You shall mark
Many a duteous and knee-crooking knave
That, doting on his own obsequious bondage,
Wears out his time, much like his master’s ass,
For naught but provender, and when he’s old,
cashiered.
Othello, Act one, Scene one.
The ANAO recently released a Performance Audit on remote employment
programs (link here). In my view it
presents a devastating account of bureaucratic and ministerial incompetence,
albeit one that spans seven years, two ministers and a change of government.
Before seeking to unpack the ANAO findings, it is worthwhile providing some
context for what we are dealing with.
The existing program, known as the Community Development Program (CDP)
operates only in remote Australia, and is simultaneously a program ostensibly
aimed at assisting unemployed citizens to find employment (thus an employment
program) and the mechanism by which income support payments are provided (a
social security program). It has around 41,000 participants of whom around 86%
or 35,000 identify as Indigenous. On 1 June, The Australian reported (link
here) that the Government was planning to reintroduce ‘mutual obligation’
into the scheme by requiring participants to ‘work for the dole’. These requirements
fell by the wayside during Covid lockdowns and are not being strictly enforced.
Arguably, the job search objective is substantially misguided given the
structural absence of a market economy across remote Australia (with the
exception of major towns and mine sites). Attempts to enforce job search
requirements have been implemented punitively in the past and led to astronomical
levels of breaches which involved suspension of income support payments. At the
same time, The Australian article mentioned above cited statistics indicating that
in 2022-23, only 603 participants were placed in jobs lasting 26 weeks or more,
that is a job placement rate of only 1.4%. Moreover, the implicit assumption
that suspension of payments will incentivise compliance are based on assumptions
that do not necessarily operate in Indigenous cultural settings.
There is in my view a strong case for undertaking a rigorous and
independent policy review or evaluation aimed at unravelling the implicit
assumptions that underpin the existing CDP and perhaps the future Remote
Jobs and Economic Development Program (RJEDP) announced in May this year by
the Prime Minister (link here). In my view
there is a case for splitting CDP/RJEDP into its constituent parts, an income
support program and a job creation program. Such a shift would nevertheless require
some deep policy consideration to consider the best way to implement each
element. IT is already apparent that the current outsourced model for CDP is
not fit for purpose (see below). It
seems likely that neither the Government nor the NIAA understand these dynamics
given that they have been unable after six years notice to develop a clear
program logic for the new program (see ANAO para. 4.39 to 4.56).
The Productivity Commission Dash Board on Closing the Gap lists two
targets related to employment: target 7 (link here) and target 8 (link here):
Target 7: By 2031, increase the
proportion of Aboriginal and Torres Strait Islander youth (15-24 years) who are
in employment, education or training to 67%. Nationally in
2021, 58.0% of Aboriginal and Torres Strait Islander people aged 15–24 years
were fully engaged in employment, education or training (figure CtG7.1). This
is an increase from 57.2% in 2016 (the baseline year).
However in remote and very remote regions, since 2016, there has been a
regression, with the proportion dropping to 45.2% in remote regions and
dropping 30.2% in very remote regions. Clearly in remote regions, for the 15 to
24 year cohort, government programs in relation to employment, education and
training are failing to gain traction, and require adjustment and/or complete
overhaul. For comparison the national statistic for non-Indigenous members of
this cohort is 79.9%. The CtG target is 13% below current mainstream levels.
Target 8: By 2031, increase the
proportion of Aboriginal and Torres Strait Islander people aged 25-64 who are
employed to 62%. Nationally in 2021, 55.7% of Aboriginal and Torres
Strait Islander people aged 25–64 years were employed (figure CtG8.1). This is
an increase from 51.0% in 2016 (the baseline year).
Nationally in 2021, the proportion of Aboriginal and
Torres Strait Islander people aged 25–64 years who were employed was highest in
major cities (62.1%) (figure CtG8.4). The proportions declined as remoteness
increased, [down to 45.5% in remote and] down to 35.0% for people living in
very remote areas. Since the 2016 baseline year, the employment rate increased
in all areas, except for people living in very remote areas where it decreased
(less than one percentage point).
The national figure for non-Indigenous Australians was 77.7% in 2021, so
the 2031 CtG target is itself only partial.
