• Dante Mavec, Kirrily Jordan
• Centre for Aboriginal Economic Policy

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03 November 2010The Australian Employment Covenant (AEC) was launched on 30 October 2008 with the bold goal of creating 50,000 new jobs for Indigenous Australians within two years. At the end of this ambitious timeframe, the scheme has succeeded in securing more than 20,000 job pledges from employers.

This is a commendable achievement, but estimates put the number of Indigenous job placements under the scheme at around 2,800, clearly well short of the original goal. The AEC has publicly backed away from its initial two-year timeframe and there has been some recent suggestion that its original target referred only to 50,000 job pledges. However, this is at best confusing, with public documents stating that the goals of the AEC initiative included the ‘placement of 50,000 Indigenous people into work’.

This paper examines the nature of the AEC and its relationship with government as well as exploring why the rate of actual job creation might have been much lower than anticipated. It first sets out the scale of the challenge entailed in creating 50,000 new jobs for Indigenous Australians, with data suggesting that this was always an impossibly ambitious goal. It then examines outcomes in three areas: the number of jobs pledged; estimates of the number of job placements; and estimates of retention rates to 26 weeks. A key point to note is that available evidence has been very limited, making any assessment of the efficiency of government spending impossible and raising important questions about accountability and transparency in the expenditure of public funds. The paper concludes with a discussion of some of the factors likely to be constraining Indigenous labour supply. It argues that while the AEC may add value to existing employment programs—particularly by securing increased employer demand for Indigenous workers—a more flexible approach to employment services might prove more effective in increasing sustainable employment outcomes among Indigenous people.