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.
Australia’s jobs crisis has made graduating university an extremely stressful time for students. Figures released by Graduate Careers Australia show the unemployment rate for university graduates at record highs. The latest available figures released in 2014 reveal that 11.6% of students graduating with a bachelor degree failed to find employment and were still looking for full-time work four months after graduation. This figure is the highest since 1995 and has more than doubled since 2008. However, as over 20% of students graduating with bachelor degrees look for full-time employment while working in a part-time or casual position, this unemployment figure only shows part of the picture. When these underemployed students are considered, the rate of bachelor degree graduates unable to find full-time employment four months after graduating almost triples to 32%, up from 14.8% in 2008. The situation for postgraduates is not much better.
Of students with master’s degrees (both coursework and research) and PhDs, the proportion without jobs four months after graduation is currently at a two-decade high of 8.7%, while the figure relating to those who have just graduated with postgraduate diplomas and certificates is the highest in over 15 years. Similarly to the undergraduate data, this statistic skyrockets when the high proportion of students who look for full time work while in a part-time of casual position are taken into consideration. When both unemployed and underemployed graduates are considered, the figures show that 17.7% of students with postgraduate degrees were still looking for full time work four months after graduating – up from 9.9%% in 2008.
Today, as the effects of the Global financial Crisis set in, the situation has become much worse. In February 2015, the ABS stated that the amount of people actively seeking full-time employment jumped up to 1.838 million (made up of 777,300 unemployed and 1.06 million underemployed). This marked a staggering 39% increase since 2008. However, this was only half of the problem: in 2015 the amount of job vacancies listed by the Department of Employment almost halved to 159,400, resulting in job seekers outnumbering job vacancies 11 to 1. Considering this alarming increase of job seekers per job vacancies – which increased a staggering 64% in 7 years – it comes as no surprise that university graduates are struggling to find full-time employment.
At this point, it is worth looking into how the Coalition Government has responded to this jobs crisis. For example, have the Coalition made any attempts to increase the amount of job vacancies?
No. In fact, they have done the opposite and have been systematically slashing jobs in the public service. Since being elected, 100,000 Australians have become unemployed while 150,000 have become underemployed. Even the government’s election promise to create 2 million jobs over the next decade is actually below the rate of expected employment growth.
Have the Coalition tried to take responsibility for its failure to create enough jobs by introducing a fair welfare system?
No. Instead, the Coalition has introduced the most wide-ranging series of attacks ever launched on the Australian welfare state since it was introduced in 1945. Rather than attempting to fix this jobs crisis, the Federal government has launched an unprecedented range of attacks against the unemployed, pensioners, the disabled and families. These measures include a proposal forcing under 30s off the Newstart benefit for 6 months at a time, increasing the punitive powers of the privately owned Employment Service Providers, and a massive expansion of the Work for the Dole scheme. It is important to remember, however, that there is nothing new about the government making life difficult for the unemployed. Currently, the Newstart unemployment benefit is $280 per fortnight below the poverty line – defined by Australian Council of Social Services as 50% the median wage (currently $400 per week) and has not increased in real terms since 1994. Youth allowance – the lifeline for many students – is $373 per fortnight below the poverty line and has not increased in real terms since 1994.
The Australian Unemployment Union, founded in early 2014, demand that the government immediately address this jobs crisis through implementing an extensive program of job creation. Rather than blaming and punishing the unemployed for this jobs crisis, the AUU demand that the Government take responsibility for its failure to create enough jobs and lift the rate of Newstart and Youth Allowance entitlements above the poverty line. Considering the urgency of this matter, it is crucial that an effective movement demanding a solution to the jobs crisis is formed. The unemployed, the underemployed, students, workers and concerned citizens must make their voices heard on this subject. If they don’t, then who will?
If you are interested in getting learning more about the Australian Unemployment Union, please visit our Facebook and website, or alternatively email us at contact@unemploymentunion.com.au
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.
The government’s new “jobactive” program has favoured American companies for lucrative employment services contracts.
Nearly half of the Work for the Dole co-ordinator contracts tendered by the federal government have been awarded to two giant corporations, including one in a joint venture with a major Australian charity.
Analysis of Work for the Dole contract documents by The Saturday Papershows MAXNetWork Pty Ltd, trading as MAX Solutions, is by far the most successful bidder, picking up more than a quarter of the 51 Work for the Dole co-ordinator roles tendered last year. MAX Solutions is a wholly owned subsidiary of controversial government services provider Maximus, whose annual revenue in 2014 was more than $US1.7 billion.