The bottom line is that under the national Agreement on Closing the Gap,
Australian governments have set employment related targets well below
mainstream levels for all age groups, and under current policy settings are
making, at best, insignificant progress on achieving even those limited targets
in remote Australia in particular. Of course it is worth remembering that
the achievement of the national target is feasible without it being met in
remote Australia where the deepest disadvantage occurs.
This background demonstrates why the effectiveness of the CDP and its
replacement is crucial both to the life opportunities of tens of thousands
of individuals, but also to the social capital of remote communities. The ANAO
performance audit of remote employment programs is thus both timely and
important as it shines a light on these issues notwithstanding that its focus
is primarily on efficiency and not effectiveness.
The ANAO report
The background to the performance audit is spelt out in the Summary and
Recommendations section of the ANAO report:
3. A 2017 Senate committee inquiry into the CDP
concluded that the program should not continue in its current form due to
negative impacts on participants and their communities. Since 2017, the
Australian Government has signalled its intent to fundamentally reform or
replace the CDP through various announcements and measures. On 13 February
2024, the Australian Government announced a new ‘Remote Jobs and Economic
Development Program’, which would commence in the second half of 2024 and fund
3,000 jobs over three years.
Rationale for undertaking the audit
4. Remote employment programs aim to assist people in
thin labour markets to secure employment. Since 2015 the CDP has been the
primary Australian Government remote employment program. The CDP covers 75 per
cent of Australia’s land mass in over 1,000 communities. In 2022–23, $384.6
million was expended on CDP payments. As at June 2023, there were approximately
41,000 people participating in the CDP, of whom approximately 86 per cent
identified as Aboriginal or Torres Strait Islander.
5. Since 2017, successive Australian Governments have
stated an intention to fundamentally reform or replace the CDP.
6. This audit provides the Australian Parliament with
assurance on whether the NIAA has been effectively managing the transition from
the CDP to a new remote employment program, including its processes to design a
new program.
I don’t propose to undertake a comprehensive analysis of this
performance report. The overarching conclusion, spelt out in para 9, was that the
NIAA’s processes to design and transition to a new remote employment program,
as at January 2024, were partly effective. The report goes into
considerable detail regarding the history, various internal processes, the design and implementation of a
series of trials, and the surprising and in my view extraordinary absence of
management oversight brought to bear throughout the transition process from
2017 to 2024. I recommend interested readers take a closer look at the meticulous
ANAO analysis. At virtually every point, they find that the NIAA’s performance
in the assigned tasks involved in transitioning to a new program was ‘partly
effective’.
A major theme of this post is that the ANAO in focussing on process
(efficiency or performance) it has understated the extraordinary failure of the
CDP to achieve positive outcomes. Just to reinforce the illogicality and
inadequacy of some of the ANAO assessments, it is worth quoting some text from
para 15 of the ANAO report:
In 2023, the NIAA extended 63 out of 64
existing CDP provider grant agreements, despite 41 per cent having an average
performance rating of ‘below requirements’ and despite failure of some
providers to ‘fully meet’ unclear selection criteria. Value for money
associated with each grant agreement extension, particularly for those
providers with a history of underperformance, was not clearly articulated. The
NIAA did not take advantage of the opportunity presented by agreement extension
negotiations to address provider performance issues in agreement terms and
conditions.
Not only do these contract extensions involve over five hundred million
dollars in Commonwealth expenditures, but they fundamentally breach an
essential requirement for outsourced public policy: the crucial requirement for
rigorous regulation of private sector providers. Without such regulatory
oversight, the rationale for outsourcing these functions falls away. Partly
effective indeed! For those interested in the excruciating detail, I point you
to paras 2.49 to 2.72 in the ANAO report, including what I consider to be a
pathetic recommendation for remediation into the future.
Unfortunately, what the ANAO does not do is take the final step and make
an assessment of the policy outcomes to date, and the likely policy
outcome once the program is finally in operation in the second half of this
year. In a previous post (link here), I discussed
how this is a function of the ANAO’s limited remit and its concern not to stray
into political criticism. Nevertheless, what matters to both the 41,000 CDP
participants at any point in time, and to the broader community, is whether the
proposed changes will produce better outcomes, not whether the processes
adopted were up to scratch. Of course, good processes are important, even
necessary, but they are not a guarantee of good outcomes.
