Department of Employment, Education, Training and Youth Affairs

ANNUAL REPORT

1995-96

Australian Government Publishing Service

Canberra



(Table of Contents)




© Commonwealth of Australia 1996

ISSN 1327 - 726X
ISBN 0 664-47502 1

This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be addressed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601.

Produced by the Australian Government Publishing Service

Department of Employment, Education, Training and Youth Affairs

Senator the Hon Amanda Vanstone
Minister for Employment, Education, Training and
Youth Affairs
Parliament House
CANBERRA ACT 2600

Dear Minister

I have pleasure in presenting the annual report of the Department of Employment, Education, Training and Youth Affairs for the year ended 30 June 1996.

The report has been prepared under subsection 25(6) of the Public Service Act 1922, and in accordance with the requirements referred to in subsection 25(7) of the Public Service Act 1922. It has been prepared in conformity with any other legislation applicable to the preparation of the annual report by the Department.

Subsection 25(8) of the Public Service Act 1922 requires you to cause a copy of the report to be laid before each House of Parliament by 31 October 1996.

Yours sincerely

(signed)

D A Hollway
11 October 1996

CONTENTS

Part 1: Overviews

Part 2: Programmes

Part 3: Appendixes

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GUIDE TO THE REPORT

This report is the Secretary's account to the Minister for Employment, Education, Training and Youth Affairs of the performance of the Department during 1995-96.

It has been prepared in line with the Department of Prime Minister and Cabinet's guidelines for the preparation of departmental annual reports.

Aids to Access

The report includes the following information to help readers:

• a table of contents;
• a list of acronyms and abbreviations;
• an index; and
• an index to guide readers to the parts of the report addressing the Department of Prime Minister and Cabinet's guidelines.

Structure of this Report

The report consists of three parts:

Part 1: Overviews

The Portfolio and Corporate Overviews provide information on :

• the Portfolio's functions and structure, including its statutory bodies and six constituent programmes;
• the economic, social, and labour market environment in which the Department has operated during the year and key portfolio developments;
• a commemorative history of the Commonwealth Employment Service which celebrates its 50th anniversary in 1996; and
• the Department's corporate structure, and key organisational developments over the year.

Part 2: Programmes

Part 2 gives information on the six programmes that the Portfolio administers, which are:

Programme 1: Schools

Programme 2: Higher Education

Programme 3: Vocational Education and Training

Programme 4: Employment

Programme 5: Student, Youth and Aboriginal Education Support, and

Programme 6: Portfolio Administration and Advising

Part 3: Appendixes

Part 3 consists of the following appendixes:

Appendix 1 A list of the media releases of Portfolio Ministers and the Department;

Appendix 2 A list of references in Hansard to parliamentary debate on Portfolio legislation;

Appendix 3 An analysis of the Department's staffing;

Appendix 4 Information on occupational health and safety;

Appendix 5 Details of payments to advertising and market research organisations;

Appendix 6 A report on the operation of the Freedom of Information Act 1982;

Appendix 7 Information on feedback from clients about departmental programmes and the response to that feedback;

Appendix 8 The Department's financial statements for 1995-96;

Appendix 9 A list of the Department's official addresses;

Appendix 10 A list of acronyms and abbreviations used in this report; and

Appendix 11 An index of compliance with the guidelines for preparing departmental annual reports.

Some information on the Department is not provided in this report, but is available on request. This supplementary information encompasses:

Other Sources of Information

Portfolio Budget Statement 1996-97 is a paper provided to the Parliament, which sets out the purpose and nature of the Budget measures that affect the Portfolio's estimates.

Portfolio Additional Estimates Statement 1996-97 is a paper provided to the Parliament, which sets out the purpose and nature of variations to Budget allocations considered through the 1996-97 Additional Estimates process.

Programmes 1996-97 is a book describing the Department's programmes. It includes Budget highlights and a guide to the Department's programme structure, programmes and financial allocations.

Information about the Department

A chart at the beginning of each programme chapter shows the Department's divisions which are responsible for each programme or components of programmes. Divisions can be contacted through the National Office switchboard (phone number: (06) 240 8111).

The addresses and telephone numbers for National Office and for Area offices are in Appendix 9.

Annual Report: Distribution

This report is distributed to Ministers, the Parliament, staff of the Department, other Commonwealth agencies and state and territory government ministers and agencies, as well as other organisations and individuals. Copies are for sale at Government Info Shops. In addition, the report will be available through the Internet.

Inquiries and Comments about this Report

Comments on this report are welcome and may be directed to the following address. The supplementary and other sources of information referred to above may also be obtained from this address:

Assistant Secretary
Quality and Corporate Planning Branch
Corporate Services Division
Department of Employment, Education, Training and Youth Affairs
GPO Box 9880
Canberra ACT 2601

Phone (06) 240 9390

Fax (06) 240 8154

A Note on Terms Used and Presentation of Numbers in this Report

The traditional spelling of 'programme' is used predominantly throughout this report. Its use extends to some instances where 'program' appears in legislation or in the name of publications.

A similar approach is taken to 'Indigenous'. In some parts of the report, 'Aboriginal' and 'Aboriginal and Torres Strait Islander' are used for historical accuracy.

Numbers in this report have been rounded wherever possible. However totals and percentages have been calculated using the unrounded numbers.

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PORTFOLIO OVERVIEW

PORTFOLIO STRUCTURE

INTRODUCTION

ROLE

The Portfolio's role is to support the Government's efforts to respond in an integrated and balanced way to the employment, education and training needs of all Australians, and particularly its youth. The Commonwealth has the major responsibility for public funding of the higher education sector and for promoting access to employment and providing assistance for unemployed people to obtain jobs. It also works with state governments, which have the main responsibility for school level education and public vocational education and training.

PROGRAMMES

In 1995-96 the Department was responsible for administering the following programmes:

Programme 1: Schools

The programme's objective is to support systems and schools to equip the nation's young people to develop their full potential and share equally in the benefits of education.

Programme 2: Higher Education

The programme seeks to use higher education resources effectively to address Australia's economic and social objectives and to meet the increasing need for an educated and skilled population. It also seeks to maintain a higher education system that takes a long-term and independent approach in pursuing its teaching, scholarly and research functions.

