List of recommendations

4.134The Committee recommends that a new Commonwealth Employment Services System be developed and implemented in line with the recommendations of this report and informed by close and ongoing consultation with experts, stakeholders, and service users. This should be underpinned by formal intergovernmental agreement(s) setting out roles and responsibilities for coordination with skills, training and related human services, service delivery, and arrangements for implementation and funding including co-investments to tackle long-term unemployment, place-based disadvantage, and industry transitions.

4.151The Committee recommends that the Australian Government work with key stakeholders to develop a refreshed vision, objectives and service eligibility for a rebuilt Commonwealth Employment Services System as follows:

The proposed guiding vision is that all Australians can enjoy decent, secure employment and economic and social participation, regardless of who they are or where they live.

The proposed objectives are:

osupport the wellbeing and economic security of individuals and their families through engagement in sustainable employment and preventing and addressing long-term unemployment and intergenerational disadvantage;

ogrow the skills and capabilities of the Australian workforce and advance the productivity of the Australian economy;

orespond to the workforce needs of business and industry and provide adaptive and flexible responses to energy and industry transitions; and

obuild human capability and social capital to connect people with the full range of social and economic opportunities available in communities.

Subject to service design and fiscal constraints, desirable adjustments to service eligibility which should be trialled are to extend support to all people who are citizens or permanent residents and who are: unemployed, not in the labour force, or underemployed; stuck in casual and insecure work or trying to survive in the gig economy; wanting to up-skill or improve their economic security; facing job loss; or working in industries and regions facing economic transition.

4.155The Committee recommends that the Australian Government work with State and Territory Governments and key stakeholders to establish permanent mechanisms for client, stakeholder, and expert input into a rebuilt Commonwealth Employment Services System with the following elements:

One or more Client Councils tasked with inputting client experiences.

An Employment Services Coordinating Council, responsible for providing stakeholder and expert advice to support continuous improvement to policy and program design and delivery.

4.169The Committee recommends that the Australian Government implement the following measures to enhance its role in stewarding the employment service system and increase the direct delivery of services by government:

Establish Employment Services Australia (ESA) as a new entity within the Department of Employment and Workplace Relations to undertake specified activities including core enabling functions in regions, be a large hybrid provider for those closest to the labour market, and some case management activities as outlined in this report.

Establish a network of regional hubs and service gateways delivered by ESA. The regional hubs should be co‑located where possible with existing services and include the following core-enabling functions:

olocal service system coordination and mapping;

ojobseeker assessment and referrals to services;

oindustry and employer engagement and support;

oadministration of government support for social enterprise and local projects; and

odelivery of industry transition and place-based projects for Commonwealth and State Governments.

4.179The Committee recommends that the Australian Government develop and implement a Commonwealth Social Procurement Framework to leverage Commonwealth spending on major projects and large service contracts to create more employment and training opportunities for long-term unemployed and disadvantaged jobseekers. The Framework should align with and complement existing approaches in the Commonwealth at the State and Territory level and be developed with input from key sector enablers such as Social Traders, National Disability Services, Fair Work, and Supply Nation.

All States and Territories should be encouraged to adopt a similar approach. This should include greater commitment to employing local people when Commonwealth, State, and local government services are delivered in local and regional areas and to improving gender outcomes in certain sectors such as construction.

4.180The Committee recommends that the Australian Government work with State, Territory, and local governments to develop and implement strategies to provide long-term unemployed people with job opportunities, including targets for the creation of entry-level jobs, paid internships and traineeships in Commonwealth, State, and Territory agencies and consideration of the role that State owned utilities and corporations could play. This should include greater commitment to employing local people when Commonwealth, State, and local government services are delivered in local and regional areas.

4.181The Committee recommends that the Government create a permanent administrative traineeship position for disadvantaged jobseekers in the electorate office of each Member of Parliament. Each placement would last between nine and 18 months, and include paid work integrated with a vocational education and training qualification and allow for a subsequent period of work while undertaking supported job search.

5.193The Committee recommends that the core service model for the new Commonwealth Employment Services System provide far more tailored and flexible support, with tailored Participation and Jobs Plans that recognise more diverse pathways to employment. The model should include the following key elements:

A digital-hybrid employment service delivered by Employment Service Australia for those jobseekers identified as being able to effectively self-manage online.

Case management services informed by more tailored assessment and Participation and Jobs Plans, differentiated by an individual’s needs and proximity to the labour market, with:

oA ‘low intensity’ advisory and support service focused on preparing for and finding work and addressing minor vocational barriers to employment, generally provided by contracted service partners.

oA ‘medium intensity’ case management service focused on setting goals and overcoming vocational and non-vocational barriers, generally provided by contracted service partners.

oA ‘high intensity’ service for people who are furthest from the labour market, including in-depth and wrap-around support, likely case managed through a public sector-led program.

Referral and access to other human services that address substantial non-vocational barriers to employment as required.

Cohort-specific specialist support delivered by organisations with relevant expertise and competency, with priority cohorts including First Nations peoples, people from culturally and linguistically diverse backgrounds and people with significant disabilities.

Social and community participation goals for people who are unlikely to benefit from other assistance for whom employment is simply not a realistic outcome at least in the short term.

5.194The Committee recommends that the Australian Government develop, trial, and implement measures to embed pre-employment and vocational supports within a person’s primary human service, such as mental health, homelessness, or family violence services. This should be informed by the approach being taken in Headspace.

