Disability employment services under new public management: A comparison of Australia and Taiwan

The cooperation of public sector and non-governmental organizations

From the 1950s in Australia the Commonwealth Employment Service (CES) provided general employment services and the Commonwealth Rehabilitation Service (CRS) provided rehabilitation and employment services for disabled people (Macali, 2006).

In 1986, the Disability Services Act (DSA) was passed and two disability employment service models were established according to the Act: open employment and supported employment. In 1991, the Commonwealth government signed the agreements with all state governments that allowed the Commonwealth government to govern disability employment services nationwide. In compliance with the agreements, the Commonwealth government started hiring disability employment advisors to provide disability employment services in the mainstream CES and established more CRS offices for the growing number of job seekers. The services provided by the public sector developed vigorously at this time (Soldatic and Chapman, 2010; Soldatic and Pini, 2012; Tuckerman et al., 2012).

The beginning of workfare

In 1994, the Labor Party government published a White Paper entitled Working Nation and declared the primacy of economy and market value for national policies. After this, Australia moved rapidly towards neoliberalism, and the government gradually adopted NPM and outsourced more and more employment services to the private sector. By 1995, 90 percent of employment services nationwide were provided by NPOs and POs (Tuckerman et al., 2012).

The succeeding Prime Minister, John Howard, who was the leader of the Liberal Party, also undertook numerous employment service reforms between 1997 and 2006. In 1997, the Australian government abolished the CES and then shut down many CRS offices and distributed services contracts among private POs and NPOs. To further facilitate efficiency and to streamline service provision, a one-stop service organization called Centrelink was established to review all job seekers’ applications (including disability cases) for unemployment benefits. Later, in 1998, the Australian government initiated a bold move echoing the privatization of public services advocated by the Organization for Economic Co-operation and Development (OECD) to create the government-funded ‘Job Network’ platform that offered free job matching services for all kinds of job seekers (Ramia and Carney, 2010). In addition, the government initiated a new case-based funding payment scheme and performance measurement system, named ‘Star Ratings’, in 1999 that provided strong incentives for service providers to compete for performances (Considine et al., 2011; McDonald and Chenoweth, 2006; Tuckerman et al., 2012).

It is evident that the disability employment services were closely affiliated to general employment services. Later, open employment services were renamed the Disability Employment Network (DEN), which followed the practice and payment scheme of Job Network. Under the DEN scheme, the government was the purchaser to contract out the services to POs and NPOs. NPOs began to take on some financial strategies and service-delivery methods used as the POs’ competitors (Considine, 2003; Thornton and Marston, 2009).

In 2005, the Commonwealth government decided to transfer the disability employment services affairs from the Department of Social Services to the Department of Employment and Workplace Relations (DEWR), which was in charge of general employment services. In the same year, the government also proposed the Welfare to Work Act and the Work Choice Act. According to the Acts, applicants for Disability Support Pension (DSP) were compulsorily referred to the employment service system and the relationships between the employment service system and welfare benefit system became closer. Centrelink plays an important role in coordinating these two systems (Humpage, 2007).

Now (with certain conditions) the DSP applicants will be transferred to the job-search allowance scheme by Centrelink. Those who are assessed to be able to work between 8 and 15 hours per week will also be compulsorily referred to the employment service system and required to actively seek employment. If job seekers do not follow service plans designed by employment advisors, do not attend job interviews, or refuse to receive vocational training as required, their allowances or DSP will be canceled. All of these measures guarantee the welfare to work policy is effectively implemented (Lantz and Marston, 2012).

In 2008, the Labor Party returned to power. However, the attitude of the Labor Party toward workfare policies was consistent with the former government. In summary, Australia has shown strong determination to become a workfare state and arguably possesses the most articulate workfare policy in the Western world (Goodin, 2002).

