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Education and Employment Legislation Committee
23/10/2019
Estimates
EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS
Department of Employment, Skills, Small and Family Business

Department of Employment, Skills, Small and Family Business

[09:03]

CHAIR: I welcome the Minister for Employment, Skills, Small and Family Business, Senator the Hon. Michaelia Cash, and officers of the Department of Employment, Skills, Small and Family Business. The committee will commence with the department's enabling services. Minister Cash, do you wish to make an opening statement?

Senator Cash: I don't, thank you.

CHAIR: Ms Hartland, do you wish to make an opening statement?

Ms Hartland : No, thank you.

Senator PRATT: Good morning, everyone. Thank you for appearing at estimates today. I want to start by asking some questions about the Franchising Taskforce.

Senator Cash: That is actually outcome 1. We're in cross-portfolio. We've got the people here, though.

Senator PRATT: No, it's all right; I'm just on the wrong page.

Senator Cash: But it does alert our outcome 1 people out the back that franchising is coming up.

Senator PRATT: We had the same issue in our briefing this morning—finding the right page!

Senator Cash: That's okay. I'm not sure if government senators have any questions in cross-portfolio to assist you, Senator Pratt, if you—

Senator PRATT: No, I know I have a couple of questions in cross-portfolio. The evaluation reports for Job Services and jobactive—are they in here?

Ms Hartland : They're outcome 1 as well.

Senator PRATT: I thought so. How about the APS Code of Conduct?

Ms Hartland : Yes, that would be in this part.

Senator PRATT: Great! I have some questions in relation to breaches of the APS Code of Conduct. How many code of conduct investigations does the department currently have open?

Dr Charker : Currently we have—when I say 'currently', I mean the period 1 July 2019 to 31 August 2019—none under investigation. We have one that is pending a breach decision. I can also provide, if that's of interest to you, data preceding the current financial year—so I can give you 2018-19 data.

Senator PRATT: That would be great.

Dr Charker : In 2018-19 we had one matter that was under investigation at that time, one matter that was identified as being a breach of the code and four matters that were identified as not breaching the code, which had also been investigated but not found to have been a breach.

Senator PRATT: How many, if any, of those cases involved self-harm or attempted self-harm by the employee?

Dr Charker : I'm just having a look at the 2018-19 matters. I have no information to indicate that that was the case.

Senator PRATT: Are you able to take that on notice, if appropriate? I note that we're talking about a small number of cases here.

Dr Charker : That's right. Bearing in mind that it is a very small number, we would be loath to provide a lot of detail, given the potential for privacy considerations.

Ms Hartland : We're happy to take on notice whether there's some further detail that we can provide, noting what Dr Charker has said. We've just got to be careful with very small numbers like that.

Senator PRATT: Thank you. That's all I've got for cross-portfolio.

CHAIR: If there are no further questions for the department's enabling services, I thank you. We will call representatives of outcome 1 for the department.

[09:10]

Senator PRATT: I'm going to commence with some questions on employment services. The government released a number of evaluations of the former Job Services Australia framework, covering 2009 to 2015, and an interim report on the first year of the government's jobactive framework. Why is it an interim report that only covers the first year of the framework?

Ms Shannon : I think you're referring to the jobactive evaluation. The jobactive evaluation is being conducted in three stages. The first stage is the interim evaluation, and that's the report that was released.

Ms Hartland : It doesn't mean there aren't subsequent evaluations, as Ms Shannon has said.

Senator PRATT: I guess what I'm interested to know—it's a fair period back in time that we're looking at, pre-2012 and pre-2015. Why is it an interim report, given it's a fair way back in time now?

Ms Shannon : There's a fairly extensive body of evaluative work that's going on in the department, and we do take a structured approach. Our typical approach is to look at the early operation of a program to try and glean any particular implementation insights or early insights on how a program's rolling out, so that we can fine-tune any policy settings, but that doesn't mean that we're not at the same time compiling a body of evidence over a longer period of the program's operation. So that work is underway, and we've provided advice previously that that work is continuing.

Senator PRATT: External factors like the global financial crisis have clearly had an impact on employment outcomes. In terms of these reports, isn't comparing the labour market between 2016 and when the global financial crisis effects were being felt a bit like comparing apples with oranges?

Ms Shannon : I think that's a fair question. What the department does, as a very standard part of evaluation practice, is design the datasets and analyses to be able to take into account factors such as different labour markets and things like compositional changes in the jobseeker case load. So those analyses have been done. The interim jobactive report presents results in both adjusted and unadjusted terms. The adjusted terms have been adjusted using regression analyses to actually take into account changes in the labour market.

Senator PRATT: So that's already been done; okay. The interim report says:

Since evaluators are unable to accurately track the sustainability of employment outcomes after a job seeker leaves employment services, this report uses exits from income support and exits from the employment service program as proxies for employment.

I see that the Youth Jobs PaTH evaluation report stated 'unavailability of data once a person leaves the income support system'. So these reports, by their own admission, demonstrate that there's no legitimate way that the government can argue that these programs lead to secure and stable employment outcomes. Does the department agree?

Ms Shannon : I don't think I agree with the way the question's framed. By nature, we can only collect data on participants in programs while they're in the program, but we have a number of other methods to collect information. We track employment service participants when they receive a job placement at four, 12 and 26 weeks. In the evaluation, we construct data sets and we follow people for typically nine months, 12 months and, if we can, longer—24 months in some cases. We look at whether or not they remain off the employment services case load, and we look at any changes in their income support reliance. They are proxies—the reports are careful to say that—but, if somebody has left the program with a job and they don't return and they don't return to income support, we might draw a reasonable conclusion that they remain in employment.

Senator PRATT: So you do statistically track in all cases where they've returned to income support. What if they return to another form of income support?

Ms Shannon : Unless they're activity tested, they don't come back into the case load for employment services. They might go onto a parenting payment or onto the disability support pension or the age pension.

Senator PRATT: But you can't assume that there's a labour market outcome on that basis.

Senator Cash: I don't want to put words into the department's mouth, but I think the evidence that the official is giving is that, in particular post the 26 weeks, the research actually provides you with the ability to assume that there is a labour market outcome. I don't know, Ms Shannon, if you want to explain that to the committee in terms of what the research says.

CHAIR: I will just jump in quickly. The committee has resolved to authorise all media outlets present at the public hearing to record the proceedings, subject to the following conditions. We've got media in the room now. The committee or a witness can object to being recorded at any time. The committee can require that recording cease at any time. Recordings must not occur from behind the committee or between the committee and witnesses and must not otherwise interfere with the proceedings. Computer screens and documents belonging to senators and members must not be recorded. Flashes must not be used. The direction of the committee secretariat must be followed. Sorry, Ms Shannon.

Ms Shannon : The department also conducts post-program monitoring surveys, asking jobseekers about their labour force status, either during the course of their participation in the program or after their participation in the program has ceased.

Senator PRATT: Can you take on notice what percentage of participants in the programs undertakes those surveys? I want to move on now to asking some questions about jobactive placements. The government has claimed repeatedly that jobactive has achieved one million job placements. We note, however, that there are still more than 700,000 people who are unemployed. Can the government confirm that you do not mean that one million Australians have found employment through jobactive since 2015?

Mr Smyth : Since 1 July 2015 we've had 1,445,920 job placements occur under jobactive. That is putting people into employment through the program.

Senator PRATT: Where they have some kind of income from that. Can you confirm for us, please, that that includes the PaTH program, Work for the Dole, a wage subsidy scheme or other mandatory programs?

Mr Smyth : Work for the Dole is not a job placement as such, so the numbers there would not be included. It would include people who have received a job placement out of the jobactive program. It would include people who have received a job placement out of Transition to Work and obviously through the PaTH program as well. That would be not where we classify an internship as a job placement. It would be actually based on an outcome payment made to a provider following a four-, 12-, or 26-week outcome.

Senator O'SULLIVAN: You're saying that the internship is not counted?

Mr Smyth : It's not classified as employment.

Senator O'SULLIVAN: But when they go on from the internship into a job where they're paid by the employer, and they're off benefits, that's counted as a placement?

Mr Smyth : That's when it occurs. That's correct. Generally for employment services providers, they are not remunerated for job placements. They are remunerated for outcomes at four, 12 and 26 weeks. For four- and 12-week outcomes, it's where a person has their benefits reduced by 60 per cent, and it's 100 per cent off-benefit at 26 weeks—that classifies as an outcome payment.

Senator PRATT: So just to clarify, is a period in which someone is getting a wage subsidy included in your statistics?

Mr Smyth : It would be at the four-, 12- and 26-week mark, where we clarify those people as being employed, and so there are outcome payments that are made to providers, yes.

Senator PRATT: My question was about the one million job placements—

Senator Cash: I think the evidence was 1.4 million.

Senator PRATT: Yes, but my question is: are those wage subsidy places, Work for the Dole, PaTH programs or other mandatory programs included in those job statistics? You've gone some way to clarifying that by saying Work for the Dole is not.

Senator Cash: There are a number of programs you've put there. For example in relation to the wage subsidies, the person is actually in employment, so the employer is entitled to the wage subsidy. I might get the department to take you through exactly what is in the statistics to properly answer your question.

Senator PRATT: I would be keen to at least get an impression of what's in and out.

Senator Cash: That's what we'll get the department to do for you.

Ms Hartland : I think that's right because the answer to your question isn't yes or no—

Senator Cash: Because of the nature of the programs you've put forward.

Ms Hartland : Some of those programs are a definite no and some it's a yes.

Senator PRATT: So PaTH is in?

Mr Smyth : PaTH is certainly included. ParentsNext is a pre-employment program. However, there are a number of participants that, through that program, decide to move into employment. So their employment would be classified at the four-, 12- and 26-week mark as well. If they move off the benefits that they're receiving—60 per cent and 100 per cent at those intervals—they would be counted then as well.

Senator Cash: We've just going to clear up some information in relation to PaTH.

Ms Hartland : In terms of what Mr Smyth has said, there are aspects of PaTH that are not there because they're the sort of pre-employment training bit of it. The higher part is, but not other parts of PaTH, because there are three distinct parts of PaTH.

Senator Cash: Would it assist if we also provided that further information on notice to give you the clear explanation?

Senator PRATT: I'm happy for you to take that on notice. I would be interested in you including in that answer a breakdown of those jobs, so I can see how many jobs are post-26 weeks where there's an ongoing employment relationship where there's no wage subsidy.

Ms Hartland : I understand the question. You want to know what's included in those numbers and what's not included. I'm happy to step through that.

Senator O'SULLIVAN: Can I just clarify something? So the 1.4 million, did you say?

Mr Smyth : The 1.445 million.

Senator O'SULLIVAN: Those people, at that point in time, were off benefits?

Mr Smyth : They were placements that were made for four, 12 and 26 weeks.

Senator O'SULLIVAN: So they've gone off welfare and into work?

Ms Hartland : That's correct.

Senator PRATT: No. My understanding is that they could have a reduced welfare payment.

Senator O'SULLIVAN: If they're part time?

Mr Smyth : That's right: at 60 per cent at four and 12 weeks.

Senator PRATT: And that those with a reduced welfare payment, because they're in one of these programs, are currently counted in those one million placements?

Mr Smyth : That's correct.

Ms Hartland : So some of those are a pathway to employment and then that opens a range of other issues about those numbers that go on to full-time employment.

Senator Cash: They are in work. To put it simply, they are in work.

Senator PRATT: But it doesn't mean one million Australians finding full-time jobs who are no longer on income support, does it?

Mr Smyth : We can go through labour force statistics. What we are talking about here is a different set of statistics. These are jobactive people and then there are ABS labour force statistics and I'm happy to have my team come up and talk about what the—

Senator Cash: I think there is a conflation of two issues now.

Senator PRATT: No. Look, I understand that. But there's a difference between the government saying a million Australians have been assisted into employment and a million Australians have jobactive placements?

Senator O'SULLIVAN: Aren't they labour force statistics?

Mr Smyth : That's right.

Senator Cash: I think it's the conflation of two issues.

Senator PRATT: Yes, but the government is the one that's been conflating them by these figures.

Senator O'SULLIVAN: No, they're not. They're labour force statistics.

Senator PRATT: How many participants have received more than one placement? How many have received more than two placements? And how many have had more than three?

Senator Cash: What program? Are you still in jobactive?

Senator PRATT: Yes. I might also ask in that context that those placements aren't double-counted in the figures we were just talking about?

Ms Hartland : I think we've put these on notice before so we'll just track them down.

Mr Smyth : I've got some statistics here about the participants that have received one job placement through to those that have had multiples as well. This is from 1 July 2015 to 31 August 2019. We had 2,034,000 unique participants that commenced into jobactive. Of those, 825,000 people achieved at least one job placement. For two job placements, we have 185,150 people. Three job placements, 77,269. Four job placements, 34,585. Five job placements, 16,560. And six job placements, 8,071.

Senator PRATT: Thank you. Just to clarify, are those job placements double counted in that one million figure?

