Job Services Australia – ineffective and rife with corruption – scrap it!

The ABC – Four Corners – program tonight will highlight the corruption and inefficiency within Australia’s privatised labour market services sector. The program – The Jobs Game – will screen at 20:30 Eastern Standard Time. I participate in the program although the extent of that participation is at the time of writing not known. I did about 2 hours of filming for it in December. Unfortunately, the ABC geo-blocks its iView service which allows Australians to watch past programs via the Internet. If the program is available via YouTube I will post a link. The flavour of the program is summarised in this promotion piece published by the ABC News service today (February 23, 2015) – Government recovers over $41 million worth of false claims after ‘rorting’ of Job Services Australia scheme. The Guardian newspaper will also publish an article based on this blog for tomorrow’s edition (sometime during the day). So the issue is getting out there finally after successive Governments have been trying to hide the issues. After all, its ideological baby is terminally ill and they don’t want to admit that.

The ABC used this graphic as one of several to promote the story today in social media.


The rest of the text is a more elaborated version of the 900 words I sent the Guardian earlier today.

In 1998, the Australian government created a new ‘industry’ – the ‘unemployment’ industry, when it privatised the Commonwealth Employment Service (CES) and handed over labour market program delivery to profit-seeking private providers.

Our 17 traditional industries are productively engaged in producing manufacturing goods, agricultural produce, public services, education, recreational services, and the like which provide employment and incomes and enhance our material standard of living.

The ‘unemployment’ industry produces nothing but heartache, wastes billions of public money, and the private service providers regularly defraud the system. See – Government recovers over $41 million worth of false claims after ‘rorting’ of Job Services Australia scheme.

With unemployment remaining high in the 1980s and skyrocketing during the 1991 recession because the Australian government was obsessed with pursuing fiscal surpluses, its response to the rising long-term unemployment that it had produced was to introduce this privatised management scheme.

This parasitic private sector fringe – the Job Network – was, in effect, a new industry, whose product was unemployment.

Many people think it was the conservative Howard government that started the trend to outsource and privatise government services. It is true that it was the Howard government which privatised the public employment service and created the so-called Job Network in 1998.

But these conservatives, who took office in 1996, were not the founders of the scheme. The neo-liberal ideology had been infused in the so-called workers’ party – the Labor Party.

The ridiculous claims by the current government about the need to cut deficits can be traced back to the last fiscal statement from the Whitlam Labor government for 1975-76. From that point on the Australian public has been duped about ‘budgetary’ matters and entrenched unemployment has been one of the destructive legacies.

The most salient and empirically robust fact about the performance of the Australian economy at the time the Job Network was introduced was that actual GDP growth was not been strong enough to achieve and sustain full employment. As a consequence, the low point unemployment rate had ratcheted upwards over successive economic cycles.

The problem has not gone away.

As a response to the 1991 recession the Labor government started planning for the creation of a competitive market for the provision of employment assistance. It began with the ‘Working Nation’ White Paper of 1994, which was a belated response to the massive unemployment that was caused by failed government policy response to the 1991 recession.

They refused to introduce an appropriate fiscal stimulus at the time and hoped that the ‘market’ would sort out the problem. It didn’t – and unemployment kept rising.

Under the Keating Labor Government at the time, one third of the public assistance effort for the long-term unemployed was given to contractors in both private and not-for-profit agencies. This quasi-market was subject to oversight by an independent government regulator and agencies were paid on a ‘fee-for-success’ basis.

This was the basis for the ‘new industry’ – profiting from managing unemployment.

The Government argued that a competitive model would improve the quality and flexibility of services provided to the most disadvantaged job seekers.

Agencies provided individual case management and were able to refer the long-term unemployed to a range of jobs and subsidised work and training programs provided under the government’s Jobs Compact.

The scheme was deeply flawed and the Labor government justifiably lost office in 1996.

The election of the conservative Coalition Government in March 1996 saw the abolition of the Jobs Compact programs and thoroughgoing reforms to labour market assistance.

The Working Nation strategy was derided as an expensive policy failure unduly concerned with process, and the continuing role of the central bureaucracy (the CES) was seen as antithetic to innovation and the tailoring of interventions to meet the needs of heterogeneous job seekers.

The Government identified cost cutting and the tighter targeting of support as explicit objectives of reform implying an ability to deliver both better and cheaper assistance.

