National Press Club address, Canberra
I acknowledge the Ngunnawal people as the Traditional Custodians of the land on which we meet today.
I pay my respects to their Elders, past and present.
And I extend that respect to all First Nations people joining us here today and around the country.
I acknowledge my colleagues from across Government, including Minister Don Farrell.
I also want to acknowledge the Secretary for the Department of Employment and Workplace Relations, Simon Duggan.
And representatives from employment service providers, employers and community organisations.
But most importantly – those in the room with lived experience of our employment services system.
Because many of you will understand all too well how our current system is letting too many people fall through the cracks.
Today, I will outline the Albanese Labor Government’s vision for the future of our employment services system.
These once in a generation reforms will create a more responsive, effective and dignified system.
A system that helps more Australians into jobs.
And a system that delivers better outcomes and better value for money for the Commonwealth.
But first, I want to start by talking about why helping people into suitable, meaningful employment is so important.
The dignity of work is a foundational value for Labor Governments.
Work delivers obvious benefits, by providing economic security.
But work also provides confidence, connection and community.
To have a job can help give people purpose.
As Minister for Employment and Workplace Relations, my job is to make sure as many Australians as possible share in the benefits of work.
Under the Albanese Labor Government, we have seen the lowest average unemployment rate of any government in the last 50 years, and the creation of over 1.2 million jobs.
We’re seeing more people than ever engaged in the labour market, with the participation rate remaining high by historical standards.
But as the 2023 White Paper on Jobs and Employment highlighted, low unemployment does not mean everyone can easily access work.
There are still too many Australians missing out on the benefits of work because of barriers to their participation in the labour market.
Some of these Australians might have a gap in their employment history, perhaps because they’ve taken time out of work for caring responsibilities or health issues.
They might face discrimination because of age or disability.
They might have limited digital literacy.
They might have suddenly been retrenched after decades in the same job, only to find themselves shut out of the labour market because of a skills gap.
Or they might lack the confidence to get started in finding employment.
All of these factors, among others, can determine the distance someone is from entering or re-entering the labour market.
But if we believe in the opportunity and dignity of work, it is critical that there is support for people to address these barriers so they can get into work.
The government has several policy levers to do this, including our skills and training system.
But for many people, the pathway to employment is difficult to navigate on their own.
And this is where our employment services system plays an absolutely vital role.
At the individual level, this system has one objective:
To place people into a suitable, meaningful job.
But it must do more than just job-matching.
A well-functioning employment services system must also be able to provide the right assistance to jobseekers based on their distance from the labour market.
From brief interventions, all the way through to intensive supports, that help people overcome their barriers, and prepare and connect them into work.
And of course, on a broader level, a good employment services system helps economic growth by lifting participation, and reducing friction in the labour market.
I have visited more than 20 employment service providers since becoming Minister, and spoken to many jobseekers using our employment services system.
And where services are working well, jobseekers feel like someone has their back and is walking alongside them.
Like Jason.
Jason came to his employment service provider after more than five years out of work.
He’d been going through a really tough time in his personal life, and had complex barriers which were stopping him from securing a job.
He had developed significant anxiety and self-doubt, because of repeated rejections from employers.
He felt like he was never going to get another long-term job, and had no idea how to even start trying to find one.
Jason’s provider took a personalised approach to building his confidence through coaching and support.
They also helped him obtain a forklift licence, recognising a clear demand for these skills among businesses in Jason’s local area.
His provider connected him with one of these local businesses, who offered Jason a casual job.
And with ongoing encouragement and support from his provider, he was able to do well in this role.
After six months, that casual job turned into fulltime work – and a promotion.
Jason’s story shows why government investment in employment services, to help jobseekers overcome barriers and find a suitable job, is critical.
The Commonwealth recognised the importance of this investment 80 years ago, when the Curtin Government established the Commonwealth Employment Service, or CES, in 1946, as a centralised labour exchange.
The need for such a service had been outlined the previous year, in Australia’s first ever Employment White Paper, in recognition of the fact that achieving full employment required an active role for government in connecting people to work.
And for people who were job-ready, the CES worked.
But because its focus was on job-matching, it didn’t have enough support for people who were further from the labour market and needed additional help.