Mr Smyth : They're counted as a placement, yes, they are. They're unique placements.

Senator PRATT: So they're unique placements. So I can go away and add up the pool of each—

Mr Smyth : We can provide to you on notice a breakdown, if you like, a table around that.

Senator PRATT: The number of people in multiple placements is not the same as the number of placements overall. So, yes, a table would be helpful.

Senator O'SULLIVAN: On this particular issue, it's not unusual for a person that's been unemployed for a long time to go into a short-term job?

Mr Smyth : Absolutely.

Senator O'SULLIVAN: It's actually a good stepping stone for them? So they might do multiple short-term jobs, maybe harvesting-type work or Christmas casual sort of work. Is that correct?

Mr Smyth : That's correct.

Senator O'SULLIVAN: And then that can lead to other—

Mr Smyth : The important factor there is that employers generally like to have people that have a bit of a CV filled out. Also we're talking about people that may have a disability, a partial capacity to work. They may also have issues around mental illness, drug and alcohol problems, so the nature of some of those barriers that they actually face means they do come in and out of work.

Senator Cash: Senator O'Sullivan, I think you are aware, given the extensive work you've done previously, of the different streams, stream A, stream B, stream C. So for stream B and stream C, as Mr Smyth has said, the barriers are far more substantial than stream A.

Ms Hartland : I think as the employment growth has been strong, then you actually start to be dealing with some of those more complex issues as well.

Senator Cash: Which is a good thing.

Ms Hartland : So you're likely to see those number of placements, I'd say, looking at my officials, increasing for the reasons that Mr Smyth said as well, about getting experience in the workplace.

Mr Smyth : It's worth mentioning there that the jobactive caseload peaked at 790,000 people in February 2016. As at 31 August this year, it's down to 615,000 people, so a 22 per cent decline.

Senator O'SULLIVAN: A 22 per cent reduction in people?

Mr Smyth : That means that the people that the providers are now dealing with are generally more concentrated in those B and C categories, where people face more barriers to employment.

Senator O'SULLIVAN: So this system is called jobactive and the previous system was Job Services Australia. Is there a difference in the level of outcomes achieved between the previous system and this system?

Mr Smyth : There is, Senator. The outcomes under jobactive have certainly been stronger than under Job Services Australia. I'll just try to find the statistics for you.

Ms O'Rance : This is from the post program monitoring survey that my colleague spoke to earlier. For the period 1 January 2018 to 31 December 2018, 48.6 per cent of people who participated in jobactive in that period were in employment. That's an increase of 0.6 percentage points since the start of jobactive. It's also higher than the equivalent employment rate in the last three years of Job Services Australia.

Senator O'SULLIVAN: There have been evaluations of the program—Senator Pratt referred to one, but there have been subsequent ones. For full disclosure, I was involved as a volunteer adviser on a panel before parliament. Can you tell us, for the benefit of the committee, a little bit about the work that was done last year and the I want to work report? That evaluated the program and some of the ideas and suggestions that the government has taken up.

Ms Hartland : In terms of the new employment services model?

Senator O'SULLIVAN: Yes, looking at the new employment services model for 2020.

Mr Smyth : That was the largest consultation the department has undertaken; 1,400 people were involved in that consultation. The report was provided to the government. The government deliberated on that report and, on 20 March this year, the government made an announcement that it would move to a new employment services model, taking into account the views of the panel and the recommendations of the panel to move to a different servicing model for participants in employment programs.

We are now trialling in two employment regions. One is the Mid North Coast of New South Wales, which effectively runs from Bulahdelah to Woolgoolga and about 50 kilometres inland, so it includes major centres like Coffs Harbour and Port Macquarie. We have three providers up there. Our other trial region is in Adelaide's south, and runs mainly around Noarlunga, not quite out to Murray Bridge and down to Kangaroo Island. We are trialling a new model that the report to government recommended. Where people are able to self-manage and have digital capability, they should be able to use digital servicing in order to help them find employment. We are continuing to build a pretty sophisticated online system to enable that to occur. In the context of the current jobactive case load, you might liken it to stream A.

The report then recommended that, for the people who face more significant barriers to employment—streams B and C—we should have more intensive, face-to-face servicing by providers, where people are given the time and the attention to get them ready for employment and to address some of the barriers, be they non-vocational or vocational barriers. In doing that, service providers should have a different remuneration system. So the remuneration arrangements that we are trialling in the Mid North Coast and Adelaide's south with the new servicing model is higher up-front payments, performance payments in terms of progress of people towards employment, higher outcome payments and bonus payments for people who have been long-term unemployed—getting them into employment.

Senator O'SULLIVAN: So this is enabling providers to invest upfront early into the development of the jobseeker and their skills development and is particularly focused on those jobseekers that need that extra support. Is that correct?

Mr Smyth : That's correct.

Senator O'SULLIVAN: So jobseekers who are mostly job-ready will have access to a digital system. Is that system now in operation?

Mr Smyth : It is in operation. There are a few elements to that. There is what we're calling Digital First. They are the most job-ready people that are able to self-manage through digital services. That commenced on 1 July in the two trial regions. We've also established a second tier called Digital Plus, which is for those people that might also need some of the elements of the employment fund. They might need a little bit more consultation and help and advice from what we're calling a contact centre that we've established—a call centre that's staffed with people to be able to provide those participants with the advice that they need. And if one of those participants needs a licence in order to get into a job, or they might need some work boots or something, we're making our employment fund available for the contact centre with the participant to enable that to occur.

Senator O'SULLIVAN: Would that include being able to do digital literacy training?

Mr Smyth : That's right.

Senator O'SULLIVAN: So, if they're using a digital system, they'll be able to access that support to be able to get it?

Mr Smyth : That's right. In parallel to that we've been running an online employment services trial, where people have been randomly selected through coming into employment services. It's stream A. We've had 23,160 referrals into that trial. It's voluntary. People can opt out of it if they wish. But, out of that, 0.5 of one per cent have opted out due to access issues.

Senator O'SULLIVAN: Were you expecting that?

Mr Smyth : It's certainly lower than we thought. We were constantly hearing that there were access issues around digital availability for people. But 0.5 of one per cent is quite a low number. The opt-out rate at the moment is about 8.9 per cent, and that is about 1,969 people that have opted out. About 990 of those people have opted out because they prefer face to face. We're still doing some analysis around that, and it may well be that the reason they prefer face to face is they've been previously in the employment services system and had contact and engagement with a services provider and got a job outcome out of that or were comfortable with the provider that they were previously engaged with, and so they're wanting to go back to that. We think that that is likely to be the case. But, out of the large number of people that have been referred into the trial, we've only had about 260 people that have said they're not confident using a computer.

Senator O'SULLIVAN: In engaging with that digital system, it's their own choice to be part of it?

Mr Smyth : That's correct. It's voluntary.

Senator O'SULLIVAN: And the feedback—

Mr Smyth : We've had very positive feedback from the users there and the experience. They're saying that it's more convenient. It gives them a greater sense of—

Senator O'SULLIVAN: Instead of needing to turn up to the service provider physically, they can do it online?

Mr Smyth : They can do it online.

Senator O'SULLIVAN: They can report their job search, the mutual obligation requirements, so they have the flexibility; is that right?

Mr Smyth : That is correct. The feedback we've received is that it gives them a greater sense of empowerment and reduces the burden and the costs associated with travelling to provider sites. And the interesting thing is that we're getting the same rates of outcomes through that online servicing trial as we are through stream A with providers.

Senator O'SULLIVAN: And is this helping people in regional areas?

Mr Smyth : There is no question that it would be helping people in regional areas.

Senator O'SULLIVAN: So they don't need to travel far. Back to the trial—

Mr Smyth : The new employment services trial? We call it the NEST.

Senator O'SULLIVAN: Are you trialling the new payment model there? You might have seen that there are existing providers, so, therefore, they'd already be contracted.

Mr Smyth : No. What happened is that when the government made the announcement that we were using two trial sites, on the mid-North Coast of New South Wales and in Adelaide south, current jobactive contracts for remaining providers were extended for a period of two years. They will complete in mid-2022. We've now signed new deeds with the eight providers in our two trial regions. Those new deeds are under the new employment services model. We are transitioning—it's a phased approach. We started Digital First on 1 July. We recently started Digital Plus. We will start moving people into the enhanced services model in late October or November. There's a kind of transition period that's occurring. The providers in those two trial regions will be remunerated under the new model.

Senator O'SULLIVAN: If we've got time, I might come back to the payment model. I know that one of the recommendations from the panel was 'flexible activation', which is flexible mutual obligations for jobseekers. Is that being trialled? If it is, can you describe how it's working?

Mr Smyth : I might get Ms Ryan or Mr Emerson to talk about it, but that will commence on 1 July next year. There's a whole period now of, I suppose, user centred design, consultation and focus groups that we'll be undertaking to ensure that we get that kind of model right before we commence it on 1 July.

Senator O'SULLIVAN: For the benefit of the committee, the current model is that you've got to do 20 job applications per month, and this trial is going to trial a bit more of a flexible approach to that.

Mr Emerson : Yes. One of the key features of the new employment services trial is the activation points based model, as Mr Smyth said. Currently we're co-designing that with a range of jobseekers, providers and other representatives of the community just to see how best to design it and implement it. You're right. It actually looks at how we can better tailor the number of job searches to their particular circumstances and to meet their mutual obligation requirements as well as build in a range of other things that are more meaningful. They'll be able to see at any given time, when the points based system commences next year, where they stand, how many points they've got to meet in order to achieve their activation or their mutual obligation requirements. It's still a work in progress; it's starting next year. We're just making sure that our user centred design is actually informing our design approaches.

CHAIR: I might cut you off there, Senator O'Sullivan.

Senator SIEWERT: Can I go to the targeted compliance framework. Have you got a comprehensive breakdown of the application of the TCF like you've given us twice before?

Ms Hartland : Yes, we have. We can provide that to you.

Senator SIEWERT: It would be great if you could have it now.

Ms Hartland : We thought you might ask that question, and we have that here.

Senator Cash: We anticipated you. We'll have copies provided for the committee, as well, Chair.

Senator SIEWERT: Does this correspond with the summary of the data, the timeline for the summary—no, it's different again, isn't it?

Mr Emerson : Yes. This is as at 31 August.

Ms Hartland : This a point in time, up to date.

Senator SIEWERT: This is at a point in time from 1 July last year. Is that right.

Mr Emerson : Yes.

Senator SIEWERT: Thank you. It's obviously quite difficult to ask questions about it when we've been given it right now, so perhaps I'll go to one of my other questions while I take time to absorb that shortly and come back to it. Going back to the issue that I touched on briefly, which came out of the number of people who are going back for reassessment following their capability assessment—the 44 per cent who are going back. What's happening with those people?

Have you been tracing them through the process subsequent to them being sent back? Obviously, I haven't had a chance to look at that for 31 August, but up until the last set of figures it was 44 per cent. You get the demerit point and a capability reassessment, and 44 per cent of those assessments have gone back to zero because the plans were found to be, for whatever reason, inadequate.

Ms Hartland : I might get some officials to clarify this, but not all of that 44 per cent is categorised in that way.

Senator SIEWERT: Can you tell me about what's happening with that 44 per cent.

Ms Hartland : We can take you through exactly what happens.

Mr Emerson : Senator, what you're referring to is the people who have, at the time of the capability interview, had their assessment by their provider and it's been determined, for a range of reasons, that they're not capable of fulfilling the items in the job plan. So they're being, therefore, sent back to the green zone. But that could be for a range of reasons. That could be for the fact that their circumstances have changed. That's exactly why the compliance framework is set up as it is. It's a safeguard so that the provider can, at that point in time, just check that they're capable of undertaking those activities as agreed in their job plan or their participation plan. A high proportion of those people who are sent back have a change of circumstances and, therefore, are reset to zero and go into the green zone.

Senator SIEWERT: My immediate question there is: what are the proportion who have gone back to zero and what are the reasons they've had?

Mr Emerson : Yes, we do have that, but we don't have that here. For clarity, if your question is on the number of people and for what reason they're moving back into the green zone, the high proportion of those would be, obviously, that they were not determined as capable of achieving their plans because of their particular situations. So we'd have to take it on notice—

Senator SIEWERT: Sorry, I was given this only a minute ago. I've just had a look. If you look at errors, you have actually provided in the green zone for the not capable—

Mr Emerson : This is flow data. There's stock point-in-time data, which is part of the public report, and then there's flow data. This is from 1 July to 31 August. These won't add up to the 44 per cent. This is because these are over a period of time. So if your question is 'What proportion of the 44 per cent?' we'd have to take that on notice. But you can see on the back of this A3 sheet the reasons why they were—

Senator SIEWERT: Yes, and that's where I've just looked. But if you look at 'not capable—all', it's 38 in stream A, 46 in stream B and 43 in stream C. Then, when you look at 'errors in job plan', it's interesting that stream B is turning up higher there, too. 'Errors in job plan' is 58, 66 and 64 per cent. That's a pretty significant percentage. The point that I'm getting to here is that when people get to the third demerit point they've already had payment suspension. There's a big problem here, is there not, in the fact that people are getting inappropriate job plans to begin with? They're going through the stress of the suspension and getting to the third demerit point when you are realising there's an error in their job plan. Why aren't we doing the job plans better in the first place?