Mobilization power of disability groups in Australia

Similar to other countries, disability rights movements started in the 1960s in Australia to fight against social and political oppression and to gain recognition, redistribution of sources, and representation. In the 1980s, disability rights movements succeeded in facilitating passing or amending many social legislations. Moreover, disability groups nationwide earned the opportunities to participate in policy discussion. However, the situation changed after the mid-1990s. Disability groups split because of disagreements and thus their collective strength weakened. Subsequently, some disability groups contracted with the government to implement social welfare projects and the conflicts of interest hindered their campaigns. The Howard government used various strategies to differentiate and split disability groups, to create conflicts among them, and to reduce the overall capacities of disability groups to advocate for disability rights. After the disability employment services were rapidly privatized, POs and NPOs equally shared the market and disability groups could no longer play a strong role in leading relevant policy reforms (Soldatic and Chapman, 2010).

Development of disability welfare services

Since the 1950s, disability services in Taiwan have undergone two stages of development: privatization and reprivatization. In the 1950s and 1960s, the government could only provide limited social assistance and disability care services. Supplementary services or supports from private organizations were in great demand. NPOs have always been the leaders in providing disability services in Taiwan. In the 1980s Taiwan was influenced by the United States, and contracting out services to private organizations and purchasing services from the private sector became prevalent. In 1983, the government started to commission private organizations to provide disability services and relevant services officially became privatized.

In 1980, the Disability Welfare Act, the first act to uphold the rights of people with disability, was passed in Taiwan. This act was renamed the People with Disabilities Rights Protection Act in 1997 and constituted the legal basis to advocate public policies to improve the employment of people with disabilities. After martial law was lifted in Taiwan in 1987, disability welfare advocacy organizations initiated a series of movements to appeal for disability welfare rights. Social workers played an important part in these movements.

After the 1990s, the number of private organizations commissioned by the government to provide social welfare services rapidly increased. In 1997, more than 50 private organizations were commissioned by the Taipei City government to provide a range of welfare services (Lin, 1997).

The Government Procurement Act was enacted in 1998, and the Act for the Promotion of Private Participation in Infrastructure Projects was enacted in February 2000. Accordingly, the contracting out of public services was encouraged and formalized. These laws and regulations not only expanded the privatization of social welfare services, but also inexplicitly showed that the government had the intention to involve POs in the welfare industry.

PES for the disabled

Originally, the PES system in Taiwan did not provide specialized services for disabled people. Disabled people with working ability could only obtain services such as employment counseling, and job opportunity enquiries from the general employment services system. On the other hand, the government authorities in charge of the disability welfare service provided various supportive services, including employment preparation and job-seeking services to disabled people.

In 1995, the central government initiated the supported employment services model in some counties and cities, and started working with NPOs for disabled people in providing services by offering subsidies. As this service model gradually became stable and mature, the central government started promoting supported employment services nationwide. Several local governments began formally tendering and contracting out employment services to the private sector after 1998.

In the 2000s, the unemployment rate in Taiwan continued to rise. The government began to consider providing unemployment benefits through the PES system and combining the services of unemployment identification, job placement, and vocational training. Also, the case management model was first introduced into the PES system in the hope of enhancing its proficiency. In 2003, the central government started to hire case managers in the employment service system. Their main tasks included coordinating necessary resources and services to assist job seekers with multiple difficulties. In some counties and cities without employment services centers and stations, this service was outsourced to private POs through labor dispatching. Professionals were hired by service dispatching companies and worked at government offices to provide job-search case management services. Disability employment services became specialized and were gradually separated from the general PES system at that time.

By 2013, more than 100 NPOs nationwide provided supported employment services. However, although the People with Disabilities Rights Protection Act permitted POs to provide supported employment services, no PO has ever attempted to join the market at the time of writing.

Unemployment benefits for the disabled

In Taiwan, the unemployment rates in the 2000s were unusually high. In 2002 the unemployment rate reached 5.17 percent, which put great pressure on the ruling Democratic Progressive Party government. The Employment Insurance Act was passed in 2002, which stipulates that any employee protected by the Act will be entitled to unemployment benefits and invalid benefits of the Labor Insurance under specific circumstances. According to the Employment Insurance Act, unemployed citizens who have been insured for at least one year within the past three years and who have been able and willing to work are eligible for unemployment benefits, as long as they have registered at a PES agency after involuntarily leaving their previous positions. They cannot obtain an employment or vocational training opportunity within 14 days after registering. The amount of unemployment benefits is about 60 percent of the average of six insured monthly incomes immediately before the date of unemployment and lasts for no longer than six months. Since rigorous eligibility of unemployment benefits, few disabled people fulfill the eligibility criteria for these benefits.

