Chapter 2
Education, Employment and Workplace Relations portfolio
Introduction
2.1
This chapter summarises areas of interest raised during the committee's
consideration of the Budget Estimates for the 2010-11 financial year. It
follows the order of proceedings at the estimates hearings and is an
indicative, but not exhaustive, list of issues examined.
Outcome 4 (Employment)
Job Services Australia
2.2
As at the last two rounds of estimates hearings, the committee took an interest
in the reforms created by the establishment of Job Services Australia (JSA) on
1 July 2009.
2.3
The committee made a thorough examination of JSA's employment providers.
There are 111 contracts for JSA, provided by 136 organisations.[1]
An additional 120 organisations are subcontracted through commercial
arrangements with primary providers. Opposition senators pursued the measures
taken to ensure accountability of all subcontractors. The department explained
that primary providers are required to seek approval from the department prior
to entering into any subcontracting arrangement.[2]
2.4
Opposition senators also questioned the efficiency of subcontracting
rather than having direct contracts with providers. Ms Paul, Secretary, DEEWR,
explained that it was advantageous for organisations during the tender process
to demonstrate local expertise yet still have the reach of a national operation
and the ability to target specific client groups. Many of the organisations in
the tender process achieved this through the use of subcontractors.[3]
2.5
Opposition senators also asked about the financial viability of
employment providers. The department outlined that 10 to 12 of the primary
providers have informally identified issues with their commercial operations,
some as a result of JSA’s new funding model. The department explained that some
providers had not adapted readily to the changes and, in particular, had found
difficulties with the financial flexibilities provided through the Employment
Pathway Fund (EPF).[4]
2.6
In these cases, the department has assisted providers to assess fixed
costs and make internal restructures. The department outlined that, whilst five
providers have transferred business or relinquished contracts, there has been
no loss to job seekers. The committee notes that the relinquishment of
contracts and the transfer of business has been a consistent occurrence
historically.[5]
Indigenous Employment
2.7
The Indigenous Employment Program has been allocated $139,460,000 for
2010-11.[6]
The department outlined that in the period 1 July 2009 to 31 March 2010 there
have been 12,777 commencements in employment and training under the program;
7,593 of these were employment placements. In addition there have been 25,600
Indigenous job placements through JSA.[7]
2.8
The committee examined the allocation of $6 million over the next 3
years to improve Indigenous employment, recruiting and retention practices.
This measure supports the National Partnership Agreement on Indigenous Economic
Participation across governments to increase Indigenous employment in the
public sector by 2.6 per cent by 2015. The department explained that the
funding is for resources to support agencies, and agencies are expected to
continue to invest in their own strategies.[8]
Outcome 5 (Workplaces)
2.9
Following on from questions asked at Additional Estimates in February
2010, senators questioned officers about the application of the Fair Work
Act 2009 and, in particular, large-scale changes brought about through the
award modernisation process.
2.10
Opposition senators targeted questions towards the impact of the modern
awards on new businesses, asking whether transitional provisions would apply
consistently to both new and established businesses. The department explained that
provisions were consistent for both types of businesses.[9]
2.11
Opposition senators also sought clarification on the application of take-home
pay orders[10]
and questioned officials about the level of education and awareness among employees
about the use of these orders. Opposition members flagged the possibility of an
employer dropping an employee’s pay based on a modern award rate and the
employee being unaware of their entitlement to apply to Fair Work Australia for
a take-home pay order. The department explained that employer organisations
have been advised to maintain existing rates of pay. Moreover, should an
employer choose to decrease an employee’s pay, that worker is entitled to a
take-home pay order. Extensive education campaigns have been undertaken to
ensure take-home pay orders are accessible to workers, including the ability
for a union to apply on behalf of a class of employees.[11]
2.12
The committee also asked questions about the Fair Work Education and
Information Program. The department outlined that 19 organisations received
$10.7 million to administer the program. Organisations delivered 3500
activities, of which 2400 were workshops or seminars. The program finished in
April 2010 and upon receipt of all reports from providers the evaluation
process will begin. The department explained that future education campaigns
are a matter for the Fair Work Ombudsman.[12]
General Employee Entitlements and Redundancy Scheme (GEERS)
2.13
The committee pursued questions relating to the $178.4 million allocated
to the General Employee Entitlements and Redundancy Scheme (GEERS), an $88 million
increase from last year’s allocation. Departmental officers explained that
GEERS is a demand-driven scheme and the funding appropriated in each budget
fluctuates depending on the number of insolvencies, the award or conditions of
employment, outstanding entitlements and years of service for employees in that
particular year. The committee also queried the measurement of GEERS'
performance against the outcomes listed in the Portfolio Budget Statement and
heard that this was done through client surveys.[13]
2.14
The department reported that in the period 1 July 2009 to 30 April 2010 GEERS
received 15,622 claims and the average amount of assistance per claim was $9926.57.
