Private employment services have failed, watchdog is needed: Inquiry head

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The head of a parliamentary inquiry into the nation’s $7 billion employment services system has backed the creation of an independent watchdog to help protect jobless Australians, declaring full privatisation of the sector has failed.

Labor MP Julian Hill, who is chairing the inquiry into Workforce Australia and the network of private employment service providers that operate under it, said a fresh approach was needed to help people into jobs, signalling more government intervention.

The inquiry has heard harrowing evidence from people who have been required to use employment service providers, with many complaining about a “dehumanising” system.Credit: iStock

The employment services sector was privatised by the Howard government, but there have been growing criticisms about the types of services provided and ongoing complaints that profit-driven providers fail to adequately support older or long-term unemployed people.

Employment service contracts are the second-largest tenders issued by the federal government, but there are few formal avenues for complaints to be raised by users.

Hill, speaking to the National Employment Services conference on Wednesday evening, said while his inquiry would make its final report in November, it was evident that the current system was failing the hundreds of thousands of people who were dependent upon it.

“It’s obvious that full privatisation has failed. The previous government implicitly admitted this when creating Workforce Australia by bringing those closest to the labour market back into digital services,” he said.

Julian Hill said when it comes to employment services “it’s obvious that full privatisation has failed”.Credit: Elke Meitzel

“Any country thinking of adopting the fully marketised system that Australia has had for over two decades would be nuts to do so.”

While unemployment has fallen to 50-year lows, the total number of long-term unemployed has started to increase over recent months. Among people out of work for at least two years, the median length of time searching for a job for someone in their late 50s or early 60s is almost 200 weeks.

Almost 500,000 people participate in employment services for more than a year, and Anglicare Australia noted that disadvantaged jobseekers, including those with a disability, those without a qualification or older people, were struggling the most to get back into a job.

The inquiry has heard harrowing evidence from people who have been required to use employment service providers, with many complaining about a “dehumanising” system. Even some providers have complained that the system is now focused on complying with job-seeking regulations rather than properly training people for employment.

The recent Employment White Paper also raised issues with the current approach to bringing people back into the workforce, raising expectations the government will seek to overhaul Workforce Australia and the arrangements around employment services.

Hill, whose inquiry was set up to examine the operation of the Workforce Australia agency, said there had to be a shift in the focus of employment providers.

“Let’s be blunt: it’s a sadly simple answer in Australia, as our system doesn’t care about things like productivity, workforce participation, economic security, human capital, or secure work,” he said. “It literally only cares about kicking people off welfare at every moment.”

Hill said it was clear there had to be much clearer oversight of the entire sector. That oversight would include improving the quality of employment services, the consideration of bringing some services back under government control, pricing and the sharing of information among providers to help improve outcomes for jobseekers.

“I am strongly of the view that Australia should establish an employment services quality commission as an independent watchdog for the system,” he said.

Hill said a new oversight organisation should not be based in Canberra but in another capital city.

“This would also help to kick-start a fresh approach and culture to system oversight and tap into a broader recruitment pool,” he said. Hill’s inquiry is due to report next month.

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