Friday, 10 May 2019

“Welfare-to-work” is now a billion-dollar industry which consistently fails vulnerable jobseekers

The Guardian, 4 May 2019:

“Welfare-to-work” is now a billion-dollar industry. Providers compete for the lucrative contracts, worth $7.6bn to the taxpayer over five years when the last round was signed in 2015.

Proponents for the privatised system argue the model is much cheaper and boasts a better cost-to-outcome ratio.

But myriad reports – including recent findings from a Senate committee and a government-appointed panel – have found the most disadvantaged jobseekers are being left behind.

In 2002, a Productivity Commission report that was largely supportive of the then-new privatised model still warned “many disadvantaged job seekers receive little assistance … so-called ‘parking’”. That practice still occurs under this name today, according to employment consultants who spoke to Guardian Australia for this story.

When a person applies for Newstart, they are assigned a Jobactive provider and placed into one of three categories ordered by the level of assistance they might need: streams A, B and C.

The outlook for the most-disadvantaged jobseekers is bleak: only a quarter will find work each year. Overall, 40% of those receiving payments will still be on welfare in two years. While Jobactive has recorded 1.1 million “placements” since 2015, one in five people have been in the system for more than five years.

New data provided to Guardian Australia by the Department of Jobs and Small Business shows about 1.9 million people have participated in Jobactive between July 2015 and 31 January 2019. In that time, 350,000 – or 18% – have been recorded gaining employment and getting off income support for longer than 26 weeks.

And of those 350,000, only 35,852 – or 10% – had been classified as disadvantaged in Stream C.

Since Lanyon was placed on Jobactive, he’s had eight job interviews and sent in about 150 applications. Eighteen months ago he says he slept in his car and showered at a homeless shelter after finding work close enough to take but too far away for a daily commute.

He knows his chances of getting back into work diminish each day he’s out of the workforce.

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