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The Disability Community and the Regional Economic Crisis

Michael Sumner
Chief Executive, Disability Services Australia Limited

 

Abstract In putting forward an Australian perspective on the implication of the Asia Pacific regional financial crisis, it is important to state that fortunately in Australia we have been shielded from the full effect of the economic downturn. We are, however, extremely concerned that there will be a flow on effect felt in Australia. In this respect there are some indicators that say our current buoyant financial situation may well be sorely tested over the next few years. This paper tries to address some experience Disability Services Australia encountered. Six projects managed by the Business Services Review will be presented at the end of this paper.

An Australian Perspective

In putting forward an Australian perspective on the implications of the Asia Pacific regional financial crisis, it is important to state that fortunately here in Australia we have been shielded from the full effect of the economic downturn.

In general, our economy is reasonably strong; consumer spending is very high; personal and business interest rates are at the lowest level in over 25 years. Unemployment rates are slowly falling and, business outcome is cautiously optimistic.

We are however, extremely concerned that there will be a flow on effect felt in Australia as our neighbour countries attempt to not only cope with a major financial crisis , but at the same time are experiencing internal political instability of a significant magnitude. In this respect there are some indicators that say our current buoyant financial situation may well be sorely tested over the next few years.

Australia can however relate to the difficulties rehabilitation and disability service providers are experiencing at the moment, within the Asia Pacific region. Whilst our present economic position is fairly positive it most certainly has not always been this way. Indeed, Australia only started to emerge from a severe financial recession over the past three to four years. Before this time we were suffering from a recession described by many economic analysts as only being equalled by the great depression of the 1930's. During this recession, which lasted for about five years, the disability community suffered significant problems; problems, which to some degree we are still recovering from.

It is for these reasons that I feel Australia's disability community can offer some thoughts on how others might cope and, what, if any opportunities exist within the dark clouds of economic crisis. Is there in fact a silver lining within the dark cloud?

Disability Services Australia Ltd., operates a wide range of support services for people with a disability in the Sydney metropolitan area and nearby rural areas. These services include sheltered, supported and competitive employment as well as residential and day programme services. Through our operating arms Amaroo Industries, Amforce Labour Solutions, One To One Employment and Disability Support Services we provide services and support to over one thousand people with a disability.

During the most difficult times and despite the recession, we continued to grow and develop our services to people with a disability as well as increasing the sales income generated through our sheltered workshops. This was at a time when many other disability groups were experiencing significant problems in maintaining service provision as well as in their business outlets. In fact much of our growth came about as a result of these organisations seeking Disability Services Australia to take over their operations due to the difficulties they were experiencing. The question is, why do some grow and develop whilst others have trouble staying afloat. Regrettably, the answer is far more complex than the question itself.

During Australia's economic crisis many mainstream businesses were facing extremely difficult times with a serious downturn in their operations and sales, along with ever increasing interest rates on business loans, mortgages and working overdrafts. This resulted in Australian business beginning a process of massive downsizing of their employee base and at the same time "change management" became the buzz phrase of the day.

A recent report from the Australian Graduate School of Management has found that the emphasis on cost cutting and shedding of employees has slumped and, that the high performing businesses are not now downsizing. This concept is no longer seen as fashionable, in fact it is seen as having very negative connotations, with one result being a significant number of Australian businesses have lost a lot of highly trained and skilled people during this process. The repro states that dealing with the problems presented by the financial crisis was often undertaken with a machete when a scalpel applied in a more deliberate and delicate way would have done a far better job.

In painting this picture of doom and gloom however, it is our experience that significant opportunities are available to work centres, sheltered workshops and supported employment services operated to benefit people with a disability. During this time Disability Services Australia worked on cultivating strategic alliances with manufacturers and importers of goods and services. The result of these alliances provided an opportunity for our disability employment services to undertake work on an outsourcing basis that had previously been done in house, by the business.

Due to the downsizing of employee numbers in mainstream business, our experience in Australia showed that manufacturing and service businesses were looking for outside agencies to take over work and tasks that our own employees had been doing.

These are some of the opportunities that exist but they are opportunities which must be seized by disability organisations, indeed you may even need to create the opportunities by convincing business your organisations have something to offer them. Remember, whilst you may well have problems you are seeking answers for, so do mainstream businesses as well. You must try and provide them with some of the answers to their questions.

In order to take advantage of any opportunity that may exist within an environment of crisis, it is vital for the disability organisation to be forward thinking and to develop a positive attitude regarding success, rather than being introspective and worrying about the problems you are beset with. Your focus must move from the problems themselves to the solutions of the problems.

As mentioned earlier, during the time of deep economic recession Disability Services Australia prospered. We were able to expand rather than contract our services. We found supported employment opportunities inside mainstream business for over 150 people with a disability and, at the same time expanded our sheltered employment operations thereby increasing the number of employment places for our clients. During the significant growth we experienced Disability Services Australia's financial stability and security improved and this added to the positive operating environment we were in.

Why? Because whilst we were surrounded by a sea of financial and business despair we did not wallow or flounder, rather we started swimming strongly and, as a consequence significant opportunities were gained for clients of our disability services.

Many organisations within Australia are however still recovering from the effects of the downturn, even though the economic climate has been improving over the last few years. There is no doubt the recession has had a significant and detrimental effect on these services and in particular some of those who operate sheltered workshops for people with disabilities. The economic recession certainly exacerbated what was already an extremely difficult operating environment.

Many service organisations were in receipt of inadequate or inequitable funding from Government and were still dealing with the effects of a deliberate ten year campaign by Government and lobby groups to close down altogether sheltered workshops.

