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Employment services: a chance to invest in human potential: speech by Senator Penny Wong to the National Employment Services Association (NESA) 2005 National Conference: Hilton Hotel, Sydney: 28 July 2005.\n

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Senator Penny Wong

Speech to the National Employment Services Association (NESA)

2005 National Conference

Hilton Hotel, Sydney, 28 July 2005

Employment Services: a chance to invest in human potential


I want to thank you for inviting me to your National Conference. Since I

was appointed Shadow Employment Minister in November last year, this is

the first time I have had the opportunity to speak to you all at this very

important annual event for the industry.

I have had many discussions since my appointment with both the

providers and users of employment services. These discussions have

confirmed my view that the value of active assistance in helping people

find work is immense and immeasurable.

Work is one of those essential things - like home, family and friendship -

that gives meaning to our lives. A government that cares about people will

do all it can to foster people’s capacity participate to in work and to gain

purpose through work.

Such a government would do all it could to support the people who

actually deliver employment services.

That’s what I think is ‘the human factor’. We talk a lot about the labour

market, supply and demand, the models, flow charts and systems, the

continuum and the acronyms. But I fear that when politicians and

bureaucrats only talk about employment issues in the abstract, it is

sometimes possible to forget the real reason we’re all in this: to help

people benefit from work.


In making ‘the human factor’ the theme of your conference, you have

made your values very clear. When it comes to employment, the human

factor applies on an individual level and on a big picture, societal level. An

individual is better off working if they can, and a community is better off if

its people can share the economic and social benefits of work.

That means that when we make decisions about what employment

services should look like, they can’t be done without putting the needs of

the individual job seeker first. Our systems must be built around people,

rather than slot people into our systems.

And we can’t overcome barriers to employment by simply redefining what

a barrier is!

In many senses, the challenge for employment services providers has

never been greater. Likewise, the onus on government to provide valuable

support to service providers has never been greater.

At first blush this might seem a paradox, because of a very low official

unemployment rate.

After all, more Australians are employed than ever. Yet we have more

people who have been long term welfare recipients.

We also have a skills crisis that puts our long term prosperity at risk, and

an ageing population. All of us depend on a skilled and ready labour force

to support our economic growth and our standard of living into the future.

This is no time for complacency. Our nation’s future prosperity, values and

social cohesion depend in no small part on the support government

provides to the employment opportunities of the Australian people.

I know this is a challenge you take very seriously.


Part of that challenge - for us as policy makers and legislators - is to

make your support for job seekers a viable proposition. This is the case

whether you are from a charitable, community or private provider, in our

cities or in our regions, or the remotest areas.

Government must support those who work in the service of others.

I want to use this opportunity today to share with you some of my

thinking about how government could support those efforts better. And I

want to emphasise that I am all ears when it comes to making this system

work better.

An efficient labour market?

One of the outcomes against which the Department of Employment and

Workplace Relations is measured, is “an efficient labour market.”

A glance at the headline unemployment rate would offer some hope that

this objective was being met.

Of course, you know better than I do that the headline rate, while

promising, does not tell the full story.

Official unemployment is at 5 per cent. The labour market is tighter than

it has been for a generation - which provides a difficult set of challenges

for you as employment services providers. However, there are some other

indicators that suggest there is a lot of untapped potential for the labour


First, look at the alarming number of Australians on income support. Over

600,000 on Parenting Payment, 700,000 on Disability Support Pension

and over half a million people on Newstart.


And very long term unemployment remains chronic. In the last five years,

the number of people claiming Newstart for five or more years increased

by 68 per cent to over 125,000.

Let’s consider where that unemployment is concentrated. Unemployment

generally is worse in regional and remote areas than it is in the cities.

Take teenage unemployment as an example. One in five teenagers who

wants full time work is unemployed - and it’s worse in some regions, like

Geelong, where it’s one in three.

As you will know, the bulk of employment growth has occurred in part

time and casual jobs. Some people prefer to work part time or on a casual

basis. But many do not. One in five part time workers - that’s 600,000

Australians - wants more work than they can get.