Mr Emerson : We are working very closely with providers on improving the way in which job plans are developed. This is actually a key focus. It will get to a point within the next six months where providers will have the error rate in those job plans factored into their performance. So that is an important feature of making sure that providers are, in fact, tailoring the job plans well to the specific situation of jobseekers.

Ms Hartland : Senator, as you'd appreciate, because I know you know the program very well, there are—and others can talk about this more—issues around disclosure as well. There is obviously a skill there for the providers, which is what Mr Emerson is saying. There is obviously a training issue. This is dealing with complex people issues—

Senator SIEWERT: We are how many years into jobactive and, previous to that, Job Services Australia, and we're still not getting the job plans right? I mean, come on!

Senator Cash: Senator Siewert, you're incredibly passionate about this, and I do acknowledge that, but I think you've got to listen to the evidence the secretary has just given in relation to the evidence that potentially the jobseeker is providing. We've been through this before, as you know, at previous estimates. The whole point of the targeted compliance framework is to actually identify, before you get into the final phase, where you move off to a different portfolio, whether or not there are capability issues and to work through them with you. This is actually a positive change, because it is now working with the individual to identify if they are having issues with their job plan, to seek to rectify them and to put them back into the green zone.

CHAIR: How many people have actually received a financial penalty compared to the previous system?

Senator Cash: When we say 'penalty', I think we also need to—

CHAIR: Under the targeted compliance framework.

Senator Cash: There are two parts to this system, and the words that are often used conflate the two systems. I might get the department—

Senator SIEWERT: This isn't coming off my time, is it?

Senator Cash: No, no.

CHAIR: No, it's not coming off your time.

Senator SIEWERT: We all know this.

CHAIR: You've had nine minutes so far.

Senator Cash: There is a difference in relation to a suspension. As you know, once you re-engage, the suspension is lifted.

Senator SIEWERT: I was very careful in my language. I said 'suspensions'.

Senator Cash: You did, but we might just clarify.

CHAIR: That would be very good. It's not coming off your time, Senator Siewert.

Senator SIEWERT: Okay.

Mr Emerson : I am happy to take you through how we're going in terms of penalties and suspensions, if you like, if that's what the question was. Mrs Hill will do that.

Mrs Hill : Just looking at the last year of the jobseeker compliance framework, from 1 July 2017 to 30 June 2018, we saw 394,444 financial penalties applied to 110,876 jobseekers. From 1 July 2018, when the targeted compliance framework commenced, to 31 August 2019, we've seen 24,892 financial penalties applied to 14,816 jobseekers.

Ms Hartland : There's been a 90 per cent reduction. As at 31 August 2019, the figure I've got is that 1.3 per cent of jobseekers were in that penalty zone. I know there is a difference in the things that are being asked here.

Senator Cash: That's what I'm trying to explain to the committee.

Ms Hartland : But that's in answer to your question.

CHAIR: Thank you. I'll go back to Senator Siewert.

Senator SIEWERT: I don't know whether you've had feedback from jobseekers, but I certainly have. When you get a suspension, depending on the timing, it's a financial penalty, because you don't get your payment when you need it, and, when you're living on Newstart, you're living from payment to payment. I understand that we've got a fundamental disagreement here, but the people I talk to who've had suspensions feel it very strongly.

Ms Hartland : We've worked really hard to ensure that there aren't those sorts of hardships in terms of the time frames. I think there are some stats that I can probably grab around—

Mr Smyth : It's about 14 per cent of people that have a suspension that occurs over a payment cycle.

Senator SIEWERT: Sorry?

Mr Smyth : Fourteen per cent of people that receive a suspension have that suspension occur over their payment cycle. There are 14 per cent of people that, in terms of getting a suspension, haven't re-engaged at the time that their payment is made, out of all of the people who are suspended.

Senator SIEWERT: What about when they get suspended just before the payment's due? Is that included in the 14 per cent?

Mr Smyth : Yes. That's right.

Ms Hartland : If you flip it round the other way—I think I'm right in saying this—86 per cent of people who have a suspension do not incur a financial penalty, if you like.

Senator SIEWERT: You would have heard the evidence we got from the ParentsNext inquiry that people, even if they haven't copped it, have to manage their money because they think they are going to cop it. So just because you haven't copped it doesn't mean it's not having an impact on your stress and anxiety level. That's certainly evidence we have received.

Ms Hartland : We understand that. I was just putting on the table what the actual figures are. But I take your point.

Senator SIEWERT: Looking at the suspensions that have occurred in the warning zone, 58.3 per cent are Indigenous people, 55.7 per cent are homeless and 59 per cent are ex-offenders. I'm trying to look at those vulnerable cohorts and see what impact this system is having. That's a high proportion of those cohorts that are copping some form of suspension.

Mr Emerson : Senator, you're correct. It is a feature of the evaluation—and we said this at the last estimates too. It is something we take very seriously. Obviously, we do look at the cohort data to see where there are, for example, differences between cohorts and the way the Targeted Compliance Framework is applied. This would be a feature in the evaluation which is currently being scoped and is currently underway.

Senator SIEWERT: I'll come back to that. Over half of stream C—52.6 per cent—are copping a suspension.

Senator Cash: I think you've got to overlay that the department's basic foundation in terms of the system is actually a better system because it is identifying up-front whether people have an issue—

Senator SIEWERT: But it's not identifying them up-front. 'Up-front' is when you go into the system, not when you've copped three demerit points.

Senator Cash: Based on the information that is often given, as you know, by the varying people within stream A, B and C. The whole point of this system is to identify as early as possible so they don't ultimately get to the part where they are—we'll agree to disagree on this system, and you and I have done that before. This system is about the individual and ensuring they don't go to the penalty phase. Suspension, as you know, is not a loss of money. I appreciate what you are saying, but it is not a loss of money, and it gives the person to identify whether there is an issue and have it rectified.

Senator SIEWERT: I want to go back to the fact that we are not picking up that group of people who for various reasons—I'm going back to that vulnerable cohort who get picked up at the third demerit point, where they get a capability re-assessment. My contention is that those people should not be getting to that point without being picked up. There is a slight change in figures here, but 44 per cent is still nearly half of people who are copping suspensions because there are errors in their plan, because their job plans are inappropriate or because of the disclosure of new information. I hear what you are saying, but my point is that we don't have a system up-front that's identifying people soon enough. If you go to stream C—

Mr Smyth : We've struggled with this, there is no question, because there are significant privacy issues that go to how much information we know about individuals coming into the system versus the self-disclosure regime that currently operates. It does require a lot of self-disclosure. People who don't disclose that they may have a drug and alcohol problem or a disability or some other elements that are a barrier to them being in the system, and therefore their job plan is not appropriate—if we don't have that disclosure, it is very difficult for us.

Senator SIEWERT: I understand, but 63 per cent of people with a disability have got to the point where there are errors in their job plan—and they have already identified a disability. Presumably, these are 'partial capacity to work'. Under the cohorts, in the demographics, for disability, 'errors in job plan' is 63 per cent. How can we get to a point where 63 per cent of people with a disability are getting caught up under 'errors in job plan' when they have already copped three demerit points?

Mr Emerson : They've actually also had three demerits. For some reason, these people have also had a suspension. They have offered a reasonable excuse and it has not been deemed to be a valid reason—

Senator Cash: A reasonable excuse.

Senator SIEWERT: There are errors in their job plan.

Mr Emerson : But that has been sent back and re-tailored to meet their personal situation. That is a safeguard for that person.

Senator O'NEILL: A safeguard!

CHAIR: We have a document to be tabled. Is it the wish of the committee that this document be accepted as evidence? There being no objection, it is so ordered. Senator Pratt.

Senator PRATT: Thank you. I'm just trying to come to grips with how the information in front of us, which has been tabled, relates to my question. Is this the equivalent of the public data that has been released, or is this new data for us today?

Ms Hartland : This is more detailed data. It just goes into that data.

Senator PRATT: And this is not what you have generally and publicly disclosed. Your public data previously hasn't provided this level of detail, has it?

Ms Hartland : I'll start with an explanation and we can add to that. We have provided this level of detail publicly before. What we were getting to is that there is such granularity around this data that we were starting to get to very small numbers of people—ones and twos—and we were starting to worry about some of the privacy implications. So we were concerned about that. Obviously we are happy to provide it to the committee. There are a lot of complexities in explaining around this level of data. We are also concerned about that. Thirdly, the number of times people were actually accessing this data was very small. I think we had 100 hits on our website in total. There is a lot of detail that goes into providing that and providing the context around it. I am very happy to provide it to the committee and talk that through. We took a view that it was better to provide a truncated version of that and we would be happy, on request, to talk through it.

Mr Smyth : Since we have had the new higher level data, with more contextual narrative around interpreting the data up on our website, we had 400 hits within the first few days around that. So it was more digestible for people. As the secretary said, we have provided this level of data to the committee since the TCF's been in operation.

Ms Hartland : For point in time, over time, it becomes very complicated. We are very happy to take you through it line by line.

Senator PRATT: I would be concerned that the government is not trying to hide—as Senator Siewert has highlighted—the number of people and the reasons why jobseekers are returning to the green zone after dropping to—

Ms Hartland : I am absolutely not trying to hide it. As I said, we've provided all this level of detail. It's just that it is very complicated. It wasn't being used. It takes a lot of resource to do that. We just thought this was a better way of dealing with it.

Senator PRATT: One of the issues is that this is a paper version of it. Would you be prepared to email us the spreadsheet of this—because when you download it from the website you can see that—

Ms Hartland : We can send you a PDF version of it.

Senator PRATT: When you download it from the website, you can normally see it in a table format.

Ms Hartland : We can provide an electronic version of this.

Senator PRATT: Thank you.

Mr Emerson : My understanding is that this would be included anyway because—

Ms Hartland : We've tabled it now; it will be part of that. However the committee wants to get it, we are happy to do that.

Senator PRATT: When you have the data on a website, you can add it up, subtract it and look at what is actually going on inside it. But when it's tabled in this form it is very difficult to do that.

Mr Smyth : We probably wouldn't provide an Excel spreadsheet. We' probably provided it in PDF format. There is an issue around data manipulation in all of that.

Senator PRATT: Did you take it down from the website previously because that data was able to be manipulated?

Mr Smyth : No, because we haven't provided it in anything like the Excel spreadsheet arrangement. It is normally in a PDF—accessible reader arrangements that we have to comply with government on.

Ms Hartland : That's the protocol.

Senator Cash: Correct; that's what we're expected to do.

Mr Smyth : Yes, there are protocols.

Senator PRATT: So you will regularly publish this data with us and give us another set of this at the next estimates?

Mr Smyth : We'll provide it to the committee at the next estimates.

Senator PRATT: In a response to an FOI request for detailed compliance data, the Department of Employment said:

Since the commencement of the Targeted Compliance Framework, the department has decided to release data on an annual basis. This allows sufficient time for jobseekers to progress through each zone and the accrual of demerit penalty milestones and ensures the data for the period is robust and meaningful.

In terms of your public data, is the plan, following the inaugural report, just to release it annually?

Ms Hartland : No, it's not. It's actually to release it six-monthly.

Senator PRATT: Based on Senator Siewert's questions before, inside this data, how do we measure suspensions that weren't the fault of the jobseeker?

Mr Emerson : That won't be included in the six-monthly report, but you will be able to see the number of suspensions. I'll just check if you can see it on this report.

Ms Hartland : You can't see it. As you can see, there is a lot of data there.

Mr Emerson : The suspensions won't appear on this A3, but we are happy to answer questions about that.

Senator PRATT: My concern is that truncating in that publicly released data both the suspensions that are purportedly the fault of the jobseekers and those that are not demonises the quantity of people who are seen to have ended up in the red zone. I'm concerned about the public narrative around that. Why are you choosing to do that? Can you not recognise that that is an unfair thing to do?

Mr Smyth : Before people get into the red zone a capability interview and a capability assessment are undertaken to determine whether they are capable of meeting their job plan. If they are capable of meeting their job plan then they do move into the penalty zone. As the secretary said before, only 1.3 per cent of the case load are in the penalty zone. It is a small number. They are people who are deemed to be capable of meeting their job plan requirements but are not doing so, and, therefore, incur a penalty.

Senator O'NEILL: Is that assessment the one that is done by phone?

Mr Smyth : It's done by DHS.

Mr Emerson : The capability assessment is done by DHS.

Senator O'NEILL: Yes, but my question is: is it done by phone?

Mr Emerson : It can be done by phone, but most of the time it is done face to face.

Senator O'NEILL: Can we get the breakdown on that?