5.195The Committee recommends that in designing a high intensity case management service for people furthest from the labour market, most likely delivered by the public sector or community based not-for-profit service partners, the Australian Government consider the lessons of the former Personal Support Programme and the French ‘remobilisation’ package for long-term and very-long-term unemployed people.

5.202The Committee recommends that the Commonwealth Employment Services System include a youth-specific service, open to all people under the age of 25years. The Youth Employment Service should retain the existing Transition to Work program as a more intensive option while also providing less intensive support options that vary according to individual circumstances and Participation and Jobs Plans. Commissioning and procurement should preference youth specialist providers with proven track records in delivering services to young people, as well as providers which are co-located with other youth services in youth hubs where possible.

5.203The Committee recommends that the Australian Government:

promote and encourage employers to deliver training to improve attitudes towards older people in the workforce; and

strongly encourage providers—and service partners, under the rebuilt Commonwealth Employment Services System—to work with employers to change attitudes towards older people in the workforce and to develop more inclusive recruitment and work practices.

5.211The Committee recommends that in relation to employment service support for ex-offenders:

Commonwealth and State and Territory Employment and Corrections Ministers commission a serious piece of reform work—potentially via National Cabinet—to develop a refreshed intergovernmental commitment and agreement to reform, design, delivery and funding of employment services for ex-offenders pre-release, on-release and post-release. States and Territories should be encouraged to co-invest in employment services and programs for ex-offenders given the significant fiscal savings that accrue from reduced recidivism.

There be at least one specialist provider available in each jurisdiction and no more than one in each place, supported by cohort based and place-based programs which integrate with the corrections system and provide holistic support and access to other human services.

6.78The Committee recommends that the Australian Government take account of the findings of this report in relation to pay and conditions, support appropriate short-term actions to help stabilise the workforce, and link medium-and longer-term arrangements for pay and conditions in a rebuilt system focused on quality to a coherent plan to re-professionalise the sector’s workforce. Such a plan should also include measures to ensure that the ratio of clients to staff is sufficiently low that staff are able to deliver effective, person-centred services to clients.

6.88The Committee recommends that the Australian Government work with the sector and key stakeholders to co‑design a professional framework of skills, capabilities, and qualifications for frontline staff consistent with this report. Development of the framework should be led by the new Employment Services Quality Commission. The framework should include:

a typology of skills, qualifications, and competencies that frontline staff must hold;

measures to ensure that frontline staff possess the necessary competencies to support a diverse cohort of clients, including First Nations peoples, older people, and people with disability;

measures to ensure that required competencies can be adjusted to account for regional variations and labour market contexts; and

measures to enable service partners to recruit and retain staff who do not possess formal qualifications where appropriate, including measures to enable service partners to:

orecruit staff with lived experience in or experience delivering pre-employment or employment services; and

osupport staff to gain formal qualifications post-commencement.

6.89The Committee recommends that the Australian Government work with the sector and key stakeholders to co-design a new approach to support ongoing capability development of frontline staff in the employment services system. This should include establishing an Employment Services Capability Fund.

7.100The Committee recommends that the Australian Government address issues impacting the functionality of employment services IT systems as a matter of urgency. A continuous improvement fund and program should be implemented for IT systems, with priorities determined collaboratively with providers having regard to evidence provided to this inquiry. The fund and program should include implementing measures to:

streamline reporting and other information requirements, with a view to significantly reducing the number of times a provider is required to report the same information;

improve accuracy, reliability, and consistency in the information available to providers, and to other key stakeholders as appropriate;

ensure that providers have access to up-to-date information on participants on their caseloads, including information on resumes and job searches;

allow providers to make changes to the information in the system regarding participants on their caseloads;

ensure significant changes to IT systems are rigorously tested with providers and other key stakeholders before they are rolled out; and

provide ongoing funding to DEWR to enable it to undertake minor and periodic changes to IT systems to avoid the current situation arising again.

7.101The Committee recommends that the Australian Government adopt a clear ‘tellgovernment once’ principle for employment service clients, whereby critical information relevant to a client’s employment potential and service history is available to relevant public sector agencies and service partners contracted to support an individual.

7.102The Committee recommends that the Australian Government expedite work between the Department of Employment and Workplace Relations and the Australian Taxation Office to fully integrate Single Touch Payroll data into the management and administration of employment services and introduce legislative changes to make it available for broader research and evaluation purposes.

7.103The Committee recommends that:

dedicated channels (email and telephone) into Services Australia be re‑established for service delivery partners including service partners and the Department of Employment and Workplace Relations; and

the rebuilt Commonwealth Employment Services System include more collaborative arrangements between Services Australia, Department of Employment and Workplace Relations and providers to address servicing and participant issues and experiences.

7.104The Committee recommends that the Australian Government, working with key stakeholders in the employment and human services ecosystem, simplify and streamline the approach to assurance and accreditation for employment services. This should include:

identification and removal of duplicative and redundant requirements in the accreditation process;

development of a framework for mutual recognition of accreditation across the employment services and broader human services ecosystem;

implementation of a risk-based approach to assurance, incorporating clear recognition of provider accreditation and a focus on demonstrated risk indicators;

providing timely feedback to providers after an audit or assurance process, including implementation of standard timeframes;

identification of future opportunities to leverage data to support payment and process compliance; and

the Australian Government or a suitable intermediary becoming a supplier of Right Fit For Risk compliant IT security services for smaller organisations.