In addition, there are 1.2 million Australians who aren’t even in the labour

force - that is they aren’t actively looking - but they do want to work. So

there are actually over 2 million Australians who are either officially

unemployed or want to work more. Suddenly, the labour market doesn’t

seem quite so tight.

In fact, we have over two million human factors. Stories of hardship,

frustration, rejection, wounded confidence and lowered esteem - stories

that could be rewritten with happy endings.

We are all glad to see low official unemployment. But when we look past

the headline unemployment rate, the picture is a bit less rosy. Consider

that there are 1.7 million Australians who are aren’t working but want to

work. Consider that our nation faces a skills crisis.

And here lies the problem: there are plenty of people who are prepared to

work, but aren’t prepared for work.


You can’t have a surplus and a shortage at the same time. You also can’t

argue that 1.7 million potential workers is a shortage. Surplus cannot

equal shortage, so we need to add something else to the equation: skills.

If we invest in the skills of available workers we can address the shortage

of skilled labour.

Welfare to work

That’s why we were so disappointed that the so-called welfare to work

changes offered so little in terms of skills. If a job seeker doesn’t have the

skills an employer wants, he or she will struggle to be employed. If you

have a client who doesn’t have the skills an employer wants, you will find

it difficult to get them into a job.

So failing to make a proper investment in skills doesn’t help anyone.

Before I say anymore about the specific Welfare to Work changes that

affect employment services, let me say that Labor explicitly supports

welfare reform.

Welfare protects people who are vulnerable from falling into poverty - it

provides social security. It is an essential part of the social fabric in a

resourceful, civilised society like ours. Equally, a resourceful and civilised

society does all it can to promote work opportunities for all who can work.

Some people, perhaps motivated by a sense of political mischief, have

sought to create the impression that Labor would prefer people to

languish on welfare than be in work. Plainly, this is ridiculous.

The reason we don’t support these welfare changes is that they are not

welfare reform!


Real welfare reform would develop real opportunities for people to become

job-ready and gain work. We need to get as many welfare recipients into

work as possible. But the cold heart of these changes is a cut to the

income of vulnerable Australians.

This political mischief is ongoing. Mutual obligation is a value shared

across the community, including my side of politics. Yet if we suggest that

Work for the Dole could be improved to lead to better job outcomes, we

are accused of being opposed to Work for the Dole and opposed to mutual


Mutual obligation has been around for a very long time and it’s not going


If we suggest that Job Network could be improved, to better help

disadvantaged job seekers, we are accused of wanting to nationalise

employment services.

Can I make it clear that Job Network is here to stay.

Given the labour market challenges that I have identified, Labor sees

employment services as the bridge that takes people who struggle to find

work on their own to a secure future.

In this context, there are two key Government proposals that are

counterproductive and ignore the human factor. The first is changing the

Job Seeker Classification Instrument (JSCI) and the second is the

shortening of contracts.

It would seem to me, as a relatively new observer of the employment

services industry, that when official unemployment is low, those who

remain jobless are going to need some extra help to find work. But the

Government seems to have it the other way around. The strong labour

market seems to be a license to change the definition of disadvantage,

because everyone should be doing better in a strong labour market.


Obviously, those who remain jobless in a strong labour market are

struggling. Saying they are now less disadvantaged than before, and

decreasing the support you are able to offer them, does not seem


Isn’t it a wondrous thing, that Government can reduce disadvantage

simply by changing the way it’s measured! I’m sure it will bring comfort to

a great many people to know that with the stroke of a pen, they now have

fewer barriers to employment than they had before!

Of course, the number of people affected by the change in JSCI has not

been disclosed. But we do know that changing the definition of

disadvantage is an out of touch, bureaucratic trick to save cash that helps

nobody. Where is the human factor in that!

It also seems odd that contracts are now being extended on such a short

term basis. Six months is a very short time indeed. How do you manage

employment contracts with your own staff? Who will lease you a building

for six months? How do you build trusting relationships with clients and

employers? This is a very strange policy direction indeed which puts

unnecessary pressure on Job Network providers. It is also dramatically at

odds with the policy that Labor took to the election - where Job Network

contracts would be for five years rather than the current three.

