OECD Reviews on Local Job Creation O E C Employment and Skills Strategies in Australia D R e v ie The Local Job Creation series focuses on the role of employment and training agencies in contributing to job w OECD Reviews on Local Job Creation creation and productivity. It explores how OECD countries are implementing labour market and skills policy s o and putting measures in place at the local level to stimulate quality employment, inclusion and growth. n L o Employment and Skills Contents c a Executive summary l J o Strategies in Australia b Reader’s guide C Chapter 1. Policy context for employment and skills in Australia re a Chapter 2. Overview of the Australian case study areas tio n Chapter 3. Local Job Creation Dashboard fi ndings in Australia Chapter 4. Towards an action plan for jobs in Australia: Recommendations and best practices a i l a E m p lo y r m e n t a n d t S k ills S s t r a t e g ie s in u A u s t r Consult this publication on line at http://dx.doi.org/10.1787/9789264207899-en. a lia This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information. A ISBN 978-92-64-20788-2 9HSTCQE*cahiic+ 84 2014 01 1 P OECD Reviews on Local Job Creation Employment and Skills Strategies in Australia This work is published on the responsibility of the Secretary-General of the OECD.The opinionsexpressedandargumentsemployedhereindonotnecessarilyreflecttheofficial viewsoftheOrganisationorofthegovernmentsofitsmembercountries. This document and any map included herein are without prejudice to the status of or sovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundaries andtothenameofanyterritory,cityorarea. Pleasecitethispublicationas: OECD(2014),EmploymentandSkillsStrategiesinAustralia,OECDReviewsonLocalJobCreation, OECDPublishing. http://dx.doi.org/10.1787/9789264207899-en ISBN978-92-64-20788-2(print) ISBN978-92-64-20789-9(PDF) Series:OECDReviewsonLocalJobCreation ISSN2311-2328(print) ISSN2311-2336(online) ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityofthe relevantIsraeliauthorities.Theuse ofsuchdatabytheOECDiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraeli settlementsintheWestBankunderthetermsofinternationallaw. Photocredits:Cover©AndyDeanPhotography/Shutterstock.com. CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/publishing/corrigenda. ©OECD2014 Youcancopy,downloadorprintOECDcontentforyourownuse,andyoucanincludeexcerptsfromOECDpublications,databasesand multimediaproductsinyourowndocuments,presentations,blogs,websitesandteachingmaterials,providedthatsuitable acknowledgmentofthesourceandcopyrightownerisgiven.Allrequestsforpublicorcommercialuseandtranslationrightsshouldbe submittedtorights@oecd.org.Requestsforpermissiontophotocopyportionsofthismaterialforpublicorcommercialuseshallbe addresseddirectlytotheCopyrightClearanceCenter(CCC)[email protected]çaisd'exploitationdudroitdecopie (CFC)[email protected]. 3 FOREWORD – Foreword Across the OECD, policy makers are grappling with a critical question: how to create jobs? The recent financial crisis and economic downturn has had serious consequences across most OECD countries, with rising unemployment rates and jobs being lost across many sectors. Indeed, for some countries, the effects of the downturn are continuing, if not amplifying. Shrinking public budgets in some countries also mean that policy makers must now do more with less. In this context, it is necessary to think laterally about how actions in one area, such as employment and training, can have simultaneous benefits in others, such as creating new jobs and better supporting labour market inclusion. Over recent years, the work of the OECD LEED Programme (Local Economic and Employment Development) on Designing Local Skills Strategies, Building Flexibility and Accountability into Local Employment Services, Breaking Out of Policy Silos, Leveraging Training and Skills Development in SMEs, and Skills for Competitiveness has demonstrated that local strategies to boost skills and job creation require the participation of many different actors across employment, training, economic development and social welfare portfolios. Employers, unions and the non-profit sector are also key partners in ensuring that education and training programmes provide the skills needed in the labour markets of today and the future. The OECD Reviews on Local Job Creation deliver evidence-based and practical recommendations on how to better support employment and economic development at the local level. This report builds on sub-national data analysis and consultations at the national level and with local stakeholders in two case study areas. It provides a comparative framework to understand the role of the local level in contributing to more and better quality jobs. This report can help national, regional and local policy makers in Australia build effective and sustainable partnerships at the local level, which join-up efforts and achieve stronger outcomes across employment, training and economic development policies. Co-ordinated policies can help workers find suitable jobs, while also stimulating entrepreneurship and productivity, which increases the quality of life and prosperity within a community as well as throughout the country. I would like to warmly thank the Australian Department of Employment for their