7.118The Committee recommends that the Australian Government establish an Employment Services Quality Commission as an independent regulator for the sector. The Employment Services Quality Commission should have functions in accordance with the findings of this report including:

establishing a quality framework and licensing standards;

workforce standards and sector professional development;

provider licensing and accreditation;

advising on pricing for high quality services, commissioning and payment models;

complaints management, including the development of a complaints procedure that is user-friendly and readily accessible to participants;

data collection, analysis, release, and championing transparency; and

research, evaluation, continuous learning, and quality improvement.

8.61The Committee recommends that the Australian Government:

adopt a clear default principle of transparency whereby all data is published as matter of course unless there is a compelling reason not to do so; and

implement a comprehensive and structured program of data release to support research capability and enable evidence-based improvements to the sector, with the program to include:

oidentification of data assets—including administrative and survey data;

oa clear schedule for the release of data assets to the public;

oa comprehensive data protection framework;

otraining and ongoing support in the use of the data for all officers;

oa service level requirement that administrative and survey data will be released no less than 12months after it is collected unless the data is specifically collected for the purposes of an evaluation; and

oa policy framework and IT system changes to support the integration of data from other sources including Australian Government, State and Territory Governments, and research institutions.

This program should be finalised and published within 12–18 months of the tabling of this report.

8.62The Committee recommends that the Australian Government implement a new evaluation framework for employment services, including the following key elements:

A maximum 18-month period release date for evaluation reports following the end of the period analysed.

Release of data used for the purposes of the evaluation for external scrutiny and analysis at the time the evaluation report is published.

Inclusion of a broader range of metrics of effectiveness, including measures which assess the success of the system in building a jobseeker’s capacity for social and economic participation and meeting the needs of employers.

Consideration of the satisfaction of service users including unemployed people and employers.

8.75The Committee recommends that the Australian Government establish a unit within the new Employment Services Quality Commission responsible for continuous research and learning regarding service delivery and quality improvement and sharing of good practice. The unit should undertake its work with the Department of Employment and Workplace Relations, service partners, clients and external research partners including Universities and the Australian Centre for Evaluation, with its functions to include:

leading work to identify and share best practice in the design and delivery of employment services;

identifying and mapping pathways to employment, including services that would best support jobseekers along those pathways and the costs associated with service delivery; and

developing an ongoing collaborative research agenda for the sector, including measures to enable greater access to data to support research efforts.

8.78The Committee recommends that the Australian Government ensure all service partners can access information they enter into the department’s IT systems unless there are clear, defendable reasons for not making that data available.

8.83The Committee recommends that the Australian Government ensure a rebuilt Commonwealth Employment Services System permanently design in the capacity to experiment with innovative service delivery approaches. Trials should be subject to rigorous co‑design with stakeholders including participants, providers, peak bodies, and academic and policy experts, and should be subject to robust monitoring and evaluation. ‘Innovation zones’ should be considered along with exclusion of approved trials of new initiatives from performance metrics so as not to discourage or punish providers and services which try new approaches.

9.98The Committee recommends that the Australian Government reframe its initial contact with and messaging to jobseekers as quickly as possible. A better framework for contacting jobseekers should include the following key elements:

Clear, consistent information is available on relevant government websites about the roles, functions, operation, and benefits of employment services.

Jobseekers are able to contact responsible agencies directly for advice on employment services and income support within a reasonable timeframe.

Avoiding conduct or language that reinforces shame associated with accessing income or employment support.

Ensuring communications use plain, sensitive language.

Communications notifying jobseekers of their Participation Interview are unambiguous as to reasons for the contact and clearly explain the purpose of the interview.

If possible, outbound calls show a dedicated phone number, so recipients know who the contact is from. This should acknowledge potential concerns as to spoofing, spam and fraud.

9.114The Committee recommends that the Australian Government co-design a new jobseeker assessment service, including the following key elements:

The Job Seeker Snapshot (JSS) is retained, subject to amendments to ensure it accurately identifies jobseekers who are best suited to online-hybrid services. The amendments should be trialled ahead of national rollout and should be subject to robust monitoring and evaluation.

All jobseekers, except those determined via the JSS to be suited to online services, are rapidly referred to Employment Services Australia for comprehensive assessment of the jobseekers’ aspirations and barriers.

Following assessment, Employment Services Australia (via Regional Hubs):

oprovides details of the services and providers in the area;

orecommends service(s) that would be most beneficial for the jobseeker;

oidentifies people who have little to no short-term prospects of securing employment, who have other barriers that should be addressed before referral to a provider or who would be better supported by a non-provider service, and prepares a Participation and Jobs Plan for those clients that underpins their mutual obligations; and

oidentifies people who should be referred to a provider for case management and support with job search, providing the jobseeker up to a week to select their provider and supports a handover.

A client who shows commitment and meaningfully engages with Employment Services Australia during the assessment process fully meets their mutual accountability requirements for that period.

Performance measures for Employment Services Australia focus on the appropriateness of services to which jobseekers are allocated.

