Another of Gorgeous Dunny’s excellent memoirs (written in 1998, but under the current mob, highly relevant) – as always, many thanks, GD.

Patrons might like to know a little more about the author, so with his permission …

Gorgeous Dunny’s earlier career was in tourist industry marketing in Sydney. After completing a Bachelor of Arts degree in 1982, he was unemployed for some time in Adelaide during the 1982-83 recession before joining the CES network in late 1984.

In 1987 he was appointed CES Employment Counsellor for Warrnambool and the Western Victoria district. Most of his work was in that role and as a Case Manager and Disability Jobseeker Adviser. He departed with a voluntary redundancy when the CES closed on 30th April 1998.

He was regarded as innovative in the successful application of CES Labour Market Programs to assist in the rehabilitation, preparation and entry into the workforce of people with severe disabilities. He formed a close liaison with Western District Employment Access who were responsible for disability training and placements in that region. A result was a continuing high number of successful placements in employment.

 

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During the 1996 election campaign, Dr Kemp promised that a coalition government would retain the CES labour market programs that were currently in place. The announcement startled the then Employment Minister, Mr Crean, who remarked that Dr Kemp had spent the previous two years bagging those very same programs he was now supporting. It did not occur to Crean (or to anyone else) that Kemp was lying, or that the coalition had no intention of honouring that promise.

The problem of Dr Kemp’s credibility was bypassed by appointing Senator Vanstone as Employment Minister. According to a DEETYA National Office heavy who visited the CES Area/Network management staff just after the 1996 Budget, Vanstone announced she wanted to get rid of the CES only a week after coming to office. He claimed that National Office staff had fought a rearguard action to salvage the CES, but had only delayed the inevitable this long. On the other hand, DEETYA National Office management had shown little commitment to the CES network, and he might have been lying as a means of damage control amongst shocked and angry CES staff.

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Whether it was the coalition’s doing, DEETYA management or (more likely) both, the CES/Area management and staff were kept in the dark until the 1996 Budget announcements. Having been subjected to two rounds of savage CES network staff cuts and voluntary redundancies in just over two years, they were assured in July 1996 by then Secretary Sandy Hollway that no more cuts were necessary. The proposed corporatisation of Employment Assistance Australia (CES Case Management) and the CES Employer Services sections into a placement service then known as PEPE (later to become Employment National) was just one of the 1996 Budget Paper concerns. The CES Jobseeker Registration functions were to move to DSS, creating a new one-stop service, ultimately to be known as Centrelink. There was to be a competitive situation not just for case management (as was introduced by the previous government) but for employment placement services. It was to be paid for by “cashing in” (i.e. abandoning) labour market programs and using a fraction of those funds to pay results-based “incentives” to placement agencies.

Thus, at one stroke the Government had heralded the end of the CES and of labour market programs while allowing the Treasurer a big saving towards filling the alleged “black hole”. Very few outside the bureaucratic and political circles of Canberra and their media and lobbyist hangers-on realised the extent of the revolution proposed. Some community groups dealing with the unemployed did, but many of these were tempted by the opportunity to bid for these services, confident that they’d do as well as or better than the CES. With some severely disadvantaged social groupings in case management this was true. So they were mostly silent.

Bishop Michael Challen, of the Brotherhood of St Laurence, wrote an excellent criticism of this proposed system in The Age. But he was almost a lone voice and was ignored by its advocates. CPSU criticisms were dismissed as self-interest. The Skillshare community organisations providing jobseeker preparatory services throughout the nation, had almost as much to lose as the CES, but were muted. Possibly they feared that public criticism might damage their chances of getting a contract. (In the event, they mostly missed out on contracts. That finally fired comment on the loss to the community. By then, 18 months afterwards, it was a bit late. Such criticism was fobbed off as “sour grapes”.)

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The extent of the revolution might also have been disguised by the fact that the same Budget contained many long overdue rationalisations to most Labour Market Programs (LMPs) making them simpler to interpret and administer. There had been some cutbacks and rule-tightening (particularly for Jobtrain, now known as TEP), but LMPs generally escaped relatively unscathed for that period. The changes were a result of several years’ negotiation to try and make sense of a range of overlapping programs and services. It had required the breaking up of enclaves in Canberra and commitment to common goals. Although unrelated to the change of government, Senator Vanstone was smart enough to seize upon the previous inefficiencies (that were, of course, “… the fault of the previous government”) which had been overcome by the current government.