The Keating government took steps to complement the CES with third-party providers, in an attempt to deliver this more intensive support.
The Howard government, of course, went one step further by abolishing the CES in 1998 and contracting out all employment services to these providers.
The employment services system has had several names since then: first Job Network, then Job Services Australia, then Job Active.
But each iteration was ineffective at calibrating the intensity of support to the needs of participants, so they could achieve employment.
And we still see these issues today in Workforce Australia, designed by the former Liberal government and rolled out in 2022.
Because at its core, Workforce Australia shares the same fundamental flaw as every other version: a one-size-fits-all approach to supporting jobseekers at different distances from the labour market.
And that means not enough people are getting outcomes like Jason.
The Commonwealth spends around $2 billion each year on our employment services system.
But as the Albanese Labor Government’s 2023 White Paper highlighted, this system is ill-equipped to respond to the diverse needs of the over one million Australians who access it each year.
These concerns were echoed in the final report by the House Select Committee on Workforce Australia Employment Services in 2023, drawing on the evidence of hundreds of submissions and witnesses.
That report found that a one-size-fits-all approach, across all elements of Workforce Australia, is letting too many participants fall through the cracks and creating inefficiencies in the system.
Under Workforce Australia, most participants access support through a third-party employment service provider.
These providers should be delivering flexible, personalised support.
But the overwhelming evidence shows us that for too many people, this is simply not the case.
Because the one-size-fits-all approach to servicing and provider incentive payments cannot deliver the right intensity of support to all jobseekers on the caseload.
And equally, the standardised approach to mutual obligations is not as effective as it should be in helping jobseekers get into work.
If you’re lucky enough to be healthy, with recent work history and a post-secondary qualification – you are closer to the labour market, and therefore a provider is more likely to be able to help you find a suitable job.
Because the way providers are paid means they are incentivised to focus their efforts on those who fit into this narrow profile – rather than supporting everyone on their caseload.
And people with more complex barriers to employment simply get put in the too-hard basket – what’s known in the system as parking.
20 per cent of the Workforce Australia caseload have been stuck in the system for five years or more.
This figure is just too high.
Meanwhile, jobseekers who don’t need the level of support offered by a provider get funnelled into Workforce Australia Online.
Created by the Morrison government, this online platform was pitched as a more cost-effective way to support jobseekers.
But in reality, to call it a digital employment service would be too generous.
Because instead of providing any personalised assistance, the platform is simply a compliance management tool for people to acquit their mutual obligations and access the Employment Fund.
Of course, some people do find a job while in Workforce Australia Online.
But often, that’s because they found a job on their own – not because of the limited support available to them.
And that lack of individualised support means we see too many people languishing in the online caseload for the maximum 12 months, before an automatic referral to a provider.
For many people, that could be a wasted year with no real progress towards employment, making it harder to then get a job.
Whereas other participants in the online system are seeking out provider-led services that are more intensive than they actually need, because there is so little support available through the digital platform.
This one-size-fits-all approach across Workforce Australia is letting too many people in the caseload fall through the cracks, and failing to support them into a job.
But even where people are being placed into work, the incentive structure for providers often means there is not enough regard for whether it is suitable work.
Which very often leads to poor job fit.
And poor job fit, often leads to a poor outcome – for the participant and the employer.
Around 1 in 6 people who have exited Workforce Australia end up re-entering the system within a year.
This carries personal costs for the individual, increasing the risk of disengagement and more likely to remain on income support.
It also carries a productivity cost to our economy, when someone is placed into an unsuitable job where they can’t make a meaningful contribution.
And there’s a financial cost to the Commonwealth, to continually fund placements that fail.
Of course, suitable employment must be the ultimate goal for every participant.
But the timeframe and pathway for getting there will be different for each individual, based on their barriers to employment and distance from the labour market.
The failure of the one-size-fits-all approach to meet the diverse needs of jobseekers has been evident for some time.
In response, successive governments have introduced a range of complementary programs to plug some of these gaps and provide support to specific groups of jobseekers.
However, most of these programs are operating in siloes, rather than being integrated into the core employment services system.
Which leads to gaps – and duplication – and inefficiencies.