The Work for the Dole program is part of the Abbott government’s newly announced jobactive program, which will replace the Job Services Australia (JSA) system from July 1. As part of this process, all existing JSA employment services contracts – the federal government’s program for assisting jobseekers – were tendered, and again MAX Solutions scored big.
The shake-up reduced the number of employment service areas across which providers may operate from 116 to 51 new regions. A capped number of employment service provider contracts, including a single Work for the Dole co-ordinator, were up for tender in each region.
MAX Solutions, one of two companies that was the focus of a recent Four Corners program alleging fraud in the JSA system, already enjoyed the largest share of Australia’s employment and disability employment services market (about 10 per cent), having earned $800 million from the federal government over the past five years under its existing employment department contracts.
The US company now dominates the “welfare business” in Australia, having picked up 27 employment services contracts across the country, including 14 of the 51 regional Work for the Dole co-ordinator contracts. The next most successful provider – Mission Providence – will operate in 11 regions, including six Work for the Dole co-ordinator contracts.
The Saturday Paper can reveal MAX Solutions’ highly successful tender bids were guided by the former Department of Employment senior employee who managed the purchasing process of the 2009 JSA tender, which awarded MAX Solutions its dominant market share.
Darren Hooper, a career public servant and former senior executive within the department, was employed by MAX Solutions in September 2014 – one month before the tenders for new Work for the Dole and employment services contracts were opened. Hooper left his most recent position as Queensland state manager within the Department of the Prime Minister and Cabinet to become general manager of strategy at MAX Solutions.
According to a Saturday Paper source, this is the second time MAX Solutions has made a key recruitment from the public service in the lead-up to an employment services tender. In February 2008, the company employed Karen Massier, the former chief of staff to a Coalition minister for workforce participation, Sharman Stone, and director of the then Department of Education, Employment and Workplace Relations. Massier was appointed MAX Solutions’ general manager of strategy performance seven months before the start of the JSA’s 2009 tender.
The Saturday Paper does not suggest any improper conduct on the part of Darren Hooper or Karen Massier. Massier is now general manager of strategy and government relations at APM, a new Australian entrant into the general employment services market that won contracts in nine of the new jobactive regions.
Mission Australia’s US partner
The other big winner from the Work for the Dole tender is Mission Providence, a joint venture between welfare organisation Mission Australia and Providence Service Corporation, another US sharemarket trading company. Mission Providence picked up co-ordinator contracts for six of the 51 regions.
Providence Service Corporation’s website describes it is “a national leader in the management and provision of the highest-quality human social services”. The company’s 2013 annual report cites that its “revenue rose modestly to over $US1.1 billion, net income more than doubled to $US19.4 million”.
A spokesperson for Mission Providence said Mission Australia and Providence “share the same core values and a commitment to best-practice services and support for people in need, through exceptional services, relationships, and innovation”.
The Work for the Dole co-ordinator contracts are worth $380,000 a year each and involve lining-up potential host workplaces for jobseekers, and selecting where the jobseeker will undertake their unpaid work. The remaining 31 Work for the Dole co-ordinator contracts not awarded to either MAX Solutions or Mission Providence were close to evenly divided between another 18 organisations.
The successful contract bids were decided by the Department of Employment and announced on March 31. The federal government said tenders were partly assessed according to how quickly the bidding providers had got jobseekers into work compared with their competitors during the past five years.
Maree O’Halloran, president of the National Welfare Rights Network, said: “It’s difficult to accept that employment assistance funding for people who need work should be diverted to provide profits to big US corporates … It remains to be seen if there is a loss of local knowledge and experience. The main problem as we see it is that they are flogging a tired, old and expensive product in Work for the Dole.”
BCA unimpressed by new scheme
The new jobactive scheme will apply Work for the Dole to all Newstart recipients under 50 years old who have been unemployed for more than 12 months. Jobseekers aged between 18 and 30 will be required to do unpaid work for up to 25 hours a week for six months of every year in which they are unemployed, depending on their jobseeker classification.
The Work for the Dole program purportedly aims to reduce Australia’s growing long-term and youth unemployment. Figures released last week show Australia’s unemployment rate at 6.1 per cent. The greater concern is the number of long-term unemployed (those on Newstart for more than 12 months), which has doubled since 2008. Youth unemployment levels are their highest since 1998.