Appropriations for Labour Market and Training Assistance were cut from $2.16 billion in 1995-96 to $1.2 billion in 1997-98. However, the principle goal of reform was defined as delivering better and more sustainable employment outcomes for job seekers underwritten by a more competitive, flexible and performance-based approach to the delivery of employment assistance.

In 1998, the focus on outcomes and the use of competition to allegedly drive greater efficiency and choice underlay the dismantling of the CES and its replacement by Centrelink (the government overseer of the privatised provider contracts) and the Job Network.

For further historical background – see the blog – Oh for a decent public employment service!.

The privatisation of the CES and the shambolic and corrupt system that emerged (the Job Network) was part of the trend towards mean-spirited government that led to the abandonment of a commitment to full employment and the retrenchment of a comprehensive welfare state.

The Job Network was epitomised by the government’s pursuit of the diminished goal of full employability, which constructed mass unemployment as a supply-side problem rather than a system-level failure of the economy to provide enough jobs for those who desired to work at the current wage rates on offer.

Under full employability, the government no longer ensured that employment growth matched labour force growth but focused, instead, on getting individuals ‘work ready’, should there be jobs available.

It was the exemplar of the OECD’s Jobs Study approach which focused on supply-side activation – a fancy word for blaming the victims of a demand failure and threatening them with starvation should they not agree to submit to the pernicious management regime (relentless dole diaries, meetings with case managers etc) which included working for free.

The stated goal of the Job Network and its more recent incarnation, Job Services Australia (JSA) is to assist the unemployed to gain skills and employment.

The reality is very different. Its purpose is in fact to In reality, it ‘manages’ the unemployed, frustrates their legitimate receipt of income support, and creams off profits for the providers.

The stress caused by pernicious system further impacts on the disadvantage that the unemployment already experience as a result of job (and income) loss.

A recent US study – Personality Change Following Unemployment – finds overwhelming evidence that spells of unemployment changes the core personality which makes the person “less conscientious, agreeable and open” and makes “it difficult for them to find new jobs”.

See also the related news release (February 18, 2015) – Basic Personality Changes Linked to Unemployment, Study Finds – for a summary of the research.

The Job Network was introduced at at time when it the macroeconomic constraints on its effectiveness were substantial.

First, the Australian economy had failed to generate sufficient employment since 1975 to match the preferences of the labour force. Since the early 1970s, employment growth has not kept pace with the underlying population growth, which is why the unemployment rate is now over 340 per cent higher than it was in 1971.

The following graph shows the available labour supply (labour force) has outstripped total jobs since 1974 with entrenched unemployment being the result.


Exacerbating the shortage of jobs was a policy of deliberate fiscal drag (pursuit of budget surpluses) which created the demand failure.

Please read my blog – Tracing the origins of the fetish against deficits in Australia – for more discussion on this point.

Since January 2013, employment has grown by a pathetic 2.1 per cent, while the working age population has grown by 3.7 per cent.

Yet the public narrative still focuses on the supply-side – the allegedly ‘lazy’ and ‘unskilled’ unemployed.

The unemployed cannot search for jobs that are not there!. It is a cruel hoax to claim otherwise and to punish the victims of the jobs shortage.

Please read my blog – The unemployed cannot find jobs that are not there! – for more discussion on this point.

The performance of this new ‘industry’ has been abysmal.

The system started failing from day one.

A 2002 report by the federal Productivity Commission Independent Review of the Job Network – described the Job Network as a ‘managed’ or ‘quasi’ market for the provision of subsidised employment services, which aims to mimic the activities of competitive markets by allowing scope for competition, flexibility in service delivery, rewards based on outcomes and some degree of choice for the unemployed.

First, the Job Network comprised multiple independent agencies, each having a share of a common system of public service provision. Second, the agencies were a mix of profit and not-for-profit organisations; and third, job seekers do not purchase services but have services purchased on their behalf by government.

Under the Job Network, the government was a purchaser and regulator of employment services, not a direct provider. The role of government was to award contracts through a competitive tender process, regulate providers, determine standards, and to collect and disseminate performance information.

However, this perverse “quasi market” soon revealed it was not immune from market failure.

There was policy schizophrenia in expecting an outcome-based funding model for employment services to deliver ‘better and more sustainable employment outcomes’ in the absence of concomitant policies to alleviate the macroeconomic constraint and create real employment opportunities.

In a highly demand-constrained labour market, characterised by persistent unemployment and marked regional disparities, it was always unclear how the supply-side focus of the Job Network could be effective.