Mr Smyth : That would be a question for DHS.

Senator O'NEILL: In our own personal interactions with people, there is a significant difference between when you are in a room observing somebody and when somebody is on the phone.

Senator Cash: I think we would have to refer it to DHS. It is just a different—

Ms Hartland : I will have to take it on notice. I don't have those figures. As Mr Emerson said, the vast majority of those would be face to face. I take your point. We'll get you those answers through DHS.

Senator O'NEILL: Thank you. And I am interested in Senator Pratt's point about when it is something that is the responsibility of the jobseeker and when it is an error by the department.

Senator Cash: Again, you're in the penalty phase. So we'll need to refer it to DHS for you.

Ms Hartland : Just to be clear on what Mr Smyth is saying—and I think we might be getting a bit confused about red zones here, because we have the colour red on this chart—when we talk about the penalty zone, and the 1.3 per cent of the 578,000 people, we are talking about when there is a financial penalty. We are just being careful with the language.

Senator Cash: And they have moved to DHS; they are no longer within—

Ms Hartland : That's after the five demerit point process and then that penalty zone.

Mr Emerson : That's right. When they are in the red zone, that is when they are actually beginning to lose their income support—that is one week, two weeks and four weeks whereas a suspension is paid once they re-engage.

Ms Hartland : So we are talking about 7,400 people out of approximately 580,000 people.

Mr Emerson : That's correct.

Senator PRATT: In terms of the rest of my questions about data, now that we've got the table it's actually hard for me to prioritise those questions. It's quite difficult. I note that in September A Current Affair featured a welfare recipient who, under a drug-testing plan, may lose payments due to his drug use. Can I ask you, Senator Cash, if your office had any involvement in that report to the media?

Senator Cash: I would need to see the report. Do have it in front of you?

Senator PRATT: No, it was A Current Affair, about a welfare recipient losing payments, so I don't have it in front of me.

Senator Cash: Again, I'd need to see it. I don't know what date you're referring to.

Senator PRATT: Okay. If you could take on notice, Senator Cash, whether your office, or the Prime Minister's office provided any material to A Current Affairregarding that report.

Senator Cash: If you could just provide us with the date et cetera of what you're referring to.

Senator PRATT: Yes. It might well be, seeing as you're having to take the on notice—

Senator O'NEILL: How many stories are on A Current Affairabout welfare recipients!

Senator PRATT: Are you aware of the story, Senator Cash?

Senator Cash: I would need to refresh my memory. There are a lot of stories out there. But, if you could just provide me with the details, I could take that on notice for you.

Senator PRATT: So you're not aware of a welfare recipient who may lose payments due to his drug use, under the drug-testing plan—

Senator Cash: Again, this would actually be a separate—

Ms Hartland : If it's around the drug testing, it's probably DHS.

Senator PRATT: No, I understand that, but this is a question to Senator Cash about whether she recalls the involvement of her ministerial office.

Senator Cash: As I said, I don't have enough detail to actually respond, but I'll take it on notice.

Senator PRATT: Sorry, Senator Cash, it just sounds to me like you almost recall it. You're not able to say—

Senator Cash: If you can give me a specific time and date—but I don't have anything in front of me at this point in time. My understanding is that nothing was given from my office to A Current Affair. But, again, we'd have to also refer it to DHS, because this is actually a DHS policy issue. But, if you can provide me with the time and date, I can take it on notice for you.

Senator PRATT: Thank you. So, if I want to ask questions about wrongful suspensions, they'll be covered in this table; is that right?

Mr Emerson : Wrongful suspensions? No. They're not covered in this table, no.

Senator PRATT: Okay. I've got plenty of questions; it's just that the table has really thrown me. How many participants are engaged in jobactive, how many this time last year and how many at September 2013?

Senator Cash: September 2013 would have been Job Services Australia.

Mr Emerson : Yes.

Senator Cash: Are you happy for the department to take that on notice for you?

Ms Hartland : I've got some figures, but not across that particular time frame. As I think Mr Smyth said before, the jobactive case load at 31 August is 615,667 in the figures I've got. It's been gradually declining since February 2016, when it peaked at 790,555.

Senator PRATT: Are you able to tell us now the number of long-term and very long term unemployed across all of those streams now?

Mr Smyth : Yes, I can.

Mr Emerson : Yes, I've got that. For the jobactive case load stream, by stream as at 31 August 2019, I can give you a breakdown of stream A to stream A volunteer, stream B and stream C for LTU, long-term unemployed, first. The first number, 'eligibility to be determined', is 2,271; stream A volunteer, 2,269; stream A, 89,598; stream B, 221,108; and stream C, 87,531. That's just for long-term unemployed. For very long-term unemployed, with eligibility yet to be determined—these are people yet to have their situation confirmed—the number is 1,390; stream A volunteer, 1,510; stream A, 43,448; stream B, 166,851; and stream C, 72,493.

Ms Hartland : Chair, could I just correct the record? Earlier, I said that the drug trial was DHS's responsibility. I just had a message saying it's actually DSS's responsibility. I'm sorry. It was just the wrong acronym in my head.

CHAIR: Thank you.

Mr Emerson : Did you need anything else in addition to that, including the totals? I guess that's just a matter of adding them up.

Senator PRATT: No. I think we can work through that.

Mr Smyth : Could I also clarify? Our definition, in our case load, of long-term and very-long-term unemployed is a bit different from what the ABS data around those people is. Around 28 per cent of our case load at any one point in time is actually working on a part-time basis, but they're not receiving enough income through what they're doing to get off income support, obviously, whereas the ABS definition is the one hour.

Senator SIEWERT: Yes. So helpful—not.

Mr Smyth : I did want to clarify that. That's why you'll see that, when the ABS data comes out about long-term unemployed et cetera, it's quite different to the case load that we actually have within jobactive.

Senator PRATT: Is there any reason you don't include that data inside this table that you've provided for us?

Mr Emerson : That's a good question. The reason is that this table shows only those jobseekers who are part of the TCF—to what the TCF applies. Some of these people may not have the TCF applied to them.

Senator PRATT: Senator Cash, I've found that news article.

CHAIR: Is that the A Current Affair program?

Senator PRATT: Yes. It was on 16 September. The story for the period of 9 to 16 September.

CHAIR: Because it's a television program, I think the minister—

Senator PRATT: I'm happy to forward the email to you now.

Senator Cash: The answer to your question is no, but I'll take it on notice to ensure that it is no. My understanding is that the answer is no.

Senator PRATT: So it's 16 September.

CHAIR: Can you table it at all? Is that possible?

Senator DAVEY: Or make sure a link is provided to Hansard so that we can—

Senator PRATT: Yes. I'm sending the FOI to the chair and the secretary and Senator Cash now.

Senator Cash: Sorry—the FOI?

Senator PRATT: Yes, the FOI decision that shows the date of the—

Senator Cash: Okay. Chair, I'm confused now that we have an FOI involved.

CHAIR: I'm not going to tell you what to do. I'm getting a bit confused myself.

Senator PRATT: I raised, when asking you, that it was in the context of—

CHAIR: I think the minister has taken it on notice. It's probably the best thing to do.

Senator Cash: The answer to the question, I understand, is no, but I'm happy to take it on notice in case I'm looking at something different. I have nothing in front of me.

CHAIR: That would be good. Just to assist the committee and senators, the plan is that we will finish with outcome 1 at 10.30, as per the program. We can then go on to outcome 2 after the morning tea break. I remind senators that we have a private meeting at 10.30, so we've got 12 minutes remaining for outcome 1. Senator Pratt.

Senator SIEWERT: It says here 11.30.

CHAIR: That's tomorrow.

Senator SIEWERT: I beg your pardon.

CHAIR: There might be some questions that senators need to put on notice as such. Senator Pratt, we can give you a few more minutes. Senator Siewert, you might have one more question. If not, we'll take them on notice. I know Senator O'Sullivan wishes to ask a couple of questions. Senator Pratt, over to you.

Senator PRATT: Thank you. I'll let Senator O'Neill take the call.

Senator O'NEILL: I have a couple of quick questions around the franchising.

Senator PRATT: That's next. We're still on jobs and employment services.

Senator O'NEILL: Thank you.

CHAIR: We've got 10 minutes. Senator O'Sullivan, we might just go to you for a couple of quick questions.

Senator O'SULLIVAN: I'm just seeking a clarification, following on from Senator Siewert's question. Sometimes the impression that we're given is that jobseekers that find themselves on suspension—and, ultimately some end up with a penalty; although, as you've pointed out, only a very small number actually end up there—are left on their own to deal with the barriers. Can you explain the kind of supports that are around to help those jobseekers address their issues—the level of actual interaction that they have. It's not just a letter that they get, is it? There are people involved in helping them navigate the challenges and the issues before they actually end up on suspension and with penalties.

Mr Emerson : So each time a jobseeker does not attend an activity—this sounds like I'm coming at it from a deficit approach, but that's the only way to illustrate it.

Senator O'SULLIVAN: Well, they've got barriers; let's face it.

Mr Emerson : That's right. These people would have in their job plan a range of things that they've agreed that they want to do in order to help them find work. If they don't attend an appointment, all they need to do is call up. If they don't call up to say, 'I can't make the appointment' and to reschedule it, they will get a suspension and there'll be a demerit. But there'll be a conversation between that jobseeker and that provider as to why it is that they can't. That will, over time, build a better understanding with the provider. That's after the job plan has been negotiated and tailored to their needs. At the third demerit, they'll have an opportunity to come in and talk about what it might be

Senator SIEWERT: That's not good enough.

Mr Emerson : that's stopping them from achieving—

Senator O'SULLIVAN: So barriers are identified, and let's say they're referred to some counselling, some support, some allied health support.

Mr Emerson : Yes, that's right.

Senator O'SULLIVAN: Is that then counted as part of their mutual obligation?

Mr Emerson : That's correct. During the conversation, if they've identified that they've got potentially drug and alcohol barriers they might be referred to some allied health support. They might be referred to a social worker.

Senator O'SULLIVAN: So that period, when they're in allied health support, is counted as part of their mutual obligation?

Mr Emerson : Correct.

Senator O'SULLIVAN: They're not going to get suspended if they're undertaking counselling or getting support.

Mr Emerson : That's correct, Senator. They won't be suspended for attending drug and alcohol support. They may require some more intensive work to help prepare them for an interview and it might involve an employment fund and spending some money to do that. It might involve helping them with transport. Over time, if things are still going a little bit off track, they might then be connected with some more intensive professional services or professional support. So there's a lot of support provided by providers throughout the whole period while they're going through the Targeted Compliance Framework. And just to reinforce: 60.3 per cent of people remain in the green zone. Very few people, as the secretary said—only 1.3 per cent—are actually in the penalty zone, so the Targeted Compliance Framework is therefore much more targeted at those people who are most wilfully and persistently non-compliant.

CHAIR: Thank you, Senator O'Sullivan. I will hand over to Labor who may wish to cede some time to Senator Siewert—I'll let you work that out amongst yourselves.

Senator PRATT: We've both got an unlimited number of questions.

CHAIR: I'm sure you do—on notice.

Senator PRATT: I might just ask the good people at the table: why is it that for those people who get to a financial penalty stage the number of men in that situation is three times higher than the number of women; and what are you doing about it?

Mr Emerson : Yes, we have noticed this, Senator. It's similar to the answer that I provided to Senator Siewert, which is that it is a really important part of the evaluation. I'm sorry if that's not a satisfying answer, but it is in fact—

Senator SIEWERT: All those men—it's good for the evaluation.

Mr Emerson : part of what we're looking at to develop the TCF into the future. You've given one example of men having a high proportion in the penalty zone. Why is that? So our evaluation will help to inform that.

I'm sorry. Are you able to point to any of those reasons now? I'm sure there must have been some analysis done.

Not at this stage.

Senator PRATT: Are you able to point to any of those reasons now?

Senator O'NEILL: There must have been some analysis done.

Mr Smyth : We're a bit over 12 months into the TCF, but my colleagues just said to me that there is some anecdotal evidence to suggest that younger male jobseekers are more likely to not fully engage with the system. But, again, we need to assess the data. We need to understand a little bit more about this before we actually draw firm conclusions around it.

Senator PRATT: I'm sorry, but everyone knows that young men are hard to engage with. Why don't you have a strategy embedded in the program from the start to address that? There are high school programs, there are mental health programs—they all target this cohort.

Mr Smyth : We do. And we have a program, Transition to Work, that targets young people that the TCF doesn't apply to. That program is achieving very good outcomes relative to jobactive. It gets higher outcomes, but it's really focused around a group of what you might call disengaged youth or youth who have not actually finished school or who have more significant barriers and the like. We have a more targeted approach to that cohort of people. We have one provider per region around that program, and that program is achieving good results.

Senator PRATT: So you've recognised that in the case of young people. Surely you would have assumed, in the case of these capability assessments and their progression through, that you were going to have similar issues and you would have built that into the programs.