As for Labor Insurance, insured citizens who cannot recover from injuries or disease after being treated twice, and are diagnosed as permanently disabled by an authorized hospital, will be able to apply for disability allowances. In addition, disabled people who are insured by Labor Insurance and protected by the People with Disabilities Rights Protection Act can apply for disability pension if they are officially considered unable to work for the rest of their lives. The disability pension is calculated according to the insurance seniority with the amount usually equaling 1.55 percent of the average insured monthly income. Only employees who have lost their working abilities completely will be eligible for the invalid benefits.

Because the agencies providing supported employment services are not in charge of reviewing the disabled people’s application for unemployment benefits and disability pension, the possibility of integrating the employment service systems in general and for the disabled barely exists. Since the Taiwanese government does not provide job-search allowances to disabled people and the unemployment benefits are relatively low, there is hardly any financial pressure for it to reform its welfare system in this area.

Mobilization power of disability groups in Taiwan

Social welfare in Taiwan was influenced by new scholars who had returned from overseas in the early 1980s before any reform of public administration system was carried out. In 1983, the government commissioned the Christian Children’s Fund, which was later renamed the Chinese Children’s Welfare Foundation, to implement a family foster care service, and thus started the contracting out of social welfare services (Lin, 2012).

At the same time, social affairs bureaus at local governments in Taiwan faced unprecedented pressure because they were unable to fulfill the policies promised by the three important acts passed earlier in 1980, including the Senior Citizens Welfare Act, the Public Assistance Act, and the Disability Welfare Act. The strong criticisms from social groups and scholars forced the government to cooperate with NPOs to solve the dilemma caused by the scarcity of government budgets and manpower and the increasing demands of social services.

In 1983 the Ministry of the Interior subsequently announced a plan to use community resources to promote social welfare services. According to this plan, both local and central government could share the financial responsibility to promote various collaborative services with NPOs.

Disability organizations have long been involved in providing social welfare services and advocating disability rights. In the 1990s, disability rights groups and parents’ organizations made great contributions in promoting relevant legislations, enhancing social welfare services, and fighting for special education resources. The League of Welfare Organizations for the Disabled was founded in 1990 and consisted of more than 70 disabled rights groups. There are also various national organizations specifically for certain disabilities and these organizations often have local branches too. Typically, specific disability groups will bid for local governments’ service programs. The League does not compete with any other disability group in bidding for government service contracts and therefore can focus on advocating disability rights impartially.

According to the People with Disabilities Rights Protection Act, the central and local authorities shall appoint the representatives of people with disabilities or their guardians, to jointly decide on the affairs concerning the protection of rights and interests of people with disabilities. This article shows that the disability groups in Taiwan not only can be commissioned to provide services, but are also entitled to participate in policy formation.

Regarding disability employment services, local governments frequently invite experts with experience in disability services to help formulate relevant regulations and services content. In the past three years, disability groups have continued to actively advocate for their rights. The mobilizing vitality of the disability groups in Taiwan continues to be a crucial force for advocating disability rights.

The influence of disability rights groups

Both Australia and Taiwan experienced disability rights movements before their public sectors started to provide disability employment services. Whether the movements persisted was a crucial factor, resulting in the different developments of disability employment services in these two countries.

In the late 1990s, both Taiwan and Australia contracted out disability employment services. However, the purposes and courses to reform the disability employment services in Taiwan and Australia diverged. In Australia, many for-profit agencies provided employment services to disabled people. In contrast, NPOs dominated the services market in Taiwan. This is a major difference in development of these two countries.

