TAKING OBLIGATIONS SERIOUSLY
Posted on Thursday, 25 September 2003
Speech notes for Mission Employment Launch
Thanks to the latest Job Network changes, it should finally become impossible for people who lose their jobs to go on unemployment benefit and disappear into the system to become part of a culture of long-term welfare dependency. The key principle of the third employment services contract is that no one should be forgotten, neglected or ignored.
From day one, unemployed people will be linked with a Job Network member, given an up-to-date resume and provided with regular job matching advice. After three months, they will receive three weeks full-time job search training. After six months, (if they’re under 50) they’ll do Work for the Dole or another high-intensity activity to help maintain an employment mindset. After 12 months, they’ll receive “customised assistance” and have their job seeker account increased to an average of $900 a person to help fund training, work experience, or employment incidentals.
When it replaced the old CES in 1998, the Job Network was a radical innovation. It’s been constantly improved since then and has become a model for employment service reforms in other countries. Although change (including the latest shift to what the Government calls the “active participation model”) has not been easy, the Job Network and other employment services such as Work for the Dole have been an important part of bringing unemployment down.
The OECD has estimated that Australia’s non-accelerating-inflation rate of unemployment (the unemployment rate achievable when the economy is going well) has fallen from over 8 per cent to about 5.5 per cent “as a result of reforms to industrial relations and labour market assistance arrangements since the second half of 1990s”. The fact that unemployment is now 5.8 per cent despite softer economic growth and a poor recent international economic outlook is a tribute to the capacity of Job Network staff and Centrelink officers to motivate and help unemployed people.
As the Job Network improves, it’s more important than ever to ensure that unemployed people make the most of the services available. In an ideal world, everyone on unemployment benefits would understand that the best way to get the job you want tomorrow is to take the job available today. In the real world, according to research released last year, less than 40 per cent of job seekers are highly motivated and determined to find work. To a greater or lesser extent, the rest think they are unlikely to find the work they want and have become accustomed to life on welfare.
It’s little fault of theirs. They have been cruelly discouraged by misleading pseudo-statistics about seven jobseekers chasing every job (even though there are new jobs available every month and positions can be created for really keen people). Despite changes such as the Working Credit enabling people to keep nearly all of their earned income for the vital first few weeks of employment, many have concluded that high effective marginal tax rates mean work is more trouble than it’s worth.
The fact that finding work is rarely easy makes defeatist propaganda even more pernicious. There’s nothing compassionate in passive welfare for people capable of work especially when the new Job Network is better than ever at helping them find employment. With new opportunities available, the Government has now put further measures in place to ensure that people on unemployment benefits take their responsibilities seriously.
As part of the transition to the new Job Network, about 720,000 registered job seekers were each asked to attend a “vocational profile” interview to create an on-line resume for regular job matching. This is the first time that the entire population on unemployment benefits has ever been more-or-less-simultaneously contacted and has been a reminder of how hard it is to motivate long-term unemployed people.
Of the 1.6 million vocational profile appointments made since April, over 900,000 were not attended. Several months of effort by Job Network members and Centrelink to contact about half a million activity-tested people has produced only 320,000 completed vocational profiles. So far, Centrelink has warned about 90,000 job seekers about possible consequences and almost 12,000 have had their benefits temporarily suspended.
It has always been a condition of receiving unemployment benefits that people are serious about trying to find work. In theory, there have always been penalties for not turning up at job interviews, Job Network appointments and Work for the Dole. In practice, unemployment benefits have often become the wage people earn when they’re not working because there’s been little apparent connection between failure to turn up and future consequences.
The system used to work almost entirely on the basis of computer-generated letters. By the time Job Network members had sent two “where were you” letters and made a report to Centrelink, which had then despatched two letters of its own and subsequently reviewed the job seeker’s case, two months or more could have passed before people’s benefits were reduced in a process known as breaching.
Often, there was no discussion between Centrelink and uncontactable job seekers who stayed on benefit but lost support without any clear understanding of the reason why. Welfare advocates such as ACOSS likened the cumulative reduction in benefits to a $1000 fine and criticised a system which was allegedly tougher on missing an interview than on speeding through a shopping centre. A better analogy would have been with workers who expected to be paid despite unauthorised absences. Still, the ACOSS critique meant, in practice, that there was less pressure on people to attend inconvenient interviews and more demanding employment service programmes.
In July last year, the Government began to introduce new arrangements. When people failed to attend Job Network interviews and could not be contacted, their payments were suspended. Suspended job seekers had to visit Centrelink to have their payments resumed and backdated at the full rate if they had a reasonable justification but otherwise with a breach penalty.
To encourage participation, the Government is now extending suspension arrangements to all activity-tested job seekers (with exceptions for people who are homeless, live in remote areas or have serious mental illness). From this week, people who haven’t complied with the activity test and haven’t responded to attempts to make contact will have their payments temporarily stopped. Payments will recommence once they have re-scheduled interviews, agreed to participate in Job Network programmes or resumed Work for the Dole.
When people don’t attend, Job Network members will make two phone calls within two days to reschedule or to assess whether jobseekers are serious about finding work and participating in programmes designed to help. If contact can’t be made or is unsatisfactory, Job Network members will give Centrelink a “participation report”. Centrelink will then try twice to make contact, usually within two days. If job seekers can be contacted, Centrelink will impose a “breach” if their behaviour was unreasonable. If not, Centrelink will notify them that their payments will be suspended unless they make urgent contact. When people subsequently make contact, Centrelink will restore payment, reschedule their interviews, reconnect them to the relevant programme and impose a breach if their behaviour was unreasonable.
Depending on whether people have failed to turn up for an interview or missed participation in an activity, the penalty can be an “administrative breach” (16 per cent reduction in benefit for 13 weeks) or an “activity test breach” (18 per cent reduction for 26 weeks) but, in a more responsive system, these can now be reduced to eight weeks if job seekers subsequently return to full participation in employment service programmes.
Under the new arrangements negotiated between Centrelink, the Department of Employment and the Department of Family Services, job seekers will have their interviews re-scheduled, be transferred to a more appropriate payment, or have their payments suspended within 16 days of Job Network members submitting a participation report.
The Government wants unemployed people to participate in programmes designed to help. It doesn’t want people on unemployment benefits to be punished. The suspension arrangements should significantly reduce breaching but significantly improve compliance by ensuring that failure to participate has swift and serious consequences. The Government doesn’t want people who are genuinely unemployed to lose their benefit even temporarily but taxpayers are entitled to know that unemployed people are doing their best to find work.
Recent research suggests that people on benefits are well aware that their fellow unemployed don’t always accept obligations and need “carrots and sticks” if they are to find work and leave welfare. For working age people who are capable of work remaining on welfare must become a matter of necessity not choice. No one likes taking anything away from people who have little enough as it is but experience with the Job Network amply demonstrates that it’s impossible to be fair without also being firm.
The Government requires unemployed people to make use of Job Network services because it has every expectation that they will eventually find work. Unemployment can come down further but only by expecting the best of people and institutions and by constantly fine-tuning systems to improve their performance. It’s no longer right to describe the Government’s approach to unemployed people as “help and hassle” because there should be no hassle for people who take their obligations seriously and considerably more help thanks to the new Job Network arrangements.