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Thursday, 9 August 2001
Page: 26034


Senator GIBSON (5:24 PM) —I rise to support my government colleagues in opposing the proposal before us. The government has provided very good economic management for Australia since coming to office in 1996. Australians have enjoyed economic growth of four per cent and higher for most of that period. As a consequence, there has been huge growth in employment. Counter to Senator Lundy's comments about helping the unemployed, the best thing that we can do for the unemployed is to provide a climate whereby firms expand, create jobs, prosper and make profits. That is what we have encouraged. The government has the runs on the board. There has been substantial growth in the economy since we have been in power. Unemployment has come down substantially since the previous administration's legacy of high unemployment. That has come about as a result of our being very good fiscal managers. We have reduced the government debt. Basically, we have managed to get the government out of the debt market to a large extent and have endeavoured to reduce government activity to the bare essentials that are required for the efficient running of this country. We have done that in many ways.

Rather than me, as a member of the government, singing the government's praises, I think I should start by quoting some of the comments from the OECD's economic survey of Australia which has been published this week. The OECD says, basically, that Australia has done very well indeed. As well as doing very well with the economy, it looks likes Australia will have the highest economic growth in the world next year. One of the conclusions of the OECD survey reads:

Substantial progress has been made towards completing the tax reform agenda

A further conclusion states:

Structural reforms have raised the trend growth of multifactor productivity ...

That is, after all, what we are aiming at—lifting productivity, both for labour and for capital, in our economy. That is where economic growth comes from; that is where rises in incomes come from; and that is where we increase employment. It is that level of economic productivity that we must increase. We have made substantial progress in doing that. We have also, and I quote again from the conclusions:

... lowered the structural rate of unemployment

A further conclusion reads:

Enterprise bargaining has increased labour market flexibility but there is scope for further improvement

Another one reads:

A contestable placement market has improved job-provision, while more active job search has been encouraged

I now turn to some of the detail in this report. Under the headings `Labour-market assistance and welfare report' and `Introducing competition into labour market assistance', page 99 of the report states:

Given the unsatisfactory results of prevailing labour-market services, especially in relation to their substantial cost, a radical reform of all areas of labour-market policies has been undertaken since 1996-97. The key objectives have been to deliver a better quality of assistance to unemployed people ... to target assistance on the basis of need ... to address the structural weaknesses and inefficiencies inherent in previous arrangements for labour market assistance; to put into effect the lessons learnt from international and Australian experience of labour market assistance; and to achieve better value for money.

Effective since May 1998, the new system has involved the most significant reorganisation of labour-market assistance since the establishment of the Commonwealth Employment Service in 1946. The main elements are Job Network, which is a contestable employment placement market, with competition between private, community and government contracted service providers.

This major change has changed the government's primary role from that of provider to that of purchaser of employment services. Again I quote:

This reform has put Australia at the forefront of OECD countries to introduce market-type mechanisms into its employment service framework and to make its publicly-funded placement services fully `contestable'.

The rationale underlying the reform is that competition encourages a high level of service and that fees paid to Job Network organisations provide a strong incentive for them to perform. ... Fees are paid on the achievement of outcomes ...

The major changes introduced under Job Network include the replacement of previous labour market programmes and case management services with three key employment services.

- Job Matching, which is the gathering of available vacancies and assisting eligible job-seekers into jobs through the provision of labour exchange services;

- Job Search Training, which is assisting job-seekers with a moderate degree of labour market disadvantage in obtaining employment through training in job search skills, interview techniques, motivation and confidence-building; and

- Intensive Assistance, which implies the provision of individually tailored assistance to obtain employment for the most disadvantaged job-seekers, as determined through the Job Seeker Classification Instrument.

Compared with the structure of the previous system, there has been a huge increase in the number of sites and in the number of providers throughout Australia. From the second tranche, we now have over 2,000 sites throughout Australia. There has been an evaluation of the service. Again, I will quote from the OECD report, on page 102:

The first stage of a three-phase evaluation project became available in early 2000 ...

It goes on to say:

A report of the second stage of the evaluation was released in May 2001.

The evaluation shows that Job Network has made significant progress in the development of a competitive market, in the numbers of job seekers assisted, in making a difference to the job prospects of the unemployed and in delivering value for money. Further progress was made towards a competitive market by expanding the geographic coverage and a competitive basis of Job Network's services.

That is not the government talking, that is the OECD report talking.


Senator Jacinta Collins —You are being selective. It says, `While it is too early to measure.'


