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Tuesday, 31 October 2000
Page: 18697

Senator JACINTA COLLINS (3:41 PM) —I table the explanatory memorandum relating to the bill and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Madam President, I am presenting today a new Private Members Bill that has as its aim the establishment of the Job Network Monitoring Authority.

When preparation for the implementation of the Job Network framework was initially proposed by this Government in 1996 and when operations began in 1998, it was all done outside of Parliament. Parliamentary debate and opportunities for amendment - i.e. the normal levels of scrutiny, accountability and transparency that large changes of this nature should go through - were bypassed. The Government's refusal to allow the Parliament, as distinct from its department, to examine the Job Network, and the radical $3 billion dollar experiment that it represents, needs to be remedied.

The secretiveness that surrounded the Job Network's establishment has also continued in its operation. Using the same organisation that established the Job Network, i.e. the Department, to also monitor its effectiveness is just not acceptable in an age of greater accountability of the executive and its actions.

Of course, the problem of having the same organisation establish, monitor and create policy, as well as let $3 billion contracts, is not new. In fact, economists have been studying `capture theory' as they call it for some time.

We only have to look at the Public Sector IT outsourcing debacle. This has cost taxpayers millions, and shows this Government's failure to monitor its large outsourcing initiatives in any meaningful way. This Government has let its ideology of `private good, public bad' cloud its responsibilities of ensuring that when contracts are handed out en masse there is a careful and ongoing, independent analysis and monitoring of the process. Such analysis is vital to secure for the taxpayer value for money and minimum quality standards. It is also vital to ensure that the public has confidence that there is no cover up. It should be noted that it took the Auditor General to uncover the massive losses in the outsourcing program. Details of the loss of taxpayers money of this magnitude should have been open to public scrutiny well before the Auditor General's report.

We also know through feedback from job seekers about Job Network providers, as well as analysis from labour market researchers, that there are structural flaws in the way that the system of contracts and associated payments is administered. These structural flaws are making it difficult for even the most community spirited Job Network providers, of which there are a large number, to do their job effectively.

Let us not forget that the Job Network is a radical experiment on the unemployed of Australia and an ideological obsession in making this experiment a purely market driven one. As the Auditor General has pointed out, however, this market is one that is artificial; it is one that has been created from scratch and it is one where the rules are created and enforced purely by DEWRSB.

An artificial market like this one is where you would least expect a blind obsession with doing everything on a purely tendered basis to work. This purely tendered basis is however the methodology that is currently applied to the Job Network. The current Minister for Employment Services has admitted as much when he recently flagged the idea of not tendering the entirety of the Job Network in the next round. The structural flaws in the design also include the fact that every extra dollar that is kept as a profit by a provider means that one less dollar is spent on training the unemployed. These are flaws that can best be exposed through an independent Monitoring Authority as proposed in this Bill.

When Labor began case management of the long-term unemployed it recognised that it was important for a separate body to monitor and evaluate the system to be created. To this end the Employment Services Regulatory Authority was established. It was at arms length from Government and had wide ranging powers to oversee the tendering out of the long-term unemployed to case managers.

Whilst this legislation has some similarities to that which established ESRA, it is not the same. All of the powers once held by ESRA have now been absorbed by DEWRSB. This Bill does not seek to transfer them all back to the Job Network Monitoring Authority.

Instead it effectively seeks to monitor DEWRSB in its role as the administrator of $3 billion worth of Job Network contracts. The Monitoring Authority will have no direct role in the tender process.

Madam President, I would like to now take the Senate through some of the problems that we know about in the Job Network and how the proposed Monitoring Authority would be able to address these.

Parking of unemployed

Wherever you have a system operating purely on a limited capacity in terms of the number of unemployed that you can have on your books for assistance at any one time - then there are incentives built into the system to deal with the easiest cases first at the expense of harder cases.

Currently, it is possible to help the easier cases first so as to get a payment and leave the harder clients till later or not help them at all. Providers may do this because they are not allocated money to assist every job seeker; they pick and chose who they help. Another job seeker will be walking through their door straight away and this person may be easier to help than some of their existing clients.