Mr Emerson : We provided significant training to providers, and then providers themselves continue to develop really good awareness of their own case load, their own jobseekers, and how to support the particular needs of their jobseekers when they're applying the targeted compliance framework. We've got a large number of people out there who are delivering the services who do a very good job at tailoring the conversations in their interactions with their jobseekers.

Senator PRATT: In other words, you're saying, despite having those programs in place, you're not able to move that massive disparity which, in all cases that I can see in this table, is more than 50 per cent men versus women in some cases. If you look at Work for the Dole activity, you've got 431 women in the first penalty versus 1,500 men, and it's also an extraordinarily large statistic in terms of financial penalties.

Ms Hartland : Senator, as you were saying before—because the employment figures have been so strong, we're getting the complexity around the case load that is there in jobactive. You've seen that reduction in the numbers of jobactive clients and you've heard some of those figures in terms of long-term unemployed. We know that there's a more complex array of issues there that people have. It's why we're also changing the system, the NES system, to look at those more intensive services.

There's certainly much more that can be done, and this system, which has been in place for 12 months, is actually starting to raise some of those issues for us. We're using other programs, mature-age programs, TTW, those sorts of things. We've just changed the rules around TTW to extend the age of people who can access that from 21 to 24 years of age. We're making adjustments all the time. We understand that there are issues that need to be dealt with. We don't have all the answers—I wish we did—but I think we've made better progress with these programs than we have in previous programs. We need to make better progress again, and that's what we're trying to do.

Senator SIEWERT: Can you tell me how many people, who have been suspended over the five, have not re-engaged?

Mr Emerson : You asked that question as a question on notice last time. We have updated data.

Senator SIEWERT: Yes, I'd like updated data.

Mr Emerson : I might ask Mrs Hill to provide that to you. So when you say 'not re-engaged', does that mean they've gone off payment after 28 days and therefore not re-engaged back with Centrelink?

Senator SIEWERT: Yes, I have asked previously but I want the most up to date.

Mrs Hill : From 1 July 2018 to 31 August 2019—this is in jobactive—there was a total of 104,480 people. And 1,472 were from the penalty zone.

Senator SIEWERT: Sorry?

Mrs Hill : At the time, 1,472 were in the penalty zone.

Senator SIEWERT: So you said140,000?

Mrs Hill : I said 104,480.

Senator SIEWERT: And they've dropped off. We don't know if they've got work or where they are? Is that correct?

Mr Emerson : That's right.

Ms Hartland : It could be that they have got a job.

Senator SIEWERT: So over 100,000—

Mrs Hill : Yes, in over a year.

Senator SIEWERT: Have been suspended and not reconnected?

Mr Emerson : Presumably, most would have got employment.

Senator SIEWERT: Presumably, but we don't know. Is that correct?

Mrs Hill : We don't have that information.

Mr Emerson : They would be sustaining themselves through employment, no doubt.

Senator SIEWERT: No, that's an unsafe assumption, particularly when you look at CBT.

CHAIR: It's 10.30 and we do need to break. There are lots of questions, I understand, that you'll put on notice.

Senator SIEWERT: On this particular one, do you have a breakdown? Because there's no point in me asking any further. Do you have a breakdown of the demographic of those people?

Mr Emerson : Yes, we do. We have stream A and stream B.

Senator SIEWERT: Are you able to table that today?

Mr Emerson : Yes.

Senator SIEWERT: Could you table that?

Mr Emerson : Yes, we have that breakdown.

Senator SIEWERT: Chair, can I also say, I understand that we are finishing this now. This is not on adequate time to go through what is effectively nearly a $7 billion program.

CHAIR: These are supplementary estimates. We have the budget estimates which have more time.

Senator SIEWERT: It's still not adequate, with all of the changes that have been made. I understand we are stopping now; I'm not arguing for us to continue. I do think that we should give consideration to spillover, because we haven't got anywhere near any of the programs that this program covers, which deserve examination.

Senator O'NEILL: Labor would support that.

CHAIR: Okay, what we'll do is there will be no further questions—

Senator SIEWERT: Well, there are.

CHAIR: apart from those that are going to be put on notice. I'd like to thank all of the relevant witnesses and wish you good speed home. Outcome 1 is finished.

Proceedings suspended from 10:32 to 10:47



CHAIR: To assist those watching at home, we're going to very briefly reopen outcome 1 for the purposes only of questions in relation to franchising. Senator O'Neill has questions on franchising for about five minutes.

Senator O'NEILL: Thanks for coming back, Mr Cully. I have a couple of questions, as I indicated, about the Franchising Taskforce. What's the budget allocation?

Mr Cully : There's no allocated budget as such. We're managing it within the existing funds of the division and Mr Beasley's branch.

Senator O'NEILL: Do you have an estimate of the costs to date?

Mr Cully : I wouldn't. It obviously involves a team of people working directly on it within the division but also drawing on some other people. There have been some costs in terms of the roundtables and the translation of the issues paper that we released. So we'd have some costs, but I don't know that I'd be able to give you the total cost to date. But we can take it on notice.

Ms Hartland : We can take it on notice.

Senator O'NEILL: If you can take it on notice and provide as much detail as you can on the breakdown, that would be appreciated. In terms of the task force work, when do you expect to finish?

Mr Cully : I think the task force terms of reference indicated that advice would be provided to government before the end of the year, but the task force will also work to then finalise the government response.

Senator O'NEILL: How will the people who are making submissions be protected? Will they remain confidential?

Mr Cully : Yes. We made a conscious decision not to publish the submissions to the task force for those issues of confidentiality, and we would do everything that we need to to preserve the confidentiality of people who've submitted and want them to remain confidential.

Senator O'NEILL: I'm sure you'd be aware of some comments that I've made in the last 24 hours about the lack of transparency around the work that's going on with regard to the taskforce?

Mr Cully : Yes, I am. With respect, I think we have been transparent. Obviously, the minister issued a media release about the task force and its work. We've had an issues paper, and we're out there consulting with stakeholders. We're not holding—

Senator O'NEILL: The product of those consultations and the submissions are not available for general perusal, are they? They're only available to you?

Mr Cully : They are available to us. They are the base informing the development of the work we do and the advice we provide to government. They will influence that, but, equally, we've just spoken about confidentiality and so on. People are giving us information on the basis that it won't be public. It's to inform the work of the task force and the advice to government. But, certainly, those views that have come out in consultations will be reflected, for instance, in the regulatory impact statement that will be issued and the other work of the task force in terms of its advice to government.

Senator O'NEILL: Will there be any breakdown of the sources of your advice?

Mr Cully : I can certainly give you some figures in terms of the number of people that we've met with and the types of stakeholders. As of 17 October this year, we've had 57 bilateral meetings, there were 31 roundtable participants and there were 75 responses to the issues paper. Of those stakeholders, eight were representative bodies, 16 were—

Senator O'NEILL: Sorry, I really appreciate the information, but you're going just a little fast for me and I can't quite hear you properly, so could you speak up as well. Was it 51 bilaterals?

Mr Cully : There were 57 bilateral meetings.

Senator O'NEILL: And 31 roundtables.

Mr Cully : That's correct. There were 75 responses to the issues paper. And, in terms of the types of stakeholders, there were eight representative bodies, 16 franchisors, 40 franchisees, 10 intermediaries and 14 other.

Senator O'NEILL: In terms of those participants, can you give me any further detail, even in confidence, about who submitted?

Senator Cash: We'll take it on notice to provide that to you.

Mr Cully : We'll take that on notice, Senator, and see what we can provide.

Senator O'NEILL: I just put on the record that there's quite a significant difference there, in terms of 75 responses to the issues paper compared with 406 submissions to the parliamentary inquiry, 190 of which were confidential—not for the process but because people were fearful due to intimidation in the sector, and that's why they submitted to that committee confidentially. So I think it's very important for the task force going forward, and for the minister, to understand that the very last thing that we need to have happen here is a reprosecution of the quality of the work or a questioning of the quality of the work of the committee that delivered the unanimous report. And I am a little concerned, looking at the breakdown of representative bodies, franchisors, franchisees, that the most populous group amongst those are the franchisees, not the franchisors. They do not look like they've dominated the task force's work so far. It looks like the franchisors and the franchisees are on a level playing field, almost.

Mr Cully : It was 16 franchisors and 40 franchisees.

Ms Hartland : I have to say that that stakeholder engagement continues as well. And, obviously, we're not working in a vacuum of not seeing that the other work that you've referred to is also being done. But, in terms of your point about that confidentiality which Mr Cully has answered, we're very much aware of that, too.

Senator O'NEILL: The parliamentary committee's report has already got a significant number of recommendations in it. Yesterday, we had people visiting us here in parliament who've continued to sign up to the old schemes that exist, and we've heard the stories of exploitation that has gone on of franchisees and of people who are working in franchises, in terms of wage theft. My understanding of the work of the committee as it was presented was that the task force was to be an implementation task force, not a reprosecution task force. When will the implementation commence?

Mr Cully : Just in terms of the role of the task force, the recommendation itself was that the task force be set up to examine the feasibility and implementation of a number of the committee's recommendations. It was looking at what could possibly be done in terms of some of those recommendations; it wasn't simply about just implementing what was there. So that is the work the task force is undertaking. They're looking at those recommendations and seeing whether they are feasible in practice, how they could be implemented and the most appropriate way for them to be implemented.

Senator O'NEILL: Mr Cully, does it concern you that people today are signing up to franchise agreements that the committee found are profoundly in favour of franchisors, and that they are leading to people losing their livelihoods and losing their homes, with the consequent mental health and health challenges that arise out of that? Does it concern you that that continues because of the delay?

Senator Cash: I'll just jump in there. Just to follow on from what Mr Cully said, it was a bipartisan report, and the first recommendation of the fairness in franchising parliamentary report was to establish the interagency committee, which the government did. Key stakeholders—and I'm more than happy for Mr Cully to provide you with further evidence on this, and you'd know this as well—have indicated to us that, due to the complex nature of the laws, they want us to get it right. And that is what we're doing with implementing the first recommendation of what was the bipartisan report. We are taking a considered approach so that, when we do receive the department's advice, stakeholders do understand that it has had the necessary consideration, and we can move from there. And, in a matter of weeks, my understanding is that we will have that advice from the department.

CHAIR: Thank you. If it's okay, Senator O'Neill, I'll cut it off there.

Senator O'NEILL: Just one question to the minister, if I can. Minister, you'd be aware of the recommendations or comments of Mr Keogh of the ACCC around this matter recently, with very serious concern about the nature of franchising and people signing up to franchising. He gave very frank advice to people to consider in this interim period between the government receiving the report, which was in March and here we are in nearly November. Are you aware of the advice of Mr Keogh from the ACCC to people considering purchasing a franchise?

Senator Cash: I'll get the department to respond.

Mr Beasley : We are aware of the speech that Mick Keogh gave, but I don't have the specifics in front of me at the moment. What was the specific question in regard to that?

Senator O'NEILL: You are aware of that?

Mr Beasley : We are aware of that speech.

Senator O'NEILL: Are you putting out any advice to people to very seriously reconsider signing up to any franchise until there is a new establishment of a safer reality for them?

Mr Cully : It's not our role to give advice to franchisees in this context. Mr Keogh has obviously given that position—

Senator O'NEILL: That's why I directed the question to you, Minister. There is a long lag time between March and now, and people's lives are on the line here.

Senator Cash: The government has been very transparent in the process that it has followed. We have adopted and implemented the first recommendation of what is a bipartisan committee report to us. We have established the interagency Franchising Taskforce. We put out an issues paper, and we've taken you through the feedback that we have to date. The key stakeholders in this have also indicated that they want the government to get this right. For the reasons that actually you have articulated, they don't want the government to rush into something and not properly respond to the issues that have been raised. In but a matter of weeks, we will have the advice from the task force which the government will consider.

CHAIR: On that point—

Senator O'NEILL: That isn't an answer to the question—

CHAIR: No more questions, Senator O'Neill—

Senator O'NEILL: The question was: are you going to take interim action—

CHAIR: Senator O'Neill, please—

Senator O'NEILL: to raise your concerns for franchisees.

CHAIR: Senator O'Neill, they have come back for you. What we are going to do is thank the people from the franchising section for coming back for outcome 1. Run while you can! Thank you very much. This formally ends outcome 1.

[10:59]

CHAIR: We will now go on to outcome 2. By the way, one of the previous witnesses did table a document. Are there any objections to the committee accepting the document as tabled? No? It is so ordered. Can someone please walk me through how VET and skills funding works at the Commonwealth level?

Ms N Williams : I'm happy to walk you through that. There's a range of funding mechanisms that exist at both the Commonwealth and the state and territory level. I think it's important to start off by noting that VET is a shared system. Both the states and territories and the Commonwealth have some level of responsibility for funding the system. Essentially, the Commonwealth provides funding to the states and territories through a range of different agreements, including the National Agreement for Skills and Workforce Development, which is the primary agreement by which we provide funding to the states. Around $1.5 billion annually goes to the states under that agreement. It's an amount of money that has been gradually ratcheting up over the years and is increasing. That funding is essentially to allow the states to run the training system. The states have responsibility for delivery of the system and that includes making decisions around where within the system that funding is allocated—whether it's to TAFEs, or to private providers within the system, or whether it's to subsidies, and the types of subsidies that it's allocated to.

