CHAPTER 3: A NEW FRAMEWORK FOR LABOUR MARKET ASSISTANCE

Drawing upon the principles discussed in Chapter 2, the Government has decided to adopt a new framework for the future delivery of labour market assistance in Australia. The changes proposed are radical and comprehensive, involving the most significant reorganisation of labour market assistance arrangements since the establishment of the CES in 1946. At the same time they are creative and responsible socially as well as fiscally making best use of available resources and offering better help and genuine hope to unemployed Australians.

This chapter outlines the main elements of the Government's proposed framework and their broad implications for clients, providers and existing institutions. Further details (including issues on which public views will be invited) are provided in subsequent chapters.

A new framework: client-focused, not programme-driven

The primary objective of the Government's reforms is to ensure that labour market assistance has a clear focus on real job outcomes and genuinely makes a difference to those assisted. Under these reforms labour market assistance will be client­focused, not programme­driven. Clients will benefit from higher standards of service, more flexible and customised assistance, and ultimately better and more lasting employment outcomes (see box).

Benefits for clients

Jobseekers would register for income support and employment assistance at the most convenient office of the new Government service delivery agency. All jobseekers would be able to use the agency's self­help facilities in their search for work, and to obtain general advice and guidance over the counter from agency staff. Those selected for additional forms of assistance (described in Chapter 4) would be referred for that assistance to the employment placement enterprise of their choice. Clients will benefit in three main ways from the Government's reforms. As the new arrangements are put in place unemployed people can expect to receive: better quality of public services. The new agency will offer more integrated services to clients at the highest possible standards of quality; no longer will it be necessary for unemployed people to move between separate CES and DSS offices to receive closely related and even overlapping services. more flexible and customised assistance in their search for work. For those receiving intensive assistance, in particular, assistance will be far better tailored to their individual needs and circumstances; no longer will clients be referred to compulsory training courses of little relevance or benefit to their vocational needs. ultimately, and most significantly, better and more sustainable labour market outcomes, underwritten by a more competitive, flexible and incentive­driven approach to the delivery of labour market assistance.

Under new arrangements to take effect from December 1997 there will be a wider range of providers of labour market assistance and far stronger incentives to achieve sustainable job outcomes. Jobseekers will have greater choice as to who will help them; providers will have maximum flexibility as to how they organise and deliver their assistance; and taxpayers will have an assurance that public funds are being spent to best possible effect.

Relative to existing arrangements for labour market assistance, the Government's proposed framework involves three key sets of changes:

• changes to the delivery of Commonwealth services to jobseekers, integrating key functions performed by the separate CES and DSS networks into a single national network of offices;
• the development of a fully contestable market for publicly­funded employment placement services, in which assistance will be provided by a diverse group of employment placement enterprises (EPEs) including private firms, community organisations and a corporatised public provider; and
• new arrangements for the delivery of assistance to jobseekers, including new and more flexible forms of assistance, new approaches to the targeting of that assistance, and significant reforms to payment and incentive arrangements. Details are provided in Chapters 4­7.

A single point for delivery of Commonwealth services

The Government will establish a new statutory authority within the Social Security portfolio to be the key point of public contact for people seeking access to Commonwealth services. The new agency will play a key role in receiving clients, determining their eligibility for entitlements, assistance and services, and completing the service either directly on its own account or by referral. It will manage an integrated national network of service outlets and related electronic/teleservice centres, operating under a system of service agreements with relevant Commonwealth policy Departments.

The establishment of this agency will mark a major change in service delivery arrangements for the Commonwealth. Initially it will focus on income support, student assistance and employment services which are a large proportion of total Commonwealth services. In time it will have scope to move beyond these core areas to become a genuine one­stop shop for a wide range of Commonwealth Government services. Even in the shorter term its services will extend across families, the unemployed, students, retired persons, carers and widows, the short­term incapacitated and people with disabilities. It will therefore be the public presence for some of the most important social responsibilities of Government.

