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Federal

Jun 4, 2010

Rudd overpromised on indigenous unemployment

Tthe Australian government might have exacerbated the expansion of the Indigenous unemployment gap, report Professor Jon Altman and Dr Nicholas Biddle.

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Yesterday, employment data for 2008 and 2009, the first two years of the Rudd government, were released. And the figures suggest that rather than delivering on their ‘closing the gap’ pledge, the Australian government might have exacerbated the expansion of the indigenous unemployment gap it has committed to halve.

In early 2008 the incoming Rudd government made its national apology to indigenous Australians and with rhetorical flourish the prime minister launched the Closing the Gap policy framework. This admirable document includes six statistical targets to either reduce or eliminate life expectancy, mortality rate, educational and employment gaps between indigenous and other Australians.

Quickly the Council of Australian Governments was coaxed to adopt this framework later incorporated into the National Indigenous Reform Agreement (Closing the Gap).

A key target is to halve the gap in employment outcomes between indigenous and non-indigenous Australians within a decade. This will require an estimated reduction in the gap in the employment rate (the employment/population ratio) from 24% to 12% through the creation of an estimated additional 100,000 jobs in 10 years, or 10,000 jobs each year. A neat indicative trajectory provided at Schedule G ‘Progress towards the Closing the Gap targets’ illustrates how this statistical outcome is to be achieved.

An early warning was provided to the government in April 2008 that trends from 1971 to 2006 showed that this goal was unrealistic and possibly unachievable; the warning was ignored.

The annual ABS publication, Labour Force Characteristics of Aboriginal and Torres Strait Islander Australians: Estimates from the Labour Force Survey is the key instrument available to track the employment situation of indigenous people. Data is available annually going back to 2002, although the release for 2008 was delayed due to issues with benchmarking.

For a government that has committed to a managerial evidence-based approach to policy making the data released yesterday provides an early opportunity to use official statistics to gauge progress in closing the employment gap at the national level. The ABS is careful to warn that all labour force survey estimates are subject to sampling errors that require some caution in interpretation, hence our national focus.

Some headline information provides a damning indictment of the COAG strategy. Consider the following:

  • The unemployment rate rose substantially from 13.8% of the indigenous working-age population in 2007 to 18.1% in 2009
  • The employment/population ratio (the employment rate) fell from 50.4% in 2007 to 47.6% in 2009
  • The estimated number of indigenous people employed decreased from 163,200 in 2008 to 161,200 in 2009, a decline of 2,000
  • The gap in employment percentages between indigenous and non-indigenous Australians of  23 percentage points in 2007 increased to 24.4 percentage points in 2009
  • The increase in the gap in unemployment rates was even greater, growing from 9.6% in 2007 to 12.6% in 2009.

The indigenous sample in the labour force survey is relatively small. Apart from the rapid rise in the unemployment rate, it is difficult to tell with complete certainty whether the other differences are statistically significant. Indeed, due to cuts to the ABS’s budget ensuring statistical certainty has become more difficult, precisely when government accountability for indigenous outcomes is supposed to improve. What we can say with certainty is that the government is a long way short of the 10,000 additional jobs needed to be on track to halve the employment gap by 2018.

One might charitably blame the deterioration in indigenous employment on the global financial crisis, but such an explanation would at best be partial. In fact owing to the nation building and jobs plan of early 2009, non-indigenous employment levels have hardly deteriorated. Yet despite warnings that recently recruited indigenous people might warrant special assistance and be the first dismissed, the Australian government did nothing special for those arguably most vulnerable to the GFC.

Indeed, it is likely that through two of its own policy interventions the Australian government might have exacerbated the expansion of the employment gap.

First, in August 2008, the prime minister quickly jumped to endorse the goal of the Australian Employment Covenant (the Forrest Plan) to generate 50,000 new private sector jobs in two years, or 25,000 annually, and to underwrite it with training support. This was despite statistically-based warnings that such targets were fanciful, a claim that is sadly vindicated today with only an additional 400 jobs in total (public and private) evident in 2009 compared to 2008.

