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Select Committee on the Future of Work and Workers
18/05/2018

CASEY, Dr Simone, Policy Analyst, Jobs Australia

[12:15]

CHAIR: I now welcome Dr Simone Casey from Jobs Australia. Thanks for joining us today. I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you?

Dr Casey : Yes, it has.

CHAIR: Would you like to make a short statement, and then we will have some questions for you.

Dr Casey : Thank you for the opportunity to make a submission to this important inquiry and to outline a little bit about my role as a policy analyst at Jobs Australia. Also, just to let you know, today is the day of my graduation for my PhD. So my 'Dr' is very fresh, and I'm still getting used to it! I actually have my graduation kit with me, so I'll be gowning up after this and running off to the—

CHAIR: What's your PhD in?

Dr Casey : Employment services.

CHAIR: Great.

Dr Casey : My qualifications align to my expertise as a policy analyst at Jobs Australia. I'm here with a delegated responsibility from Jobs Australia.

CHAIR: Thanks for that. Was there anything you wanted to say by way of an opening statement about the Jobs Australia submission or anything like that?

Dr Casey : I know you've read the submission, so I don't intend to go into the full detail about what Jobs Australia does. In brief, Jobs Australia is a not-for-profit agency that's funded by our members, who are also not-for-profit agencies. Our primary purpose is to provide representation to the government on policy for employment services agencies. As a policy analyst at Jobs Australia, my particular role is to keep abreast of developments in labour market employment services policies, so that we can provide good advice to government on the way that employment services are resourced and so that the quality of services meets the needs of disadvantaged and long-term unemployed people.

We are primarily concerned with unemployed people who are at the entry level of the labour market or have been left behind in the labour market, particularly long-term unemployed people. You are probably aware that all people in receipt of unemployment benefits in Australia are required to attend employment services agencies as a condition of their welfare payments, so it is not only the long-term unemployed who are exposed to employment services; there are a range of people with a range of levels of entry in the labour market who go to employment services agencies as well. I believe you've already had evidence from the Department of Jobs and Small Business in this inquiry about the ongoing reform of employment services, and they have probably already outlined their view of the way that employment services would need to adapt to meet the changes in the labour market that are approaching.

CHAIR: Would you like to add anything on that?

Dr Casey : The issues that we outlined in our submission were particularly around our concerns with the contingent labour force or the people who are entry level labour. With employment services and the resourcing to date, you're probably aware that employment services were marketised in 1997 initially and run on a payments-by-results basis, which means that they're paid for actually getting people into jobs. It's a graduated amount depending on how long the employment outcome is for. There has been some longstanding concern, I think, about the effectiveness of employment services in really helping the people who are at the entry level get sustainable jobs, or get the skills that will enable them to remain in the labour force. You mentioned the word 'churn' before, quite a lot of the unemployed people who are exposed to employment services who are at that contingent level do form that labour market churn. They're in and out of employment quite a lot. Our interest in the reform of employment services will be to invest more in the long-term unemployed and the people who are being left behind in the labour market.

CHAIR: What do you see as the key changes that are required to better assist long-term unemployed people and people who are seeking employment for the first time? What are the main changes we need?

Dr Casey : The people who are seeking employment for the first time will be young people, and I'll come back to those in a second. Speaking mainly about the long-term unemployed, the people who have been left behind, the evidence of what works with that group, for many years now, has reflected the need for investment strategies, which means, in large, providing them with opportunities to acquire on-the-job skilling opportunities. There's a framework they called train and place versus place and train. Place and train has often been found to be the most effective way of actually providing people with base skills, current work experience and employability skills acquired on the job. Our view at Jobs Australia is that we need more investment in models that invest in those kinds of strategies for unemployed people.

CHAIR: In order to get to that system, is it a matter of simply more funding being made available to provide incentives to employers to take people on or whatever it is that's needed? Talk us through what the funding would be used for and what else apart from funding would be needed to get to that kind of system.

Dr Casey : I don't want to speak too far out of my remit, but mainstream employment services, that is jobactive—there's another of other smaller niche programs, which works with different activation strategies and funding models—is currently funded for about $1.2 billion per annum. A large part of that funding is invested in employment services agencies to basically provide services to monitor job search activity. They'll be dealing with the large volume of unemployed, which, I think, is around 800,000, and primarily monitoring whether they are undertaking job search up to a certain level. And then also finding activities for them to participate in for six months of the year when the job seekers are in their mutual obligation phase. So there's a lot of work that employment service agencies actually do around compliance, that is making sure people have shown up and done the things that they were supposed to do, as well as attend these activities that have been generated to provide them either with skills or work experience opportunities. In my view, and a view that I think Jobs Australia would support, is that we need to divert some of the existing resources within the funding envelope away from compliance-based activity to actual work experience and skilling strategies.

CHAIR: What's your sense of whether employers are up for that change in approach towards place and train?

Dr Casey : I think you mentioned wage subsidies. We certainly know from the evidence that wage subsidies work very well and employers like wage subsidies. There is a little bit of complexity around the internship model as well. There are wage subsidies offered as incentives with internships. We are currently experiencing with the Youth Jobs PaTH program, which is for young unemployed people, some complexities in being able to find internships for young people despite the availability of wage subsidies.