In addition to that, the Commonwealth funds a range of programs directly. These are things like the apprenticeship programs, the apprenticeship incentive programs and a range of other programs that support both employers and students directly. The Commonwealth puts in around $1.1 billion in funding per annum. In addition to that, of course, the Commonwealth provides funding directly to students to support them in their study, via loan arrangements. We're looking at, for example, the VET student loan arrangements that occur at the moment, and things such as trade support loans. Around about $0.5 billion goes into the system annually in the form of loan arrangements from the Commonwealth directly to students.

There's also funding under other national partnership agreements, such as the Skilling Australians Fund, which the Commonwealth provides to states that have signed up to that agreement, directly to target outcomes or achievements around apprenticeships and traineeships and to lift the number of apprenticeships and traineeships in the system. Around $158 million this financial year will go to the states and territories via that agreement.

CHAIR: For layman's language here, does the Commonwealth government fund TAFE?

Ms N Williams : The Commonwealth doesn't fund TAFE, no. The Commonwealth provides funding to the states and territories to fund TAFE. Each state and territory makes decisions around how they allocate the funding we provide them. They also provide funding from their own budgets into the TAFE system or into the private system. Every jurisdiction across the nation differs in terms of the level of investment that it puts into its TAFE system.

CHAIR: You touched on some figures, but what's the annual amount the government spends on skills and training through the different mechanisms that the Commonwealth government uses to fund skills training?

Ms N Williams : In 2019-20, as an example, we spent in the vicinity of $3.4 billion of Commonwealth funding. That goes into the VET system. It's that combination of things: money paid to the states, money paid directly into Commonwealth owned programs, funding provided directly to students via loans, et cetera.

CHAIR: Is that investment growing, or is it falling?

Ms N Williams : That investment has stayed reasonably stable and it's projected to continue to grow over the forward estimates.

CHAIR: So, there haven't been cuts?

Ms N Williams : There's been some movement in funding. You'd be aware, of course, that there were some big changes to the funding levels in the system that arose out of the VET FEE-HELP issues that we experienced a number of years ago. That led to some fluctuations in funding—so, some sharp rises in terms of the amount of money that was going into the system via VET FEE-HELP, and then, of course, some decreases that occurred once we cleaned up the issues we were having with that set of funding streams. There have been those variations that have occurred. If we look back historically, around 2012-13 we were looking at around $3.8 billion being provided by the Commonwealth in the system, and now it's sitting at around $3.4 billion. We project that that will continue to rise over the forward estimates. And, in particular, that the money we provide to the states and territories, via that national agreement that I spoke to you about, is projected to increase by quite a substantial amount over the forwards as well.

CHAIR: How much is it? Are you able to tell us how much it's going to increase?

Ms N Williams : It's around $1.5 billion now. By 2023 it's projected to increase to about $1.6 billion. It continues to increase and it's done that since it was established. From 2011-12 it sat at $1.3 billion and it's continued to progressively increase over the last couple of years.

CHAIR: Am I correct to say, so I understand fully, that state governments are responsible for how that funding is spent?

Ms N Williams : We provide that funding to the states under the agreement, that's right. But the states have flexibility in terms of how they allocate that funding. The key requirements of the agreement are that they allocate it to the VET system, to training, but there are no input or output controls around that.

CHAIR: The federal government can't tell a state how to spend that money? For example, to cut spending to a TAFE or an allocation to TAFE.

Ms N Williams : No. The states do have full flexibility under that agreement to allocate the money wherever in the system they see fit.

CHAIR: So they're the decision-makers?

Ms N Williams : They're the decision-makers around that, that's correct.

Senator Cash: Often you'll hear the rhetoric Commonwealth equals TAFE. The Commonwealth provides the funding but the states administer the funding. The decisions in relation to TAFE are made by the states and territories under the national agreement on skills development, the NASWD. Does that clear it up?

CHAIR: Yes.

Ms N Williams : That recognises that it is a federated system so there's shared responsibility between the states and Commonwealth. The states do put their own budget funding into the system as well. In addition to the money that that the Commonwealth provides the states do allocate their own funding to the different elements of the system, including TAFEs or private providers.

CHAIR: There's been a bit of media commentary around the traps about cuts to TAFE. This is to clarify the point, who would be responsible for those cuts to TAFE if it's not the Commonwealth government that directly funds the TAFE?

Ms N Williams : As I was saying, states and territories have responsibility for allocating their funding within their jurisdictions, including allocating that funding to the TAFE system or to other parts of the system such as private providers or subsidies et cetera.

Senator Cash: The Commonwealth provides, is it the $1.5 billion, into the agreement?

Ms N Williams : That's correct.

Senator Cash: And then it is up to the states and territories what they do with it, including TAFE or not TAFE.

Ms N Williams : Or other things. Yes.

Senator O'SULLIVAN: What percentage of the VET system, the training, is provided by TAFE compared to—

Senator Cash: Do you mean versus other providers?

Senator O'SULLIVAN: Versus other providers, other RTOs.

Ms N Williams : The numbers do vary. I might have some colleagues here who can provide some advice on this if that's possible. We do have numbers around the numbers of students that are using the TAFE system versus the private system, but I think it's fair to say that the numbers are kind of skewed towards the private system in a large part. Maybe Mr Hardy might be in a position to provide some exact detail around that question.

Mr Hardy : Across the whole VET system there's around about four million students all up undertaking vocational education and training, and the TAFE system represents around about 16 per cent of that.

Senator O'SULLIVAN: I understand that it's a demand-driven system. Can someone describe to us what that means? Is it that students get to decide where they go? Is that right?

Ms N Williams : Yes, largely. There are subsidies in place, of course, where state governments subsidise particular qualifications or courses that can change the way in which students behave in the system. But, yes, largely students make choices around the types of courses that they study, the provider they will go to to study that course. Like Mr Hardy said, there's a real split between the public and private provision. A lot of students are doing a range of courses. They may not necessarily be doing full qualifications. They could be doing part qualifications or they could be doing short courses, and they may do a good proportion of those courses in either the public or the private system.

Senator O'SULLIVAN: If an employer or an industry group is an RTO and a student decides to go there rather than to a government-run TAFE, media commentary seems to say that that's somehow a cut to TAFE. If someone's choosing to go to a private provider, and there are examples of where those providers are actually run by industries and employers, is that a cut?

Ms N Williams : That explicitly is not a cut, no. Students do make choices based on a range of factors; it's true. They'll choose based on the type of course that they want to do and the quality of the course that's being offered by the different providers that are available to them. They'll look at the cost of the course and government subsidies. Whether or not they're able to access things like the VET Student Loans arrangement that we have in place is also a part of the decisions that the student will make. But you're quite right: there's a high level of student choice in the system.

CHAIR: You mentioned apprenticeship programs. What does the Commonwealth provide to support employers, and is this demand driven?

Ms N Williams : The Commonwealth provides funding for incentives directly to employers. I might get some of my colleagues to talk a little bit about the numbers. We have an incentives program that sits at around $393 million per annum in terms of the funding that is set aside to be provided to employers for incentives. This is a demand-driven program, so obviously it depends largely upon the interest and the demand that comes from employers as to whether they are keen to employ a person in that program or not.

CHAIR: Senator O'Sullivan has a follow-up question.

Senator O'SULLIVAN: Are you able to explain what have been the major items of reduced government expenditure in the skills space?

Ms N Williams : It depends a little on the time frame.

Senator O'SULLIVAN: I think you mentioned VET FEE-HELP before.

Ms N Williams : Yes, VET FEE-HELP is obviously an area where there have been significant changes in funding. We don't need to go back through the history of that, but, as you note, Senator, that was a big and significant change. There were also changes made to the apprenticeship program—I might ask Mr Palmer to talk to that a little bit—that were designed, I guess, to clean up some of the issues within the program that related to existing workers. They were quite large funding changes to the program.

Mr Palmer : In the period 2012-13 there were a number of changes made to the program. Prior to those changes, almost all apprentices attracted an incentive. The changes were that only apprentices that were on the National Skills Needs List attracted incentives if they were an existing worker or if they were part time, and only apprentices or trainees that were full time attracted the incentive. As a result of that we saw quite a dramatic decline in the number of people, particularly in traineeships, because the incentive program wasn't there to provide funding to employers to undertake trainees in that capacity as existing workers.

Senator O'SULLIVAN: Senator Cash, yesterday we heard reports of a $900 million cut. Can you explain to us where that figure came from?

Senator Cash: It's not a cut, to be very clear. Labor Party members saying something does not make it true. This is a demand-driven program. Good governments actually will ensure that they're budgeting for more than what the demand is projected to be, to ensure that every single person who puts their hand up and says that they want to be part of it is able to do so. The demand was met by the program. It is an underspend. That is all it is. But I also think you have to properly put it into context in terms of what the Labor Party, when they were in government, ripped out of the system. The biggest fall in apprentices actually occurred under the former Labor government. I think it was 110,000—and I'll get the department to give you the time frame for that. But also $1.2 billion in employer incentives was ripped out of the system. I think the department have articulated for you how VET is funded, what the responsibility for the states is versus the Commonwealth. But, in particular, every well-resourced demand-driven program meets demand, which is exactly what happened in this case.

Senator O'SULLIVAN: There were examples of the system previously where it was exploited—

Senator Cash: The VET FEE-HELP system?

Senator O'SULLIVAN: VET FEE-HELP, the Tools For Your Trade program.

Senator Cash: Correct.

Senator O'SULLIVAN: These programs weren't successful.

Senator Cash: In cleaning up what was considered by some commentators to be one of the biggest policy disasters of all time, the VET FEE-HELP system—and I'm happy for the department to take you through what occurred—there was a spike in the number of people going into the system, because they were literally being signed up to a VET course for a computer, and there was going to be no outcome at the end of it. When you step in yet again and clean up a mess that has been created, the demand obviously goes down, because the dodgy providers were taken out of the system.

Senator O'SULLIVAN: And it was exploiting vulnerable people too, wasn't it?

Senator Cash: Unfortunately the evidence is all there. There are so many different stories you could tell. Signing up someone to a course in exchange for a computer, I would argue, is not a good business practice and in particular is not good for the vulnerable student, who ended up with nothing other than a debt, because they still incurred the debt. When we came into office, we put in legislation to ensure that, if these students had realised the debt, they would be able to apply for the Commonwealth to come in and waive the debt.

Senator PRATT: The calculations in your annual report show that $919 million budgeted for education and training programs since 2014 was not spent. Is that correct?

Senator Cash: We just need to clarify this. Yesterday the department was shown a table that we could not find anywhere, but I think I've just articulated the response to that question. This is a demand-driven program. The allegations that were being put out yesterday—by the shadow minister, I believe—that there was a $900 million cut are absolutely false. It is a demand-driven program and the demand for that program was met.

Senator PRATT: You will admit, therefore, that there's an underspend of more than 17 per cent since 2014?

Senator Cash: It is a demand-driven program. Like any demand-driven program, it meets demand, regardless of whether the Labor Party or the coalition are in office. A demand-driven program is a demand-driven program.

Senator PRATT: But that's not what you promised in terms of expenditure. You can spend that money on investing more in the existing places. You can spend that money recruiting more people into the system.

Senator Cash: This is money that is allocated to a demand-driven program over a period of time. We'll call it the forward estimates. The demand for that program was met. I don't know how much clearer I can be in relation to demand-driven programs.

Senator O'SULLIVAN: No-one was turned away.

Senator Cash: Absolutely. The demand was met.

Senator PRATT: We've had what has been a more formal cut in terms of the $3 billion from TAFE—

Senator Cash: Hold on. Chair, the underlying premise of this statement that has just been made is false. I'm happy to yet again have the department take the committee through what funding the Commonwealth provides, the additional funding we have provided via the most recent budget into skills—

CHAIR: Would that assist you, Senator Pratt?

Senator Cash: Just because someone says something does not make it true.

Senator PRATT: That's fine. I'll try to refrain from statements that I know will politicise our discussion, so that we can get into the details.

Senator Cash: Yes, but I just want to make it very clear: just because someone calls something a cut and it is printed by a journalist does not mean it is true. The $900 million from yesterday is the perfect example of where that is just a deliberate misrepresentation of what occurred, for political purposes and nothing more.

Senator PRATT: Labor compiled that table. That's the source of it. But in fact the underspend—

Senator Cash: You compiled it. Can I just ask then: was it a table from an annual report?

Senator PRATT: Yes.

Senator Cash: So you physically took that from the annual report. You just said Labor compiled the table.

Senator PRATT: That's correct. Based on the history of the—

Senator Cash: Could you refer us to the particular page of the annual report? We could not find that table in an annual report yesterday.