Programme 3: Vocational Education and Training

The programme aims to contribute to the improvement of Australia's economic competitiveness and social well-being by improving the productivity and skills of the work force.

Programme 4: Employment

The programme's objective is to assist the efficient functioning of the labour market by improving the skills and employment prospects and equitable access of people who are disadvantaged in the labour market.

Programme 5: Student, Youth and Aboriginal Education Support

The programme seeks to promote equality of educational and employment opportunity for all young Australians by improving access to, participation and retention in, and completion of education, training and work experience. The programme also seeks to improve educational outcomes of Indigenous people, to whom the Government gives special priority.

Programme 6: Portfolio Administration and Advising

The programme's objective is to provide strong and effective corporate leadership, portfolio advising and management, and the effective and efficient allocation and management of resources.

Following the change of Government in March 1996, the Department was given the additional responsibility for youth affairs.

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LEGISLATION ADMINISTERED

The key legislation administered by the Portfolio is:

Employment Education and Training Act 1988;

Employment Services Act 1994;

Higher Education Funding Act 1988;

Student and Youth Assistance Act 1973;

Vocational Education and Training Funding Act 1992; and

the groups of Acts relating to States Grants Education Assistance and Overseas Students.

In all, the Portfolio administers 35 items of legislation. A full list is available on request.

PORTFOLIO STATUTORY AUTHORITIES

The following statutory bodies have been established by legislation administered within the Employment, Education, Training and Youth Affairs Portfolio:

Anglo-Australian Telescope Board

Australian Maritime College

Australian National Training Authority

Australian National University

Employment Services Regulatory Authority

National Board of Employment, Education and Training, and

University of Canberra.

Each of these bodies tables its annual report in Parliament.

The activities of three of the above authorities were particularly significant during 1995­96, as they complemented the work of the Department:

• the National Board of Employment, Education and Training provided independent advice to the Minister on matters relating to employment, education, training and research;
• the Australian National Training Authority allocated funding provided by the Commonwealth to states and territories, to support a national vocational education and training system; and
• the Employment Services Regulatory Authority, promoted competition in the provision of case management services. The Authority is responsible for regulating, monitoring, and evaluating the operation of the case management system.

THE YEAR IN REVIEW

Portfolio Environment

The environment in which the Portfolio operates is a global world economy which has been evolving since the 1980s. Australia has been pursuing an on-going programme of tariff reductions, deregulation of the finance sector and microeconomic reform in the non-traded sectors. These have had major impacts on the structure of the Australian economy and labour market including:

• combined imports and exports as a proportion of GDP rising from approximately 30 per cent in the early 1980s to approximately 40 per cent by the mid 1990s;
• a decline in the relative contribution of manufacturing and agricultural industries to total employment, offset by strong employment growth in the service industries and in the professional occupations;
• a decline in the relative contribution of manufacturing and agricultural industries to total employment, offset by strong employment growth in the service industries and in the professional occupations;
• a decline in full-time work opportunities as a proportion of all work opportunities, accompanied by an increase in reliance on part-time, casual and contract employment (over the last decade, part-time employment grew at more than five times the rate of full-time employment); and
• a fall in the demand for unskilled labour and a large reduction in full-time employment opportunities for early school leavers.

These developments, together with technological change and the efforts to improve the competitiveness of Australia's industry in the international environment, have had major implications for the skills base of the Australian work force. The requirements for initial entry into the work force have been changing, and there is a growing recognition of the continuing need to acquire new skills, upgrade current skills and maintain the relevance of qualifications, that is, for life-long learning.

This has helped to shape the way that the education and training system has developed. The fall in full-time work opportunities for school leavers has contributed to significant growth in the proportion of students staying on to Year 12 and, in turn, the numbers proceeding to higher education and to vocational education and training.

With the growing awareness of the importance of vocational education and training, pressures have emerged for greater flexibility in how and where it is delivered. This includes easier and more efficient transition between the different levels of education, training and employment. Responses from the education and training sector have encompassed greater use of on-the-job training; more flexible arrangements for recognition of prior learning and credit transfer; and the development of a national approach to the recognition of qualifications.

In addition, the schools sector has become increasingly involved in providing initial vocational and training, easing the transition of students from school to work or vocational education and training through schemes such as the Australian Student Traineeship Foundation.

Employment Environment in 1995-96

1995-96 presented a difficult operating environment for the Portfolio. It was a year of subdued labour demand with employment growth slowing sharply over the course of the year. Employment growth for males was stronger than for females.

The employment outcome was unexpected in the context of continuing strong economic growth. Real GDP, as measured by trend GDP(A), rose strongly, by 4.2 per cent, in the year to the June quarter of 1996.

The moderate employment growth was insufficient to prevent a rise in unemployment during 1995-96, even though a fall in the participation rate, for males and females, softened the impact of the employment slowdown. The unemployment rate rose slightly in the year to June 1996 and teenage unemployment remained almost unchanged.

Vacancies remain at quite low levels and prospects are for only moderate employment growth in 1996-97.

Long-term unemployment continued to fall through 1995-96, reflecting in part the impact of labour market programmes targeted at this group. Long­term unemployment in June 1996 was one third lower than two years previously.

Further detail on labour market trends in Australia in 1995-96 is provided later in this overview section.

Working Nation and Labour Market Programme Outcomes

During most of 1995-96, a major priority for the Department was to continue to implement the Working Nation initiatives introduced by the previous Government in May 1994. These initiatives focused on industry and regional development assistance to reskill the most disadvantaged job seekers, and the development of a skilled and flexible labour force.

Working Nation introduced the Job Compact which gave people, who were in receipt of unemployment allowances for more than eighteen months, the guarantee of a job or training opportunity as part of a reciprocal obligation to seek work actively. Early intervention, case management and the introduction of the Youth Training Initiative and the National Training Wage were also major features of the Working Nation programmes.

The report on Programme 4 sets out the major employment outcomes from Working Nation in 1995-96. In summary, the number of Job Compact clients fell from more than 278 000 in July 1995 to 230 000 in June 1996. In 1995-96, 336 000 clients entered case management.

The Department undertook an evaluation of Working Nation which examined the implementation of its programmes and early measures of effectiveness. Overall, the findings highlighted the need to be realistic about what can be achieved through active labour market policies. This applies both to the setting of targets and to the way in which the targets interact with broader policy objectives. Further information on the Department's evaluations of programmes is available in the report on Programme 6.