It was also the case that a system centred on outcome payments in which providers had discretion with respect to the level and nature of assistance afforded to job seekers created incentives for ‘creaming’ and ‘parking’.

The Productivity Commission’s Independent Review of the Job Network in 2002 found that the payments structure to Job Network providers has led to a substantial proportion of Intensive Assistance recipients being ‘parked’ – that is, taken onto the private agency books to get the first incentive payment but then ignored because the prospects of getting any further payments (for successful job placement) were bleak.

Job seekers with the greater chance of achieving a payable outcome were targeted while those in greatest need of assistance (with low employment probabilities) were left unsupported.

The lack of correspondence between needs and services reflected the difficulties associated with specifying objective outcomes and performance indicators that will allocate resources according to an ordering of societal needs; and relate to both the quality of assistance provided and the quality and sustainability of jobs attained.

The prices attached to employment outcomes also did not adequately reflect all the costs of unemployment which include not only income and output loss, but the deleterious effects on self confidence, competence, social integration and harmony, and the appreciation and use of individual freedom and responsibility.

Subsequent evaluations of the effectiveness of the Job Network showed it failed to provide sustained employment prospects for the vast majority of the case load.

By 2005, employers were complaining of massive skill shortages despite the Job Network providers receiving billions of dollars in public money to develop such skills among the hundreds of thousands of unemployed persons under their ‘management’.

The Government of the day (in 2002-03) reacted to the early criticisms of its failed program by reinforcing what it called the Active Participation Model – aimed at reducing the outlays that were rising as unemployment continued to increase in the face of the on-going failure to stimulate aggregate demand.

The Government argued that the Active Participation Model would ensure the case loads carried by the Job Network agencies would decline.

Underlying the new approach to “mutual obligation” was the view that improving the effectiveness of the employment services system depended on changes to the system itself, and not on the expansion of employment opportunities.

The enhanced ‘effectiveness’ of the system was sought by a reconfiguration of the payment structure and greater integration between Job Network services and mutual obligation activities.

As a result, the ‘Job Search Training’ and ‘Intensive Assistance’ programs were recast as ‘Intensive Support’ and ‘Customised Assistance’. A job seeker who remained unemployed after 12 months would receive Customised Assistance (CA) for a further six-month period.

After that if the individual had not found work they would be required to undertake another Mutual Obligation activity, which included Work for the Dole programs.

The marquee Work for the Dole program, which forces people to work at below legal hourly pay rates is just a compliance measure designed to extract menial effort in return for miserly income support. It does not provide a pathway to permanent paid-work in the open market or develop productive skills.

The providers also have perverse incentives to keep the unemployed in the program rather than find them meaningful work.

A related feature of the system and one its the most repugnant was known as “breaching”. This is where the system openly violated basic human rights.

The Government introduced penalties that would be imposed on the long-term unemployed people found to be – in the Government’s assessment – not genuinely seeking work.

The Government gave the Job Network providers the power to identify and punish unemployed people that the Government believes are deliberately avoiding work.

Once identified, the Job Agencies were also able to force these workers to complete double the hours in work-for-the-dole programs and issue on-the-spot suspensions of payments for unemployed people who failed to attend interviews.

This penalty system was called breaching. The data that emerged was shocking. There was an escalation in the number of people subjected to the loss of benefits.

The evidence was that Job Network providers acted capriciously and had no specific procedural guidelines for making decisions about breach recommendations leading to inconsistent treatment of the unemployed within a single organisation.

We learned that unemployed workers who failed to attend a first interview were more consistently and readily breached than others. Rules of natural justice were not being correctly applied in all instances (some unemployed were subjected to unjust decision-making processes).

Job Network agencies used strategic breaching to remove potentially ‘non productive’ unemployed from the books – which meant – workers who they felt they were unable to secure any further placement funding for.

Moreover, those that were being breached include schizophrenics who were prone to episodic illness and unable to attend interviews on days when they were suffering the most; homeless people who were unable to access mail at old addresses informing them of an activity test interview and other disadvantaged citizens.

On taking office in 2007, the Rudd Labor government admitted that the Job Network had failed although they didn’t express it in that way.

However, their revised Job Services Australia system only made minor administrative and contractual changes, none of which addressed the basic problem of a lack of jobs.

The recent data on the performance of JSA is similarly poor.