Senator PRATT: It's a compilation of the annual reports in your education and training programs since 2014.

CHAIR: So it's not a single table from a single annual report?

Senator Cash: It was made up.

Senator PRATT: It's not made up. They're using the department's figures.

Senator Cash: Can you refer us to a specific page in the annual report so we can all have a look at that table.

CHAIR: I think we're asking for pages, though. There were a number of—

Senator PRATT: They'll have different pages in different annual reports.

Senator O'SULLIVAN: So you took it from here and there and put it—

Senator Cash: Correct. It was made up.

CHAIR: To assist the committee perhaps we could get those pages of the different annual reports.

Senator PRATT: We've got the table here. It's taken from your annual reports. It says—

Senator Cash: Could we just confirm it's actually not taken from the department's annual report.

Ms Hartland : It's certainly not from the employment annual report. We did have difficulty replicating it. If you wanted to step through the individual items, when we tried to look at those programs, I think most are demand-driven and some are cost recovered. I think we have a whole comparison of apples and oranges.

CHAIR: From what I understand, this table is not a single table on a page of an annual report from a particular year; this is a table that our good friends in the Labor Party have compiled from a variety of sources.

Senator PRATT: No, I can tell you how we've done it. One year's annual report will put forward your actual expenditure from the annual report, and we've compared that with the variation from the allocated funding—

Senator O'SULLIVAN: To get a story.

Senator Cash: This is the issue—

Senator PRATT: which is also from your annual report data. You have to compare that, year on year.

Senator Cash: You have made up a report.

Senator PRATT: No, we haven't. We've subtracted your allocated funding from the actual spent funding.

CHAIR: I think we're comparing apples and pears and making fruit salad here.

Senator Cash: It is a demand-driven program.

Senator PRATT: Of course. I'm not denying that you might characterise it as a demand-driven system.

Senator O'SULLIVAN: Because it is.

Senator Cash: It is a demand-driven program.

Senator PRATT: Does this mean you're going to cut the budget in the future in these areas or are you going to leave that pot of money in the expectation that you don't think you want to meet demand?

Senator Cash: I think there's a fundamental misunderstanding in relation to what a demand-driven program is.

Senator PRATT: I understand what a demand-driven system is.

CHAIR: To assist me, perhaps you could take us through what a demand-driven program is.

Senator PRATT: We've lost enough of our time to the government already.

Senator SHELDON: This is my first opportunity to go to estimates in the last few days. This is the first estimates where I've had so much time that's taken up by the government. This is an opportunity for the crossbenchers and for Labor to ask questions of the government and the bureaucracy. You have those opportunities yourself with your own minister. This is part of the transparency issue, the transparency problem that you have in this committee. You shut people down who try to hold the government to account.

CHAIR: Senator Sheldon, I am speaking as the chair, so don't try to talk over me. I come from a large Catholic family; I can talk over anybody. I'll go through the timings on my little bit of paper.

Senator SHELDON: I have not attended any other committee where this approach has been taken as chair.

CHAIR: You've experienced before how I handle these committees. I'm more than happy to go through the timings of what happened in the previous session, if this assists the committee.

Senator SHELDON: You're taking up time so there's less information and there's less opportunity to ask questions of the minister and the government.

CHAIR: The government had 21 minutes and 26 seconds, Labor had 50 minutes and the Greens had 18 minutes. If you'd been here from nine o'clock, you would know that I'm very fair in how I break up the timing of the questions, and Labor and the government have not—

Senator SHELDON: This is the fourth committee I've been to, and the other senators from the government—

CHAIR: Please, talk over me; I'm happy to keep on talking.

Senator HANSON: Gentlemen, this isn't debating. The chair is in control.

CHAIR: Thank you. When the chair is speaking, don't try to talk over, please. You've experienced my committees before. I'm very fair in how I allocate the questions and I always ensure that the opposition has more time than the government. We're here trying to ascertain certain information. The question was not a political question; it was assisting the ascertainment of that information, and you'll find through the course of the day that that will be the case. If you'd been here from nine o'clock, you would understand that. Please don't try to play your political games with me, because it does not win any points out there.

Senator PRATT: Thank you very much. You characterise this as a demand-driven system. Is that why there are 150,000 fewer apprentices and trainees than when this government first came to office?

Mr Palmer : As I was explaining a moment ago, the decline in apprenticeship numbers is largely driven by the changes in 2012 and 2013 that reduced the number of incentives made. That saw quite a dramatic decline in apprenticeships. If we look at, for example, existing worker commencements, and I'll just go back and get myself a table—not on the NSNL, not in trade, they were running at about 22,000 per quarter in 2010. In 2012, prior to the reduction, they peaked at around 40,000 per quarter. They fell quite quickly as a result of those policy changes and they're now running at about 3,000 per quarter. In that 2012-13 period a number of changes were made that impacted on the take-up of apprenticeships and particularly of traineeships, rather than trade apprenticeships.

Senator PRATT: Are you concerned? What are you doing about that lack of take-up? You're the government.

Senator Cash: Thank you for the opportunity to respond to that. In the first instance, you needed to clean up VET FEE-HELP. Certainly all of the feedback that I received when I first commenced in the portfolio was in relation to how that had very much ripped the confidence out of the VET system. Progressively looking at the different policies that you can put in place to incentivise both employers—and I'm happy for the department to take you through those policies—

Senator PRATT: I want to ask more specifically about the $800 million allocated for the Apprenticeship Support Network, of which more than $200 million is unspent, with $50 million of that in the last year alone.

Ms N Williams : You're referring to the Australian Apprenticeship Support Network?

Senator PRATT: That's right. I note that your annual report lists positive growth in apprenticeship completion rates from the previous year as a key outcome. I'm just seeking your confirmation that that was not achieved in the 2018-19 financial year, with a completion rate of just 56.7 per cent.

Ms N Williams : AASN, like many programs we're talking about here, is highly reliant on demand and the number of apprenticeships that come through the door. There's an element of that program that relates to servicing of individual apprentices and individual employers. Like all of the programs that we're talking about, as the demand changes, the amount of funding that's required in order to service those apprentices can change from year to year. Mr Palmer may have more to add to that.

Mr Palmer : No, I think that's a fair description.

Senator Cash: Senator Pratt, you also asked in your question what the government is doing. I'm happy for the officials to take you through the skills package—the commitment in skills that was in excess of half a billion dollars—the target to get 80,000 new apprenticeships over the next five years and the impact of what has been a very successful rural and regional wage subsidy for apprentices and the take-up in relation to that. There is a huge package of work being undertaken by the government—

Senator PRATT: I don't need you to take me through that.

Senator Cash: Sorry, you actually asked what the government is doing.

Senator PRATT: I'm just mindful of the time. My concern is that we have a low completion rate, just 56.7 per cent, while there's an underspend of some $50 million in the support networks. It seems surprising to me that you wouldn't take the extra money that's sitting there in the underspend to directly invest to lift that completion rate. Why haven't you done that?

Ms N Williams : It might be useful to talk a little bit about how the AASN model operates. AASN providers are paid to support apprentices through the system.

Mrs Lynch-Magor : The AASNs are a demand driven program. Apprentices work with AASNs, and the AASNs support both employers and apprentices from the commencement of an apprenticeship and throughout the lifetime of the apprenticeship. Some apprentices need more assistance than others. Some need support such as making sure that they're choosing the right apprenticeship and understanding the contractor training. Some require quite strong pastoral support and mentoring. Also, they're quite often very young people going into apprenticeships. I guess what I'm trying to illustrate is that the support per apprentice can be very different.

Senator PRATT: I know, and clearly you've got some of those programs in place. But how can you explain, then, a completion rate of just 56.7 per cent?

Mrs Lynch-Magor : I would also draw your attention to the recent review—I can't talk about it too much—of the AASN provision of service. The services have been re-tendered. The re-tendered services took into account the policy review of AASN services. For example, the review suggested that what we needed to do was focus a little bit more on gateway and in-training services—that entry point. In the new contract round, with the new contracts that we will have in place, we're looking to reflect the services more effectively for both employers and apprentices.

Senator PRATT: In that context, are you going to continue with this underspend, or are you going to invest that extra funding in these new programs?

Mr Palmer : It might be helpful if I explain some of the rules under which we operate. Because it's a demand driven program, it's not money that we can reapply to other purposes. We have to spend the money for AASNs on AASNs. We can't spend it on something else that takes our fancy or something outside of the contract with the AASN provider.

Senator Cash: And that's across government. They are the operating rules that people work under.

Senator PRATT: I understand that. What I'm trying to come to grips with is the extent to which this becomes a deliberate strategy by government to hide the fact that you're overpromising on training places and under-delivering on the outcomes.

Senator Cash: I'll need to reject the premise of the question. We had the Joyce review and we announced a skills package in excess of half a billion dollars in the budget, which we—

Senator PRATT: It won't help if you don't spend it.

Senator Cash: Well, half a billion dollars is spent; it's all been allocated. I could get the department to take you through that allocation of in excess of half a billion dollars.

Senator PRATT: It's all been allocated here, but you're not spending it.

Ms N Williams : I think it's an important distinction to make here. It's not money that's been allocated. It's an estimate of the amount of money that we think we will need in order to meet the demand in the system. There will always be an element of additionality built into that in terms of a bit of headroom to ensure that if demand increases then you've got enough money to provide to employers and students et cetera. But the way in which those estimates are worked through is to allow us to be able to have the flexibility to increase funding where there's additional demand—

Senator PRATT: Clearly you might not want to be seen to be cutting education funding, so are you now going to start assuming an underspend in each area?

Senator Cash: Again, Chair—

Senator PRATT: You understand my question, though?

Senator Cash: I don't want to get into the cutting of education funding, because that's actually—

Senator PRATT: You've had a $200 million underspend, out of the $800 million, with more than $50 million of that unspent, and this seems to be happening year on year on year.

Senator Cash: Again, I think that the department is giving evidence as to what a demand driven program is. The department officials—based on the evidence that I've heard—have clearly taken the committee through what funding is provided by the Commonwealth for skills. There seems to be either a misunderstanding—

Senator PRATT: No, I don't misunderstand. You could spend more of that money within the demand driven system by allocating more money per head or per course in order to lift the quality rates and the completion rates that you're talking about.

Ms N Williams : The way we look at this is: we need to have sufficient money forecast within the budget to accommodate increases in demand, and each program does have that. If we take the Apprenticeships Incentives Program as an example, there's about a 10 per cent headroom in there, in the numbers that you've been quoting to us. We consider that to be reasonable. You do need a bit of money in there, should demand increase, to be able to cover the funding that you'll need for employers and apprentices et cetera. It's not unreasonable or unusual to have those sorts of fluctuations in demand driven programs. By their very nature, they're going to move around a lot. That's what happens across government in a whole range of demand driven programs. We do need to ensure that we have enough funding within the budget to cover those fluctuations, which is why you see, over various years, very different expenditure patterns against each of those programs.

Senator PRATT: Why do you keep over-budgeting?

Ms Hartland : Maybe I can talk a little bit about it from a budgeting point of view in terms of the rules. I've got two options in terms of providing advice to government—what the Department of Finance will accept. One is that we provide a bit of that contingency and the 10 per cent on top of programs, which is—

Senator Cash: Which is across the board, though. It's across portfolios.

Ms Hartland : We'd look at the contingency.

Senator Cash: Yes, but it's cross-government, isn't it. It doesn't matter who's in office.

Ms Hartland : Yes, that's right. This is just general—

Senator Cash: This is the way it operates.

Ms Hartland : in a demand driven program. My second option is that we utilise that and then have to go back to government, which makes it hard in a budgeting process.

Senator PRATT: Yes, I understand those elements of how government works. But it seems to me that you haven't illustrated one iota of concern for what look like systematic underspends. Has the department been directed to take any action in relation to these underspends?

Ms N Williams : If you look at the decisions that were taken through the budget, in terms of the skills package, there are a range of initiatives there that relate to these programs, particularly programs that are designed to increase the number of apprenticeships and traineeships that are able to access incentives through the system. These programs are designed to work towards encouraging employers to take on more apprentices. Our view is that, as those programs start to roll out, we'll start to see a much higher uptake of apprenticeship and traineeship incentives, and that will work towards ensuring that there is more money spent, essentially, in these demand driven programs, because demand will be rising.

Senator PRATT: When I talk to employers in the manufacturing sector, they're crying out for skilled workers. Why is demand so weak that you can't meet your funding allocation, and what headroom are you planning for next year's budget, given these year-on-year underspends?

CHAIR: How long do you think you've got left, Senator Pratt? I know you want the rest of the day.

Senator PRATT: Senator Smith has at least 10 minutes on this.

CHAIR: Senator Hanson has five minutes. Forty-five minutes was allocated for the session. Do you want to stretch it out to 55 minutes?

Senator Cash: Are we also having a spillover?

