Thank you for inviting me to be at your last leadership forum for the year, and a busy year it's been.
I'd like to take this opportunity to update you on significant progress relating to the reform of employment services, and to talk about the challenges and opportunities that lay ahead of us in 2009.
I will be happy to take any questions you have at the end.
2008 has been a very challenging year to say the least, but we have also achieved a great deal.
Commencing in January, which now seems like a very long time ago, we started discussing future directions for the nation's employment services.
Throughout the year I have talked with many of you and I have appreciated your considered feedback, advice and suggestions.
I know that you have invested your time and talents not only in assisting to design the new system, but more recently in submitting your proposals to be part of the delivery of the new Employment Services.
As a result of your input, we've developed the new Employment Services in a way that encourages innovation and partnership and focuses on the most disadvantaged Australians. As promised, the new employment services will also cut red tape, and whilst maintaining accountability, this will lift much unproductive administration from you and indeed from the system.
At the same time we've been working on other important areas during the year. This includes of course the Disability Employment Services Review.
The process of reforming disability employment services started with the Government changing what in my view was a ridiculous policy of the previous Government. A policy that compelled Disability Support Pension Recipients to have their benefits reviewed and therefore jeopardised, simply for putting up their hand for work. This major disincentive to work for DSP recipients was removed in early September.
Many of you will be aware that on Wednesday I released a discussion paper outlining significant proposals for the reform of disability employment services. There are a few key elements of the Government's proposed reforms to disability employment services that I'd like to outline to you.
The Government proposes to uncap access to disability employment services. Just like universal employment services, job seekers with disability who need assistance, will be able to obtain it in a timely way.
Change in this area is understandably a very important matter for people with disability and their advocates, and the uncapping of access to services will remove a major inequity that in my view has lead to unfair outcomes.
This particular change would allow for example, specialist disability employment services - knowing they have a place available - to plan to assist school leavers with disability to help them transition into the workforce.
Disability employment service providers will in future be able to have effective partnerships with schools to help students with a disability plan to enter the workforce and avoid the cycle of welfare that so tragically befalls many people with disability in our community.
Like universal employment services, the proposed new system will also focus on skills development and training - particularly in areas of skill shortages. There will be added incentives to provide job-seekers with a disability with the skills that employers need to fill vacancies, and to provide job-seekers with a genuine career path.
For job-seekers with disability in rural and regional areas we propose to increase funding via a loading for remote clients. The proposed increase is from 20 and 30 per cent to a flat 70 per cent.
We also propose to simplify the system of referrals to make sure that job-seekers with disability get the services that are most suitable for them.
And also in line with the improvements to universal employment services, we will remove complexity and cut red tape for providers to allow them to devote more time to helping their clients.
Submissions on these proposals close 30 January 2009, and I invite those of you with an interest to put forward your further comments.
The reforms to DEN/VRS will of course form a key element of the National Mental Health and Disability Employment Strategy that we are working towards finalising in the New Year.
Turning now to some of the key challenges for universal employment services in the New Year and in particular the transition process.
I want to re-enforce to you that I am strongly committed to consultation on policy development but also in relation to operational matters such as the transition to the new universal employment services.
I appreciate that many of you have spent a lot of effort developing your tenders, and that it has been a time consuming process. Now that tenders are in, we need to turn our minds to transition.
For the transition to be as smooth as possible and to ensure that specific operational and logistical arrangements are tested, we will need the benefit of industry expertise.
It is proposed that a Transition Reference Group be established to assist with this purpose.
The Reference group will focus on three key areas:
- movement of job seekers from current services to the services that commence on 1 July 2009
- arrangements for providers to ensure they are fully prepared for quality delivery of the new services, or that any winding up that needs to occur is as easy on all concerned as possible
- Thirdly, the development of new Employment Services Guidelines and related materials.
As I have said many times - and I will say again for emphasis - the Government is committed to reducing red tape. This will include the introduction of new streamlined guidelines for Employment Services. DEEWR will be talking with NESA over the coming months about these new guidelines, following initial discussions on a general framework.
There will be opportunities for people not on the Reference Group to provide feedback on the transition process. We will publish the proceedings of the Reference Group, and invite discussion and questions from other interested parties.
