Punished by the lucrative welfare-to-work industry: 'I was contemplating suicide' The outlook for the most disadvantaged jobseekers is bleak: only a quarter will find work each year. The privatised system is leaving them behindWhen Mark Lanyon applied for the dole four years ago, he was sent to his nearest job centre, at Leongatha, about 40 minutes drive from his home. He lives in public housing in the Victorian town of Foster, population 1,200. Luckily his car was working at the time because there are “only three buses out and four buses in” each day.
“There are no jobs in Gippsland unless you have experience milking a cow or you are under the age of 18,” Lanyon says. “I am 54 years old.”
He’s not milked a cow, but he has worked in the mining and transport industries, and as a carpenter. Most recently, he had gotten warehousing jobs through labour hire. Eventually, they dried up. “They just keep bringing fresh people in.”
Lanyon is among the 400,000 unemployed Australians who must engage with Jobactive, the government’s main employment services program, in order to keep their welfare payments.
Since the late 1990s, Australia has paid private companies and non-profits to run the 1,800 job centres around the country. They are tasked with getting people like Lanyon into work. The problem is that, on the whole, they’re not.
“The system is failing to help the people who need the most help, and that is the long-term and very long-term unemployed,” says Peter Defteros, a policy adviser at Jobs Australia, which represents non-profit providers.
For people like Lanyon, the consequence of that failure is poverty. “I haven’t had a nutritious meal in I don’t know how long,” he says. “I don’t cook because I do not want to turn the stove on. I watch TV without lights on at night. I don’t want to have a electricity bill that I cannot pay.”
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“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.
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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.
Lanyon’s first job centre wanted him to come back to Leongatha twice a week to spend three to four hours on the centre’s computers looking for work. He was also going to have to send off 20 job applications a month.
It would have been a mean feat for someone without reliable transport living in a town of about 1,000 people. If he didn’t meet the requirements, his benefits would be cut. Lanyon refused to sign.
“Rather than negotiate with me she told me she was just going to cut me off,” he says. “I was going back home and the truth is I was contemplating suicide, I was thinking of driving in front of a truck. I pulled over a few minutes later and went back to the Salvation Army.”
Lanyon’s next experience was at the other end of the spectrum. His current consultant is much more “understanding” and he is yet to have his payments suspended for breaching the rules. (Of the 400,000 Jobactive participants at 31 December, about 175,000 had been penalised by their provider and had their payments temporarily cut.)
Still, Lanyon has been unable to access funding for the training courses he wants to do. Remarkably, he’s also had no help putting together his resume. “I was given Windows Word access and told to go for it,” he says in an email. (He also sends across an earlier version that was created in Notepad.)
It appears Lanyon has been “parked”.
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In 2015, the government overhauled what was known as Job Services Australia to create Jobactive. New contracts were aimed at incentivising providers to help get the long-term unemployed “job ready” and place them into work.
The number of providers was slashed from 79 to 44 and the share of for-profit operators increased from about a third to nearly half.
The government also decided to change the way it pays providers. Where once only about a third of payments were tied to job placements, now about half are.
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Jobs Australia’s Defteros acknowledges that providers get larger fees for getting the most disadvantaged jobseekers into work. Still, the results have been “perverse”.
“Consultants can spend a lot of time working with people who are a long way from being able to get work, but they’re just not rewarded for it necessarily,” he says. “They are forced to direct their efforts into where they get a financial return.”
Indeed, it seems many have. Since the Jobactive contracts began in July 2015, about 120,000 jobseekers had three or more “placements” recorded, while about 6,000 job seekers had received six placements. Each placement triggers a payment to their provider, which critics say encourages providers to “churn” workers through insecure work.
“It is really all about profit, it is not about helping people anymore,” says Kylie Wright, who works as an employment consultant in St Helens, on Tasmania’s east coast. “The only way I have met my KPIs is by people finding their own employment. My employer still gets paid for that. It is all about outcomes, it is not about putting them into jobs that actually suit them.”
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If you ask advocates for the unemployed what’s wrong with Jobactive, two words come up a lot: “punishment” and “trust”.
“The current system punishes people for not being able to get jobs that don’t exist,” says Owen Bennett of the Australian Unemployed Workers Union (AUWU).
Critics argue it is cruel to punish the unemployed for not meeting their “mutual obligations”, citing data that shows there are eight unemployed and under-employed people for every job vacancy in Australia.
“The system treats people who are out of work as if they are responsible for the lack of jobs,” says Emma Dawson, of the left-leaning thinktank Per Capita. “And they are still being expected to apply for jobs when they are very unlikely to get them.”
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www.theguardian.com/australia-news/2019/may/04/punished-by-the-lucrative-welfare-to-work-industry-i-was-contemplating-suicide