Some of the worst outcomes are evident in resource-rich Queensland and Western Australia where the indigenous unemployment rate exploded to 20.8% and 20.7% respectively in 2009, from a more modest 12.7% and 11.1% respectively in 2008. In the space of a year, Western Australia went from having one of the best indigenous unemployment rates to one of the worst. The current dispute between the government and mining companies over the Resource Super Profits Tax demonstrates the potential risk for indigenous people associated with state abrogation of responsibility for meeting its employment targets to the corporate sector.

Second, in December 2008, at the worst possible time, the Rudd government committed to continue the Howard government attack on the Community Development Employment Program (CDEP), a workfare program that provided flexible employment opportunity. This program had been indiscriminately abolished in urban Australia in 2007; then the new government expanded the abolition program to regional Australia from July 1, 2009 to remote mainland Australia from July 1, 2011 and to the Torres Strait from July 1, 2012. The predicted dire consequences of the abolition of CDEP without provision of a matching number of proper jobs has again, sadly, been proven correct: indigenous unemployment rates of 19.4% in major cities and 20.5% in regional areas bear testament to this poorly considered ‘reform’.

There is no need to have sympathy for the Australian government and its risky reform agenda — it has been warned time and again. We have much more sympathy for indigenous Australians. The negative effects of the COAG National Indigenous Reform Agreement on them have been clearly exposed by the labour force statistics. Indigenous Australians would not be surprised by these findings; many, especially in regional and remote regions where community organisations retain some voice, have been lobbying minister Jenny Macklin about the deterioration of their employment situation.

Unfortunately, indigenous people are used to grand promises and subsequent failure — Closing the Gap is little different from Bob Hawke’s failed promise of employment equity by the year 2000, or John Howard’s failed promise of practical reconciliation and equality in employment outcomes (by when, cleverly unspecified).

There is an urgent need to move beyond performative employment goal setting, be it by the Australian state or by elements of the corporate sector, or by both in unison. Such action is costly and damaging and perpetuates a climate of policy failure.

Instead we suggest hard policy work is needed to determine more realistic targets and better targeting of a suite of programs tailored to the diverse circumstances and aspirations of all indigenous people. The current highly technical COAG approach is clearly not working; the Australian state needs to enable community — and regionally-based employment action based on what is currently successful.

This will require more investment in development and a rapid policy backflip on the abolition of CDEP, before 2011 when thousands more in remote Australia will shift from workfare to welfare, once again widening the employment gap.

What is currently occurring is unconscionable; the supposed project of employment improvement based on top down, centralist and, ultimately, ideologically-driven policy making is not decreasing indigenous unemployment and associated poverty and despair, anomie and social cost. Official statistics tell us the employment gap is probably widening.

The Australian nation should demand better and, brandishing ABS factual evidence, hold the Rudd government and its bureaucratic machinery accountable.

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13 comments

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13 thoughts on “Rudd overpromised on indigenous unemployment

  1. SBH

    The supply side of this equation is a small problem compared to the demand side. Employers do’nt hire indigenous people. They don’t for various reasons including racism, poor targetting of ads, poor reputations in the community, innadequate evaluation of skills and abilities and lack of direct connection with indigenous communities. And EVERY TIME I meet with people they say the AEC will fix the problem.

    Ultimately, the only thing that lifted rates of women in the workforce was legislation. Its about time that legislation is passed to ensure that Aboriginal people are treated fairly by the labour market instead of equally.

    Thanks for a great piece John and Nicholas

  2. davidk

    I w as a little sceptical of the validity of Twiggy’s plan at the time. I wonder how long it will be before the RSPT is blamed for the winding back of this proposal.

