Employment

An investigation by the Centre for International Corporate Tax Accountability and Research (CICTAR) has found an "alarming lack of transparency" from major government contractors operating inside the privatised employment services system.

It has also raised concerns about the potential for conflicts of interest arising from for-profit companies in the system making large donations to Australia's major political parties.

[…]

It shows how for-profit "employment services providers" can use aggressive tax minimisation, large dividend payouts, offshore-related party payments, tax havens, and opaque financial reporting to extract profits from the system, without breaking any laws.

And it questions if the system is meeting the public's expectations.

"It's no secret that Australia's system of privatised employment services has failed," the report argues.

"The Howard-era system fills the pockets of private equity and millionaires, while leaving jobseekers without work."

Splendid overview of RBA counter-productivity from my friend and colleague Martha:

In November 2024, The Reserve Bank Act was ammended. The changes now required the RBA’s monetary policy board to determine the monetary policy of the bank to stabilise prices in Australia, to maintain full employment in Australia and stabilise Australia’s financial system.  The Reserve Bank’s role was to prevent banks from destabilising the financial system to prevent credit crashes. The Statement on the Conduct of Monetary Policy-Reserve Bank was an agreement between the Treasurer Jim Chalmers and the Reserve Bank Board on the 10th July 2025. The agreement provided full operational autonomy to the RBA’s Monetary Policy Board, underlining the RBA’s goals of price and inflation control.

Somehow the ‘economic prosperity and welfare of all Australians’, got swapped out for keeping the banking sector stable. Now whilst the concepts might be related, stabilisation of Australia’s financial system is no guarantee of either economic prosperity or welfare for all the people of Australia. The RBA has also completely reinterpreted the term ‘full employment.’

Specifically the RBA’s statement of monetary policy explains ‘to achieve its statutory objectives, the Bank sets monetary policy to keep inflation in the economy to 2%-3%, and employment at the desired level that is consistent with maintaining low and stable inflation. In other words, there always has to be a level of ‘natural’ unemployment to avoid inflation.  Dr Kelly notes that even when inflation is within the RBA’s desired target range of 2-3%, the RBA does nothing to stop unemployment rising by lowering interest rates.

(Thanks for the name check, Martha.)

Governor Michelle Bullock has admitted that the RBA is basing its actions on the expectations of inflation, rather than direct observation of inflation. The RBA relies on the NAIRU (the non accelerating inflation rate of unemployment). The NAIRU cannot be directly observed or measured, it can only be inferred. My colleague, economist Katy Swain, hilariously calls the NAIRU, the RBA’s ‘invisible friend.’

In calls with more than 200 organizations Gownder said researchers found that some of last year’s large-scale job cuts were belt-tightening decisions, not the result of shifting work to AI.

“So then that's not losing a job to AI. That is a financial decision masquerading as an AI job loss. They're just saying: ‘Well, we're hoping we'll fill it with AI at some point.’ So that is a very different proposition than AI is actively stealing all these jobs.”

There is a real phenomenon of a frozen white collar job market in which corporations are not hiring for open roles as a hedge to see if jobs can be duplicated with AI, he said.

“But let's face it, when you have work to do, it's got to get done at some point,” Gownder said. “If the AI doesn't work out, they're either going to have to hire or they're going to have to find some other solution.”

Gownder said historically, the loss of industrial and manufacturing jobs in the USA’s “rust belt” was driven by globalization not robotics, and he sees a similar scenario playing out now with AI.

“Outsourcing is a very popular one,” he said. “They’re firing people because of AI, and then three weeks later they hire a team in India because the labour is so much cheaper.”

Your regular reminder that solving every problem by creating a competitive market of private sector "service providers" does not work.

Just 11.7% of jobseekers in Australia found long-term employment through a job provider in the latest financial year, according to the Department of Employment and Workplace Relations’ annual report.

Service providers are allowed to claim publicly funded outcome payments when clients have completed four, 12 and 26 weeks in employment – regardless of whether the client or provider found the job.

[…]

Jeremy Poxon, a welfare advocate at the Antipoverty Centre, said the system was failing “en mass” to help get people into meaningful work.

“The government knows full well that this system is failing on this basic metric to help people into work,” he said.

It came as Guardian Australia revealed Centrelink has threatened payment suspensions to jobseekers at a rate of five a minute, despite serious concerns from social security experts that they are illegal.

