Programme performance

In 2014–15, the department met or exceeded six of the 19 key performance indicator targets for Programme 1.1.

The subdued labour market continued to limit the number of job opportunities for job seekers in 2014–15—the final year of the Job Services Australia programme. Only 72 per cent of the headline annual 450,000 job placement target was achieved (see Table 1).

Job Services Australia 2013–14 2014–15 estimate 2014–15 actual
Table 1 Programme 1.1 deliverable
Total job placements achieved 337,632 450,000 324,342

The strong influence of labour market conditions on achievement of targets is demonstrated by the close relationship between the department’s internet vacancy index and job placements in Job Services Australia, as shown in Figure 2. In general, the number of job vacancies increases as labour market conditions improve, which means there are more jobs to place job seekers into. By contrast, in subdued labour markets, vacancies fall, making it harder for job seekers to gain employment. This helps to explain why the annual job placement target was only achieved once during the six years of the Job Services Australia programme (in 2010–11).

Figure 2 Number of Job Services Australia job placements versus internet vacancy index, 2009 to 2015

Number of Job Services Australia job placements versus internet vacancy index, 2009 to 2015

Tables 2 to 6 show the department’s results for the key performance indicators for Programme 1.1 in 2014–15 and the previous year. The department met or exceeded seven of the 19 key performance indicator targets in 2014–15.

Under the Job Services Australia programme, fully eligible job seekers were assisted in one of four streams depending on their level of labour market disadvantage. The most job-ready job seekers were assisted in Stream 1, while job seekers with the most severe barriers to employment were assisted in Stream 4. For each stream, the department measured the programme’s effectiveness by the percentage of job seekers moving into work or study or off benefit (Newstart or Youth Allowance (other)) three months after participation in the programme. Longer term off-benefit outcomes were measured 12 months after participation.

For 2014–15, the department amended the targets for five key performance indicators. The Stream 2 employment outcome and off-benefit targets were lowered, and the employment targets for Streams 1 and 3 were increased to reflect recent performance.

The proportion of job seekers achieving employment outcomes and moving off benefit was below targeted rates. However, job seekers moved into education and training at higher than targeted rates and the cost of moving job seekers into work was below target levels.

The department will report on a new range of performance measures and targets in 2015–16 to reflect the objectives of the jobactive programme.

Table 2 Cost per employment outcome for employment services delivered by Job Services Australia
Key performance indicator 2013–14 2014–15 estimate 2014–15 actual
Streams 1–3 $1,890 $3,000 $1,794
Stream 4 $6,971 $12,000 $7,177

Note: The cost per employment outcome for Job Services Australia is calculated as the cost of job seekers assisted divided by the number of job seekers employed (as measured through the department’s Post-Programme Monitoring Survey) in the reporting period.

Key performance indicator 2013–14 2014–15 estimate 2014–15 actual
Table 3 Proportion of job seekers in employment three months following participation in employment services
Stream 1 55.1% 60% 55.2%
Stream 2 41.2% 40% 39.5%
Stream 3 33.4% 35% 32.6%
Stream 4 23.6% 25% 21.8%
Key performance indicator 2013–14 2014–15 estimate 2014–15 actual
Table 4 Proportion of job seekers in education or training three months following participation in employment services
Stream 1 22.5% 15% 21.1%
Stream 2 24.8% 15% 24.9%
Stream 3 22.6% 15% 23.1%
Stream 4 20.2% 15% 22.7%
Key performance indicator 2013–14 2014–15 estimate 2014–15 actual
Table 5 Proportion of job seekers off benefit three months following participation in employment services
Stream 1 50.1% 55% 47.2%
Stream 2 34.9% 40% 31.7%
Stream 3 21.9% 35% 20.1%
Stream 4 24.7% 30% 21.9%
Key performance indicator 2013–14 2014–15 estimate 2014–15 actual
Table 6 Proportion of job seekers off benefit 12 months following participation in employment services
Stream 1 63.5% 65% 61.9%
Stream 2 48.5% 50% 46.3%
Stream 3 32.9% 40% 31.0%
Stream 4 34.0% 35% 31.3%

The deliverable and key performance indicators presented in Tables 1 to 6 are based on departmental administrative and programme monitoring data. The department also measures the effectiveness of employment services through the following broad indicators:

  • unemployment rates for disadvantaged groups
  • the labour force participation rate and the employment-to-population ratio for people of workforce age (15–64 years)
  • the average duration of unemployment per labour force member.

