WHAT TO DO ABOUT CDP NOVEMBER 2016

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CONTENTS 1. 2.

3.

4. 5.

6.

7.

Introduction ..........................................................................................................................ii

1.1 1.2

About Jobs Australia ..............................................................................................................................................ii About this report ...................................................................................................................................................ii

Executive Summary ...............................................................................................................1

2.1 2.2 2.3 2.4 2.5

Problems with CDP: Too many financial penalties ............................................................................................... 1 Problems with CDP: Poor connection with communities and lack of community buy-in .................................... 1 Problems with CDP: Complex administrative arrangements................................................................................ 1 Principles for reform ............................................................................................................................................ 1 Solutions: .............................................................................................................................................................. 2

Problems with CDP ................................................................................................................4

3.1 3.2 3.3 3.4 3.5 3.6

Too many financial penalties ................................................................................................................................ 4 Poor connection with community aspirations and a lack of community ‘buy-in’ .............................................. 11 Complex arrangements ...................................................................................................................................... 14 Difficulties interacting with Centrelink ............................................................................................................... 17 Unclear program objectives ............................................................................................................................... 18 The over-arching policy framework underpinning CDP ...................................................................................... 19

Options for Solutions ........................................................................................................... 21

4.1

Principles for reform / long-term objectives ...................................................................................................... 21

Off-the-Shelf Solutions ........................................................................................................ 22

5.1 5.2 5.3

Option 1: The CDP2 Bill ...................................................................................................................................... 22 Option 2: Reinstate an Improved CDEP .............................................................................................................. 24 Option 3: The Community Employment and Enterprise Development Scheme ................................................ 27

Other Solutions ................................................................................................................... 34

6.1 Objective 1: Requirements need to be adjusted so that most participants can meet them most of the time and to more closely align with the requirements of other income support recipients......................................................... 34 6.2 Objective 2: arrangements should be simpler for both participants and providers........................................... 35 6.3 Objective 3: Participants / community members should have sufficient income to pay for necessities ........... 36 6.4 Objective 4: Communities should be empowered to make decisions about how the program operates in their community ..................................................................................................................................................................... 36 6.5 Objective 5: Incentives should encourage participants to engage in unsubsidised work .................................. 37

Conclusion .......................................................................................................................... 38

Appendix A: ................................................................................................................................ 39 List of attendees at the Jobs Australia CDP Forum, 31 August – 1 September 2016 ..................................................... 39

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1.

INTRODUCTION

1.1

ABOUT JOBS AUSTRALIA

Jobs Australia is the national peak body for non-profit organisations that assist unemployed people to prepare for and find employment. We help our members make the most effective use of their resources and promote the need for services that will help unemployed people to participate fully in society. We provide an independent voice for members who range from large charitable organisations to small local community-based agencies. Jobs Australia is the largest network of employment and related service providers in Australia and is funded and owned by its members. Jobs Australia members are non-profit organisations that help unemployed people to prepare for and find employment. Typically, Jobs Australia members do some or all of the following: • Deliver services under Commonwealth and/or State Government funded programs, such as jobactive (including Work for the Dole), Disability Employment Services, Community Development Program (formerly the Remote Jobs and Communities Program), Skills for Education and Employment, and similar State Government programs. • Deliver accredited or non-accredited training for unemployed people as Registered Training Organisations, Group Training Organisations, apprenticeship centres, social enterprises and other non-profit training and education institutions. • Deliver similar employment and training services to unemployed people without any government funding. 1.2

ABOUT THIS REPORT

This report is intended to help inform deliberations on how to improve the current Community Development Program (CDP). The report is informed by a 2-day forum conducted by Jobs Australia in Alice Springs on the 31 August and 1 September, 2016. The forum included representatives from CDP provider organisations, academics (with extensive experience researching remote programs) and Aboriginal peak bodies. All up, more than 30 organisations were represented at the forum. A full list is provided at Appendix A. At the forum, we asked the attendees to work in groups to identify current challenges in CDP, then to imagine how things might be different and better, and to literally draw what they imagined. Some of the illustrations are reproduced throughout this report. The illustrations and discussions at the forum have assisted greatly in the preparation of this report.

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2.

EXECUTIVE SUMMARY

2.1

PROBLEMS WITH CDP: TOO MANY FINANCIAL PENALTIES

The Community Development Programme (CDP) in its current form is causing severe hardship in many Indigenous communities. Financial penalties imposed on job seekers in remote areas have significantly increased following the introduction of CDP and are now incurred at more than 70 times the rate at which they are incurred in non-remote areas. Financial penalties are often substantial – they result in significant and irretrievable loss of income and in some cases leave individuals without money for essentials, including food. There are flow-on effects for families, communities, and more broadly, remote economies. There are three main drivers for the high number of financial penalties in remote communities: 1. Work for the Dole requirements are too onerous. In remote areas, Work for the Dole obligations are significantly more onerous than in non-remote areas. Some of the differences are explained in our fact sheet comparing remote and non-remote Work for the Dole. 2. The CDP contract requires providers to recommend income support sanctions. The contract requires providers to apply the job seeker compliance framework and recommend financial penalties in order to be paid certain payments. This effectively removes providers’ discretion, forcing them to recommend penalties (even in situations where they know that the penalty will be rejected). 3. The national job seeker compliance framework is not suited to these requirements or to the circumstances of people living in remote communities. The architects of the national job seeker compliance framework never anticipated that someone would design a program with such oppressive requirements. 2.2

PROBLEMS WITH CDP: POOR CONNECTION WITH COMMUNITIES AND LACK OF COMMUNITY BUY-IN

Communities have had little say over the design of CDP, and – while some providers put significant effort into community engagement – there is generally little room in the program for communities to exercise genuine decision-making power over the type of projects and work and activities that are undertaken and valued and given legitimacy in the program. Communities feel disempowered by the program and this affects motivation and engagement. 2.3

PROBLEMS WITH CDP: COMPLEX ADMINISTRATIVE ARRANGEMENTS

CDP is a program that is closely linked to the income support system. Remote job seekers are required to participate in specified ways to fulfil the mutual obligations that attach to their income support payments. Because the income support system contains complex rules to protect vulnerable job seekers, any program that is delivered in the context of the system is affected by this complexity. In contrast, the former CDEP scheme paid participants ‘CDEP wages’ and so avoided much of the complexity that comes with income support. 2.4

PRINCIPLES FOR REFORM

Analysis of the problems in CDP, makes it clear that significant reform must be undertaken to reduce the unacceptably incidence of income support penalties and to make the program more effective

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and relevant to the different and particular needs, labour market and other circumstances and the aspirations of the remote communities it serves: 1. Requirements need to be adjusted so that most participants can meet them most of the time and to more closely align with the requirements of other income support recipients. 2. Administrative arrangements should be simpler for both participants and providers. 3. Participants / community members should have sufficient income to pay for necessities. 4. Communities should be empowered to make decisions about how the program operates in their community. 5. Incentives should encourage people to engage in unsubsidised work. 2.5

SOLUTIONS:

There are a number of possible means of achieving desirable and necessary reform including: (i)

Reviving the CDP2 Bill, which failed to pass the last Parliament before the election was called;

(ii)

Reintroducing CDEP; or

(iii)

Implementing the proposed ‘Community Employment and Enterprise Development Scheme’ (CEEDS), which was developed by Aboriginal Peak Organisations NT (APO NT) in 2011.

Our analysis has established that, of the above solutions, the CEEDS model was the only option that meets all of the objectives of reform. Some of the implementation details need further work but the model is already well-developed and has the support of many Aboriginal organisations. It is also possible to achieve some, but not all, of the necessary reform by making a number of significant adjustments to the existing CDP arrangements which would include: • Reducing Work for the Dole hours from 25 hours per week to 15 hours per week, with greater flexibility in relation to when hours are worked. • Removing contractual incentives / requirements for CDP providers to recommend financial penalties, so that providers have genuine discretion over when to use the compliance framework. • Simplifying the job seeker compliance framework (for all job seekers, not just those in remote areas). • Introduction of wages-based arrangements, which are focussed more on incentives than on penalties. • Expanding wage subsidies so that more remote job seekers can be placed in subsidised work placements. • Improving access to Centrelink and other services so that people in remote areas who have disabilities or medical conditions that affect their participation can be properly assessed and have their mutual obligations adjusted accordingly. • Changing contract terms to require providers to engage (and hand some decision-making power to) communities in the development of community development plans and proposals for projects. Consultation and Engagement for Effective Reform

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Looking ahead to the development of a new approach, and in keeping with the Prime Minister’s undertakings and commitments in relation to the government’s approach to Indigenous policies and programs, it will be necessary to have a process of genuine and systematic consultation and engagement with all affected communities and with providers and other stakeholders to work out the shape and the details of a reformed and more effective program.

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3.