On the original Budget projections, the new LMPs would only survive 14 months. (Ultimately, it was 18 months because of legislative delays in introducing the new system.) It seemed a lot of cost and trouble for programs that were doomed.

During 1996 and 1997 a complicated new mainframe and LAN/PC system called Integrated Employment System was progressively introduced. In addition to rewriting the previous Jobsystem mainframe computer system (arguably one of the best employment network systems in the world), the plan was to integrate that with Jobseeker Touchscreens, LAN PC/Internet systems and PASS (the LMP payments system).

It seems that more than just CES network and Area staff and management had been kept in the dark on the dismantling of the department. Millions of dollars and hours must have been invested in both the Information Technology (IT) and Labour Market Program changes. The Government could have saved a lot by calling these changes off quickly after coming to office. Some were probably contractual arrangements inherited from the previous government, but a more honest open policy might have saved plenty.

As it was, there were some comical effects. Vanstone overplayed her hand in bagging the previous government’s efforts. To paraphrase her, nearly all LMPs were a waste of time and money, except the Jobstart wage subsidy. She was severe on results from brokered job creation schemes such as Jobskills, New Work Opportunities and LEAP compared with the higher employment retention rate in Jobstart placements.
But it was like comparing row-boats with bicycles. Job creation schemes were for people who were 3-5 years + unemployed and not job-ready. The programs were essentially to make them job-ready. Jobstart placements were mostly filled by people 6-12 months + unemployed, and work-ready.

Shortly after, she was forced to introduce her own version of job creation with Special Employment Support (SES). According to Vanstone that was going to lead to “real jobs” (a favourite government cliché). It didn’t. It led to a lot of frantic CES efforts (plus fiddling and arranging waivers) even to get a quota of suitable referrals in the time allowed. The only difference was that it was more statistically honest than Labor’s schemes because it did not remove trainees from the unemployment lists while they were on the program.

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Job creation programs attract a lot of criticism from small business, the New Right and Treasury officials. Usually it is along the lines that they are “not real jobs”, are temporary, costly and serve no useful purpose. Statistics like Vanstone wheeled out are produced to support that view. But, as mentioned above, they are basically personal development programs. Their works are focused on environmental and recreational infrastructure. I live in Warrnambool where the Lake Pertobe Recreational Park was developed under just such a program 20 years ago. In its value as a community recreation and picnic area and as a major facility for tourists, the Lake Pertobe project would have paid for itself 10 times over. So I remain sceptical when people start saying such schemes are a waste of time and money. Talkback Radio pandering like Work for the Dole is comfortable for most people to support, and may be useful. But the costlier job creation programs at least address the issues of social alienation, which are a large part of long-term unemployed people’s concerns. They should also be the community’s concerns.

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Jobtrain was also panned by Vanstone but on inconclusive research data, which failed to consider the time lag for trainees in getting into permanent employment; or the fact that many former Jobtrain graduates got their start in employment by linking with the Jobstart wage subsidy. Training for Employment Program (TEP) tightened up approvals for training. You virtually needed an offer of work to be approved for TEP. In addition, allowable training time was halved so that only courses of 26 weeks or less could be approved. Partly, that was to encourage more people to use Austudy, which was much cheaper for the government with students having to find their own fees, books and equipment costs. But it had a detrimental effect on training approvals. The most vocationally relevant courses in our district are electronics and hospitality. Courses are usually of 40+ weeks, and there are heavy costs for equipment, particularly for long term unemployed.

By late January 1997 hardly any money had been spent on Labour Market Programs (LMPs). It was not surprising given the tighter guidelines and the Minister’s public contempt for their value.