These broad indicators are based on Australian Bureau of Statistics data and so provide externally available indicators of performance. In addition to the effectiveness of employment services, the outcomes for these broad indicators also depend on economic and labour market conditions, so those two factors are described first, before the broad indicators are discussed.

Economic conditions

Both the global and Australian economies expanded at a moderate pace in 2014–15. In seasonally adjusted terms, Australia’s real gross domestic product grew by 2.0 per cent over the year to the June quarter 2015, which is higher than in Japan, but lower than in India, China, the United States and the United Kingdom.

The Australian economy is still in the slow process of a major economic transformation—away from growth led mainly by investment in mineral and energy resources to the broader-based drivers of activity in the non-resources sector. Over the past year, the volume of mining exports rose, while commodity prices and the terms of trade (the ratio of the export price to the import price) fell. Profits dropped by 7.2 per cent over the year to the June quarter 2015, and total compensation to employees (wages, salaries and supplements) rose by around 2.2 per cent over the same period. Overall, labour market conditions remained soft, and the unemployment rate was elevated.

Labour market conditions

Against the backdrop of subdued global growth and below-trend economic activity domestically, the Australian labour market improved somewhat, although underlying conditions remain relatively soft. For instance, the level of employment rose by 224,400 (1.9 per cent) between June 2014 and June 2015 to stand at a record high of 11,768,600. Full-time employment increased by 133,500 (1.7 per cent) over the period to 8,156,200 in June 2015, also a record high. Part-time employment rose by 90,900 (2.6 per cent) to a record high of 3,612,400 in June 2015. The stronger growth in part-time work reflects, at least in part, a rise in underemployment, which has increased by 104,200 (10.9 per cent) over the year to the May quarter 2015 (latest available data).

Employment growth has been mixed across industries over the year to May 2015, with employment increasing in 10 industries and declining in nine. Professional, scientific and technical services recorded the largest gain, adding almost 100,000 new jobs to the economy over the past year. Solid increases were also recorded in Australia's largest employing industry, health care and social assistance (up by 67,300) as well as in accommodation and food services (48,100), transport, postal and warehousing (24,700) and construction (23,500). Manufacturing employment fell by 9700, and the longer term outlook for manufacturing remains subdued, although the fall in the Australian dollar over the past year has provided some relief. The largest fall in employment was recorded in mining (down by 33,300), as the industry continues to transition from a construction phase to a less labour-intensive production and export phase and as projected future mining investment falls. A large decline in employment was also recorded in agriculture, forestry and fishing (20,200), but employment in the industry is projected to rise slightly in the medium term.

The level of unemployment increased by 10,500 (1.4 per cent) in 2014–15, while the unemployment rate fell marginally, from 6.1 per cent in June 2014 to 6.0 per cent in June 2015. The slight fall in the unemployment rate occurred in conjunction with a 0.1 percentage point increase in the participation rate, to 64.8 per cent in June 2015, although it remains well below the peak of 65.8 per cent in November 2010.

Reflecting the underlying soft labour market conditions that continue to prevail, the level of long-term unemployment (people unemployed for 52 weeks or more) increased by 2900 (or 1.7 per cent) between June 2014 and June 2015, to 183,300. The level of very long-term unemployment (people unemployed for 104 weeks or more) also rose, by 9900 (or 12.6 per cent) to 89,000 in June 2015.

While youth labour market conditions improved slightly over 2014–15, the cohort remains disadvantaged. For instance, the level of youth employment increased by 33,000 (1.8 per cent) over the period, while the youth unemployment rate declined by 0.2 percentage point to stand at 13.3 per cent in June 2015, although it remains more than double the rate for all persons.