PROBLEMS WITH CDP

3.1

TOO MANY FINANCIAL PENALTIES

Financial penalties have skyrocketed with the introduction of CDP and vastly exceed penalties in the non-remote programs, such as jobactive. A recent report completed for Jobs Australia by ANU researcher, Lisa Fowkes, points out that: “There are approximately 34,000 job seekers in CDP, compared to around 760,000 in jobactive – it is less than 1/20th the size of the larger program. Yet, since the CDP came in, the number of penalties to remote job seekers has exceeded that applied to their non-remote counterparts. In the quarter ending March 2016, 46,183 financial penalties were applied to CDP participants, compared with 27,338 applied to jobactive job seekers.” 1 Note that the data cited in the report is administrative data published by the Department of Employment – that is, the figures are taken directly from the Government’s own data. Figures for ‘financial penalties’ only include penalties that result in a job seeker losing money and do not include those for which a job seeker may receive back-pay. To illustrate, the following chart shows the estimated number of penalties per 1,000 participants in the non-remote program, jobactive, compared to the remote program, CDP, for the period 1 January to 31 March 2016:

FIGURE 1: ESTIMATED PENALTIES PER 1,000 PARTICIPANTS FOR THE MARCH QUARTER 1600 1400

1,358 per 1,000 participants

1200 1000 800 600 400

36 per 1,000 participants

200 0

CDP

jobactive

Sources: Lisa Fowkes, ‘Update on the Impact of the Community Development Programme on Social Security Penalties’; Department of Employment, ‘Job Seeker Compliance Data – March Quarter’.

These financial penalties resulted in participants losing at least one tenth of their fortnightly payment for each day of non-compliance with requirements. For a single person on Newstart, for example, the fortnightly payment is $527.60 and so a penalty would reduce the payment by $52.76 for each day of non-compliance.

Fowkes, L 2016, Financial Penalties in CDP – September Update, retrieved 20 September 2016

1

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Such high rates of financial penalties have negative impacts for individuals, their children and families, and for their communities more broadly. Reports have already emerged of families going without food, and some community stores have confirmed that food sales have dropped since the introduction of CDP. Serious penalties, which involve up to 8 weeks without income support, can be particularly harmful and have serious flow-on effects. These include an inability to pay rent and fines, further impoverishment and a reduced capacity to engage in services, leading to long-term disengagement. Despite what might be being achieved in terms of increased attendance and a very modest improvement in employment outcomes under CDP, the very high rate of penalties is causing more harm than good and an urgent response is needed. FIGURE 2: ILLUSTRATION OF THE IMPACT OF PENALTIES

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3.1.1 WHY ARE FINANCIAL PENALTIES SO HIGH? High financial penalties flow from the combined effects of (i) the onerous and inflexible requirements for participants in CDP; (ii) the contract between the Federal Government and CDP providers, which requires providers to recommend financial penalties for any non-attendance; and (iii) the way that the compliance framework set out in the Social Security Act 1991 operates in remote Australia. The result of these three factors is quite clear: significant periods of non-payment. As Lisa Fowkes has explained: “There is no available public data which shows how many weeks either on average or in aggregate are actually lost through 8 week penalties. However, the number of penalties applied for ‘persistent non-compliance’ is an indicator of the number of people who have been repeatedly penalised -at least three times - over a maximum 6-month period. In the March 2016 quarter, 5672 serious penalties were applied, an increase of one third on the 4148 applied in the previous quarter. Each represents at least three minor penalties followed by up to 8 weeks without payment.” 2 For comparison, while there were 5,672 serious penalties for persistent non-compliance applied to the 32,000 CDP participants in the first three months of 2016, the equivalent number of penalties in jobactive for the same period was just 1,036 across a caseload of 760,000 participants. The factors that lead to the high rates of penalties in CDP are discussed below: • Onerous, inflexible and potentially discriminatory work for the dole requirements • Contractual requirements for CDP providers to recommend sanctions • Social security act and the job seeker compliance framework • Limited access to diagnostic, treatment and support services in remote areas

3.1.1.1 ONEROUS, INFLEXIBLE AND POTENTIALLY DISCRIMINATORY WORK FOR THE DOLE REQUIREMENTS

The participation requirements in CDP are significantly more onerous than for any other employment program, which contributes to higher financial penalties and has led to claims of discrimination 3. In CDP, participants are required to attend Work for the Dole for 5 hours per day, 5 days per week, all year round. Participants can take ‘leave’ of up to 6 weeks per year. In CDP, Work for the Dole must consist of work-like activity and must be supervised. By comparison, requirements for Work for the Dole in the non-remote jobactive program are less onerous and more flexible. For most job seekers, the first year of jobactive does not include any Work for the Dole requirements – rather, job seekers must search for a job, meet with their provider and undertake any activities (such as training) agreed to in the Job Plan. In their second year of servicing (and in each subsequent year, if they do not find work), job seekers are required to undertake Work for the Dole for six months. In jobactive, Work for the Dole requirements are also generally fewer hours per week than in CDP and the requirements are more flexible. Job seekers over 30 years of age are required to complete 15 Ibid. ACTU 2016, ACTU executive vows to end racist Community Development Program, retrieved 20 September 2016 2 3

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hours per week of Work for the Dole or other approved activities, while those under 30 are required to complete 25 hours of activity. The activities in the “Work for the Dole phase” can include Work for the Dole (consisting of supervised work-like activity), short courses / training, voluntary work, Green Army, part-time work or a range of other approved programs. Because the requirements in CDP are so much higher and more onerous than for other programs, it is much easier for participants to fail to meet them. FIGURE 3: EXTRACT OF PMC ‘FLIPCHART’ EXPLAINING MUTUAL OBLIGATION

Source: Department of Prime Minister and Cabinet, CDP Flipchart

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3.1.1.2 CONTRACTUAL REQUIREMENTS FOR CDP PROVIDERS TO RECOMMEND SANCTIONS

The second factor that contributes to higher penalties is the contract between the Government and CDP providers. As with other employment services contracts, the Government sets the terms of the agreement. In the case of CDP, Government has included contractual terms which effectively require CDP providers to recommend sanctions for any job seeker non-attendance in order to receive funding for their services, as demonstrated in the case study below. FIGURE 4: CASE STUDY FROM THE CDP GUIDELINES HANDBOOK

Under the CDP funding agreement, providers are only paid for participants who actually participate in Work for the Dole, or for taking compliance action after non-attendance and the participant reengages within 14 days. The provider will, however, have incurred costs associated with providing the services, regardless of whether a particular participant attends. The costs include, for example, office / accommodation costs, staff costs, vehicle costs and the cost of a supervisor for the activity. These costs cannot be reduced when a person does not attend their activity. In addition, the contractual Key Performance Indicators (KPIs) measure the extent to which: “All Eligible Job Seeker non-attendance is handled swiftly and appropriately in accordance with Guidelines and the CDP Funding Agreement.” 4 What this means in practice is that, while CDP providers technically retain the discretion to recommend or not recommend a financial penalty for non-attendance without reasonable excuse, they face their own financial penalties if they choose not to recommend a sanction. Exercising discretion and not recommending a sanction for a particular participant results in the provider not being paid for that participant and risking other penalties for failing to meet the KPIs. As a result, every provider, as a matter of course, reports the non-attendance to DHS with a recommendation for a financial penalty applied to the participant. 4

PM&C, CDP Guidelines Handbook (not publicly available)

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In non-remote programs, providers do not face direct financial and contractual penalties for exercising their discretion and they are free to use other approaches to engage or re-engage a participant in services. They are free to appropriately weigh up the consequences of recommending a penalty, taking into account all the circumstances including the impact on the participant’s family. In CDP, this is not the case.

3.1.1.3 SOCIAL SECURITY ACT AND THE JOB SEEKER COMPLIANCE FRAMEWORK

The Job Seeker Compliance Framework is set out in the Social Security Act 1991. It has been amended over the years and amendments are subject to rigorous examination and debate in the Parliament. It is complex, with different penalties for different types of breaches. Much of this complexity arises from the Parliament’s efforts to balance a general desire to create obligations in return for income support and to provide safeguards and protections for the many people in the system who are vulnerable, and who may suffer additional harm if they lose payments. Recent amendments have strengthened and simplified the framework somewhat 5. The Further Strengthening Job Seeker Compliance Bill 2015 6 would have simplified the framework further but the Government was unable to secure sufficient support for the Bill prior to the 2016 election, and the Bill lapsed when the Parliament was dissolved. (It should be noted that proposed changes in the Bill which would have removed waivers for re-engagement following a serious failure would be highly detrimental in the context of CDP participants.)

Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Bill 2014, retrieved 20 September 2016 6 Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, retrieved 20 September 2016 5

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BOX 1: SUMMARY OF THE JOB SEEKER COMPLIANCE FRAMEWORK As it currently stands, the Compliance Framework includes five main types of failures and associated penalties. These are: no-show-no-pay failures, connection failures, non-attendance failures, reconnection failures, and serious failures. The details of each are explained in the DSS Guide to Social Security Law. In general, however, the framework penalises participants if they do not turn up for a meeting or activity and do not have a reasonable excuse. If a participant incurs three penalties in a six-month period, then a ‘Comprehensive Compliance Assessment’ (CCA) is triggered. A CCA is a key protection for vulnerable participants, intended to ensure that people with an underlying issue are identified and supported appropriately rather than simply continuing to be penalised. The CCA review is conducted by a specialist DHS officer, who checks to see whether the participant has an underlying barrier (such as homelessness, a disability or health condition, etc.) affecting their ability to comply. If there is such an issue, the participant may be referred for another assessment to determine whether they are eligible for the Disability Support Pension or can be referred for additional assistance. If, however, there is no such underlying issue, the participant will incur a ‘serious failure’ for ‘persistent non-compliance’. The penalty for a serious failure is an 8-week payment suspension, which can be converted into full-time Work for the Dole. If the participant elects to convert the penalty into Work for the Dole, then the requirement is to undertake 25 hours per week of work-like activities – that is, the penalty is exactly the same as the standard participation requirements in CDP. If, however, the participant again fails to turn up for Work for the Dole, then the 8-week nonpayment penalty is applied.

In non-remote programs where participation requirements are more reasonable, repeat penalties are relatively uncommon. Most job seekers who incur a penalty re-engage quickly to minimise the amount of the penalty and stay re-engaged in services. In CDP, however, where the requirements are more onerous, repeat failures are much more common and, as a consequence, many participants are referred for a CCA. While awaiting a CCA, further penalties cannot be applied by DHS. This relates to the purpose of the CCA, which is to identify underlying issues and ensure that vulnerable participants are not repeatedly penalised when they really need more support. But, because CDP providers must continue recommending penalties in order to be paid under the CDP funding agreement, they continue submitting penalties even though they know that DHS is legally obliged to reject them. This futile exercise wastes significant resources of both the provider and DHS. Naturally, this is very confusing for everyone involved, and trying to get payments reinstated, or even trying to get an explanation, requires a phone call to the Participation Support Team in DHS – and often spending hours on hold. Put simply, the relationship between the participation requirements, the contractual requirements and the compliance framework do not appear to have been fully or properly considered. Those three things when put together result in an unacceptably high rate of job seeker penalties, with the result that the Program reduces the overall well-being of communities rather than advancing their wellbeing.

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3.1.1.4 LIMITED ACCESS TO DIAGNOSTIC, TREATMENT AND SUPPORT SERVICES IN REMOTE AREAS

A lack of services in remote regions makes it harder for participants to be assessed properly and to receive the support they need to meet the onerous and inflexible participation requirements in CDP. Despite the fact that Indigenous people living in remote areas of Australia experience higher rates of chronic health conditions and mental illness, difficulties accessing appropriate specialist services in remote communities mean that participants are often unable to gather the required medical evidence for exemptions, ‘reasonable excuses’, or Department of Human Services assessments 7. As noted by a Government report in 2012: “[I]t can be more difficult for people who live in remote and very remote areas with restricted access to medical and mental health services to provide adequate documentation to have non-vocational barriers recognised through the ESAt or JCA. Analysis conducted by the Department indicates that this has been a factor in restricting access to [higher levels of assistance] for job seekers in remote areas… Other factors such as the higher proportion of Indigenous people in remote areas who do not speak English as a first language and the lack of the concept of ‘disability’ in some Aboriginal cultures may also lead to lower numbers of Indigenous job seekers reporting non-vocational barriers. This would contribute to the relatively low proportion of Indigenous job seekers in these areas who are placed in [the highest level of assistance].” 8 As such, it is likely that many underlying barriers to participation go undetected. The lack of appropriate diagnosis of many mental and physical health conditions that limit peoples’ capacity to work can result in these conditions not being reflected in reduced participation requirements. And the lack of availability of specialist health services means that people are often not able to get the support they need to help them participate in CDP services. The gaps in diagnostic and support services in remote areas can result in unreasonable expectations about participation, which increase the rate of penalties. 3.2

POOR CONNECTION WITH COMMUNITY ASPIRATIONS AND A LACK OF COMMUNITY ‘BUY-IN’

While many CDP providers invest significant resources into community consultation, the CDP has been substantially driven centrally by the Minister and the Department of Prime Minister and Cabinet. While over 1100 people participated in community consultations over the RJCP, the introduction of the CDP arrangements and – in particular – 5 days per week Work for the Dole, was not subject to any substantive or systematic community consultation. There is generally little real community control or engagement in decision-making and consequently little community ‘buy-in’ in the program. As a result, CDP providers report that communities often feel unengaged and disempowered and individual community members are not motivated to participate in the program. At the recent Jobs Australia CDP Forum in Alice Springs, we placed attendees in groups and asked them write down challenges with the program on post-it notes. Challenges related to effective and meaningful community engagement were raised by every group.

Fowkes, L and Sanders, W 2016, Financial penalties under the Remote Jobs and Communities Program, retrieved 20 September 2016 < http://caepr.anu.edu.au/Publications/WP/2016WP108.php> 8 Department of Education, Employment and Workplace Relations 2012, Servicing Indigenous Job Seekers in Job Services Australia, retrieved 20 September 2016 7

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Similarly, when asked to illustrate problems with the current program, one group drew a picture with the CDP provider on an entirely different planet; such is the sense of disconnectedness from the world of the participants and their communities. FIGURE 5: “CHALLENGES” AROUND COMMUNITY ENGAGEMENT, LOCAL CONTROL AND MOTIVATION

Some of the issues at the community level relate to the basic structure of the Program. For instance, many participants have participated in previous programs such as CDEP, and remember being paid at the minimum wage (or higher) to work on the same kind of projects they do now, and with fewer bureaucratic hoops to jump through. Combined with the high rate of sanctions, there is a very real and valid perception that people are worse off in this Program than they were before. Other issues, however, are likely to be related to inadequate community consultation processes. Interestingly, the observations about the way that some communities have reacted to the Program are consistent with expected results based on the academic literature on community and peoplecentred development. At the Forum, an expert on community development, Dr Elise Klein, referenced the writings of Nobel Laureate Amartya Sen to emphasise the importance of having communities central to making decisions over their lives. In this sense, development requires more than mere consultation (and beyond including just one or two individuals) – it requires communities and individuals to determine the goals that they themselves value. Employment programs often focus on the ‘outcomes’ and pay less attention to the process for achieving them. In community development, however, the process (and particular in relation to real and active community participation in decision-making) is often as important, or even more important, than the outcomes. Moreover, this process of the people subject to interventions having control over the interventions opens up room for those interventions to be tailored to the diversity of community circumstances and aspirations.

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FIGURE 6: SLIDE FROM PRESENTATION BY DR ELISE KLEIN, UNIVERSITY OF MELBOURNE

The community development literature obviously has a great deal of relevance for CDP. In most remote communities, people will be engaged in a range of activities that contribute to either the ‘customary economy’ (hunting, traditional land management, cultural practices) or the ‘market economy’ (the private sector), and with much of the market activity only taking place through the intervention of ‘the state’ (i.e.: with government funding). Some activities will cut across these categories. The precise mix of market and customary activity varies considerably from community to community, but in general those that are more remote will have less interaction with the market and a greater focus on customary activity as there are fewer market opportunities or else they are more difficult to commercially realise 9. Therefore, the whole concept of what constitutes ‘work’ needs to be much broader than that which currently applies in CDP; specifically to include the diversity of productive labour people undertake in remote communities. CDP fails to realistically recognise and provide sufficient flexibility for the wide range of different circumstances in remote communities. In CDP, the requirements for activities are set out in the contract and guidelines and include requirements that the activities must be ‘work-like’ (that is, like market-economy work), must take place for five hours every day over a working week (Monday to Friday) and must include a lunch break. Work in the customary economy is only allowed in the

Altman, J 2003, Economic Development and Participation for Remote Indigenous Communities: Best Practice, Evident Barriers, and Innovative Solutions in the Hybrid Economy, Australian National University, retrieved 2 November 2016 9