Prime Minister Tony Abbott told reporters when announcing jobactive: “Work for the Dole is an important step in the right direction because you are having a go. That is the important thing. It is very much part of our Australian characteristic.”
Lisa Fowkes, a former chief executive of Job Futures, a non-profit provider of employment services under JSA, told The Saturday Paper she thought the idea of getting the unemployed to do voluntary work was good in principle, but questioned whether it would help long-term unemployed people over 35 get back into the labour market.
Fowkes, now a research scholar at the Australian National University, said that previous research on Australia’s Work for the Dole program published in the journals Applied Economics and Youth Studies Australia“found (in part) that because the program focus was on building generic skills through projects undertaken in not-for-profit organisations … there was often a mismatch between the type of skills development available through Work for the Dole and the demands of the labour market”.
The Business Council of Australia wrote in its submission last year to the employment department’s exposure draft for its jobactive scheme that the BCA “supports the principle of mutual obligation” but “work activities proposed will not address skill and qualification gaps present in a large cohort of the JSA caseload”. It further noted that “there is a strong risk it will displace some existing paid work in the not-for-profit and public sectors”.
The Saturday Paper also spoke with a number of people who are currently on the Work for the Dole pilot program that has been running across 18 locations since late last year. While some said they were enjoying the voluntary work, most said they felt the work they were doing was “menial” and “repetitive”, and not helpfully in accordance with their employment goals. One said he was pulling out nails from timber all day, another that she had just completed aged care studies but was put to work sorting clothes in a local charity store.
Another jobseeker wrote online that she had been given two choices by her employment services provider: “Either work in a kitchen peeling vegetables with court-ordered rehab people, or sort through contaminated charity bins for 15 hours each week.”
The request for tender document stated that jobseekers must be placed in a “quality” host worksite. However, there are no express obligations in the subsequent contract deed to put jobseekers into programs that align with their jobseekers’ employment aspirations, or national or area skill shortages.
Illegitimate JSA claims
In 2013, an external audit of Job Services Australia found that only 39 per cent of providers’ payment claims were legitimate. A 2009 government investigation found MAX Employment – MAX Solutions’ employment services provider arm – had enrolled 141 people into a training course that did not exist and directed the company to repay thousands in government fees.
The key changes to be implemented in jobactive include fewer jobseeker classifications, determined according to level of disadvantage and length of unemployment; a new requirement for jobseekers to look for 40 jobs a month, in addition to the current requirement they apply for 20 a month; and a reduction in the number of employment service providers from which the government accepts tenders, from 79 to 44, thus consolidating those it considers the best performers.
In a statement to The Saturday Paper, MAX Solutions’ managing director, Deborah Homewood, said her company’s success was a result of its high star rating. “Over the past six years, MAX Employment achieved employment outcomes for more than 280,000 jobseekers, many from our most marginalised communities,” she wrote.
Homewood added: “MAX Solutions’ tender was strictly in accordance with the stringent requirements laid down by government.”
Since 2006, MAX Solutions has increased its number of government service contracts, picking up 63 IT, management, workplace safety and human resources consultancy tenders from federal government departments, including 17 from the Department of Employment since 2010.
MAX Solutions’ parent company, Maximus, made its entry into Australian government services when in 2002 it purchased Leonie Green and Associates, a provider for Job Network, which preceded JSA. At the time of the purchase Green told Fairfax Media: “Long-term, [Maximus’s future] is very much driven by the government direction in outsourcing. Ultimately, if Centrelink is privatised, Maximus would be very well-suited to help.”
To see the Minister’s grossly inadequate response to this letter, click here
20 April 2015
The Hon. Scott Morrison, MP Minister for Social Services Parliament House Canberra ACT 2600
Dear Minister,
On behalf of the many Australians who believe in the importance of a fair and equitable welfare system, we the undersigned write to voice our strong objections to the harmful and damaging legislation currently before the Senate, which would introduce a 6-month waiting period for unemployment benefits for people under 30.
