Senate Education and Employment Legislation Committee [Part 2], , 1:55:36 to 2:08:13
The committee analyzes provider performance and the extension of contracts for underperforming services. Members critique the 15% target for 26-week employment outcomes and the methodology used for budget reporting.
Topics: Employment, Procurement, Government spending
Speakers: Lisa Schofield, Senator Jane Hume, Tania Rishniw, Senator Penny Allman-Payne, Senator Matt O'Sullivan
>> Yep, that's fine. Um I want to ask about some of the Workforce Australia low performing providers specifically. Um, just bear with me on this one because I might just have to step it through a bit. So, the department rates every provider license each quarter as high, moderate, or low. And low, as I understand it, is defined as not meeting the department's expectations. In June 2026, the ratings published on the 27th of August put 22 providers of the 169 licenses out there as low. Is that right? Does that sound right,
>> Senator? I I'm not sure that I have that data with me. Let me check if one of my
>> just check the data and allow me to continue on. So y >> the data that I have suggests that it is 22. Of those 22, 15 are rated low on sustained employment, which is the part of your framework that measures whether people get and not just get jobs, but keep jobs. Yes. And four have been rated as low for >> five quarters in a row, which is quite consider significant. In July, the department said that Workforce Australia contracts are being extended to October 2028, as we've already discussed. Has every one of those 22 had their contract extended to October 2028? Even the ones that haven't performed five quarters in a row. So,
Senator, if I can, I'll just go back and um sort of revisit the um the testimony that I just gave previously. So, one of the things that I said was that we're um just in the process of finalizing some sort of internal and um and other briefings around the way that we're going to do those extensions um across all of the programs that are being extended out until October 28. So, that's Workforce Australia Services, Transition to Work. There are a range of um programs that are going through that process. Um one of the things that we have looked at when we're looking at those extensions and that is currently being considered um is provider performance. Um we will be it's being considered now as to whether or not um all all contracts are um extended as is whether or not there are some providers who need to be put on what we refer to as um performance improvement plans or PIPS. Um we have used those quite successfully over the past sort of 12 months or so to really um help providers to improve their performance. Um so so at this point Senator I I kind of can't say whether or not those particular providers will have um extensions for that full period of time whether they may have um a performance improvement plan put in place um or whether they'll be on offered an extension because as I said those considerations are sort of being done um almost as we speak.
>> Okay. So in answer to a question on notice the department said that 14 licenses were extended last year on those performance conditions. I assume that they were pips. Yep. Yep. Um, by the 31st of March, only two of them had improved. 12 were still on PIPS. How many of the 12 have improved since? And what happens if a provider is still rated low in a year's time? So, I might
have to take on notice, Senator, how many of the 12 have improved? I just don't have that detail in front of me. I'm very sorry. Um and I I also can't sort of say how many of them sort of off the back of that may then have you know a contract in place in 12 months time noting that as I said we're actually kind of working through right now um how we will work with providers on the extensions um beyond
so if these providers are kept on what you're saying is poor perform poor performing providers will potentially continue to provide services albeit until this decision is made or or until after October 2028. Is that right? >> Is that what I'm hearing?
>> So Senator um >> sorry >> no no it's okay. So providers are on contract um right now and those contracts run through now until the end of June next year. So um
>> June next year.
>> Yeah. So June 27 is when the contracts are in place until right now. Um we are then considering the extension from July 27 through until October 28th. So that's the extension period that we're talking >> There have been providers as we've said before as you mentioned and I talked about who right now are subject to performance improvement plans. We are right now looking at how those providers um have responded to those performance improvement plans. That is one of the things that we are thinking about as to whether or not providers get an extension from 1 July next year through until October 28th. >> Okay. Does that help?
>> Yep. Absolutely. Okay. I think there's a lot of providers out there that are pretty sure that the that extension provided to them was, you know, was going to be offered to them automatically that was there wasn't a sort of a deadline date at the end of June next year. But that's okay. That's for you, for you to communicate, not for me. Um, the department's headline measure for Workforce Australia, the 26 week employment outcome rate. I just want to step this one through too. So, in rough terms, this outcome rate is the share of participants who get a job and are still in that job six months later. Is that correct?
>> That's correct.
