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Thursday, 12 December 1996
Page: 7259


Senator CAMPBELL (Parliamentary Secretary to the Treasurer)(9.42 a.m.) —I table explanatory memoranda to the bills and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard

Leave granted.

The speeches read as follows—

REFORM OF EMPLOYMENT SERVICES BILL 1996

In my August ministerial statement, Reforming Employment Assistance—Helping Australians into Real Jobs, I outlined the government's vision for the most radical changes to employment services since the establishment of the Commonwealth Employment Service in 1946. Since the release of that statement, the government has undertaken extensive consultations about the government's proposals with interested groups in the community across Australia.

In this sitting I am introducing a package of legislation to provide the statutory framework for implementing the government's reforms to employment services. As well as this bill, the package includes the reform of Employment Services (Consequential Provisions) Bill 1996 which would cover other matters required for the implementation of the government's reforms.

The Commonwealth services delivery agency bill 1996, which has been introduced in this sitting, completes the legislative framework for the reforms.

The primary objective of the government's reforms is to ensure that labour market assistance has a clear focus on real job outcomes and makes a genuine difference to those assisted.

This package of legislation would provide for reforming employment services in a way which is largely consistent with the feedback we have had from the community in that consultation process. At the same time the reforms remain true to the government's belief that labour market assistance must be made more effective by focusing clearly on real job outcomes and opening up the employment placement market to the advantages of competition.

The reforms to labour market services in the bills should also be seen in the broader context of the government's commitments to deficit reduction and budgetary discipline. These commitments are essential for increasing the growth capacity of the Australian economy and ultimately for delivering sustained reductions in unemployment.

.   The government's structural reforms will produce an environment in which business, particularly small business, will continue to grow and create jobs.

.   The Workplace Relations And Other Legislation Amendment Act 1996 allows for more genuine enterprise bargaining, opening the way for more flexible workplace practices and greater productivity and international competitiveness.

.   Microeconomic and regulatory reforms will reduce business costs and add to the competitiveness of Australian firms.

No government program can equal the benefit that will flow from getting Australia's economic policy setting right as the base for creating jobs. However, government together with private enterprise and community organisations can play an important role in equipping job seekers with the skills, experience and opportunities to benefit from real jobs growth.

Although the government's reforms are significant and far reaching, much of the machinery to achieve them is not new. We have built on previous arrangements which worked well—in particular individualised one-to-one assistance for disadvantaged job seekers. The referral procedures in this legislation for employment assistance have refined and streamlined the current referral procedures for case management. The numerous programs that were operating, either poorly or not at all, and that were, in many cases, simply churning job seekers through those programs without obtaining real outcomes, have been abolished.

My August statement outlined six principles for the reform of employment services. They were:

1.   The assistance to job seekers should be based on their individual needs and their capacity to benefit from it in terms of achieving an employment outcome.

2.   Providers should have access to flexible forms of assistance that fit the needs of job seekers.

3.   The incentive framework should reward providers of labour market assistance primarily for placing job seekers in real jobs, with additional incentives for those most in need.

4.   A competitive market for employment placement services should separate purchaser from providers and ensure that providers operate on the basis of competitive neutrality.

5.   Conditions for payment of income support for unemployed people should be linked closely with active employment assistance measures.

6.   Job seekers and employers should be able to receive high quality and streamlined service from the agencies and providers with which they interact.

This legislation is in keeping with these principles.

Aims of the legislation

The aim of this legislation is to establish the mechanisms to deliver employment services and to establish a fully competitive market for employment assistance to job seekers. In particular, the bill would:

.   Enable the Commonwealth to engage entities to provide employment services;

.   Define the criteria for participation in the employment assistance scheme ( "employment assistance" as it is called in the bill was referred to as "intensive employment assistance" in my ministerial statement)

.   Provide for the procedures for referring participants in the employment assistance scheme to employment placement enterprises (or EPES);

.   Outline compliance requirements of job seekers under the bill;

.   Allow for the investigation of complaints about the provision of employment services;

.   Provide for the review of relevant decisions relating to employment assistance participation and referrals to EPES; and

.   Include provisions to ensure the confidentiality of information concerning users of employment services.

This legislation would complement the Commonwealth services delivery agency bill 1996 that would establish and provide for the management and activities of the agency as a provider of integrated government services—social security and employment services in the first instance.

Provision of employment services

The bill would provide for the provision of "employment services". "employment services" means unemployment benefits within the meaning of paragraph 51(xxiiia) of the constitution. This encompasses both unemployment benefit payments and services which assist the unemployed. In the bill, "employment services" would include:

Self help assistance;

Labour exchange;

.   Job search assistance;

.   Employment assistance; and

.   Entry level training support services.

