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Social Security Legislation Amendment (Job Seeker Compliance) Bill 2011

CHAIR —Welcome. Although the committee does not require you to speak under oath, I advise you that the hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the parliament itself. We have received your written submission. Thank you very much. I now invite you to make an opening statement and then we will have questions from the committee.

Mr Thompson —I will briefly refer to a couple of key parts of our submission. The first thing to say is that there is clearly a problem in the present system. The most recent data, for the December quarter 2010, published by the department last week suggests that the number of people failing to attend appointments in particular is continuing to increase; it is not decreasing. The failure of people to attend is the source of an enormous amount of frustration on the part of our members, who are trying to help these people to get jobs, and it is a waste of resources in terms of people being ready for those people who do not turn up and so on. For Centrelink, for DEEWR and for employment service providers it creates financial costs, inefficiencies and distractions, which detract from the goal of assisting people into employment and inevitably impact negatively on the effectiveness and efficiency of the overall system. On the other side of the coin we are also keenly aware of the impact of financial penalties on people living on Newstart, the single rate of which is $239 a week. We look with great trepidation at the prospect of further penalties being applied to these people in terms of what might happen to those citizens. First and foremost, they are citizens. They tend to be referred to in the system as job seekers, but they are citizens and many of them are living in poverty.

In 2008 the DEEWR submission on the Employment Services Reform Bill noted the need for a compliance system which uses early intervention and re-engagement rather than punitive financial measures. The department acknowledged at that time the counterproductive impacts of placing financial penalties on people, which might actually cause more difficulty in terms of their ability to participate and comply.

I have been involved in a number of high-level exercises about this part of the system for many, many years. The system has the difficult job of striking a balance between deterring job seekers from non-compliance through the use of disincentives—I would not call financial penalties ‘incentive’—and engendering more positive engagement. In the December quarter 2010 there were 30½ thousand males and 14,302 females who did not turn up for a provider appointment. We say it should not be assumed that all of those citizens are disobedient or recalcitrant when they fail to attend interviews or other interventions, and the imposition of more immediate and perhaps more onerous penalties might address the symptoms of their failure to engage and comply with the requirements without addressing the real causes.

The bill introduces some further significant layers of complexity in a system which is already incredibly complex and difficult to comprehend—about the complexity of the system and its requirements, about the ways in which requirements are communicated and negative job-seeker perceptions of the relevance, frequency and usefulness of interviews and other interventions. If the system is not delivering what they need, on the one hand one can understand why the government might want to introduce more penalties and more immediate penalties, but we would argue that the recent history of this system suggests that financial penalties to not actually have the effect that policy makers and architects of the system might want and that there is a need to look more deeply at the reasons why people are not turning up and doing what is required of them. On that basis we suggest that, regardless of what happens in terms of the passage of the bill, there is a need to look quite deeply at why these 45,000 citizens are not doing the right thing and what needs to happen to make it possible that they do. I will leave it at that.

CHAIR —Thank you very much for your presentation. It sounds very much to me that people not turning up to interviews is a particular problem for your members in terms of time and all the rest of it. You have talked about penalties. The bill does provide for a couple of things, including, first of all, suspensions. There is back pay once people are reconnected. In a sense it is a penalty, in terms of payment being stopped, but it is not an ongoing penalty. The money is restored to the people once they make that initial connection. I would be interested in your comments on that specific provision. You have mentioned that this is unworkable, but do you think that making sure that these people are protected from this could target it at better at the people it could work for?

Mr Thompson —Suspension with back pay is better than imposing a penalty which cannot be withdrawn. But take the situation of a person who, for whatever reason, has missed an appointment and then goes to an ATM on a Friday night to get money to pay their rent and finds that there is no money in their account, or that a periodical payment has been take out of their account and there is not enough money in the account to cover it. That person will get a financial penalty from the financial institution. The subsequent restoration of the Centrelink payment does not deal with any of that. I understand that the government is looking at that from the point of view of trying to better relate the negative consequences of failure to do something with the time period in which it occurs so that it does not happen somewhere down the track. The reason they tried to do it somewhere down the track was so that people would get a chance to realise that it was going to happen.