Opposition senators highlighted the lengthy waiting period that some workers experience
due to the requirement for a business to be in liquidation before GEERS can
process a claim. They also queried whether a mechanism could be introduced to
the scheme to allow the worker to be paid from government resources, with the
money to be reimbursed by the liquidated company at a later date. The Minister
undertook to pass on this suggestion.[14]
Cross Portfolio
2.15
Opposition senators sought clarification about funding allocated to the
National Green Jobs Corp. DEEWR's website shows a $79.6 million investment over
two years, and the Portfolio Budget Statements show there is $77.2 million
allocated over three years.[15]
The department explained that $79.6 million is the total cost of the budget
measure, which includes the cost of departmental expenses to administer the
measure. The $77.2 million over three years is the actual cost of the program.[16]
2.16
Opposition senators asked about the Trade Training Centres in Schools
program. They placed on notice a number of questions pertaining to exit clauses
in the contracts and indicated a desire to replace the Trade Training Centres
with alternative arrangements.[17]
Comcare
2.17
Opposition senators asked whether regulatory complexity would increase for
non-government licensees in moving to the national occupational health and
safety system. Officers explained that the issue has been discussed in
workshops with the licensees. Additionally, Comcare, with the department, has
consulted with senior officials in states and territories to determine possible
consequences of the transfer.[18]
2.18
Opposition senators referred to an article in the Public Service News,
'Comcare calculations add up to problems'[19],
and asked how Comcare has overcome the issues identified by the Acting
Commonwealth Ombudsman. Officers responded that they welcomed the scrutiny and
a number of responses have been implemented, including changes to Comcare's
information technology and training systems.[20]
Safe Work Australia
2.19
Officers from Safe Work Australia stated that they are well advanced in
their development of the model work health and safety regulations and priority
codes of practice. The time line for completion is October-November 2010, which
will be followed by a four-month public consultation period and an agreement
from the Workplace Relations Ministers' Council during early 2011.[21]
2.20
Opposition senators expressed concerns that the jurisdictional notes
contained in the Model Work Health and Safety Bill could produce fundamental
jurisdictional differences.[22]
Officers confirmed that jurisdictional notes allow individual jurisdictions to
amend and sometimes delete entire provisions of the model bill, but explained
that in most cases this would only occur when there was duplication with an
existing law.[23]
Officers noted that Safe Work Australia is developing a model explanatory
memorandum to aid in consistent interpretation.[24]
Fair Work Ombudsman
2.21
Senators inquired about the progress of the Shared Industry Assistance
Project (SIAP). Grants from this program will be used to develop modern award
guidance material in partnership with the Fair Work Ombudsman. Applications
close on 15 June and decisions will be made by 30 June 2010.[25]
2.22
Opposition senators questioned the ambiguity surrounding the model
transitional provisions to the modern awards. Officers explained that
submissions received through the public consultation process indicated a number
of contrary views on certain aspects of the transitional provisions. The
Ombudsman stated that these matters would be resolved through Fair Work
Australia.[26]
Fair Work Australia
2.23
The committee asked about the progress of the telephone conciliation
trial. Officers replied that the trial has been very satisfactory and has had
good settlement rates.[27]