The election of a new Government in 1996 brought about a major shift in employment policies. Pathways to Real Jobs, the Government's election statement on employment matters, sets out the approach to labour market assistance. Subsequent decisions have focused on the streamlining of labour market programmes and the plans to restructure fundamentally the way employment services are delivered.

Employer and Industry Servicing

The emphasis on assisting employers was continued throughout 1995-96. The Commonwealth Employment Service (CES) assisted employers to meet their labour needs by filling more than 520 000 vacancies. More departmental staff were outposted to provide advice and assistance to employers about employment and training assistance. Area Consultative Committees (ACCs) also sponsored some 600 new projects including 13 new small business incubators which provided the capacity to assist up to 355 tenant businesses.

Regional and Community Employment Councils (RCECs) are to be established as a key initiative to build on the work of ACCs and strengthen business and jobs growth in regions. Planning is under way to set up several pilot RCECs which will bring together business leaders and representatives of the wider community to link more effectively the training of unemployed people with sustainable jobs and with regional development plans.

Departmental programmes contributed to increasing traineeship commencements to some 35 000 in 1995-96. The availability of more flexible traineeship arrangements, including those delivered solely on-the-job was a key factor in the increase. Total traineeship commencements including those which do not attract a subsidy from departmental programmes numbered more than 37 000. The capitalisation of training incentives was introduced to assist large enterprises employing a significant number of apprentices and trainees. The up front payment allowed firms to defray the considerable initial costs associated with expanding training within their enterprise.

The New Enterprise Incentive Scheme assisted around 12 000 people to undertake small business training with more than 10 000 of these establishing small businesses. The scheme not only assists unemployed people into self-employment but contributes to an employment multiplier effect when those small businesses expand and take on employees.

In December 1995 the Forest Industry Labour Adjustment Package was introduced to assist workers displaced from the native forest industry as a result of Government conservation decisions. The assistance was in the form of retraining, re-employment and relocation.

50th Anniversary of the Commonwealth Employment Service

On 1 May 1996 the CES completed fifty years of providing employment services to the Australian people.

Commemorative activities at Area and regional levels have provided an opportunity to reflect on the contributions of staff over the half century of CES operations. They have also provided an opportunity to focus on the pivotal role that staff continue to play in meeting the Government's objectives of helping all Australians achieve the best possible employment, education and training outcomes.

A commemorative essay on the CES is included later in this overview section.

Education and Training

Overall the educational attainment of the Australian population is rising. In 1995, 46 per cent of 15 to 64 year olds in the labour force had post-school qualifications compared with 43 per cent in 1986. However, Year 12 retention fell again in 1995 (from 74.6 per cent to 72.2 per cent) but continues to be well above the levels of a decade ago. Girls continue to have higher retention to Year 12 than boys.

In 1995-96 work in the areas of key competencies, vocational education in schools and enterprise education has promoted educational practices that enhance productivity and lifelong learning in the workplace, as well as promoting effective and reliable pathways from schooling to employment for young people. The focus on student learning outcomes and teaching practices, which includes making learning outcomes in these areas explicit, has begun to generate considerable change in the nature, delivery and articulation of general and vocational education in schools. This reflects system-level changes towards outcomes-based education.

The Australian Student Traineeship Foundation was established in 1994 to promote the broadening of senior school education to include the opportunity for young Australians to acquire workplace knowledge and experience before they graduate from school. The Foundation encourages schools and employers to develop 'best practice' workplace learning partnerships which give students the opportunity to develop recognised academic skills and vocational competencies.

The Australian Vocational Training System provides a broad range of articulated pathways combining education, training and experience in workplaces. The system is based on nationally endorsed industry and enterprise competency standards.

A key initiative of the new Government is an integrated package of reforms in vocational education and training. The Modern Australian Apprenticeship and Traineeship System (MAATS) will build on the successful features of the Australian Vocational Training System, including the use of national industry and enterprise competency standards. New initiatives will make the training system more flexible and responsive to industry needs.

The objective of MAATS is to modernise the Australian training system to make training, especially entry-level training, an attractive business proposition for a much wider range of enterprises. This will greatly expand the employment and career opportunities for all Australians, particularly for young people, as well as increasing the international competitiveness of Australian enterprises through enhancing work force skills.

Some 631 000 students were enrolled in higher education in 1996. Enrolments have increased by 63 per cent in the decade to 1995 and by 4.4 per cent between 1995 and 1996. Female students account for 54.3 per cent of all enrolments in 1996.

Over the decade to 1995, participation in higher education increased from 36 to 48 per thousand of the 17 to 64 year old population. Between 1994 and 1995, the participation rate for 17 to 24 year olds, which is the age cohort most likely to participate in higher education, increased from 142 to 150 per thousand.

Tighter targeting of benefits paid by the AUSTUDY programme was introduced in 1996 through the AUSTUDY Actual Means Test. The introduction of the test responded to community concerns that some comparatively well-off families were receiving AUSTUDY payments. It assesses the total financial means available to clients where taxable income may not be a good indicator of need for Government support.

In 1996 literacy, particularly in the schools sector, emerged as an important issue. The first National School English Literacy Survey will establish reliable, national baseline data on the literacy performance of primary school children at Year 3 and Year 5. It will be possible to make comparisons with national literacy benchmarks for these cohorts of school children.

Following the National Review of Education for Aboriginal and Torres Strait Islander Peoples in 1993 the Commonwealth has reaffirmed its commitment to the National Aboriginal and Torres Strait Islander Education Policy, acknowledging the importance of its strategies for enabling Indigenous people to exercise greater educational self­determination and experience better educational outcomes. The priorities include the setting of literacy, numeracy and employment targets to improve educational outcomes.

In March 1996, the incoming Commonwealth Government announced its strong support for the objectives of Indigenous education. A restructured Indigenous Education Strategic Initiatives Programme which emphasises educational outcomes will commence on 1 January 1997 with increased appropriations.

Youth

Since March 1996, the Department's role in youth affairs has been enhanced, as reflected in the inclusion of 'Youth Affairs' in the name of the Department. The Minister released a statement on youth policy, Australia's young people: shaping the future with the 1996-97 Budget. The statement identifies tackling youth unemployment as the Government's first priority and sets out the agenda in youth policy for the future.

