A Labor MP has questioned the privatisation of the multi-billion-dollar employment services system, saying it’s failed to prepare many disadvantaged jobseekers for work and made others less employable by demeaning them.
In his first public comments after being appointed chair of a parliamentary inquiry into the sector, Julian Hill also took specific aim at work for the dole and said parts of the welfare compliance regime resembled the TV show Squid Game, in which contestants compete in do-or-die trials.
Hill insisted the inquiry into the $7.1bn Workforce Australia scheme will go where a long line of past investigations hadn’t by examining “sacred cows” such as privatisation and “work-first” ideology.
Over the past two decades, successive governments had focused on reducing job services spending and the welfare budget at “pretty much any cost”, he said.
Hill said the objective of supporting people into good jobs was “absent entirely” from the current system.
“The impact on disadvantaged people, communities, employers and the labour market of the policies used to achieve these two objectives are secondary considerations,” Hill told the National Employment Services Association’s annual conference on Tuesday.
Employment services was privatised in the late 1990s by the Howard government and is now the Commonwealth’s second largest procurement after defence.
The system has been reformed several times amid questions over its effectiveness, with the latest incarnation, the $7.1bn Workforce Australia scheme, established in the final days of the Morrison government.
Labor supported the Workforce Australia legislation in opposition but the employment minister, Tony Burke, established an inquiry after mounting concerns about the program, including some outlined by Guardian Australia.
As evidence of the model’s failure, Hill pointed to the current labour market, where employers are “screaming for workers” yet there “remain hundreds of thousands of Australians stuck in the long-term unemployment queue”.
While some “are ill-suited for a myriad of complex reasons for the skilled work on offer”, for “far too many … the system has failed for years to prepare, invest in, train and skill them”.
“Or worse, it’s demeaned them and made them less employable over the months and years rather than helping them,” he said.
Hill questioned “whether we can ever get the incentives right in a fully privatised system”.
“If the point of privatisation was to create innovation and efficiencies, if we now regulate and prescribe everything in detail, then why would we continue with the current form of privatised system?” he said. “Please don’t presume we have an answer to that question: we do not yet know.”
Although he argued there was a place for mutual obligation, Hill said politicians had fuelled stereotypes by loudly insisting “any job’s a good job”.
He said he told his constituents in Bruce, which covers disadvantaged suburbs such as Dandenong, that while some “need a push or a kick up the bum”, employment consultants were too often “glorified Centrelink compliance officers”.
Jobseekers were “forced to … do work-for-the-dole stunts that don’t help them get a job” and were punished through payment suspensions and cancellations, pushing them “further into poverty”, Hill said.
He added: “… the state should not make people do things that harm them or make them less employable on the way … ‘Work for the dole’ anyone?”
Hill also described the “Targeted Compliance Framework” (TCF) – which hands jobseekers “demerits” for non-compliance – as “Boston Consulting meets Squid Game in a dystopian reality TV show that we make citizens play every day”.
Jobseekers can have their payments cancelled for repeated “non-compliance” in a so-called “penalty zone” under the TCF.
These are distinct from “suspensions”, in which payments are temporarily stopped until a person attends a catchup meeting or fulfils missed requirements.
Hill said the international evidence showed payment cancellations fell on those with the “most chaotic lives and push people – including those experiencing trauma, family violence and addiction – further into poverty”.
He believed there was a place for payment suspensions as a “behavioural tool, if not automated and reasonably applied” but was “sceptical about the utility of cancellations”.
The Australian Council of Social Service advocates for a “fairer” mutual-obligations system including the end of work for the dole, while others such as the Australian Unemployed Workers Union and the Greens argue such requirements should be discontinued, saying even payment suspensions – in which welfare benefits are delayed – are harmful and should be scrapped.
A UK study in 2018 found benefits “sanctions” – where payments are reduced or cancelled for non-compliance – were ineffective at getting people into work. Some Australian employment services providers have also questioned the broader mutual-obligations regime.