In the past 10 years, numerous government-owned enterprises have been privatized in Taiwan, and several public projects involving large-scale infrastructure have been outsourced to the private sector. However, social welfare services have never received a great deal of attention from POs. In Taiwan, approximately 80 percent of for-profit employment services organizations are brokers whose main business is to recuit foreign workers. POs attempting to join the disability employment services must register with the government and follow a vocational rehabilitation service model strictly. This may be why there is no PO willing to provide disability employment services. POs can earn money easily from broking foreign workers and proving labor dispatching services.

On top of that, the earliest disability services in Taiwan were provided by non-governmental organizations (NGOs) such as Christian or Catholic groups from the United Kingdom, the United States, or Germany, which left a tradition of NGOs providing disability services in Taiwan. With the lifting of martial law in 1987 came a surge of new disability groups largely established by the parents of disabled people and by disabled adults. These disability organizations make up the largest share of, and are the most influential, among Taiwan’s social welfare groups. In 1990, they formed a coalition to successfully lobby legislators to amend the Handicapped Welfare Act, incorporating an employment quota system into Taiwan’s regulations that was unprecedented. In 2007 they also in participated in revising the Handicapped Welfare Act, and introduced the International Classification of Functioning, Disability and Health system into the Act, which marked a milestone in Taiwan’s legal protection for the disabled.

Taiwan’s social welfare groups are influential in thwarting the attempts of POs to provide welfare services for profit-making purposes. When POs sought to enter the social welfare industry, they encountered strong resistance from social welfare organizations. For example, when the Taiwanese government tried to introduce large funds from the life insurance industry into the elderly care service industry at the end of 2013, social welfare groups voiced strong objections and fierce negative criticism. In the end, the proposal was deferred. Due to the dominance of welfare groups, public disability services in Taiwan are most likely to remain privatized and quasi-market-oriented, instead of becoming market and profit-oriented.

The government’s determination to apply NPM

Governments determination and strategy to pursue NPM have contributed much to the different developments of disability employment services in Australia and Taiwan.

For the Taiwanese government, the purpose of contracting out, privatization and reprivatization of disability employment services is to expand service capacity and coverage, rather than to transfer the services from the public sector to the private sector. It needs to solve the problems of insufficient manpower and budget in the public sector but does not intend to enhance the service efficiency.

On the other hand, the Australian government has comprehensively implemented NPM in its public administration. It has applied many business strategies to reform the public sector. The Australian government has been very willing to try diversified and pragmatic tactics, like outsourcing services and encouraging POs to compete with one another. The contracting out of PES was one of its most successful examples. The government is determined to become a new ‘steer, not row’ government. It has not only privatized state-owned enterprises, but also substantially reduced its ownership of these enterprises and restricted involvement in their management (e.g. Qantas, the Commonwealth Bank, and Telstra). Evidently, the Australian government has completely accepted and adopted NPM principles and strategies instead of just using NPM as a matter of formality.

The connection between welfare benefits and employment services

Providing job opportunities instead of financial assistance is a product of capitalist work ethics, which states that poor people with working ability should work even if the job is temporary and low-paid. For example, the Temporary Assistance for Needy Families (TANF) in the United States or the income support system in the United Kingdom both uphold the workfare or welfare to work policy and use job opportunities instead of financial assistance to push poor people back to work. They believe this policy can effectively eradicate welfare dependency.

Australia successfully applied NPM to disability employment services by outsourcing, emphasizing the value of efficient performance, and using various tactics to manage the performance. Another crucial reason for this achievement is the policy that tightened welfare benefit eligibilities. The Australian government realized very early that a continually increasing number of DSP applicants would cause financial problems. International organizations such as the OECD also promoted privatization, liberalization, and marketization, in the hope of solving the unemployment problems suffered by advanced countries as well. The policies that combine employment services with eligibilities for social benefits rebuilt the relationship between employment and welfare (Considine, Lewis and O’Sullivan, 2011).