One understands the motivation for saying, ‘We will try and make the negative consequence happen as soon as possible after the behaviour that gave rise to the negative consequence.’ We say later in our submission that it is absolutely imperative that the government communicates in simple, plain language—and not just the legalistic notification that might be required under the terms of the act—to all of these citizens who are otherwise going to be in trouble. Last year or the year before, the department funded national welfare rights to produce some plain language material, not using legalistic terms, targeting young people, explaining, ‘These are the consequences of your failure to attend’. It comes to them in the form of a little booklet, not a mail-house letter in a window faced envelope—which is how most communication happens. We think it is imperative that the government does that.

In terms of your questions about vulnerability, I think we are all concerned to make sure people who have mental health issues or are homeless or whatever do not get caught in some parts of this system. I think there remain questions about whether the system is doing the best it can to identify and flag all of those people. A lot of the factors that go to making somebody vulnerable are not necessarily disclosed by people in the course of routine Centrelink interviews and other interventions that they have.

CHAIR —Thank you very much.

Mr BANDT —Can I just explore the evidence base around two points: firstly, around what it is that leads to people’s failure to attend. You mentioned in your submission some research you have done with the Nous Group and some work done by the Centrelink working group, suggesting that confusion and disconnect is a major factor in disengagement. Could you talk a bit more about that in the context of what the bill is trying to achieve?

Mr Thompson —My point is simply that most people who are not close to this would not actually understand that people are required to attend sequences of interviews at Centrelink, they are required to lodge forms with Centrelink and they are required to report to Centrelink. Overlayed with that, those people in the Job Services Australia system are required to attend appointments and other activities arranged by their Job Services Australia providers in addition. That amounts to a significant amount of mandatory activity on the part of the people concerned. A lot of the front-line workers in the system, who are part of the work that we did with the Nous Group report that people just do not understand it, especially people who are new to the system. Some segments of the population, people on Newstart in particular, are well versed in the system; they know how it works, they have been in and out of it, they are used to being in the system and they are used to doing what they need to do to meet their requirements. But some people, particularly people who are new to the system or people who do not have much experience of it, are kind of overwhelmed and confused by the system. That is why we say that the importance of very clear communication cannot be underestimated in all of this.

Mr BANDT —You referred to the independent review, the Disney review. Recommendation No. 1 of that was that there be a plain English reworking of all of the documents relating to compliance. How far has that progressed, as far as you are aware?

Mr Thompson —I do not know. I am not aware how far it has gone. I was involved in an earlier review, called the Breaching Review Taskforce—chaired by Tony Blunn, a former secretary of the social security department—in the early 2000s. I, with the then head of the Social Security Appeals Tribunal and some senior DEWR  people—I think it was called DEWSBR then—had a go at trying to convert some of the highly legalistic communications that people were receiving then from the system into plain English. I suspect it is a kind of never-ending work in progress that needs to continue to happen.

Mr BANDT —You think that would help with connection and reconnection failures, if that was done?

Mr Thompson —It certainly cannot hurt for people to understand clearly what their requirements are and what they need to do to meet them. Again, I go back to the raw numbers: I sincerely do not believe that those 45,000 citizens who failed to turn up to appointments are all recalcitrant and disobedient. We need to look behind the numbers to find out why that is going on. Why is it, after a whole lot of iterations of different kinds of penalties and requirements, that we still have a situation where a whole lot of citizens are not being effectively engaged in the system.

Mr BANDT —The second part of evidence you refer to in your submission that I want to ask you about is that you say you reviewed the body of research—this is on page 2 of your submission—on job seeker experience of compliance and note that excessive compliance has resulted in decreased motivation and reduced self-efficacy. Are you saying that the academic literature that you have reviewed says that if the system is intended to be more punitive it will actually have the effect of disengaging people?

