Unions and community groups have criticised the federal Labor government for not implementing the kind of radical reforms to the national employment services system recommended by previous inquiries.
The Minister for Employment and Workplace Relations Amanda Rishworth announced the “biggest shake-up” of employment services in 30 years at the National Press Club on May 26. Labor will spend $312 million on “reforms”, impacting more than a million people on JobSeeker.
But it has not taken back employment services into the public system, as recommended by its own select committee in 2023.
The current system relies on privately-owned employment service providers, bought in by the John Howard Coalition government. It costs taxpayers some $2 billion a year.
The government’s changes include overhauling the current approach to a three-tiered system for those looking for jobs through Workforce Australia. The changes include: a digital service; provider-led support for people needing more skills and “intensive services” for people facing complex barriers.
Antipoverty Centre spokesperson Jay Coonan criticised the reforms, saying that retaining the mutual obligations system is “punishment as usual”.
“You can’t punish people into employment in an economy designed to keep at least 4 per cent of us unemployed, especially with the RBA [Reserve Bank of Australia] aggressively pursuing higher unemployment.”
Coonan said many unemployed people want a tailored system but it is “not possible to deliver in any meaningful way under a coercive system”.
“It’s not a major overhaul if you keep ‘mutual’ obligations in place,” adding that the use of suspensions must be immediately paused.
Coonan said the 2023 Rebuilding the employment services system report raised significant concerns about the number of incorrect penalties applied to unemployed people.
Julian Hill MP, the inquiry’s Labor chair, found that the current national employment services system is “an inefficient outsourced fragmented social security compliance management system that sometimes gets someone a job against all odds”.
Further Hill said: “It should not be controversial to state that full privatisation has failed. Even the previous government implicitly admitted this … The current system is inefficient, tying clients and providers up in red tape, driving away businesses and effectively making too many people less employable by requiring them to do silly courses, pointless activities or apply for jobs they simply cannot do.
“It has failed to prepare people for today’s red-hot labour market and to effectively address long-term unemployment, with 150,000 people stuck in the system for over five years. This must change.”
The committee’s 600-page report made 75 recommendations, including reestablishing a public Employment Services Australia.
The Community and Public Sector Union (CPSU) described Rishworth’s changes as “a step in the right direction” but that it did not go far enough to “fix a system that is fundamentally broken”.
CPSU national secretary Melissa Donnelly said on May 27 that the “complex and vital task” of helping people find stable and productive jobs “should ever have been given to private, profit-seeking businesses.
“It has been an unmitigated disaster for job seekers and employers and come at a huge cost to taxpayers,” Donnelly said, adding the government should have taken steps to bring the system back into public hands.
The Proud to be Public campaign, backed by the CPSU, also criticised Labor’s decision to continue to allow private employment services providers. “The evidence couldn’t be clearer. Just 11.7% of job seekers found long-term work through providers in the last reporting year. That’s not success; it’s system failure.”
The Proud to be Public campaign is calling on the government to expand the role of the public service where private providers are failing job seekers; bring more services back to the public service over time; where a community-based service is more effective, such as in the ACT and regional communities, ensure it can operate; and move away from a punitive system to one that delivers real support.
Donnelly said the system needed to be able to “support people into secure and meaningful jobs, connect employers with the right workers and put people before profits.”