FINANCIAL FRAMEWORK (SUPPLEMENTARY POWERS) AMENDMENT (EMPLOYMENT MEASURES NO. 2) REGULATION 2016 (F2016L01747) EXPLANATORY STATEMENT

Commonwealth Numbered Regulations - Explanatory Statements

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FINANCIAL FRAMEWORK (SUPPLEMENTARY POWERS) AMENDMENT (EMPLOYMENT MEASURES NO. 2) REGULATION 2016 (F2016L01747)

EXPLANATORY STATEMENT

 

Issued by the Authority of the Minister for Finance

 

Financial Framework (Supplementary Powers) Act 1997

 

Financial Framework (Supplementary Powers) Amendment

(Employment Measures No. 2) Regulation 2016

 

The Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) confers on the Commonwealth, in certain circumstances, powers to make arrangements under which money can be spent; or to make grants of financial assistance; and to form, or otherwise be involved in, companies.  The arrangements, grants, programs and companies (or classes of arrangements or grants in relation to which the powers are conferred) are specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations).  The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013

 

Section 65 of the FF(SP) Act provides that the Governor-General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that Act.

 

Section 32B of the FF(SP) Act authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Principal Regulations.  Section 32B also authorises the Commonwealth to make, vary and administer arrangements for the purposes of programs specified in the Principal Regulations.  Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programs. 

 

Schedule 1 to the Regulation amends the Principal Regulations to establish legislative authority in Schedule 1AB for spending by the Government on two initiatives which will be administered by the Department of Employment.  The initiatives are part of the Youth Employment Package which was announced in the 2016-17 Budget.

 

Funding will be provided for:

*         the Youth Jobs PaTH program which is designed to support young people under the age of 25 years to gain the employability skills and real work experience they need to get and keep a job, and provides incentives for employers to take them on; and

*         the ‘Encouraging Entrepreneurship' initiative to support job seekers, including young people, who wish to start their own business.

 

Details of the Regulation are set out at Attachment A.  A Statement of Compatibility with Human Rights is at Attachment B

 

The Regulation is a legislative instrument for the purposes of the Legislation Act 2003.  The Regulation commences on the day after registration on the Federal Register of Legislation. 

 


 

Consultation

 

In accordance with section 17 of the Legislation Act 2003, consultation has taken place with the Department of Employment.

 

A regulation impact statement is not required as the Regulation only applies to non-corporate Commonwealth entities and does not adversely affect the private sector. 

 

 


Details of the Financial Framework (Supplementary Powers) Amendment (Employment Measures No. 2) Regulation 2016

 

Section 1 - Name

 

This section provides that the title of the Regulation is the Financial Framework (Supplementary Powers) Amendment (Employment Measures No. 2) Regulation 2016.

 

Section 2 - Commencement

 

This section provides that the Regulation commences on the day after it is registered on the Federal Register of Legislation. 

 

Section 3 - Authority

 

This section provides that the Regulation is made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedules to the Regulation.

 

Schedule 1 - Amendments

 

Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)

 

This item adds two new table items to Part 4 of Schedule 1AB to establish legislative authority for government spending on two initiatives which will be administered by the Department of Employment.

 

New table item 174 establishes legislative authority for the Government to fund the Youth Jobs PaTH program.

 

The Youth Jobs PaTH (Prepare - Trial - Hire) is designed to support young people under the age of 25 years to gain the employability skills and real work experience they need to get and keep a job, and provides incentives for employers to take them on. 

 

Total funding of $751.7 million over four years was announced in the 2016-17 Budget for the program which features three elements outlined below. 

 

Employability Skills Training (Prepare)

 

To help young people gain a foothold in the labour market, young job seekers will participate in intensive pre-employment skills training within five months of registering with jobactive (unless extenuating circumstances exist).

 

The first three weeks of training will focus on skills such as working in a team, presentation, and appropriate IT skills.  A further three weeks of training will centre on advanced job preparation and job hunting skills.

 

This is an ongoing measure starting on 1 April 2017. 

