Category Archives: The Australian

MYEFO: Work for the Dole scheme abandoned

The Australian, 16/12/15

Rick Morton, Michael Owen

The government is walking away from its flagship Work for the Dole scheme and will save $127 million by restricting the program and its contingent intensive support to unemployed people under 25.

The money will be recouped over three years from the program that was at one stage due to have 150,000 participants across the country.

Between July and September this year, the vast majority of work-for-the-dole participants were over 25. Estimates data shows there were 21,131 over-30s and 15,148 under-30s. On September 30, there were more than 21,000 people aged over 25 in Work for the Dole.

Work for the Dole was mandatory for those aged up to 60 under the old regime, tied to monthly appointments with the government’s Jobactive service providers , to help them find work.

Under the updated system, those receiving the “intensive” services at June 30 this year will be grandfathered, but new entrants having problems finding work and jobseekers over 25 will use regular Jobactive services.

In the three months from July to September this year, the government spent $64.5m on Work for the Dole, including $12.5m to co-ordinators.

As at June 30, almost 17 per cent of job-support clients who had found work for six months — considered a bonus milestone — were back without work after a further six months. The rate was almost 30 per cent for those with the most significant support requirements.

Work for the Dole was criticised by many in the welfare sector for being ineffective compared with other intensive training options or wage subsidies. About 19 per cent of those participating in Work for the Dole schemes were employed three months later.

Departmental data suggests wage subsidies result in job outcomes of between 47 per cent and 65 per cent after six months.

More money will be given to a national program to help school- leavers into full-time work with the $212m Transition to Work getting a $109.8m boost over four years. The program is for people aged 15-21, including those who are not on income support, to help them overcome barriers to employment and gain skills to get into the workplace.

Lisa Stewart, 29, said without compulsory Work for the Dole she would never have had the opportunity to acquire the skills to find full-time work. Ms Stewart, who left school in NSW in Year 9, ended up in Adelaide at 19 with a limited education, few skills and next to no job prospects.

She is now a fully fledged hospitality employee with the Adelaide Convention Centre and the Tandanya indigenous arts centre’s cafe, after completing a vocational education course in North Adelaide and a Work for the Dole program, where she worked three days a week.

“I’ve had a pretty rough trot throughout my life, but I am determined to better myself and get on the road to success,” she said. “They should not discriminate on how old you are. I only found myself in my mid-20s and the doors started opening through the Work for the Dole program.”

GenerationOne indigenous jobs program results ‘dismal’

The Australian

The government’s flagship indigenous job creation program that aimed to employ 5000 people by the end of the year has resulted in just 471 jobs retained for longer than six months.

Based on the GenerationOne employment model developed by mining magnate Andrew Forrest, the $70 million Vocational Training and Employment Centres were an election commitment of the Coalition and are designed to reward businesses for keeping indigenous Australians employed.

Figures obtained by The Australian from the Department of Prime Minister and Cabinet show that while 2723 people have started the VTEC program since January 2014, just 471 have secured employment for the targeted 26 weeks.

A total of 1978 indigenous jobseekers have been placed in jobs in the past 18 months. Many may yet meet the 26-week employment target by the end of the year.

But about 10 per cent of participants — 237 people — have begun jobs and dropped out of the program, and a further 192 people have left the program before beginning employment.

The program has so far cost about $20m.

The figures provided by the department suggest the retention rate for those who begin employment placements is about 66 per cent.

Labor indigenous affairs spokesman Shayne Neumann said the results suggested the program was falling short of its promised benefits and the government would fail to meet the 5000 jobs pledge.

“This has been going on for ­almost two years now and we have dismal results,” Mr Neumann said.

“It hasn’t started well, the drop-out rates are already significant, and only 17.3 per cent of people who have started have reached the 26 weeks, so that is not a good outcome.”

But GenerationOne’s national manager of vocational training and employment Matthew O’Sullivan said the outcomes were positive, particularly given the program dealt with many hardcore unemployed.

“With several thousand indigenous people moving into employment already and with many more expected do so by the end of the year, GenerationOne is proud of what is being achieved by the network of VTECs,” he said.

“This is particularly so when you consider that VTECs are required to target indigenous jobseekers that have been assessed by Centrelink as having significant and multiple barriers to employment.”

Under the program, VTEC providers are contracted to employ strategies to ensure job retention rates and must provide post-placement support throughout the 26 weeks of employment.

Indigenous Affairs Minister Nigel Scullion said the government was monitoring the program.