Self help assistance would be available at the agency to all job seekers. It would include access to: job vacancy displays, other employment and training information and facilities such as computers and telephones.

In labour exchange services, employment services providers would canvass employers for job vacancies to be placed on the national vacancy data base. Providers would also match, refer and place eligible job seekers into vacancies on the data base.

Job search assistance would involve employment services providers delivering the sort of assistance currently provided by job clubs, such as training job seekers in effective job search techniques and providing access to facilities for intensive supported job search.

Employment assistance would be the most intensive form of assistance and would be similar to, but more flexible than, the current case management system. Employment assistance would be provided to eligible job seekers by EPES contracted by the Commonwealth.

Entry level training support services are those services (except labour exchange) which would be provided to eligible job seekers and employers to assist entry into traineeships and apprenticeships. These services would be provided by employment services providers or other contracted agencies.

The legislation would enable the Commonwealth services delivery agency to enter into an agreement with the employment secretary to provide employment services. Under this agreement, and an agreement with the social security secretary, the agency would:

.   Register, assess and refer job seekers to further assistance;

.   Provide job seekers with self help job search facilities; and

.   Activity test job seekers and apply deferment period provisions under the Social Security Act 1991.

Competitive employment services market

The legislation would enable the employment secretary, on behalf of the Commonwealth, to contract entities to provide employment services, including employment assistance. In line with the government's requirement for competitive neutrality in the employment services market, the legislation does not distinguish among private and community providers and the public EPE.

The public EPE will be a company incorporated under the corporations law.

The legislation would also provide for the minister for employment, education, training and youth affairs to make a written determination specifying what matters the employment secretary should take into account when engaging an EPE to provide employment assistance and the procedures which the employment secretary should follow when so deciding.

Employment services providers are to compete for contracts to provide employment services which would be awarded by tender. Selection is to be based on performance, quality and value for money. For labour exchange and employment assistance, providers will largely be paid for getting job seekers into real jobs. In the case of employment assistance there will be higher payments for more disadvantaged clients.

Tenders are to be awarded to entities which have a demonstrated ability or experience to provide the sorts of services required. However, we also want to see credible new private and community players enter the market.

We must also ensure that all areas have access to high quality employment services. Therefore in those regions where standard tendering on an outcomes basis proves unworkable (particularly some rural and remote areas) my department is intending to invite providers to tender on a fee-for-service basis. As a last resort it is intended that the minister for employment, education, training and youth affairs will be able to direct the public EPE to provide such employment services as are necessary in the public interest. The Commonwealth will be required to pay the reasonable costs of the public EPE providing this community service obligation.

Under the legislation, EPES could not charge participants for providing them with employment assistance. This does not preclude EPES from charging non-participants for similar services. This may provide an additional revenue source for EPES.

Employment assistance

The government's intention is for employment assistance is to be based on an assessment of the personal needs of each job seeker. Its aim is to enable that person to gain employment or improve their employment prospects. The legislation would provide for the minister for employment, education, training and youth affairs to make a written determination of services which will be taken to be the provision of employment assistance. Assistance may involve training, job search assistance, wage subsidies or other innovative and flexible forms of assistance. EPES would be free to decide with the participant the optimal kinds and mix of assistance needed to get the participant a job. Participants would generally receive employment assistance for 12 months, although extensions will be allowed in particular circumstances.

The agency would be responsible, on behalf of the employment secretary, for deciding which job seekers would be participants in the employment assistance scheme. The agreement between the employment secretary and the agency will specify guidelines for this purpose.

My ministerial statement indicated that (intensive) employment assistance eligibility should be confined to job seekers who have been unemployed for 12 months or more or are assessed as at high risk of long-term unemployment, and who are:

A recipient of a qualifying DSS income support allowance (Newstart allowance, youth training allowance, sole parent pension, disability support pension and other forms of DSS income support but excluding age pension and mature age allowance); or

A participant in a community development employment project; or

An unemployed young person aged 15 to 20 years and not in receipt of income support.

The legislation would provide for the minister for employment, education, training and youth affairs to make a written determination specifying eligibility criteria for employment assistance. The initial determination will include the criteria I have just listed.

As well, the minister may include in this determination events or circumstances which disqualify people from employment assistance eligibility. The determination may also include matters to be taken into account by the agency, on behalf of the employment secretary, when determining a person is not eligible for employment assistance. This provision would allow the minister to specify criteria which would disqualify a person from employment assistance eligibility on the basis that the person is judged not able to benefit from employment assistance.