Mr Thompson —In some part, because humiliating and punishing people does not do much for their self-efficacy. On the other part, if there is too much activation and not enough assistance in the system, people will jump through all the hoops and that will become what they do; rather than going beyond that and doing what they need to do to get a job. So meeting all the requirements, filling in the diaries, filling in and lodging the fortnightly forms and so on becomes an activity in itself. We need to get past that.

CHAIR —Are you suggesting that turning up to an appointment is just another hoop that people have to—

Mr Thompson —What I am saying is it may well be the case that some of the job seekers do not think it is going to be at all helpful. If that is the case, then we need to look at why they think that and whether the system needs some adjustments to make it more helpful. The department of human services has been conducting some trials called Local Connections to Work, involving very long term unemployed people and, I think, older unemployed people. They are interviewed in joint with Centrelink employment service providers and providers of other community services. They are given a better experience and they report very high degrees of satisfaction with that. That will probably be quite different from an arrangement that used to operate where they had to go in once a fortnight to Centrelink, wait in a queue for an hour and a half for a two-minute interview; which they may well, as I might well, not perceive as being particularly helpful or useful.

CHAIR —Some of these interviews might be very helpful, but if people do not even get to the interview—

Mr Thompson —I agree with and accept that.

CHAIR —It is one thing to be filling out a job diary and jumping through the hoops; it is another thing to actually get to the employment interview where someone could well help them. I assume you would suggest that most of the agencies that you represent actually have very useful job interviews which really do assist people in finding work.

Mr Thompson —I certainly hope so, yes.

Ms O’NEILL —This morning we have been hearing about the under-use of specialist services for people who have mental health issues and other disabilities. Is it likely that with a change in the interviews and a refocus on the purpose of those interviews and an encouragement for people to disclose that they might need specialist services we might get a better spread of resources—engaging people who need specialist services with those specialist services—by attending these interviews.

Mr Thompson —I think the underutilisation of specialist services is in the name of choice. I think we can go a bit far with choice sometimes. I will use a youth specialist as an example. I can think of Melbourne organisations you will probably hear from this afternoon—where older people who are arguably not in the youth cohort can say, ‘I want to go to that youth specialist’, and in the case of, for example, Melbourne City Mission, they have had to set up separate services to cater for the non-youth people who come to them. We have suggested to the minister and the department that they need to change the referral arrangements so that people who do not require that specialisation are not able to choose that provider in the name of market choice, and to find ways of making sure that more people who do need the specialist help go straight to the specialists. In terms of people with mental health issues, if they are not in a position where they accept and label themselves or identify themselves as having that need, then it does not matter what you do; they are not going to go to the right place by their own choice, so you need to find some other ways of getting them there.

Ms O’NEILL —There is a possibility for these interviews to have some sort of shift in cultural focus—for the people who are conducting interviews to better use the services that are available to them and to guide people towards them.

Mr Thompson —If there are enough resources in the system for the interviews to be of sufficient duration, depth and quality to be able to get people to a place where they are disclosing and talking about their real circumstances and real needs. In the case of some people with quite complex needs, it can take a very long time to get people in a place where they are sufficiently trusting of people to do that. I am talking about experience that goes to many different iterations of logos and acronyms over the last 30 years.

Ms O’NEILL —I would like to ask about social media as an opportunity to engage people in finding out about those sorts of service provisions. Also, in terms of communicating clearly the messages that you have indicated, have there been any very effective social media campaigns—using Twitter or Facebook—that have been used by Jobs Australia or any other provider of these services?

Mr Thompson —I do not know about more contemporary social media, but the department found that SMS messaging was a very effective means of engaging with job seekers, telling them about job vacancies and doing all that in real time. I booked my car in for a service in West Melbourne the other day for Monday morning, and I got an SMS reminder on Friday afternoon and then one first thing on Monday. That really helped me to not forget that I had to take my car in for a service. I sit on a committee that Telstra is required to operate as a condition of its licence, called the Low Income Measures Assessment Committee. It has conducted research which suggests that very high proportions of people on low incomes these days use prepaid mobiles and fewer use landlines. There are lots of prepaid mobiles. The use of those kinds of messaging systems is potentially another way of getting to people and reminding them about their obligations. That is why we suggest in our submission that we need to go behind some of these numbers, which are arguably really quite disturbing—the fact that so many people are not meshing in the system—and find out what is really going on so that what really needs to happen can happen. The financial penalties, and more of them, and more immediate financial penalties, will no doubt encourage some of them to do more of the right thing, but we would contend that there is still an underlying problem that also needs to be addressed.

