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Debate rages over federal unemployment scheme

Adam Zuchetti
Adam Zuchetti
01 August 2019 3 minute readShare
Employment Minister Michaelia Cash

Employment Minister Michaelia Cash says it’s “working”, but the government’s Jobactive scheme has attracted criticism for being “complex and inadequate”, as figures show the majority of unemployment benefits recipients are having payments denied for failing to meet requirements.

Following the release of figures that there have been some 2.3 million suspensions of welfare payments to jobseekers — often for not attending a job interview — Ms Cash said during an interview on 2GB radio on Wednesday (31 July) that the system is “working”.

Asked by host Steve Price if the figures demonstrated a “tightening up” of the way payments are applied, Ms Cash (pictured) said: “Well, what the figures actually show is that the system is, by and large, working, because when the majority of people have their payments suspended, the overwhelming majority, they re-engage with the program.

“The program is designed to get you off welfare and into work, and the majority of people, while, yes, they may miss an appointment here and there, they actively re-engage and ultimately move through Newstart within about 12 months.”

The minister said there is a “mutual obligation” between the government and the recipients of unemployment benefits to ensure those funds are not abused.

“If you’re in receipt of a welfare payment, you will have, what we call, a mutual obligation requirement. In other words, you are receiving something from the government and, in return, you’re doing something for the government,” Ms Cash said.

“And in this regard, it’s all about ensuring that, as an unemployed person, you’re either actively looking for work because we want you back in work or, alternatively, you’re participating in an activity that will help you into employment. That’s what your mutual obligation is all about.”

‘Inadequate system, not more welfare cheats’

However, Settlement Services International (SSI) — a not-for-profit business helping refugees and asylum seekers to find work in NSW — hit back, claiming that “high levels of unemployed welfare recipients losing access to their payments is indicative of a complex and inadequate system, not a proliferation of ‘welfare cheats’.”

“Federal government data... sparked a furore after it revealed just under four in five participants in the Jobactive scheme had their welfare payments suspended at least once in the 12 months to June this year,” it said in a statement.

“Reasons for suspension of payments included failure to attend job interviews or appointments and failure to look for work.

“These figures are indicative of a complex system that is not adequately meeting the needs of people experiencing unemployment, particularly disadvantaged jobseekers.”

According to SSI’s general manager of service delivery – community, Karen Bevan, poor flexibility in the current Jobactive system has led to “perceptions that it is overly focused on compliance and penalties, rather than support”.

Of particular concern, she suggested, is a lack of specialist providers for people who come from culturally and linguistically diverse backgrounds — services that, she said, had been offered under the previous scheme, Job Services Australia.

However, Ms Bevan said it is welcome news that the government is progressing with a $1.3 billion overhaul of the scheme, which she said would improve access to vacancies and training once it is rolled out nationally in 2022.

“Everyone should be able to exercise agency and control over their pathways to employment. This leads to stronger, long-term employment outcomes,” she said.

Not enough employers on board

Some in the business community have expressed frustrations at the current system, suggesting that employers are being sent the same candidate multiple times for the same role, or that candidates put up for vacancies are quite obviously unsuitably qualified.

Yet the head of the Australian Chamber of Commerce and Industry (ACCI), James Pearson, told My Business he believes the unemployment system works reasonably well, but that reforms are needed — and underway — to boost the number of employers signed up in order to make it more effective.

“The current system has delivered good outcomes for many jobseekers, but not enough employers use the system to fill their vacancies, which is why the reforms really matter,” he said.

“There are some great programs which employer groups are connected with that help long-term unemployed jobseekers become more job-ready, by focusing on some introductory vocational skills as well as important attributes, such as turning up on time and working as part of a team.

“The Productivity Boot Camp linked to the NSW Business Chamber is a great example, as it prepares long-term unemployed young people for work in construction in a practical way.”

According to Mr Pearson, business and employer groups — including the ACCI — have been actively working with the government in a bid to reform Australia’s employment services offering to be more effective for all stakeholders, including better matching jobseekers with relevant vacancies.

“The government has undertaken a constructive path to achieve positive reform that will benefit both employers and jobseekers by establishing an independent panel — on which ACCI was a member — to recommend improvements to the system,” he said.

“This panel reported last year and, as part of that process, undertook detailed user consultation with both employers and jobseekers, and recommended changes to ensure that the government-funded system is better linked to the job market, as well as using new digital technology to better match jobseekers to vacancies.”

Mr Pearson added: “We are [also] working with government to improve outcomes for the PaTH program, because gaining experience is so important. We need to help young people out of the trap of not being able to get a job without experience, and not being able to get experience without a job.”

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Debate rages over federal unemployment scheme
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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