THOMPSON, Mr David Francis, AM, Chief Executive Officer, Jobs Australia

WILSON, Mr Lance Richard, Policy Analyst, Jobs Australia

[11:08]

Evidenc e was taken via teleconference—

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provide to you. We have received your submission. We invite you to make a short opening statement and then we will proceed to questions.

Mr Thompson : In terms of an overarching position on this, I think it is important to hit the pause button for a minute and look at the very long-run history of this. We have got a system which is, as I described it this morning, eye-wateringly complex. It is complex for the job seekers. It is complex for the front-line workers in the employment services system and it is for those people in the Department of Human Services who will play a role in administrating it.

I think it is also important to note that some of the carve-outs, different rules and arrangements that have been made over the past 10 or 15 years are therefore reasons which are designed to ensure that those people, who are not wilfully non-compliant but do need to have their particular circumstances taken into account, are protected. I think we would take the view that, if there is any significant risk that vulnerable people will not be adequately taken care of and protected, then that perdition would not be acceptable.

I will go on and say that I think it is important that the committee also consider the context and circumstances in which the legislation actually operates. There are the legislation and associated regulations. There are formal guidelines about the legislation and associated regulations. There is training provided about the legislation and associated regulation. There is a contract—which job active providers, for example, have—which also dictates how some of these things happen, and there is an information technology system by which it all actually operates.

The way the IT system operates will have considerable bearing on how the front-line workers are actually exercising judgement, engaging with the job seekers and reporting to the system about whether something is satisfactory or not satisfactory, whether they are exercising a discretion et cetera.

We note some of the observations made by the department, for example, asserting the introduction of waivers actually caused wilful noncompliance without any regard for what is actually happening with those job seekers. We think it is getting close to time to have a fresh look at the whole system to see if it can be even more simplified.

In that context, like some of our colleague organisations, we welcome some of the changes which go to further simplification. Particularly, we welcome those things that are going to reduce complexity for the job seekers, reduce complexity for the front-line workers and reduce red tape. I think, if the bill is passed, you will hear Australian employers celebrating the removal of some of the pestilential employer contact certificates for part of the system.

There are some really good things in this but, as I said, we are worried about whether we are in a situation where people are receiving adequate training so that they can exercise discretion so that they do not do things like make people enter standard job plans; that they are exercising reasonable judgements about what is a reasonable job search activity—somebody who has been unemployed for five years and living in a regional area who has applied for 1,000 jobs where 20 per month may be way too many.

I will just finish by saying there is also a need to look at the way in which the legislation and guidelines are communicated. The example we give in our submission goes to the detailed guidance in relation to what justifies a 'reasonable excuse'. The training delivered by the department suggests that the consultants should judge whether something is unreasonable by using a much simpler test—that is, whether a member of the public would consider the excuse reasonable. It is a whole lot more complicated than that and necessarily so in that case we need to make sure that the system is actually operating as the parliament intended.

I will finish by saying that some of these things that are being done will significantly simplify the system. It would be a very good idea for the government to undertake some work to actually see if some of the assumptions that it is making about job seeker behaviours and the way in which frontline staff are operating are borne out by the way they view the world or whether there are some other things operating which need to be taken into account. It is a very big system and it is very complex. When we are talking about the way 800,000 citizens at any one time are being treated, it is really important to get it right.

CHAIR: Thank you. We will go to Senator Lines.

Senator LINES: Thanks for your submission to the committee. In this hearing this morning we are seeing a number of themes coming through that are being repeated. Certainly the knowledge of frontline staff is one issue that keeps coming up. Another issue is where job seekers are given conflicting information or are not given information at all. We heard from Willing Older Workers this morning, and Mrs King gave evidence it took six months before she found out that there was a low-income health card. I am just wondering whether you have other examples of that. Is that what is behind your push for adequate training and frontline staff understanding what the legislation is and what a person's entitlement is?

Mr Thompson : We do not know much at all about whether they are being told about entitlements like low-income health cards and so on. But, as senators will have observed, this is so complicated. Even with the best will in the world and the best training in the world, there are going to be inconsistencies. An individual employment consultant might have between 150 and more than 200 unemployed on their caseload, and they do not have time to really get their head around some of this and it is inevitable that there will be inconsistency. For example, you have to sign a standard job plan, because it is a whole lot easier than trying to tailor one that suits your particular needs. The department will say that it monitors that, but that is not to say that it does not still happen.