9.118The Committee recommends that the Australian Government develop and implement measures to:

enable providers to refer jobseekers back to Employment Services Australia for re‑assessment;

enable jobseekers to self-initiate transfers between providers and services with minimal administrative burden, subject to the provider or service having been identified as appropriate during their assessment;

allow jobseekers to seek re‑assessment by Employment Services Australia; and

require re‑assessment by Employment Services Australia of jobseekers being supported by a provider who have not secured work within a defined period.

9.122The Committee recommends that the Australian Government:

review the boundaries of Community Development Program (CDP) regions with a view to incorporating clearly urban areas (such as the southern area of Darwin) into mainstream employment services while allowing a ‘buffer’ or ‘overlap’ zone where people can choose to be allocated to CDP or mainstream services; and

simplify the process for jobseekers who move regularly between remote and non-remote regions and give consideration to allowing a person to nominate one program through which they will be primarily serviced and stay attached to that service.

9.133The Committee recommends that the Australian Government consider reinstating the Sickness Allowance and extending eligibility for the Allowance to people with sustained, medium, or longer-term medical conditions that preclude them from seeking employment in the foreseeable future and allow medical certificates for longer than three months where appropriate.

9.134The Committee recommends that the Australian Government consider possible minor adjustments, as proposed in this report, to better identify jobseekers who are extremely-long-term unemployed and are eligible for and should be granted a Disability Support Pension. This should be done without revising the impairment tables or creating a perverse incentive to become extremely long‑term unemployed.

9.135The Committee recommends that the Australian Government develop and implement measures to reduce the cost of obtaining medical evidence for purposes relating to employment services, up to and including offering subsidised medical appointments for this purpose.

10.99The Committee recommends that the Australian Government ensure that all participants in employment services have access to training and supports to improve their digital literacy, noting that lack of digital literacy is frequently a barrier both to efficiently accessing services and to employment.

10.100The Committee recommends that the Australian Government:

ensure that the digital tools for employment services and the primary government websites for employment services are available in, at a minimum, the languages in which reporting is available via the Centrelink Express Plus app, as well as in those languages most commonly used by jobseekers on the employment services caseload;

develop and implement a strategy for increasing the number of languages in which online information and reporting tools are available, including in response to changes to the makeup of the employment services caseload;

ensure major updates to digital tools and user interfaces for employment services are fully tested with target cohorts before being implemented. This should include testing with older people, people from culturally and linguistically diverse backgrounds, First Nations peoples, and people with disability; and

develop a Digital Protections Framework to provide robust safeguards for clients and other stakeholders against the adverse impacts of increasing digitalisation and automation of services.

10.110The Committee recommends that the Australian Government should properly resource the Department of Employment and Workplace Relations (DEWR) to support its transformation into a hybrid provider with a spectrum of online services and more intensive supports, with a robust evidence base established via use of data analytics and randomised control trials including proactive outreach, for example:

general periodic welfare checks;

coaching discussion of the client’s progress in terms of building capacity and moving towards employment;

proactive provision of information about skills development and training opportunities and other support services in a client’s local community and region (supported by Employment Services Australia’s mapping of the human services eco-system in each region);

trialling an occasional video or face-to-face engagement, given the success this has had in overseas hybrid public providers; and

information about transferring to provider-led services to people identified through engagement or data analytics as not faring well in online services or identified as being at higher risk of long-term unemployment.

10.111The Committee recommends that with respect to the optimal default time(s) that a client remains in online services:

The Australian Government review and establish a firmer evidence based through Service Improvement Trials using randomised control trial methodology, with a view to determining an optimal default time for participation in an enhanced online or hybrid service. This may include trialling six-, 9-, 12- and 15-months (accompanied by consistent proactive interventions) and assessing the outcomes for various cohorts of people, expecting that the optimal time may vary depending on a person’s characteristics, geographic location, and variations in the labour market.

The Department of Employment and Workplace Relations be provided with the ability to require re-assessment of a person in online services, and to mandate referral to face-to-face provider services where there is clear evidence that a person is not faring well and is unlikely to succeed without more intensive support.

10.119The Committee recommends that the Australian Government seriously consider the implementation of a policy framework to integrate commercial digital jobs marketplaces into the employment services system taking account of the conclusions of this report, including the following key elements:

Competitive neutrality and open access to all providers subject to meeting robust cybersecurity, privacy, and service standards.

Safeguards and transparency relating to the use of artificial intelligence, including to prevent algorithmic discrimination against disadvantaged jobseekers.

Jobseekers being able to automatically report activities through commercial marketplace partners to the employment services system.

Regular sharing of data on jobseeker activity with the employment services system, to enable program-level accountability and inform future policy direction.

Relevant content is promoted on behalf of businesses and industries using in-flow and adjacent marketing channels.

Clients have regular access to a wide range of job opportunities and recommendations based on their candidate profile and/or job preferences.

Eventual retirement of the online jobs board in Workforce Australia once commercial partnerships are established and working well.

11.53The Committee recommends that the Australian Government design and implement a new policy framework to give effect to the legislative requirement for an Employment Pathway Plan, which should include the following key elements:

An acknowledgement of the requirement to show commitment and engage meaningfully with the employment services system and a broad explanation of the genuinely mutual obligations which apply. This includes the preparation of a Participation and Jobs Plan within a default timeline and that a payment is provisional until the plan is approved.

