Job services providers should face a new regulator with powers to oversee pricing and quality, according to the government chair of an inquiry into employment services.
The era of “massive multibillion-dollar ‘set and forget’ tenders” is over, the Labor MP Julian Hill has warned the National Employment Services Association, the peak body for providers responsible for enforcing mutual obligations on jobseekers, on Wednesday.
Hill told the Nesa conference the current system “only cares about kicking people off welfare at every moment” and should shift to “boosting productivity by helping people to fulfil their potential as their seek work”.
Hill said he is “strongly of the view that Australia should establish an employment services quality commission as an independent watchdog for the system”, foreshadowing more regulation for the sector when the inquiry into job services concludes in November.
The inquiry has already recommended the overhaul of the controversial ParentsNext program and now turns to broader changes to the job services system, which were also foreshadowed in the employment white paper.
Labor is facing calls for significant changes including to abolish mutual obligations, which it has all but ruled out, or bringing back the Commonwealth Employment Service, as the Community Public Sector Union is campaigning for.
Hill told the conference that “full privatisation has failed”, as even the Coalition “implicitly admitted” when it created Workforce Australia, allowing jobseekers closest to re-entering work to use a digital service instead of private providers.
“Any country thinking of adopting the fully marketised system that Australia had for over two decades would be nuts to do so.”
Hill said that “some functions would be better delivered by government and should be institutionalised”, including “regulation and oversight”.
“Most OECD countries have some sort of independent regulator,” he said, expressing a personal opinion for an employment services regulator in Australia to be located outside Canberra “to be closer to the service delivery ecosystem, probably in one of the large capital cities”.
Although Hill noted “the committee has not formally considered recommendations”, Labor has effective control of the inquiry with four members of the seven person committee.
“The approach of recent decades of massive multibillion-dollar ‘set and forget’ tenders which are evaluated every five years or so with little data sharing, formal evaluation, learning and collaboration along the way has to change,” he said.
Hill said the regulator would be responsible for: a quality framework; licensing of non-government providers; workforce standards; pricing, including commissioning and payment models; complaints; data transparency; and information-sharing for continuous improvement across the sector.
Guardian Australia and the Saturday Paper have shown in addition to lucrative government contracts, job services providers earn millions more by moving welfare recipients through jobs and training in their own related companies.
Hill suggested it would be “quicker and better” to put the new regulatory functions in an existing regulator, such as the Australian Skills and Qualifications Authority, which oversees the vocational education and training sector.
Hill said the regulator needed to “rebuild a culture of learning, improvement, and evaluation right across the system”, with academics and not-for-profits and peak bodies helping to spread good practices across job service providers.
“For genuine system learning to occur, a cultural shift would be required, from compliance enforced from above to learning driven from the bottom up.”
In a September hearing, Hill said he had “very little sympathy” for providers who did not want to share information. “I think, if you’re not prepared to share, you should bugger off and not take taxpayer money.”
On Wednesday the assistance employment minister, Andrew Leigh, announced that the Australian Centre for Evaluation has formed its first partnership, with the employment department, to use randomised controlled trials to evaluate features of online employment services.
The employment white paper found although the job services system “may work relatively well for an average job seeker, it has failed those who are most disadvantaged”.
The current system will be revamped with eight new principles recognising the need for services that “protect the dignity and respect rights of individuals”, provide a pathway towards “decent jobs” and deliver “strong Australian Public Service stewardship in the system … to ensure that individuals are not left behind”.