But, perhaps feeling the heat from nervous MPs, Vanstone cracked a big tantrum before Area Managers about the lack of spending. She accused the CES staff of deliberately not approving LMPs as revenge for her decision to trash them. Managers were unable to convince her of the tighter guidelines being the problem (and I am sure they were too diplomatic to mention that her attitude to LMPs might have slowed down enthusiasm for approving them). So they came away with urgent riding instructions to the network to adopt a more ‘flexible’ approach to approvals and to develop plans for approving more people on courses. So desperate was the appeal for action that it was some days before the network was told that the guidelines (especially the 26-week limit) would not be changed. By then a bag of eligible trainees had been offered assistance on courses that were not eligible. Waivers had to be arranged.

There were similar somersaults with IT software and hardware. Probably the contract with IBM for the supply of Touchscreens and PCs had been signed and budgeted for before the change of government. Whenever it was, it was long before the decision to dismantle the CES and LMPs became known. Consequently, there was Government panic and indecision about what to do when the thousands of PCs supplied by IBM arrived for the network. Was it worthwhile paying for the software to make them useable? Would they look silly giving the CES all this costly gear just before getting rid of them? Should they look around for another buyer? Meanwhile, the PCs, fully paid for, sat in storage for several months while these points were pondered. Finally they relented and distributed the PCs to the CES network with software. I was one of the recipients, using them for 9 months before exiting with the CES closure on 30th April 1998.

The only anecdotal hint I heard of our fate was about July 1996. This was that an unseated Liberal was given a job on Vanstone’s staff. His task was to visit CES Areas and Regions, find out just what they did, and report it to the Minister. He confided to a CES manager that the investigation was a revelation to him. He had had no idea how skilled, versatile and service-oriented the CES staff were, nor how integrated they were with local communities and businesses for economic development and employment. He was submitting a report reflecting that and urging the retention of the CES services. But he advised that it would make no difference, because the Government had made up its mind long ago, and no new evidence would change it.

The view held by the coalition party members (including this ex-MP until then) and the bureaucracies in Canberra was that DEETYA was a huge bureaucracy chewing up enormous sums of taxpayers funds for little or no visible return. The unemployment rate was still too high after many years of heavy funding. If they couldn’t do anything about that, what was the use of them? It was a convenient argument (avoiding the role of economic policy) which the Government spread to selective, sympathetic columnists once the revolution was announced. Even P.P. McGuinness, not normally noted for intellectual shallowness, echoed that line.

Before analysing the new employment directions, that sophistry must be dismissed. The CES network was an aggregation of labour market exchanges throughout the country. It facilitated supply and demand in the job market and provided intelligence. It was no more responsible for unemployment than stock exchanges are for falls in investment, or the Weather Bureau for rainfall. A range of variables may contribute to unemployment – from seasons and harvests, overseas conditions and terms of trade, industry restructuring, economic policy, industry policies, investment, government spending, to individual access and skill levels.

CES/DEETYA was not responsible for these, but it had a role in identifying them and developing strategies to minimise possible damage from these variables. Labour Market Programs were aimed at alleviating some harm done in restructuring, and in overcoming the barriers to people seriously disadvantaged in the open job market such as people with disabilities, aborigines, migrants, long term unemployed, sole parents and so on. Whatever the effectiveness of the programs, nobody seriously suggested that they’d be able to change the rate of unemployed.

DEETYA was not well regarded by the Canberra bureaucracies, who considered it poorly managed. Some years ago, plans to merge it with the better-regarded DSS were later quashed by the Labor government. In addition, DEETYA and the CES were ideological misfits. An ideological puritanism has dominated Treasury, Finance and most economic departments depending on them for the past decade. One of the strands was a belief in the virtues of competition and the sanctity of the marketplace. A further one, articulated by Des Moore, was that governments should stay out of economic activity as much as possible, except possibly to encourage competition. According to Moore, governments inevitably got it wrong. On the rare occasions when they might be right, their timing was wrong. So they’d be better off doing nothing. (Our industry and trade policies seem based on that reasoning.)