The Government's prime objective in making this change is to achieve the highest possible standard of service to Commonwealth clients. The new agency structure will offer the opportunity to eliminate current discontinuities and inefficiencies in the services provided by different delivery networks; to integrate specialist services for particular groups of clients, notably Aboriginal and Torres Strait Islander clients, migrants and youth; and over time, to achieve a higher quality, more coherent and more efficient delivery of all Commonwealth services.

The Government has examined closely the full range of labour market assistance services currently provided by the CES, with a view to identifying those functions which should continue to be provided directly by the public sector through the new agency. Factors weighed in this assessment included considerations of national consistency, client privacy and accountability for the commitment of public funds.

The Government has concluded that the public sector should continue to provide, through the service delivery agency, a uniform national service for the registration of jobseekers; for the assessment of jobseekers' eligibility for employment assistance; for referral of clients to assistance in the employment placement market; and for administering the activity test and enforcing compliance with conditions of assistance. For client convenience, the agency will also provide access to vacancy information, self­help facilities and on­the­spot referrals to employers and employment placement enterprises. With these exceptions, however, all other employment placement functions will be contracted out to EPEs, including the corporatised public EPE, in a fully contestable market for employment placement services.

Further details of the proposed service delivery agency are given in Chapter 8.

An employment placement market

The Government has decided that current arrangements for the delivery of labour market assistance should be replaced with a contestable and, after an interim period, a fully competitive market in which private, community and public sector agencies would be contracted to place unemployed people into jobs. In this market, a diverse range of employment placement enterprises would undertake the job placement, counselling and assistance services currently provided by the CES, EAA and contracted case managers. The Department of Employment, Education, Training and Youth Affairs (DEETYA) would act as the Government's agent in purchasing services from EPEs.

A focus on outcomes

A fundamental aspect of the Government's reforms is to shift the focus of labour market assistance away from placements into short­term programmes and on to placements into long­term jobs. Payment structures and incentives need to be redesigned accordingly.

Under the competitive arrangements described below payments to EPEs will be heavily weighted to reward the placement of clients into real and lasting outcomes. Those outcomes will fall into two main categories:

• primary outcomes, involving the placement of clients into full­time jobs, apprenticeships or traineeships; and
• secondary outcomes, involving the placement of clients into substantial part­time work or accredited education and training courses.

Payments for primary outcomes will generally exceed those for secondary outcomes. Placements into short­term training courses or other temporary 'programme' activities will no longer attract an outcome fee from the Commonwealth.

The Government sees these changes as central to the objectives of its proposed reforms, rewarding outputs rather than inputs, purpose rather than process. Further details are provided in Chapter 7.

A competitive framework

Recent public sector reforms, both in Australia and overseas, which have increased reliance on market based mechanisms and competition have resulted in an increase in efficiency, innovation and choice.

Case management arrangements in Australia began to incorporate these principles in 1994, though on a limited basis. The Government believes it is now time to expand the use of market­like mechanisms in the delivery of broader labour market assistance. It sees substantial scope to utilise the capacities of private and community sector agencies in the delivery of services to unemployed people. At the same time it acknowledges the substantial achievements of the CES over many years, and considers that the public sector should continue to play an important role in the future delivery of employment placement services.

The EPEs which will operate in the new employment placement market could include business and industry associations, private employment agencies, community and voluntary organisations, education and training institutions and any other body meeting relevant quality assurance standards. Specialist providers which cater for the needs of particular groups will also be encouraged. In addition, a corporatised public provider will be established to operate on the same basis as its private and community sector competitors. This public employment placement enterprise will play a key role, particularly in the transitional period, in ensuring national continuity of employment service delivery as the new market develops. Like other providers, its operations in the longer term will depend upon its capacity to compete successfully in the market.

Competition policy and competitive neutrality

In June this year the Government issued a Commonwealth Competitive Neutrality Policy Statement as required under the terms of the Competition Principles Agreement endorsed by the Council of Australian Governments in April 1995. That Statement set out a number of competitive neutrality principles to be observed if a government service provider is to operate within a competitive market framework.

The key requirement is that government business activities should not enjoy competitive advantages over their private sector competitors simply by virtue of their public sector ownership. In achieving this objective in the employment placement market it will be important to separate clearly DEETYA's role as the purchaser of services in the market from the CES's current responsibilities in the delivery of those services. Among other advantages, this separation will allow the public EPE to focus single­mindedly on its role as a high­quality and competitive provider of employment placement services, unencumbered by other competing responsibilities. This clear sense of purpose will benefit both clients and staff.