It is often reported that if you are a mature age job seeker, or if you are someone who requires a little bit of money to be spent on you, then there is a significant chance that you will be `parked'. That is, your details will be filed and your resume shredded after three months. No follow up phone call, no provision of training - nothing. Labor would argue the design of the system encourages this.

One of the first tasks of the Job Network Monitoring Authority will be to conduct an urgent and independent review of the payment system.


Perhaps the most critical flaw with the current structure is the lack of guaranteed training. Now it is true that Job Network providers are allocated a portion of their money under their contracts for training purposes. Allocating this money, however, is no guarantee that any of it will actually be spent on training the unemployed.

Given the large feedback that has been received from the unemployed about the lack of training provided in the Job Network and similar concerns from staff working for Job Network providers, it is clear that this aspect of the Job Network is not being monitored at all. In fact, this was confirmed by answers from the Minister for Employment Services to questions on notice put by the Member for Dixon, Ms Kernot, that state in response to a query about the amount of training done that:

“Job Network members are not required to account for expenditure on various forms of assistance to clients. The department cannot, therefore, report on expenditure on accredited training within Job Network”

Such reporting should be required. How else will it be known whether Job Network providers are in fact providing the training that they are paid to undertake.

The provision of quality training is the key to sustainable employment.

The Job Network Monitoring Authority will be vital in making sure that Job Network providers deliver the training required.


As can be imagined, the Opposition rightly acts as a lightening rod for people who are dissatisfied with their treatment under the Job Network. Many of these people are dissatisfied because they have had a breach unfairly recommended against them by a Job Network provider.

What appears to be happening is that unemployed people are being breached for minor misdemeanours with no checking to ensure that there is not a legitimate excuse. The misdemeanour is passed on to Centrelink who apply a penalty in respect of the breach, again without a checking process.

The first time that the individual knows about it is when their payment does not arrive. What is just as bad is that when the unemployed individual goes to appeal against their breach and offers a legitimate excuse they are confronted with the fact that DEWRSB asks as part of their business agreement with Centrelink that:

“at least 60% of all possible breach notifications actioned are applied, and at least 75% of these are maintained.”

Madam President, we should know more about the incidence of breaching by providers.

Mission Australia claimed last week that the withholding of payments as a consequence of these breaches is contributing to the upturn in homelessness and pleas for assistance.

The role here of the Job Network Monitoring Authority will be to investigate Job Network providers that are applying high levels of breaches and take action to ensure that the provider is only making breach recommendations where there is no reasonable explanation.

Poor reporting

Another important role of the Job Network Monitoring Authority will be its ability to provide some measure of how well the Job Network is performing. To date, all we have had are what can only be described as `dodgy' assertions from the Minister for Employment Services, desperate to prove that `my system is better than yours'.

There has not yet been published a net impact analysis of the Job Network programs. This would be the best way to analyse their level of effectiveness. Such studies should be undertaken and published immediately.

It must be noted that the first independent and thorough analysis of the Job Network will come not from the Government, not from the Department but from the Organization for Economic Cooperation and Development. Whilst I'm sure that the OECD will come up with some interesting findings, this will only be a once off occurrence, not ongoing review.

What is needed is ongoing monitoring of the Department's administration of the Job Network. Problems need to be identified, publicly discussed and solutions worked out, not just once by an international organisation, which only has access to what the Department shows it, but by a formal domestic authority that has access to its own store of knowledge and expertise concerning the Job Network.

This Monitoring Authority will provide job seekers, Job Network providers and the general public with an objective analysis of how things are really faring and provide the basis for constructive reform.


I call upon the Government to pass this Bill and establish the Job Network Monitoring Authority. If the Job Network is running as smoothly and as transparently as the Government claims than the Minister for Employment Services should have no hesitation in offering his full support for this Bill. The Authority should have been set up at the same time as the Job Network back in 1996. It's time to remedy the situation.

Debate (on motion by Senator Calvert) adjourned.