Andrew Forrest is currently talking up the achievements of the Australian Employment Covenant (AEC), the scheme originally billed as seeking to create 50,000 jobs for indigenous Australians within two years.
In October 2010 — two years after the AEC was officially launched — myself and Dante Mavec examined the outcomes the scheme had achieved in that period. We were concerned about the lack of data available to assess the AEC’s merits, as well as the lack of transparency about the amount of public funds committed to the scheme.
More information has since come to light. According to the AEC’s website, employers have so far pledged about 45,000 jobs under the scheme. Forrest has said he is “quite confident” his target of 50,000 job promises will be met by the time the funding agreement with the Commonwealth government expires at the end of June.
But getting 50,000 job promises from employers is very different from getting 50,000 indigenous people in jobs. The AEC says the goalposts have not been shifted. It says the scheme was always premised on a three-way agreement, with the AEC aiming to build employer demand, employers committing the jobs, and the Commonwealth government training the indigenous people to fill them.
Exactly how many jobs have been filled is difficult to know. The AEC suggests that it’s about 4300, but because of complex difficulties with reporting, only a smaller number of these can be individually verified. Questioning in Senate estimates revealed that in February 2011 this number was just under 1800.
Understanding how many of these jobs have been filled as a direct result of the AEC is even more difficult. Some employers who are participating in the scheme had already developed Reconciliation Action Plans or been involved in Corporate Leaders for Indigenous Employment Projects. These schemes — that predate the AEC — encouraged employers to develop and implement strategies to increase indigenous participation in their workforce. So it is quite possible that they would have employed more indigenous people irrespective of their engagement with the AEC.
If the needs of indigenous job seekers are now being better met, knowing which scheme contributed to that outcome may not be important. But isolating the effects of the AEC is useful if we want to know whether it is an approach that should be extended. It is also important if we want to assess the value for money of public investment.
Senate estimates has helped us there too. The funding provided to the AEC by the Commonwealth government has included a grant of just over $4 million to help establish the organisation. But the agreement also allows for outcome payments to the AEC on the basis of three things: job promises, job placements and job retention to 26 weeks.
Because not all of the 4300 job placements identified by the AEC are individually verifiable, the organisation has only been able to claim outcome payments on a subset of these. A rough calculation on the basis of the figures revealed in Senate estimates suggests the AEC would have been able to claim about $290,000 for the 1761 job placements and $31,000 for the 286 job seekers who had remained in employment to 26 weeks. Additional outcome payments for job promises and placements secured before July 2011 — and for retention of those jobs to 26 weeks — can be claimed until March 2012.
Interestingly, though, the AEC has been able to claim much more on job promises. Again, making a rough calculation on the basis of job promises listed on the AEC website, the organisation would so far have been able to claim about $3 million in outcome payments for these pledges. Andrew Forrest’s concerted last-minute efforts to boost the number of job promises before the funding agreement’s expiration has not only given him a positive media story, it has also substantially increased the outcome payments the AEC is able to claim.
This is not to suggest any impropriety. Indeed, there is no indication that such outcome payments are used for anything other than reinvesting into AEC operations.
Nonetheless, the ability to claim outcome payments on job promises would appear unusual, particularly because the AEC acknowledges that they may never know how many of these promises turn into actual job offers, let alone jobs for indigenous people.
The number of jobs currently listed as available on the AEC’s online Jobs Board is about 900, with 5000 more forecast to become available in the next 12 months. That leaves perhaps 35,000 jobs that employers presumably plan to offer in subsequent years. But, employers even with the best of intentions may have pledged to take on a certain number of indigenous job seekers only to find that a change in their circumstances means the expected vacancies do not arise.
It is not clear that outcome payments for job promises are a wise investment in this context.
Forrest and the AEC are right that we should be looking at every available option to increase indigenous employment opportunity. But we should maintain some analytical scrutiny along the way.
Kirrily
Thanks for keeping us informed about Twiggy’s project.
I see that your Oct 2010 analysis found that “However, there are very few jobs listed in other parts of the country where there are very high concentrations of Indigenous unemployed. For example, other than two jobs in Katherine and one in Port Hedland there are no identified jobs in the remote parts of the Northern Territory or Western Australia” (p.17).
Is there any further detailed information about who is offering jobs in remote regions, where and what type of work?
Bob Durnan, Alice Springs
Let me say at the outset that the people I’ve been in touch with from the AEC are good people trying to do worthwhile work. Let me also say I have had nothing to do with Forrest.
However…………….
Forrest again shifts the goal posts. When the AEC was launched and to this day, its objective was “….securing 50,000 sustainable jobs for Indigenous Australians.” this is still on their website. Not pledges – jobs. When I last spoke to the then CEO Mal James he said the AEC had found around 700 jobs Australia wide.
Now you might say good on Forrest for having a go or at least he’s doing something but I demur. What I think he’s doing is spending public money that could be put to a useful purpose, grandstanding at the expense of a people he purports to love and respect, entrenching the idea in Aboriginal minds that white people talk lots and do little and reinforcing a general community view that Aboriginal employment is an intractable issue that even a charmer like Forrest backed by the Commonwealth purse can’t fix.
The AEC has no strategy to go from the desire of an employer to employ Aborigines to that employer actually employing them. They don’t have a plan and can’t provide support to employers like job coaches to support managers, mentors for Aboriginal employees or cultural awareness training for organisations and staff – all vital to successful outcomes. The AEC talks often about moving to the next phase beyond pledges but they just don’t seem able, despite the money, resources and contacts theorically at their disposal, to actually do anything.
Has anyone got a guarantee in writing, that aboriginal people will be paid the award rate? I’ve heard from aboriginal people that there can be people working side by side in the NT, and the aboriginal workers is only paid the dole – half of which is quarantined? I call the despicable. Wouldn’t surprise me is Forrest adopted the same ‘plan’?
Excellent article. It’s absolutely crucial to keep up real scrutiny when dealing with such claims.
Most of all when such empty claims come from Andrew Forrest or anyone associated with him. Lots of propaganda and dodgy deals for the Australian taxpayer are his expertise, while lining up his own pocket!
Meanwhile… precious public funding is severely lacking for many essential health, educational and cultural services that would make a world of difference to needy people, let alone needy Indigenous people.
What’s new?: the ALP wasting money and good intentions, just to keep the business lobbyists onside… Just like the racist NT Intervention: no more than a useless waste of money for unconvincing propaganda, with the occasional good by-product almost by fluke!
Excellent article.
Depressing.
No easy answers on this stuff, but the AEC looked promising.
There should also be considerable scope for greatly increasing employment in the NT and the far north through processing the meat currently being exported live. The Government should be directing this change. Would take a few years but can be done – should be done.