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program if it is valued by the market economy (e.g.: art that can be sold) and if it fits within the program’s requirements for supervision and for maintenance of time sheets. This necessarily conflicts with the ideas which underpin effective community development. In a true community development approach, the community would be empowered to determine not only what ‘projects’ it pursued, but what types of work it valued in the first place. By failing to ensure that communities are free to pursue the “lives they value and have reason to value” 10, the Program leaves communities disempowered and unengaged. Notably, the original conception of the Community Development Employment Projects (CDEP) scheme did seek to empower communities. Under the original CDEP, communities received a quarterly grant equivalent to the amount that would otherwise be paid in unemployment benefits (plus an amount for project costs and administration), and used that grant to employ people on community projects of their choosing. How they administered the CDEP wages and other details of the arrangements were determined by the community 11. As payments were wages, not income support payments, there was also no income or assets test to determine eligibility or activity tested requirements to participate. By 2004 there were over 35,000 Indigenous people participating with 70 per cent living in remote Australia and 265 community-based Indigenous organisations administering the scheme. In this way CDEP (at least in its original form) more closely reflected the principles of community development than more recent programs. The flexibility of CDEP also exposed it to criticism by those who believed it should have a greater focus on achieving labour market outcomes, although there was some evidence that – where labour demand existed – the program could in fact facilitate these outcomes. In a sense there is something of a balance to be struck: empowering communities to determine the type of work that they themselves value may diverge somewhat from objectives such as closing the employment gap. Improving CDP and leveraging community buy-in to improve engagement will nonetheless likely involve a shift in the emphasis of the Program to ensure that communities are empowered through greater control over what the Program does and how it is done. 3.3

COMPLEX ARRANGEMENTS

A great deal of confusion arises because of the complexity of the CDP contractual arrangements, which are in turn a consequence of the way that the Program operates within the context of the income support system. This is especially the case where participants move from remote areas to non-remote areas (or vice versa) and experience periods in jobactive as well as CDP. The inconsistency across the two programs in the requirements and hours of participation, etc., makes the system more complex to manage and more difficult for participants and employers to navigate. This is more than just a complaint about ‘red-tape’. Complexity has a range of negative consequences beyond administrative inefficiency. Participants can become disengaged simply because they find it all too hard; vulnerable people can fall through the cracks; providers can and very often do become

Klein, E 2016, The Curious Case of Using the Capability Approach in Australian Indigenous Policy, Journal of Human Development and Capabilities, 17:2, 245-259, DOI: 10.1080/19452829.2016.1145199 11 Miller, M 1985, Report of the Committee of Review of Aboriginal Employment and Training Programs, retrieved 20 September 2016 10

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more focused on administration than on their real tasks; and employers and others in the community find the program requirements difficult to understand and interact with. 3.3.1 THE INCOME SUPPORT SYSTEM Australia’s social income support safety-net is highly targeted to ensure that resources are allocated to those who are in need. This targeting necessitates a tight set of bureaucratic rules about eligibility, as well as around the connected programs of support (such as employment programs). Some of these rules are about ensuring that people who are not eligible for payments do not receive them, and others offer important safeguards and protections to ensure that people who are vulnerable and in need of support are not left penniless. An important safeguard in this context is the requirement that a Comprehensive Compliance Assessment (CCA) be undertaken after three financial penalties are applied for non-compliance. The CCA is undertaken to ensure that there is not an underlying issue, such as a disability, homelessness or domestic violence that is affecting the person’s ability to participate in the program. As such, removing the CCA would make the Program simpler, but it would also remove an important protection. The rules make the most sense when applied to the situation of a person who claims benefits for only a short period of time. For example, the income and assets tests are easy to apply to a worker who loses their job, claims benefits during a spell of unemployment, and then moves back into work relatively quickly. The tests become much more complicated for people with lives that are not so straight forward and in limited labour markets. People who move in and out of work, have intermittent medical conditions or disabilities, who move around a lot, who have variable household composition, who may not have ready access to telephone and internet services and who have occasional non-work income (from art sales, native title agreement payments, related to mining etc.) tend to have a much more difficult time jumping through all of the administrative hoops associated with each ‘change of circumstances’. This is exacerbated by the need for evidence and independent assessment of circumstances. CCAs and other assessments must be conducted by DHS, but a lack of access to DHS assessors means there are long waits and assessments are not generally conducted face-to-face. Over the phone assessments are less thorough and are less likely to identify barriers to participation. Interpreters are almost never used. Similarly, access to medical and other services to verify illness or disability is problematic in remote communities where access to such services is limited 12.

Department of Education, Employment and Workplace Relations 2012, Servicing Indigenous Job Seekers in Job Services Australia, retrieved 20 September 2016

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FIGURE 7: ILLUSTRATION OF HOW CONFUSING REQUIREMENTS LEAD TO DISENGAGEMENT

3.3.2 THE CDP CONTRACT The rules-based, individualised income support system also creates significant work for CDP providers, who have to track attendance and appointments electronically in a computer system connected to Canberra. In many remote communities, internet and mobile phone access is not available or is limited and so the Program has to be administered via paper timesheets, which must then be sent to the CDP provider’s office for centralised data entry. The administration associated with CDP is a huge burden for providers that consumes significant resources. The payment model and KPIs in the CDP contract are also complicated and cumbersome. Providers find it extremely difficult to accurately predict their income from one month to the next, which makes planning and budgeting difficult. Providers are also sceptical about the accuracy and integrity of the scores that they receive from the Department in the performance framework. The former CDEP scheme avoided many of these difficulties by paying for projects, and organisations paying wages instead of income support being paid to individuals. Government only had to administer grant funding for the community, not individualised income support entitlements, and the CDEP providers then administered wages on terms agreed with the community. There were rules around CDEP Wages, but they were more flexible and less administratively cumbersome than present arrangements. There are other problems associated with wages (discussed later in this report) but there may, nonetheless, be ways to simplify the Program and make it easier to understand and administer by changing the way that it sits within the income support system.

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3.4

DIFFICULTIES INTERACTING WITH CENTRELINK

The complexities of the income support system are made all the more challenging in remote communities because it is difficult to access Department of Human Services / Centrelink offices. DHS has a minimal physical presence in remote Australia, with most places either not serviced at all, or only serviced by Centrelink ‘agents’ or ‘access points’ which offer only a basic range of services (such as processing forms) and are not staffed by Departmental officers with decision-making authority. As a consequence, interactions with Centrelink generally involve waiting for long periods on the phone – usually in a CDP provider’s office. Assessments that are undertaken face-to-face in other parts of Australia are not undertaken face-to-face in remote areas, which affects the reliability of the assessments. FIGURE 8: A GENERAL STORE AND CENTRELINK ACCESS POINT AT STIRLING STATION, WILORA NT

Photo: Peter Defteros

This is all the more problematic because the implementation of CDP has increased the need for participants to interact with Centrelink. At the recent Jobs Australia CDP Forum, many groups expressed frustrations with Centrelink – and particularly around the ridiculous amount of time it takes to get in contact with anyone.

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FIGURE 9: ILLUSTRATIONS OF THE DIFFICULTIES DEALING WITH CENTRELINK

Problems with access to Centrelink could be addressed significantly with changes to the Program and other arrangements to reduce the need to interact with Centrelink so often, but there is a need for DHS to invest additional resources in order to ensure that people in remote Australia are able to access services on an equitable basis. 3.5

UNCLEAR PROGRAM OBJECTIVES

Like other remote employment programs, the requirements in CDP reflect multiple objectives, only some of which are directly related to employment. According to the Department of Prime Minister and Cabinet: “The Community Development Programme (CDP) is our remote employment and community development service. CDP has two parts; helping people find work, and allowing them to contribute to their communities and gain skills while looking for work.”

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It is true that there are some excellent remote Work for the Dole projects, and a number are capable of becoming social enterprises and even viable, profitable businesses. Some activities do also provide valuable skills that prepare people for employment in the private sector. These are, however, more the exception than the rule. In most remote communities there is little market economy to speak of and the prospects of many Indigenous people obtaining private-sector employment are slim. Furthermore, the ‘skills’ developed in many Work for the Dole activities are only loosely directed at unsubsidised employment in the market economy. More commonly activities are directed towards meeting local community needs (for example, basic maintenance work, building new community facilities, growing vegetables for community consumption). As pointed out by the Minister for Indigenous Affairs, Senator the Hon. Nigel Scullion, this is not necessarily a bad thing, because participants “are engaged in purposeful activities in their communities, where they choose to live, and they are choosing to live in an area where there is no economy and a growing population”. 13 However, as under the former CDEP, there is a significant risk that the labour of CDP workers will be used instead of engaging employees. Unlike CDEP, where this occurs CDP workers will end up working for substantially below award wages, and without capacity to withdraw. Previous programs have also had mixed objectives. The original objectives of the CDEP scheme “were to reduce the adverse effects of unemployment and income support dependency, to strengthen communities, and to promote self-determination and cultural maintenance” but through the late 1990s and 2000s, Government “increasingly refocused the objectives of the scheme onto unsubsidised employment outcomes”. 14 This reduced the capacity of CDEP to deal with diversity of circumstances and of aspirations. Given that there is a mix of objectives at play in the design of remote programs, it is appropriate that those objectives be reflected in the program design. Currently, the CDP payment model focuses exclusively on (i) whether an individual participant is in an activity or not, and (ii) employment in the market economy. A more appropriate program design would take into account the ‘quality’ of activities, and the extent to which they support the non-employment outcomes that the Program supports. The Program should also be evaluated against the full range of objectives. 3.6

