Australia’s system for helping jobseekers into work will be overhauled for the first time in 30 years as the federal government grapples with the best way to assist the country’s growing number of long-term unemployed people.
Three years after a Labor-led committee said that Australia’s employment services system was like “using a nuclear bomb to kill a mosquito”, Workplace Minister Amanda Rishworth will on Wednesday reveal the one-size-fits all system will split jobseekers into three streams for the first time.
It will separate people who are newly unemployed and already have skills to re-enter the job market, for example, from those who have been unemployed for long periods of time, disconnected from the labour market or face other barriers to employment.
These streams will determine which job-seeking services people can access as well as their mutual obligations – the conditions that jobseekers must meet to keep receiving income support from the government.
“This is a major positive step for the over one million Australians who access this system each year, by ensuring they will get the right support at the right time,” Rishworth will say.
The employment services system was privatised under the Howard government. But it has since been criticised for prioritising profit-driven providers who do not adequately support older, disadvantaged or long-term unemployed people.
A parliamentary committee led by Labor MP Julian Hill in 2023 found the system was holding back the entire economy because it failed to properly train people while tying up employers in mountains of red tape.
The inquiry recommended the government, which spends about $2 billion a year on the scheme, be more involved than simply have a federal department oversee private service providers.
Rishworth will reflect on those findings in her National Press Club address on Wednesday, where she will argue that a one-size-fits-all approach was failing to support people and pushing them into unsuitable jobs.
One in six people who exit the Workforce Australia caseload are re-entering within a year, at a cost to participants, the economy and the federal government. Businesses have also told the government they are frustrated by being sent unsuitable candidates from providers.
Meanwhile, there is a growing list of people who are outside the labour market and languishing there for years. Twenty per cent of the Workforce Australia caseload has been there for five years or more, Rishworth will say. This group, now about 140,000 people, was 13.5 per cent of the caseload in 2015.
“If you’re lucky enough to be healthy, with recent work history and a post-secondary qualification, a provider is more likely to be able to help you find a suitable job, because you are likely to be closer to the labour market,” Rishworth will say, according to speech excerpts provided in advance.
“But the way providers are paid means they are incentivised to focus their efforts on those who fit into this narrow profile – rather than supporting everyone on their caseload. And people with more complex barriers to employment simply get put in the too-hard basket.”
To better tailor services, the new system will split people into three streams. According to the Australian Bureau of Statistics, the biggest group of unemployed are those out of work for between four and 13 weeks (206,800 people) while 144,800 have been unemployed for at least one 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 cater 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, set to receive more intensive support that might span social services. This group of people is more like to be older, have medical or physical limitations, fewer qualifications and be in regional or outer-suburban areas.
The new system will still utilise private providers but will rely less heavily on for-profit services. For example, there will be a stronger role for community-based organisations who have more experience linking people to housing or financial support.
Labor will keep mutual obligations for people on income support despite the Australian Council of Social Service push to remove them for being harmful and counter-productive.
But these will also change, based on people’s circumstance – a departure from the current points system, which deploys a standardised approach to keep people engaged in job hunting.
“Our public debate has been stuck in a conversation about whether mutual obligations are too hard, or too soft, when the real question should be: are mutual obligations activities actually helping people get into work? Unfortunately, all too often, the answer is clearly ‘no’,” Rishworth will say.
“Our government supports mutual obligations, which reflect the community’s expectation that if you can work, and are receiving income support, you should be taking active steps to obtain work.
“However, mutual obligations need to be fair, proportionate, and above all, effective, in order to facilitate people getting a job.”
How this will work is yet to be determined, and the government will consult with key stakeholders on the design.
With Shane Wright
Natassia Chrysanthos is Federal Political Correspondent. She has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect via X or email.