Senator LINES: No, and we have heard evidence of that this morning—for example, people wanting to take the job plan and some agencies saying yes to that request and others saying no. We might be able to tolerate inconsistencies in other departments—I cannot think of an example—but this is a system that is dealing with people who are vulnerable. Job seekers are vulnerable. To lose your job affects not only your livelihood but also inevitably your self-esteem. So this level of inconsistency is unacceptable. Is it a matter of additional staffing and training? What do we need to do to get it mostly right? There will always be some inconsistencies but, as you pointed out, with 800,000 citizens interacting with this system, we do need to get it right.

Mr Thompson : I doubt very much whether extra staffing is on the table, given the costs that would be involved, so that gets you to making the system as simple and fair as it possibly can be, taking care to protect the vulnerable and, at the same time, making sure that the training that people are being given actually properly covers the legislation and the intention behind the legislation. I will give you an example. The IT system will have detailed records down to individual front-line consultants of how many times they exercised discretion in not pursuing compliance failure of one kind or another. And there will be people actually worrying about the extent to which Big Brother is watching them to see if they are not one of those people who it is believed are exercising too much discretion and being too soft. It is more than just a training thing but the whole environment in which all this happens. The department has some very good training and it has got very clever and innovative in ways in which it delivers it, and I am sure it is not beyond their wit to do it better. As we say in our submission, some of this simplification will help that, but we have just got to take a lot of care with it.

Senator LINES: But your comment about taking care of the vulnerable: that is not a feature anywhere, although you would think it is self-evident. That is not a mandate, is it?

Mr Thompson : No, it is not actually written in, but it is the reason why some of these waivers and other things are there. As an example, the department asserts that having waivers creates an incentive for noncompliance. There might be a whole lot of other reasons why there is noncompliance. The argument is that there is an incentive for you to be required to do eight weeks work for the dole rather than lose payment. That is not much of a prize.

Senator LINES: Absolutely. I might come back, but I will pass back to the chair.

CHAIR: Senator Siewert.

Senator SIEWERT: I wanted to go to the comment that you have made in terms of waivers. When you were talking about waivers and the issues around evidence of wilful noncompliance, can you just expand on what you mean and what you would suggest if there should be further amendments made to the bill?

Mr Thompson : I will ask Mr Wilson to help me out on the details, but the legislation seeking to remove the availability of waivers, the waivers are there so that when somebody does something that has very bad consequences, they have got a way of coming back from those consequences. If you can imagine all of the things that go with not having an income for eight weeks—losing your house, not being able to eat, et cetera. This was operated by the government under former Minister Andrews in, if memory serves me correctly, 2006. I can remember saying to then Minister Andrews: for some of these people, the imposition of these penalties will have dire consequences. I said to the then minister: 'I beg you to give them a way to show that they are willing to correct their noncompliance but to allow them to continue to be on income support. We are not talking about people who are serial wilful noncompliers; we are talking about people who might not comply for reasons which might not be knowing to the system, for example.

Mr Wilson : The comments we made in our submission were along the lines that the case for the removal of the waiver is not made out by the data that the department presented. What I was referring to there specifically was the data presented in the explanatory memorandum at page 9, where the department pointed out that for the number of penalties actually served by the job seeker, the proportion has dropped to 22 per cent in 2013-14. They contend that that is due to this being some kind of an incentive but there is not really anything to substantiate that. It could be other reasons that are causing the number to increase. It could be, for instance, that rents went up in that period or cost of living went up and that more of the job seekers who had this penalty applied would experience financial hardship, therefore more waivers are applied. The logic does not necessarily follow that the availability of waivers has acted as an incentive.

Senator SIEWERT: Thank you. I want to go to issues on Employment Pathway Plans and the evidence we have received this morning and also in submissions. We have been talking this morning about the changes in the bill providing more incentive, for want of a better word, for employment service providers to force job seekers to accept a one-size-fits-all plan. We have already been talking about the differences between job seekers, but that there will be more pressure on people just to sign up to the plan they are presented. We have had evidence in fact that that is already happening and that therefore this will reinforce that.

