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  • From public good to private gain: The failure of employment services

From public good to private gain: The failure of employment services


The neoliberal state was not born of a desire to build society. It was born of the unfettered determination to build private capital. This should come as no surprise given that one of neoliberalism’s best-known proponents, Margaret Thatcher, liked to claim ‘there is no such thing as society.’ This is why it maintained, and sought to perfect, the twin-pronged approach of eroding the political capacity of working people and dismantling the public sphere.  

No doubt there have been some who genuinely believed that unleashing market forces in areas such as employment services that were formerly in public hands would result in better services at a lower cost to the public purse. But the engineers of the socially destructive projects of the neoliberal era knew very well that they were more likely to result in the enrichment of some to the detriment of many. They were never interested in building social solidarity. They were, on the other hand, unfazed by greater social fragmentation, given their individualistic philosophy.

When the Howard Government, in 1998, did the quintessentially neoliberal thing and privatised the Commonwealth Employment Service, it was merely building on this grand design of neoliberalism, eroding the wages, conditions, and organising capacity of working people while selling off, the social infrastructure we need in order to live together and strengthen society. In other words, a trajectory towards deliberately induced precarity, ripping the guts out of both working conditions and general living conditions. 

Precarity is the key word here. It encapsulates the ongoing trauma of never feeling safe, of being terrified of what tomorrow might bring, be it homelessness, the loss of a job, the loss of working hours, or the loss of dignity. 

It was absolutely crucial to this ideological framework that the people who were amongst the most vulnerable to insecurity, namely the workers who were subjected to structural unemployment, should also be subjected to a punitive regime of so-called mutual obligations, payment suspensions, demoralising and degrading demands, income inadequacy and, perhaps most injurious, a political culture that went out of its way to blame and demonise people for the unemployment and poverty they were forced to endure.

Much of this architecture of paternalism and punishment endures to this day. So deeply ingrained is the practice of neoliberal governmentality that it has not only survived but flourished under governments formed by either side of politics. As Catherine Holmes wrote in her final report on the Royal Commission into the Robodebt Scheme, published in July of this year: ‘Anti-welfare rhetoric is easy populism, useful for campaign purposes. It is not recent, nor is it confined to one side of politics.’

This is why the recent release of the Rebuilding Employment Services Report is so historically significant. It unequivocally demonstrates that the neoliberal experiment has not only failed but has caused untold pain for many who were caught in the jaws of one of its flagship entities. 


'The release of the Rebuilding Employment Services Report provides us with an excellent opportunity to change the institutionally embedded neoliberal trajectory; an opportunity to craft a new trajectory, one that protects us from precarity rather than intensifying it.'


The Report describes the ‘excessive – often very punitive – compliance and enforcement arrangements, which have little or no positive impact on their capacity for social and economic participation,’ observing that the current employment services system is predicated on two ‘flawed theories’:


‘The first is that unemployment is an individual failing […] and that clients will make efforts to secure employment if only they are beaten hard enough. 

‘The second is that choice and competition in human services will inevitably result in better services and improved employment outcomes, especially for vulnerable and long-term unemployed people.’ 

‘The system is also driven by the pernicious myth of the ‘dole bludger’, reflected in a patently ridiculous level of compliance and reporting activities.’


The instruments used against unemployed workers were always boldly displayed for the benefit of employed workers, reminding them that they too could be subjected to this nightmarish regime if they dare to resist or refuse the increasingly difficult conditions that many are subjected to as a result of the long neoliberal march through the labour market, especially those who bear the brunt of extreme precarity as casual workers, labour hire workers or those forced onto sham contracts. 

The theory was that you are unlikely to complain about not having paid sick leave if the alternative is having to jump through hoops to fulfil meaningless obligations while trying to wage a daily battle for survival from below the poverty line. 

Julian Hill, Chair of the Select Committee on Workforce Australia Employment Services, admirably sets the tone of the report by opening his foreword with a quote from the Ken Loach film, I, Daniel Blake, depicting the oppressive experience of a 59 year old joiner with a chronic heart condition as he navigates the British welfare system. ‘I am not a shirker, a scrounger, a beggar, nor a thief. I’m not a blip on a screen… My name is Daniel Blake. I am a man, not a dog. As such, I demand my rights. I demand you treat me with respect. I, Daniel Blake, am a citizen, nothing more and nothing less.’

Hill goes on to demonstrate what he means when he asserts that this is ‘not a fairy floss review’:


‘It’s harsh but true to say that Australia no longer has an effective coherent national employment services system; we have an inefficient outsourced fragmented social security compliance management system that sometimes gets someone a job against all odds. The system does not effectively serve jobseekers or engage service partners, and it is overly focussed on supply (jobseekers) rather than demand (employers). Government must be far more actively involved with a public sector core to a rebuilt system.’