“While it is too early to assess final outcomes, the government is monitoring progress closely and supporting VTECs to reach employment targets,” Senator Scullion said.

The government initially committed $45m for the country’s 28 VTECs to place up to 5000 indigenous Australians into “guaranteed jobs”. A further $25m was committed to the program in last year’s budget under the Indigenous Advancement Strategy.

Budget 2015: Income management boost

Political Reporter
Canberra

Income management in remote indigenous communities and low socioeconomic regions will be extended for three years as the government rolls out the new healthy welfare card.

A funding boost of $147 million will continue income management in all current locations, supported with $25.6m for financial counselling and support services across two years.

Mining magnate Andrew Forrest’s proposed healthy welfare card, which prevents the spending of welfare payments on alcohol and drugs, will be allocated $2.7m for consultation with communities and industry.

The funding also will be used to identify the technology and service delivery arrangements for a “commercially delivered debit card arrangement”.

Further funding will be provided across three years to undertake trials of the debit card in up to three communities, based on the recommendations made in the Creating Parity report. Locations are to be determined.

“The trial is expected to reduce harm resulting from alcohol, drugs and gambling, while also testing a role for community leaders in influencing social norms,” the budget papers read.

Funding associated with the trial has not been disclosed, as negotiations with potential providers are yet to be finalised.

Thirty-two service delivery hubs will provide financial literacy education, an indigenous mentoring program and an expanded Indigenous Home Ownership Education service.

Jobs goal slips out of Tony Abbott’s reach

Work wanted.

Work wanted. Source: TheAustralian

The Australian, 15th January 2015

Martin Crowe

THE federal government is falling behind on a key election pledge to create one million jobs over five years, in a blow to its economic agenda as experts warn that the target may never be achieved.

Jobs are being created too slowly to reach the goal, just as Tony Abbott names “jobs and families” as his top priorities for the year ahead after a punishing political fight over last year’s ­budget.

In the next test of the policy, offic­ial figures to be released today are tipped to show monthly jobs growth that is too low to meet the government target.

The setback highlights a broader challenge for the nation as the resources boom fades and the economy cools, forcing the government to consider new ways to balance the budget at the same time as it wants to use public spending to shore up growth.

With job insecurity high and job creation below long-term trends, the nation is set for a steady rise in unemployment that could harm consumer confidence and retail sales.

The government admitted yesterday that there were new pressures on tax revenue after The Australian revealed a $2 billion hit to major gas projects as a result of falling oil prices, compounding the problems of falling iron ore and coal prices.

Employers created about 11,700 jobs each month during the government’s first 12 months in a continuation of the relatively weak jobs growth since the global financial crisis.

Mr Abbott needs job creation to jump to 18,000 every month for the next four years to deliver on his promise, a huge rise that economists now consider to be unlikely.

Employment Minister Eric Abetz stood by the jobs pledge yesterday but conceded that it was going to be difficult to deliver and sought to blame Labor and the Greens for preventing new jobs schemes getting through parliament.

The jobs pledge was one of the first priorities in Mr Abbott’s Real Solutions plan before the last election, promising to generate “one million jobs over the next five years” by forging a bigger and more productive economy.

But, with challenges mounting, economists said the government had been “misguided” to make the promise to voters when it needed a lift in economic growth that was yet to materialise.

“It is hard to see it being achieved, even though 200,000 extra jobs a year doesn’t seem much more than what is implied by population growth,” said Melbourne Institute of Applied Economic and Social Research principal research fellow Roger Wilkins.

“Lower oil prices will probably help growth, but unemployment seems to be inexorably edging higher over the next year or two.

“In any case, it is a misguided — and close to meaningless — policy goal.

“ The real policy targets should be things like economic growth, employment-population rates and household income growth.”

Australia had 11.5 million people in jobs when the Coalition came to office so its formal target needs jobs growth of just less than 1.75 per cent a year, said Bank of America Merrill Lynch chief economist Saul Eslake.

“That would imply that real GDP growth needs to be at least 3.25 per cent per annum in order to achieve the government’s promise,” Mr Eslake said.

But, instead, economic growth this year is expect­ed to be 2.5 per cent.

The government trimmed its forecast for employment in last month’s budget update while it warned of higher unemployment.

Mr Eslake warned that trends in productivity could mean the government would have to boost real economic growth to 4 per cent a year to reach the target, well beyond the levels foreseen in the budget.

“The bottom line is I think this will be a difficult promise to achieve, and one that really shouldn’t have been made in the first place,” he said.

