Today employment service providers across the country, large and small, are being told by the Department of Employment whether they’ll have a contract after 30 June under the Government’s revamped “Job Services Australia” employment program.

The Government has unexpectedly found itself with a problem consequent to the nature of the current Job network service contracts, nearly all of which could not have been extended beyond 30 June. Julia Gillard this morning was blaming the “incompetent Howard Government” for that. In fact the contracts were meant to be contested every three years to ensure taxpayers got value for money and clients got the best possible service. It’s hardly the Coalition’s fault that they were unaware in 2006 that 2009 would be a recession year.

Nevertheless, those who miss out under the new tender process will complain loudly, while the winners won’t be heard from. Unsuccessful tenderers will have to close, throwing staff out of work themselves. So far, the major complaints have been about the entry of two UK firms, expected to be A4E and Reed Employment.

As Crikey reported last week, there are serious concerns about the capacity of foreign firms to provide localised services or services integrated with the provision of support services, particularly given the strong emphasis of this Government on training. There’s also, to be blunt, a basic resentment toward foreign newcomers.

Yesterday the Government tried to head off some of the more damaging speculation, with Employment Participation Minister Brendan O’Connor sent out to provide a “national overview” of the new contracts, without providing any details about individual tender outcomes, which will only be released once everyone is informed.

It was not an especially successful effort, as today’s press coverage suggests (Patricia Karvelas here, Misha Schubert here; Alexander Symonds and Sophie Morris in the AFR). O’Connor is not the most polished media performer and he struggled to stay on message under vigorous questioning from journalists starved of Parliament House action in recent days.

O’Connor first tried to establish a defensive perimeter with some numbers: 141 providers and 48 subcontractors; 72% of successful contractors are existing providers; about the same ratio of not-for-profit to private providers has been maintained; two new (unnamed) overseas providers will have “less than 2% of employment services”. The assembled journalists, led by Alison Carrabine, smashed through the outer defences very quickly. How many providers would miss out and how many jobs would be lost, they demanded to know.

O’Connor rather clumsily explained the basically sound point that, given the burgeoning need for employment services, net employment in the sector was likely to go up even if some providers missed out. But he refused to admit to any numbers. Some current providers hadn’t tendered, he said. Others would be sub-contracted by successful tenderers. Negotiations were continuing. This only goaded the journalists and it became a game of trying to get O’Connor to give a number. It became clear about 60 current firms who tendered for contracts had lost out, but the Minister was refusing to let any digits pass his lips, so to speak.

For each number that he did present there were alternative numbers. If 72% of successful tenderers are current providers, more than a quarter are new firms. The new overseas firms might only have 2% — but was that 2% of the full $4b contract, or $80m? O’Connor wouldn’t clarify. He was more eager to explain that the Government had integrated a range of previously fragmented programs into a single new employment program better aimed at meeting special needs and providing training opportunities. All of which was true, but of limited interest.

There’s nothing wrong with a tender process, even an ill-timed one, but it’s a tough sell, especially when there are real questions about the ability of successful tenderers to do as good a job as the ones they’ve replaced. Julia Gillard probably could have sold this, but O’Connor was on a hiding to nothing. That’s life as a junior minister, to take one for the team. And O’Connor took plenty yesterday.

Peter Fray

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