In the last week before the May budget when Labor was finalising its modest increase to jobseeker payments, Peter Dutton had a rejoinder: bring back Work for the Dole.
The problem with that request, treasurer Jim Chalmers noted, is that Labor never abolished it.
The Albanese government inherited the Coalition’s Workforce Australia job services model, which in theory uses a points system to encourage jobseekers to apply for jobs, and undertake training and other activities that improve their job readiness.
With $1.5bn a year committed to the program – which is delivered by private providers who have valuable contracts that cannot be torn up – the best Labor could offer was a review.
This week will begin with Chalmers releasing the employment white paper, which includes work on improving productivity through reducing barriers to employment.
Job services is relegated to one of the broad “reform directions”, not a concrete policy. But the white paper will be a springboard towards the parliamentary inquiry report on Workforce Australia, to be tabled in November.
We’ll see shortly how big a shake-up of the job services system Labor is up for.
The problems with the system are well known, but let’s recap them quickly.
In a bid to stamp out the very small minority of people gaming the system, successive governments have ordered jobseekers to tick boxes and jump through hoops.
But ordering them to fire off dozens of CVs rarely achieves the desired result, beyond annoying employers whose inboxes they cram, and many courses, including the controversial ParentsNext program, are low quality.
Despite repeated overhauls, providers still benefit from short-term outcome-based payments, meaning they are incentivised to get people into any job, no matter if it is a poor use of their skills.
Armies of people pushed into crap jobs does little for national productivity, nor for their career development. Unmotivated, they churn through the system again.
And then there is the endless ticket-clipping by the job services agencies, who my colleague Luke Henriques-Gomes and later the Saturday Paper have shown earn millions more by moving welfare recipients through jobs and training in their own related companies.
Enough. Make it stop. But how?
Up one end of the spectrum, there are radically progressive solutions like abolishing mutual obligations, as even some not-for-profit job agencies have called for, or bringing back the commonwealth employment service, as the Community Public Sector Union is campaigning for.
Safe to say, mutual obligation is going nowhere. Dutton would use the potent anti-welfare politics of the dole bludger stereotype to bludgeon Labor to death if it tried.
The Labor MP Julian Hill, who is chairing the inquiry, has already made it clear this won’t be a recommendation, saying in a May hearing “that society has a reasonable expectation that people, in return for social security, make reasonable efforts to get work” – the only question is how to “operationalise” that.
But Hill has called for a shift away from the “slightly nutty work first” incentives of the current system, warning it “drives employers away from the system and it’s driving unemployed people mad”.
“People are not stupid; they know when they’re being asked to do things that don’t meet their aspirations or their life goals or are just not realistic for them,” he said on 6 June.
Instead, it seems the inquiry is likely to recommend a refocus on sustainable participation in the labour market by first identifying what the barrier to employment is for the particular jobseeker.
Jobseekers can then be directed into different pathways: intensive support, if they have complex social, medical or mental health issues; a training pathway, if acquiring skills would help them land a job; or an “activation” pathway for those who are closest to re-entering the labour market.
So yes, it might be reasonable for some people to be asked to send CVs and attend interviews for appropriate jobs. What’s needed is more face-to-face assessment to check what would actually be helpful for them.
In hearings Hill has noted that “many countries run a system where the government is the provider for the people closest to the market”. Australia has a digital system to keep track of jobseekers who don’t need much help at low-cost, which could be expanded into a public option.
More complex case-management can be outsourced, with bigger outcome payments for providers who genuinely help people overcome larger barriers to employment.
Hill has also complained that the current system is too competitive, leading to perverse incentives such as job services developing relationships with particular employers and then not sharing leads.
“It’s just bizarre having 11 agencies all tripping over each other and treating employer relationships like capital that they fight over,” Hill said on 26 May.
It sounds like the inquiry is moving towards a mixed-market model with greater reliance on the government to provide basic job services, while the private sector is consolidated, with contestable contracts but less direct competition.
Whatever the inquiry recommends, it’s already clear that the box-ticking and ticket-clipping must be replaced by a system that identifies and overcomes the barriers to work.
Job services should be the business of changing lives, not monetising an endless churn of the unemployed.