Referral to employment assistance

Because employment assistance is the most costly employment service, the government is concerned that places be directed to those job seekers who are most in need and who have capacity to benefit from the assistance. For this reason, the legislation would provide discretion on the part of the agency, on behalf of the employment secretary, to ration the flow of people eligible for employment assistance into employment assistance participation. Eligibility for employment assistance does not imply automatic or immediate access to employment assistance.

The referral process for employment assistance that would be provided for in the legislation is as follows.

Staff in the agency would be acting under the authority delegated by the employment secretary.

Depending on available employment assistance places, the agency would notify in writing a job seeker who is eligible for employment assistance (or who is likely to become eligible) to attend an interview. Generally this interview would be with the agency. However, the agency may nominate another person to conduct the interview. This could be, for example, if the agency considers that the person should have a professional assessment of barriers to employment. If the agency considers that the person could reasonably be referred to an EPE for employment assistance, the person must be notified in writing that he or she is now a participant in the employment assistance scheme and should choose an EPE. Whether a person could reasonably be referred to an EPE would often depend upon whether there are sufficient employment assistance places available.

To ensure that participants are fully aware of their rights and obligations, the legislation would provide that the participant must be given written information about employment assistance and informed that he or she will be required to enter into an employment assistance activity agreement (EAAA).

.   The EAAA is an agreement negotiated between the participant and the EPE setting out a program of activities aimed at getting the participant a job.

The circumstances under which a person ceases to be a participant will be specified in a ministerial determination. These are expected to include circumstances in which the person:

.   Obtains full-time employment for 26 weeks or more, or other outcome attracting an outcome payment;

.   Is assessed as having no capacity to benefit from employment assistance; or

.   Fails to enter into or comply with their EAAA without a reasonable excuse; or

.   Reaches the conclusion of the agreed period of employment assistance.

If a job seeker is in receipt of Newstart allowance or youth training allowance and fails to attend an interview without a reasonable excuse, he or she may lose qualification for allowance for a period. This provision underlines the importance the government attaches to job seekers taking advantage of the opportunity to participate in employment assistance.

EPE choice

If there is more than one EPE to which a participant could reasonably be referred, the legislation would provide that the participant be given the opportunity to nominate the EPE he or she would prefer. The agency would refer the participant to his or her nominated EPE if it is reasonable to do so. Otherwise, the agency would nominate an EPE for that participant. The agency would also nominate an EPE for those clients who do not express a preference.

Special needs assessment and community support program

In my ministerial statement I flagged the concept of "capacity to benefit". The public consultation process revealed a community concern that in applying the notion of "capacity to benefit" from employment assistance, the government would permanently exclude some very disadvantaged people from employment assistance and deny them any form of government assistance other than income support.

This is not the case.

After discussions with community sector representatives the government has decided that what is really at issue here is the necessity for some job seekers to have a special needs assessment.

This is not intended to mean that some people will be put on the scrapheap.

It means that the government recognises that it is not fair to require some unemployed people to go through the hoops of preparing for employment when they are in no position to hold down a job.

The vast majority of unemployed people will not require this special needs assessment.

Where a special needs assessment is judged to be required, it will be a formal and objective assessment of a job seeker's personal characteristics to see whether employment assistance of the type and level able to be offered is really fitting for their special needs. The assessment will be administered by specialist or professionally qualified staff in the agency or by expert external providers.

The legislation would provide for a framework within which the agency could refer a person to the new community support program in order to gain assistance in accessing services that will address disadvantages that are acting as a barrier to achieving employment.

Under the community support program people found not ready to benefit from employment assistance will access more suitable and well coordinated Commonwealth, state or community services. Assistance could include drug or alcohol rehabilitation programs, other activities addressing significant or debilitating personal development needs, counselling and assistance with accessing and maintaining stable accommodation. The community support program will ensure that the government is not neglecting its responsibility to assist job seekers who are not ready to benefit from employment assistance. If a job seeker's personal circumstances change during participation in the community support program, eligibility for employment assistance would be reviewed. Similarly, if following participation in the community support program a person's circumstances change so as to allow them to benefit from employment assistance they will become eligible.

Employment assistance activity agreements

The legislation would require participants to enter into an EAAA with the EPE providing their employment assistance. As well as setting out activities aimed at getting the participant a job or improving their employment prospects (such as paid work experience or training), the EAAA would set out the rights and responsibilities of the EPE and job seeker and the timeframe for completing these activities. The terms of the EAAA must take into account the participant's capacity to comply with the agreement, such as their education and the state of the local labour market.