Others praised the government for being ambitious and said the nation needed a big target to keep Australians in work as the population increased.

“We haven’t got enough employment growth to soak up all the people entering the workforce,” said HSBC chief economist Paul Bloxham. “I do think the government’s target is achievable.

“It’s a challenging time to get the economy to grow at its trend levels (about 3 per cent a year) but we remain optimistic that growth will continue to rebalance from the mining sector to the non-mining sectors.

“And, as the economy rebal­ances, employment should continue to grow.”

The latest monthly jobs figures will be released by the Australian Bureau of Statistics today with Deutsche Bank chief economist Adam Boyton tipping the addition of about 10,000 jobs.

The weaker jobs growth could give Labor a powerful political weapon against the government at the next election, although Bill Shorten has not outlined any altern­ative policies to produce better growth than the government. While business groups and economists note that employers — not governments — actually create jobs, the Prime Minister’s message to voters was that the Coal­ition’s economic agenda would generate more growth and encourage employers to hire more staff.

Senator Abetz said the promise remained government policy. “The government is confident of reaching its job target of one million jobs over five years,” he said.

“However, we do not underestimate the task and the difficulty in achieving it given the ALP/Green tactics of blocking and delaying our job creating initiatives.”

The budget last May forecast employment growth of 1.5 per cent this financial year but this was cut to 1 per cent in the mid-year update in December.

The gloomier outlook has led the government to scale back its hopes for revenue from personal income tax, at the same time that it expects to collect less company tax than planned because of the slump in iron ore and coal prices.

Assistant Treasurer Josh Frydenberg acknowledged the challenges and hinted at more savings in the May budget to respond.

“The numbers will be reviewed when it comes around to the next budget in May but there’s no doubt this is putting pressure on government revenue,” Mr Frydenberg said.

Labor’s assistant Treasury spokesman Andrew Leigh claimed that meant the government was flagging a “fresh round of cuts” in the budget.

“The Abbott government has today confirmed that its only economic strategy is to cut and keep cutting,” Dr Leigh said.

30 years working for dole a reality

THE AUSTRALIAN

JOBSEEKERS in remote indig­enous communities “with no economy” may never get a real job and could spend up to three decades working for the dole.

However, Indigenous Affairs Minister Nigel Scullion told The Australian that as long as jobseekers are taking part in 25 hours a week of meaningful community activities, working for the dole in perpetuity was not a negative outcome.

“I don’t think that is a bad thing,” he said. “They are engaged in purposeful activities in their communities, where they choose to live, and they are choosing to live in an area where there is no economy and a growing population. And while people may say, ‘How can you possibly do this to people?’, there are no alternatives.”

The government is planning to introduce tough new rules for the Remote Jobs and Community Program that aim to end passive welfare and the harmful effects of “sit-down money”.

Under the tightened welfare rules, which come into effect on July 1, jobseekers in remote areas aged 18-49 will be obliged to undertake work-for-the-dole activ­ities for 25 hours a week, five days a week, for most of the year.

Approved activities would include helping getting children to school, aged care, volunteer work, learning to drive and literacy and numeracy training.

Senator Scullion said the scheme could improve living standards, citing unhygienic conditions in remote areas that contributed to chronic disease.

“Many of my communities live on the floor, it is like a cave,’’ he said. “I think that one of the characteristics of civilisation must be that you don’t have to eat at the same level as your animals, it must be something like that. I feel very strongly that we should try to provide furniture.”

On Friday, a Senate inquiry heard there would not be an exhaustive or exclusive list of approved activities as the scheme needed to be flexible enough to meet individual requirements.

Senator Scullion insisted the program would not provide free labour to companies in remote areas, but businesses should be engaged where possible.

He again stressed that the government would take a hardline approach to passive welfare.

“Staying at home like a couch potato with the channel clicker is probably not amongst (approved activities) because this is about moving people from a dangerous and vulnerable place to a more positive place, and ensuring that they are connected with the sort of skill set and the sort of envir­onment that allows them to move into work when it becomes available,” Senator Scullion said.

Consultations on the final desig­n of the scheme — including potential for annual and cultural leave — is continuing with remote communities and job-service providers. The policy will apply to both indigenous and non-indigenous recipients of Newstart and Youth Allowance in 60 remote areas, covering 76 per cent of Australia’s area.

About 37,000 people are covered by the Remote Jobs area, 83 per cent of them Aboriginal or Torres Strait Islander.