A new Participation and Jobs Plan is developed: by the participant— online if in hybrid services; with Employment Services Australia if being case managed there; or with a contracted partner Job Coach provider if referred for outsourced case management. This would be a goal-based plan which should include, at a minimum:

oan overview of the participant’s aspirations, needs, and circumstances;

othe support the provider will deliver to help the jobseeker address their needs and achieve their aspirations;

oactivities in which the participant commits to engage, including how these will contribute to building capacity and moving toward employment;

otimeframes for completing expected activities; and

oagreed requirements for regular appointments (the timeframe for which may vary depending on individual circumstances).

The Participation and Jobs Plan is a result of genuine negotiation between jobseeker and provider.

The Participation and Jobs Plan is regularly reviewed and updated to ensure that it aligns with the current needs and circumstances of the jobseeker.

11.58The Committee recommends that the Australian Government, consistent with the adoption of broader objectives for a rebuilt employment services system such as economic security and productivity uplift, develop and articulate:

guiding principles for job quality informed by international experience and approaches, including a typology of ‘lower’ and ‘higher’ quality jobs, to set out an Australian view as to what constitutes decent work which the system should aspire to help people secure; and

develop metrics to evaluate the success of the employment services system in supporting jobseekers to obtain ‘quality’ employment.

11.63The Committee recommends that the Australian Government develop—through a process of co-design—trial and evaluate the cost-effectiveness of a career progression assistance program targeted to employees in lower-paid, entry-level, and insecure jobs. This should be funded on a fee-for-service basis.

11.73The Committee recommends that the Australian Government review governance arrangements for the Employment Fund, including administrative requirements for reimbursements and approved categories of expenditure. This should include:

clarifying the items that should be automatically allowable and directly accessible for jobseekers such as meeting transport costs to interviews, services and mandatory activities; data; and Drivers Licence training and acquisition;

simplifying the process to claim reimbursements using a less punitive ‘Trust but Verify’ approach to contracted partners to reduce the number of staff devoted to administration and compliance and free up these resources for more productive activities;

increasing flexibility in how the Employment Fund may be used (for payments that are not to a provider or a related entity); and

giving consideration to crediting the Employment Fund annually for very-long-term unemployed clients.

11.82The Committee recommends that the Australian Government establish a clear default principle that:

Providers are not permitted to refer participants on their caseload to training programs which they deliver or which are delivered by a related entity except with express approval by the department which would only be expected in limited circumstances. Guidelines should be developed to clarify the circumstances in which approvals may be given. These should require DEWR to have regard to whether refusing to approve referrals would unduly restrict access to training or support in thin market areas, and to whether the training is of high quality and represents value for money.

Providers are not permitted to use the Employment Fund to pay for activities, services, or programs that they deliver or which are delivered by a related entity except with express approval from the department. Guidelines should be developed to clarify the circumstances in which these approvals may be given.

There should also be a safeguard that requires a client to be told in every instance when an own or related entity payment is sought from the Employment Fund, that activities funded must never be imposed by a provider on a client, and that they be advised of potential alternatives given the conflict-of-interest risk.

These default principles should be reviewed as part of the reforms leading to a rebuilt Commonwealth Employment Services System to determine whether they remain necessary.

12.100The Committee recommends that the rebuilt Commonwealth Employment Services System include a dedicated employer-focused service, as a one-stop-shop to ‘hide the wiring’ for businesses. This service should be delivered by Employment Services Australia’s Regional Hubs, and should have the following key functions:

A greater focus on matching jobseekers to vacancies, including brokering placements for jobseekers with specific needs.

Working with employers to deliver recruitment and workforce development support, including job design and job carving, new human resources practices and adapting work environments to welcome new and diverse employees and support them to stay.

Working with employers to encourage and support them to deliver training, and to encourage employers to see themselves as not just a destination but as a key contributor to skills development.

Delivering or providing referrals to industry-specific training.

Partnering with providers, employers, and other key stakeholders to deliver targeted demand-driven employment projects focused on meeting the workforce needs of an individual employer or local community or region.

Providing in-employment support, including career development.

Collecting and sharing local labour market data to inform insights about vacancies and local skills needs.

12.101The Committee recommends that the rebuilt Commonwealth Employment Services System make greater and more targeted use of intermediaries and bridging services such as not-for-profit labour hire firms, social enterprises, and sector and industry bodies, particularly as a means of reducing actual and perceived risks for employers associated with engaging disadvantaged jobseekers and in supporting social procurement initiatives. This should include:

making facilitating and coordinating engagement between contracted partners, intermediaries, and employers a key function of Employment Services Australia’s regional hubs; and

ensuring that intermediaries and bridging services are captured by the Commonwealth Social Procurement Framework contemplated by Recommendation 5.

13.132The Committee recommends that the Australian Government consolidate and reduce the number of complementary programs and implement measures to enhance the programs which are retained. Over time, this should include the following changes:

Ceasing Employability Skills Training, with the support provided via Block 1 courses incorporated into quality case management services and the support provided via Block 2 courses incorporated into the services delivered by Employment Services Australia’s regional hubs.

Retaining Career Transition Assistance and trialling remote participation in the program to improve accessibility especially in thin markets.

Retaining Self-Employment Assistance while reviewing the program with consideration to the enhancements recommended in evidence to this inquiry. This should include broadening eligibility criteria for the program.