THE OVER-ARCHING POLICY FRAMEWORK UNDERPINNING CDP

The majority of people required to participate in CDP are Indigenous Australians. CDP has a long history, stemming from the Indigenous employment program called Community Development Employment Projects (CDEP) and the former Remote Jobs and Communities Program (RJCP). CDEP was a successful program running since 1977, providing support for Indigenous productive labour to engage in community and commercial activities. CDEP was largely successful; by 2004 there were

The Australian, 30 years working for dole a reality, 2 March 2015, retrieved 20 September 2016 14 Dockery, M and Milsom, N, 2007, A review of Indigenous employment programs, National Centre for Vocational Education and Training Research (NCVER), retrieved 20 September 2016, 13

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over 35,000 Indigenous people participating in CDEP with 70 per cent living in remote Australia and 265 community-based Indigenous organisations administering the scheme 15 16. The disproportionate and differential targeting of Indigenous Australians through CDP is just one example of the highly paternalistic and assimilationist policies of successive Australian governments. Since European settlement, government policies have aimed to colonise and assimilate Indigenous peoples and to control their unceded territories 17. In contemporary times and since the 1990s, successive governments have proposed and sought to implement a number of contentious welfare reforms aiming to instil “responsibility”, including attaching behavioural conditions to welfare payments, income management, defunding narrowly defined ‘unproductive’ communities and Indigenous organisations, activation strategies to get children in school and Indigenous people into training and what is defined as ‘real jobs’ (employment in the mainstream economy), as found in CDP 18 19 20. These polices overlook Indigenous people’s rights to self-determine cultural, economic, social development as laid out in the United Nations Declaration for the Rights of Indigenous Peoples (UNDRIP). CDP is just one example of the neo-colonial policy framework applied to Indigenous peoples in Australia.

Altman, Jon. 2016. "Basic income for remote Indigenous Australia: prospects for a livelihoods approach in neoliberal times." In Basic Income in Australia and New Zealand: Perspectives from Neoliberal Frontiers, edited by Jennifer Mays, Gregory Marston and John Tomlinson, UK: Palgrave Macmillan, Basingstoke. 16 Jordan, Kirrily. 2016. Better than welfare? Work and livelihood for Indigenous Australians after CDEP. Canberra: ANU Press. 17 Wolfe, Patrick. 2006. "Settler colonialism and the elimination of the native." Journal of Genocidal Research 8 (4):387– 409. 18 Altman, Jon. 2014. "Indigenous policy: Canberra consensus on a neoliberal project of improvement." In Australian Public Policy: progressive Ideas in the Neoliberal Ascendancy edited by Chris Miller and Lionel Orchard. Bristol: Policy Press. 19 Strakosch, Elizabeth. 2015. Neoliberal Indigenous Policy: Settler Colonialism and the 'Post-Welfare' State. London: Palgrave MacMillan. 20 Klein, Elise. 2016. Developing Minds: psychology, neoliberalism and power Abington: Routledge. 15

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4.

OPTIONS FOR SOLUTIONS

4.1

PRINCIPLES FOR REFORM / LONG-TERM OBJECTIVES

From the discussion about the problems in CDP, and based on the discussions at the Jobs Australia CDP Forum, it is clear that: 1. Requirements need to be adjusted so that most participants can meet them most of the time and to more closely align with the requirements of other income support recipients. 2. Administrative arrangements should be simpler for both participants and providers. 3. Participants / community members should have sufficient income to pay for necessities. 4. Communities should be empowered to make decisions about how the Program operates in their community. 5. Incentives should encourage people to engage in unsubsidised work. FIGURE 10: ILLUSTRATION OF HOW THE PROGRAM SHOULD WORK IN THE FUTURE

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5.

OFF-THE-SHELF SOLUTIONS

5.1

OPTION 1: THE CDP2 BILL

The Social Security Legislation Amendment (Community Development Program) Bill 2015, commonly referred to as the CDP2 Bill, sought to address some, but not all, of the issues discussed in this report. The Bill was introduced into the Senate in December 2015 but was not debated prior to the calling of the 2016 Federal Election, and the Bill consequently lapsed when the Parliament was dissolved. It could nonetheless be revived and reintroduced into the current Parliament for debate should the Government believe that to be the best way forward. In summary, the Bill sought to “create greater incentives for activity-tested income support recipients in remote communities within selected regions to engage with activity requirements and find and remain in paid work” 21. It sought to achieve this by: • Making payments weekly instead of fortnightly (to provide a more immediate impact when financial penalties are applied); • Allowing the Minister to determine a simpler compliance framework, under which CDP participants would be penalised for each hour of non-attendance in activities; • Making CDP providers responsible for payment of benefits instead of Centrelink; and • Allowing participants to earn more income from employment before their income support payments would begin to taper. A further proposal for a ‘community investment fund’ was mooted in the Bill’s explanatory materials but was not reflected in any of the amendments contained in the Bill itself. Presumably, the fund proposal was to be implemented without legislation and through the Indigenous Advancement Strategy. A useful summary of the Bill and the issues that were raised by stakeholders is available from the Parliamentary Library 22, and submissions on the Bill are still available on the Parliament website 23. For the purposes of this report it will suffice to say that the Bill would have failed to address a number of key problems in CDP and was therefore rejected as a viable option by those attending the forum. Financial penalties would only have increased further, as participants would be penalised for each hour of non-attendance and the many thousands of penalties rejected by DHS would have been applied. The administrative burden for providers of administering CDP is already costly and onerous. The complexity of administering the system requirements under the CDP2 Bill – especially with hourly attendance tracing and without financial consideration for the additional resources that would be required– would be horrendous and further distract from the important tasks of working to improve employment opportunity. Providers would become entirely responsible for the sanctions and so would bear the brunt of participants’ anger when penalties are applied. It should be noted that, over many years, DHS has established internal processes and built customised facilities to

Parliament of Australia, Bills Digest No. 93, 2015-16: Social Security Legislation Amendment (Community Development Program) Bill 2015, retrieved 2 November 2016 < http://parlinfo.aph.gov.au/parlInfo/download/legislation/billsdgs/4399835/upload_binary/4399835.pdf;fileType=applicatio n/pdf> 22 Ibid. 21

23

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration/Social_Security/ Submissions, retrieved 2 November 2016

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manage these risks. These could not be replicated by providers. There was nothing in the Bill to address problems at the community level, such as the feelings of disempowerment and resentment towards the Program. In addition, key protections would be removed. While CDEP allowed providers to deduct CDEP Wages payments for non-attendance, this is fundamentally different from allowing CDP providers to deduct penalties from people’s social security payments. The reason that DHS applies financial penalties and not providers is that there need to be checks and balances in the system to ensure sanctions are not applied inappropriately and that decisions are taken in accordance with administrative and social security laws. The Bill would have compromised those checks, leaving participants exposed to the risk that sanctions might be applied inappropriately. Current arrangements that require providers to penalise job seekers even where they believe this is not appropriate would have remained in place so that they would have been limited in their ability to exercise discretion. Even the proposed mechanism to allow additional earnings before income support payments began to taper was problematic. The solution in the Bill was to simply raise the threshold – but that move would have made most part-time workers eligible for income support on top of their earnings, and hence created an incentive for full-time workers to reduce their hours. Meanwhile, people who worked two days per week and did Work for the Dole for three days would be worse off under the Bill as under the proposed rules they would lose two full days’ income support. Other issues related to the removal of Parliamentary oversight of the compliance framework and a lack of appropriate consultation about the changes also made it difficult for stakeholders to support the Bill. Had proper consultation been undertaken, some of the issues with the proposals might have been able to be resolved – although this would have required changes to the CDP program itself (for example to enable greater provider discretion without financial penalty). But in the form that it was presented, the Bill was not a viable solution to the problems in CDP and it should not be pursued.

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BOX 2: DOES THE CDP2 BILL MEET THE OBJECTIVES FOR REFORM? Objective:

Assessment:

1.

Requirements need to be adjusted so that most participants can meet them most of the time and to more closely align with the requirements of income support recipients.

No. Requirements would continue to be difficult to meet.

2.

Administrative arrangements should be simpler for both participants and providers.

No. Some participants would be paid income support by CDP providers, others would be paid income support by Centrelink. Some people would move between the two. Providers would need to track attendance hourly. Taper rates would be simpler but the new threshold would also extend income support to people who are currently not eligible and might penalise those who take up part time work.

3.

Participants / community members should have sufficient income to pay for necessities.

No. Financial penalties could be expected to increase with attendance tracked hourly and reduced scrutiny of penalties.

4.

Communities should be empowered to make decisions about how the Program operates in their community.

No. Communities would continue to be consulted by providers (to varying extents), not given explicit control over any part of the Program. No greater autonomy for providers to exercise discretion.

5.