On similar grounds, it will be important that the referral of clients to EPEs by the new service delivery agency does not advantage the public EPE over other EPEs, or vice versa. Similarly, any market development functions to be carried out by the purchaser, such as the provision of training for providers or the promulgation of 'best practice', will need to be available to all providers on the same basis.

Competitive neutrality also requires that government business activities should have a charter with clear commercial objectives; a management structure with authority and accountability for achieving those objectives; effective performance monitoring; and appropriate cost attribution mechanisms. The Government believes that these requirements will best be satisfied if the new public EPE is corporatised and established as an independent authority within the Employment, Education, Training and Youth Affairs portfolio. To provide flexibility in the public EPE's operations, and to allow it to compete effectively with private providers, staff of the new authority will be appointed under employment conditions outside the Public Service Act 1922.

The conduct of all EPEs in the employment placement market will be subject to the provisions of the Trade Practices Act 1974 and to oversight by the Australian Competition and Consumer Commission. The Trade Practices Act 1974, among other things, prohibits anti­competitive conduct such as price fixing agreements and the misuse of market power.

Competitive neutrality requirements for Government service providers

Where government service providers operate within a competitive market framework Government policy requires that they satisfy the following competitive neutrality requirements: corporatisation ensuring that business activities operate within an appropriate commercial structure largely separate from non-commercial activities; taxation neutrality ensuring that the government business does not have access to taxation exemptions not available to other competitors; debt neutrality subjecting the government business to similar borrowing costs as that of its competitors (by means of a borrowing levy to offset the borrowing costs advantages arising from explicit or implicit government guarantees on borrowing; or if borrowing from the Budget, requiring the Government business to pay rates of interest commensurate with prevailing financial market rates); rate of return requirements requiring the government business to earn commercial rates of return and pay commercial dividends to the Budget; regulatory neutrality subjecting the government business, where appropriate, to the same regulatory environment as its counterpart private sector businesses; and full cost pricing principles ensuring that the prices charged by the government business reflect full cost attribution for its business activities.

In addition, under the new competitive neutrality arrangements, the Government will be introducing a mechanism whereby market participants can register a complaint with the Productivity Commission if they consider that a government business is gaining an unfair advantage by virtue of its government ownership. From July 1997 also the Productivity Commission will be able to advise government business entities where it detects potential inadequacies in their competitive neutrality arrangements, and to propose modifications to pricing practices and accounting arrangements which would improve compliance with competition policy principles.

Tendering and purchasing arrangements

EPEs will compete for funding contracts awarded by tender, with selection based on performance, quality and price. DEETYA will act on the Government's behalf as the purchaser of services in the employment placement market, with responsibilities which include:

• specifying the services/outcomes to be delivered, the terms of contracts and associated payment arrangements;
• conducting the purchasing process;
• providing infrastructure support and systems, including a national vacancy database;
• ensuring continuity of service provision for example, in the case of contractor failure or where no tenders are received;
• monitoring contractor performance and compliance with the terms of a contract; and
• reporting to Government on the overall effectiveness of employment intervention.

Within budgets set by Government, DEETYA will identify the resources it can devote to the delivery of labour market assistance in particular regional labour markets. Tender specifications would be prepared taking account of expressions of interest received. This may involve differing specifications and contractual models for different markets or regions. The information received would also assist in determining the geographic level at which the tender process is to be conducted. Further negotiation would take place where market gaps are identified.

To capitalise on the benefits of the competitive framework it will be important to move as quickly as possible to the letting of tenders on a price-competitive outcomes basis, that is, with prices related to the fees to be paid to EPEs for the achievement of defined categories of outcome. Tenders would be assessed against 'value for money' criteria which would include:

• capacity to service the labour market to which the tender relates;
• the level of relevant skills possessed by the tendering organisation/consortium;
• compliance with mandatory and desirable service requirements set out in the request for tender documents;
• financial viability;
• price; and
• compliance/agreement to terms and conditions of contract (including willingness to provide performance/bank guarantees and agreement to liquidated damages provisions in the event of non­performance).