A matter that is concerning most Australians, and I know it is deeply concerning providers of employment services, is the Global Financial Crisis.
From an economic perspective, we all know the world is facing a difficult, challenging and unpredictable period. Australia however is in a strong position to withstand the economic fallout.
The Mid-Year Economic and Fiscal Outlook forecasts that unemployment in Australia will rise to 5 percent by June 2009 and 5¾ percent by June 2010.
The current global financial crisis is undoubtedly having a serious impact on future economic growth and employment. The Government has been up front and honest about that - but we've also taken early and decisive action.
Our responsibility is to get the policy settings right for the longer term so that our economy can continue to grow - well beyond the current global financial turmoil.
The Government's Economic Security Strategy will help secure jobs for Australians and provide new training opportunities.
The $10.4 billion package that commenced the strategy will also help pensioners, seniors, veterans, carers, and mums and dads, by providing immediate financial support. It will stimulate economic activity right now when we need it, and will help employers secure and create jobs. This package alone is expected to create up to 75 000 additional jobs across the country.
Last weekend the Prime Minister announced the Council of Australian Governments package worth $15.1 billion over five years. This will create 133 000 jobs and further stimulate the economy.
The $6.2 billion car industry package announced recently is also another demonstration of the Government's determination to plan long term and to protect jobs.
We're committed to ensuring all Australians are given every opportunity to find or re-gain work if they have been displaced by the fall out of the global financial crisis. Our focus on the most disadvantaged job seekers through the new Employment Services is now even more important in light of the economic challenges facing us.
The Government's new, demand-driven Employment Services will be flexible enough to respond to changing economic conditions.
We know that increasing unemployment will create challenges for Employment Service providers. There will be more job seekers and in some industries, fewer job vacancies.
As you all know, the new Employment Services places a strong emphasis on equipping job seekers with the skills that employers need. There are employers who still have difficulty and will continue to have difficulty finding skilled staff.
Over the last 12 months, the Government has announced a number of important investments to increase skills.
Under the Productivity Places Program, 309 000 new training places will be set aside for people currently outside the workforce, over five years, to address skills shortages.
As recently as October we announced a further $187 million investment in the Productivity Places Program, to create an extra 56 000 new training places this financial year.
We will always be prepared to listen and to respond where fine tuning is needed. However I'm confident - underpinned by the Government's Economic Security Package which will create more jobs - the new Employment Services will stand up very well during tough economic times.
As I mentioned earlier, as global economic conditions worsen, it will be more important than ever to maintain our focus on the most disadvantaged.
The causes and effects of disadvantage are many and there is no single or simple solution. Many disadvantaged job seekers remain deeply trapped in social and economic circumstances that perpetuate generational and locational disadvantage.
The new Innovation Fund will provide opportunities to trial new solutions that offer fresh ways and alternative thinking, to overcome the barriers to employment faced by the most disadvantaged job seekers.
Today I am pleased to make available the new Innovation Fund Guidelines. They set out how the fund will operate and the types of projects that are eligible for funding.
An important feature of the Innovation Fund will be its flexibility to support a diverse range of projects. For example:
- joining employment services with health providers, drug and alcohol programs, childcare providers, preschools and schools, language and cultural organisations, local government, business, housing and other services
- mentoring support for groups of job seekers with specific disadvantage; and
- establishing social enterprises
Up to $500 000 per year will be available for projects, through the Innovation Fund, with initial projects to commence on 1 July 2009.
The guidelines for the Innovation Fund are available on the DEEWR website, so that those interested can start to design their proposals, subject of course to being chosen for the Innovation Fund Panel.
One weakness of the current Job Network is that there is not enough emphasis on directly meeting the needs of employers who are experiencing skills and labour shortages.
The new Employment Services will reward providers who work with employers to create 'work-ready' job seekers who can meet critical local labour market needs.
Employer Brokers are another important element of Employment Services. They will have a strong focus on providing solutions to meet the specific needs of employers.
Along with the Innovation Fund guidelines I am also pleased that we are today making available the new Employer Broker guidelines. The guidelines provide more detail about the role of Employer Brokers and the types of activities that can be funded.