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Yet here was the CES/DEETYA, a government quasi-monopoly in the middle of the marketplace actively seeking to manipulate market aberrations. Basically, the department, the network and labour market programs were incompatible with the prevailing orthodoxies. So when the coalition mentioned their desire to get rid of the CES, it would have been received with enthusiasm. The only questions were likely to be on the timing and the rationale for that decision. The politics and publicity remained sensitive. Our Regional Manager was reprimanded and gagged for making a public (and truthful) comment in 1997 that the CES was finished. The local liberal MP hastily issued a press release that it was not finished, just reshaping and improving. Well, there was no panic – so it might have fooled a few.

But it is still hard to make sense of this strategy, especially the most spectacular action in job brokerage of destroying the entire CES labour exchange network across the nation and replacing it with a fragmented contracted placement agency system.

It is scandalous that 50 years of accumulated labour market expertise and regional knowledge should be just thrown away. It would have made more sense to sell off the whole network to Drakes than to let it just disintegrate in the manner it has. Could anyone seriously imagine a decision to subject the Sydney Stock Exchange to competition, with rival exchanges at North Sydney, Brookvale, Parramatta and Cronulla each guaranteed a certain share? Yet that is essentially what Job Network will be doing. You may be able to trace any job in Australia if the touch screens and computer systems are working, but you will see each vacancy broker separately if you find suitable jobs. Information is held discretely only on the broker’s own vacancies. You cannot go to one single referral point for all vacancies. Nor can employers access the entire range of jobseekers available for work.

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Agencies receive some payments for getting and filling vacancies, but their main revenue will come from placing unemployed people on benefits in jobs for 3 months or longer. That should force them to focus on getting people off benefits into jobs, which is the government’s endgame. At least agencies will focus on those on benefits, so shouldn’t that help? It should help by having the agent ask, “Have I got the right person, on benefits, for the job?” rather than, “Can I find the right person for this job?” There is a subtle change here from the old system. Instead of an incentive going to an employer to take a longer term unemployed off benefits, it now goes to the placing agency and can occur with shorter term unemployed. Whether the agency has to split some of this with the employer remains to be seen. My concern as an old-style public servant is that there are possibilities for bribery and corruption, which were precluded from the regulations-driven system applying before.

A greater concern is that certain labour market sections will be excluded from placement assistance. Employed people seeking improved positions, students seeking after hours or vacation work and unemployed spouses in 2-income families are all unable to claim benefits. Therefore, an agency will receive no payments for placing or providing assistance to these jobseekers apart from a possible placement commission from an employer. Can Job Network thus represent the whole range of the labour market in the manner that the CES had?

It has been suggested that agencies may still help place these people to retain credibility with employers. The supply of vacancies (along with the ability to fill them quickly and reliably) will remain the most critical factor in the viability of most agency businesses. [If there is a sustainable criticism of the CES, it is the neglect of this sector from 1992-1994. It was forced by DEET and government decisions. Recovery efforts were later made with fair success.] However, it is likely that this group will have to pay a registration fee to list with an agency – an imposition not forced on those receiving benefits. It is not clear how harvest and seasonal workers not receiving benefits will fare under this system. Nor, for that matter whether growers (already squeezed by liberalised trade policies) will have their vacancies serviced without cost as they were in the past. The system is geared only to assisting people on unemployment benefits into work.

It is unclear if people on other benefits such as Disability Pension or Supporting Parents benefits will be able to receive the same placement assistance. Under the previous system they would have been entitled to labour market program assistance at the equivalent of at least Flex 3 (intensive). The 1996 Budget Paper briefing suggested that Disability placement assistance would pass to Centrelink. Up to March 1998, Centrelink staff had not been informed if any program assistance, such as the Work Experience for People with Disabilities placement program, would continue. It is similar with the Modifications to the Workplace Program. Let us hope that they remain or are rejuvenated in some form.

Miraculously, the Disabled Apprentice Wage Subsidy (DAWS) program has survived against all predictions. It is one of the oldest and most successful LMPs, enabling people with disabilities to obtain trade skills, thus becoming competitive and independent in the job market. Survival is most likely linked to it being grouped with entry-level training programs, which the government left intact. While it remains we can hope for some compassion in the job market. But not so with Training for Aboriginals Program (TAP). That original training wage subsidy scheme has gone.