Incentives should encourage people to engage in unsubsidised work.

No. Incentives drive attendance in activity. Arrangements for top-up do not help people along a path to sustainable employment, but trap them in part-time work. There is even an incentive for full-time workers to reduce their hours and start claiming income support. Providers’ focus shifts further away from building opportunity and toward administration.

5.2

OPTION 2: REINSTATE AN IMPROVED CDEP

A number of features of the former CDEP scheme are appealing. Because CDEP participants were paid wages, most of the complexity in CDP was completely avoided. Communities were empowered to determine how the scheme would operate in their area and what projects it would pursue. Communities implemented no-show-no-pay rules as rigidly or as flexibly as they liked, with most having some mechanism to ensure that the most vulnerable community members were provided for. Those who could not be provided for in CDEP could still access safety-net payments by applying for income support. Most importantly, CDEP was paid at the relevant award hourly rate. Other benefits of CDEP included raised incomes, employment creation, pathways to other employment, enterprise development and a range of positive social outcomes.

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BOX 3: NUGGET COOMBS’ PROPOSAL TO PUT ‘SIT DOWN MONEY’ TO A BETTER USE “While there does not appear to have been any general policy decision, the practice appears to be growing of endorsing applications for unemployment benefit from Aborigines in these areas. The following aspects of the situation are relevant: (1) Unemployment benefit probably provides as much, if not more, income than Aborigines would earn from wages if work was freely available and they were able to choose freely between such work and unpaid leisure for their own pursuits. (2) Although work for wages is not now generally available (a) There are socially important tasks to be undertaken of the special work projects type; (b) Aborigines could be trained to reduce the need for scarce and more expensive white employees. (3) Until recently unemployment benefit was not expected in most Pitjantjatjara communities. (4) It seems irrational to pay men to be idle when socially valuable works are being terminated. I believe it would be rational and practical to solve this policy issue in the following way: (a) periodically (quarterly) officers of the Department of Employment should visit Aboriginal communities in remote areas and assess, in consultation with the community and Department of Aboriginal Affairs, the employment prospects and the probable number of eligible unemployed; (b) a grant should be made, through the Department of Aboriginal Affairs, to the community on a quarterly basis equivalent to the unemployment benefit which would have been received by those assessed as likely to be unemployed; (c) the community should be authorised to use this grant to employ its members on approved work projects – on a basis which would provide them with an average of three or four days’ work a week; (d) Aborigines from these communities should then be regarded as ineligible for unemployment benefit on the grounds that paid work is available to them within their own community; (e) The Department of Aboriginal Affairs should supplement these employment grants to cover material and equipment costs for approved projects provided that a reasonable contribution was made by the community to these costs.” Source: Coombs 1978, cited in Sanders 2012

There were, however, a number of problems with CDEP that emerged over time. There were concerns that the scheme could be discriminatory because CDEP participants did not originally have access to supplements such as rent assistance, nor did they have full employment rights. A 1997 review by the Race Discrimination Commissioner did not find discrimination, but did question the inconsistencies. It recommended that CDEP workers be given the rights of other employees. In response, DSS determined that CDEP participants should be eligible for the Work for the Dole supplement of $20.80, and that was enough to bring participants within the income support system and enable payment of rent assistance and other add-ons 24.

24 Sanders, W 2012, Coombs’ Bastard Child: The Troubled Life of CDEP, Australian Journal of Public Administration, 71 (4): 371-91

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Other concerns were raised about CDEP becoming a ‘destination’. This happened in a number of ways: firstly, CDEP employment may have displaced private-sector and public-sector employment, or at least inhibited employment being created because, in essence, the Commonwealth was subsidising private and government employers by providing free labour. In the public sector, CDEP led to cost-shifting between levels of government, resulting in inadequate funding for what should have been fully-funded public sector employment, such as teacher’s assistants and municipal services workers. This cost-shifting reduced opportunities for employment pathways out of CDEP in remote areas. Some also argued that the generous taper arrangements that applied to CDEP meant that CDEP workers were unwilling to take up other offers of employment. As a consequence, working for CDEP became an end in itself and few people moved from CDEP into private sector employment. Structural factors also impacted on employment beyond CDEP in remote areas, such as few jobs available, and a range of complex cultural, historical and socio-economic barriers. Notably, most of these criticisms could also be directed at the new CDP. Arguably, the new CDP creates even greater issues of substitution and ‘lock in’ as (i) it includes a higher percentage of the working age population; (ii) workers are required to undertake more hours of work, and therefore are more useful to employers; and (iii) the lock in effect would be expected to be increased because of a lack of time for job search and individual work preparation. In addition, the issues of exploitation are more pronounced, as CDEP workers were afforded award wages and could opt out, whereas CDP work at below award rates and have no ability to refuse a Work for the Dole placement. Another problem with CDEP and the payment of wages is the emergence of income management policies. To mandate the payment of wages onto a cashless debit card would raise complications – it could require legislation, could be discriminatory, and could be expected to be highly controversial. It is one thing for government to manage how people spend income support payments; it is another thing entirely to regulate how people spend their wages. It is worth noting, however, that CDEP did have a community-mandated income management component, with deductions very often made for expenses such as rent, bills, fines, funeral accounts and store credit. Reviving CDEP would also still require some consideration of the relationship between the CDEP program and the income support system. CDEP sat on top of the income support system – those who were employed in CDEP did not receive income support payments, but those who were not employed in CDEP could still apply for benefits. People with serious non- vocational or health issues retained access to a safety net under CDEP, while today many are in Work for the Dole and experience financial penalties. In today’s context, reviving CDEP for some or all of the working-age community members would still leave a question to be answered around what requirements would apply to those who remained in the income support system. This may mean adjusting requirements and program design in CDP to ensure participants had a strong incentive to move into CDEP. These challenges are not insurmountable and it is possible to revive a CDEP-like scheme that would sit on top of the current CDP and pay wages, provide an opportunity to earn top-up and help to transition participants into market-economy employment wherever that is possible.

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BOX 4: WOULD A RETURN TO CDEP MEET THE OBJECTIVES FOR REFORM? Objective:

Assessment:

1.

Requirements need to be adjusted so that most participants can meet them most of the time and to more closely align with the requirements of other income support recipients.

Partially – and it depends on what happens to people who are not earning wages as part of CDEP. Preservation of current Work for the Dole arrangements would be incompatible with this objective.

2.

Administrative arrangements should be simpler for both participants and providers.

Partially. More people on wages (simpler to administer) would reduce the number of people on income support (where things are complicated).

3.

Participants / community members should have sufficient income to pay for necessities.

People on CDEP wages would be better off, but people left on the income support system would continue to be penalised too frequently, should the existing Work for the Dole requirements continue to apply to those on income support.

4.

Communities should be empowered to make decisions about how the Program operates in their community.

Yes. The way that CDEP operates, including the activities that attract CDEP wages and top-up, would be determined by local communities.

5.

Incentives should encourage people to engage in unsubsidised work.

Yes. Top up and wages provide strong incentives to move off income support.

5.3

OPTION 3: THE COMMUNITY EMPLOYMENT AND ENTERPRISE DEVELOPMENT SCHEME

The Aboriginal Peak Organisations NT (APO NT - a collective of Aboriginal peak bodies in the NT) developed its own proposal for a new way of delivering remote employment services in 2011. The proposal was put to the then Labor Government as part of the consultations about the development of the Remote Jobs and Communities Program (RJCP), which later became CDP. APONT called their model the ‘Community Employment and Enterprise Development Scheme’ (CEEDS). While some aspects of the model can be seen to have influenced the direction for RJCP (e.g.: APONT called for a single provider in each region, contracted for a five-year term via a competitive tender), the key features of the proposal were not adopted. It is worth noting the substantial work that went into the development of the model. APONT conducted forums, surveys, community visits and interviews in a consultation process that engaged Aboriginal organisations, CDEP providers, CDEP participants and community leaders in the NT. They also engaged experts such as Dr Kirrily Jordan and Professor Jon Altman to advise on the development of the model. As a result, the model elicited broad support from a wide range of stakeholders.

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The model drew on CDEP but also took account of the criticisms of CDEP. It combined a basic service for people receiving income support payments with higher ‘tiers’ of support, utilising subsidised wages, to reward people who moved further along a pathway to unsubsidised employment. The principle of ‘no work, no pay’ was balanced with requirements that were reasonably able to be met by the majority of participants with differing levels of work capacity, and the model sought to ensure that it did not undermine minimum wages or displace private sector employment.