active participation and support of this study. Sergio Arzeni Director, OECD Centre for Entrepreneurship, SMEs and Local Development EMPLOYMENT AND SKILLS STRATEGIES IN AUSTRALIA © OECD 2014 4 – ACKNOWLEDGEMENTS Acknowledgements This report has been prepared under the Local Economic and Employment Development (LEED) Programme of the Organisation for Economic Co-operation and Development (OECD) as part of a project undertaken in co-operation with the Australian Department of Employment (formerly the Department of Education, Employment and Workplace Relations). The review is part of the programme of work of the OECD LEED Division under the leadership of Sylvain Giguère and Sergio Arzeni. The principal authors are Jonathan Barr (Policy Analyst, OECD) and Thorsten Stromback (Curtin University). The authors would like to thank Francesca Froy and Ekaterina Travkina (both Senior Policy Analysts, OECD) and Lucy Pyne (Consultant, OECD) for their comments on this report. Thanks also go to Michela Meghnagi for her work on the data analysis, as well as Elisa Campestrin, François Iglesias, Malika Taberkane and other colleagues in the OECD LEED Programme for their assistance with this report and project. Jennifer Allain prepared the manuscript for publication. The authors would also like to acknowledge the valuable contributions of Randall Eberts from the W.E. Upjohn Institute for Employment Research in the United States, as well as Chris Warhurst and John Buchanan from the University of Sydney, Australia. Special thanks should be also given to the representatives at the local, state and national levels who participated in meetings and provided documentation and comments critical to the production of this report. EMPLOYMENT AND SKILLS STRATEGIES IN AUSTRALIA © OECD 2014 5 TABLE OF CONTENTS – Table of contents Acronyms and abbreviations ...................................................................................................... 7 Executive summary ...................................................................................................................... 9 Reader’s guide ............................................................................................................................ 11 Chapter 1 Policy context for employment and skills in Australia .......................................... 15 Australia’s economy and political administration .................................................................... 16 The governance framework for employment policies .............................................................. 18 Vocational education and training policies .............................................................................. 22 Economic development policies ............................................................................................... 24 Summary of institutional arrangements ................................................................................... 25 Recent policy developments ..................................................................................................... 26 Policy responses during the crisis ............................................................................................ 26 Note .......................................................................................................................................... 31 References ................................................................................................................................ 31 Chapter 2 Overview of the Australian case study areas ......................................................... 33 Overview .................................................................................................................................. 34 Ballarat-Bendigo Priority Employment Area, Victoria ............................................................ 34 Ipswich-Logan Priority Employment Area, Queensland ......................................................... 36 The balance between skills supply and demand ....................................................................... 38 Note .......................................................................................................................................... 41 References ................................................................................................................................ 41 Chapter 3 Local Job Creation Dashboard findings in Australia ........................................... 43 Overview of results from the Local Job Creation Dashboard .................................................. 44 Theme 1: Better aligning policies and programmes to local economic development .............. 45 Theme 2: Adding value through skills ..................................................................................... 53 Theme 3: Targeting policy to local employment sectors and investing in quality jobs ........... 58 Theme 4: Being inclusive ......................................................................................................... 61 References ................................................................................................................................ 