Certainly the issues around employer engagement with employment services and the problem of unemployment and providing skills that align the pool of unemployed to their future job opportunities have been long term and complex for the sector in the policy design. My view is that employers should be brought more closely in line with the employment service's activity and that incentives need to be provided to employers to take those people on for that 'place and train' model that I mentioned. But there are all sorts of risks for employers in those kinds of things, so there is definitely room for a lot stronger relationships between employment services and employers.

CHAIR: I've noticed in your submission that your members have a lot of experience and knowledge of the VET landscape and are in many cases themselves providers.

Dr Casey : Correct.

CHAIR: There's been a lot of commentary over the course of this inquiry about whether our current VET system is good, bad or indifferent. What is your organisation's perspective on that? What changes would be the key ones, do you think?

Dr Casey : I have to acknowledge at the outset that I am personally not a huge expert on VET. I have worked at an employment services agency that was a VET provider and have seen what it is like to manage an RTO and the compliance associated with that. Certainly the way the competitive marketisation of VET has operated has created some perverse results which have created quite a bit of aversion in funding strategies in the states. I think what we are seeing now is a shift back to less risk-averse approaches to what is called privatised VET, which is the market operated VET. If the government is committed to providing vocational education outside of government provided vocational trainers such as TAFE, certainly there is a lot more work to do to develop the alignment of that sector with future skills needs. There have been a lot of shifts in funding around VET and new initiatives coming out of COAG in the way that VET money is provided to the states. It is different in every state. I'm not sure I understood your question!

CHAIR: That's okay. I don't want to take you beyond where you feel comfortable going. I notice in your submission you have raised the issue of the complexity of the current social security system for independent contractors. I am interested in hearing what you have to say there and, again, on any changes that you think will need to be made to the social security system.

Dr Casey : I have personal experience of being an independent contractor and being on social security. For a period, I was entitled to the parenting payment and I was also undertaking contract work as a tender writer. So I had a period where I would earn, say, $30,000 in a short space of time and I was required to report that income, as any independent contractor is, to Centrelink via a profit-and-loss statement. Basically what you're supposed to do is forecast your income for the six-month period and then any social security entitlement that you have will be tapered according to what that six-month period of income is. Then, when you complete that six months, you complete a profit-and-loss statement. I can't remember the exact name of that. If your income varied over that period to what you expected, you would either earn a social security debt or be owed social security. There is a lot of work in preparing the profit-and-loss statement. You need to put down all your business expenses. You should use an accountant to make sure that your items of expenditure et cetera are all appropriate for your type of business and that kind of thing. I think that the current arrangements for independent contractors to report income from contract work are very onerous and difficult—if the contractors are, during that period, due to the level of income that they receive, entitled to social security. There is quite a lot of complexity. You could be a casual worker and you report your income online to Centrelink every fortnight and say, 'I earned $160,' and it's a lot simpler than if you're an independent contractor. I believe that independent contractors will be deterred from applying for social security payments that they may be entitled to by virtue of having a low income for the period of their independent contract work, or they may be deterred from actually reporting that income appropriately, because of the complexity. I think it's an area that needs more consideration.

Senator PATRICK: Dr Casey, if you don't mind I might ask an unfair question.

Dr Casey : Okay!

Senator PATRICK: You can choose whether or not you want to answer it! Do you see the landscape of job assistance changing in 2028? Have you looked at that? Your submission is focussed predominantly on now, but have you done some projections and said, 'This is what it's going to look like in 10 years time'?

Dr Casey : Jobs Australia is party to Senator Cash's expert advisory group on employment services for 2020. That is a confidential expert group, so we don't have direct reports on the matters that they are considering in that group, but we do understand that the department has an interest in more online self-servicing. Technology is enabling a lot more of the compliance based activity that I mentioned before, like Jobsearch and self-reporting of attendance at activities. All of this stuff is coming very soon, so we see that as enabling capacity to be freed up for those investment strategies, because less resources will be needed at the employment services agency to undertake that work, effectively, in manual terms. So we are conscious that with employment services in the future there will be capacity for that to be provided by the technology that is in development at the moment. There will also be the capacity for governments to use big data to analyse risk in different ways, so that those people who are the most at risk of remaining unemployed or not getting a job because of their background, skills and experience or because of the barriers that they face will be more effectively identified and will be able to be treated more effectively.

Senator PATRICK: I'm just wondering, as I approach an unemployment agency, if I talk to a robot who connects in with some data that may easily identify where the jobs might be and what is suitable. Do you see anything like that happening?

Dr Casey : There have been, on a limited scale, some assessment tools that use variables to calculate risk of long-term unemployment. They are also used to calculate outcome rewards to providers. The people who have the longest duration of unemployment or the most complex barriers to employment have always been able to be identified, but the capacity to orient services specifically to particular circumstances has been more difficult, because employment services, essentially, are a human service where people go in and have an interview and discuss face-to-face with someone what their needs or wants are. In the last employment services tender there was quite a lot of interest in apps. People were saying, 'Our agency is going to develop this really whizzbang so that people will be able to find the job that suits them'—that kind of thing. So all that stuff was starting to happen then. But also, because of the need to rationalise that one-on-one servicing, people were looking at robots: ring up and talk to Siri and say, 'Hi Siri, I applied for three jobs today,' and she says: 'How're you going? That's great.' There's definitely quite a lot of scope for some of the Human Services interaction that occurs now to be done by technology.