Ceasing facilitation programs for employers and rolling these services into a consolidated employer-focused service delivered via Employment Services Australia’s Regional Hubs. This consolidation would include the Local Jobs Program, Workforce Specialists, and Employer Liaison Officers.

Continuing foundation skills programs with an enhanced focus on digital literacy and digital skills.

13.144The Committee recommends that Work for the Dole (WfD) be retained primarily as a last resort activity for people who fail to meaningfully engage or comply with their Participation and Jobs Plan over the long term. People who choose to participate in or are referred to WfD should receive a supplement that at least realistically covers their costs of transport and participation.

13.145The Committee recommends that the Australian Government co-design and trial a ‘Work in the Community’ community employment program in a limited number of regional areas and places with entrenched disadvantage, including the following key elements:

Voluntary participation and choice of placement.

Projects that contribute to community development, identified based on mapping of community need.

Jobs of varying duration and intensity with appropriate payment.

Work-like experiences with skills development and in-work training.

Success be defined around improvements in capability, health, mental health, connectedness, self-esteem, skills, and confidence rather than expecting entry into open employment in the first instance though open labour market pathways should be actively encouraged and facilitated.

The Australian Government should also consider providing a right of return tothe program to give clients confidence and security to pursue open employment.

13.157The Committee recommends that the Australian Government work with State and Territory Governments and key stakeholders such as Social Traders to develop and implement a Commonwealth social enterprise strategy, including the following measures:

Funding for social enterprises. Subject to the outcomes of the trials contemplated by Recommendation 51, a reverse auction grant model as developed by Jobs Victoria should be preferred.

Articulation of the role of social enterprises within the employment services system—both as employers and as training and support providers.

Direct links to the Commonwealth Social Procurement Strategy outlined in Recommendation 5.

Reducing if not eliminating barriers to entry into the employment services system for social enterprises.

Ensuring that data on training and employment outcomes is shared between social enterprise and government systems.

Endorsement of the certification framework administered by Social Traders, including additional financial support to enable national scaling.

13.158The Committee recommends that direct funding be made available to social enterprises which directly support employment outcomes. A reverse auction grant model as developed by Jobs Victoria should be used to establish an efficient price per outcome for various cohorts. This should include trialling the following complementary funding measures:

Each employment region be allocated a flexible grants fund which can be used to fund local organisations including social enterprises. Organisations could apply for funding using the reverse auction grant model making transparent the impact and cost, with grants assessed at the regional level. Funding should be reallocated from the existing Local Jobs Program, and designed to allow State and Territory Governments to co-invest in particular regions or places of interest; and

A complementary National Employment Grants Fund be established to allow social enterprises and complementary community-based programs to bid for funding for employment projects that cross more than one region.

13.172The Committee recommends that as a fundamental system design principle, wage subsidy programs (and other Active Labour Market Programs including paid work experience) should be centrally and transparently administered by the Department of Employment and Workplace Relations with funding de-linked from the Employment Fund.

13.173The Committee recommends that in redesigning wage subsidies as part of reforms to the employment services system key design principles to be considered include:

Maximum subsidy amounts available to employers, including scalable subsidies which reflect the capacity of a person being hired or trialled, their disadvantage and how long they have been out of the labour market and the number of hours a worked.

The types of work for which a wage subsidy may be claimed, including:

oa preference for secure work (more than six to 12 months) rather than temporary, casual and ‘gig’ work;

othe availability of subsidies for industries or roles which are currently excluded from the scheme;

othe extent to which subsidies should be available to labour hire organisations— if at all then likely only in sectors where labour hire is the major industry norm; and

ocoherence and integration of disparate incentive programs including within DES, CDP and any other such Commonwealth programs.

The adequacy of safeguards and integrity oversight, including restrictions on the circumstances in which an employer can claim a subsidy and on the number of subsidies that may be claimed.

13.174 The Committee recommends that the Australian Government work with State and Territory Governments to simplify access to and administration of wage subsidies across jurisdictions. This should include:

expanding the range of ways in which a person or organisation may enter into a wage subsidy agreement;

extending the time available to enter into a subsidy agreement, and aligning timeframes for agreements across programs as far as possible; and

enabling access to wage subsidies across Commonwealth, States and Territories programs via a single user interface.

13.178The Committee recommends that the Australian Government consider properly designed paid work experience, including the following key elements:

Engagement of a jobseeker from the employment services caseload for set periods (which may vary by placement).

Wages at or above the minimum wage with costs met by government or split between government and the employer, subject to negotiation.

Structured training and skills development opportunities.

Incentives for businesses to take on a number of work experience placements per year based on their total number of employees with employment pathways for a reasonable percentage.

A gradual increase in hours worked to build jobseekers’ resilience and fitness for work based on individual capacity.

Proper integrity safeguards and monitoring to avoid unethical churn and misuse by employers.

14.140The Committee recommends that in a rebuilt Commonwealth Employment Services System, the range of mutual obligation requirements be broadened and be much better tailored to individuals. Reforms should focus on cutting red tape, addressing employers’ concerns, and ensuring that mutual obligations are effective in supporting people into work, and should be founded on the following key principles:

For clients who are assessed as close to the labour market and largely self-managing in online-hybrid services: the Points Based Activity System (PBAS) be retained to underpin reporting against a person’s Participation and Jobs Plan. Changes to the PBAS should be made to provide more flexibility in activities; better tailor the points to the individual; and monitor progress and intervene earlier where a person is experiencing challenges in navigating the system.

