ACOSS welcomes the government embarking on reforms to the employment services system, which is in desperate need of a radical overhaul. It is imperative that this process delivers significant structural reforms in order to ensure the existing failures do not continue.
The system has been failing in its purpose to support people to access decent paid work, and caused widespread harm to people on low incomes through the application of mutual obligations.
The government's focus on delivering services that are high-quality and responsive, and that provide meaningful and tailored support is welcome, as is their shift away from an outcomes based funding model and introduction of a lived experience panel as part of the reform process.
To ensure the problems of the past are not repeated, reforms must move away from the competitive and market-based commissioning model that has driven declining quality, scrap the failed and harmful mutual obligation compliance system, and centre lived experience in the design of the new service.
"Today we have seen important acknowledgement of some of the biggest problems with employment services, which is failing to support people into employment and causing significant harm. This reform process must deliver the fundamental overhaul that is needed to ensure these failures do not continue. We look forward to engaging with the government on this," Acting CEO of ACOSS Edwina MacDonald said.
"Only one in eight people in 2025/26 using the provider service have achieved a positive outcome. There is plenty of evidence the scheme is harmful, with around a third of people hit by automated payment suspensions while trying to get by on poverty level payments.
"The Minister's recognition that mutual obligations are failing to help people into paid work is welcome. However, it appears the current compliance and penalties framework will remain in place, despite the large-scale harm caused by automated payment suspensions and the Ombudsman reports in the last year calling out unfairness and illegality. We urge the Government to remove mutual obligations entirely.
"To fundamentally transform this system, we also need to move away from the Howard-era model of competition and performance based contracting. We hope the Government will properly consider a genuine break from this failed approach as part of its consultation, and re-orient the system around a more collaborative and high quality approach.
"We also need to see an increase to Jobseeker, Youth Allowance and related payments, which are so low they create an additional barrier to people getting into paid work. People are focussed on struggling to survive, to keep a roof over their head and eat three meals a day, let alone buy a new outfit or get a hair cut for a job interview.
"This reform process presents a real chance to build something that works for people, employers and most importantly the community, and we must make the most of that."
ACOSS is a member of the Government's Employment Services Advisory Group. Our policy positions going into this consultation are outlined in the below position paper. We urge the Government to provide full transparency around these processes, and ensure lived experience engagement is on equal footing with other forms of expertise including via membership of the Employment Services Advisory Group.