The Department of Employment’s own data (most recent) – data – tells us that in the three months to September 2014, only 42.8 per cent of those who had received JSA assistance for the previous 12 months had gained jobs.

Further, 57 per cent of the jobs gained were “Casual, temporary or seasonal” and a further 11 per cent were “Self-employed”.

Of those who managed to gain work, around 50 per cent stated they were underemployed and wanted more hours of work.

The results are worse for more disadvantaged workers – only 33.4 per cent (Stream 3) and 23.7 per cent (Stream 4) gained jobs.

The other interesting aspect of the system is the impact the participation has had on the dominant service providers, which are major religious organisations (Mission Australia, The Salvation Army and Wesley Mission).

They have become schizoid organisations as they preach concern for poverty and compassion for the unemployed yet are coopted by government to inflict pain on the unemployed.

These organisations are on the front-line in reporting the unemployed to Centrelink for any perceived ‘non-compliance’ with the pernicious requirements for income support.

Centrelink, which then withdraws benefits (breaching as discussed above).

The other angle, which is revealed in tonights Four Corners program is that provider fraud has been rife.

In 2006, four employment agencies, including the largest (Salvation Army) were found to have falsified their reporting to get higher contractual payments (at least $12 million).

In 2011, Fairfax media reported that the “the Catholic Church’s employment arm had systematically defrauded the program”.

In 2013, an External Audit of JSA found that only 39 per cent of providers’ payment claims were legitimate.

The preliminary report noted that:

… the rate of invalid claiming exceeds that which might be expected in a typical risk managed program administrative environment.

The providers listed “data entry errors” among other dubious excuses to explain away their conduct.

No prosecutions have followed these cases of invalid claiming involving millions of public cash.

Many other cases of ‘fraud’ have been reported and probably many more have been swept under the carpet by the Government anxious to evade public scrutiny.

See the – ABC report, February 23, 2015 – for further documentation.

Research shows that best-practice training occurs within a paid-work environment. What training occcurs in the JSA just shuffles the unemployment queue given the jobs shortage.

Don’t ever forget – The parable of 100 dogs and 95 bones

The main reason that the supply-side approach is flawed is because it fails to recognise that unemployment arises when there are not enough jobs created to match the preferences of the willing labour supply. The research evidence is clear – churning people through training programs divorced from the context of the paid-work environment is a waste of time and resources and demoralises the victims of the process – the unemployed.

Imagine a small community comprising 100 dogs. Each morning they set off into the field to dig for bones. If there enough bones for all buried in the field then all the dogs would succeed in their search no matter how fast or dexterous they were.

Now imagine that one day the 100 dogs set off for the field as usual but this time they find there are only 95 bones buried.

Some dogs who were always very sharp dig up two bones as usual and others dig up the usual one bone. But, as a matter of accounting, at least 5 dogs will return homebone-less.

Now imagine that the government decides that this is unsustainable and decides that it is the skills and motivation of the bone-less dogs that is the problem. They are not “boneable” enough.

So a range of dog psychologists and dog-trainers are called into to work on the attitudes and skills of the bone-less dogs. The dogs undergo assessment and are assigned case managers. They are told that unless they train they will miss out on their nightly bowl of food that the government provides to them while bone-less. They feel despondent.

Anyway, after running and digging skills are imparted to the bone-less dogs things start to change. Each day as the 100 dogs go in search of 95 bones, we start to observe different dogs coming back bone-less. The bone-less queue seems to become shuffled by the training programs.

However, on any particular day, there are still 100 dogs running into the field and only 95 bones are buried there!

A commitment to full employment is required

This year marks the 70th Anniversary of the Australian government’s White Paper on Full Employment, which defined its commitment to maintaining full employment.

We understood that mass unemployment resulted from a systemic failure to create enough jobs and that the victims were largely powerless.

We trusted government to use its spending capacity when private spending was weak to ensure that there were enough jobs.

The successful strategy maintained very low unemployment for more than 3 decades. In the process, the government ran almost continuous fiscal deficits and was a major employer itself. It didn’t deliberately punish those who the system would leave behind unless help was extended.

The onset of neo-liberalism in the 1970s and the erroneous fetish for fiscal surpluses led to this commitment being abandoned. The rising unemployment that followed dampened wage pressures, which satisfied the employers, who had lobbied for years to have the commitment scrapped.

