Why the jobactive system is so resistant to change and what we should do about it

Last week Opposition Minister for Employment Terri Butler signalled a plan to fix a ‘broken job system’ if Labor wins the next election. Her announcement comes at a time when there are many obstacles on the road to a better system and she has released few concrete ideas on how Labor intends to address them.

In her press release, Butler argued the $6 billion over four years spent on Jobactive isn’t leading to good outcomes. The recent government commissioned review, I Want to Work: Employment Services 2020 Report, found that over the last decade the proportion of employers using the system plummeted from 18 per cent in 2007 to 4 per cent in 2018. Butler questioned the effectiveness of a system that relies on knowing what employers want and where jobs are, from which employers themselves are increasingly disengaged. She proposed cutting the administrative workload of job providers so that they can spend more time building industry and community connections, working on cases with more individual focus and all the while addressing the high turnover of job services staff who act as ‘welfare compliance enforcers.’

So far, Labor’s proposal for an overhaul hasn’t clearly outlined or defined the plan for fixing the system. It also hasn’t acknowledged the specific and unique challenges young people face who are in the jobactive system, not to mention the disparities in experience that exist between regional and metropolitan young jobseekers.   

Why have we stuck with the status quo?

A simple but important reason till now for the lack of innovation in job services is the sheer complexity of the existing system. Whether you are a public servant, a Centrelink worker, an employment advisor, or a service user, there is so much to learn about how it all works: what the participation rules are for job search and and work for the dole, the minute detail of how providers are contracted and paid, how data are collected and reported on and financial sanctions for non-compliance.

All that bewildering complexity tends to ‘normalise’ those kinds of rules, and certainly makes it harder to question them. But even though rules for participation and financial sanctions most affect unemployed people – especially young people – they were never consulted about the design of them and were rarely, if ever, involved in the evaluation of them, even though these punitive rules will have a profound effect on their lives and futures.

For providers, sticking with one set of arrangements makes things like financial planning and staff recruitment – preferably at scale – a bit more predictable. The status quo has also been shored up by the profitability of providers (till this current contract at least), and by the public service careers that have been advanced in designing and delivering this OECD-endorsed employment system. Last but not least, even the most reformist incoming Minister can be intimidated by the charge of going soft on ‘dole bludgers’. The fear of this label, and the maintenance of the status quo, has led to the exclusion of service users’ experiences from any changes or adjustments to the system so far.  

A second reason is the cost and scale of the system. As Butler points out, the $6 billion spent on it over the past four years indicates what is at stake in the periodic competitive tender processes. These have been so costly and disruptive in themselves that in the name of market stability, contract periods have gone from three to five years, now renewable for longer, with business levels adjusted according to star ratings comparing provider performance.

This contracting exercise is reviewable by the National Audit Office; there is scrutiny by parliamentarians of all stripes on the relevant Senate Estimates Committee, as well by employment services peak bodies. At the edge of the picture is a hungry pack of media looking for a newsbreak on stories of government trip-ups and provider rorting. All of this explains the heavy risk management by the government and again, the lack of new ideas and funding options.

A third reason we are mired in an employment system so hard to change is that the purpose-built IT system created to run it works to narrow and deaden the kind of help that is available to unemployed people. This system also monitors them in such a scripted way — one dictated by Social Security legislation in case they need to be sanctioned with reduced payments — that the experience is far from helpful if not demeaning.

The system is undoubtedly sophisticated: it exchanges client information with Centrelink, keeps track of employers and placements, sets up provider payments, and calculates comparisons of providers’ performance. This gives government contract managers and employment services executives the dashboards they can use to monitor various aspects of provider performance and its implications for profitability.

Advisors at the frontline find the IT system helpful in that it combs out the tangled threads of rules and policy settings into a workflow that they can administer with confidence, supported by checklists, tick-boxes and pick-lists. It shows who has appointments, what to ask, and which participation activities for each individual will avoid the loss of the dole. It is an efficient system for ‘contract compliance’, making it particularly helpful for the many new staff needing to be trained due to increasing rates of staff turnover on the frontline, but ironically, a key reason for staff churn rates is this very reliance of the IT system.

Despite all those IT system functions, there are no features that would, for example, ask for – or be able to show – which people are churning through short cycles of work, or send a notification after someone has applied for 300 jobs without a result, or tell us which skills courses are not leading to jobs. And there is certainly no question in the system that could ask – or process – the question of what is most difficult about a person’s life right now.

So while the IT system is efficient, it is seldom effective. It privileges process over results, preventing genuine conversations that could harvest more diverse, perhaps more surprising information from which we might learn how to make a better system.

What makes all the above challenges of public service administration extra hard is the wild-card dynamism of the labour market, which is breaking down what used to be full-time and more secure employment. The reality is that for most people on the dole trying for entry level jobs, the options are being broken up shorter-term, shift-based work on a just-in-time basis, and even then only in some parts of the country. This is especially hard on young people trying to get their first work experiences and build up their skills. The atomisation of work units has been aided by employers’ increasingly efficient recruitment, screening, and communications technologies, as well as their ability to note, track and prefer the people whose productivity is hitting the targets.

The lack of jobs, the unpredictable labour market, and the precarious nature of the jobs that are available, is out of the control of both young people and the current system, and as we have seen, it has seriously compromised young people’s ability to get going in working life and out of the system. Grappling with the new labour market reality will require some serious analysis and design thinking.

Review and new thinking should be tri-partisan

So yes indeed, the system really does need an overhaul. At the heart of that is the moral imperative to offer a better deal if any semblance of participation policy is to be retained. Some deep thinking and richer conversation – with the voices of job seekers themselves included – is needed, and on a tri-partisan basis (including cross-benchers, especially the Greens Senator Rachel Siewert). This should happen before the duelling mentality of the next campaign divides and diminishes the considerable experience of people in all the major parties who over the years have learned about, interrogated, scrutinised, funded and generally wrestled with the system as a profound – and shared – challenge of public service design. Clearly they will not necessarily agree, but all would have a contribution to make, if skilfully handled, to some properly informed and balanced debate on how to rethink skills and job services in Australia.

Beyond that, the employment system should be set into the context of larger goals we want as an economy and as a society. Dole claimants could re-imagined as people who can create and contribute to social care and cohesion, environmental sustainability, and the sharing of skills they already have. Could the government work with the States to invest in the spaces, places and resource centres in communities that would promote this kind of community building and self-help, along with the skills to recycle, mend, fix or grow things, as an appealing alternative to being at home, or at Centrelink or the shops? Could we take the risk of investing in experiments with local economies, with collective social entrepreneurship, individual microenterprise, and business incubation support? All these questions should be meshed with skills and the value chain that links with TAFEs and other teaching and learning entities.

The possibility of a change of government – on both sides – should galvanise some much-needed deep reform. Before the next election is the ideal time to agree about what has gone wrong and why the system is so inherently hard to change. This process would acknowledge the best intentions of our successive governments, find the common ground of our shared options and priorities for change, and most importantly involve those who are most impacted by the system in meaningful ways. A strong mandate like that to make a better system could reinstate a bit more trust in government, as well as being the right thing to do, because the real losers continue to be people on the dole.