a wool-testing factory and later a job managing a chestnut farm. Oh the hours spent scanning the CES jobs boards in the pre-internet age.

However when the Howard government was elected in 1996, the CES was on its way out. Within two years the body that had lasted 50 years had its administrative functions split between other agencies, and the jobs/training matching process had been tendered out to private providers.

The network of private profit-making and not-for-profit organisations delivering services was overseen by several incarnations of an agency that became known as the Job Services Network.

That was also the broad approach taken by the Rudd and Gillard governments, though by 2011 a review was arranged by then minister for employment participation, Kate Ellis, due to “allegations about Job Services Australia [ie. private] providers inappropriately claiming fees for services they did not deliver.”

Put more simply, some private providers of job services were accused of box-ticking that allowed them to milk the public purse, without providing a long-term transition from welfare to work -- their raison d'être.

Minister Ellis announced the results of that review by saying: “We are incredibly proud of the successes of the JSA system which is out-performing earlier employment services models and helping keep Australia's unemployment levels at low levels which are the envy of much of the world.

"Despite Opposition claims that the government over-reacted in taking swift and strong action on the issue of provider brokered outcomes, today's report reinforces the need for the changes made to increase accountability and transparency."

Hmm. In retrospect, that moment in economic history represented the high-water-mark of the mining boom and Rudd-stimulus-led jobs boom. How much the JSA system had to do with it is questionable.

Moreover, Ellis was “proud” of a system that even then needed greater “accountability and transparency” – quite a contradiction.

Fast forward two years, and the youth joblessness crisis is spiralling out of control, and the Abbott government’s response to it is bringing on a political crisis all of its own.

The characteristically rhyming slogan used to present Abbott’s plan is “earn or learn”, though there is growing concern that this could just as easily mean 'burn public money to no end'.

A young Tasmanian on the ABC’s Q&A, for example, recently complained that he’d done plenty of higher education, but lived in a region where there were 16 unemployed for every job being advertised.

In such an environment, cynics point out that the best way to find a job is to start your own ‘employment provider’ consultancy, and take government money matching these jobless Tasmanians to jobs (fat chance) or, failing that, to approved ‘registered training organisations’.

Liberal member for Murray, Sharman Stone, faces a similar situation in her electorate around the Shepparton region in Victoria. Stone fears that setting up RTOs might be the only growth industry in town, though training the unemployed for which jobs exactly?

As noted previously (Abbott is right to follow Gillard's jobs plan, August 12), Australia’s low labour mobility compared with international competitors means you can train job-seekers until they’re blue in the face, but they may still not be prepared to move to where the jobs are.

In the dying days of the Gillard/Rudd government, tertiary education minister Chris Bowen set up an inquiry into ‘the role of the Technical and Further Education system and its operation’.

That inquiry was discontinued when the Abbott government was elected, but not before a former director of TAFE Tasmania, and managing director of a small tulip bulb growing business employing seven staff, Paul Roberts-Thomson, made a submission stating:

“The VET market represents one of the most easily accessible troughs of government money for exploitation. I do not believe it is reasonable for the Australian taxpayer, as represented by government, to accept uncritically the position taken by either RTOs or industry, or, for that matter, the numerous consultants that benefit from the VET trough.”

Trough-led recovery, anyone?

Besides maintaining a network of employment service providers, the Abbott jobs plan features “A network of Work for the Dole coordinators ... contracted to work with Employment Providers and source Work for the Dole places and projects with organisations such as local councils, schools, community organisations and state and federal government agencies.”

This is not a new idea, but again the scope for private entities to over-claim public funds, while under-delivering outcomes is the stuff of legend.

During the early Howard government era, community groups were contracted by the then Department of Education Employment and Workplace Relations to take work-for-the-dole participants.

Some were so successful that they became de facto employment service providers – passing work-for-the-dole participants on to other employers.

In some cases they were better described as ‘work-experience for the dole’, according to one coordinator who had been running community garden schemes around Fremantle, Western Australia, but later was involved in finding job places for dole recipients with a wide range of other companies and community groups.

She recalls that the problem with the work-for-the-dole was that she had to manage a mixed group – half were motivated job seekers, interested in her group’s projects, but half were entirely unmotivated or unsuited.

She describes “young women with long nails who couldn’t dig a hole” turning up to build a community garden.

That, she says, is the problem – the incentive for the community group is to “tick off all the boxes” for such workers, and claim government subsidies.

An ‘Exposure draft for employment services 2015-2020 purchasing arrangements’ circulated by the Abbott government is big on assurances that such box ticking won’t be allowed.

Though not a policy document, the draft says the government’s approach:

– Significantly reduces the level of prescription, complexity and red tape for Employment Services Providers and rewards sustained performance.

– Training will be more tightly targeted and job seekers will not undertake training for training’s sake.

– There will be five-year deeds to reduce costs and red tape for providers.

– Payments to providers will be restructured to promote stronger performance and emphasise the achievement of employment outcomes, not process.

– A new performance framework will measure not only outcomes, but also service delivery quality.

Well that all sounds lovely. However, it still sounds like a bureaucratic nightmare.

Viewed historically, Australia dispensed with a government agency, the Commonwealth Employment Service, because it was full of public-service inefficiencies and bureaucracy ... and replaced it with a large and disparate network of private providers, some of them inefficient or rorting the system, and overseen by a complex structure of bureaucracy.

Which is better? This former CES-referred wool-tester and nut farmer can’t be sure.

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