Since 1 July 2009, more than 90 per cent of conciliations have taken place over
the telephone. In addition, of the 6871 matters that have been conciliated, 81
per cent of those have been settled at the conciliation stage. Officers
noted that they have received a lot of positive feedback about the process.[28]
2.24
The committee inquired about the outages in, and efficiencies of, the
Case Management System (CMS). Officers explained that the system provides a
uniform database by which material can be entered and tracked as it moves
through the organisation. Officers said that, from general observation, periods
of outage have not been excessive, and offered to provide more detail on
notice.[29]
Australian Building and Construction Commission
2.25
The committee noted the pending conclusion of the Hon John Lloyd's term
as Commissioner of the Australian Building and Construction Commission (ABCC)
on 28 September 2010.[30]
Senators sought details on the process of both his resignation and the
advertisement of the position of commissioner. The department had earlier
tabled a letter from the Hon Julia Gillard MP, Minister for Employment and
Workplace Relations, outlining that the position was due for advertisement,
that Mr Lloyd was welcome to apply and that the appointment would be based on
merit.[31]
2.26
Senators asked for an update on active investigations. Officers stated
that as at 1 May 2010 the ABCC had 59 active investigations and took further
detail on notice.[32]
2.27
Senators also asked about arrangements between the ABCC and the Fair Work
Ombudsman in relation to sham contracting.[33]
Officers explained sham contracting incidents can be allocated to either
organisation. This is on a case-by-case basis, according to the broader context
surrounding the incident and which organisation has the relevant expertise.[34]
Outcome 1 (Child care)
2.28
Opposition Senators called for an explanation of the government's
decision to not build 222 child care centres. Officers responded that the
centres were never a firm commitment, but were subject to monitoring the child
care market in the wake of the collapse of ABC Learning. Opposition Senators
acknowledged that they were aware that this was the Government's position.[35]
Data from the first quarter of 2010 showed that 91 per cent of long day care
centres across all regions reported having vacancies each day. On the basis of
these vacancies, numbering some 65,000 long day care places each day, the government
decided that further supply of child care centres was not warranted.[36]
2.29
Committee members queried the impact of the government's proposed
capping at $7500 and temporary four year indexation pause of the child care
rebate. Officers explained the measure was expected to impact on only three per
cent of families in its first year, and that the $86.3 million savings generated
by the measure would partially offset the cost of implementing a National
Quality Framework for the child care sector.[37]
Outcome 3 (Higher education and VET)
Tertiary Education Quality and
Standards Agency
2.30
Senators were interested in progress with establishing the Tertiary
Education Quality and Standards Agency (TEQSA). The minister representing the
Minister for Education indicated that the relevant legislation could be
introduced in the spring session of parliament. Senators were told that
consultations were occurring with an expert reference group, which included
some vice-chancellors, and that while there is some apprehension about the
yet-to-be-revealed details of the proposed standards, there is broad support
for the general concept of introducing common standards.[38]
Education Investment Fund
2.31
There was also considerable interest shown in the Education Investment
Fund (EIF). The committee heard that the EIF is targeted toward substantial
infrastructure projects that have a 'transformative potential for higher
education, VET and research systems'[39].
