On the 30 November 2023, the Australian Parliament House of Representatives Select Committee on Workforce Australia Employment Services released their final report following their inquiry into Workforce Australia Employment Services.

The final report, titled Rebuilding Employment Services - Final report on Workforce Australia Employment Services, highlighted issues with the current employment services system, such as excessive focus on rapid job placement, barriers for smaller organisations, and limited support for social enterprises. The report stressed the importance of systemic change, leveraging procurement processes for employment, and involving social enterprises to support jobseekers and employers effectively. In fact, social enterprise was mentioned 192 times throughout the 650-page document, with 50 references to social procurement, and an entire section on ‘The role of social enterprise’ (p.400).

Steps to bolster social impact and inclusive employment outcomes

The Select Committee recommends a strategic approach, including certification mechanisms, direct funding models, and improved coordination among and between all levels of government and government initiatives to bolster social impact and inclusive employment outcomes. In addition to these recommendations, the report also acknowledges the exponential increase in social security and welfare expenditure over the years, signaling the importance of effective reforms in employment services for long-term economic sustainability.

The below recommendations from the Workforce Australia Report have been identified as being specifically related to social enterprise and in many instances has called on state and local governments to support or work in alignment to the recommendations.

4.179 Recommendation 5: The Committee recommends that the Australian Government develop and implement a Commonwealth Social Procurement Framework to leverage Commonwealth spending on major projects and large service contracts to create more employment and training opportunities for long-term unemployed and disadvantaged jobseekers.

The Framework should align with and complement existing approaches in the Commonwealth at the State and Territory level and be developed with input from key sector enablers such as Social Traders, National Disability Services, Fair Work, and Supply Nation.

All States and Territories should be encouraged to adopt a similar approach. This should include greater commitment to employing local people when Commonwealth, State, and local government services are delivered in local and regional areas and to improving gender outcomes in certain sectors such as construction.

13.157 Recommendation 50: The Committee recommends that the Australian Government work with State and Territory Governments and key stakeholders such as Social Traders to develop and implement a Commonwealth social enterprise strategy, including the following measures:

• Funding for social enterprises. Subject to the outcomes of the trials contemplated by Recommendation 51, a reverse auction grant model as developed by Jobs Victoria should be preferred.
• Articulation of the role of social enterprises within the employment services system—both as employers and as training and support providers.
• Direct links to the Commonwealth Social Procurement Strategy outlined in Recommendation 5.
• Reducing if not eliminating barriers to entry into the employment services system for social enterprises.
• Ensuring that data on training and employment outcomes is shared between social enterprise and government systems.
• Endorsement of the certification framework administered by Social Traders, including additional financial support to enable national scaling.

13.158 Recommendation 51: The Committee recommends that direct funding be made available to social enterprises which directly support employment outcomes. A reverse auction grant model as developed by Jobs Victoria should be used to establish an efficient price per outcome for various cohorts. This should include trialling the following complementary funding measures:

• Each employment region be allocated a flexible grants fund which can be used to fund local organisations including social enterprises. Organisations could apply for funding using the reverse auction grant model making transparent the impact and cost, with grants assessed at the regional level. Funding should be reallocated from the existing Local Jobs Program, and designed to allow State and Territory Governments to co-invest in particular regions or places of interest; and
• A complementary National Employment Grants Fund be established to allow social enterprises and complementary community-based programs to bid for funding for employment projects that cross more than one region.

There were additional recommendations made by the Select Committee that also relate to social enterprise and the role of State Government, for example:

4.169 Recommendation 4: The Committee recommends that the Australian Government implement the following measures to enhance its role in stewarding the employment service system and increase the direct delivery of services by government:

• Establish Employment Services Australia (ESA) as a new entity within the Department of Employment and Workplace Relations to undertake specified activities including core enabling functions in regions, be a large hybrid provider for those closest to the labour market, and some case management activities as outlined in this report.
• Establish a network of regional hubs and service gateways delivered by ESA. The regional hubs should be co-located where possible with existing services and include the following core-enabling functions:
• Local service system coordination and mapping;
• Jobseeker assessment and referrals to services;
• Industry and employer engagement and support;
• Administration of government support for social enterprise and local projects; and
• Delivery of industry transition and place-based projects for Commonwealth and State Governments.

Advocating for change

Social Traders was pleased to contribute significantly to the outcomes of the Workforce Australia Final Report through a written submission, appearing at a Public Hearing in September 2023, and delivering a detailed response to a Question on Notice relating to funding mechanisms for social enterprises. To see the majority of our recommendations being included in the final report is really encouraging and provides a platform for dialogue and reform long needed.

The Workforce Australia final report builds on the Australian Government’s recognition of the role of social enterprise in Australia’s workforce that was demonstrated in the 'Working Future' White Paper released in September 2023. This is the, the third-ever Employment White Paper in Australian history and is a policy document will shape the nation's employment landscape for years to come.

With a section dedicated to ‘Backing social enterprise’ the Australian Government lays out a promising roadmap that signals the government's priorities and commitment to the growth of, and collaboration with, the social enterprise sector as the future of Australia’s Employment Services system.

“The time is now for social enterprise to be elevated in the national agenda. We’re seeing the recognition grow for this innovative business model and look forward to working with the Commonwealth Government to harness the potential of the social enterprise sector over the coming years.” - Alex Hooke, Executive Director Advocacy & Engagement, Social Traders