While the first round of tendering would require strong national direction, there would be input from a regional level to inform the process with local knowledge. Ongoing tendering could be managed increasingly at a state or regional level. The most effective arrangement for organising ongoing tendering would need to be informed by the experience gained from the first tendering round.

Accountability and transparency

The Government is committed to ensuring high levels of accountability and transparency in the employment placement market. Normal processes of scrutiny by the Parliament and the Australian National Audit Office will continue to operate, with appropriate safeguards also to protect the privacy and other interests of clients. As part of its purchasing role and to meet Parliamentary accountability requirements, DEETYA will need to maintain high quality information on the performance of EPEs and an active evaluation programme.

Quality assurance will be handled through the tendering, performance reporting and contract renewal processes. Contracts could specify:

• a 'best endeavours' requirement on EPEs to achieve effective employment outcomes for their clients (but without detailed restrictions on the means by which they seek to achieve those outcomes);
• requirements for contractors to demonstrate adherence to principles of probity, fairness, EEO and other non-discriminatory principles;
• the fee schedules to apply to different categories of client;
• terms and conditions of contract compliance; and
• reporting requirements (including the reporting obligations of EPEs to the new service delivery agency).

All EPEs would be required to meet performance and quality standards in discharging their contractual commitments. Contractor performance will be monitored through acquittal and reporting on contract compliance. To ensure effective choice on the part of unemployed clients, it will be important to make widely available, and on a consistent basis, information on the relative success rates of different EPEs.

EPEs would be free to charge fees for 'value added' services provided to employers and to jobseeker clients not eligible for Commonwealth labour market assistance (eg, employed people seeking to change jobs). They would also be free to enter into their own contractual arrangements with other providers of assistance, purchasing training or other services as they see the need.

Safeguards

The market arrangements described above do not yet exist in any comprehensive form and will need time and effort to develop fully. Especially in the early period, but also in the longer term, it will be important to ensure that appropriate levels of employment placement services are available to communities in all parts of Australia, and especially in provincial and regional areas. There are two main circumstances in which special arrangements may be required:

• where the labour market circumstances of a particular region are such that it may not be possible to achieve real job outcomes at a realistic price, and hence there is little incentive for EPEs (including the public EPE) to tender for contracts on a price­competitive outcomes basis; and
• where an EPE fails in a regional area in which there are few or no other EPEs to take up its contracted workload.

Where one of these circumstances arises, and where standard tendering on an outcomes basis proves unworkable, the preferred alternative would be to call for tenders on a price­competitive, fee­for­service basis (such that services would continue to be provided in the region concerned, albeit without the desired link to real job outcomes). As a last resort, in cases where no EPE tenders a bid even under this alternative arrangement, the Minister for Employment, Education, Training and Youth Affairs could be given a residual power under the relevant legislation to direct the public EPE to provide a basic employment service. The public EPE would be provided with additional funding (at cost) to deliver this service, which would be clearly identified as a community service obligation.

As outlined in Chapter 4, the Government will be providing specially targeted funding for employment strategies directed to depressed regions of Australia. In view of this, funding for 'last resort' services within the mainstream employment placement market is expected to represent only a small proportion only of total spending on labour market assistance.

Implications for providers and public sector institutions

The arrangements described above carry significant implications for current providers of labour market assistance and for existing public sector institutions and their staff (see boxes).

The Government acknowledges that many existing case managers and other providers of labour market assistance will need to make major adjustments to their current operations in response to the reforms outlined in this Statement. There will no longer be a guaranteed level of dedicated funding for particular labour market programmes, such as the training programmes conducted by SkillShare organisations, TAFE institutions and a wide range of private training providers. Rather, EPEs will make their own judgements about their clients' needs for such specialist assistance, entering into their own contractual arrangements with training providers only when they judge that the training on offer will significantly boost their clients' chances of securing a real job outcome. In response, many training providers will need to adapt their current courses and develop their own relationships with EPEs, rather than relying on a regular stream of government programme funding. Some training providers may choose to become EPEs in their own right.

