In Australia’s welfare sector, obligations are “mutual”, but profits only flow one way | Unemployment

Written by Javed Iqbal

Two words make the money go round in Australia’s multi-billion dollar welfare-to-work industry: mutual commitment.

When someone loses their job and applies for money, they are sent to an outsourced employment agency for help looking for work. This triggers a payment to the provider – and the possibility that more will come.

The federal government will spend more than $11 billion. on the two main outsourced employment programs over four years. The top companies – some of them multinational – will raise hundreds of millions of dollars.

When a single mother’s child is nine months old, she can be sent to a work preparation support program. The taxpayer sends cash to the charity or for-profit that runs the program, sometimes to verify that she sends her children to playgroup or “story hour” in the library.

Those on jobseeker’s pay may be sent to work for the dole, or a training course, sometimes run by the same company as the provider, or a related film.

And if you get a job yourself? The provider can still demand a payment. If you fall behind on Centrelink payments, you will return to an employment agency. The money round keeps spinning.

Since the Commonwealth Employment Service was dismantled and the system privatized in the late 1990s, a large network of private employment agencies and related training companies has formed that rely on government contracts: an “unemployment industry” driven by the ideological mantra of “mutual obligation”. ”, which guarantees their business model.

Some readers have been shocked by examples of mutual obligations revealed by Guardian Australia over the past few weeks.

That includes those who are asked to travel long distances—in one case a 250 km round trip – for “tick and swipe” agreements. Another person had to skip work to go to an employment agency.

Then there are the courses: incl basic computer and literacy tests and others such as “understand body language” and “make decisions”.

Last week we revealed how the industry successfully lobbied the Department of Employment and Workplace Relations to allow “same unit” practices course references to continue.

Screenshot of Communicare's Understanding Closed Body Language course with six images of a woman conveying different expressions
Screen recording of Communicare’s Understanding Closed Body Language course must be completed by some job seekers. Photo: Australian Government / Services Australia

While some cases have emerged as part of our reporting on the new Workforce Australia system, lawyers and jobseekers have rightly pointed out that many of these issues have existed for years.

Some of the jobseekers interviewed by Guardian Australia over the past few months have struggled to get help when they needed it; others who did not need help were shuffled into “busy work” activities.

Alex North, once a jobseeker and welfare activist and now an organizer with the United Workers Union, recalls his time in the Employability Skills Training program, which is being expanded under Workforce Australia. More than $500 million will flow to private providers through the program over the next five years.

The tasks he was given to run the program included a “scavenger hunt” that involved counting parking spaces and listing the items in a vending machine at an Adelaide education provider – the winner received a freddo frog.

North already had a forklift driver’s license and had worked in hospitality, retail and warehouse as a picker and packer. But because he had been on the game for a certain amount of time, the system insisted that he take an employability training course.

On other days, he says, he was asked to copy text from paper into Microsoft Word and create a fake business, including a logo.

“It was quite humbling,” he says. “Most people were just going through the motions.”

Former employment consultants, meanwhile, have told of referring job seekers to online courses – at cost to the taxpayer – in areas their clients had no interest in. This happened, they say, because it’s the easiest way to game the key performance indicators that determine market share .

In other cases, it allowed agencies to receive additional direct payments.

One man who worked at a large for-profit provider for several years says, “A lot of people said, ‘Hey, isn’t this going to get me a job?’ And basically our response was, ‘It doesn’t matter what’s offered, this is what you have to do. It’s either this or go get a job or we’ll cut you off for your services.'”

Experts agree that some unemployed people need support and guidance to get back into the labor market. This is especially true in a period of low unemployment such as now, when a larger proportion of those on unemployment benefits are long-term unemployed.

But the evidence suggests that the combination of a privatized employment system and mutual obligations produces perverse results.

The winners are the private companies and charities that refer clients and/or provide programs; the losers are the unemployed, the disadvantaged and the taxpayers.

Quick guide

Explanation of mutual obligations


What are mutual obligations?

  • People receiving Centrelink payments must complete these tasks and activities to receive their benefits.
  • Obligations vary depending on a person’s circumstances and are set out in a “job plan” that people on benefits must sign with their employment agency to receive their first payment.
  • To meet their mutual obligations, people on the new Workforce Australia program can complete different activities each month, such as job applications or education and training. These tasks are assigned a number of “points” and most job seekers must reach 100 points to keep their benefits.
  • Jobseekers in the disability employment agency must also agree a job plan with their consultant, which generally determines how many job applications they must send out each month. But they are not subject to the points system.
  • Those on the ParentsNext program must agree to a similar plan — and complete pre-employment preparation or parenting tasks — to receive their payments.

What happens if people do not fulfill their mutual obligations?

  • They will receive a “payment suspension,” which means their benefits will be temporarily stopped unless they agree to correct the problem with their employment agency. They have two days to do this or their payment may be delayed. The suspension is generally automated.
  • Those who do not have a “reasonable excuse” for failing to fulfill their obligations will be given a “demerit point” by their employment agency. After a sixth point, job seekers can have their payments docked by 50% or 100% and then stopped altogether.

Thankyou for your feedback.

The introduction of Workforce Australia is the biggest overhaul of the system since it was privatized by the Howard government in the late 1990s. After voting in favor of the legislation that enabled the new system, Labor has now announced a parliamentary inquiry to look into it.

In a commendable attempt to avoid the problem of job agencies neglecting the neediest job seekers, Workforce Australia is cutting the number of welfare recipients sent to the privatized agencies.

Only those deemed disadvantaged will be sent to providers, while others fulfill their mutual obligations through an online platform.

While still in the early days, some jobseekers who have transferred from the old system to Workforce Australia have noticed little difference in the quality of service. Emily Rayward, who is completing a PhD in Creative Arts, spoke about being made to make a online personality test at her first appointment. While she apparently had a “love of learning” but little “spirit” or “spirituality”, there was little or no discussion of relevant employment opportunities.

“It feels very frustrating that these job agencies are receiving all this money for what feels like very pointless activity while welfare itself is below the poverty line,” Rayward said.

New system or not, as long as job seekers are subject to rigid, reciprocal obligations enforced by private organizations with an inherent profit motive, the money-go-round will only continue.

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Javed Iqbal

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