The legislation would require the participant to negotiate and comply with their EAAA. For participants who are in receipt of Newstart allowance or youth training allowance (the majority of participants) the legislation provides that an EAAA would take the place of the Newstart activity agreement for the purposes of the Social Security Act 1991 and the youth training activity agreement in the Student And Youth Assistance Act 1973. For these participants, failure to enter into or comply with an EAAA without a reasonable excuse may result in the loss of allowance for some period of time.

Employment assistance participants who are in receipt of unemployment allowances are required under the legislation to inform the employment secretary of circumstances affecting their compliance with their EAAA. EPES and participants must give the employment secretary information about compliance with the EAAA if requested to do so in writing. This allows the agency to check EAAA compliance if necessary.

The EAAA would provide the clear basis for any penalty imposed on the participant for non-compliance but it also protects a participant against any unreasonable demands by the EPE.

Officers in the agency, acting in accordance with delegation under the Social Security Act 1991, would be responsible for deciding whether to breach a participant in receipt of an unemployment allowance for failure to enter into an EAAA or for failure to comply with the EAAA, taking into account advice from the EPE.

Monitoring and information gathering powers

The legislation would secure the Commonwealth's access to information to enable it to both monitor compliance with contractual arrangements and meet accountability requirements. Because a wide ranging evaluation will be essential to assess the effectiveness of these comprehensive reforms, the legislation also enables the Commonwealth to access information for more general monitoring and evaluation purposes. Monitoring and evaluation data will assist in the promulgation of best practice. This will enable a more effective employment placement market to develop and facilitate the continuous improvement of employment services.

Advisory committees

The legislation would provide for the minister to establish a national advisory committee to advise the employment secretary on the provision of employment services. It would also provide for the establishment of regionally-based area committees which would advise the employment secretary on employment and training opportunities, increase my department's responsiveness to regional labour markets and facilitate links between my department's programs and regional development.

Other provisions

The other provisions in the bill provide for the normal protections and accountability mechanisms for the government, service providers and job seekers that would be expected in such legislation.

These provisions include:

.   The means to ensure the confidentiality of information concerning users of employment services;

.   Mechanisms within my department to investigate a job seeker's complaint about employment services provided by the agency or an EPE. These mechanisms would also enable the investigation of complaints by an EPE about the referral of employment assistance participants to the EPE by the agency; and

.   Appropriate access to review of decisions relating to employment assistance, including access to appeal to the social security appeals tribunal and the administrative appeals tribunal.

Conclusion

The government is firmly committed to making radical and comprehensive changes in the policy framework for labour market assistance for unemployed Australians. Where former policies were working poorly, or in some cases not at all, we have not hesitated to discard them or change them radically. This package of legislation does not represent change for change's sake, for, where former policies were sound and working well, the government has maintained and enhanced them, so that we have embraced the concepts of

.   Personalised case management, and assistance tailored to individual needs and circumstances

.   Targeting assistance to those most disadvantaged in the labour market

.   Using competition to drive improvements in quality, performance and price.

The legislative package, and the associated reform actions, is designed to deliver a better quality of service for unemployed Australians, better and more sustainable outcomes, and better value for money. The bill represents innovative and exciting reforms which offer benefits to all Australians.

I commend the bill to the Senate.

REFORM OF EMPLOYMENT SERVICES (CONSEQUENTIAL PROVISIONS) BILL 1996

This bill would make consequential amendments arising from the reform of Employment Services Bill 1996.

The bill would repeal the Employment Services Act 1994, which established the present case management system, the Commonwealth Employment Service (CES), Employment Assistance Australia and the Employment Services Regulatory Authority. The case management system would be replaced by new arrangements for the delivery of employment services proposed under the reform of Employment Services Bill 1996.

The bill would provide for the extension of the Privacy Act 1988 to the provision of employment services by entities engaged by the Commonwealth in the same way in which that act presently applies to case management services provided by case managers.

Amendments to the Freedom Of Information Act 1982 provide for members of the public to have rights of access to documents relating to the provision of employment services by entities engaged by the Commonwealth in the same way in they presently have under the case management system.

The bill would also provide for the ombudsman to investigate complaints about the provision of employment services. The ombudsman would be able to refer those complaints to the employment secretary where it is considered the complaint could be more appropriately dealt with by my department.

The ombudsman would be able to provide information on matters relevant to the provision of employment services to the employment secretary without the need to make a formal report to the responsible minister in all cases.

The bill would also amend a number of other acts as a consequence of the abolition of the CES.

I commend the bill to the Senate.

Ordered that further consideration of the second reading of these bills be adjourned until the first day of sitting in the Autumn sittings, in accordance with the order agreed to on 29 November 1994.