New initiatives in the 1996-97 Budget will provide support for youth over a broad range of Government services. Within the Portfolio, the establishment of the Green Corps with funding of some $40m over three years will give young Australians the opportunity to contribute to preserving and restoring Australia's natural environment and cultural heritage. Under the MAATS initiative, $187m will be available over four years to smooth the school-to-work path for students and reduce youth unemployment. The Job Placement, Employment and Training programme will assist homeless and disadvantaged young people who are looking for work or who want to continue, or re­enter, full-time education.

Internationalisation of Australia's Employment, Education and Training Services

Policy and programmes promoting Australian employment, education and training internationally complement and advance domestic reforms aimed at creating an internationally competitive work force. The international dimension of Australia's education and training contributes to the nation's growth and provides opportunities for social, intellectual and cultural engagement with the societies in our region and beyond. It also underpins access to international trade opportunities essential for Australia's economic growth. The Department's role as an effective catalyst in this area was highlighted in 1995-96 by:

• continued strategic funding support for government to government, institution and individual participation in international education and training activities;
• the further development of Australia's leadership role in APEC's human resource development agenda;
• the opening of a dialogue on education and training with counterpart countries in the Gulf States;
• the consolidation of the Australian International Education Foundation (AIEF);
• the review of the Education Services for Overseas Students (ESOS) Act; and
• the continued growth of the Department's commercial consultancy business.

In a little over a year since it was established, the AIEF has made significant progress as a government-industry partnership to promote Australian education and training services overseas and to position Australia as an international leader in quality education and training services and institutional research. In 1995-96 some 80 000 overseas students studying in Australia have expended an estimated $2.1b, an increase of 24 per cent over 1994-95.

The review of the Education Services for Overseas Students (ESOS) Act established a broad general consensus that the Act had contributed strongly to the growth and stability in the industry over the past five years. The review recommended that the Act continue as part of an effective cooperative approach to regulation involving the Commonwealth and state and territory governments and industry.

The Department's international consultancy business continued to promote and expand export opportunities for Australian business and government in employment, education and training services. In 1995-96, the Department increased the market for existing products and developed new products to meet emerging demands. The Department is achieving success in this commercial sphere and is well regarded in the international marketplace.

Social Justice and Access and Equity

Social justice and access and equity principles provide an important impetus for the provision of an equitable share of resources to all Australians. Fair access to opportunities and services such as employment, education and training is a key objective of the Government and of the Department in the delivery of its programmes. The Government made a pre-election commitment to implement an access and equity strategy for the delivery of services to all Australians, of whatever background, and to ensure that all cultural groups have access to all publicly provided services without discrimination. This will build on the previous access and equity strategy which focused on the removal of language, cultural, religious and racial barriers in the delivery of Commonwealth programmes and services.

Access and equity target groups for the Department's programmes are Indigenous people, youth, those in rural and isolated areas of Australia, migrants, women, sole parents, mature-age workers, offenders, people with disabilities and the long-term unemployed.

The Department seeks to ensure that members of access and equity target groups are informed of its programmes and services, as a first step to gaining access to employment assistance or to education and training.

It also encourages staff to receive training to assist them to address access and equity and social justice issues. Examples include training programmes in communication and client service skills, client diversity and cross cultural awareness.

Information on the implementation of social justice and access and equity principles in the delivery of programmes by the Department, including relevant performance information, is contained in the individual programme chapters.

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THE AUSTRALIAN LABOUR MARKET IN 1995-96

Employment Growth

In the year to June 1996¹, total employment rose by 67 200 or 0.8 per cent to reach 8 314 300. This was much lower than the increase recorded in the year to June 1995 of 350 000 or 4.4 per cent.

The extent of the labour market slowdown was most evident for full-time jobs. In the year to June 1996, full-time employment increased by only 26 300 or 0.4 per cent, or around 200 000 less than in the year to June 1995.

Part-time employment growth also slowed, increasing by 40 900 or 2.0 per cent in the year to June 1996, down from growth of some 125 000 in the year to June 1995. Figure 1 illustrates the employment growth slowdown.

In contrast to trends in recent years, 1995-96 saw stronger growth for males than females. Male employment rose by 55 000 or 1.2 per cent compared with growth of just 12 000 or 0.3 per cent for females.

Figure 1: Annual Employment Growth (Per Cent)

Unemployment

With the slowdown in employment growth, the unemployment rate increased from 8.4 per cent in June 1995 to 8.6 per cent in June 1996. The number of unemployed persons rose by 23 000 to 777 600.

The unemployment rate has remained well above the pre-recession rates of less than 6 per cent recorded in late 1989. The trend in the unemployment rate in the 1990s is illustrated in Figure 2.

¹ Unless otherwise stated, all labour market data are in trend terms from the Labour Force, Australian Bureau of Statistics, Cat No 6202 and 6203.

Figure 2: Unemployment Rate (Per Cent)

A fall in the participation rate, in response to slow growth in labour demand, softened the impact of the jobs slowdown on unemployment. In the year to June 1996 the labour force participation rate fell by 0.3 percentage points to 63.4 per cent. This reflected falls for both males (down 0.4 percentage points to 73.5 per cent) and females (also down 0.4 percentage points, to 53.5 per cent). The outcome in 1995-96 for females runs counter to the longer term trend of rising female labour force participation.

Teenage Unemployment

A frequently used measure of teenage unemployment (15 to 19 years) is the teenage full­time unemployment rate, which measures the number of unemployed teenagers looking for full-time employment as a share of the teenage full-time labour force (that is, those teenagers who are either unemployed and looking for full-time work or employed full-time). During 1995-96 the full-time unemployment rate remained almost unchanged in trend terms, rising marginally from 27.8 per cent in June 1995 to 28.1 per cent in June 1996.

This is equivalent to 7.2 per cent of the teenage population, reflecting the fact that most teenagers are in full-time education and not working full-time or seeking full-time work. In June 1996 (original data) two thirds of teenagers were attending school or tertiary education full-time and fewer than one in four teenagers were in the full-time labour force. Many students combine full-time education with employment, mainly part-time work. In June 1996, 30.8 per cent of school students and 45.5 per cent of tertiary students were working while in full-time education.