Mr Thompson : That is one way of looking at it. I have a completely different view. It goes to the question of how job seekers view it from their perspective. When it is done in the way in which you describe, the plan is not some sort of mutually agreed, 'I'm going to do this and you're going to do that.' It is a requirement, a hurdle I have to jump in order to receive my payment. So they do need, if they are to be effective as a plan which engages and motivates the job seeker and sets out what they are going to do and what the provider is going to do, they cannot be done in a perfunctory fashion, they cannot be done in a formula fashion, and the idea that they might want to take it home and have a think about it is a good thing rather than a bad thing. If they come back invested in and committed to what it is they want in their plan—it has to be reasonable, of course—then it will be much more likely to work as a proper plan rather than as a requirement. I think the way some of this is being talked about is it being a requirement rather than a tool to be used to get somebody on a pathway that is going to get them to a job.

Senator SIEWERT: I could not agree with you more in terms of needing to make sure it fits their needs and being able to take it home. This morning we have received evidence which suggests that some people are allowed to take it home but others are not. There was direct evidence of a case example where somebody, through an hour interview, was presented with their plan five minutes before the end of the interview and was required to sign it and could not take it home. So the evidence we have received is that there is a variation in providers' approaches to the jobs plans but the further evidence we have received is that the amendments will in fact lead to more people being pressured into signing the plan straight up, rather than being able to negotiate it over a series of interviews and being able to take it home.

Mr Thompson : The context in which that operates is that the provider who says, 'You take it away and come back,' then has to incur the costs associated with another interview and another appointment. There may be providers who are saying they are not prepared to wear that cost, even though that is what the rules say. So they will not tell the job seekers if they have the opportunity. Also, the department is much more aware of these numbers but there is something of the order of 380,000 job seekers—I might be overstating it a bit—who made a transition from an old provider to a new provider on 1 July. There has been a huge amount of pressure on people in the system to get them all signed up and obligated, on work for the dole and all the other things. So some of those behaviours might change as the system enters a more steady state. I reiterate my point: if they have completely fair dinkum tools to engage the job seeker, to help them understand their obligations and to help them understand the obligations of the providers, then it takes more time than, 'I've got this pre-populated thing which I did before the interview that I want you to sign.' The job seekers in those cases know that it is not a fair dinkum plan; it is a requirement.

Senator SIEWERT: I agree with you that in a perfect world that would be happening but the evidence we have received—and I have to say I have had evidence outside this inquiry which suggests evidence similar to what I have heard in the inquiry—is that that is not what is happening. The arguments we have heard, particularly with the appropriate and inappropriate behaviour measures, is that if they respond and say the job seekers will feel intimidated and bullied—language around 'bullying' has been used—into signing up straight away because there would be unreasonable or inappropriate behaviour—

Mr Thompson : If that is occurring, that is outrageous.

Senator SIEWERT: The concern expressed is that with these new provisions there will be even more pressure on the job seeker not to be able to respond in the manner in which you have just described, in other words, to be able to go back to renegotiate things.

Mr Wilson : One of the things I would point out is that most of the failures in this bill are the compliance measures. There are already sanctions available in other parts of the compliance framework just with different categories and different rules. My understanding of the changes is that they are not introducing anything particularly new but simply re-categorising and applying them earlier in the process, applying them when there is 'no show, no pay' failures, rather than as, say, a reconnection failure. The sorts of failures that could be penalised, I do not think there is a significant increase in the types of things that could result in a job seeker being penalised.

Senator SIEWERT: Have you had a look at the inappropriate behaviour provisions?

Mr Wilson : Yes.

Senator SIEWERT: And you still think that is the case? Certainly Welfare Rights do not agree with you.

Mr Wilson : I understand that. We had a look through the inappropriate behaviour section. I think what happens in practice at the moment is that there might not be a penalty available for inappropriate behaviour resulting in a jobs plan not being signed, but there is the availability to sanction someone for not doing their job plan. So providers end up sanctioning them for one of the activities in the job plan instead of for the inappropriate behaviour which leads to the job plan not being signed.

Senator SIEWERT: I am just trying to get the right words—I cannot remember them off the top of my head. It talks about—

Mr Wilson : The purpose of the meeting not being—

Senator SIEWERT: The purpose of the meeting.

Mr Wilson : Yes.

Senator SIEWERT: Sorry, but it is certainly my understanding of where welfare rights are coming from, and it would certainly be my interpretation, that if you do not get an outcome from your job plan interview—in other words, you support your job plan—that you could be pinged, because you do not have the outcome that the provider wants from that interview.

Mr Wilson : Yes. You could check this with the department, but I think you will find that providers are already able to sanction job seekers for that happening.

At the moment there is a 48-hour think time that is meant to be available, and that does not change with this bill. So at the moment, job seekers are meant to have 48 hours if they want to take their job plan away. They are meant to be able to have 48 hours to think about it.