 

Internship Placement (Trial)

 

Up to 30,000 internship placements will be available each year to help young job seekers who have been in employment services for six months or more gain real work experience within businesses.

 

Job seekers and businesses, with the help of employment service providers, will be able to work together to design an internship placement of 4 to 12 weeks duration, for an average of 15 to 25 hours per week.  Participation in an internship placement will be voluntary for both job seekers and businesses.

 

In addition to gaining hands on experience in a workplace, job seekers will receive a $200 per fortnight incentive on top of their regular income support payment to participate in an internship.  This payment does not constitute remuneration for work.  Also, Schedule 1 of the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016 (introduced into the Parliament on 13 October 2016) provides that such a payment would not be income for the purpose of the social security law.

 

Businesses which take on interns will receive an upfront payment of $1,000, and will also benefit from the opportunity to see what a young worker can do in their business before deciding whether to offer them employment.

 

An online portal will connect young job seekers and businesses that may host job seekers as interns.

 

This is an ongoing measure starting on 1 April 2017. 

 

Youth Bonus Wage Subsidy (Hire)

 

Stage three of the new Youth Jobs PaTH provides increased and streamlined wage subsidies for youth.

 

From 1 January 2017, Australian employers will be eligible for a Youth Bonus wage subsidy if they hire a young job seeker who has been in employment services for six months or more.  The most job ready (Stream A) job seekers will attract a wage subsidy of $6,500.  A larger $10,000 wage subsidy will be available to businesses that employ job seekers classified as less job ready (Stream B and C job seekers, and job seekers in Transition to Work on income support).  Businesses will have the flexibility to engage young job seekers either directly, through labour hire arrangements, or as part of an apprenticeship or traineeship.

 

As part of these reforms, existing wage subsidies (including those for youth, parents, Indigenous job seekers, mature age job seekers, and the long term unemployed) will also be streamlined, making all wage subsidies easier for employers to access.  Employers will have flexibility to choose how often instalments are paid (fortnightly, monthly, or some other arrangement) and over what time period, so long as the subsidy does not exceed 100 per cent of the employee's wages.  Wage subsidies will be paid out sooner: during a period of six months rather than 12 months.  All wage subsidies will be paid at a flat rate; there will be no pro-rata subsidies.  Wage subsidies will continue to be available to employers from the first day of a job seeker's employment.

 

This is an ongoing measure starting on 1 January 2017. 

 

The three stages of Youth Jobs PaTH are flexible and can be used individually or in combination.  Employment service providers will help young job seekers to access the elements of PaTH that best meet their needs.  The Employability Skills Training and Internships are new programs and therefore require sufficient time to implement.  The changes to wage subsidies will enhance all wage subsidies and are not limited to the Youth Jobs PaTH - hence the earlier start date of 1 January 2017.

 

The Youth Jobs PaTH forms part of the Youth Employment Package Budget measure, announced in the 2016-17 Budget.  Details are set out in the measure 'Youth Employment Package - Youth Jobs PaTH (Prepare - Trial - Hire)' in Budget Measures, Budget Paper No. 2 2016-17 at page 85.

 

The Youth Jobs PaTH is being delivered under Program 1.1: Employment Services, which is part of Outcome 1: Foster a productive and competitive labour market through employment policies and programs that assist job seekers into work.  Details are set out in the Portfolio Budget Statements 2016-17, Budget Related Paper No. 1.6, Employment Portfolio at page 18.

 

The Department of Employment (the department) will select Employability Skills Training providers through a competitive procurement process.  The decision-maker for this purpose will be a Deputy Secretary in the department.  Spending decisions will be made by departmental officers.  jobactive providers will make decisions on referring job seekers to Employability Skills Training.  The department contracts jobactive providers to deliver employment services to job seekers and employers on behalf of the Government.  Subject to eligibility criteria, providers will have discretion on which job seekers they refer.  The department maintains oversight of the services which jobactive providers are contracted to provide.

