While the official unemployment rate is close to the Reserve Bank’s estimate of ‘full employment’ (5%), the labour market is still very tough for people with limited skills or paid work experience, especially those unemployed long-term.
For every job vacancy there are 17 applicants, including eight people who are unemployed or looking for more paid hours. Among people receiving Newstart Allowance, 30% have a disability, almost 50% are over 45 years of age, and about one in five are the main carers of children.
Yet our social security and employment services systems are designed on the basis that finding employment is simple for those with the incentive to do so. The compliance system is among the toughest in the OECD, while Australia spends well under half the average OECD amount on employment assistance. The system is failing unemployed people, with two-thirds having to rely on unemployment payments for more than a year.
The next government should…
- Commit to full employment, so as many people as possible can secure paid employment for the regular paid hours they need.
- Commit to reduce long-term unemployment, expressed as a share of recipients of unemployment payments, over the next five years.
- In the new employment services system that replaces jobactive, lift public investment in help for people unemployed long-term and those at risk, including by:
- Investing in wage subsidies and other paid work experience (to replace Work for the Dole and Youth Jobs Path) and quality training;
- Supporting local partnerships among employment services, employers, and community services, to help those facing entrenched labour market disadvantage.
- Build a quality employment services system that responds to the needs of unemployed people and employers, by:
- Establishing an independent statutory employment services quality agency;
- Developing principles to govern the use of digital employment service platforms, including accessibility, privacy protections, and using artificial intelligence to support decision-making, rather than replace it;
- A network of employment advisors within Centrelink to complement any digital employment services platform for people with few barriers to employment.
- Re-orient employment services and payment rules systems from compliance with activity requirements towards positive help, by:
- Restoring the role of Centrelink in assessing compliance with activity requirements;
- Restoring discretion for employment services to excuse (not report) breaches, and Centrelink to waive penalties as appropriate;
- Reducing default job search requirements (20 job searches a month) for people facing above-average barriers to employment (e.g. in high unemployment areas);
- Reviewing activity requirements for people with caring roles and disabilities;
- Replacing the Community Development Program (CDP) with a new Remote Development and Employment Scheme with activity requirements no greater than the general population.