Australia’s employment services system needs large scale reform to fundamentally rebuild, according to a parliamentary review by the government.  

The John Howard government privatised employment services by nearly 25 years ago. 

“It should not be controversial to state that full privatisation has failed,” Select Committee on Workforce Australia Employment Services Chair and member of parliament Julian Hill said, adding that the previous government “implicitly admitted this” when it returned a large caseload to the public sector with Workforce Australia Online. 

“It’s harsh but true to say that Australia no longer has an effective coherent national employment services system; we have an inefficient outsourced fragmented social security compliance management system that sometimes gets someone a job against all odds,” Hill added. 

The Committee’s report includes 75 recommendations in its ambitious blueprint to rebuild the Commonwealth Employment Services System. 

The Committee also calls for a for the Commonwealth government to take a more active role by establishing Employment Services Australia to, among other things, lead each region via physical hubs. 

Furthermore, the report recommends moving away from “rigid one-size-fits all” rules, allowing for more flexible referrals to other human services, as well as a youth employment service, specialist services for First Nations (indigenous) and culturally and linguistically diverse people, and a revamped service for ex-offenders. 

The committee also wants a new regulatory culture and more relational contracting model in which service partners are contracted to work with government and employers in local communities. 

In its report, the committee also calls for re-professionalising the sector’s workforce, to reduce the 40% staff turnover rate and improve the pay, skills, and conditions of critical frontline staff. It also calls for establishing the Employment Services Quality Commission as an independent regulator. 

Another recommendation is a broadened and tailored approach to mutual obligations and a new shared accountability framework for compliance, supported by an individualised participation and jobs plan. The aim is to cut red tape and compliance burden, stop driving employers away and more effectively support disadvantaged people into work. The mutual obligations policy requires jobseekers to complete tasks and activities such as applying for jobs or attend training or job coaching, or otherwise face penalties such as having their payments stopped.  

Antipoverty Centre spokesperson and jobseeker recipient Jay Coonan told The Guardian that as long as mutual obligations were in place, the system would continue to be ineffective. 

“The Workforce Australia inquiry has shown again that ‘mutual’ obligations are being incorrectly applied and causing mass harm to those of us who are battling to survive on half the poverty line,” Coonan said. “Every payment suspension wreaks havoc for people trying to navigate the system.” 

Under the proposed remodelled compliance regime, frontline staff would be able to counsel clients a few times a year before moving into compliance, which also be softened. 

Greens senator Janet Rice said the inquiry was an important step forward, adding that “There is no evidence that mutual obligations work, they do not need to be scaled back or tailored, they need to be abolished.”  

The Australian Council of Social Service acting chief executive, Edwina MacDonald, urged the government to implement reforms that would shift it from a “system that punishes people towards one that opens up real employment opportunities”. 

Several of the reforms are proposed as urgent or to be undertaken in the short term during the current financial year to address critical issues and obvious pain points. For other reforms, the committee recommends that the government develop and publish a roadmap to a rebuilt Commonwealth Employment Services System by the end of 2024.