In terms of an outcome, after seven years of procrastination, the ANAO
had this to say regarding the design of the new program announced by the Prime
Minister this year:
21. The NIAA collaborated with other government
agencies in the development of draft policy advice in 2023 and 2024, however timeframes
were too short to allow for effective collaboration. Design issues
requiring cross-government collaboration were not resolved. In February
2024, the government announced a ‘Remote Jobs and Economic Development
Program’, which would commence in the second half of 2024 and fund 3,000 jobs
over three years. Advice provided to government in January 2024 about high-level
features of the new program drew on some findings from consultations and
trials, however, the high-level features of the new program (including the number
of jobs to be created) were not supported by modelling or other evidence.
At the time of its announcement, there was no program logic or evaluation
framework for the newly announced program. (See paragraphs 4.39 to 4.56)
It is crystal clear that the pre-budget announcement was conjured for
its political effect rather than developed methodically. As I previously noted
(link
here), the Prime Minister’s announcement of the new program was built
around the proposition that the CDP was a failed program, and that the
government would move to fully fund up to 3000 jobs. Yet the current state of
play leaves 37,000 participants on the CDP and the new scheme supposedly being
implemented in the second half of 2024. There is an extremely strong case for
governments to fund real jobs across remote Australia, but 3000 is pathetically
unambitious, and appears designed to create the appearance of action and reform
rather than actually deliver it. According to the ANAO report, while the
Government stayed silent, the NIAA website revealed that the new jobs funding
was for three years only, making the renewal of the program without an
evaluation plan contingent on the next government
My take-out after reading the ANAO’s detailed analysis was that the NIAA
was effectively asleep at the wheel for long periods since 2017, that its
Executive Committee and senior management were not monitoring the performance
of the CDP and nor were they driving the process of designing and implementing
a new remote employment program, that its Audit and Risk committee was being
drip fed rather than proactively asking the hard questions, and that the NIAA
Evaluation Advisory Committee were missing in action. Moreover, the complex stream
of ever-changing cross agency coordination committees documented in the report
clearly failed to produce a timely outcome. Of course, one might reasonably
ask: where were the responsible Ministers while this fiasco was unfolding?
The bottom line is that there is nothing in the announcements to date
which will shift the dial on the extraordinary underperformance of both the
former LNP and the current Labor Governments in relation to CtG targets 7 and 8
most particularly in remote Australia.
Unfortunately, there is a game being played here whereby governments when
not under pressure from powerful interests resort to flim flam and a song and
dance routine aimed at persuading interested parties (and the commentariat
interpreting for the public at large) that they are doing something; the ANAO
analyse performance and identify a range of process deficiencies (but not
effectiveness); the agency being scrutinised welcomes the report and promises
to do better (assisted by the fact that the ANAO recommendations relate to
processes only), and the media decide the issues are too complicated to warrant
close reading and effective reporting. Rinse and repeat.
Finally, I should point out the potential for the ANAO’s core language across
the breadth of its performance reporting to mislead. By using an implicit
rating system of effective, partially effective, or ineffective to assess
agency compliance with the relevant rules governing performance (ie efficiency
or process), it subliminally signals that it is assessing outcomes (ie
effectiveness). As I pointed out in a previous post, the ANAO does not assess
effectiveness, and leaves that to evaluations, which are overwhelmingly
undertaken by agencies and are rarely truly independent, even when outsourced
to reputable major consulting firms (did anyone mention PwC ?; or the recent
revelation by Greens Senator Barbara Pocock of consulting firms providing work
pro-bono to agencies? (link here $)). For anyone
who doubts my assessment that the Commonwealth public sector evaluation
framework is not fit for purpose, I suggest they ask themselves, why is it that
neither the previous nor the current Government have provided a response to the
Productivity Commission’s 2020 report: Indigenous Evaluation Strategy (link here). It has been
allowed to sink without trace.
For what its worth, my effectiveness ratings of the various actors’
involved in reforming the delivery of remote employment services are as
follows: NIAA entirely ineffective; relevant Governments and ministers:
regressively ineffective. The accuracy of my assessment will only be determined
in around five to seven years in the event (far from guaranteed) that an
independent evaluation of the Remote Jobs and Economic Development Program is
undertaken, and it has become clear whether the current regressive trends in
achieving targets seven and eight of the Closing the Gap process have been
reversed and the modest targets achieved. I sincerely hope that I am wrong. It
is however a very poor reflection on our systems of governance oversight and
policy development that we do not have access to an independent evaluation of
the CDP now.
3 June 2024
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