Senator PATRICK: Of course, robo and Human Services can cause problems as well.

Dr Casey : Yes, I think it's very important to put that on the record. I wouldn't really want to comment on when the robots get it wrong.

Senator PATRICK: Yes, sure. But there is scope for that in there?

Dr Casey : Absolutely. I think there needs to be some very careful discrimination about when the human interaction is required and not required. Then, when that human interaction is required, that human interaction needs to be provided by people with the right capabilities to do that work. That is a complex skillset for employment services workers. So I believe we can reinvest the funding to employment services to focus more specifically on that quality interaction between a skilled employment services worker and a jobseeker who has the highest needs.

Senator PATRICK: Thank you. That's enlightening.

Senator STOKER: Dr Casey, you said a few things about the difficulties with the way that independent contractors need to go about reporting income to Centrelink. What would you see as a better way of dealing with that problem?

Dr Casey : I'm sorry; I don't have the answer to that. I identified it as an issue without really having spent a great deal of time talking to the Department of Jobs and Small Business about alternative models for that. Social security adherence is a very complex matter and requirement. It may require some shifts in the legislation around social security and income reporting, as well as the Department of Human Services reporting templates or forms, including online forms. To date, all I have seen are forms that are a basic Excel spreadsheet that's profit and loss, which leaves it up to you to identify your business costs versus your income for your costs and average that out over the period. Again, possibly there are more online templates that could be developed. I think I'm also conscious that the department has been looking at this because of the increase in the gig economy work, which has been affecting the entry-level jobseekers that we've been speaking about.

Senator STOKER: Okay. In a similar sort of question, you've identified that the way that employment agencies are remunerated for placing somebody into work needs to be looked at if there's going to be more casual and temporary type work. What would you see as a better structure of remunerating the agencies for that?

Dr Casey : Again, it's something that I think needs very close consideration, but there should be models that still offer the 'outcome by results' incentive, which is the rationale behind providing incentives to employment services to do a good job of getting people into jobs. At the moment, as I identified in the submission, we have reports from employment services agencies finding it increasingly difficult to accumulate the number of hours of work required to clock up, basically, an outcome where they get paid for it. So it might be a question now of reanalysing the data on employment outcomes and saying, for example, that 80 per cent of them last for three weeks and then there's a hiatus of four weeks which, in the current model, an employment service provider would not get paid for, and recalibrating some of that, or recalibrating it for certain categories of work where jobseekers are identified as basically contingent workers.

Senator STOKER: Thank you.

Senator STEELE-JOHN: Thank you, Dr Casey. I apologise for missing the beginning of your submission. Could I take you to issue 7 in your submission, where you talk about minimum protections and standards for casual and contract workers and the need to ensure minimum levels of appropriate protections, remuneration et cetera. There have been certain moves internationally to force companies such as Uber to be registered as employers. I'm just wondering what your thoughts are as to how we might go about doing that here in Australia and what kinds of moves we could be making.

Dr Casey : Jobs Australia has certainly engaged in discussions with Uber, both about ways to make their jobs more visible to jobseekers in our market through our employment services agencies and how to help those jobseekers maintain their income reporting requirements according to social security legislation. We have been monitoring developments with Uber internationally. In the UK, and I think in Germany also, there has been a move towards registering Uber as an umbrella employer so that the workers are effectively covered by industrial protections. In Australia, we're a little bit behind those developments. But I think there's every reason to expect that that should be a requirement here, because it's clearly the case at the moment that Uber drivers are, for example, not experiencing the protections of other workers, including the entitlements to superannuation, holidays and so on, which have been a worthy inheritance of our negotiated working conditions in Australia.

Senator STEELE-JOHN: Can I take you back to issue 5, around skills, employment and youth, which is a particular interest of mine. Would you be able to expand a bit on the observations you've made in that section, particularly around the work done by the FYA?

Dr Casey : I'm not sure if Jan Owen, from the Foundation for Young Australians, is appearing at this inquiry. As a colleague agency in the sector, Jobs Australia has been very interested in the work that they have been doing in understanding how the future labour market will affect the skills acquisition of young people in the present time. Given their predictions of the types of work there will be in the future, they certainly advocate for different approaches to the way that young people acquire skills now. I defer to them as the experts on these matters regarding the profile of young people's skills and the future labour market, which is why I've referred to them in our submission.

Senator STEELE-JOHN: Thank you.

CHAIR: Is there anything further from anyone?

Senator PATRICK: Just congratulations!

CHAIR: Yes! Dr Casey is graduating with her PhD today.

Senator STEELE-JOHN: Congratulations!

Dr Casey : Thank you so much, and thanks for the opportunity to appear today.

CHAIR: Thank you, Dr Casey.

Proceedings suspended from 12:43 to 13:51