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One of the virtues of our national community organisations is that they attempt to provide an equitable service throughout the nation, no matter how isolated or how poor. In turn, they reflect the diversity of the various regions and people in this country and help meld them into an Australian character. Such has been the history of the old Post Master-General’s Department (later to spawn Telecom/Telstra and Australia Post), the ABC broadcasting service and the CES. The CES had a lower general profile than the others, but was ubiquitous for those in the labour market, economic development or seeking to enter. But just as the service itself has gone, so has the commitment to community and equity.

Paul Pickering, (The Age 19/3/98), has pointed out that in metropolitan Melbourne the balance of Flex 2 (jobseeker preparation) and Flex 3 (intensive assistance) service outlets is tilted heavily in favour of the wealthier eastern and southern suburbs at the expense of the outer northern and western suburbs, despite the latter having unemployment rates 50% higher than in the chosen areas. Country regions have fared no better. Portland, Victoria is more than just a whistlestop with over 10,000 people and one of Australia’s most productive ports. Yet there is now no public employment placement service. Nearby Hamilton has hardly fared better with just one (visiting) person part-time. Ingham in Queensland has no service, not even Centrelink. No doubt there are similar stories across the nation.

The time is long due for National and provincial Liberal MPs to stop swallowing the propaganda from their whips and have a good hard look around their electorates. Loss of all these rural and regional CES outlets will be costly and demoralising for small country employers and jobseekers.

The 1 300 phone numbers are not an effective substitute. The effect on rural economies of the CES job losses will be just as damaging. And it’s following a pattern of reduced public services starting with Tax Office closures and continuing with Medicare. State services in schools, railways and hospitals have been similarly wound back. Even Centrelink is under instructions to reduce staff within two years irrespective of demand. Some Queensland Nationals drew the line at supporting further selling-off of Telstra. They rightly inferred that remote communities must miss out in a market-dominated organisation. They should spread their concerns to other public services.

The new system abolishes the notions of fairness and equity to remote and thinly populated communities and to the poor. And to those having no or redundant employment skills or history, disabilities, aboriginal ancestry, language or literacy problems, social or cultural alienation, mobility or access difficulties, or simply on pensions seeking additional work and income: things are much worse. It represents the breakdown of social and community responsibility. I speak authoritatively here, having successfully aided employment entry or re-entry for many people from those backgrounds for the past 10 years. Not since the loaves and fishes days has anyone achieved more output with less input. Yet this Government would pretend that Job Network can do just that.

The Client Classification Level (CCL), on which case management incentives were paid, was a joke amongst those with client services and labour market knowledge. The assumption that you can measure somebody’s level of disadvantage from the way he/she may answer a series of boxed and categorised questions was always suspect. It assumes that people will understand questionnaires and the purpose of the questions, that they will understand the wording of several questions (which were ambiguous even to literate people), that they will answer them honestly, and that they will answer as it affects them rather than as they think the questioner might want to hear. The first version gave no weighting to access to the labour market, nor the appropriateness of particular skills or work experience to that market.

For example, a client in my caseload, aged 45, lived 20 km out of Terang (itself a small dairy industry township) with no transport or driving licence and no farm or rural skills. Simply put, he could not get work. Yet the CCL listed him as a ‘2’ (levels were 1 to 4 then) suggesting he was more or less work-ready with some problems. I gained greater knowledge of these sorts of abominations through managing the SES program in our region.

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One client, 8 years unemployed and never having had any paid work, was classified as a ‘1’, which is work-ready. The reason apparently was that she was continually doing voluntary work and courses, which probably gave her extra points in the scale (but it made no difference to her employability).

After much argument and negotiation, I managed to get her reclassified as a ‘3’ so that she could be referred to the SES program. Even then (with her wage paid by the program) the broker could not persuade any employer to take her. After experiences like that I surveyed my entire caseload (then about 140). My estimate of the error rate (people incorrectly classified regarding employability) was 40%, which I reported at the time.