Teenage unemployment remains unacceptably high and the challenge of achieving substantial reductions in teenage unemployment is a high priority for the Portfolio.

Long-term Unemployment

The marked fall in long-term unemployment (those unemployed 12 months or more) evident in 1994-95 continued during 1995-96. In the year to June 1996 long-term unemployment fell by 34 700 or 14.4 per cent to 206 200. Over the past two years, long­term unemployment has been reduced by almost one third. The number of persons unemployed two years or more also fell in the year to June 1996, down 24 300 or 17.5 per cent to 114 600, and is one third lower than two years earlier.

Long-term unemployment fell in all age groups except teenagers in the year to June 1996 (original data), with the strongest falls recorded for those aged 20 to 24 years (29.4 per cent), 25 to 34 years (28.2 per cent) and 35 to 44 years (24.5 per cent).

The reduction in long-term unemployment reflects both the benefits of economic growth and labour market assistance targeted at people who have been unemployed for a long period of time.

Employment Growth by Industry

The slowdown in employment growth in 1995-96 reflects dramatic variations in employment outcomes for key industries. The number of new jobs by industry in the year to May 1996 is illustrated in Figure 3.

Three industries, cultural and recreational services, construction and accommodation, cafes and restaurants, experienced a turnaround from strong employment growth in the previous year to a decline in employment. At the same time, other industries, especially government administration, health and community services and property and business services, exhibited much lower jobs growth in 1995-96 than in 1994-95. Manufacturing employment fell slightly in the year to May 1996.

Retail trade made the largest contribution to jobs growth, accounting for around half of employment growth during 1995-96.

Figure 3: Employment Growth by Industry: May 1995 to May 1996 ('000)

Employment Growth by Occupation

Key occupational groups, in particular professionals, salespersons, labourers and tradespersons experienced a marked slowing in employment growth during 1995-96. Plant and machine operators and drivers had a turnaround from strong growth to a fall in employment while employment growth for para-professionals strengthened.

The number of new jobs in the year to May 1996, by occupational group, is portrayed in Figure 4. The largest contributions to employment growth were from salespersons and professionals. Importantly, for vocational education and training programmes, employment of tradespersons remained almost unchanged.

Figure 4: Employment Growth by Occupation: May 1995 to May 1996 ('000)

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50^TH ANNIVERSARY OF THE COMMONWEALTH EMPLOYMENT SERVICE

On 1 May 1996 the Commonwealth Employment Service (CES) completed fifty years of providing employment services to the Australian people.

Background

Before the end of the Second World War, Australian governments and the community had been planning for a peacetime economy and society. Two of the main concerns of the Commonwealth Government in the immediate postwar period were the re­establishment of demobilised ex-service personnel and war industry workers, and how to change from a war economy to a peacetime one.

The first White Paper released by an Australian government, entitled Full Employment in Australia, was tabled in Parliament on 30 May 1945. Along with the Re-establishment and Employment Act 1945, it gave support for a long term policy to maintain full employment and expressed a strong commitment to developing sound practices in industrial relations and industrial welfare.

The Commonwealth Employment Service commenced operations on 1 May 1946. The CES had a broad charter from the outset to provide services and facilities to assist in bringing about and maintaining high and stable levels of employment, training and retraining, at a time of full employment and very high demand for scarce skills.

The Fifties and Sixties

Throughout the 1950s capital inflow, immigration, the growth of industrial markets, and improvements in pastoral productivity led to accelerated economic growth. During this period, a 0skills shortage led to increased recruitment from overseas.

The Government embarked on large scale public works programmes, communications, transport and finance projects and the establishment of a framework for an expanding private economy. The CES played a key role in integrating new arrivals into the Australian work force.

However, in 1961 economic activity fell away sharply and the labour market changed from one of full employment to one marked by over-supply. The CES was again called on to play a central role in assisting unemployed people back into work.

The Seventies and Eighties

During the early 1970s, job shortages, accelerating levels of unemployment and changes in the structure of the labour market began to emerge. These included the effect of technological change, the decline in the proportion of people in the rural sector and manufacturing industries, the increase in part-time employment and the entry into the work force of increasing numbers of women, especially married women.

At the same time, high rates of inflation across the world severely affected the Australian economy. Inflation stemmed economic growth resulting in high levels of unemployment. A recession in the 1970s heightened the awareness of the effects of the structural changes on employment opportunities. Successive governments embarked on labour market intervention approaches to aid the adjustment of emerging labour supply and demand problems in the economy during this period.

A review of client services and regional structures in March 1988 explored improved ways of servicing clients. New patterns of management were introduced involving the devolution of operational functions, the differentiation of service outlets, the upgrading of information technology facilities and the involvement of CES offices in the delivery of student assistance. A computer application (JOBSYSTEM) which records employer, vacancy and job seeker information commenced on 31 March 1991. The system markedly improved efficiency by linking, for the first time, the entire CES network in a single system.

The Nineties

In May 1993, the Department undertook a further review (the Services and Structures Review) to examine ways to improve services to clients, provide flatter structures and improve accountability at the local level. The review sought to position the Department to deliver services in an environment characterised by high unemployment and particularly long term unemployment (12 months or more).

Differentiated outlets were brought together into integrated employment servicing units with a particular emphasis on case management for the most disadvantaged clients as well as upgraded employer services. The Remote Area Field Service was introduced to deliver employment and training services to remote clients, particularly Indigenous people. State offices were abolished, with responsibility for operational management assigned to nineteen Area offices, some of which cross state borders in line with natural economic and labour market groupings, in a direct reporting line to National Office.

The Employment Services Act 1994 relaunched the CES and created Employment Assistance Australia (EAA) which provides case management services for the long­term unemployed and those at risk of becoming long-term unemployed. The legislation also created the Employment Services Regulatory Authority, to promote and regulate a competitive framework for case management of long term unemployed job seekers by private and community case management operations and by EAA.

Labour Market Programmes

The traditional role of the CES has been to promote efficiency in the labour market by speeding up the process of matching the right people to the right jobs. As unemployment increased in the 1970s and 1980s, the focus changed from job matching to assessing peoples' difficulties in the labour market, designing packages of assistance including training and wage subsidies and placing people at risk of long-term unemployment into jobs.