CHAIR: I haven't received the letter yet. That's why we'll stick to the program. If we're going to have a spillover, there's no point running too late. We've got 10 minutes left if we are going to spill over—five minutes for Labor, and then, Senator Hanson, we'll go to you.

Senator MARIELLE SMITH: I want to ask about the South Australian Enterprise Scholarships. Can you talk me through where the $24 million in funding for this program is provided for?

Ms N Williams : I'm happy to walk you through that, and, Mr Palmer, you may be able to provide some more detail. There is some residual money that sits in the program to fund the existing scholarships. Some of that funding was redirected in the budget to set up a new scholarship program which sits a bit more broadly. It's not just limited to South Australia but is available to a whole range of students across the nation who are keen to undertake a VET qualification.

Senator MARIELLE SMITH: Rather than your colleague going through that in more detail, I'm happy to take that on notice. I'm seeking the year-on-year allocation, where that's provided for. How much of the $24 million in allocated funding on this program has been spent?

Ms N Williams : Mr Palmer may be able to provide some detail on that in a second. What I was mentioning is that we did redirect a proportion of that funding in the budget to a new Commonwealth scholarship program that was around $8.17 million. And that redirection of funding is to pay for 400 scholarships, essentially, for young Australians. My colleagues may have some more detail around expenditure under the residual program. Remember, there is still a program in place purely targeted at South Australia and people undertaking qualifications in South Australia.

Senator MARIELLE SMITH: So we've got $8.1 million redirected. I want a sense of what's been spent on the existing program, to date.

Mr Palmer : Of the $24 million you're speaking of, after the redirection, there is $16.2 million in the program. Of that amount of money, the actual amount spent is $10.9 million. With what's remaining, there are commitments for a further $1.7 million and there are remaining funds leftover at the moment.

Senator MARIELLE SMITH: So $10.9 million has been spent to date?

Mr Palmer : That's correct.

Senator MARIELLE SMITH: But there's $16 million left, after what has been redirected to another program. So $1.7 million of that is expected to be spent on commitments going forward?

Mr Palmer : So uncommitted is $3.4 million.

Senator MARIELLE SMITH: We're talking about a figure of $10.9 million that's been spent on this program to date.

Mr Palmer : To date.

Senator MARIELLE SMITH: So $10.9 million out of $24 million which was allocated.

Ms N Williams : And $3.4 million is left in the program.

Senator MARIELLE SMITH: So about half has been spent to date, or will be spent, on this program?

Ms N Williams : Yes.

Senator MARIELLE SMITH: Of the money that's been spent to date—that $10.9 million—how much was spent on administration?

Mr Palmer : I'd have to take that on notice. I don't have that.

Senator MARIELLE SMITH: That's fine. I'm also interested in how much was paid to contractors and third parties?

Mr Palmer : We'll take that as well.

Senator MARIELLE SMITH: How much was given as actual scholarships? You can take that on notice.

Mrs Lynch-Magor : We'll take that on notice, but can I clarify: do you mean the number of scholars or the amount of money per scholarship?

Senator Cash: We can give you both, if that would assist.

Mrs Lynch-Magor : We'll give you both.

Senator MARIELLE SMITH: There are meant to be 1,200 scholarships, so could I have the funding there. I'm also interested in how many scholarships were provided.

Mrs Lynch-Magor : Some scholarships are more expensive than others.

Senator MARIELLE SMITH: Could I have the breakdown.

Ms Hartland : I think you're interested in how much goes into the hands of the actual scholars?

Senator MARIELLE SMITH: Yes, and I'm also interested in the number of scholarships that were provided. Do you have that figure with you? I know the aim was 1,200. How many—

Mrs Lynch-Magor : Yes, I do. In round 1,we had 351 scholarships that were accepted, and in round 2 we had 339 scholarships that were accepted. That gives us a total of 690 scholarships.

Senator MARIELLE SMITH: So 690, but you had hoped to give 1,200? Is that correct?

Mrs Lynch-Magor : We had made provision for up to 1,200 scholarships, over—

Ms N Williams : Remember, as Ms Lynch-Magor noted, that different qualifications will cost different amounts, because different qualifications are a different length et cetera. But we've also put $8.1 million of that funding into a further 400 scholarships that are more widespread—

Senator MARIELLE SMITH: That's not a program just for South Australia, is it?

Ms N Williams : No, they're a national scholarship.

Senator MARIELLE SMITH: As a South Australian Senator, you can see that I'm interested in where this goes into my state. But that really makes sense, doesn't it: you've allocated about half the number of scholarships that you provided for, and you've spent less than half of the amount of money that you've funded for. I know that there's a difference in values, but that sounds right.

Mrs Lynch-Magor : Yes.

Senator MARIELLE SMITH: Can you tell me how many applicants there were in each round?

Mrs Lynch-Magor : Yes, I can. In round 1, we received 1,188 applications. In round 2, we received 748 applications, which makes a total of 1,936 applications.

Senator MARIELLE SMITH: That seems like a lot of applications and not many scholarships awarded.

Mrs Lynch-Magor : There were criteria. Yes, there were a lot of applications received, but, as you'd understand, not all applications were compliant or met all of the criteria for receipt of a scholarship. There were also some scholars, of course, who withdrew.

Senator MARIELLE SMITH: Have you got any data on how many took up employment in South Australia following their study or placement? As you would understand, youth unemployment in South Australia has worsened since this program was announced, so it's something that I'm very concerned about, as a South Australian Senator. Do you have any data on how many took up employment and on the impact of the program? I'm concerned that there has been a considerable underspend—only half of the number of scholarships which are provided for have been given. There are a lot of applicants and it's a demand driven program, so I'm struggling to see the effectiveness. I'm happy for you to take that on notice, but could you just give me an answer now on whether you believe this program has actually achieved success in improving employment outcomes for young people in South Australia?

Mrs Lynch-Magor : I think I'd have to take that on notice. We were looking at such a range of occupations and scholars across such a range of areas that I wouldn't like to speculate. But I'm really happy to take it on notice, and we can give you a degree of granularity as well for the outcomes of the scholars who finished their study and those who, perhaps, ceased halfway through and why, and some of those sorts of things. We're happy to take that on notice.

Senator MARIELLE SMITH: As much data as you can give me would be great. But perhaps the minister has an answer on that one? Do you have something you can add?

Senator Cash: No, that's fine. The department have taken it on notice—they'll get you all of the data.

Senator MARIELLE SMITH: You can't give me anything about youth unemployment in South Australia, and whether you think that the program has been effective?

Senator Cash: It was actually the previous outcome, but I'm more than happy to take you through all of the programs that the government has in place to get youth off welfare and into work—

Senator MARIELLE SMITH: That's not what I asked. I'm specifically interested in this program, and if this program's had an impact on youth unemployment in South Australia?

Senator Cash: I think that any program that will empower an individual, which is what this program is doing, as you can see, and there are so many putting their hands up to get the scholarship—

Senator MARIELLE SMITH: But they're not getting the scholarship. Only half of them—

Senator Cash: There are criteria, but the department will provide you with the evidence. We don't have the evidence with us here at the moment.

Senator HANSON: I'm very interested in TAFE and apprenticeships, because I don't believe that everyone should be pushed on to further education at universities. For those who are not academically minded, this should be provided for them. My concern is that TAFE colleges are closing down and we're not providing enough TAFE colleges—for anyone of any age. You did state that $1.5 billion—correct me if I'm wrong—

Senator Cash: That's correct.

Senator HANSON: comes from the federal government to the states.

Senator Cash: Yes.

Senator HANSON: What proof of accountability for that money is put onto the states to ensure that that money is spent wisely and is put into the TAFE colleges?

Ms N Williams : As I said, around $1.5 billion is provided by the Commonwealth to the states and territories under the National Agreement for Skills and Workforce Development. The purpose of that funding is to allow the states to run the training system, and that includes where they allocate funding in terms of private or TAFE provision. The agreement is very broad. It gives the states broad flexibility to allocate that funding as they see fit. So that balance, or that mix, of funding between TAFEs and private providers and other parts of the system sits with the states and territories. It's their full responsibility around how they do it.

Senator HANSON: So they don't answer to you at all with regards to it? I've heard concerns from people that the college won't get paid—whether this is from the states—unless the students are passed. So the students are pulling the stunt on the teachers that they want passes before they get paid.

Ms N Williams : Arrangements differ from state to state. Different jurisdictions have different requirements in place around those sorts of things.

Senator HANSON: But don't you think that if the federal government's giving $1.5 billion there has to be accountability, if people are being pushed through the system?

The minister's right about the VET bill to the Commonwealth, because it blew out to over $6 billion in 2015 over a matter of six years—from virtually nothing to a blowout. There's not enough accountability for taxpayer dollars. That's what I'm asking. If we have TAFE colleges closing down so that people can't go and their education there and are held to ransom, I think that $1.5 billion should be made accountable.

Senator Cash: I'll let Ms Williams answer you from the policy perspective, but you actually raise a very good point. This was an agreement that was negotiated in 2012, under a former Labor government. The Productivity Commission will be undertaking a review of this particular agreement and reporting back to government next year, and certainly the states and territories have input into that. But, as a Commonwealth government, I am currently working with skills ministers—and, I have to say, very productively; they've come on board—through the COAG process and the chief ministers to have a look at how we can improve the system for the reasons you've articulated.

Senator HANSON: Good, I'm pleased to hear that because—

Senator Cash: Ms Williams wants to add something.

Ms N Williams : I was just going to add that the raft of reforms the government brought through the budget that related to the establishment of a national skills commission are designed to actually give the Commonwealth better sight over its investment into the system and to give us a better way of looking at how we allocate that investment. So I think that it's fair to say that the government has recognised that this is an area where the Commonwealth needs to be more actively engaged and focused.

Senator Cash: Certainly at the COAG meeting some months ago, the communique that was issued by first ministers—the Prime Minister, the premiers and the chief ministers—did acknowledge that the VET system does need reform. We all have the end goal, which is that the student needs to get the best possible education to give them the qualification that industry actually requires.

Senator HANSON: On the apprenticeship scheme—you know I am passionate about this, and I'm glad to see that the government took up my initiative with the apprenticeship scheme. So I just want to ask you about that. Under that scheme, the government pays 75 per cent of the first year's wage, 50 per cent of the second year and 25 per cent of the third. I understand that that was rolled out in January of this year and 1,630 apprentices were taken up. It was so successful that you rolled out another program in July. Was that all taken up—the same program?

Senator Cash: The department will have the figures for you.

Mrs White : As you said, Senator, round 1 was rolled out on 1 January, and I can let you know that in that round 1,629 places were taken up. There are still a couple of places left in the Northern Territory. There was no time limit to when the places had to be taken up. We expect those will be taken up in due course.

Senator HANSON: Under the stipulation, it was apprenticeships in rural and regional Australia.

Mrs White : That's correct. All of the Northern Territory is regarded as rural and regional Australia.

Senator HANSON: So you've still got a couple of places left?

Mrs White : We have a couple of places in round 1 only in the Northern Territory.

Senator Cash: But you are right that the majority were taken up—in fact, it was within a very short period of time.

Senator HANSON: Three weeks, I understand.

Senator Cash: This is additional apprentices, as you know.

Senator HANSON: So you rolled out the program again in July?

Senator Cash: Yes.

Mrs White : On 1 July, we had phase 2 of the program. As at 30 September, 1,558 places had been taken up. We still have 11 in what I would regard as a due diligence check, where we are confirming that the arrangements are satisfactory, and there are still 63 places remaining in round 2. We have places for non-group training organisations only in the Northern Territory—for direct employers only in the Northern Territory. We need to fill round 1 first. In the second round, for group training organisations—this is for a small employer who chooses to use a group training organisation, so the eligibility is based on the small organisation rather than the GTO—we still have some places available in Queensland and Tasmania. But for the other states, all places have been allocated.

Senator Cash: It's a very successful program.

Senator HANSON: Will you consider rolling out another one? I do have businesses asking about putting on apprentices.

Senator Cash: It is a pilot program, as you know. Based on the success of the first round, we did make a decision, because it is additional apprentices—so it's over and above—or new apprentices. The take-up was very good. The feedback we've received to date is very good, in particular because it is concentrated, as you know, on rural and regional small businesses in Australia. Certainly the feedback and the evidence to date has been incredibly positive.

Senator HANSON: Just confirm for me, I've had a report that possibly a multinational company from Western Australia has taken up apprenticeships under the scheme.

Senator Cash: I'm happy for the department to do that.

Senator HANSON: You can take it on notice and get back to me.

Mrs White : I think that question did come to me previously and, if it is the organisation I think it is, we looked into that and found that it was not true. They were actually found by the department to be ineligible.

Senator Cash: You can apply, but you've got to meet the eligibility requirements, and in that case clearly not eligible.

Senator HANSON: I'm very happy about that.

CHAIR: I understand that there will be a number of questions on notice, but this concludes outcome 2. There will be no further questions for the Department of Employment, Skills, Small and Family Business, so everybody is excused. Run while you can.