Employment

Australia’s system has long been designed in a deficit paradigm, underpinned by two flawed theories. Firstly, that unemployment is always an individual failing (ignoring structural and major barriers like ageism, racism, a lack of suitable work and thin labour markets, health, and disability). This drives the belief that if you only beat disadvantaged people hard enough to do the same things over and over they’ll somehow magically get a job, and if they don’t they’re lazy—the pernicious myth of the ‘dole-bludger’. Secondly, that more choice and competition in human services in every place, as well as harsh performance management, will inevitably result in better services and employment outcomes—especially for vulnerable and long-term unemployed people. Both theories have been proven to be rubbish, yet we have persisted in designing the entire system around them. The system designed for the few who cheat–around the worst people in society and the worst providers.

Consistent with the findings of previous reviews, it is clear that the overwhelming majority of unemployed people want to work. But the current rigid approach to mutual obligations is killing unemployed people’s intrinsic motivations and efforts to seek work, by drowning them and those paid to help them in a mountain of red tape, compliance requirements and pointless mandatory activities. People are made to do silly things that don’t help them get a job—such as pointless training courses or applying for jobs they won’t get—and are then harshly and repeatedly sanctioned for trivial or inadvertent breaches of prescriptive rules. It is ridiculous that over 70per cent of people with providers have been subject to payment suspensions despite zero evidence that 70per cent of people are cheating the system. The Robodebt Royal Commission’s finding that fraud in the welfare system is minuscule is apt. The nature and extent of mutual obligations is like using a nuclear bomb to kill a mosquito.

Under the JG scheme, the government continuously absorbs workers displaced from private sector employment. The “buffer stock” employees would be paid the minimum wage, which defines a wage floor for the economy. Government employment and spending automatically increases (decreases) as jobs are lost (gained) in the private sector. The approach generates full employment and price stability. The JG wage provides a  floor that prevents serious deflation from occurring and defines the private sector wage structure.

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In this paper I develop the argument that the NAIRU is a costly and unreliable target for policy makers to pursue. It is argued that full employment demands that policy emphasise the number of jobs rather than some politically acceptable (though high) unemployment rate. Many commentators who are otherwise sympathetic to the goals of full employment are skeptical of a policy approach that chooses along the lines of the JG to endogenise the budget deficit. There is a fear that it will make inflation impossible to control. To answer these claims, the inflation control mechanisms inherent in the JG model are outlined. The final section indicates other issues that are relevant but not addressed.

Melissa Fisher believed her jobseeker payments would be cut off if she didn’t complete a resilience training course.

So the South Australian-based artist, who has a disability and has been on income support for several years, signed up. She found herself being asked to rate her friends and family, whether God played an important role in her life and if she felt grateful she had enough to eat.

At one point in the four-day course, she was shown pictures of Brad Pitt in a chicken suit to illustrate how people can go from “nothing to something”.

“I found all of it so condescending,” Fisher says of the resilience training run by WISE employment in South Australia.

“They said that who we have in our life is important and surrounding ourselves with successful people will make us successful. If we surround ourselves with unsuccessful people we will be unsuccessful.”

Fisher says she believed the course was part of her mutual obligations which jobseekers are required to undertake otherwise their payments can be suspended. Fisher says she was never told she could choose not to do the course – and other jobseekers across Australia say they also thought the same.

A parliamentary inquiry has laid the foundations for government to reinvent unemployment services, finding the system has become obsessed with "kicking people off welfare", instead of helping them.

The government-dominated committee, established in the weeks after the government's 2022 federal election win, has called for a shift away from intense compliance measures and the return of some privatised job services to government.

Its chair, Julian Hill, said the ground-up review was the first of its kind since employment services were privatised 25 years ago.

Mr Hill wrote that in that time, the sector had degraded into a system that was not helping people find work and was neglecting employers.

"It's harsh but true to say Australia no longer has an effective coherent national employment services system," Mr Hill wrote.