We also wish to highlight our concerns over the Government’s decision to introduce harsh requirements from 1 July 2015, which will:
(1) subject all Newstart recipients who fail to attend their ‘Job Search’ appointment to stronger penalties which will result in a portion of their Newstart payment permanently withheld unless a ‘reasonable excuse’ is provided;
(2) require all ‘job ready’ Newstart recipients to Work for the Dole after only 6 months of receiving Newstart benefits (formerly 1 year);
(3) increase Work for the Dole requirements to 25 hours per week (formerly 15 hours) for those aged under 30; and finally
(4) require around 37,000 mostly Indigenous job seekers in remote areas aged 18-49 to undertake Work For The Dole activities for 25 hours a week, five days a week, for most of the year.
6 Month Waiting Period for Newstart
We are united in opposing the Government’s proposal to introduce a six-month waiting period for many Newstart and Youth Allowance recipients under 30 years of age. Considering that the Department of Social Services has set aside $229 million in ‘Emergency Relief’ to assist job seekers under 30 with money for food and shelter should the legislation pass, it must be obvious that this measure is anticipated to cause severe and extreme hardship for many job seekers under 30.
We believe the proposition is so bad that it should be rejected and no compromise proposal accepted. No set of complex ‘exemptions’ will make this policy acceptable to the Australian community.
The extra strain this policy will place on the already over-burdened Emergency Relief services will be felt strongly across Australia. We strongly oppose this punitive approach to the unemployed and urge the Government to raise the level of the Newstart Allowance to ensure all Newstart recipients can, at a bare minimum, live above the poverty line (defined by ACOSS to be $400 per week for a single adult).
Currently, the Newstart Allowance is $280 per fortnight below the poverty line. Clearly, care must be taken not to push the already disadvantaged deeper into poverty and further away from entering employment.
Strengthened Compliance Measures
The Government’s plan to financially penalise Newstart recipients who fail to attend ‘Job Search’ interviews without a ‘reasonable excuse’ – which passed the Senate in December 2014 with Labor Party support – will effectively take money out of the hands of Australia’s most disadvantaged and vulnerable. This we cannot accept. Going by the current rate of Newstart recipients being breached for failing to attend ‘Job Search’ interviews, this change will financially penalise approximately 1.4 million Newstart recipients per year after it is introduced on 1 July 2015. Disturbingly, it is the privately owned and operated Job Service Providers who will be responsible for breaching job seekers and reporting them to Centrelink.
We point out in the strongest terms that placing more powers in the hands of Job Service Providers contradicts the Australian Government’s ‘Guide to Social Security Law’, which clearly states that “Employment Services Providers do not make compliance decisions under social security law”. The perverse economic incentives offered to Job Service Providers under the Abbott Government’s $5.1 billion ‘Employment Services 2015’ system further weakens the position of Newstart recipients in their dealings with Job Service Providers.
General Concerns
On a broader note, we are deeply troubled with the Government’s harsh overall attitude toward unemployed Australians. Considering the many difficulties facing the unemployed today – from the fact that according to Government figures there are 11 job seekers for every job vacancy, to the reality that the Newstart benefit is only 64% of the poverty line and has not been increased in real terms since 1994 – the Government’s decision to direct further punishments against the unemployed is a policy that will only serve to push them deeper into poverty and further away from entering employment.
The nation-wide expansion of the Work for the Dole program scheduled to commence on 1 July 2015 is yet another example of the punitive approach to unemployed people that fails to create one single job for unemployed Australians. We point out in the strongest terms that the only real lasting solution to Australia’s growing level of unemployment – currently at a 12-year high and widely expected to increase further – is Government-administered job creation.
We ask you, for the sake of the 850,000 Australians currently receiving Newstart or Youth Allowance, and for the good of Australian society more broadly, to withdraw the legislation proposing a six-month waiting period for unemployment benefits for job seekers under 30. In its place, we demand the Government conduct an extensive program of consultation with those with lived experience of unemployment and their advocates to create the best and most effective policy to meaningfully support unemployed Australians into secure and fulfilling work.
Sincerely,
Anti-Poverty Network SA Australian Unemployment Union Fair Go For Pensioners Coalition March Australia Radical Women Stop Income Management in Playford (SIMPla) Shelter South Australia Victorian Trades Hall Council
Thank you to all groups who agreed to sign our open letter to the Minister of Social Services. Please share throughout your networks. If you are in an organisation and would like to support our open letter, please message us at contact@unemploymentunion.com.au and we will add you to the list of the signed.
To see the Minister’s grossly inadequate response to this letter, click here