My feeling was that if this was the foundation for the new payment system, then the whole thing was a house of cards. A revised CCL appeared soon after that (with just A and B levels) and this took into account some of the things mentioned. I understand that it is now in its third incarnation and known as Jobseeker Classification Level (JCL). It is the basis of Flex 3 payments. Apparently, there’s 3.1 (job-ready), 3.2 (near job-ready) and 3.3 (review). The maximum payment for 3.3 placement (in employment for 6 months) is $9000. The other two are considerably less. Under the old system the Jobstart wage subsidy for relatively work-ready clients was from $2000 to $4000. The time cost in case managing a client is likely to be $1000+. The new system is not going to leave much to offer employers for a 3.1 or 3.2.

On the other hand, 3.3 clients are going to need a lot of time, preparatory training and possibly vocational/skills training. Considering the cost of programs in the past, it is hard to see this managed on $9000 while still allowing a margin for the agency costs and commissions. The best chance of profit is a constant turnover of 3.1 and 3.2 cases. That is why I wanted no part in it.

I found the whole thing morally repulsive: that issues of human services could be solved simply by offering dollar incentives to ambitious agencies. Is there a place for empathy? Only, it seems, if you can use it as a tool to shift the person. So I opted out. (This is not intended as a criticism of community-based tenderers such as the Salvation Army and the Brotherhood of St Laurence who have an ethical commitment and proven record with the most disadvantaged. Unfortunately, they seemed to be treated as peripheral in the awarding of tenders.)

Many others, from CES management to operational staff, worked very hard over the next 18 months at trying to make themselves ‘competitive’. That was difficult because the priorities and signals from senior management seemed to change weekly. The assumption was that their knowledge and experience was generally better than most of their competitors. Therefore, they thought they’d win the largest share of the market. Although competing tenderers knew their position by March, this information was held back from CES/EN staff. Judging by the dreadful final staffing figures for Employment National, the business given EN could only be about half or less of what the CES had had before. Either that or it has been given insufficient staff to ensure failure.

With very little time left to prepare for an alternative career, hopeful CES staff were informed of their lot with an e-mail message document tactfully entitled, ‘Unsuccessful Letter’.

It is not clear if an arbitrary decision was made to give CES/EN a certain maximum percentage of the business. It may well be that they were just considered along with all the other tenders. Dr Kemp (now in charge of the Employment Ministry after Senator Vanstone had done most of the dirty work) has made public assurances of the integrity of the tendering process. We can hope that they are more reliable than his pre-election assurances were. But there is reason to query the prudence of tender selections, and not just because some dodgy operators got contracts.

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Leaving aside the decision to pension off so many CES staff with their diverse labour market experience, it seems that most decisions were based on price mechanism. Why else would proven organisations like the Brotherhood of St Laurence (in some places) and 2nd Chance miss out, while others with no experience or expertise get contracts? And why offer Queensland firms work in Geelong that they haven’t bid for and vice versa. Didn’t the awarders place any value on knowledge of local labour markets? In our district, a successful disability placement agency tendered only for niche Flex 3 business (which is the nearest to their special expertise in the labour market). They won a tender for … Flex 1 (employment placement job-ready) business, for which they’d had no experience and which was only secondary to their bid. The tendering process was a big project, in uncharted areas, within a tight timeframe and political agenda. But on the evidence we have seen so far, it may be the biggest fiasco since the Pay-TV tenders.

Like many other large organisations, the CES had its good, bad and ugly. It had a high share of brilliant dedicated people, as well as eccentrics and mediocrities. It always achieved more than it was credited with, even by DEET National Office managers. When Traineeships were introduced, marketing sections in state offices were given the promotional task because it was felt the “CES wouldn’t be up to it”. The marketing failed, until it was handed over to the CES networks with instructions to make it work.

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There are similar stories regarding Work Information Centre resources and schools/careers teacher liaison. Gossip from Centrelink was that managers were amazed that the CES network could manage Austudy inquiries with such meagre staffing resource allocations. More far-sighted Centrelink managers, adapting to a new client-centered service culture, have grabbed any CES staff on offer, even when it meant overstaffing.

One of my favourite memories was a pompous Canberra report on the CES beginning, “Network staff are under the illusion that they are there to serve the public…” It was a nice illusion. With the CES gone, the coming months will show how valuable it was in the community. Let us hope Centrelink may in time fill the gap.

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