The outcome of this one-size-fits-all approach – whether it’s parking people in the system or pushing them into unsuitable jobs – is compounded by the standardised approach to mutual obligations.
Mutual obligations are an important and longstanding feature of the employment services system, designed to encourage participants to maintain engagement in the job search process.
Our Government supports mutual obligations, which reflect the community’s expectation that if you can work, and are receiving income support, you should be taking active steps to obtain work.
However, mutual obligations need to be fair, proportionate, and above all, effective, in order to facilitate people into a job.
For too long, our public debate has been stuck in a conversation about whether mutual obligations are too hard, or too soft.
When the real question should be: are mutual obligations activities actually helping someone get into work?
Unfortunately, all too often, the answer is clearly ‘no’.
I hear from jobseekers and employment service providers that many mutual obligation requirements are a meaningless grab bag of busy activities that simply do not lead to a job.
The generic, one-size-fits-all approach to payments and placements doesn’t just deliver poor outcomes for participants.
It’s affecting employers too.
Employment service providers cannot connect people to jobs without employers.
But too many employers say it is too difficult to engage with the employment services system.
They are frustrated at being sent unsuitable candidates, because providers don’t always take the time to understand the needs of local businesses, or be responsive to what’s happening in the local labour market.
And as a result, many have simply walked away.
So it’s clear the one-size-fits-all settings that underpin Workforce Australia mean it is simply not equipped to support all jobseekers on the caseload, at different distances from the labour market, to get into work.
And it is not delivering the best possible outcomes for participants, for employers – or our economy.
Which is why today, I am announcing the Albanese Labor Government is embarking on the biggest reform to our employment services system in 30 years.
This is a major positive step for the over one million Australians who access this system each year, by ensuring they will get the right support at the right time.
And it will deliver improved value for money, by ensuring resources are directed to where they are needed most.
The reforms I am announcing comprise four major changes, with further consultation to inform some of the design detail under this framework.
The first and most important change is that we are ending the one-size-fits-all approach to servicing.
In its place, we are creating three distinct, high-quality service streams, offering different intensity of supports, depending on an individual’s distance from the labour market.
And which will better integrate complementary programs to provide more cohesive support.
The second change is the introduction of effective mutual obligations, that are reflective of an individual’s distance from the labour market and are designed to actually help people get a suitable job.
Third, we are overhauling the assessment and triaging process so barriers to employment are identified early and jobseekers are matched with the right supports from day one.
And fourth, we are introducing a new way for providers and participants to set employment goals, and clearly identify the steps to achieve these, along with ways to overcome barriers to work.
Our Government is committed to delivering an employment services system that is focused on what matters most: helping people into work.
A system that delivers high-quality, effective and universally accessible support, with the capacity for continuous improvement.
As I have outlined, the current system struggles to cater to people at different distances from the labour market.
That is why we are taking what is effectively a single service offering for the whole Workforce Australia caseload, and creating three new, distinct service streams, to better prepare and place jobseekers in work.
Each service stream will have a different service offering, a different approach to mutual obligations for participants, and different funding models for providers, to reflect the varying intensity of supports that participants need.
Service Stream One will be a new, digital service for people who are digitally literate and close to the labour market.
As I have outlined, the current Workforce Australia online platform is really only a compliance and administration tool that people use to acquit their mutual obligations.
So in this Budget, we have delivered $205 million to create an actual digital employment service that will provide participants with individualised resources, training and career mapping.
Where necessary, jobseekers will also have access to brief interventions and targeted support through a national contact centre.
This digital service stream will still have the capability to support people to acquit their mutual obligations.
These mutual obligations will be designed to help a person to achieve employment, with a focus on vocational activities like job searches.
Compared to what’s currently available, Service Stream One will be a truly effective, efficient way to support participants who require less intensive supports.
To test ways that we can provide complementary online services, our Government has also provided $5.9 million in this Budget for Future Women to trial a virtual advisory service specifically for parents, to help them move back into work.
Service Stream Two will deliver high-quality, targeted, provider services for people who are not digitally literate or need more support than the online service can provide.
There will be a clear expectation that providers will support participants to set individual employment goals, and map out meaningful steps to achieve them.