Ms O’NEILL —Can people report through an SMS that they might not be able to make their appointment?

Mr Thompson —I doubt it. It is hard to SMS a call centre. It is those sorts of things about which we need to find out a lot more.

Ms O’NEILL —Yes—a recommendation along the lines that it might make it a little bit more easy for people to do that and it might address some of the numbers as well and keep them engaged without any penalty.

Mr Thompson —Yes, which is what we all want.

Mr SYMON —Regarding the figure you mentioned on failures to attend, what percentage is that of the total? Do you have that number? I take it that it refers to the last quarter of last calendar year?

Mr Thompson —Yes.

CHAIR —I think it is 59 per cent.

Mr Thompson —Of the total number of appointments it would be in the many hundreds of thousands. It is a relatively small percentage. There are something like 600,000 or 700,000 people in the system—40,000 of them are 10 per cent or something. The department will have those numbers. If I was on my computer, I could find them. It is a small proportion but it is a significant number.

Mr SYMON —Is there anyone out there collecting reasons for non-attendance?

Mr Thompson —As in why they did not turn up?

Mr SYMON —Yes.

Mr Thompson —Not as far as I know.

Mr SYMON —We have this big number at the moment but we do not know the particular reasons why—as in: got ill, train got cancelled, couldn’t be bothered. There is nothing that you know of that is defining those—

Mr Thompson —Dog ate homework. Not as far as I know. It is that sort of thing that I am very interested in finding out about.

Mr SYMON —From the employer angle it is always going to be a frustration. If an appointment is made someone at the employer end also has to get things done as well as the job service provider, et cetera. Do you get push-back from employers back through the job service providers to say, ‘I’ve had people booked in, they do not turn up. I would rather not use this system to put people on because I have had failures in the past.’ Or has it not really come through like that?

Mr Thompson —That kind of failure of somebody to turn up for a job interview would be a serious failure which could result in a serious financial penalty. If that in fact is happening with employers, it will discourage them. In the end, if they are looking for labour, the people that we are talking about are one significant source of that labour. I think employers are much more likely to be put off by all of the paperwork associated with proving that they have got somebody employed and that they are off payment and so on. I hear a lot of that.

Mr SYMON —Is there a way to streamline that system that makes that end of it better for employers? What is the hard part about the system now,  specifically for an employer?

Mr Thompson —I do not think it is about people not turning up for job interviews; it is more about understanding how the system works and what its place is in the sense of what the job of the public employment service is in the bigger labour market. If you are looking for a nuclear scientist you are not, one imagines—unless Ziggy is out of work—going to go to Job Services Australia. We are talking about people generally in the lower strata of the labour market—not always, but generally at the lower and medium skill level. I have been saying to some of my colleagues in the department and elsewhere—this system is now 13 years old. It has never really actually cracked or penetrated the minds of employers as a place to go for labour. It is like our public employment service.

Mr SYMON —Just turning to the job seekers, you have spoken about discouragement and encouragement. Obviously, withholding payment is the discouragement model. Do you have any ideas for us in terms of encouragement?

Mr Thompson —As I said, we need to make sure that the interventions that they are receiving are perceived and are of real value to them. We need to do some more work on that.

Mr SYMON —Is that a case of simplifying what is done now or is it the language?