The attitude of the Government has changed towards sheltered workshops as a service model and workshops are seen as a legitimate choice. within a range of employment options for people with disabilities. The focus accordingly has changed from closure of workshops to the quality of the support and service offered and, to the positive outcomes people with disabilities can receive from employment within a sheltered workshop.

It was recognised however that many disability organisations were experiencing significant difficulties in maintaining their work centre operations due to the factors outlined above. In response to this ACROD (Australian Council for Rehabilitation of Disabled), the National Industry Association for Disability Services and the Federal Government Department of Family and Community Services, the funder of disability employment services, met to discuss what assistance could be given to this sector of disability service providers.

The outcome of this is that Business Service Review is about to be undertaken within Australia. The term, Business Service is used in Australia now instead of sheltered workshop. The community feels the words Business Service appropriately reflects this service model whilst at the same time removing the negative connotations the words "sheltered workshops" bring with them.

The Business Service Review is a joint initiative between ACROD and The Department of Family and Community Services and is designed to examine the range of strategic issues that are confronting this sector of disability service provision. Its aim is to recommend a course of action that will result in a strategic plan to take the sector forward in a positive way over the next three to five years.

Service providers generally view this project in a highly positive way and are pleased to see the collaboration between their representative, ACROD and the Federal Government.

The project will be managed by a steering committee comprising industry nominated representatives as well as Government representatives. Initial work on the project has begun and it is anticipated the project will have about a twelve month timeframe. The Federal Government has allocated a significant amount of funding to the review to ensure it can be undertaken in a thorough and professional manner. It is hoped the outcomes of the Business Services Review will go a long way towards assisting service providers recover from a series of compounding problems, not least of which being the effect of the economic climate.

In looking at how best to undertake the review it was decided to break the project into the following major parts.

Review Objectives

1. Develop a thorough data set for decision making
2. Examine the commercial pressures facing the Industry
3. Consider the tensions between providing support for people with disabilities and commercial imperatives
4. Estimate the future demand for business services
5. Develop best practice service delivery models
6. Outline corporate governance issues; and
7. Develop a strategic partnership approach between the sector and the Government

Terms of Reference

1. Complete industry data set and methodology for future planning requirements, to include:

a. Location of Services
b. Types of work undertaken
c. Number of people employed (by category)
d. Infrastructure base
e. Record of innovative service
f. Financial viability
g. Corporate governance arrangements
h. Client numbers and level of disability
i. Client outcomes
j. Current level of funding (per client)
k. Wage levels

2. Relevant commercial issues and strengthened agency ability to operate in the market place; to include:

a. Competition
b. Growth in industry types
c. Regional variations
d. Impact of new technologies
e. Niche markets
f. Joint ventures
g. Competency based training
h. Quality management

3. Existing tensions between maintaining a viable business and meeting the employment and support needs of people with disabilities; to include:

a. Determining the demarcation line between legitimate support costs/business costs
b. Impact of clients with challenging behaviours
c. Impact of high support needs clients

4. Future demand for business services placements; to include:

a. Future demand analysis
b. Regional variations
c. New client group opportunities
d. Wage level expectations

5. Best practice service delivery models within the industry; to include:

a. Industry standard performance benchmarks
b. Business improvement initiatives
c. Allowance for regional variations (specifically rural and remote area differences)

6. Protocols and procedures for best practice corporate governance arrangements; to include:

a. Role clarifications between Boards of Management and employed staff
b. Composition of Boards and skill mix of Boards members
c. Board of Management training and induction

7. Advice on developing a strategic partnership approach between Government and the industry; to include:

a. Strategic planning framework
b. Information transger
c. Financial viability protocols
d. State and federal overlap
e. Future purchasing and contestability frameworks

Project Scope

The Business Services Review has been divided into 6 discreet projects which incorporate all of the elements of the agreed terms of reference. The discreet nature of the projects allows for the potential involvement of a range of service providers to meet specific skills and knowledge requirements.

 

Project 1
Industry Profile

Overview

* Develop a comprehensive profile of the business services sector of the disability employment industry.

Timing

* Phase 1

* Prerequisite for subsequent projects

 

Project 2
Industry Forum

Overview

* Identify conflicting requirements of maintaining business viability whilst meeting client support and employment needs.

* Develop strategies to manage the client/business dichotomy.

Timing

* Phase 2 Project

 

Project 3
Financial & Operational Benchmarking Study

Overview

* Identify Key Performence Indicators, improvement initiatives and benchmarks against commercial providers.

* Identify current and future commercial pressures facing the business services sector.

Timing

* Phase 2 Project

 

Project 4
Best Practice Case Studies

Overview

* Develop operational case studies to identify industry best practices.

* Adaptation of best practice to a disability employment industry sector framework.

Timing

* Phase 2 Project

 

Project 5
Future Directions for Disability Employment

Overview

* Consolidate findings from Projects 1-4.

* Establish future directions for the business services sector.

Timing

* Phase 3 Project

 

Project 6
Project Management & Quality Control

Overview

* Establish overall Business Services Review project plan, discreet project tender evaluation criteria and selection of preferred project providers.

* Oversight project progress against milestones and quality of outputs from each project.

* Provide progress updates to FaCS Project Director, Streeing Committee and other relevant stakeholders.

Timing

* Throughout life of Review

 


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Asia and Pacific Journal on Disability
Vol. 2, No. 1, May 1999

Contributed by Mr. Tsuyoshi Takeda, Asahi Shimbum Newspaper

ISSN 1029-4414