Senator SIEWERT: Yes. Mr Wilson, we heard today that in fact—and I have just been speaking to you about it—that is not happening. So if that is not happening and somebody says, 'No,' and the provider either wilfully ignores that or by accident ignores that, it has more serious consequences now for the job seeker.

Mr Wilson : Yes. I would not disagree with that. And I would point out that that is why I think there needs to be some effort to make sure that the rules that are written on the paper are reflected in actual practice.

Senator SIEWERT: Yes.

Mr Wilson : At this point I do not think there is a great deal of effort to ensure that the advice that is provided to job seekers by front line staff is absolutely correct. All of those things that David has mentioned—the transition, the high turnover in staff, the large number of job seekers, the changed provider and the new model, which is quite constrained financially: all of those things—lead to the service at the front line being pressured.

Senator SIEWERT: So while we have a system like that, where we are already seeing problems—and we have had evidence of the problems—why would we now implement these new rules, that have severe consequences for people on income support, without ensuring that the system actually can deliver them? These are going to have even more severe consequences for job seekers.

Mr Wilson : Hopefully—

Senator SIEWERT: Oh, hopefully!

Mr Wilson : Hopefully, the effect of simplifying the arrangements is that there is actually more compliance and fewer sanctions applied. That has been the experience with changes that have been made so far, and I think it needs to be monitored to make sure that that is the experience with these changes as well.

Mr Thompson : If I could just add to that? I quite deliberately used the word 'citizens' before, rather than the 'job seeker' parlance, because they are citizens. The laws that the parliament applies to those citizens need to be applied as the parliament intends them to be.

But if you go back to the early days of the contracting out of employment services—the radical experiment that it was—there was much made by then Prime Minister Howard and other senior people in the government that one of the features of the system would be that job seekers would have sovereignty as consumers in the system. I think that if you reflect on the way in which some of them are reporting that they are being treated, that it is a long way from having any sovereignty. It occurs to me that one of the things that could be done to help people understand what is required of them and what is required of the providers is for the department to resource, as it has in the past, the preparation and mandatory dissemination to job seekers of things that say, 'You have 48 hours to consider your job plan, if you need that time'—to spell out quite clearly what the consequences of some of the failures would be, and not in five pages of bureaucratic mail house letters.

Mr Wilson : I would also point out that we advocated a different system in the past and we do not back away from that either—we just acknowledge that the system we have is this one, which is heavily reliant on the job seeker compliance framework. It is heavily reliant on activation and mutual obligation, and it has a very strong focus on Work for the Dole. So it is in the context of that system that we are responding to this bill. We might like to imagine a different system, but we are facing the one we have.

Senator SIEWERT: You made the comment about the assumed behaviours of how clients respond. Could you expand on that a little bit? I think you made that comment in your opening statement.

Mr Thompson : If you look at the last paragraphs in the explanatory memorandum, the bold assertion is in the third last paragraph:

The availability of the waiver provisions is also acting as an incentive for noncompliance.

That is because the number of serious failures went from 644 to 1,626. The memorandum goes on to say that:

This difference cannot be attributed to any comparable change in the size of the activity tested job seeker population or increase in the number of jobs being offered.

There might have been 1,000 other reasons that it might have gone up, and it is quite cynical and disrespectful of at least some of those citizens to assert that the fact that there have been more of them is because they can be let off.

Mr Wilson : I might add that even in the changes there is an assumption that job seekers will respond in a particular way to the compliance framework. Most job seekers, when they are sanctioned, will take steps to comply. There are going to be some who simply exit the system and do not comply—they just drop-out. I do not think anyone has paid quite enough attention to what happens to those people and I think that is the flaw across the program that we have.

Mr Thompson : We know that all of this stuff impacts far more on young people—and young males in particular—and Indigenous people and other groups within the system. One imagines Indigenous people might rely on their families in the event that they decide to opt out of the system. It does not bear too much thinking about young people who are homeless and what they might do in order to survive long periods without payment. One of the things that the committee might want to consider is recommending that there be more independent work done on how this is actually operating, rather than reporting on it on the basis of some macro statistics—looking at how the frontline staff are behaving. There is a whole literature about the way frontline staff in these services—they are usually called 'street-level bureaucrats' in that literature—will behave in ways that are quite contrary to the intentions of those who design them.

CHAIR: Thank you very much for your evidence.

Proceedings suspended from 11:45 to 12:31