Changing labour market conditions, the increase in the number of long term unemployed people and international trends such as the promotion of more active forms of assistance for unemployed people have all influenced the nature of the intervention in the labour market. In response to the growth in unemployment in the early part of the 1990s, the Government increased labour market programme spending and sharpened its focus on assisting long-term unemployed people through wage subsidy and employment experience programmes.

In August 1995, the CES Advisory Committee completed its Review of Labour Market Programmes. It recommended that programme administration be streamlined, the programmes be made more flexible and simpler, and that they have a stronger client focus.

Use of Information Technology

Information technology has delivered substantial improvements in the efficiency and effectiveness of service delivery.

During the first half of 1996, more than 2200 touch screen units were installed in CES offices throughout Australia, replacing cards on job boards and providing real time access to the national jobs database. This touch screen network, the largest of its type in the world, has been very favourably received by job seekers and provided easier and faster access to a wider range of current job opportunities.

Since mid 1995, a new Integrated Employment System (IES) has been progressively implemented in CES offices and for contracted case managers. This has included a new mainframe-based system, the heart of IES, which incorporates the national job and job seeker database and provides support for more efficient work processes across a wide range of employment service functions. Applications that operate on personal computers but are linked to this mainframe application have also been developed progressively and are being introduced. These tools support key business processes such as case management for disadvantaged job seekers and employer servicing and provide faster access to more reliable management information. IES implementation is well advanced and will be completed during 1997.

Emerging Trends

The use of intermediaries to deliver the Government's programmes is a recent development in public administration. Effective relationships have been established between the Government and business, with organisations such as the Australian Chamber of Commerce and Industry and its state and territory affiliates playing an important part in helping unemployed people. Departmental officers have been posted to industry and employer organisations to assist this process.

Increasingly, community organisations are delivering employment and labour market programmes and services. The use of contracted case managers has become an integral part of the delivery of case management for long term unemployed people and those who are likely to become so. SkillShare providers continue to make a significant contribution to assisting job seekers through training and employment related projects. Other parties working with the CES to deliver services to the unemployed include the Commonwealth Rehabilitation Service and training providers.

The changing composition of the work force poses new challenges for the CES Network. New methods of servicing employers and job seekers are addressing the trend to casual and part-time employment and other flexible working arrangements negotiated under enterprise and workplace bargaining arrangements. Increased employer liaison is a current focus of CES activities.

The CES is also addressing the employment needs of young people. This involves influencing employer attitudes toward the recruitment of young people, enhancing the effectiveness of employment, education and training linkages and providing help at an early stage in the unemployment cycle to assist young people into worthwhile education, training or work opportunities.

The 50th Anniversary was commemorated by the Secretary, Mr Sandy Hollway, at the Belconnen CES in Canberra on 1 May 1996. Other commemorative activities have been undertaken at Area and regional levels, allowing management and staff to reflect on the contributions of staff over the half century of CES operations. They have also provided an opportunity to focus on the pivotal role staff of the Department continue to play in meeting the Government's objectives of helping all Australians achieve the best possible employment, education and training outcomes.

Looking Ahead

The move to a fully competitive employment placement market, including the establishment of a corporatised public employment placement provider will occur progressively from mid­1997. In the interim, the Department will continue to operate the CES and EAA to provide mainstream employment and labour market assistance to job seekers and employers.

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CORPORATE OVERVIEW

DESCRIPTION

Mission

The Government's broad economic and social objectives commit it to increase employment opportunities, reduce unemployment, improve the skills base and promote equity in education and training and in the labour market. Its objective for this portfolio is to give access to employment, education and training opportunities to enable the nation's people to achieve their individual potential, to contribute as members of Australian society and to share in the benefits of that society.

The Department's mission is to provide the best possible employment, education and training services, within the funds available, to prepare Australians for job opportunities and to contribute to the nation's ongoing economic growth. The Department's fundamental objectives are to :

• improve efficiency and effectiveness of the labour market by fostering employment services and education and training systems that are attuned to the needs of individuals and of industry and will raise the productivity of the work force;
• promote equality of education, training and employment opportunity by helping people, particularly those at a competitive disadvantage in the labour market, to acquire knowledge, skills and competencies and to access employment opportunities; and
• provide young people with the opportunities in education, training and employment so that they can fulfil their potential to contribute fully to Australian society.

Business

The Department's business is to carry out its mission by implementing Government policies and programmes promptly, efficiently and fairly.

The Department is the main Commonwealth department for employment, education and training matters, working in partnership with other portfolio and Commonwealth agencies, state government agencies, employer and union bodies, educational institutions and local government and community organisations.

The Department is committed to the highest levels of service to its clients - employers and industry, education and training providers, international agencies, students, young people, job seekers and, especially, the long­term unemployed. It provides specific employment and educational services for Indigenous peoples, to whom the Government gives special priority.

To achieve the Government's employment, education and training objectives, the Department must communicate effectively with clients and respond to their needs with service delivery of consistently high quality.

To provide high quality service, the Department maintains skilled and dedicated staff through effective corporate services, good management and staff development.

Organisation

The Department has simplified its organisational structure to a National Office, Area offices and regional employment servicing units. National Office advises Ministers, formulates policy and manages programmes. It also delivers some education, training and international programmes direct to agencies, institutions and other clients.

Most of the staff work in Area offices, integrated regional employment servicing units and other outlets. They serve clients through the CES and Employment Assistance Australia (EAA) networks. The CES provides a national service which finds jobs for people and people for jobs. It also assists individual employers, job seekers, students and young people. EAA provides case management services to the long-term unemployed and those at risk of long-term unemployment.

Area managers are responsible for regional employment servicing units which provide face-to-face service for job seekers, employers and other clients. Regional managers are responsible for CES job seeker and employer servicing units, EAA outlets, labour market programme administration and student and youth service outlets.

One Area office in each state supports an outposted national office to carry out state­level functions. These Area offices also provide some aggregated services for all Areas in their state.

Values

The Department's corporate values and code of practice set standards of behaviour reflecting its responsibilities.