67 Chapter 4 Towards an action plan for jobs in Australia: Recommendations and best practices ...................................................................................................................................... 69 Better aligning policies and programmes to local economic development .............................. 70 Assessment of the Priority Employment Area Initiative/Local Employment Co-ordinator Model ....................................................................................................................................... 71 Adding value through skills ..................................................................................................... 77 Targeting policy to local employment sectors and investing in quality jobs ........................... 80 Being inclusive ......................................................................................................................... 82 References ................................................................................................................................ 85 EMPLOYMENT AND SKILLS STRATEGIES IN AUSTRALIA © OECD 2014 6 – TABLE OF CONTENTS Tables Table 1.1. Labour market indicators, July 2007 and July 2012 ............................................ 16 Table 1.2. Classification of jobseekers by degree of disadvantage (stream) ........................ 20 Table 1.3. Thirteen- and 26-week outcome payments for brokered outcomes ..................... 21 Table 3.1. Labour market and education and training outcomes following JSA assistance: Aboriginal and Torres Strait Islander and all jobseekers in stream 3 ................................................................................................................ 64 Table 4.1. Summary of strengths and challenges of the Local Employment Co-ordinator Model .............................................................................................. 72 Figures Figure 1.1. Changes in employment in Australian states and territories (2007-12) ............... 17 Figure 1.2. Changes in total unemployment and youth unemployment rates in Australia (2007-12) .............................................................................................................. 18 Figure 1.3. Australia institutional map at the national, state/regional and local level ............ 25 Figure 2.1. Ballarat-Bendigo Priority Employment Area ...................................................... 34 Figure 2.2. Ipswich-Logan Priority Employment Area .......................................................... 36 Figure 2.3. Understanding the relationship between skills supply and demand ..................... 38 Figure 2.4. Skills supply and demand, Victoria (2011) .......................................................... 40 Figure 2.5. Skills supply and demand, Queensland (2011) .................................................... 40 Figure 3.1. Local Job Creation Dashboard for Australia ........................................................ 44 Figure 3.2. Dashboard results: Better aligning policy and programmes to local economic development ......................................................................................... 45 Figure 3.3. In your opinion, what flexibility do you have in how you implement the following aspects of your work? .......................................................................... 46 Figure 3.4. In your opinion, are resources sufficient to meet your objectives? ...................... 47 Figure 3.5. Dashboard results: Adding value through skills .................................................. 53 Figure 3.6. Dashboard results: Targeting policy to local employment sectors and investing in quality jobs ....................................................................................... 58 Figure 3.7. Dashboard results: Being inclusive ...................................................................... 61 EMPLOYMENT AND SKILLS STRATEGIES IN AUSTRALIA © OECD 2014 7 ACRONYMS AND ABBREVIATIONS – Acronyms and abbreviations ABS Australian Bureau of Statistics AMEP Adult Migrant English Programme AQF Australian Qualification Framework AQTF Australian Quality Training Framework COAG Council of Australian Government DEEWR Department of Education, Employment and Workplace Relations EPF Employment Pathway Fund EPP Employment Pathway Plan ESA Employment Services Assessment FFP Flexible Funding Pool GDP Gross domestic product GTO Group training organisation IMF International Monetary Fund JSA Job Services Australia JSCI Job Seeker Classification Instrument LCTW Local Connection to Work LEC Local employment co-ordinators LEED Local Economic and Employment Development (OECD) LWIB Local workforce investment boards (United States) MSQ Manufacturing Skills Queensland NCVER National Centre for Vocational Education Research NEIS New Enterprise Incentive Scheme OECD Organisation for Economic Co-operation and Development PEA Priority employment area RESJ Regional education, skills and jobs RTO Registered training organisation SME Small and medium-sized enterprise TAFE Technical and further education EMPLOYMENT AND SKILLS STRATEGIES IN AUSTRALIA © OECD 2014 8 – ACRONYMS AND ABBREVIATIONS TL3 Territorial level 3 VET Vocational education and training WIN Workforce Intelligence Network (United States) EMPLOYMENT AND SKILLS STRATEGIES IN AUSTRALIA © OECD 2014