Mr Thompson —I will give you an example of something else that is just starting in the system. Centrelink get paid to do a two- or three-minute interview once a fortnight for the great majority of people that are required to turn up. That is not an assistance activity; that is a hassle. If you have to wait an hour to get your two- or three-minute interview, it is even more of a hassle. I am not arguing—you will never hear me argue against the need for people to be actively job searching. Centrelink are now saying in a lot of locations, I gather—this came out today—that instead of having one job seeker for two or three minutes they will have 10 together and spent half an hour with them and do something useful. It is that kind of thing which is to be encouraged. The Local Connections to Work trials, where they are saying that rather than have Centrelink call them in, the Job Services Australia people call them in, and then maybe find them some other sort of assistance with community services that they might need, and try to put that altogether. All of the feedback they are getting from, as I said, very long-term unemployed people, older unemployed people and disadvantaged young people is that it is very positive. It is this thing about balancing hassle and help. As the academics say, what we are trying to do with these people who do not necessarily have lots of self-esteem and positive feelings about themselves and their capability is engage, enthuse, encourage and empower them. If we can do that we will get more of them to work and we will get more of them to work quicker.

CHAIR —Following on from that, my first point is this: if you do not get them to attend any appointment then how do you empower them? How do you encourage them? How do you give them that self-esteem? We have heard some wonderful stories in our other inquiry about people who never thought they could work. Someone got them in the door and they are now working. We can look at all these different models and say, ‘Look, this really encourages job seekers,’ but if you cannot even get them in the door, how do you trial some of those new things?

Mr Thompson —I did not think you could. In the context of your inquiry this morning, the need to get people in the door so that they can be eye-balled and some of their issues can be identified when they are not disclosing, is paramount.

CHAIR —This is a very direct question: government legislation comes directly from the independent review. Going to the impact of the new job seeker compliance frameworks, recommendation 14 says—this was published in September 2010:

If further and significant improvements are not achieved within the next 12 months or so in job seekers’ attendance rates at appointments ...

—then we need to consider this. So what the government is proposing is directly coming out.

Mr Thompson —What was the date of that?

CHAIR —That was September 2010. Obviously, the data was collected the quarter before that. So we are at the 9-10-month mark and we are looking at implementing at the 12-month mark. There is no sign of it decreasing.

Mr Thompson —It is going up.

CHAIR —It is going up. You would disagree with this recommendation that—

Mr Thompson —I would simply say that I would really like to hear from the government what they are going to do about all the other recommendations, including those going to simplification and all those other things. I will be the first to say this is an enormously difficult and complex area of public administration—getting balances right is really tricky. We are talking about hundreds and thousands of citizens in a big and complicated system. Every time we make it more complicated we are actually making it, of itself, self-defeating.

Mr BANDT —This is about the status of your organisation. We have another submission from the National Employment Services Association that has a position different from yours. It says in their submission that they are the only national peak body representing community, a private, public and government sector providers and representing all Commonwealth funded employment service and related programs. Can you tell us a bit about how your organisation and whom you represent stands in relation to the National Employment Services Association?

Mr Thompson —I am a founding board member of that organisation. I was its chair for eight years or so. Our members are 280 organisations that are non-profit organisations that deliver employment services—and there is a whole array of them. There is also an array of other activities. We walk line between representing the interests of the contracted providers of the system and the citizens in the system. So, we take a slightly different view.

As I said in our submission, we can appreciate the enormous frustration associated with large numbers of people not turning up and everything that goes with that. But the term I use to differentiate our place and position is that we are ‘punter-centric’. So we think that if we can get things working best for the citizens then other things will flow to the contracted providers. That is how we come at it. As I said, we have no disagreement with the need to do something. We just do not think there is a lot of evidence to suggest that what is being done is apt, if that is all the government is doing. Certainly there is a large number of other recommendations in the Disney, Buduls and Grant review that also need to be looked at.

CHAIR —Thank you very much for your attendance. The inquiry has a short time frame but if at any point you would like to provide more information please do not hesitate to forward it to the inquiry secretary. A copy of the transcript will be sent to you for you to make corrections to your evidence as to grammar and fact. Thank you so much for presenting to us today. We appreciate your getting your submission to us, especially given the short time frame.

Proceedings suspended from 12.41 pm to 1.36 pm