The government has announced what it has described as the biggest reform to employment services in over 30 years. The system has been set up to help unemployed Australians find work. But with the continuation of mutual obligations and private providers, advocates say the changes are nothing more than a rebrand.
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TRANSCRIPT:
For Workplace Minister Amanda Rishworth, it's the biggest overhaul to Australia's employment services in three decades.
"At an individual level, the system has one objective, to place people in a suitable, meaningful job, but it must do more than just job matching. A well-functioning employment service system must also be able to provide the right assistance to job seekers at the right time."
Under the current system, over one million Australians searching for work are required to see privately owned employment service providers under a $2 billion annual scheme.
But it's been heavily criticised as unfair and punitive, with regular complaints of unfair welfare suspensions and profit driven providers.
Two Commonwealth ombudsman's reports found the suspension of many people's welfare payments for failing to meet their job-seeking requirements may have been unlawful.
She says the changes she's announced are the result of her recognising the current system isn't perfect.
"The system is ill equipped to respond to the diverse needs of over 1 million Australians who access this service each year. These concerns were echoed in the final report by the House Select Committee on Workforce Australia employment services in 2023 drawing on evidence from hundreds of submissions and witnesses. That report found that a one size fits all approach across all elements of Workforce Australia is letting too many participants fall through the cracks and creating inefficiencies in the system."
Under the changes there will be a new three-tiered approach, based on the outcome of participants undergoing new assessments to identify their individual barriers and distance from the labour market.
Under stream one, the Minister says a digital service will be provided for those who are digitally literate and ready to find work.
"Compared to what's currently available, service stream one will be truly effective and an efficient way to support participants who require less intensive supports."
She says stream two will aim to support skills development and build confidence to return to work.
"Supports under this service stream will focus on what we know works to get people into jobs like active job coaching, work ready support, and training linked to in-demand jobs, but these supports will also need to work for the participant by being clearly connected to their employment goals and to the jobs available in where they live."
Stream three is designed to support those with more complex barriers.
"We know many people in this service stream won't have a linear path into work, so this service stream will provide more time, more flexibility, and more support to build the confidence and capability."
The changes haven't satisfied those advocating for improvements to the system.
Greens spokesperson for government services, Penny Allman-Payne, says these reforms will do nothing for those who are out of work.
"If the government was serious about these reforms, it would have listened to its own inquiry that it had in 2023 that told them that we need to bring employment services back into public hands, we need to have an independent watchdog oversighting it, and we need to stop pumping money into for-profit providers who are simply making money off harming vulnerable people. If this government is not prepared to bring job services back into public hands and to abolish the punitive coercive mutual obligations framework, then frankly, these reforms aren't worth the paper that they're written on."
One of the most controversial elements of the newly announced system is that mutual obligations remain part of the process.
Under the mutual obligations framework, jobseekers on welfare must complete certain tasks in order to continue receiving payments.
Senate estimates in 2025 heard that the government knew the automated target compliance framework was causing harm and that questions remain over its legality, while an ombudsman's report in 2025 found that private employment services were making large-scale mistakes in recommending people be eligible for harsh financial penalties.
Amanda Rishworth says the government had accepted all of the ombudsman's recommendations and was seeking to address legal concerns by employing more people to boost human oversight of automated decisions.
The Minister says the government decided that a more flexible mutual obligations process was needed within each stream.
"The type of mutual obligations will differ depending on how far someone is from the labour market. So, if you were close to the labour market, then putting in job applications in jobs that you're interested in and that are in your goal plan are clearly an appropriate activity. If you are very far from the labour market and do not have work ready skills, there is no point in that participant putting in endless applications before they have got those work ready skills."
But according to Antipoverty Centre spokesman Jay Coonan, the system is built to punish people into employment in an economy designed to keep at least four per cent unemployed.
He says the government needs to focus on structural barriers rather than individual ones.
"What we need to see is, you know, to re-nationalise these services. Of course, there were issues with the Commonwealth Employment Service, but you know what is happening now is we're essentially seeing billions of dollars in money going overseas through hedge funds and investment firms that these providers are attached to, so what we're seeing is money being taken from people or money that should be spent on helping people and it's being sent away or going to these companies' profits. A far better way to do it would be for the government to run these services, to make sure that those finances were being used appropriately and accordingly to help people when they need it."
Jay Coonan says the changes are therefore nothing more than a rebrand.
"I mean, they had a three-tiered system under the job active system, instead of stream one, two, and three, they had stream A, B, and C, so we're not really seeing a fundamental shift in the way that services are being delivered for people who you know forced into these coercive systems."
