Indigenous jobs plan fails to realise promise

A federal government headline jobs program is costing a fortune to administer but failing badly.

The federal government’s headline indigenous jobs program, the most expensive component of the Indigenous Advancement Strategy, is costing a fortune to administer but failing badly, with fewer than half of 37,000 program participants fulfilling their mutual obligations.

The $1.6 billion Remote Jobs and Communities Program has delivered only about 2500 six-month job outcomes in the past two years.

The scheme was recently rebadged the Community Development Program and subjected to greater performance requirements. But providers say it is dysfunctional and will be even more unworkable once the changes come into effect at the start of next year.

The CDP is delivered across 60 remote regions by 38 organisations, more than 60 per cent of which are at least half indigenous owned. It requires participants to engage in regular “structured” or “work-like” ­activities in return for Centrelink benefits.

Since the program began under Labor more than two years ago, 11,211 people have been placed in employment, of which only 2522 were still employed six months later. Only 43 per cent of the scheme’s 37,253 participants were engaged in “structured ­activities as part of their mutual obligation requirement” as of May 31, according to the Department of Prime Minister and Cabinet.

Such activities are supposed to prepare jobseekers for work or aid with community development. But in practice organisers will do anything that will get people to turn up.

The Australian has obtained detailed financial and performance records from one provider — an indigenous company working in a remote area — and spoken to several others.

The records show the provider, which asked not to be named, has received about $4 million since the RJCP began, a fraction of what grant records show it was awarded, to deliver services to about 500 participants in a handful of indigenous communities.

It deems about 350 of those participants suitable for employment, but estimates no more than 50 per cent of them are in their given community at any one time. Only slightly fewer — about 40 per cent or roughly the national average — engage with the program.

The provider employs 20.5 full-time-equivalent staff, 11.5 of whom are indigenous and seven directly from the communities in which they are based.

Seven people work purely in administration, six of whom are town-based.

More than 60 per cent of the annual program budget goes on staff wages and 87 per cent overall on direct provider running costs, with the difference largely made up of costs maintaining remote office space and operating vehicles. None of the money goes to participants.

The closest participant is about 200km from the provider’s administrative base. Delivering the program involves conducting face-to-face interviews with every participant at least monthly. From July 1, 2013, the provider has managed to place just seven participants in work for six months. Its present target is to place 14 of 350 people in employment.

From July 1 this year with the change to CDP, the mutual obligation changed from about 20 hours of engagement per week to 25 hours of “work-like activity” over five days for 40 weeks of the year. At present providers are being funded with advance payments during a transition period. But from January 1 they will receive monthly payments calculated on the basis of the hours each participant is engaged.

Providers say the changes mean they are overloaded with bureaucracy and have to spend hours individually entering participants’ details into proprietary software.

If near full-engagement were achieved one provider acknowledged that healthy returns might be had. But it expects, on realistic calculations, to make a $700,000 loss this financial year, and is contemplating handing its contract back.

Another provider said it had only about 8 per cent engagement, and feared that once tighter restrictions on Centrelink payments came into effect from next year, most money would be sucked from the community.

“There’s almost nothing besides welfare in our economy,” that provider says.

Another said the main issues were not getting people off Centrelink but getting them through the bureaucracy to get them on regular payments in the first place.

“These are very traditional people, English second language. It’s all foreign to them.”

A spokeswoman for Minister for Indigenous Affairs Nigel Scullion said she was confident the government’s recent changes would produce “better outcomes for First Australians”.