Evaluation of the Australian Wage Subsidy Special Youth ...

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out that in 1989-90 there were substantial difficulties in finding placements with private
sector employers up to the full Budget allocation to the programme.
During the period to 1996, there was an expansion of job creation programmes rather
than wage subsidies, which was mostly due to the new case management incentive
system where the case payment for outcomes was the same for entry to any programme
placement or unsubsidised job (OECD (2001): 200). It was found that several factors
meant that the NWO 8 direct job creation programme got most Job Compact placements
rather than Jobstart: employers were reluctant to take on the long term unemployed and
considered the 9 month placement too long; dismissal laws meant employers were
reluctant to take on potentially unsuitable employees (DEETYA (1996): 46). However
importantly, in 1994/5 there was a strong administrative push to give preference to NTW
over Jobstart and it was perceived that there was competition between the programmes as
employers could get a higher subsidy under NWO than Jobstart without having to
commit to a long period of placement employment (DEETYA (1996): 41-49). Stretton
and Chapman (1990) p42 described the selection process for Jobstart as follows: “The
filling of Jobstart vacancies does involve some selection bias as the CES selects those
eligible clients who are judged to be ‘job ready with assistance´ for referral to Jobstart
vacancies. Employers then select their subsidised employee from among a number of
referrals made by the CES.”
The subsidy varied with age, education and length of unemployment (DEETYA (1996):
131). In 1995, Jobstart subsidies could run for 6 to 12 months, and subsidies varied by
unemployment length and were received in tiers so that those 18 months unemployed
received $200 for the first 13 weeks, followed by $100 per week for the next 26 weeks,
and a lump sum to employers of $500 after 12 months of continuous employment was
reached (Piggot and Chapman (1995): 4). In 1994/5 there were 40,200 Jobstart
placements for Job Compact clients, which was a fall of 25,000 from the previous year
(DEETYA (1996): 46). Employer survey findings suggested that employers found the
8 New Work Opportunities (NWO) provided direct job creation in projects where placements had work
with some training typically in environmental, age care and community sectors (OECD (2001): 199).