 

jobactive, Transition to Work, and Disability Employment Services providers will make decisions on spending for the Internship.  The Department of Social Services contracts Disability Employment Services providers and the department contracts Transition to Work providers.  Subject to eligibility criteria, providers will have discretion on when to spend funding on internships.  The department maintains oversight of such decisions by providers.

 

jobactive and Transition to Work providers will make decisions on spending for the Youth Bonus wage subsidy.  Subject to eligibility criteria, providers will have discretion on when to spend funding on a wage subsidy.  The department maintains oversight of such decisions by providers.

 

Selection criteria for the selection of employability skills training providers will be made available on the AusTender website: www.tenders.gov.au.  The spending decisions regarding successful tenderers will be published on the department's website: www.employment.gov.au.

 

Eligibility criteria and other operational policies will be included in new and updated guidelines.  These will be made available, as current guidelines are, on the department's website noted above and on the Department of Social Services' website: www.dss.gov.au.

 

If a participant in the Youth Jobs PaTH (including Employability Skills Training, Internships and Youth Bonus wage subsidy) is not satisfied with a provider's decision, the participant may request review of the decision by the provider, or raise the matter with the department or the Commonwealth Ombudsman.

 

To the extent that decisions relevant to the Youth Jobs PaTH may be made under the social security law, a participant who is dissatisfied with such a decision would generally have the ability to seek review of the decision, including by the Department of Human Services (DHS) and the Administrative Appeals Tribunal (AAT), and, on questions of law, by courts provided the person had first sought review by DHS and the AAT.  Given the existence of these review mechanisms it is not appropriate for this program to be subject to merits review.  Noting that decisions are not made under an enactment except as indicated above, the Administrative Decisions (Judicial Review) Act 1977 is not currently applicable and, for the reasons above, this is appropriate.

 

More information on the Youth Jobs PaTH is available at:

*         www.employment.gov.au/youth-jobs-path;

*         https://ministers.employment.gov.au/smorrison/creating-path-real-jobs-young-people; and

*         http://budget.gov.au/2016-17/content/glossies/jobs-growth/html/jobs-growth-07.htm.

 

Noting it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         the social welfare power (section 51(xxiiiA));

*         the external affairs power (section 51(xxix));

*         the communications power (section 51(v)); and

*         the territories power (section 122).

 

New table item 175 establishes legislative authority for the Government to fund the initiative 'Encouraging Entrepreneurship'.

 

Funding of $88.6 million will be provided to support job seekers, including young people, who wish to start their own business.  The program is ongoing.  The initiative includes four key elements that will be available from 5 December 2016:

*         the establishment of new 'Explore Being my Own Boss' workshops;

*         enhancements to the New Enterprise Incentive Scheme (NEIS);

*         the appointment of three Entrepreneurship Facilitators; and

*         the introduction of online Self-Employment Starter Packs.

 

'Exploring Being My Own Boss' workshops

 

The workshops will engage 1,000 young job seekers a year (particularly young Indigenous, migrant, refugee and disabled job seekers) to explore self-employment as an alternative pathway to employment.  Existing contracted NEIS providers will deliver the workshops, which will run for two weeks. 

 

After these workshops, participants will have the option to undertake a complementary placement with businesses in their local area to gain first-hand experience in running a small business.

 

Enhancements to NEIS

 

The existing NEIS program helps eligible job seekers to start new small businesses.

 

To accommodate the expected rise in interest in entrepreneurship, particularly among young people, an additional 2,300 NEIS places will be made available each financial year (bringing this to a total of 8,600 NEIS places per annum).

 

Additionally, the eligibility for NEIS will be expanded to allow young job seekers who are not in receipt of income support and not in employment, education or training, to participate in NEIS training and mentoring.

 

Entrepreneurship Facilitators

 

Entrepreneurship Facilitators will be appointed in three regions with high youth unemployment - Cairns, the Hunter region and Launceston.

 

Facilitators will help bring together available services and programs (such as jobactive, NEIS, microfinance services and start-up incubators).  They will also provide practical assistance to job seekers including help accessing local mentors, business partners, finance, office space, equipment and ongoing business development training.

