The Centre for Policy Development (CPD) has welcomed the Federal Government’s announcement of significant reforms to Australia’s employment services system, calling it a long-overdue step toward fixing a system that has to date failed job seekers, businesses, and communities.
Countless government reports from both sides of politics over the last decade, alongside extensive research by CPD, have consistently exposed the same fundamental flaws. A privatised, compliance-first system where the government has little skin in the game simply does not work.
The current model has failed to support providers, failed to connect with employers, and—most importantly—failed to build the skills, capabilities, and confidence job seekers need to find meaningful, secure, long-term employment.
Centre for Policy Development CEO Andrew Hudson said the government’s announcement represents a crucial shift in the right direction.
“There are three million people in Australia who want jobs, or want to work more hours, but can’t. Australia’s employment services system is meant to help address this and connect people to meaningful work, but the current model is skewed toward keeping people in line instead of helping them get ahead.”
“As a result, close to two-thirds of employment services’ entire caseload, or 460,000 people, have been looking for work for more than 12 months. Of those, 140,000 people have been left trapped in the system for more than five years. We are very glad to see the government taking the necessary first steps to build a system focused on investing in people’s capabilities rather than punishing them for their circumstances.”
CPD has long advocated for greater flexibility so participants can receive targeted, tailored support. The introduction of a new, three-stream approach recognises that different people have different needs, moving Australia beyond the rigid, one-size-fits-all model that has failed job seekers for a quarter of a century.
By changing provider funding and incentive structures, the government has signalled a more hands-on approach to ensuring providers deliver the kind of support people need. Instead of rewarding providers for “quick wins”—churning job-ready participants through short-term, casual roles regardless of suitability—the new structure must incentivise providers to work more closely with participants to find secure, long-term employment.
While today’s announcement is an important milestone, reforming this system so that it works for everyone will take time and sustained investment. Minor system tweaks will not deliver the system people need and deserve. CPD welcomes the government’s plan to consult with stakeholders on the next steps and looks forward to working closely on designing the final model.
CPD also encourages the government to look at ways to better integrate local employers and local communities into the system.
CPD Policy Director Clifford Eberly highlighted that expanding the pool of local employers connected to the system is vital for genuine system reform.
“The current system is deeply disconnected from local communities, meaning providers aren’t focused on getting people into jobs where they live or filling the needs of local businesses. Currently, fewer than 4% of employers are connected to the system,” Mr Eberly said.
“At the same time, support has not been targeted where it is needed most. Around 40% of JobSeeker recipients are concentrated in just ten employment regions. These are the specific areas where it is vital to build strong, place-based relationships between participants, providers, local employers, and communities.”
Finally, while CPD recognises the importance of accountability, changes to mutual obligations must look at the whole picture.
Evidence has shown that current mutual obligations, particularly the harsh penalties attached to them, are doing far more harm than good—actively punishing job seekers rather than helping them. This is particularly true for the most vulnerable participants, for whom strict guidelines and harsh enforcement result in significantly poorer outcomes.
Only by putting people first, and providing services and support tailored to their lives, will we build an employment services system that works for all Australians.
