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GenerationNone: How will the Coalition close the widening employment gap?

Fortescue Metals Group's Andrew Forrest.

Fortescue Metals Group’s Andrew Forrest.

NATIONAL: According to the latest Census results, the Indigenous unemployment gap is not closing. In fact, it has widened under Labor. So what is the Coalition’s plan, and why is there a disproportionate focus on the work of GenerationOne, asks AMY MCQUIRE.

ANALYSIS

Recently it was announced that one of Australia’s richest men Andrew “Twiggy” Forrest, head of Fortescue Metals Group, the world’s fourth largest iron ore producer, grew a little bit richer.

$102 million richer, in fact, according to media reports, who published the estimated amount FMG paid to its shareholders. His dividend came from a surge in iron ore prices – a development that has turned around the debt-ridden company’s fortunes.

According to BRW magazine, the FMG share price has jumped by 41 percent this financial year – adding an extra $1.2 billion to Mr Forrest’s wealth. He is now worth an estimated $4.5 billion.

In Aboriginal affairs, Mr Forrest is known for his war on “welfare”, demonstrated memorably in his explanation to ABC’s Four Corners in 2011, which probed him about FMG’s controversial offer to the Yindjibarndi Aboriginal Corporation of peanuts in exchange for mining their traditional lands around Roebourne in the Pilbara.

The proposal was that $4 million a year in cash and $6.5 million in other benefits would be given to traditional owners to mine the Solomon Hub project, which is expected to reap over $200 billion for the company over 30 years.

Mr Forrest told the ABC that cash royalties was simply “mining welfare”.

“If you want to join me one evening after 11 o’clock and walk down the streets of Roebourne and have little girls come up to you… offer themselves for any type of service you want for the cost of a cigarette, then you’ve come to the end of the line,” Mr Forrest told the ABC.

“I’m not going to encourage, with our cash, that kind of behaviour.”

The comments were met with outrage from the YAC, with CEO Michael Woodley labeling the allegations “false”. Earlier this year, the YAC won a Supreme Court case awarding them the right as sole representatives of Traditional Owners in the native title stoush.

That should give you some indication of Mr Forrest’s attitude towards Aboriginal Australians. But the mainstream media’s coverage of his philanthropic efforts has been overwhelmingly positive.

Mr Forrest believes the only way to end Indigenous disparity is through eliminating the “welfare trap” that he says has poisoned communities.

This month he claimed FMG’s Billion Opportunities initiative had reached its target to award $1 billion in contracts to Aboriginal-majority owned contractors.

Mr Forrest also believes he can help end Indigenous disparity through the GenerationOne initiative, which earlier this year amalgamated its sister organisation –the Australian Employment Covenant – also launched by Mr Forrest, into its stable.

The AEC was launched by then Prime Minister Kevin Rudd in 2008 with the ambitious plan to create 50,000 new jobs within two years.

But Mr Forrest this month backed Opposition Leader Tony Abbott to further the scheme under its new incarnation as part of GenerationOne.

The $45 million promise to GenerationOne was one of the biggest pre-election promises by the Coalition to Indigenous Australia.

It involves creating 5000 new jobs for Aboriginal people.

Mr Abbott also promised Mr Forrest would chair a review of Indigenous employment programs by the Department of Prime Minister and Cabinet within six months of taking office.

“I can’t think of a better person to make a difference in the lives of Aboriginal people,” Mr Abbott told media.

On the surface, it seems a welcome commitment, especially at a time when Aboriginal voters are drowned out by an election campaign focused on winning the marginal seats of western Sydney and Queensland.

But troubling questions arise when you look beyond that surface.

What will the $45 million be used for? What 5000 jobs – where will they be located, and in which industries? And what of the current outcomes of the AEC, given it has been dogged by questions of transparency and hounded with concerns over its data collection?

Why will Andrew Forrest, who’s Indigenous employment program has soaked up millions of dollars in federal funding, be the chosen one to head a review given a similar review was only recently completed?