Poxon said the data showed the system was better at punishing people than helping them into employment.

This project built on previous Australian and recent international research to develop a set of budget standards for low-paid and unemployed Australians and their families.  

The family types included are:

• a single person (male and female) 
• couples without children
• couples with one and two children 
• a sole parent with one child.

The approach incorporated existing community norms, expert judgments and relevant evidence from social surveys. It emphasised the views expressed by low-paid and unemployed individuals in focus groups to ensure that the standards are grounded in everyday experience and reflect actual needs.  

The results were also used to inform debate and guide decisions about the adequacy of minimum wages and income support payments for the unemployed required to support healthy living consistent with individual needs, family needs and prevailing community standards.

From the ABC's summary:

The Albanese government's Economic Inclusion Advisory Committee released its second report recently. […]

The committee made 22 recommendations to the federal government on ways to best improve economic inclusion and create a more equal and prosperous nation.

It said its recommendations had been made with regard to their fiscal impact, their effect on workforce participation, and the long-term sustainability of the social security system.

But the committee said its five priority recommendations were to:

• "Substantially increase JobSeeker" and related working-age payments, and immediately improve the indexation arrangements of the payments.
• Increase the rate of Commonwealth Rent Assistance to better reflect the high rents actually charged in the private rental market.
• Commit to a "full-scale redesign" of Australia's employment services system to underpin the government's goal of full employment, and to replace the current system, which "worsens economic exclusion" with one that "promotes economic inclusion".
• Implement a national early childhood development system that is available to every child, beginning with abolishing the activity test for the child care subsidy to guarantee access to a minimum three days of high-quality care.
• Renew the culture and practice of Australia's social security system to support economic inclusion and wellbeing.

The committee's experts said that last point was really important.

Job providers are being paid millions of dollars in public money for work that jobseekers are finding themselves, with advocates saying there is “simply no reason” for the payments.

The Department of Employment and Workplace Relations has paid providers more than $3.6m in the past five years for pre-existing employment, where someone on jobseeker found a job prior to starting with a provider, according to data provided to Guardian Australia by the department.

The data shows there has been an uptick in pre-existing employment payments, with providers receiving $1.1m in the 2023-2024 financial year, more than double the $464,200 paid in 2019-2020.

 The following searchable document is the complete White Paper as published as an Appendix to the paper by H.C. Coombs (1994) 'From Curtin to Keating: The 1945 and 1994 White Papers on Employment', Discussion Paper, North Australia Research Unit, Australian National University.

It is the only on-line archive of the full paper in its original format that I am aware of. I have corrected some formatting issues that were in the Coombs Appendix version. 

 After decades in which macroeconomic policy focused primarily on inflation, the announcement of a renewed commitment to full employment, made by Prime Minister Anthony Albanese in 2021, was a major step. Labour’s election campaign included not only a commitment to full employment but the promise of a Jobs Summit leading to a new White Paper on Full Employment, modelled on that of 1945.

Upon taking office, the Labor Government backed away from this commitment. The Jobs Summit was relabelled a ‘Jobs and Skills Summit’ and much of the discussion focused on supposed skills shortages. This was a misnomer. The problem faced by employers was not a shortage of particular skills but the difficulty of filling vacancies of any kind in a situation of full or near-full employment. After decades in which the number of unemployed workers routinely exceeded vacancies, employers found this situation difficult to accept.

An even more consequential change was the removal of the word ‘Full’ from the name of the proposed White Paper. The decision to break with Labor’s history on this crucial issue seemed to portend the abandonment of the entire process.

"The problem [is] no-one knows exactly where the harm is," she explains. And, given that companies have saved money by replacing human HR staff with AI – which can process piles of resumes in a fraction of the time – she believes firms may have little motivation to interrogate kinks in the machine. 

"One biased human hiring manager can harm a lot of people in a year, and that's not great. But an algorithm that is maybe used in all incoming applications at a large company… that could harm hundreds of thousands of applicants" – Hilke Schellman

From her research, Schellmann is also concerned screening-software companies are "rushing" underdeveloped, even flawed products to market to cash in on demand. "Vendors are not going to come out publicly and say our tool didn't work, or it was harmful to people", and companies who have used them remain "afraid that there's going to be a gigantic class action lawsuit against them".