The corporate values are:

• commitment to staff - developing skilled, motivated and ethical staff who will work cooperatively to achieve organisational objectives;
• encouraging excellence - encouraging staff and the individuals and organisations serviced by the Department to acquire skills to perform at the highest levels;
• service culture - understanding the needs of clients, informing them of rights and obligations and providing the best possible programmes and services; and
• promoting social justice - providing equitable access to opportunities for clients, reviewing the social justice impact of programmes and sharing responsibility with clients for programme outcomes.

The corporate code of practice sets standards for how the Department goes about its work. The Department and its staff strive for:

• quality and service - a high standard of work and services that are presented promptly and courteously. The Department looks for better ways of working, anticipating the needs of clients, colleagues and the workplace;
• equity and integrity - attending to the rights and needs of clients equitably. The Department conducts business honestly to win the confidence of clients; and
• efficiency and accountability - meeting goals cost effectively and accountably. The Department takes responsibility for its actions and makes decisions openly to meet legal requirements and conform with government policy.

Figure 5: Divisional Structure at 30 June 1996

The organisational units below report directly to one of the Deputy Secretaries.

Figure 6: Map of Departmental Area Boundaries at 30 June 1996

Figure 7: Top Structure of Department's Area Administration at 30 June 1996

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Organisational Structure

At 30 June 1996, the Department consisted of 19 Area offices and a National Office comprising eleven Divisions, a Legal Group, and three Branches which report directly to the Department's Executive outside the Divisional structure. The Department's Executive comprised the Secretary and four Deputy Secretaries.

A chart of the National Office top structure as at 30 June 1996 is provided at Figure 5. Figure 6 is a map of the Area structure. Figure 7 shows the top structure of the Department's Area administration. The functions of the units of the National Office are outlined below.

Functions of National Office

THE YEAR IN REVIEW

Managing Declining Resources

A major challenge facing the Department for 1995-96 was the management of a declining running cost resource base while continuing to achieve programme outcomes and maintain a high level of service to clients. The magnitude of the challenge is illustrated in Figure 8 which depicts the trend in the resourcing of the Department from 1987-88 to 1999-2000.

Figure 8: Trends in Running Cost Resources 1987-88 to 1999-2000

The Department commenced the 1995-96 year needing to reduce its running cost expenditure. It set about reducing the level of administrative expenditure to the maximum extent possible through more efficient management practices. To this end, the Department has been re-engineering its processes in areas with the potential for savings.

It has entered into national contracts to cover the supply of services in areas such as travel, printing and publication, photocopying, stationery and postage. The impact has been twofold. On the one hand, the Department has achieved savings through lower unit costs as a result of its bulk purchasing power. More significantly, the introduction of national contracts has led to improvements in the administration of departmental activities. For example, the Department now purchases supplies of forms on a 'just in time' basis in line with best practice. This has resulted in more efficient forms management practices with spin off savings.

In the area of property management, the Department has reduced its dependence on long term leases to allow greater flexibility to adjust to shifts in the pattern of its staffing. The Department is exploring options to contract out its property management function.

A substantial reduction in staffing has been necessary to achieve the required savings. In addition, the Department acted to anticipate further reductions in resources for 1996­97. Between May 1995 and August 1966, the Department has successfully managed a major voluntary redundancy programme in a difficult industrial environment which has resulted in a reduction in its staffing of more than 3000 or 20 per cent of its work force.

Continuous Improvement

The Department has taken the initial steps to introduce a culture of continuous improvement within the organisation, including the establishment of the Quality Coordination and Corporate Planning Branch (previously the Performance Improvement Branch).

In 1995-96 the Department has:

• participated in the Price Waterhouse International Benchmarking Studies on customer service, human resource management and financial management;
• been one of four agencies involved in the second stage of the MAB/MIAC Review of Personnel Services Project;
• commissioned a major review of stressors in the workplace;
• been the lead agency in a project to develop a prototype human resources management information system under the auspices of the Office of Government Information Technology; and
• compiled a data base and began to implement continuous improvement suggestions proposed by staff.

Three broad initiatives were implemented in 1995-96 under the umbrella of a business improvement agenda to improve the delivery of services to clients.

The first focussed on developing better work practices. One of the more significant projects centred on case management of unemployed clients. Other projects included a review of job seeker registration processes and account management for employers.

The second was aimed at using information technology more effectively and efficiently. It involved addressing the business issues surrounding the design and implementation of the Department's new integrated employment system.

The third group set of initiatives was directed to improving accountability and standards for the delivery of services to job seekers, employers and students. A customer service code was introduced for the client service delivery network and a charter of customer service is being developed. The Department also reviewed service standards for its Aboriginal Education Units.

Information Technology Initiatives

The re-engineering of the Department's information technology systems and facilities gathered pace during the year.

A network of more than 2200 touch screens - the largest such network in the world - was installed in some 300 CES offices throughout Australia. The screens, which enable job seekers to search for jobs by interacting with the national CES jobs database, are very popular with the Department's clients.

The first three releases of the Department's major new system, the Integrated Employment System, were implemented, providing improved tools for matching job seekers to jobs, more efficient mailhouse services for letters to job seekers and substantial improvements in management information systems.

New personal computer facilities were installed in Area offices and Student Assistance Centres. The facilities connect to the Department's National Office in a single new network based on the Windows 95 desktop system - one of the largest Windows 95 implementations in the Commonwealth.

Job Guide 1996 - a publication which provides information about careers, occupations, education and training for students, job seekers and intermediaries - was made available on floppy disk, CD ROM and the Internet for the first time.

A back-up national computer centre was installed at Homebush in Sydney. The centre is linked to the major national centre in Canberra by a private microwave facility. The Sydney centre is operated remotely from Canberra - the first time this has been done in Australia over such a distance.

Over the next year the Department plans to move its Canberra computer centre to the purpose-built Australian Taxation Office facility, to develop further its suite of systems based on the Internet and to release the remaining phases of the Integrated Employment System.

In 1995-96 the Department has progressed the development and implementation of the national education network service known as Education Network Australia (EdNA).

EdNA's role is to coordinate the development and use of information technology for educational purposes by the Commonwealth, the schools and the vocational education and training sectors in each state and territory, the higher education sector, the non­government schools sector and the adult and community education sector.

Equal Employment Opportunity

The Equal Employment Opportunity (EEO) National Programme and Action Plan has operated since July 1994. A key objective is to provide an environment free from unlawful discrimination, including sexual or workplace harassment. The plan sets out objectives for recruitment, promotion, staff development, retention and work environment issues.