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BOX 3: OUTLINE OF THE APONT ‘CEEDS’ MODEL 25 Moving from welfare to wages The APO NT model is based on what has been shown to work, and builds on the employment and enterprise outcomes already achieved by strong Aboriginal organisations under difficult circumstances. Waged CDEP has a proven ability to engage otherwise unemployed individuals in productive and educational activities. The APO NT model highlights the importance of wage subsidies for encouraging participation. It draws on evidence that, where managed well, wages and top up have been effective tools for encouraging participation and, where possible, assisting people into non-CDEP jobs. Our model recognises that the best way to inspire labour market participation in remote Aboriginal settlements in the NT is to support the development of social enterprises by local people. This requires planning and training at the local level, and partnerships between government and communities, with additional private support where appropriate. The first tier is the entry point of the scheme, in which basic opportunities for engagement and participation are provided (as they are under income supported CDEP at present). At this level participants engage in activities that develop basic skills. A basic level of income and activity support is provided. Tier 1 participants who are willing and able graduate to Tier 2. In the second tier, participants and providers work together to design a ‘livelihood pathway’ that is tailored to meet the capabilities and aspirations of the participant. This pathway also seeks to match participants to existing and possible employment and enterprise opportunities in the community economy. Payment of a participation wage will be provided at a minimum rate that is higher than basic (tier 1) income support. Wages paid in this tier will be taxed and superannuated in line with national rates. Participants in Tier 2 that have achieved their ‘livelihood pathway’ skills and experience goals must graduate to Tier 3 when a matching employment or enterprise opportunity is made available. In the third tier participants are engaged directly in the employment or enterprise opportunity identified in their livelihood pathway. The participant receives an initial period of intensive support. Government, employers and enterprises combine to contribute to the participant’s income. Wages paid in this tier will be taxed and superannuated in line with national rates. Participants are encouraged to move through the three tiers and in to mainstream employment through the use of a system of incentives coupled with a ‘no work – no pay’ mechanism. Strengthen Local Providers Under the APONT model local providers with a history and relationship with Aboriginal people are the key to success. Contract periods for local providers will be extended to five years to facilitate the development of this relationship. The APO NT model will also be supported by other programs and investments that build capacity in local communities by providing improved access to investment capital. The model also envisages the establishment of more effective recruitment and procurement methods in government services which will generate higher levels of local employment.

APONT, 2011, Work Not Welfare: Investing in a waged employment program in remote Northern Territory, retrieved 2 November 2016 < http://www.amsant.org.au/apont/wp-content/uploads/2015/01/120419-APONT-Work-not-Welfare-CEEDS-summary-document.pdf > 25

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5.3.1 TIER 1 – BASIC SERVICES FOR INCOME SUPPORT RECIPIENTS In the CEEDS model, Tier 1 most closely approximates the current CDP, although it is closer to CDEP with basic wages. The proposal describes Tier 1 as being “compulsory for anyone receiving the Newstart Allowance” and “voluntary for anyone receiving any other form of income support, such as disability payments”. In return, participants would be required to participate in “a range of activities and projects identified by the community in partnership with the local provider” for a certain minimum number of hours. This description is similar to the requirements in CDP. Tier 1 differs from CDP, however, in a number of respects. For starters, while the number of hours is not specified, APONT also refer to consistency with the minimum wage throughout the document. On that basis, based on the rate of Newstart and the rate of the minimum wage, it can be assumed that the number of hours would be in the order of 10 to 15 hours per week (or less, depending on capacity), not the 25 hours per week demanded by CDP. To implement the CEEDS model, Government would need to relax its expectation that participants undertake 25 hours of activity across five days. Secondly, the requirements for projects are different. APONT says activities must be “justified on the basis of identified economic, social or cultural needs”, which suggests that customary activities would be allowed in the program, whereas they are largely precluded by the requirements for CDP projects. The strict supervision, time recording and breaching provisions under CDP would be incompatible with the flexible, strengths-based approach being described under CEEDS. Thirdly, the payment model proposed that providers would receive service fees (up-front funding) and outcome payments for supporting participants to graduate to Tier 2 – in other words, making payment for “distance travelled” towards paid employment, rather than only paying for employment outcomes. One way of thinking about Tier 1 under this scheme would be to compare it with Stream C under jobactive, or -even more apt – the former Personal Support Programme. 5.3.2 TIER 2 – A LIVELIHOOD PATHWAY, WITH TOP-UP In Tier 2, participants would develop an individual ‘livelihood pathway’ and would receive a ‘top-up’ payment for undertaking additional hours of work. The pathway would be “matched with established and emerging employment and enterprise opportunities” – which suggests that the projects eligible for top-up in Tier 2 would have a greater focus on work in the market-economy. It is also clear that payments in Tier 2 are intended to be wages, with tax and super to apply “in line with national rates”. In this sense, Tier 2 of the CEEDS model resembles the old CDEP scheme with ‘top-up’ wages– it appears that providers would be required to employ the participants with wages subsidised by Government. Under the proposal, participants in Tier 2 would also have a “reduced rate of compulsory income management”. This part of the proposal is somewhat unclear – it seems to suggest that the wages in Tier 2 could be partially income-managed, which makes them seem more like an income support payment than a real wage. The proposal also suggests that the extra income / top-up in Tier 2 would not incur any tapering of income support – and, again, it is unclear how this would work. Tier 2 differs from CDEP in that there are greater incentives in the model to move people into unsubsidised work over time. According to the proposal, providers would receive some services fees, some ‘support funds’ (presumably something like the Employment Fund in jobactive) and outcome payments for people who move into Tier 3.

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Nonetheless, some of the criticisms of CDEP wages might be applicable to Tier 2. 5.3.3 TIER 3 – LIVELIHOOD SUPPORT AND TRANSITIONING TO EMPLOYMENT Under the CEEDS proposal, participants move into Tier 3 services when they are placed in employment, either in a private-sector or social enterprise role. Tier 3 would include wage subsidies, on the job training and general post-placement support. Providers would continue to receive service fees, funds for on-the-job training / support, and outcome payments for achieving employment and exit from the program. In Tier 3, payments to participants are clearly wages and are connected with work in the market-economy. 5.3.4 OTHER ELEMENTS The CEEDS proposal also envisaged greater say for local communities. This would be achieved by contracting local organisations that already have a strong relationship with local communities. Contracts would be five years in length and there would be only one provider in each area (not multiple providers operating competitively, as in jobactive). These organisations would be charged with responsibility for developing social enterprises – that is, businesses that trade or provide services but are established with the purpose of providing employment opportunities for local community members. Most importantly, APONT envisaged that these organisations would empower communities to determine ‘livelihood pathways’ for their community. The proposal deliberately draws on the language of international development programs and uses terms like ‘empowerment’ and ‘partnership’ to describe the relationship with local communities. Precisely how this would be achieved is not spelled out, but it would clearly involve contractual terms and contract management strategies that focused on the processes contracted providers used to engage with communities in the planning and conduct of activities. 5.3.5 COULD IT WORK? The CEEDS model is very well thought-through, reflecting the substantial effort put into research and consultation. Despite much of the context changing since 2011, the model remains highly relevant. There are, however, some issues that need to be worked through. These include: • If Tier 1 services remain in the context of the income support safety net, this would mean that complexities associated with Job Plans, assessments and interaction with DHS would remain. These could be addressed by removing the emphasis on penalties as the primary means of engagement – in the same way that former programs like PSP, JPET and the current youth Transition to Work program emphasise engagement without breaching. Activity requirements would need to be more closely aligned with ‘mainstream’ provisions – which would mean that while ‘Work for the Dole’ type activities might be a step on a path to Tier 2, its strict supervision and monitoring arrangements would not be generally applied. There would need to be greater flexibility in relation to the activity requirements so that cultural activity is able to play a greater role. This would enable requirements to be set that are more consistent with the requirements in jobactive, more individually tailored and appropriate – particularly for those with significant undiagnosed or unaddressed non vocational barriers. In turn, this would reduce the number of sanctions and the need to interact with Centrelink. In addition, the community would likely respond more positively to the program.

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• Tier 2 involves the payment of wages in place of income support (similar to the CDEP scheme) but here ‘employment’ is fully subsidised and the work is in activities organised by the provider. It would risk some of the issues that arose under CDEP and could also cause confusion, as there would likely be Tier 1 participants working for the dole alongside Tier 2 participants working for wages. The CEEDS model also seems to anticipate that at least a portion of CEEDS wages could be income-managed perhaps in a similar way to that deployed by CDEP providers, where payments for essential items were withheld by the organisation. • The model appears to require more Government funding than existing arrangements. However, there are significant administrative and bureaucratic costs in the administration of income support and compliance arrangements – both for providers and for DHS. In addition, there is a long term social and economic cost through the impoverishment, disengagement and disempowerment emerging under the current system. Existing wage subsidy arrangements could be simplified and consolidated to provide the Tier 3 wage subsidies. Payments to providers, meanwhile, could be re-cast within the existing envelope. Overall, the proposal may still require some additional investment, but it is likely to be less than it first seems and should generate long term benefits. • Some issues, such as those around long waits in the Centrelink phone queue and the issues around CCAs, will not be completely resolved by the CEEDS proposal. The issues with access to Centrelink may need to be addressed separately, perhaps with additional resources to DHS. Similarly, the service delivery arrangements could be implemented without significantly improving community engagement. The CEEDS proposal envisaged a central role for a single provider in each area, working in partnership with their local communities and using processes that empowered communities. Achieving that would require the development of contract terms and strategies to ensure that providers used appropriate processes for community-led decision-making over certain parts of the program, such as local community development plans and what activities should be undertaken within those plans.