The Government accepts that this outcome could lead to a loss of business for some existing providers of labour market training programmes in particular. On the other hand, there will be new opportunities both for training providers and others, including many of the existing contracted case managers, if they can adjust their operations quickly to the new market environment. The key will be to adapt to a situation in which assistance is to be more closely tailored to the needs of the client and payments will be linked to outcomes achieved. Effective relationships with employers will be critical.

Implications for providers of labour market assistance

The Government's market­based reforms will require significant adjustments by current providers of labour market assistance. Training providers in particular will need to adjust their current operations. New opportunities will be available to those who can adapt best and most quickly to the new environment. Providers of employment placement services will enjoy far greater flexibility in the means at their disposal to secure sustainable employment outcomes for their clients. Contracts and purchasing guidelines will focus on desired outcomes, avoiding prescriptive input controls. Detailed programme guidelines will be a thing of the past. Employment placement enterprises will have access to a richer pool of resources to assist their clients. Artificial distinctions between 'case management' and 'labour market programmes' will be abolished, and the resources currently allocated for these purposes cashed out into a flexible pool of funding. Average funding levels per client will significantly exceed those currently available to contracted case managers. Employment placement enterprises will be required to report to the new service delivery agency any breach of activity test requirements identified through their employment placement activities. They will also be responsible for determining activity test requirements for individual jobseekers who are receiving intensive employment assistance, and for monitoring compliance with those requirements. The agency will determine appropriate sanctions for activity test breaches. Success in the new market will depend on EPEs' performance in placing their clients into real jobs. Payment arrangements and incentives will be designed accordingly. Objectives will be clear and rewards transparent. To help inform client choice, details will be published of the relative success rates of different EPEs.

In a similar way, the Government acknowledges that its proposed reforms will involve significant structural changes for DEETYA and the DSS, and for staff and agencies within those two portfolios.

Many staff employed in the CES and its case management arm, EAA, would eventually become employees of the new public employment placement enterprise, within limits imposed by the public EPE's share of business in the new competitive market. Other CES staff, along with most staff in the current DSS delivery network, would transfer into the proposed service delivery agency. Others again would remain with DEETYA, either at National Office or regional levels, while some are likely to explore the new opportunities which will emerge with private and community providers of employment placement services. The Employment Services Regulatory Authority (ESRA) will cease operations by the end of 1997 as DEETYA assumes its role as purchaser in the new employment placement market.

The Government recognises that these changes may be unsettling for many staff, and will require careful management over the next 12 months in particular. It is committed to a planned and orderly process of transition, both for staff and others affected by its proposed reforms, and to this end will be arranging early consultations with all key parties. Client services need to be maintained through the transition to the new arrangements, and existing staff given every opportunity to obtain ongoing employment in the new structure as it is built. The public servants affected by these changes will have rights and entitlements in accordance with legislation and applicable awards and agreements. This will include a right of return to DEETYA of any of its staff who are transferred to the public EPE and are then made redundant or declared excess, for example, should there be a downsizing by the public EPE once it knows the level of its buiness operations.

Implications for the public sector and its staff

The Government's proposed reforms will carry significant implications for DEETYA and DSS, and for staff and agencies in those two portfolios. Once the new arrangements are fully implemented, in December 1997: DEETYA will assume a new role as purchaser in the employment placement market, subsuming ESRA's role as purchaser of case management services. It will no longer be a direct provider of services on its own account. DEETYA will let tenders and manage contracts for the delivery of employment placement services; provide infrastructure support to the market, including a national vacancy database; monitor performance and evaluate outcomes achieved; and report to the Government regularly on performance and effectiveness issues; DSS will assume the role of the purchaser of income support and related services from the new government service delivery agency. It will no longer be a direct provider of these services on its own account. DSS will retain policy and programme management responsibility for the full range of social security provisions. It will report to the Minister and the Government on the delivery of these services; the new service delivery agency and the public employment placement enterprise will assume the range of responsibilities currently exercised by the CES and DSS service delivery networks; and many CES staff will become employees of the new public employment placement enterprise; others will transfer into the new service delivery agency; and others again will remain with DEETYA. Current APS staff recruited by the service delivery agency will continue to be employed as public servants. Staff of the public employment placement enterprise will be employed outside pubic service conditions, in order for the public EPE to operate on equal terms with its private and community competitors. Current APS staff who take up employment with the public EPE will have rights and entitlements in accordance with legislation and applicable awards and agreements.