>> Okay. And the target is 15%. >> Yeah. It is kind of low, isn't it? I thought that too. >> So the 202425 annual report at page 36 says that it was 13.2% in 2324. It was 11.7% in 24 and 25 and that it has not been achieved since it was first reported. Okay. The 2026 27 corporate plan at page 45 now calls 15% a stretch target. Golly, if 15% is the stretch, >> what's the minimum accept acceptable
>> Yeah. So, Senator, um, and I should say that, um, the current data that we have for, um, up until for the 12-month period to 31 May 26 is sitting at 12.9%. Um, so still
>> 12.9
>> 12.9. So, still not um, not meeting that 15% target that has been in place for the program. Um so Senator and I I think we've sort of had this um we've put this on record at previous estimates hearings. Um we agree that that 12.9 as it is now and the other numbers that you've mentioned is not high enough and it it should be higher. Um the the language around a stretch target sort of came as a um a result of us you know kind of working through and looking at what the data has told us over the last few years and that um obviously as you've read out you know that that 15% hasn't been met. It it is one of the things and I'm happy obviously for Mish Rich new to um to chime in but it is really one of the things that's driving the way that we're thinking about reform um and thinking about what are the types of um services that need to be offered what are the sorts of incentives that need to be in the system for both you know participants and providers to really increase that um increase that number. um the government is very clear that getting you know secure work so you know having those jobs that last for um for at least six months is really what it is that that we want to be striving for in the system. Um we know through other data that we have that if someone's in that job for 6 months they're quite likely to sort of hold that for um you know if it's sort of two years or more following that. Um so so we agree Sand it's a really sort of key thing for us that we want to sort of continue to see improve and that's really what's driving you know a range of decisions that are being taken around the way that we run our programs now the types of we've made some changes to that performance framework for providers that you were talking about before to really sort of start to try to move them more in that um in that direction and incentivize the sorts of behaviors that that we think will kind of help to get um more job seekers into those longer term jobs. Um but I think you know the minister in her statement has in her speeches has you know made it clear that >> that's not good enough where we need to do some work.
>> Haven't but I know she said that this isn't good enough but she hasn't said what the minimum is. What's the minimum
>> I'm not sure that I would sort of sit here and speculate senator on um you know on a number that that we would sort of necessarily pick. Um I think it's going to depend on I think one of the things that we need to sort of think through in reform is really thinking about what are the things that we want to measure. um noting that we're really keen to have um and the minister's been really clear about this, we want more personalized, more tailored supports. What are the sorts of things that we want to incentivize? How do we kind of measure that progress for a person as they're, you know, on their way to to get a job? Um, so that's not to say that, you know, we won't measure this as as one of the things that we'd want to kind of keep an eye on potentially going forward, but I think that there are other things that we need to kind of measure and report on to see how well we're tracking um with the way that we're wanting to, you know, potentially restructure the programs.
>> And Senator, if I could come in there, I mean, Miss Schofield has just articulated this is one of the big driving pieces of reform. Um, one of the things that we've heard consistently in the consultations and the feedback is how do we strengthen the understanding and relationship with employers? How do we actually look at creating a system and a better matching of job seekers with employers and an understanding of employer needs? Um, we will continue to strive to meet the current targets while we're reforming the system.
>> Okay. So, the current targets say that 15% is a stretch minimum is a is a stretch target. Yeah. But we just being very clear there is no minimum. There is no sort of flaw at which we've failed here.
>> We've got a 15% target Senator that we'll continue to you know to try and meet. Um we've said that as you mentioned in our corporate plan. We'll continue to report on that through the PBS and our annual report and we'll continue to um make changes and try and um and get us to that or beyond if we can. Um but I think that will need for us to sort of think about and make the structural changes that we're thinking about in um the process of reform.
>> Senators, I'm just seeking some guidance from the committee here. I know we've got outcome two still to get to and three agencies to reach tonight. Um
>> I can be done with
>> All of those have been requested by the opposition. So I've just need some guidance on how we handle that. Yeah.
Yeah. I I can be done on this on um
>> very quick clarifying the the the figure of um 15%. Is that just for that cohort or is it across the entire case load >> of job seekers in the system?
>> It's for the case load who are in the workforce Australia services component. So those job seekers who are serviced by employment services provider for that cohort.
>> Okay. On notes I don't want to take up topic. Can you come back to us with the the retention rate across the different >> um case loads? >> They're in the system people in the online system.
>> Happy to do that, Senator.
>> Yeah,
>> I've got like just a couple of little done for outcome one.
>> Okay. I've just been told that Senator Allman Payne is also seeking another block of questions for this. So, I think you'll have to have a meeting to work out >> how to resolve it.
>> All right. I promise I'll be super quick. I just want to say the um the portfolio budget statement says that you've made refinements to how that 26 week rate is calculated. Can you just tell me what those refinements are?
>> Um yes, I can do that. Um so it was it was a relatively minor um methodology change, Senator. Um it was essentially it we made the change to try and have a bit more confidence in the um in the numbers. We weren't capturing all of the outcomes because of various lags in data. There were some 26 week outcomes that were just they were sort of happening outside the right time frames and weren't being captured. So we adopt changed the methodology a bit to be able to capture what is a much truer sense of the 26 week outcomes that are relevant for the um for the this measurement. It did not have a significant impact on the um on the number though in the first instance. So,
>> so can I just be clear then? Uh, the 12.7% of the budget papers and the 12.9% figure that you provided in July, they're both on the new method. Is that correct? >> The newly refined method
>> from the the PBS and um and this number. Yes. Is on the same method.
>> Okay. But the 2024 25 number would have been on the old method.
>> That's correct.
>> Okay. Terrific. Thank you. I'm happy to
move that next pain. Um, I'm just note we are breaking in seven minutes. Thank