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BOX 5: WOULD THE CEEDS MODEL MEET THE OBJECTIVES FOR REFORM? Objective:

Assessment:

1.

Requirements need to be adjusted so that most participants can meet them most of the time and to more closely align with the requirements of other income support recipients.

Yes. The proposal includes less onerous / more flexible requirements attached to income support payments, as well as strong incentives for people to move towards market-economy employment.

2.

Administrative arrangements should be simpler for both participants and providers.

Yes. The arrangements would move more people out of the income support system and onto a wage. Those who remain on income support would have less need to interact with Centrelink, because requirements would be easier to meet and if, as suggested, the program is shifted towards positive, rather than compliance-based, engagement.

3.

Participants / community members should have sufficient income to pay for necessities.

Yes - though many people would still incur financial penalties if they failed to meet the requirements.

4.

Communities should be empowered to make decisions about how the Program operates in their community.

Yes. The proposal includes community decisionmaking over key aspects of the delivery of the program.

5.

Incentives should encourage people to engage in unsubsidised work.

Yes. Top up and wages provide strong incentives to move out of the income support system.

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6.

OTHER SOLUTIONS

It is, of course, possible to develop other solutions to the problems in CDP. That does not necessarily mean scrapping the current program and starting again – rather, it means adjusting the existing arrangements so that the disruption association with large-scale changes can be minimised. Examples of the ways that some of the challenges in CDP could be addressed are discussed below. FIGURE 11: ONE GROUP’S VISION OF THE FUTURE

6.1

OBJECTIVE 1: REQUIREMENTS NEED TO BE ADJUSTED SO THAT MOST PARTICIPANTS CAN MEET THEM MOST OF THE TIME AND TO MORE CLOSELY ALIGN WITH THE REQUIREMENTS OF OTHER INCOME SUPPORT RECIPIENTS

• Work for the Dole requirements could be reduced from 25 hours to 15 hours, or providers could be allowed to negotiate activity requirements on an individual basis with each participant, provided that the hourly rate achieved (ie: total income support payment divided by hours) is equal to or above the minimum wage.

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• Mutual obligation activities could be more flexible. For example, the weekly requirement could be made up of at least 10 hours of supervised activity alongside other positive contributions to individual or community well-being (such as traditional activities, sports, attending medical or other appointments or training, taking kids to school) which could count towards the remainder. • Remove requirements / incentives for providers to recommend financial penalties. Instead, give providers incentives to make aggregate improvements in attendance and engagement – for example, if current participation is tracking at 30%, then link a portion of provider funding to achieving greater engagement in the following quarter or six month period. • Improve access to culturally appropriate medical and mental health services, so that those who should have reduced mutual obligations can access proper assessments and gather the evidence Centrelink requires. This could include, for example, extending existing mobile services. Additional protections need to be put in place for those who have not been assessed face to face, or where insufficient evidence exists of capacity to participate. FIGURE 12: ILLUSTRATION EXPRESSING SUPPORT FOR REDUCED WORK FOR THE DOLE HOURS

Reduce work for the dole requirements to 15 hours.

6.2

Same level of obligation in remote and non-remote. Move from 25 hours.

OBJECTIVE 2: ARRANGEMENTS SHOULD BE SIMPLER FOR BOTH PARTICIPANTS AND PROVIDERS

• The national compliance framework could be simplified, as was proposed during the term of the last Federal Parliament. That proposal would have replaced all financial penalties (connection failures, etc.) with the simpler ‘no-show, no-pay’ arrangements that apply to activities. This could be expected to increase the number of financial penalties applied, so needs to be balanced by other changes. As mentioned earlier, Jobs Australia does not support all of the proposed amendments in the Further Strengthening Job Seeker Compliance Bill 2015 but firmly believes that existing arrangements, which allow for the waiver of an 8-week non-payment period resulting from a serious failure, should be retained if a participant re-engages. • Compliance should only be used as a last resort for those on income support, with “no work no pay” only operating for those in wage-based service streams.

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• Significantly increase and extend the wage subsidies available for the employment of Indigenous people who live in remote areas. This could be expected to lead to more employment, including in social enterprises established by CDP providers, and move more of the current CDP participants out of the income support system and onto wages. • Adjust the requirements (as above), so that they are easier to comply with, resulting in fewer financial penalties and less interaction with Centrelink. • Improve access to Centrelink and other services (as above). • Change the funding arrangements so that providers have more certainty and are better able to budget for and manage quality activities, as well as to purchase goods and services that meet the individual needs of participants. CDP has seen a huge reduction in relevant training as providers are reluctant to allocate funds when they are depending on job seeker compliance to stay financially viable. FIGURE 13: CENTRELINK SHOULD BE ACCESSIBLE ON COMMUNITY

6.3

OBJECTIVE 3: PARTICIPANTS / COMMUNITY MEMBERS SHOULD HAVE SUFFICIENT INCOME TO PAY FOR NECESSITIES

• Refocus program rules so that providers are encouraged to use positive engagement strategies rather than being forced to recommend breaching. • Adjust requirements (as above), so that they are more proportionate and individually tailored, resulting in fewer financial penalties. • Provide a level of ‘basic income’ in remote areas, which is paid unconditionally. • Protect automated Centrepay deductions (generally rent, utilities and debt repayments) so that financial penalties apply only to discretionary funds. 6.4

OBJECTIVE 4: COMMUNITIES SHOULD BE EMPOWERED TO MAKE DECISIONS ABOUT HOW THE PROGRAM OPERATES IN THEIR COMMUNITY

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• Providers could be required to develop and regularly update community development plans with each community (similar to Community Action Plan requirements in the original RJCP). • Increased allocation of resources to create new opportunities for participation in social, cultural and economic activities that benefit local communities, such as the Community Development Fund under RJCP. • The Department of Prime Minister and Cabinet could introduce contractual terms requiring providers to engage communities in planning and decision-making on local activities, including establishing governance and advisory arrangements that include local people. • There should be formal and transparent consultation processes about changes to programs, so that communities and other stakeholders can have a say – not just those with privileged access to decision-makers. FIGURE 14: ILLUSTRATION OF MINISTER SCULLION LISTENING TO STAKEHOLDERS

6.5

OBJECTIVE 5: INCENTIVES SHOULD ENCOURAGE PARTICIPANTS TO ENGAGE IN UNSUBSIDISED WORK

• People receiving Newstart in remote areas could be provided with additional ‘Working Credits’, allowing them to retain their income support payments for longer as they transition into work. • Wage subsidies could be expanded to provide more opportunities to move into paid employment and to make transitions between seasonal/contract work and paid employment in the CDP scheme without going back to income support.

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7.

CONCLUSION

This paper has explored the problems with the current CDP arrangements and proposed some solutions. The set of recommendations developed by APONT, known as the CEEDS model, represents the most well-developed and comprehensive set of proposals that would address the issues with the current program. It is possible to envisage other solutions too. The most important thing is that many aspects of the current CDP must be changed, as the Program is currently causing more harm than good, and in areas where the alternatives to income support are, at this point in time, extremely limited. It is also of vital importance that a process of genuine and extensive consultation and engagement is embarked upon to frame and develop the details of a new or reformed program.

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APPENDIX A: LIST OF ATTENDEES AT THE JOBS AUSTRALIA CDP FORUM, 31 AUGUST – 1 SEPTEMBER 2016 Aboriginal Medical Services Alliance Northern Territory Aboriginal Peak Organisations Northern Territory ALPA Australian National University Batchelor Institute Campbell Page Limited

IS Australia/Victoria Daley Regional Council Jobfind Centres Australia Julalikari Council Aboriginal Corporation Kullarri Regional Communities Inc Marra Worra Worra Aboriginal Corporation MAX Solutions

Cape York Employment

Midwest Aboriginal Employment and Economic Development (MEEDAC) Incorporated

CatholicCare NT

Miwatj Employment and Participation

Community Bridging Services (CBS)

My Pathway

Central Desert Regional Council

Ngurratjuta/Pmara Ntjarra Aboriginal Corporation

Central Land Council

Roper Gulf Regional Council

Charles Darwin University

Tangentyere Council Inc

Complete Personnel

The University of Melbourne

Darwin Skills Development Scheme Inc.

Tiwi Islands Training & Employment Board

Housing SA

Tjuwanpa Outstation Resource Centre

Ironbark Aboriginal Corporation

Winun Ngari Aboriginal Corporation