Comparison of the EEO Profiles for 1994­95 and 1995-1996

Total staff numbers declined by 6.8 per cent during the year. The numbers in all EEO groups have also declined but the proportion of staff within each group has been maintained. The EEO profile at 30 June 1996 is at Appendix 3. A comparison of the 1994­1995 and 1995-1996 profiles reveals that:

Women

The proportion of total staff was unchanged at 58 per cent:

• in the Senior Executive Service it declined from 36.7 per cent to 31.5 per cent;
• in the Senior Officer grades it increased from 42.5 per cent to 43.2 per cent;
• in the technical designations it declined from 21.3 per cent to 20.9 per cent;
• in the professional designations it declined slightly from 71.1 per cent to 70.7 per cent;

Indigenous Staff

The proportion of total staff increased marginally from 5.0 per cent to 5.1 per cent but in the Senior Officer grades it declined from 2.1 per cent to 1.7 per cent;

Staff with Disabilities

The proportion of total staff declined slightly from 4.7 per cent to 4.5 per cent:

• in the Senior Officer grades it declined slightly; and
• in the Senior Executive Service it declined from 6.1 per cent to 3.3 per cent;

Staff from Non-English Speaking Backgrounds

The proportion of total staff increased slightly from 10.1 per cent to 10.3 per cent:

• in the Senior Officer grades it declined slightly; and
• in the technical designations and professional officer grades it increased from 4.1 per cent to 6.7 per cent.

Equal Opportunity in Appointments

EEO information on appointments to statutory and non­statutory bodies in the Portfolio excludes appointments by state or territory governments and non-government agencies. These appointees are not required to provide EEO data and in many cases do not do so. Consequently, no EEO data (apart from gender) were available for 53 per cent of appointees.

At 30 June 1996, a total of 1329 Commonwealth appointments had been made to positions on portfolio bodies of which;

• 372 (28 per cent) were filled by women;
• 15 (1.1 per cent) by Indigenous peoples;
• four (0.3 per cent) by people with a disability; and
• 12 (0.9 per cent) by people from non-English speaking background (10 first generation and 2 second generation).

Of the 135 appointments made in the 12 months ending 30 June 1996:

• 60 (44 per cent) were women;
• two (1.5 per cent) were of Indigenous background;
• one (0.7 per cent) was a person with a disability; and
• two (1.5 per cent) were of a non-English speaking background.

Internal and External Scrutiny

External scrutiny of the Department is provided through Parliament by way of established committee processes and reports tabled by the Australian National Audit Office as well as Parliamentary questions on notice. Formal review mechanisms allow individuals to appeal against departmental decisions.

Internal scrutiny is provided through the operation of Internal Audit, fraud prevention activities and a comprehensive programme of evaluation.

This section of the report summarises the significant areas of scrutiny for the past twelve months. More detailed information on external and internal scrutiny is provided in Appendix 7 and in the supplementary information referred to in the Guide to the Report.

Parliamentary Scrutiny

In 1995-96 the Department provided answers to 132 parliamentary questions on notice and responses to 25 Parliamentary Standing Committee inquiries.

The Australian National Audit Office tabled 7 reports in the Parliament which dealt, either directly or indirectly, with the Department's operations during 1995-96. Those reports were:

• Audit Report No. 3 1995-96, Performance Audit - CES Case Management - Department of Employment, Education and Training;
• Audit Report No. 13 1995-96, Financial Statements Audit - Results of the 1994-95 Financial Statements Audits of Commonwealth Entities;
• Audit Report No. 23 1995-96, Performance Audit - Procurement of Training Services - Department of Employment, Education, Training and Youth Affairs;
• Audit Report No. 25 1995-96, Performance Audit - Department of Employment, Education, Training and Youth Affairs;
• Audit Report No. 27 1995-96, Financial Control and Administration Audit - Asset Management;
• Audit Report No. 30 1995-96, Performance Audit - Implementation of Competition in Case Management - Employment Services Regulatory Authority, Department of Employment Education, Training and Youth Affairs; and
• Audit Report No. 33 1995-96, Preliminary Study - Joint Commercial Arrangements.

Remedial action has been completed on seven reports tabled in previous years.

Details of the Department's responses are provided in each of the reports listed. It disagreed with only one of the ANAO recommendations - Recommendation 4 of Audit Report No. 30 1995-96, Implementation of Competition in Case Management. The ANAO had recommended that a firm mechanism be used to establish a unit cost for the provision of case management services in order to determine the funds available for case management. A detailed explanation of the Department's position is contained in Audit Report No. 30.

Administrative Law

Ombudsman Act 1976

In 1995-96, the Ombudsman received 381 written complaints (272 in 1994-95) and 2280 oral complaints (1154 in 1994-95) concerning the Department. Of these, 46 were referred to the Department.

There were no reports to the Department under sections 15, 16, 17 or 19 of the Ombudsman Act 1976.

Act of Grace Payments

One Act of Grace Payment of $7 000 was made by the Department in 1995-96.

Federal Court

In 1995-96 there was one case referred to the Federal Court that concerned the Portfolio.

Social Security Appeals Tribunal

The Social Security Appeals Tribunal (SSAT) is an independent body established to review decisions under the Social Security Act 1991. The Tribunal also has jurisdiction in relation to the Student and Youth Assistance Act 1973 (concerning, in particular, decisions relating to AUSTUDY and the Youth Training Allowance), and the Employment Services Act 1994 (concerning decisions of the CES in relation to breach activity or case management).

The SSAT received 4396 appeals in 1995-96 against decisions under the Student and Youth Assistance Act 1973 and the Employment Services Act 1994. By comparison, in 1994­95, the SSAT and its predecessor, the Student Assistance Review Tribunal, received 1824 appeals. Of the 4396 appeals received, 3426 appeals were finalised in 1995-96, as follows:

• 995 appeals were withdrawn or dismissed;
• 80 decisions were varied;
• in 459 cases the SSAT ruled it had no jurisdiction;
• 868 decisions were set aside; and
• 1024 decisions were affirmed in the Department's favour.

Administrative Appeals Tribunal

In 1995-96, the Administrative Appeals Tribunal heard 353 appeals against decisions of the SSAT. Of these, 98 were made by the Dep