Monitoring and evaluation

The Government recognises that the new employment placement market will take several years to develop and mature, and that the full benefits of these reforms will therefore be realised only gradually over time. It will monitor developments closely during the early years of the new arrangements, and be prepared to make adjustments as necessary in the light of experience. A comprehensive evaluation strategy will be developed as a matter of priority, and a major evaluation report completed within three years of full implementation of these new arrangements (ie, by December 2000).

CHAPTER 4: FORMS OF ASSISTANCE

This chapter describes the main forms of assistance which will be available to unemployed people under the new arrangements to take effect from December 1997, and the eligibility criteria which will apply to each. It also outlines the arrangements for the funding of assistance in the new employment placement market, identifying those labour market programmes which will be 'cashed out' into the market and those which will be retained as discrete programmes for particular purposes.

Forms of assistance

The main forms of assistance which will be available to clients under the Government's proposed reforms are self­help facilities, labour exchange services, job search assistance and intensive employment assistance. Each of these is described below. The flows of clients into these various forms of assistance are illustrated in Chart 4.1.

Chart 4.1: Flow of clients into labour market assistance

Self­help facilities

Self­help facilities will form the first tier of support for jobseekers. All jobseekers, regardless of their duration of unemployment or whether they are in receipt of income support payments of any sort, will be able to access self­help facilities from the service delivery agency to assist with their search for work.

The facilities available at the service delivery agency will include :

• job vacancy displays via Automated Job Selection (AJS) touchscreens for clients to select jobs that employers have lodged via EPEs or directly on the national vacancy database to be maintained by DEETYA;
• information on EPE services available locally, in order to facilitate jobseeker choice of EPE;
• information about other services such as migrant services, health issues, local initiatives and so on; and
• assistance over the counter to ensure that jobseekers could use the facilities effectively, deal with client inquiries and facilitate referrals to open vacancies.

These facilities will be provided free of charge to all clients.

Additional facilities will also be provided free of charge in some agency outlets to assist clients with job search activities. These may include, for example:

• newspapers to identify further job opportunities;
• telephones to encourage clients to initiate contact with employers and service providers;
• photocopiers, personal computers, printers and fax machines for clients to prepare correspondence and resumés and to respond quickly to employers requests for information; and
• a range of employment-related information services, including educational and occupational information assessed through touchscreen units.

Labour exchange services

At present, the CES provides labour exchange services for all jobseekers. It also provides a free vacancy filling service for employers. Public funding for these services will now be limited to recipients of most DSS income support allowances and participants in Community Development Employment Projects (CDEP), together with young people registered at the service delivery agency as unemployed.

EPEs will be paid for the placement of eligible jobseekers against vacancies registered on the national vacancy database, with contracts for the provision of labour exchange services for an agreed number of placements being let on a price­competitive basis. Labour exchange services are discussed in more detail in Chapter 5.

Similar services will be provided to support the filling of apprenticeship and traineeship vacancies. Details are contained in the paper released by the Minister for Schools, Vocational Education and Training Training for Real Jobs -The Modern Australian Apprenticeship and Traineeship System.

Job search assistance

Additional help will also be available to certain jobseekers eligible for labour exchange services to access job search training through Job Clubs and similar forms of assistance. This would typically take the form of training in resumé preparation, job search techniques and the use of facilities such as telephone, facsimile and word processor. Such training also serves to increase self-esteem, confidence and motivation.

This assistance will be available for selected unemployment allowees, recipients of most other DSS income support allowances, CDEP participants and unemployed young people (15­20 year olds) not in receipt of income support. To be eligible, clients will need to have been unemployed for a certain minimum period (usually six months), be assessed as needing additional assistance and not already receiving intensive employment assistance.

These services will be delivered by EPEs under contracts awarded on a competitive tender basis. Payments will be made on a fee­for­service basis.

