Friday, 6 May 2016

So how is the Coalition's 'supadupa' Jobactive Australia scheme going?

This is an excerpt from a Prime Minister Tony Abbott, Minister for Employment Senator Eric Abetz, MP for Cowper and Assistant Minister for Employment Luke Hartsuyker joint media release on 31 March 2015:

In 1998, the Howard Government introduced the Job Network and revolutionised the delivery of employment services to job seekers.
Unfortunately, the Rudd-Gillard-Rudd Government changed the employment services system to reward process over results and encourage training for training’s sake.
The system became mired in red tape, letting down job seekers and employers.
The new jobactive system will be focused on results and reward performance not process.
From 1 July 2015, 66 organisations will deliver one or more jobactive services to job seekers and employers across Australia.
There will be clearer incentives to ensure employment service providers are focused on better preparing job seekers to meet the needs of local employers and helping people to find and keep a job.
Service providers will no longer receive ‘job placement’ payments.
The rules around training have also been tightened to ensure that job seekers are not being sent to training for training’s sake, as is currently the case.
There will be less red tape so that providers can spend more time doing what they do best – helping job seekers find and keep a job.
The new employment services contract will also be extended from three years to five years.
A new regional loading for providers in selected regions will be introduced, recognising that labour market conditions vary across Australia.
The new model encourages young job seekers to take up a job and employers to take on new employees.
The Job Commitment Bonus programme will encourage young, long-term unemployed job seekers aged 18-30 to find and keep a job.

Setting up Jobactive Australia cost an est. $6.756 million according to the Dept. of Employment.

In the first two months it was operating (1 July 2015 to 30 September 2015) those approved service providers billed the Employment Fund General Account a total of $6.170 million predominately for professional services, training, clothing & presentation.

On 17 September 2015 Employment Minister Eric Abetz boasted that Jobactive Australia had reached 50,000 job placements since the start of the scheme. However he was careful not to qualify what comprised a 'placement'.

According to the Dept. of Employment Budget Statements 2015-16 Jobactive Australia was allocated $1.459 billion for that financial year. This budget expense is expected to rise to $1.778 billion in 2016-17, with total employment services expenses expected to total $1.932 billion.

For that amount of money the Abbott-Turnbull Government expects the Jobactive scheme to have placed 380,000 jobseekers in often wage-subsidised employment in 2015-16, at a cost of est.$2,500 per placement covering Employment Fund expenditure, service fees and outcome payments.

Unfortunately 68% of these placements are likely to last only 4 weeks before the person is unemployed once more. I suspect the percentage of temporary jobs is so high because this allows service providers to bill the government again and again for ‘helping’ those same job seekers find other temporary jobs once the initial placement dissolves into thin air and, via the $1.2 billion national wage subsidy pool potentially allows employers to 'churn' new employees on short term contacts so that employers receive financial benefits from the pool but employees are unemployed at contract's end.

None of the departmental employment sustainability measures encompass positions lasting longer than six months, so it is unclear as to whether there is a genuine expectation that job service providers will assist in finding permanent employment for anyone.

In July 2015 when Jobactive Australia commenced, the real national unemployment rate was probably running at est. 8.7% and by March 2016 it had climbed to est.11% according Roy Morgan Research vs ABS Employment Estimates (1992-2016).

In November 2013 the Australian Bureau of Statistics (ABS) seasonally adjusted combined unemployment and underemployment rate (underutilisation) was 13.5% and by February 2016 this combined rate was 14.2%.

In September 2013 the average number of weeks an unemployed person spent looking for a job was 39, with an est.134,400 people looking for 52 weeks and over.
Under the Abbott-Turnbull Government by March 2016 the average number of weeks had risen to 46.2, with an est. 181,700 people looking for 52 weeks and over. [Australian Bureau of Statistics, Labour Force, Australia, Detailed - Electronic Delivery, Mar 2016] 

In June 2014 an est. 123,800 15 to 24 year-olds were looking for full time or part-time work. By March 2016 the number of young people in this category had risen to 133,000. [ibid]

The Brotherhood of St. Laurence reported on 14 March 2016 that some rural and regional areas weregrappling with youth unemployment rates above 20 per cent.

Richmond-Tweed (including Tweed Heads, Byron Bay, Lismore, Mullumbimby) in the NSW Northern Rivers region had a youth unemployment rate of 14.5% in January 2015 and by January 2016 this rate had risen to 17.4% [Brotherhood of St Laurence, Australia’s Youth Unemployment Hotspots: Snapshot March 2016, p. 3]

Yet on 1 May 2016 Treasurer Scott Morrison was telling The Courier Mail that there had been 50,000 youth jobs created in the past 18 months across Australia. He also was offering no supporting proof for this bold statement covering November 2015 to April 2016 and, as neither ABS labour force nor job vacancy data tracks jobs growth it is hard to see where he finding his figures.

Somehow these statistics engender little confidence that the Liberal-Nationals Coalition has taken a genuinely constructive approach to unemployment since winning government in September 2013 – despite that gung-ho media release announcing “jobactive services”.

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