Senator GIBSON —No, I am picking the relevant parts for this service, which is what you are criticising, Senator. I am saying that here we have outside people basically congratulating the government on what it has done in its reforms in many aspects of the economy, but particularly in its reform of introducing competition into labour market assistance. Of course, the report does say that there have been problems, and the government acknowledges that there have been problems, but do we need extra bureaucracy to cope with these problems? Of course we don't, but the trouble is that the opposition believe that when there is a problem you add another layer of bureaucracy. The government does not believe that at all. If there is a problem, let us make sure that the system is actually working as it is designed to, let us make sure that there is effective competition and let us make sure that people actually deliver what they are contracted to deliver. We acknowledge that there have been some problems, but we have to make sure that the current system is working. When you bring in a new system, of course there are going to be some problems—everyone expects that in any organisation.

The opposition has proposed this bill to add another layer of bureaucracy over the system and to increase costs so that people pay more taxes and get lower returns than what is happening now. The Job Network is already scrutinised by parliament. A number of statutory agents—the Australian National Audit Office, the Ombudsman, the Australian Competition and Consumer Commission, the Privacy Commissioner, the Human Rights and Equal Opportunity Commission, in addition to various interest groups, academics and others—are already commenting on the workings of the Job Network. What would we get from any extra scrutiny? It would be counterproductive because it would have to impose extra reporting and compliance burdens on the members of the system. As I said earlier, it would add an extra layer of bureaucracy—exactly what is not required for freeing up and increasing productivity of the Australian work force.

The government has in place a comprehensive set of governance arrangements to ensure that Job Network members do deliver quality service and comply with the terms and conditions of their contract. We do not need to establish an independent regulatory authority for the employment services industry because we have effective governance already in place. The Job Network code of conduct is supported by a complaints handling process which enables the department to monitor Job Network members' compliance with the code and to work with Job Network members to resolve problems and to improve service quality. The code requires all Job Network members to have their own internal complaints handling process and to provide job seekers with information about the complaints process.

If a job seeker or an employer, or any other party for that matter, believes that a Job Network member is not delivering service in accordance with the principles and the commitments set out in the code of conduct, they are encouraged in the first instance to raise their concern with the Job Network member concerned. A customer service officer will assist the complainant to resolve the complaint and will investigate the matter if appropriate. Customer service officers can require Job Network members to take action to fix problems. Most Job Network members are keen to resolve complaints quickly and will agree to take action to resolve the problem. Most complaints are resolved very quickly—95 per cent within a 30-day period. The department operates a free Job Network customer service line, which is staffed by customer service officers in each state and territory. Through this line, customer service officers can assist callers by providing advice, resolving complaints and investigating concerns if appropriate. Customer service officers can also require Job Network members to take remedial action in relation to complaints.

In the 12 months to June 2001, there were approximately 1,900 calls to the customer service line. Approximately 59 per cent of the calls were simple queries or requests for information. The remaining calls related to complaints about the network, particularly about the quality of service provided by Job Network members. Job seekers represent over 80 per cent of callers to the customer service line, with over 90 per cent of callers' concerns being resolved within seven days. We also have quality audits. Quality audits can be initiated by the department where a Job Network member is the subject of continuing complaints or the subject of a particularly serious complaint. Quality audits have also been conducted at Job Network member sites that exhibit good practice. In the 12 months to June 30 2001, 92 quality audits were performed and a further 25 are planned for the next three months.

I now move to referral of complaints to investigation and compliance units. In cases where a complaint is particularly complex or serious and it is believed that the Job Network member may have seriously breached their contract with the Commonwealth, the department's investigation and compliance units assist with the investigation. In these instances, customer service officers and the investigation and compliance staff work closely and cooperatively to resolve the issue. All such investigations are undertaken by trained and accredited departmental investigators in accordance with the forward control policy of the Commonwealth and the Commonwealth's fraud investigation standards package. These investigations are subject to periodic quality assurance reviews by the Australian Federal Police. All allegations of fraud received by the department and, in addition, any potentially fraudulent matters arising from the department's assurance reviews and routine contract management of service providers are investigated. The investigators operate independently from the groups within the department that are responsible for policy or day-to-day management. Where an investigation reveals sufficiently admissible evidence to establish criminality, the matter is referred to the Director of Public Prosecutions. Ultimately, it is his decision as to whether a prosecution should be instituted and, if so, on what charge or charges.

While I understand that there have been problems, the procedure that I have set out is working. The government is confident that it can be improved, and the government is firmly of the view that we do not need another layer of bureaucracy to go over that which already exists. It will simply increase costs and slow down the system. Australians do not want to pay more taxes to run additional bureaucracy. We believe—and we have good evidence to believe—that the system is working well. Sure, there have been some problems, but they are being corrected. The existing system for handling complaints is more than adequate to meet the needs of the system. I support the government's position in opposing this bill.