Intensive employment assistance

Intensive employment assistance (IEA) involves a personal assessment of need followed by customised assistance such as training, job search assistance and wage subsidies. To be eligible, a jobseeker must either have been unemployed for 12 months or more or assessed as at high risk of long­term unemployment, and fall into one of the following eligibility categories:

• a recipient of a qualifying DSS income support allowance (see Chapter 6);
• a CDEP participant; or
• an unemployed young person aged 15­20 years and not in receipt of income support.

IEA will be provided by contracted EPEs, both private and public, which will tender in the open market to deliver services to clients. Clients will generally receive assistance for 12 months only after which time, if no outcome has been achieved, the client will cease IEA while retaining access to self­help facilities and labour exchange services. The forms of assistance provided under IEA will vary and will depend on the assessment of individual need. EPEs will be free to determine the optimal mix of assistance needed to obtain an outcome and will not be limited by the constraints associated with current labour market programmes. IEA arrangements are discussed in more detail in Chapter 6.

Appendix 1 summarises the full array of services to be offered for each client group under the Government's proposed arrangements.

Funding the employment placement market

The Government is committed to helping the unemployed into work through the provision of customised and flexible assistance in the employment placement market. To achieve this it will abolish most current labour market programmes (see box) and 'cash out' their funding, together with funding for case management services, to create a single pool of resources for use in the new market. In addition, some of the funds currently used for the administration of the CES, case management and labour market programmes will also be added to this pool. This approach will ensure the most cost­effective and efficient use of available resources.

In the early period of operation of the new arrangements wage subsidy funding will be separately identified within the funds made available to EPEs.

Funding for those income support elements of labour market programmes equivalent to unemployment allowances, ie, the Youth Training Allowance (YTA), the Job Search Allowance (JSA) and the Newstart Allowance (NSA) will be transferred to the relevant income support appropriation in the Social Security portfolio.

LABOUR MARKET PROGRAMMES TO BE ABOLISHED A. To be cashed out into the employment placement market Wage Subsidy Programmes (after a transitional period) Brokered Programmes JobSkills Landcare and Environment Action Programme New Work Opportunities Formal Training JobTrain Special Intervention Programme Accredited Training for Youth SkillShare Formal Training Elements of the Training for Aboriginals and Torres Strait Islanders Programme (TAP) Others, including Job Clubs Mobility Assistance Scheme Direct Assistance Elements of TAP Non ELT/Regional Intermediaries B. To be transferred to the income support appropriation in the Social Security portfolio Formal Training Assistance

Estimates of the funds likely to be available for use in the employment placement market are given in Chapter 9. Details of the transitional arrangements for labour market programmes in the period to December 1997 are discussed in Chapter 10.

Programmes to be retained

Although most labour market programmes are to be cashed out, as described above, some client groups and programmes have special requirements which can be met most efficiently by retaining a separate programme identity and funding (see box).

PROGRAMMES TO BE RETAINED Support for Indigenous People Employment Strategies Elements of the Training for Aboriginals and Torres Strait Islanders Programme (TAP) Entry-level Training Incentives for employers, apprentices and trainees Programmes to develop and promote apprenticeships and traineeships Personal Benefits for Apprentices Pre-vocational Training Regional Assistance Forest Industry Labour Adjustment Package ) Office of Labour Market Adjustment ) Regional and Enterprise Assistance ) (to be incorporated into the Area Consultative Committee/Regional ) programme of assistance for Community Employment Council ) depressed regions) Intermediaries ) Other New Enterprise Incentive Scheme Workplace English Language and Literacy Programme Advanced English for Migrants Programme Bridging Courses for the Overseas Trained

Special arrangements for indigenous Australians

As noted in Chapter 6, special provision will be made within the arrangements for intensive employment assistance to meet the needs of Aboriginal and Torres Strait Islander clients. In addition, separate funding will be retained for the employment strategies element of the Training for Aboriginals and Torres Strait Islanders Programme (TAP). Employment strategies typically provide employment and career development opportunities for Aboriginal and Torres Strait Islander people.