$6 million will be spent over three years to fund Employer Broker activities.
There remain occupations and industries crying out for skilled workers. Employer Brokers will target the areas and industries experiencing skill shortages as a priority.
Employer Brokers will engage with employers and coordinate and maximise the efforts of Employment Service providers to match the labour needs of employers.
Employer Brokers will be expected to disseminate their strategies and the results widely, so that successes can be applied in other locations and industries.
Employer Broker activities will be funded up to $100 000 per year, with initial projects to commence on 1 July 2009.
It is appropriate, because you will be hearing from representatives of the Australian Employment Covenant shortly that I touch on the very important matter of the employment of indigenous Australians.
The Australian Government is committed to closing the gap between the living standards of Indigenous and non-Indigenous Australians. As the Prime Minister has said
- this is a national priority.
There is no reason why in Australia today we should accept a 17 year life expectancy gap between Indigenous and non-Indigenous Australians.
A range of reforms to close this gap are underway in partnership with the states and territories.
The Council of Australian Governments has agreed this year to a range of initiatives for Indigenous Australians totalling $4.6 billion, across early childhood development, health, housing, economic development and remote service delivery.
So what is the employment gap between Indigenous and non-Indigenous Australia?
At the time of the last Census in 2006, only 48 per cent of the Indigenous workforce-aged population were in jobs. This compared to 72 per cent for other Australians - a gap of 24 percentage points.
To halve this gap by 2016, an additional 100 000 Indigenous Australians would need to gain employment.
The Government has recently been consulting on reforms to Community Development Employment Projects (CDEP) and the Indigenous Employment Program (IEP). Changes proposed will work in tandem with private sector initiatives like the AEC, education reforms and reforms to Employment Services more generally, to deliver better outcomes for Indigenous Australians.
The new Employment Services will continue to be the largest provider of employment services for Indigenous people across Australia. That's the reason, and those who have tendered will be well aware, we have emphasised the need for providers to put in place indigenous employment strategies as part of the employment services tender.
The Government is currently considering the community feedback we've received about the Indigenous Employment Program and Community Development Employment Projects, before we make final decisions about changes. The aim is to begin the new IEP and CDEP on 1 July 2009, so the final details in relation to change will be announced in the near future.
The Government is also strongly supporting private-public partnerships to help create employment opportunities for Indigenous Australians and drive demand. These include projects such as the Australian Employment Covenant.
The Australian Employment Covenant is an ambitious new private sector initiative which aims to secure 50, 000 sustainable jobs for Indigenous Australians.
The Covenant is a three way commitment in which:
- employers guarantee employment to 'work-ready' Indigenous Australians,
- the Australian Government funds pre-employment training to the specifications of Covenant employers, and
- Indigenous participants commit to accepting and remaining in employment once they're trained.
Many organisations that are already delivering Indigenous employment programs will be key players in this innovative project and the Government is an enthusiastic supporter of the AEC.
You will hear more about the Covenant from AEC CEO Mal James later this afternoon. I urge you to support this initiative and encourage your clients to participate.
Looking ahead, 2009 is also going to be a busy, challenging and important year for employment services.
As I indicated earlier, to ensure the transition to the new Employment Services is as seamless as possible for both job seekers and providers, DEEWR will work with providers throughout the transition period. The aim will be to prevent or resolve any issues that may have occurred during previous transitions.
The Department will focus on:
- Ensuring the latest information is available
- Making sure the IT support and DEEWR and Centrelink customer service lines are equipped to answer queries from jobseekers, providers and employers; and
- Maintaining a robust IT systems during transition
Employment Service providers will receive information on an ongoing basis on secure sites, commencing around the time of the tender announcement. This information is being developed by DEEWR National Office in consultation with Centrelink, DEEWR state and territory offices. It will also be discussed with the DEEWR / NESA Working Party.
In conclusion, I want to thank you for your involvement in the delivery and reform of employment services. I know that you share a commitment to giving all job-seekers - including those who face the greatest barriers to participation - the opportunity to reach their full potential, and to contribute to our society through meaningful employment. I wish you and your loved ones peace and enjoyment over the Christmas/ New Year period.
Thank you.
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