Senator TIERNEY (4:15 PM) —The government will be opposing the proposed inquiry into the Job Network on two basic grounds—one being procedural and the other substantive. The procedural reason for not having an inquiry at this time is that the education committee that would be going to undertake such an inquiry has a number of things in train at the moment. It has a program that will take it through to the end of September next year. Its inquiries include one into Aboriginal education, which is about halfway through; a proposed inquiry into GST aspects of educational services, which will take up a large part of the first part of next year; and the inquiry currently before it into regional employment and unemployment. The terms of reference for that inquiry were put down almost a year ago, and the committee has spent virtually a whole year on it so far and looks like going into another year before it reports.

That inquiry started in 1997 and will report in 1999. Despite Senator O'Brien's assurances, I am not convinced that the inquiry that he is proposing would be in such a narrow time frame as that suggested, given the legislative program next year and given the GST inquiries and Easter. I cannot quite see how you would fit it into such a time frame, particularly given the history of the other inquiry over the past year.

The main procedural reason that it should not proceed at this point is that we are actually currently inquiring into the Job Network. Right around Australia, in all capital cities and in a lot of regional centres, when we undertook inquiries into regional employment and unemployment there was on each occasion—and, as the whole inquiry progressed, even more so—a percentage of time devoted to questions about the Job Network. The reason was that members of the opposition thought that they could have a good bash at the government before the election and could try to highlight issues relating to the Job Network in their local press. This was not a particularly successful strategy, and the Hansard record shows that over that period of time nearly 300 questions were asked by opposition members, in all parts of Australia and to a wide range of witnesses, about the Job Network. We still have not finished that inquiry. We have an inquiry date in a week or two in Canberra, where we will be talking to other groups of people and peak bodies, and then we will report.

One of the problems about how long the whole process has taken is that the Job Network has evolved over that time, and so I am not too sure exactly what we are reporting on. We have actually taken evidence at different points in time as the Job Network system bedded down. So, if we give a historical perspective, some of the problems that people saw in the early part of the inquiry have been fixed by revisions by this government. I suppose that in our next hearing in Canberra we can manage to get an update on the Job Network—where it is up to at that time and what any perceived problems are—and then report in February. I would have thought that that covered the issue of the Job Network to this point in time.

If members of the opposition want to bring the matter back later when the committee has finished its work on Aboriginal education, regional employment and unemployment, and the GST aspects that relate to education—which, as I said, will take us through to September next year—the government would look at it again at that point. But I would suspect that the program we have introduced with the Job Network would have been well and truly bedded down by that time and there would probably not be the need for such an inquiry, particularly as the political imperatives would have disappeared by that point in time.

Senator O'Brien said a number of things about the Job Network, things which I would like to put a government perspective on. He said it was introduced by administrative arrangement and not by legislation. The government did legitimately have the power to do that, although that was not really its preferred course of action. It would have liked to have legislated for it; but, of course, members of the opposition, I would like to make plain, are the ones that prevented that happening. That was the only way that it could be done.

When the system was introduced, it was introduced in place of a failed system known as the CES, the Commonwealth Employment Service, which was not providing properly for the unemployed in this country. Under the old system, about 11 per cent of all jobs were placed through the CES. Most other people made other arrangements for finding employment. The system was set up in a time of low unemployment and it managed to do its job reasonably effectively in times of low unemployment—and I am talking about after it was set up in the late forties, through into the fifties, sixties and early seventies. But it never quite coped with the difficulties created by a larger level of unemployment. So there has been an evolution over the years of governments that have tried with varying degrees of success to grapple with the problem.

Probably the most spectacular failure of the last Labor government was its so-called Working Nation program. Senator O'Brien, in his criticism of Job Network, claimed that the government was wasting money. It is very well documented how much money the last Labor government wasted on Working Nation, where the placement rate was only about one-third. Two-thirds of the people under Working Nation, having gone through various programs at great expense to the taxpayer, ended up back on the unemployment queue, often greatly disillusioned. As a fellow said to us in one of the inquiries, it would have been better to have been left in the gutter than to have been picked up out of it and then dropped back in it again. That was his reaction to it.

We had the situation of churning dole queues, where people were trained but there was no job for them and so they were retrained but there was still no job and so they were retrained again. As a matter of fact, in Wollongong they said they had the best-trained dole queues in the world. It was a program that failed spectacularly, and the Australian people showed their view of that—along with their view of a number of the other failures of the previous Labor government—in 1996, when they threw it out.

A very different approach was needed, and that is what this government has brought in. The community sector has often taken a role in helping the unemployed, sometimes informally and sometimes with government assistance. The business sector—groups like Drake Personnel and others—has always been involved in the employment market and, of course, the government, through the CES, has been involved in the employment market. Under Job Network, this government created a more flexible and more formal arrangement where those various sectors could compete in providing job services.

The broad approach was actually founded on the very sound principle that people who were trying to get people employed were to be funded based on success of placement. The feeling was that this should turn around the rate of success so that it was better than the failed Working Nation program. As the minister at the time, Dr Kemp, said on many occasions, very early on Job Network was outperforming the old CES and had the potential, after some of the teething problems had been solved, to do quite a lot better.

As I mentioned before, the whole system has been bedding down since 1 May this year. It has been in a process of evolution over that time. It has got a particularly bad press, aided and abetted by the ALP, and Senator O'Brien made some rather strange statements today. He talked about `great angst in the community', and `great disaster' was another phrase he used. These things do not become a reality by opposition members constantly saying them. You really have to ask the job providers what their view of it is, and that certainly is not their view at all. The vast majority of them think the system is working quite successfully, and have said so—and in terms of their own operations the vast majority of them are.

A number of providers in the new system had never been in the system before. It is understandable that they would make some commercial mistakes in the way in which they undertook the tendering process, assuming that in the FLEX 1, FLEX 2 and FLEX 3 system they might pick up two of those types of programs and be able to cross-subsidise. Of course, when they picked up only one type, particularly FLEX 1, they did not have that opportunity and a number of them got into some difficulty because of that. We are about to move into the second tendering round, and I think as we move into this process the realities of how this system works will be a lot more apparent to people in business and they will make much wiser judgments this time around in their tendering.

The important thing is that we have a flexible system which has, compared with the old CES, a much wider range of providers and many more locations where people can come and access the service. The very important point that is at the centre of this is that it must work through success of the end product. No matter how much money we put into the support of job services, the key measuring variable at the end of the day is: do people get a job at the end of the process?

The Labor government's approach, despite the enormous amount of money it put into that approach over the years, was demonstrably a failure. This system provides greater flexibility and provides market forces to determine who gets what services, which businesses set up what services and where those services are located. It is a much better opportunity to have a system that is more robust and more successful and, at the end of the day, doing what these work support systems must do, that is, get people through and, finally, place them in a job.