Supports under this service stream will focus on what we know works to get people into jobs – like active job coaching, work-ready supports and training linked to in-demand jobs.
But these supports will also need to work for the participant, by being clearly connected to their employment goals and to jobs that are available where they live.
Similarly, mutual obligations will also need to be explicitly connected to a participant’s employment goals, with the flexibility to adjust as someone moves closer to the labour market.
Service Stream Three will deliver intensive services for people who are furthest from the labour market.
We know many people in this service stream won’t have a linear path into work.
So this service stream will provide more time, more flexibility and more support to build confidence and capability.
It will include alternative pathways to employment, including social enterprises.
And participants will have more options to work towards their employment goals, like mentoring, work experience or volunteering.
Payments to providers will recognise these longer pathways to employment, and strengthen post-placement support for better employer engagement.
And providers in this service stream will be distinct from those in service stream two – chosen for their deep community connections and relevant experience in delivering intensive support.
The mutual obligation requirements in service stream three will focus on meaningful engagement and building someone’s readiness to work.
In this Budget we have delivered $52 million for early, targeted delivery of Service Stream 3 over the next year, so we are ready to roll it out nationally.
These three distinct service streams will fundamentally reshape our employment services system.
And I would like to stress this point: they go beyond anything attempted by any other government in a very long time.
Because even if we look back to Job Active under the Abbott government, which also used streams to categorise jobseekers by need, we saw the same problems as we see now in Workforce Australia.
A one-size-fits-all approach, that used the same set of provider incentives across the whole caseload and a standardised approach to mutual obligations.
But under our new system, there will be different intensity of supports, different provider incentives and different mutual obligation requirements – all directly connected to helping jobseekers achieve sustainable, meaningful employment.
Of course, to make sure the employment services system is working as effectively as possible, people should be connected with the right supports from the moment they enter the system.
But too often, the current assessment process is failing to deliver even this basic function.
At the moment, the system solely relies on a Job Seeker Classification Instrument, which produces a numerical score that determines the likelihood of that person leaving income support within 12 months.
There is no ability in the assessment process to determine how far someone is from the labour market and identify their barriers to employment.
But if you’re going to help someone get into a job, these are the fundamental things you should know about them.
So as part of this Budget’s investment in reform, we have committed $27 million to develop a brand new assessment process.
This new assessment process will be much more holistic, to make sure someone’s barriers, and their distance from the labour market, are clearly identified and understood.
This will ensure people are referred into the correct service stream and get the right support from day one, potentially reducing the time they spend out of the labour market.
We will also be introducing a formal reassessment process, so supports remain appropriate for people as their circumstances change.
The information gathered in this new assessment process will then be used to develop a tailored Employment Goal Plan for each participant.
This plan will outline a person’s employment goals, and steps to achieve them.
It will replace the current Job Plan, which usually reflects a standardised template that is often filled with arbitrary activities, rather than outlining genuine steps to help people get a job.
These new Employment Goal Plans will bring together activities, supports and mutual obligations that recognise an individual’s barriers to employment.
And will give every participant in every service stream a clear pathway to work.
Today I have outlined the reform direction for our employment services system.
And our Government has invested $312 million in this year’s Budget to establish key elements of the new system.
However, there is a lot of design detail underneath the overarching framework that I have outlined which will need to be carefully worked through.
That is why today I am launching a public discussion paper to seek input on that design detail, which is now available on my Department’s website.
To ensure that participant experience is central to the design of the new system, expressions of interest are opening today for a user lived experience panel.
And to provide technical advice to Government on the design of the new system, I have established the Employment Services Reform Advisory Group.
To ensure we have the time required to design and implement a new national system, I am also announcing today that all current Workforce Australia contracts will be extended by 16 months as we work through the final design details.
Now I cannot overstate the job in front of us.
This is major, complex reform.
But it will be worth it to realise the benefits of an employment services system that functions as it should.
Because every single participant, no matter how far they are from the labour market, deserves a system that provides a clear pathway to employment and can address their individual needs.
A system that can deliver many more stories like Jason’s.
And a system that helps more Australians into jobs so they can share in the benefits and dignity of work.
Thank you.