Entry­level training programmes

The Government will be retaining dedicated funding for entry­level training (ELT) to support the development of the Modern Australian Apprenticeship and Traineeship System (MAATS). The major focus of MAATS is on a significant expansion in ELT opportunities for young people and school leavers, rather than on unemployed clients. Under MAATS, ELT programmes will be delivered through Contracted Entry Level Training Agencies (CELTAs) which would provide employers with access to integrated entry­level training support services. The Commonwealth seeks a single point of contact for employers and prospective apprentices and trainees through these agencies. It will consult with businesses and State and Territory Governments to reach agreements on how these arrangements will operate in each State and Territory.

Through MAATS the Government is aiming to expand opportunities for traineeships and apprenticeships. Research has shown that ELT incentive payments play a role in encouraging employers to recruit apprentices and trainees, and in particular assist small and medium­sized businesses. An employer incentives programme is being maintained as a clear recognition of the public benefit in increasing the proportion of young people who obtain post­school qualifications. The programme will be better targeted and restructured to provide stronger incentives to employers to take on apprentices and trainees, and to encourage progression through structured competency­based training in order to create a highly skilled and productive workforce.

MAATS will also address the significant under-representation of young women in apprenticeships and training programmes with a view to designing, in consultation with industry, new programmes to meet the needs of young women in the workplace.

Programmes for migrants and for English language training

The Government has identified three programmes in this area which would more appropriately be retained as discrete programmes under the new arrangements. These are:

• the Workplace English Language and Literacy Programme;
• the Advanced English for Migrants Programme; and
• the Bridging Courses for the Overseas Trained programme, administered by the National Office of Overseas Skills Recognition (NOOSR).

Although these programmes have been funded from labour market programme and training assistance appropriations, they are clearly different from other labour market programmes in their purpose, clientele and administrative arrangements. In view of this, the Government has decided that they should continue as discrete programmes within DEETYA.

More generally, assistance with English language training (not necessarily related to employment) will continue to be available to migrants under the Adult Migrant English Programme (AMEP). AMEP provides newly­arrived non­English speaking migrants and refugees with English courses to enable them, in their initial settlement, to operate in basic social situations. The programme also provides settlement­related information. Clients have a legislated entitlement to 510 hours of tuition or the number of hours it takes to reach functional English, whichever is achieved first.

The New Enterprise Incentive Scheme

The New Enterprise Incentive Scheme (NEIS) provides the only source of dedicated Commonwealth assistance for unemployed people to establish new businesses. It is one of the most successful and creative of existing labour market programmes, providing intensive preparatory training in small business management followed by a period of income support and business mentor advice. The new businesses thus created in turn employ many additional people. The programme is delivered nationally by NEIS managing agents who are paid on the basis of actual business commencements.

Assistance for regions

Under the Government's reforms all regions will benefit from more effective and efficient job placement services. The arrangements to operate in the new employment placement market will cater for the needs of rural and remote regions in three main ways:

• by providing higher outcomes funding for intensive employment assistance, where appropriate;
• by providing for fee­for­service tenders in regions where outcomes­based funding arrangements prove non­viable; and
• as a last resort, by providing for the Minister for Employment, Education, Training and Youth Affairs to direct the public EPE to offer additional services in remote regions as a community service obligation.

In addition, a dedicated funding programme will support strategies to improve the skills base of regions experiencing adjustment pressures or high levels of unemployment. Under this programme project funding will be made available for initiatives which:

• assist regions to adapt to structural change, diversify their industry base or respond to major retrenchment activity;
• consult young people and employers to identify strategies for increasing opportunities for youth employment and training;
• foster entrepreneurship and the establishment of new small businesses; and
• provide local unemployed jobseekers with the skills to compete for emerging job opportunities.

The capacity of regions more generally to benefit from these initiatives will depend on the involvement and support of local employers. The new Regional and Community Employment Councils (RCECs) will play a significant role in this process. RCEC pilots are to be established in 1996­97, and will build on the work of the existing Area Consultative Committees (ACCs) while addressing a number of weaknesses in current ACC arrangements. There will be increased representation of employers and employer organisations, and stronger links with regional development agencies, particularly State government bodies.