Auditors have identified a design flaw in the much criticised work-for-the-dole program that mainly applies to Aboriginal Australians in remote areas but finds that on the whole, public servants have done a fairly good job of implementing the government’s directives.
The way contracted service providers are paid under the Community Development Programme has reduced the incentive for them to get clients into real jobs, compared to the Remote Jobs and Communities Program which it replaced, according to the Australian National Audit Office.
The CDP applies to vast swathes of the country outside metropolitan areas, carved up into 60 regions. The result is that 83% of people served by it are Indigenous, while about 65% of the 40 non-government service providers are described as Indigenous organisations. The total spending is about $1.6 billion between 2014–15 and 2017–18.
The maximum potential incentive payments to those providers were increased under the CDP, but they were also targeted in a different way, to reward providers for their clients staying in work for longer periods of time. They have not had the intended effect because there is now less chance the providers will ever see the full amount, according to this week’s report.
Under the RJCP, the providers got 9% of the payment as soon as the client was placed in work and a further 4% of the total at seven weeks. They don’t get any bonus until the person has kept the job for 13 weeks under the CDP. At that point they receive 30% of the total, and the remaining 70% of the incentive payment if the person is still employed at the 26-week mark.
This means the providers are at higher risk of missing out on a bonus altogether under the CDP, noting that in remote areas where the CDP applies, 54% of people placed in jobs made it to 13 weeks and only 40% were still employed after 26 weeks.
The Department of the Prime Minister and Cabinet will now review the CDP provider payment structure and other areas for improvement identified in the audit. But otherwise the audit found it has done a reasonably good job of administering the rapid transition to the CDP from the RJCP, which was put in place in the dying days of the last Rudd government.
“The transition from the RJCP to the CDP was largely effective,” according to the report. “The CDP was supported by stakeholder consultation, as well as risk management and evaluation frameworks. In addition, PM&C has strengthened its approach to monitoring and responding to compliance issues impacting on provider payments.”
The implementation ticked a lot of the audit’s boxes – it was “supported by an external review of Indigenous Training and Employment, stakeholder engagement, and an effective communication strategy” – but not all of them.
Program design – a process heavily influenced by the government’s policy choices — appears to be the weakest point. It was “based on incomplete analysis of the data” from the former government’s short-lived RJCP and parts of the new program were not based on sound evidence, according to the ANAO.
Looking for sound advice that fed into the design process, the auditors found the 2014 Forrest Review and “consultation across government” as well as discussions with “employers, community councils, the Indigenous Advisory Council and representative bodies” held by the Minister for Indigenous Affairs, Nigel Scullion.
The key learnings for all government agencies start from the obvious points that policy design, advice to government and implementation should be based on sound analysis and a strong evidence base — and that evaluation needs complete and robust data to be effective.
“Where new programs are being implemented, entities should identify evaluation strategies and data requirements (including baseline data) early in the process, and monitor implementation of data collection throughout the trial,” the report explains.
It goes on to add, “Implementation planning should reflect adequate consideration of key risks throughout the implementation process, particularly where policy or program implementation involves untested service delivery models, new technology, or where significant behavioural change is expected.”
And don’t just identity the risks and come up with a plan to address them, make sure your mitigation strategies are actually working, especially when the risks you expected start to materialise, the auditors advise.
A lot of the risks with the CDP transition that PM&C identified came to pass, mainly because the changeover happened a bit too quickly. This made it hard for service providers to clearly understand how their previous funding arrangements linked up with new performance requirements.
“PM&C has established appropriate governance, key program frameworks and guidance material to assist in the administration and delivery of the CDP,” the auditors note approvingly. “PM&C has also strengthened its approach to compliance and fraud prevention in light of identified program risks.”
The auditor-general’s team reports performance monitoring arrangements are transparent and linked to program objectives. KPIs like “13 and 26 week employment outcomes; as well as aggregate hours of attendance by participants” show some improvement.“Getting people into work in remote communities is complex and there is certainly room to improve.”
Often in remote areas the jobs just aren’t there, and to this end PM&C has built two complementary programs aimed at addressing gaps in remote labour markets – incentives for employers and funding to grow Indigenous enterprises. The audit notes these are significantly undersubscribed and suggests they could be better targeted and monitored in terms of outcomes.
Is the CDP administered efficiently? It’s too early to tell, according to the audit report, which simply points out the “unit cost” is higher than in the RJCP or the mainstream jobactive program.
Risk management was generally pretty good but “some key program risks were either not identified in the program level risk plan, or were not fully addressed by mitigation strategies”.
The department tightened up its compliance activities throughout the course of the audit, to better recognise the risk of handing out taxpayers money to organisations based on self-reported performance data, and it agrees to “adopt a more transparent and systematic approach” to ancillary payments (which are meant to help jobseekers pay for work clothes, training courses and the like).
Some of the instances of non-compliance included allegations that at least one provider claimed funding for clients who were actually dead, or in jail, and funding intended to “boost local employment” being kept by the organisation, as well as various forms of apparently deliberate misreporting. PM&C recovered about $700,000 through its investigations last year alone.
Back to the future?
The minister seems very pleased with the audit’s results but also subtly acknowledges the mounting criticism of the CDP in his response.
“Getting people into work in remote communities is complex and there is certainly room to improve,” said Scullion, reiterating that he intends to bring back elements of the rather popular Community Development Employment Projects (although he keeps getting the name wrong, despite it first appearing in the 1970s).
“I am focused on continuing to improve employment and economic development outcomes for people in remote Australia, including many of the positive elements of the former Community Development and Employment Programme [sic] that Labor abandoned in 2013.
“We will soon commence consultation on a new remote employment model for Australia.”
While it was Scullion’s opponents who finished off the CDEP in 2013, his own colleagues began the process of dismantling the Fraser-era program at the tail-end of the Howard years. The minister began indicating he was open to a resurrection a few months ago.
One of its foremost proponents, Australian National University emeritus professor Jon Altman, notes former Prime Minister Tony Abbott described the Coalition’s role in this bipartisan abandonment of the CDEP as a “well-intentioned mistake” and has argued at length that the CDP does not, as Abbott suggested, make up for this.
The CDP has been repeatedly criticised, outside of the normal cut and thrust of politics, particularly because it applies more onerous requirements to remote welfare recipients than the mainstream welfare system does. Even the United Nations special rapporteur on the rights of Indigenous peoples has suggested this is discriminatory, in practice:
“The Programme imposes an inflexible digitalized regime on recipients that issues penalty notices and docks their pay for missed scheduled work. Under the Programme, contracted organizations that provide employment have fewer opportunities to tailor engagement strategies to local communities or to particular individuals.
“The rate at which jobseekers within the Programme are penalized is around 27 times that of mainstream, predominantly non-indigenous, jobseekers. In practice, these requirements are discriminatory, being substantially more onerous than those that apply to predominantly non-indigenous jobseekers.”
The government has no plans to make requirements for unemployment benefits the same for people regardless of where they live, but this week’s audit report will be another factor informing the next development in the federal government’s remote area employment policy, according to PM&C.
Top image: Job seekers in the Torres Strait Islands are undertaking Indigenous ranger activities as part of the CDP. Credit: Commonwealth of Australia.