This failure to support people who work in employment services is

unhelpful and leaves you distracted from what should be your only

challenge: helping people find work. You shouldn’t have to battle

bureaucratic systems before you even get to the starting line.

The system should be designed to support you to work in the service of

others. Bureaucratic inflexibility, such as the one size fits all framework,

regardless of whether you are based in George Street, Sydney or in

Oodnadatta, makes it harder for you to do your job.


There are other complexities and challenges that have been added to your

roles. For a start there’s more responsibility for a more severe breaching

regime. There is now much more pressure on you to investigate the

extent to which a job seeker ought to be breached for not seeming to

comply with their job search requirements.

Knowing that whatever you recommend will automatically occur, and that

this recommendation could push people at risk right over the edge, is not

what many of you signed up for. In my view, it is not appropriate for the

Government to absolve itself of responsibility for finding out why people

are struggling to meet their obligations. Passing the buck to you is unfair

and onerous. It’s understandable that some providers have been forced to

consider whether they are prepared to be a part of such a scheme.

More broadly, can I say that Labor is pragmatic when it comes to

compliance. We support a system that works - that encourages people to

gain work. Plainly, the evidence from the Government’s own Breaching

Review Taskforce, and other recent evidence, is that breaching can do

more harm than good. I have no doubt that you have many good ideas

about how we can have a genuinely improved compliance framework. But

you should be able to develop a relationship of trust with a job seeker.

The proposed framework does not support that trust.

There’s also the question of how you are supposed to determine who’s

worthy of a Wage Assist subsidy - and who is a “shirker”. What do you do

when you run out of Intensive Support Customised Assistance options?

This question would be made simpler if there were more Wage Assist

places to begin with. We welcome the re-introduction of wage subsidies -

and the Government’s silent admission that scrapping subsidies was

wrong. But there’s no doubt there are not enough places and there’s no

doubt they could be better structured to encourage employers to retain

subsidised employees after the subsidy ends. One option is to phase out

the subsidy over a longer period to encourage retention.


These difficult and unnecessary challenges come in the context of little

data. One of my greatest frustrations has been the alarming lack of

information surrounding how many people face a loss of income and how

many people in what locations will be asked to start looking for work.

If it’s frustrating for me, it must be a nightmare for you. How are you

supposed to plan your business without sufficient, timely information

about how many people you can expect to use it - and what kind of

service they will need? How will you know from year to year the extent to

which you should plan to be a specialist provider or a generalist provider?

These frustrations were completely unnecessary. Welfare reform had been

on the table for a long time. After nine long years of Howard Government

talk about welfare reform, the decisions about welfare changes were made

on one day, in the week before the Budget was delivered, in a private

meeting between Peter Costello and John Howard, without advisers from

the Department or even the relevant ministers - let alone the people in

this room.

This kind of mismanagement has led to welfare changes that range from

the extreme to the incompetent - decisions that disregard the human

factor and disregard your knowledge of how to help job seekers. There are

plenty of people - in this room and across Australia - who could have

spotted the flaws in the package. Some were asked for advice - but most

were ignored.

But with respect to everyone in the employment services industry, the

biggest frustration, the biggest tragedy is not that your advice was

ignored. It is not even that they have not provided you with the

information and resources you need. The biggest tragedy is that the

Government’s changes leave welfare recipients unprepared for the task

they face.


In leaving welfare recipients unprepared, the Howard Government leaves

Australia unprepared. We can’t waste the potential of over 1.7 million


An ageing population and a skills crisis make absolutely clear the need for

real reform that actually improves people’s chances of getting a job.

Investing in jobless Australians now will help all Australians enjoy a secure


The link between supporting the jobless and supporting employment

services providers is inextricable. That link is the human factor that has

sadly been lacking from a lot of recent decisions. Asking you to do more

with less is no way to help those who are really struggling to find work.

Government needs to get back in touch with the human dimension of

employment services if Australia is going to be prepared for our future

labour market challenges.