For clients who are managed directly by Employment Services Australia or referred to service partners for case management, the core requirement be to meaningfully participate by attending appointments and undertaking activities as agreed via the Participation and Jobs Plan.

For clients who persistently fail to meaningfully engage or to comply with their Participation and Jobs Plan, the PBAS be used as the default reporting and compliance tool.

Over time, the Australian Government should also broadly harmonise mutual obligation requirements across the ‘mainstream’ employment service program and the Community Development Program.

14.147The Committee recommends that the Australian Government urgently implement changes to the compliance framework for employment services, proposed to include:

Providing case managers with frontline discretion to counsel clients regarding their obligations for the first two or three times that a person misses an appointment or commits another minor compliance breach within one year—rather than being forced to trigger demerit points and compliance action.

Adjusting the period within which a person must reconnect with the system after committing a breach from 48 hours to no more than four or five business days.

Amending the Points-Based Activation System (PBAS) such that:

o100 points is seen as the maximum and not the default points target across all services;

othe Digital Services Contact Centre (DSCC) review and consider adjustments to the points targets for clients in Workforce Australia Online who have experienced repeated suspensions or other penalties; and

ofor clients in Workforce Australia Services, the default points target be set at 50 points, with discretion afforded case managers to vary the points target up or down based on their professional judgement exercised in consultation with clients and that all points targets be reviewed as soon as possible after this report is tabled;

Case managers and the DSSC are given additional discretionary points (e.g., up to 40 points) that can be allocated each month to people who fail to meet their points target but who are showing commitment and are deemed to be meaningfully participating.

14.151The Committee recommends that as part the reforms contemplated by the Employment White Paper, the Australian Government:

monitor the impact of the proposed extension to the income support nil rate period; and

review income support eligibility criteria to ensure that they adequately take account of the circumstances of people impacted by seasonal work arrangements, especially in Northern Australia and other regions required due to the dry/wet season.

14.159The Committee recommends that the Australian Government implement the following clear default principles:

People suffering from substance dependency who are not genuinely seeking and engaged in medical treatment are not eligible for exemptions from mutual obligations.

Where a person is actively participating in medically supervised treatment for substance dependency including rehabilitation programs and early phase recovery, this can form all or part of a person’s Participation and Jobs Plan.

Exemptions are no longer automatically applied to people exiting the criminal justice system and are considered only on a case-by-case basis.

14.166The Committee recommends that the Australian Government replace current default mandatory activation requirements with a framework of ‘availability test’ activities that help jobseekers progress to employment, including the following key elements:

Activities in which the jobseeker must participate to meet their activation requirements are mutually agreed between the jobseeker and their provider (or Employment Services Australia) for online participants).

‘Default’ activation activities are removed, with jobseekers enabled to select from activities including community-based programs and paid work.

Specific timing for activation points be removed, and replaced with a more flexible range so they work in with a person’s other efforts and activities and take account of life events that may occur.

Activation requirements are recorded in the jobseeker’s Participation and Jobs Plan.

If a client refuses to choose or do an activity then, their case manager or Employment Services Australia (for online participants) is empowered to determine the mandatory activation activity that would best support them.

Employment Services Australia can exempt jobseekers from activation requirements in limited circumstances.

14.178The Committee recommends that, consistent with the Interim Report’s recommendations, the Australian Government introduce legislation to provide an additional compliance tool of a Partial Payment Withholding (a ‘holdback’) as a less onerous alternative to full payment suspensions providing strong incentive to re-engage with services but without leaving people (and their children and families) with insufficient funds to meet basic needs. 'Holdbacks’ should be repaid to the participant on re-engagement.

14.179The Committee recommends that the Australian Government implement a new Shared Accountability Framework. This should replace the current Targeted Compliance Framework and should include the following key elements:

Frontline discretion is restored so that case managers can educate and counsel people regarding their obligations for a limited number of minor or initial compliance breaches each year.

After counselling options are exhausted, a number of warnings be recorded which could result in a partial payment withholding (holdback) until the non-compliance is remedied.

People who accrue the maximum number of warnings by persistently failing to meet mutual obligation requirements are be referred to Employment Services Australia for a capability assessment.

Should there be barriers to participation or engagement, the client is referred back to their provider or offered the option to transfer to a different provider or service.

If there are no barriers to participation, the client may elect to be referred back to their provider and made aware of the risk of more serious compliance measures including payment suspensions, penalties, or cancellations. Alternatively, the client would be transferred to intensive case management by Employment Services Australia.

All decisions that affect income support payments must be made by a public servant in Services Australia, and not automatically by the IT system.

Guidelines and training for staff should be developed in consultation with stakeholders and subject to periodic review by the new Client Councils and the Employment Services Coordinating Council.

14.183The Committee recommends that the Australian Government consider trialling incentives to enhance engagement with employment services, with a view to national scaling if an incentive proves effective in increasing engagement and successful outcomes.

14.189The Committee recommends that the Australian Government consider options to simplify income reporting for employment services clients, especially those who are not working and do not intend to work and those who are participating in self-employment programs, including by enabling less frequent reporting for a defined period of time.

