Scrap ‘punitive’ mutual obligation system for Australia’s jobseekers, job agency tells inquiry | Unemployment

Some job agencies running the federal government’s flagship employment services program, Workforce Australia, are arguing for a review or overhaul of the mutual obligations system, with one calling for the requirements to be scrapped entirely.

A parliamentary inquiry reporting to the employment minister, Tony Burke, is currently investigating the scheme, which was established in the dying days of the former Coalition government.

The committee’s chair, Labor backbencher Julian Hill, has already indicated that the “sacred cows” of Australia’s privatised job services system would be placed under the microscope and the inquiry’s first interim report called for the abolition of the controversial ParentsNext program, mostly aimed at single mothers on benefits. It also suggested a small role for the public sector in the replacement program.

With the inquiry turning its attention to the larger $7bn Workforce Australia system, job agencies have raised concerns about “punitive” and counterproductive compliance measures, with one industry player, Sarina Russo Job Access, suggesting the government should consider ending the controversial work-for-the-dole scheme.

Another provider, non-profit Wise Employment, said it believed removing mutual obligations from the system would improve engagement from jobseekers as long as it was combined with incentives.

Under the current system, jobseekers must complete a range of tasks each month – such as job applications, education or training, or other personal development activities – to meet their requirements. The various tasks are worth a set number of “points” and if the jobseeker does not hit their points target, their welfare payments are temporarily suspended.

Wise Employment, which is among the top 10 largest providers according to past analysis conducted by Guardian Australia, said in a submission that it would be better to remove this punitive approach.

It called for a radical overhaul of the system where employment services were open to all people looking for work, not just those receiving welfare benefits.

Under the plan, those on jobseeker benefits could choose whether to attend an employment services provider and those who did so would receive a higher rate of payment.

Sarina Russo Job Access, a for-profit player in the market for many years, claimed the work-for-the-dole program led to slightly better employment outcomes, but added the quality of those jobs was unclear.

It noted the controversial scheme had downsides, including that it created a pool of people working for less than minimum wage. It also pointed to the reported safety concerns with the program and noted it was unpopular with jobseekers, a view echoed by other providers.

skip past newsletter promotion

Sarina Russo Job Access said the inquiry should consider short-term subsidised job opportunities as a replacement to work for the dole.

Joblink Plus, a non-profit Workforce Australia provider, said the “long-held and current mutual obligations system was “punitive and potentially harmful”.

It said in its submission that aspects of the system were “drastic” and it called for the “immediate review of the efficacy of mutual obligations as a longstanding feature of Australian employment services”, as well as, the “income suspension lever of the Targeted Compliance Framework”.

Max, a for-profit multinational that long dominated the market, said the concept of mutual obligations was a “good one”, but the current system was too complex.

It was one of several job agencies that said compliance – such as suspending a person’s payment or reducing their benefits through penalties – should be carried out by Services Australia. The sector and experts argue that insisting job agencies serve as “clinician and cop” pollutes the relationship between a jobseeker and employment consultant. Compliance was moved from Centrelink to the job agencies under the Turnbull government, a move opposed by job agencies and welfare advocates.

Labor has said it supports some form of mutual obligation and the principle is also still widely supported by the employment services industry.

Annette Gill, a policy adviser at the National Employment Services Association, told an inquiry hearing this week the problem was “not mutual obligation” but how the requirements were set, specifically that “compliance” was “heavily emphasised”.

Jobs Australia, which represents non-profit job agencies, called for a review of mutual obligations, but did not provide a view on the current overall system.

The Workforce Australia contracts signed last year represented the biggest overhaul to the system in many years, limiting the jobseekers referred to job agencies to those considered disadvantaged or longer term unemployed. Those considered “job ready” simply report their job search efforts to an online portal.

The change was aimed at ensuring providers focused their taxpayer-funded efforts on helping those who needed help to find work.

Burke said last year it was too late for the Labor government to abandon Workforce Australia – which includes the contentious “points-based” mutual obligations system – adding that the inquiry would look at short-term and longer term reform options.

The inquiry must hand down its final report no later than 29 September.