Labour market conditions, while improving somewhat in the first half of 2015, are expected to remain reasonably soft. The latest Treasury budget forecasts are for employment to increase by 1.5 per cent in 2015–16, before rising to 2 per cent in 2016–17; Treasury expects the unemployment rate to reach 6.5 per cent in the June quarter 2016, before declining to 6.25 per cent in the June quarter 2017.

The department provides current labour market data for employment services providers and the general public through the Labour Market Information Portal website. Table 7 provides a five-year view of the variances in unemployment rates across segments of the labour force.

Population group 2010–11 2011–12 2012–13 2013–14 2014–15
Table 7 Unemployment rates for disadvantaged groups, 2010–11 to 2014–15
People from culturally and linguistically diverse backgrounds (15 years and older)a 5.7 5.7 6.3 6.7 6.8
Lone parents (with children aged under 15 years)a 11.4 11.1 11.9 11.6 13.2
People with disability (15–64 years)b na 9.4 na na na
Youth (15–24 years)c 11.4 11.4 11.9 12.6 13.7
Aboriginal and Torres Strait Islander Australians (15–64 years)d na na 20.9 na na

na = not available.

Note; Data is for the financial year (July to June) and in original terms unless otherwise stated. Historical statistics reported in previous annual reports have been impacted by revisions made by the ABS to Labour Force Survey estimates, as a result of updated population benchmarks as released in Australian Demographic Statistics (cat. no. 3101.0). The currently quoted unemployment rate for Indigenous Australians is based on the full suite of responses to the 2012–13 Australian Aboriginal and Torres Strait Islander Health Survey by the ABS. The unemployment rate for youth is in seasonally adjusted terms.

Sources:

a. ABS Labour Force, Australia, Detailed - Electronic Delivery, July 2015 (Cat No. 6291.0.55.001).

b. ABS, Disability, Ageing and Carers, Australia: Summary of Findings, 2012 (Cat No. 4430.0)

c. ABS Labour Force, Australia, June 2015 (Cat No. 6202.0, Table 17), seasonally adjusted.

d. ABS, Calculation based on figures from the National Aboriginal and Torres Strait Islander Health Survey, 2012–13, ABS 2013, Customised report.

Labour force participation rate and employment-to-population ratio for people aged 15–64 years

The labour force participation rate refers to the proportion of the workforce-age population (people aged 15–64 years) that is either employed or looking for work. It is used to determine whether an increasing proportion of the population is working or looking for work and is a good indicator of the total supply of labour. However, it does not include those who are marginally attached to the labour force, such as discouraged job seekers.

The employment-to-population ratio refers to the proportion of the workforce-age population that is employed. This ratio is influenced by both labour demand and effective labour supply factors. It is also a good summary indicator for measuring labour market performance relative to other countries, particularly those in the Organisation for Economic Co-operation and Development (OECD).

Australia’s trend employment-to-population ratio for workforce-age people increased by 0.5 percentage point over the year to June 2015, to 72.1 per cent (see Figure 3). The trend workforce-age participation rate also increased by 0.5 percentage point over the same period, and was 76.8 per cent in June 2015.

Figure 3 Labour force participation rate and employment-to-population ratio, people aged 15–64 years, trend data, June, 1978 to 2015

Figure 3	Labour force participation rate and employment-to-population ratio, people aged 15–64 years, trend data, June, 1978 to 2015
Source: Australian Bureau of Statistics 2015, Labour force, Australia, June 2015, cat. no. 6202.0, Table 18.

Average duration of unemployment

Changes in the average duration of unemployment per labour force member indicate the ability of unemployed people to find work. Figure 4 provides a time series for this measure in trend terms for the past 14 years. In the 12 months to June 2015, the average duration of unemployment per labour force member increased marginally, from 2.6 weeks to 2.7 weeks.

Figure 4 Average duration of unemployment per labour force member, June, 2001 to 2015

Figure 4 Average duration of unemployment per labour force member, June, 2001 to 2015

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