Peter Strong: Australia needs state-owned services that can fight unemployment at a local level

Responding at the local level to crises is better than trying to respond from an office high up in an ivory tower in Canberra or some capital city.

In 1989, I was the manager of the Goulburn Commonwealth Employment Service (CES).

One night, I went to Canberra to have dinner with an adviser to the federal cabinet and to the prime minister. This was part of my ongoing, endless education on how politics works in Australia. We had a good conversation about how government operates at his level and other such things. 

As the evening came to an end, I asked about the constant rumours that the CES was to be closed and all its functions gifted to the private sector. He replied that governments and policymakers did indeed want to close the CES but what was stopping them was the need for the Commonwealth to have an ability to respond to emergencies at the community level.

He explained the CES was the only mechanism the federal government had to quickly react to crises such as natural disasters, large scale retrenchments, major industry reforms, recessions, wars, and pandemics. 

Not long after the dinner, I moved from Goulburn to Canberra to work in the department responsible for employment and labour market reform.

I became involved in developing responses to industry and workforce disruption created by John Button’s industry reforms and the removal of tariffs for textile, clothing and footwear and for the passenger motor vehicle industry, among other changes.

The responses included enterprise restructuring support, local economic development, job creation, small business development and a comprehensive inclusive approach to vocational training.

All these responses were carried out at the community level and local CES staff were a key part of these responses.

As a result of these new experiences and learnings, I then ended up consulting to the World Bank on micro and macro-economic reform activities in the old Soviet Union as that ex-nation went through incredible change. I spent much time, particularly in Central Asia, and also in Turkey, and later on with the United Nations on support for women in business in China.

In the Central Asian project, I was (alarmingly) known as the “mass retrenchment expert”. I worked with the Kyrgyz and other governments to develop a national capacity to deal with enterprise restructuring. This included asset divestiture, job creation, small business development, business incubators, local economic development and vocational training.

Another parallel World Bank project involved a group of Australians creating a version of the CES in the countries of the old Soviet Union, including Russia.

When I returned to Australia I found that, while we were setting up a version of the CES in countries going through major change, Australian governments (both Labor and Liberal) were dismantling the CES and replacing it with government-funded private companies.

The contracts with private sector employment services focused on confronting the problem of long-term unemployment.

This, in my opinion, has not been successful, but it did create a few wealthy individuals. (I am not sure that people should become millionaires on the back of the long-term unemployed.)  

We need to get local again

Now, we have the crisis of a lifetime coming from the bushfires and COVID-19. 

There is no federal government presence at the local level, and no way to get support to those in desperate need.

Instead, for example, we saw responses to bushfires delayed by the need to work with state and local governments. We also have a new crisis on the harvest trail where crops across Australia are lying unpicked and rotting.

We have also seen Prime Minister Scott Morrison in a National Press Club address call for the federal government to have special emergency powers so it can respond without delay to emergencies.

One thing that we must do urgently, in these times, is re-establish a capacity for comprehensive employment services to exist at the local level and deal with people on the day they become unemployed, not when they become long-term unemployed.

These place-based employment services need to connect employers (small business in particular) to potential employees and provide the unemployed with relevant training opportunities.

It should not be a government agency, but a state-owned business enterprise called the “National Labour Market Adjustment Agency” (NLMAA).

It needs to provide information to government on what is happening in local areas, and it needs to develop job creation activities. Being locally based, it will be able to respond to the needs of the small labour markets and the small and medium businesses in those labour markets.

The NLMAA can then empower the local business community to respond to change through local economic development activities, which is the empowerment of key players in the business community to do what they know is needed.

The NLMAA would provide information and resources to the business and employer community to access government support when needed and create work when possible.

Let’s go local with employment services and economic reform, because, after all, ‘local’ is where we all live.

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