15.108The Committee recommends that the Australian Government develop over the next nine to 12 months a new model for regulatory culture and relational contracting for a rebuilt Commonwealth Employment Services System and articulate this before new approaches to commissioning are trialled or determined. This should occur as a collaboration between departments, centralagencies and expert academics supported by insights from the Australian National Audit Office and practices in other jurisdictions and the private sector.

15.127The Committee recommends that the commissioning model for a rebuilt Commonwealth Employment Services System includes the following elements:

A review of employment regional boundaries leading to a substantial increase the number of regions to better reflect natural labour markets and communities of interest, aligned as much as possible with Disability Employment Services and the Community Development Program. This should include mechanisms for periodic review.

Service partners engaged as follows:

ofor the generalist case management service, one partner per location, acknowledging that this may mean more than one partner per region;

ofor the youth specialist service, one partner per location, acknowledging that this may mean more than one partner per region; and

ospecialists commissioned to support target cohorts with priority on people from culturally and linguistically diverse backgrounds, people with disability, ex-offenders, and First Nations peoples, some of which may operate across more than one region utilising flexible servicing models.

Procurement for generalist and youth case management services and specialist service partners continue to be undertaken centrally but adjusted to include:

oa simplified tender process, to reduce barriers to entry for smaller and community-based organisations;

oa requirement for providers to demonstrate capacity to deliver targeted services to participants in their employment region; and

opriority for service partners which are able to demonstrate strong local and community connections and a proven track record in place.

Consider longer license terms for all providers, using Belgium’s approach which involves nine-year contracts with three-year renewals, with staggered re-tendering so that only one third of the provider market is subject to review at any one time.

15.128The Committee recommends that the Australian Government include efficient business transmission mechanisms into contracts for employment services. These should provide for:

increased use of government assets in the delivery of assistance; and

the transfer of facilities, assets, and equipment (and potentially staff options) when a provider is replaced in a location.

15.129The Committee recommends that as a priority, even before a new commissioning model is fully developed and implemented, the Australian Government prioritise the recommissioning of First Nations specialist services in areas with high populations of First Nations jobseekers and jobseekers from culturally and linguistically diverse backgrounds. Priority should be given to commissioning Aboriginal Community Controlled Organisations.

15.140The Committee recommends that the Australian Government implement trial arrangements to rebuild public sector understanding of and capacity to deliver high-quality services while broader reforms to the employment services system are progressed. These should include:

consideration of the Commonwealth taking over the direct delivery of employment services in a small number of places, suggested to include the Australian Capital Territory; and

implementing arrangements whereby the Commonwealth partners with a service provider in target regions and for target cohorts, including to provide coordination and mapping supports and some direct delivery of services.

15.162The Committee recommends that funding arrangements for a rebuilt Commonwealth Employment Services System be the subject of co-design based on a more relational contracting model and include the following key elements:

Additional upfront funding based on a block- or activity-based funding model.

Payments for employment outcomes, with the proportion of payments claimable against outcomes substantially reduced relative to the current system.

Payments for other appropriate outcomes that help a person progress towards employment.

Bespoke grant and other flexible funding arrangements for specialised services such as work experience and engagement with social enterprises.

Additional loading to enable higher intensity supports for jobseekers in target cohorts, including migrant and refugee jobseekers and jobseekers with disability.

The Employment Services Quality Commission be responsible for:

oadvising government on funding models and recommended pricing for quality services;

opreferred approaches to funding service partners; and

omonitoring and reporting periodically on the system’s overall operating costs (including transactional and other costs relating to a quasi-market) so there is greater transparency for government and the public.

The system should allow for experimentation with different potential funding models to evaluate and learn what works most effectively and efficiently.

15.163The Committee recommends that while alternative funding arrangements are developed a second service fee be considered if a person has not secured employment for 12 months balanced by a corresponding reduction in the outcome fees so as not to increase the overall cost to the Budget.

15.173The Committee recommends that the Australian Government review existing performance management arrangements for providers, and co-design and implement a new framework as a high priority. This should include:

simplifying performance management and assessment arrangements;

reducing the focus on blunt, time-based employment outcomes;

consideration of additional measures such as job quality, human capacity-building, and employer support;

an approach to performance management that focuses on working with providers to improve performance rather than imposing sanctions; and

removing measures relating to contract compliance.

While the review is conducted and the new framework designed, the Australian Government may elect to pause formally assessing providers against the existing performance framework.

16.27The Committee recommends that the Australian Government urgently explore (in advance of the next Victorian and Commonwealth Budgets) the striking of an agreement with Victoria for a demonstration partnership for the delivery of the Jobs Victoria program and the integration of that program into the Commonwealth system on a fixed-term basis in regions of high disadvantage. This should include governance arrangements, measures to enable sharing of information and labour market insights, a robust monitoring and evaluation framework, and arrangements for co-investment.

16.28The Committee recommends that the Australian Government seek to negotiate an agreement with Tasmania for a demonstration partnership in relation to the Jobs Hubs program. This should include funding arrangements, measures to enable sharing of information and labour market insights, a robust monitoring and evaluation framework, and arrangements for co-investment.

16.29The Committee recommends that the Australian Government develop and publish a transition plan for the rebuilt Commonwealth Employment Services System by the end of 2024. The plan should be reviewed and updated on a regular basis to reflect the progress of implementation of recommendations in this report.