Structured Training and Employment Projects and Wage Assistance evaluation

STEP and Wage Assistance A net impact study

Executive Summary

During 2006-07, $71 million worth of assistance was provided through the Indigenous Employment Programme (IEP) as a key component of the Indigenous Employment (IE) Policy. In addition to spending on other components of the IEP, Structured Training and Employment Projects (STEP) and Wage Assistance received $28 million and $4.4 million funding respectively. Other components of IEP included the National Indigenous Cadetship Programme, Corporate Leaders for Indigenous Employment, Community Development Employment Projects Placement Incentives, and Voluntary Services to Indigenous Communities Foundation. Indigenous Australians also received assistance through mainstream services.

This study examines the impact of STEP and Wage Assistance in terms of improvements in the off-benefit outcomes of job seekers. This study took place prior to the introduction of STEP – Employment and Related Services (STEP-ERS) providers and only looked at job seekers assisted under the STEP model of assistance. Off-benefit outcomes measure the proportion of job seekers who were on income support when they commenced in the assistance that had moved completely off income support at the time of outcome measurement. A net impact approach was used to compare the outcomes achieved by STEP and Wage Assistance participants with those of matched comparison groups. This approach has been used to assess the effectiveness of labour market programmes both in Australia and internationally. The methodology is in line with that suggested by the Productivity Commission and the OECD.

The net impact measures shown in this report are primarily based on the 12 month off-benefit outcomes achieved by job seekers up to August 2007. Net impact results between 1 and 24 months after commencement are also shown in the report. The study examines the impact from commencement in the programme. Referral impacts, which capture compliance effects that occur where job seekers avoid participation in the programme by finding employment or declaring previously undeclared income, are not likely to occur given that participation in these programmes is voluntary for these job seekers.

STEP and Wage Assistance, with their strong focus on employment, achieved high net impacts and were found to be a useful form of assistance for Indigenous job seekers. These impacts are in line with findings for other successful programmes in Australia.