And therein lies the heart of the problem, as well as its solution, which is elaborated in 75 recommendations, including:  


  1. Establishing a new entity—Employment Services Australia (ESA)—within DEWR as a large digital-hybrid provider for jobseekers with fewer barriers to work, to actively managing the caseload; to provide core enabling functions in every region; and to provide case management services in some places and for people who are furthest from the labour market or persistently non-compliant with their obligations.
  2. Establishing a regulator—Employment Services Quality Commission—responsible for workforce standards and professional development; research, continuous learning and improvement activities; quality frameworks, advising on pricing and funding mechanisms for quality services; data collection, analysis, and release; and complaints management.
  3. Significantly enhancing social procurement, including via the creation of a national social procurement framework to leverage federal spending on major projects and services to assist more disadvantaged people back into employment.
  4. Entry level job opportunities. Reinvigorating entry-level jobs and paid internships and traineeships in Commonwealth, State, Territory, and local government agencies for long-term unemployed people. 


Whilst warmly welcoming the key recommendations, Community and Public Sector Union National Secretary Melissa Donnelly adds a more critical note on mutual obligations:

‘Disappointingly the report falls short in failing to recommend the abolition of mutual obligations, which is the ineffective and punitive compliance framework that underpins the current model. The recommended reforms in the report are positive, but a true departure from the current punitive system will require further significant work from the government.’

The report does recommend reforming the mutual obligations system, including returning breaching powers to Services Australia, ending automated payment suspensions, and ensuring people have access to a human decision maker before their payments are suspended.

The greater policy ambition however, given the Committee Chair’s completely appropriate position that there should be no sacred cows, would be to displace the entire mutual obligations framework with a framework of mutual respect, as I have argued in We’ve Got Your Back: Building a Framework that Protects us from Precarity.

This would embrace the practice of respect for unemployed workers, underemployed workers, workers in insecure jobs, sole parents and other carers, people with a disability, students, older people and veterans. It would also include a focus on respect towards frontline workers delivering social services and a framework that encourages and enables self-respect, community empowerment and self-determination. 

While it is logical to expect that we adhere to reasonable systemic requirements, people do not feel respected when they are made to jump through administrative and compliance hoops or when we are subjected to paternalistic control. Neither do we feel respected when we are structurally denied fundamental rights such as a place to call home. The principle of mutual respect must also, of course, specifically embody the complete rejection of sexism, racism, homophobia, transphobia, ableism, and ageism. 

History teaches us an unpalatable truth, a truth that continues to be writ large across our news feeds: that it is usually more socially acceptable to crush a group of people after having successfully cursed them, causing them to appear condemned in the public imagination, thereby justifying their violation. Feminist scholar Sylvia Federici makes this observation powerfully, arguing that the condemnation of the violated is essential to any system of dispossession. 

The release of the Rebuilding Employment Services Report provides us with an excellent opportunity to change the institutionally embedded neoliberal trajectory; an opportunity to craft a new trajectory, one that protects us from precarity rather than intensifying it, one that neither curses nor crushes the soul, one that helps us to be human together.




Dr John Falzon (he/him) is a poet and sociologist. He is Visiting Fellow at the School of Regulation and Global Governance, ANU, and was national CEO of Vinnies from 2006 to 2018. He is the author of The language of the unheard (2012), Communists like us (2017), Goodbye Neoliberalism (2018) and We’ve got your back (2020). He is a proud member of the Australian Services Union. 

Main image: (Getty images)

Topic tags: John Falzon, Employment services, Centrelink, Government, Neoliberalism



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Existing comments

You are quite correct. The demise of the CES under John Howard was a disaster. It needed fine tuning but not abolition. Neoliberalism in the cause of a specious progress has been a disaster everywhere.

Edward Fido | 16 December 2023  

I'm more than despondent that John Falzon lost his application for preselection for a Labor seat. Had he won, he would have brought a breath of fresh air to the parliament, and hardly one controlled by vested interests either within the party machine or amongst those who have made their compromises with high finance and the supremacy of the market.

My fear is that, contrary to a decade or so ago, Labor is now run by party strategists, who's focus is unrelentingly on winning elections. While this is partially accounted for by those who bay for blood, be it that of refugees or the unemployed, from the conservative side of politics, there are precious few from the Left who could enunciate, let alone defend a principle that Labor stands for, whether in matters of finance, the promotion of human rights, defense policy or foreign affairs. In all of these policy arenas, strategic considerations have triumphed over matters of principle.

Should it then surprise that the public are so jaundiced with politics that they too have become immune to appeals advanced by people like Falzon, whose eye has never been on the latest poll?

No wonder the Greens are so ascendant!

Michael Furtado | 16 December 2023  

Your reflection is so true and oh so sad in a country where once existed the concept of the "fair go". While Morrison may be seen in retrospect as an absolute disaster, John Howard and his Neoliberalism was and remains a disaster for the "lucky Country". Unfortunately, the current government is way too timid to rock the boat. I suspect that more "teals" will win seats at the next election, as voters become completely disillusioned by the current mob of party hacks occupying Federal Parliament. The sooner essential services are removed from the private feeding trough and blatant misuse of taxpayer's money, the better. The NDIS providers as well as private employment agencies are classic examples of financial abuse of both the client and the taxpayer. The Public Service in the end, is the most efficient provider of such services to the public, particularly our disadvantaged. citizens.

Gavin A. O'Brien | 17 December 2023  

If Kevin Rudd is a spoilt brat, it may be because his wife made millions from John Howard's privatisation of employment services. Rudd as a Howard frankenstein: how ironic is that?

s martin | 21 December 2023  

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