On 1 July 2015, the Abbott Government will introduce legislation that will effectively give privately owned and operated Employment Service Providers the unprecedented power to fine unemployed people for missing their Job Search appointments without a ‘reasonable excuse’.
The Australian Unemployment Union have three major objections to this harmful legislation:
It gives the privatised Employment Service Providers more powers
A number of these Employment Service Providers – including the so-called ‘charitable’ organisations – have been exposed as adopting an overly punitive approach to the unemployed. The Government should be investigating these institutions for its harsh treatment of the unemployed, not giving them more powers and cutting ‘red tape’.
It pushes the unemployment further into poverty
Considering the already inadequate rate of Newstart benefit – which is $280 per fortnight below the poverty line – this punitive measure will only serve to push the unemployed further into poverty and ultimately away from employment.
Going by the current rate of Newstart recipients being breached for failing to attend ‘Job Search’ interviews with their Employment Service Provider, this change will financially penalise approximately 1.4 million Newstart recipients per year.
A high number of those who miss their appointments have significant physical, social, economic and mental barriers preventing them from attending. It was found recently that one in four people on Newstart have a significant disability.
In the Senate discussion regarding this bill, it was noted that the Government estimates that fining the unemployed in this manner will save them $161.1 million over 4 years.
This punitive legislation is a shameless attempt by the Federal Government to avoid their responsibility to solve the ongoing unemployment crisis, in which there are 11 Job Seekers competing for every job vacancy.
Its against the law
Despite the fact that the Government insists this power will be in the hands of Centrelink, in reality it will be the Employment Service Providers making the decisions on the ground. This is in direct violation of Social Security Law which clearly states that “Employment Services do not make compliance decisions under social security law”. The AUU is currently launching a legal challenge on this basis.
Our ‘Fight the Fine’ Campaign
If you are interested in helping us organise a ‘Fight the Fine’ rally in your local area on 1 July, please contact us by email (firstname.lastname@example.org) or on facebook. The more volunteers we have, the better equipped we will be to fight this cruel attack on the unemployed.
Any assistance you can offer us in our campaign, no matter how small, will be greatly appreciated.
Its time to fight back!
Frequently Asked Questions
What will this new Legislation do?
Passed in both houses of parliament in December 2014 with Labor Party support, this legislation will subject all Newstart recipients to financial penalties if they fail to attend their Employment Service Provider appointments without a ‘reasonable excuse’.
If found to have missed an appointment without a ‘reasonable excuse’, Newstart recipients will be fined 1/10th of their total fortnightly payment (roughly $50).
In the Senate discussion regarding this bill, it was noted that the Government believes that fining the unemployed in this manner will save them $161.1 million over 4 years. Clearly, this legislation will result in many unemployed people having their Newstart entitlement docked and will allow Employment Service Providers – as the ones who are responsible for administering these appointments – the power to further threaten, oppress, and in some cases bully the unemployed.
It is clear that fining Newstart recipients for mild transgressions such as missing Job Search appointments will only serve to take money out of the hands of some of the most impoverished people in Australia.
What are Employment Service Providers?
After the Commonwealth Employment Service was privatised in 1998, the Government has spent around $18 billion dollars on both for-profit and charitable Employment Service Providers.
These providers were responsible for ensuring that people who receive an unemployment benefit actively look for work and meet other ‘mutual obligation’ activities. The more unemployed people an Employment Service Provider churn through, the more money they received from the government.
According to a 2012 Government-audit of the industry, only 40% of funds paid to agencies were verifiable. Additionally, extensive evidence has shown that a number of Employment Service Providers have rorted the system in various ways to receive extra government funding.
According to a whistleblower working for the a SP called ORS Group, 80% of claims “have some sort of manipulation on them, from a forged signature with everything completely falsified to manipulation of a date or the hours worked”.
Over the last 3 years, the Federal Government has clawed back more than $41 million worth of false claims by private employment agencies – including from so called ‘non-profit’ organisations Salvation Army and the Catholic Church. It is estimated this is only a small portion of the tax-payer funds being falsely claimed by the Employment Service Providers.
Shockingly, rather than punishing these fraudulent organisations the Government has actually rewarded them.
One of the biggest offenders who was exposed as highly corrupt by ABC’s Four Corners program – the US owned Max Employment – have recently been rewarded with a 5-year $800 million Government contract. Along with our ‘Fight the Fine’ national campaign, the Australian Unemployment Union is currently petitioning the Abbott Government to investigate Max Employment for its alleged rorting.
Rather than government funding going to where it needs to go – creating secure work for the unemployed – it is actually ending up in the pockets of the privately-run Employment Service Providers.
With around 800,000 unemployed people, over one million underemployed people, and only 150,000 job vacancies to go round, it is urgent that this money be spent on creating secure work for the unemployed and not simply handed to corporations.