When will the terms of reference of that review be announced?

And has the AEC/GenerationOne actually demonstrated value for money?

GenerationOne claims the initiative – which acts as a bridge between government and the private sector – has already lead to more than 61,000 new job pledges being made by Australian employers.

These pledges, of course, will not always lead to the jobs being filled by blackfellas – they are aspirational and not specifically Indigenous-focused jobs.

GenerationOne claims 16,000 Aboriginal people have been placed in “Covenant” jobs since the scheme’s inception.

But there have been continual questions over whether these jobs are full-time, part-time or casual, and where they are located.

There is also trouble verifying how many jobs resulted in13-weeks or 26-weeks outcomes and there is limited data on job retention.

In a February hearing of Senate Estimates, DEEWR officials revealed that out of the 11,441 placements identified at the time, only 3,785 reported 26-week outcomes. There were 1,721 exits from the program but no data on 13-week outcomes.

When questioned by Greens Senator Rachel Siewert about the lack of data around 13-week outcomes, DEEWR replied it was up to the employer to inform the AEC of its data and not all employers had done so. This was despite other government job programs requiring data on 13-week and 26-week outcomes.

A report published by the National Audit Office into DEEWR’s management of the AEC raises more questions.

According to the report, the Indigenous Employment Program (IEP) and Job Service Providers (JSP) are both used to place Indigenous job seekers with “Covenant” employers.

According to figures in the audit report, there were 1276 13-week outcomes and 820 26-week outcomes through JSA. Approximately 5500 26-week outcomes were achieved through the IEP, although the report concedes there was errors and that because of this “DEWR has generally not reported placement and outcome data for the Covenant publicly and instead focused on funds committed (rather than spent).”

The report does mention that in May 2012, the federal government had “assisted 73 employers with up to $132 million in funding”. That’s millions of dollars to deliver a relatively low number of jobs.

“Some caution needs to be applied when considering the department’s performance data as the figures including funding committed to employers,” the report said.

The AEC originally attracted $20.1 million in start-up funding in 2008, with Labor committing to fund training for covenant jobs.

The AEC was also to receive outcome payments for job placements, but there has been no data about how much federal funding the organisation received given the lack of data from the AEC.

At Senate Estimates in February, DEEWR claimed GenerationOne had not received any federal funding to deliver these programs. The Audit report does mention DEEWR’s relationship was likely to change given the amalgamation of the program with GenerationOne.

A key part of GenerationOne’s strategy is the promotion of the Vocational Training and Employment Centres (VTEC) model inspired by FMG’s facility at Port Hedland.

“VTEC inverts the current process — rather than identifying the person, then the training, then hoping there will be a job, VTEC identifies a willing employer with a job, then finds an Indigenous jobseeker and trains that person to meet the needs of the job. VTEC tackles the barriers that prevent Indigenous job candidates from finding a job and building a long-term career,” the GenerationOne website claims.

But a report completed by consultancy firm Hugh Watson for DEEWR in September last year found that this model “shares many of the key features” which contribute to the success of other projects, suggesting that this is not a new concept.

“In sum, most if not all of what is proposed in the GenerationOne VTEC model is already in operation in the organisations reviewed; all of which are working successfully,” the report finds.

It also claimed that the FMG VTEC model, which is “operated by a large employer in a remote region” does not provide “proof of concept” for the GenerationOne VTEC model “which is primarily designed for multiple smaller employers across different industries in an urban setting”.

“The other case study projects also do not support the feasibility of the proposed multiple industries, multiple locations, multiple small to medium sized enterprise component of the GenerationOne VTEC model,” the report found.

The latest Census results found that the Labor government was failing in bridging the gap in employment outcomes between Indigenous and non-Indigenous Australia.

It remains to be seen whether a disproportionate focus on the work of Andrew Forrest and GenerationOne will have an effect on closing the gap, or contribute to it widening.

If anything, the data is simply not there.

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