 

Self-Employment Starter-Packs

 

Self-Employment Starter Packs will be introduced to help young people develop their innovative ideas into successful businesses.

 

The packs will be available online, supported by content distributed nationally, and will contain information and links to the services available to help support job seekers to establish a business.

 

The Encouraging Entrepreneurship measure was announced as part of the broader Youth Employment Package in the 2016-17 Budget.  Details are set out in the measure, 'Youth Employment Package - encouraging entrepreneurship and self-employment', in Budget Measures, Budget Paper No. 2 2016-17 at page 84.  The Department of Employment (the department) published information about these measures on its website (www.employment.gov.au) on 5 May 2016. 

 

Encouraging Entrepreneurship is being delivered under Program 1.1: Employment Services, which is part of Outcome 1: Foster a productive and competitive labour market through employment policies and programs that assist job seekers into work.  Details are set out in the Portfolio Budget Statements 2016-17, Budget Related Paper No. 1.6, Employment Portfolio at page 18.

 

All spending for the Encouraging Entrepreneurship initiative will be managed in accordance with the Grant Guidelines for Entrepreneurship Facilitators 2016-2020, which is publicly available on the department's website.  A Deputy Secretary of the department will approve all spending in accordance with the Public Governance, Performance and Accountability Act 2013.

 

The appointment of the Entrepreneurship Facilitators will be through a competitive grant process.  The grant process ensures transparency and accountability and internal processes will be put in place to ensure the best value for money.  As part of this process, the department has appointed an external probity adviser to observe and monitor the allocation of grants.

 

All NEIS specific measures ('Exploring Being My Own Boss' workshops and increasing NEIS places and broadening of eligibility) will be delivered by existing NEIS providers.

 

'Exploring Being My Own Boss' workshops will be delivered in all Employment Regions, which are regions identified and displayed on the department's Labour Market Information Portal (http://lmip.gov.au).  

 

Both the 'Exploring Being My Own Boss' workshops and increasing NEIS places and broadening of eligibility will be delivered in accordance with the jobactive 2015-2020 Deed.  The department will also enter into contracts with Facilitators, specifying the services they must provide.

 

If a person is not satisfied with a decision of a provider, or of a Facilitator, the person may request review of the decision by the provider or Facilitator, or raise the matter with the department or the Commonwealth Ombudsman. 

 

Given the existence of these review mechanisms and the fact that NEIS and Encouraging Entrepreneurship are part of the broader package of employment services, it is not appropriate for these measures to be subject to merits review.  Noting that the above decisions are not made under an enactment, the Administrative Decisions (Judicial Review) Act 1977 is not currently applicable and, for the reasons above, this is appropriate.

 

Additional information about the initiative is available on the following websites:

*         Budget overview and funding information - http://budget.gov.au;

*         information about NEIS, agency Portfolio Budget Statements and summary of new Entrepreneurship measures - www.employment.gov.au; and

*         information about NEIS - https://jobactive.gov.au.

 

Noting it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         the social welfare power (section 51(xxiiiA));

*         the external affairs power (section 51(xxix)); and

*         the territories power (section 122).

 

 

 

 


Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (Employment Measures No. 2) Regulation 2016

 

This Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations.  Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. 

 

The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013

 

Schedule 1 to the Regulation amends the FF(SP) Regulations to establish legislative authority in Schedule 1AB for spending by the Government on two initiatives which will be administered by the Department of Employment.  The initiatives are part of the Youth Employment Package which was announced in the 2016-17 Budget.

 

Funding will be provided for:

*         the Youth Jobs PaTH program which is designed to support young people under the age of 25 years to gain the employability skills and real work experience they need to get and keep a job, and provides incentives for employers to take them on; and

*         the 'Encouraging Entrepreneurship' initiative to support job seekers, including young people, who wish to start their own business.

 

The Minister for Employment has portfolio responsibility for these programs.

 

Human rights implications

 

The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This Regulation is compatible with human rights as it does not raise any human rights issues.

 

 

Senator the Hon Mathias Cormann

Minister for Finance


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