The Commonwealth government is exploring delivering employment services itself, after a report found major deficiencies in the current system it referred to as a "hunger games" style contracting model.
Last week, the government released its long-awaited response to the Rebuilding Employment Services report, which was handed down by a parliamentary committee in November last year.
While the government did not commit to a full return to the Commonwealth Employment Service model, which was scrapped in the 1990s, it did indicate an openness to the APS having a "more active stewardship of the system".
"In some instances, this may include delivery of services where it can have the most meaningful impact."
In a statement, Employment Minister Tony Burke said the government was embarking on significant changes to the sector.
"Work has begun to deliver the government's ambitious program of reform. We will collaborate with the community and business to make sure we get it right."
In the 2024-25 budget, the Albanese government earmarked $3.7 million to begin a trial of APS service delivery in Broome and funded a pilot of a pre-employment service for parents, carried out by public servants in the city of Playford, South Australia.
The government will also trial the insourcing of employment facilitators in some regions under the local jobs program.
"These trials will inform the approach to any future direct APS delivery," the response notes.
A spokesperson for the Department of Employment and Workplace Relations said it was the government's belief that a greater role for the APS in employment services delivery would benefit Australians.
"The government believes strong APS stewardship in the employment services system will benefit individuals, businesses and communities across Australia. This may include direct service delivery, as will be trialled in Playford, and through the Local Jobs Program, or working more closely with local service delivery partners to support capability building to improve services and outcomes, as is the case in Broome."
The Community and Public Sector Union welcomed the changes as a first step in reform of the employment services sector.
"The government's response to the Rebuilding Employment Services Report is a significant shift in policy direction and acknowledges the need for a complete overhaul of our employment services system," CPSU national secretary Melissa Donnelly said.
"The CPSU is pleased to see the government's commitment to an increased role for the APS in service delivery, including piloting of place-based approaches to employment services, however a more comprehensive roadmap is required."
Implementing these changes may be a challenge, however, with the parliamentary committee's report noting the APS is "detached from the realities" of providing services on the ground, "with no view anymore of what a quality service is or how much it costs".
"Two decades of largely outsourced service delivery has turned the APS into contract managers with little involvement in stewarding the system at a local and regional level or fostering learning and quality."
Fixing the currently deficient employment services system would also require a shift in the mindset in the public service and across society more broadly, from a focus of kicking people off welfare, to enabling pathways for people into full employment.
Outside of rebuilding a public sector employment agency, the CPSU had called for an end to mutual obligations, while the Australian Council of Social Services argued that automated payment suspensions needed to be scrapped.
Prior to the response, the Albanese government had abolished these requirements in the ParentsNext program, however ACOSS CEO Cassandra Goldie said the government's overall response so far was "disappointing".
"While changes outlined in the May budget offered small steps in the right direction, the government has failed to take urgent action to prevent harm or provide a clear plan for badly needed reform," she said.