It was established that two payments of $3 billion each had been made to the
fund, and that its current balance was $5.868 billion. Of that sum $3.95
billion was committed to projects, with $0.941 billion actually paid out as at
31 March 2010.[40]
Productivity Places Program
2.32
Opposition Senators asked questions about changes that have been made to
the Productivity Places Program since its commencement on 1 April 2008. Officers
explained that, in response to the global recession, funding was brought
forward from future program years to be deployed in areas of high need. States
received additional resources and improved flexibility to enable them to
respond quickly to local training needs. It was explained that funding was
brought forward from the 2013-14 financial year for this purpose, and that the government
would decide in future years whether to replace that funding in 2013-14.[41]
Outcome 2 (Schools)
Schools funding review expert panel
2.33
The committee opened its examination of outcome 2 by asking about the
expert panel which has been engaged to oversee the review of school funding
from late 2010. Officers informed the committee that the panel was selected by
the Deputy Prime Minister and that DEEWR offered advice on membership. The
committee was told the panel will be fair and open-minded in its deliberations,
and that the expectation is that the review process will be 'very open and
robust'.[42]
The panel will report its findings in 2011, which will allow enough time to
implement changes and for schools to make adjustments before the new funding
period starting in 2013.[43]
Indigenous Boarding Facilities
2.34
Committee members wanted to know what progress had been made on the
construction of three Indigenous Boarding Facilities in the Northern Territory.
The committee was informed that, a site has been confirmed in Wadeye and
negotiations are continuing on sites for facilities in the Warlpiri Triangle
and East Arnhem Land.[44]
2.35
Some Senators remarked that progress seemed to be slow for the
Indigenous Boarding facilities, which were announced in the 2008-09 Budget. In
response, officers described the extensive consultation process that has been
undertaken, to ensure that chosen sites are appropriate and that community and
family needs are met.[45]
Smarter Schools – Low
Socio-Economic Status (SES) School Communities National Partnership
2.36
The committee was interested to hear about progress rolling out the
Smarter Schools – Low Socio-Economic Status (SES) School Communities National
Partnership. The Commonwealth is contributing $1.5 million over seven years,
with states and territories matching that contribution in their jurisdiction in
either new funding or redirected resources.[46]
The object of the partnership is to initiate reforms in schools and communities
which will support the education and wellbeing of students in low SES
communities.[47]
2.37
Senators were told that $120 million has been paid under the partnership
to date and that by the end of 2010, 975 out of the 1683 schools which will
ultimately receive support will be actively participating in the partnership. Officers
informed the committee that the department's state office network has extensive
relationships with schools, school communities and other education stakeholder
groups, and that these relationships are central to the department's monitoring
and evaluation of the Smarter Schools – Low SES School Communities National
Partnership.[48]
Building the Education Revolution –
Primary Schools for the 21st Century
2.38
Senators showed considerable interest in the Building the Education
Revolution – Primary Schools for the 21st Century (BER - P21)
program.
2.39
The committee was told that as at 30 April 2010, 98 per cent (or 10,376
of 10,697) of all P21 projects had commenced.[49]
Senators were also told that as at 7 May 2010, $7.8 billion has been
paid out by the commonwealth to the 22 education authorities[50],
and a further $2.2 billion is expected to be paid out by the end of July 2010.[51]
Of this amount some $6.16 billion has been committed for expenditure in
contracts between education authorities and builders.[52]
2.40
There was also discussion about the processes that the Commonwealth has
in place to ensure that it achieves value for money under the BER program. Officers
explained that there were several assurance steps built in to the process:
appropriate documentary frameworks were established at the outset of the
program; discussions were held with education authorities to discuss value for
money in the context of the stimulus prior to establishing agreements;
agreement documentation specifically referred to value for money principles in
contracting and tendering; and there is a requirement to adhere to government
procurement regulations, including ensuring value for money.[53]
The BER Implementation Taskforce has been established as an 'additional measure
of assurance'.[54]
2.41
Opposition Senators noted that at the recent Finance and Public
Administration estimates the Australian National Audit Office (ANAO) had been
critical of value for money assurance mechanisms DEEWR had built into the BER.[55]
Officers from DEEWR commented that the Auditor-General did not make those
remarks in the BER Audit Report, and added that they do not agree with the
ANAO's remarks and do not accept them.[56]
Senator Gavin Marshall
Chair
Navigation: Previous Page | Contents | Next Page