  3. Legrosbisson

    Andrew Forrest’s initiative supplements the efect of a Minerals Council of Australia MOU with the Commonwealth to lift Aboriginal employment in the resources sector, especially in the remote areas where mines and Aboriginal communities coincide. The current MOU was recently renewed, following a sustained effort by industry over a decade.

    But the industry was apparently in despair over the Commonwealth’s failure to meet its commitments under the first five year MOU. Many resources companies have given up on the byzantine government employee assistance arrangements, covering all costs and hiring their own experts. There was as a result reluctance to sign the recent renewal. A recent MCA study forms the basis for a current MCA assertion that Aboriginal people would be about 1.2 billion dollars better off via improved employment if the Commowealth had met its employment training and mentoring commitments under the first MOU.

  4. David Thackrah

    Nothing has changed since the 1950’s. The aboriginal people “have their own mind” on the issue of working in the standard Australian pattern, despite having fine minds and an ability to focus on work at hand if they so wish.

    If a solution as to precise equality is to emerge, it will have to come from the “cousins” themselves. They are loyal Australians with passion for the natural environment. Their thinking is not all about the 40 hour week or award wages.

    I do think the furtive introduction of “off-shore” labour cuts across the intention to employ indigenous people, who can also be engineers and safety officers as well, as it appears contract off-shore labour deflects on-costs due to Australian labour.

  5. SBH

    Legrosbisson – yeah that’s right mate, it’s the governments fault. well spotted.

  6. Boerwar

    It is a pity that the stats don’t provide insight into the dynamics of what is happening. In particular it would be interesting to know what happened in relation to the old CDEP numbers and the new numbers in relation to jobs that were created out of the CDEP funds. The numbers involved are large enough to have made a significant impact on the percentages.

    Another stat that would be available would be to have a look at the number of Indigenous people employed in the APS. I would have thought that this is the easiest and most direct area for the Commonwealth Government to have a direct impact on Indigenous employment.

    I would not be holding my breath.

    Anyway, time for a properly focussed study and yet another report, I suppose.

  7. Boerwar

    Whoops. I was commenting on the short article in crikey, not the full one.

  8. Marion Scrymgour

    I thank Jon Altman for once again placing his measured and diligently researched assessment into the public domain. He has been sounding the same warning alarm for some years now, and had alreading influenced me when back in October 2007 I made these comments about CDEP:

    “Unlike any other in the western world, the Howard Government, as part of their response to the National Emergency, has embarked on a deliberate policy of moving people from work to welfare. In their bid to control the incomes of as many Aboriginal people as possible – and discovering that CDEP is classified as waged income, and not welfare – they are in the process of dismantling CDEP, and announced it as part of the intervention on 23 July. For people on CDEP, that means being told their wages – earned through the sweat of the brow are to be abolished, and they are to be moved back to Work for the Dole, or short term training programs. To be sure, some will get full time jobs – however almost exclusively in the public sector at local and Territory Government level. However, some 7,500 people currently on CDEP, some 5,500 people will be thrown out of work. This will push the Aboriginal unemployment rates in the Territory to over 50 per cent, and in remote areas to 75 per cent. I have been astonished at the way in which the Federal Government – and Minister for Workplace Participation Sharman Stone – has been able to get away with this – and convince the media in particular that what they are saying is anything other than a lie and a hoax. She has continually been able to get away with stating that CDEP is welfare – when it is in fact an employment program that has been in existence for 30 years. She has continually referred to CDEP as “sit down money”, when in fact CDEP was created specificially to get people off the dole – “sit down money” and into work. She re-invents history, and she has got away with the oft-repeated lie that people now on CDEP will be “transitioned” to “real jobs” when only a fraction will successfully get jobs. And the media – and initially Federal Labor – have swallowed the lie. At least Federal Labor has been persuaded by its Territory parliamentary representatives to ressurect a reformed CDEP if they are elected”.

