Government to scrap one-size-fits-all jobseeker system in major 30-year reform
Australia’s system for helping jobseekers get into work is set to be overhauled for the first time in 30 years as the federal government figures out the best way to help the country’s growing number of long-term unemployed people.
Three years after a Labor-led committee said Australia’s employment services system was akin to “using a nuclear bomb to kill a mosquito”, Workplaces Minister Amanda Rishworth will announce on Wednesday that the one-size-fits-all system will split job seekers into three streams for the first time.
This will separate newly unemployed people who already have the ability to re-enter the labor market from those who, for example, are long-term unemployed, disconnected from the labor market or face other barriers to employment.
These flows will determine what job search services people can access and their reciprocal obligations (conditions that job seekers must meet to continue receiving income support from the government).
“This is a huge, positive step forward for the more than one million Australians who access this system each year, ensuring they get the right support at the right time,” Rishworth said.
The employment services system was privatized during the Howard government. But it was later criticized for prioritizing profit-driven service providers who did not adequately support people who were elderly, disadvantaged or long-term unemployed.
In 2023, a parliamentary committee led by Labor MP Julian Hill found that the system was hampering the entire economy because it failed to properly train people while tying employers up in bureaucratic mountains.
The inquiry recommended that the government, which spends about $2 billion a year on the program, get more involved than a federal ministry that oversees private service providers.
Rishworth will consider these findings in his speech to the National Press Club on Wednesday, arguing that a one-size-fits-all approach is failing to support people and pushing them into unsuitable jobs.
One in six people leaving the Workforce Australia caseload re-enters within a year; This harms participants, the economy, and the federal government. Businesses also told the government they were disappointed to be sent inappropriate candidates from providers.
Meanwhile, an increasing number of people are out of the labor market and have been languishing there for years. Twenty per cent of Workforce Australia’s caseload has been there for five years or more, Rishworth says. This group, now numbering about 140,000 people, accounted for 13.5 percent of the caseload in 2015.
“If you’re lucky enough to be healthy, have a recent work history and have a post-secondary qualification, a provider is more likely to help you find a job that suits you because you’re likely to be closer to the labor market,” Rishworth will say, according to previously provided speaking excerpts.
“But the way providers are paid means that they are incentivized to focus their efforts on people who fit that narrow profile, rather than supporting everyone with their caseload. And people with more complex barriers to employment are also thrown into a very difficult basket.”
To better tailor services, the new system will divide people into three branches. According to the Australian Bureau of Statistics, the largest group of unemployed people are those who have been unemployed for four to 13 weeks (206,800 people), while 144,800 people have been unemployed for at least a year.
The first stream in the new system will be for people who are ready to work but need help finding a job; They will use a digital service.
The second stream will appeal to people who need help building skills and confidence to return to the job market. They will receive targeted, provider-led support.
The third stream is for people who face complex barriers to employment and are prepared to receive more intensive support, which may include social services. People in this group are older, have medical or physical limitations, are less skilled and live in regional or suburban areas.
The new system will still use private providers but will be less reliant on for-profit services. For example, the role of community-based organizations with more experience connecting people with housing or financial support will be stronger.
Labor will continue to uphold its reciprocal obligations to people receiving income support, which the Australian Council of Social Service has deemed harmful and counterproductive.
But these will also vary depending on people’s situations; It’s a departure from the current points system, which applies a standardized approach to keep people looking for work.
“Our public debate has become bogged down in a debate about whether reciprocal obligations are too hard or too soft, when the real question should be: Do reciprocal obligation activities really help people get started? Unfortunately, too often the answer is a clear ‘no’,” Rishworth will say.
“Our government supports reciprocal obligations, which reflects society’s expectation that if you are able to work and receive income support, you should take active steps to find work.
“But to make it easier for people to find work, mutual obligations need to be fair, proportionate and, above all, effective.”
How this will work is yet to be determined and the government will consult key stakeholders on the design.
with Shane Wright
Natassia Chrysanthos is a Federal Political Correspondent. He has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect with: X or email.