The situation in Taiwan is very different. The government contracted out employment services only under a practical consideration. No corresponding welfare benefit systems or strong policy ideology influenced this change. One of the essential reasons is that the whole social security system does not provide a safety net for the disabled. The assessment criteria for low-income households are rigorous in Taiwan, so the number of qualified low-income households always remains low. In 2014, low-income households account for only 1.73 percent of total households in Taiwan, and people meeting the standard of low income account for only 1.48 percent of the total population. Since the amounts of the average benefits for unemployment or for disabilities are extremely low, approximately one-fifth of the minimum wage in Taiwan, the disabled can hardly depend on the social benefits and have to seek jobs, and the government can hardly provide any more incentives by adjusting the amount of the benefits.

Unmasking NPM reforms

This study has thus far identified the social contexts that caused the differences in NPM undertakings by Taiwan and Australia. For both countries, though, the NPM reforms may be more of a curse than a blessing to their welfare development.

Over the years, Taiwan seems to have made considerable progress in building a solid welfare infrastructure. Indeed, the country has implemented sweeping social welfare schemes, ranging from a national health insurance program in 1995, unemployment benefit in 2003, a national pension program in 2007, to the passage of a long-term care services bill in 2015. However, efforts have yet to be made to shore up job security for the disabled, who currently can expect no more than specialized assistance in improving job skills.

Neoliberalism has induced a globalized labor market in which wages are far exceeded by workload. In addressing such problems, Taiwan has failed to strengthen its employment security system. Among those sustaining the most profound impact in Taiwan are the disabled, low-income households and the long-term unemployed, who have not received due protection against employment instability. NPM can be readily exploited to attribute all problems to lack of efficiency, while perpetuating the myth that the provision of skill training coupled with employment services open to competition would lead to job security. The truth is that the majority of the disabled in the country suffer from inadequate and insufficient employment protection, and about 40 percent of those employed reported earning less than the minimum wage according to a government labor statistics survey published in 2009.

Under the NPM policy, NPOs in Taiwan are required to go through cumbersome paperwork and bureaucracy. They are also under enormous pressure to deliver measurable performances. The NPOs are forced to shorten the duration of supportive services to an average of three months, exacerbating job insecurity for the disabled. To win another renewal of the contract, NPO staff grow increasingly submissive to the NPM control and are left with insufficient time and resources to review or advocate existing or other services. Driven to prioritize performance above anything else, the service providers tend to attribute job barriers to the personal issues of the disabled and no longer seek to address structural problems. Taiwan’s NPM scheme with its excessive controls has helped to keep POs at bay, but the workings of NPM are nevertheless eating away at the NPOs’ social assets and causes established through decades of efforts.

In reforming employment services, Australia has advanced a lot further than Taiwan. Australia’s success with NPM can be attributed to its restructuring of welfare policies, which threatens to withdraw short-term welfare benefits if the disabled fail to turn to the employment system as required. This in essence turns structural problems into personal problems. Outsourcing employment services, in addition, works conveniently for the public sector to evade political responsibility of low placements for the disabled. The Australian government can transfer unemployment risks to job seekers themselves and pass on public denunciations of its incompetency and lack of efficiency to private providers. Through payments and service rating system, the Australian authority pressures private contractors to expedite job placements in line with its work-first policy, but to little avail for the disabled in building employability. On a level playing field, the NPOs in Australia are compelled to turn services into entrepreneurial operation in order to compete with the POs under the government’s result-oriented performance evaluation.

One striking similarity begins to come to light: Taiwan and Australia have both caused the disabled to fall prey to neoliberalism. Under the mask of NPM schemes, both countries have set rules to subject their service sectors to state control. Under the pretext of market mechanism, the disabled are left with conditional short-term benefits or a complete lack of financial support and are coerced into self-dependency. NPM unmasked in fact reveals a powerful government keeping a firm grip on the lives of the socially and economically marginalized. However, human service workers of the two countries are not left without an alternative. Social workers will have the opportunity to play an active role in the sector. Instead of being victims of neoliberal forces, they can team up with other social and political actors, including their clients or political groups, to use their professional knowledge and techniques to bring about better governance of social services.