    To my great regret, that last bit didn’t come true. Instead the current Federal Labor Government did a renaming trick with CDEP abolition/reform that was similar to what they have done with the Waste Management facility legislation. The so-called “reformed” CDEP programs that are living on borrowed time in the Territory now bear little resemblance to the true CDEP programs that existed before the intervention and have really just served to formalise the “workfare to welfare” transition that Jon Altman refers to. The grotesque stupidity of the prohibition on “top-up” reflects a particular mindset that has taken root in the current Ministers office – something like: “It takes a State to fixed a failed state”. Big Government rules ok.

  9. Boerwar

    So, did the 7500 CDEP places that were replaced with 2000 jobs equal a net loss of 5500 jobs in the employment stats?

  10. Boerwar

    Nationally, there has been a loss of around 2000 jobs. If jobs were lost because of the end of CDEP, then the net change in jobs would be -7500 CDEP+2000 replacement=5500 CDEP losses, offset by increases elsewhere of 3500, to lead to a net loss of 2000.

    Not sure if these sums mean anything at all, but would be very interested in knowing if not.

  11. kayt davies

    Great article and great comments.

    CDEP was not problem free but there were better solutions available other than canning it. One of the suggestions I heard that seemed to make a lot of sense was making it possible for CDEP wages to be paid for work done, rather than hours worked. Outcomes based payments. $X per hectare mowed, road graded, shed built, bag of rubbish collected. This would have solved the issue of timesheet rorting that happens in remote locations where it is not physically possible to have reliable overseers looking over every shoulder.

    This would have started to address the work ethic issues that get tactfully called “barriers to employment” while also allowing the flexibility that Indigenous workers claim rights to on cultural grounds. Overall the system is currently a mess and the money being thrown at it to keep everyone quiet about it is just going to make it harder to tidy up in the long run.

  12. Charlie McM

    So government persues policy when evidence indicates error but decides not not adopt available alternatives. That is the definition of folly put by Barbara Tauchman in her essays on how seemingly omnipotent powers are incrimentaly drawn into an imbroglio and are eventually humiliated by much smaller mobs. Has government seriously looked ahead to a decade or so hence at a plan B for gap as wide as ever ? Government then would essentialy own a swag of racially homogenous centres of inequity, like nothing prevoiusly seen in Australia although detention centres come close. The police stations are bening built now and security could be the employment growth category.

    Policy that concentrates NT Aboriginal folk into large centres and unwittingly brands them with all manner of mandatory controls, will diminish clan and linguistic identity strengthening a racial one. Hopelessness and rage in communities is being expressed in self harm, suicide and crime but that internalization of despair may change. A deep resentment could fester and be projected outwards onto a ‘remote’ government or wider Australian public. Warning about such a scenario scenario was the gist of my submission to the ER review. It elicited no response so maybe its too far fetched to be taken seriously. Whatever the eventuates in this huge experiment by government the chances of disasterous policy failure are not low.

    Policy needs to be nondiscriminatory and have the sense of being owned by the people its for. Communities must cease being defined as remote and every effort made for integration so that they become more like proper towns. Inducing and hiring the kind of staff who would make their lives in the communities would be a good start.

    Government in these times, stuffed with management staffers tend to believe too much in the ability of government to fix complex problems from afar. Distance buggers perception, increases costs and mitigates againts responsibility being taken at the source. Local initative that could generate a real local economy is stymied by layers of imposed regulation it can do nothing about.

  13. David Coe

    In the community sector we have known that this government has displayed little concern about developing the capacity of individual Aboriginal and Torres Strait Islanders or groups.
    Personal experience shows the funding levels to reach the community have declined since the loss of Howard!!!!
    Their policies and the implimentation of those policies is depriving the community of resources to build capacity in he community or foster individuals who have multiple and serious barriers to gaining employment outcomes.
    As a long time Labor supporter I am at best dissapointed by the circumstances highlighted in this article. Facts that have been obvious to people working within the community sector for some time.
    Kevin, it’s time (to change the direction of where you are heading).

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