Neo-liberal economists, media commentators and politicians claimed that the unemployment rate consistent with full employment had risen so no policy alarm was warranted. The claims are spurious.

When the unemployment rate was 8 per cent – that was somehow full employment. When it dropped to 6 per cent – that was somehow full employment. Then it dropped to 4 per cent at one stage and these idiots tried to run the same line.

They claimed structural rigidities were the reason the full employment level unemployment rate had shifted even though they couldn’t point to any changes in structure of the economy or policy that would push the unemployment rate up from its true full employment value of around 2 per cent (to allow for people moving between jobs) and say 8 or 9 per cent.

Additionally, the government encouraged a new ‘divide-and-conquer’ nomenclature which vilified the victims in order to reconstruct the public narrative about unemployment.

To his eternal disgrace, the Federal Labor minister, Clyde Cameron coined the term “dole bludger” in 1974 to reinforce the message that the unemployed were lazy and indulgent. We heard of “work-shy lion tamers” exploiting our generosity to avoid work while receiving income support. Then there were cruisers, job snobs, leaners etc

By isolating the unemployed, the Government could cut their real benefits and make their lives hell. Both sides of politics have refused to increase the unemployment benefit above the poverty line.

Australia could easily achieve an unemployment rate of less than 2 per cent if the Government reinstated its commitment to full employment and introduced large-scale job creation programs. The extra jobs would not accelerate inflation and would deliver a huge boost to our most disadvantaged workers.

The first thing the government should do is close down JSA and, instead, introduce a – Job Guarantee. Unemployment would drop very quickly to below 2 per cent and everybody would be better off.


The reality is that this new compliance regime that the Australian Government introduced did not address the substantive cause of the mass unemployment – the failure of the economy to provide enough jobs.

It established a new industry – with private parasites pursuing a profit motive by meeting the perverse performance targets specified in their contracts. These agencies were meant to support the unemployed but quickly assumed a police-type role imposing fines and disciplining the unemployed.

To increase their revenue, the providers also cheated and fabricated their reporting. Some have been caught and forced to pay the money back, while others are getting away with it. None have been sent to prison for the frauds.

The system failed to achieve any of its stated purposes which were, of-course, not the real roles that the government was interested in pursuing anyway.

As the neo-liberal era has matured over the last three decades, Australians have plenty to be ashamed of. Our inhumane treatment of those seeking refugee status, our support for illegal invasions of Iraq and Afghanistan, our treatment of indigenous Australians, our neglect of those with severe disabilities, and many more violations of decency are obvious.

The punishment we mete out to the unemployed through JSA ranks up there.

That is enough for today!

(c) Copyright 2015 William Mitchell. All Rights Reserved.

This Post Has 26 Comments

  1. As you say Bill, if a responsible “progressive” party had been in office during the periods of tenure of Hawke, Keating, and Rudd/Gillard (i.e. not infused with the same neoliberal ideology as its conservative opponents), then we would not have seen a continuation of the deliberate and entrenched unemployment and underemployment policies which have operated during the past forty years.

  2. Thanks for the heads up on the role of Labor stalwarts in the creation of the Job Network abomination.
    The only talent that Keating had was for rather amusing and savage abuse of his political opponents.One of the reasons he lost the 1996 election.
    He is,of course,still on the public payroll with a liberal ex PM’s pension plus perks.

    I’m sure that the vested interests,despite what Four Corners will reveal,will try and put lipstick on the pig and they will probably succeed.
    George Orwell,bless his cotton socks, so long ago coined a term to describe this obfuscation of the truth. – Double Speak.

  3. I’m always amazed at the similaritys in the application of the neoliberal effort and it’s results globally; right down to the approximate dates certain policies and narratives began to surface. It seems there are very few original thinkers to choose from among the leadership hopefuls in our world.

  4. J Chistiansen,

    No “leadership hopeful” can possibly afford to say anything original: they’ll be castigated as cranks, extremists, etc etc by their rivals. Leadership hopefuls have to stick to what Mr & Mrs Average approve of.

  5. Having just watched the Four Corners report, it looks like those commercial companies who have set up supposedly to find jobs for unemployed workers, are more interested in maximising their own profits than finding those jobs and will do whatever it takes to do that.

    And this couldn’t have been foreseen when the system was commercialised some 17 years ago?

  6. Bill, will there be any talk of the job guarantee idea as a possible solution on the program or busting myths (e.g. empthesing how the Howard govt borrowed money despite surpluses.)

  7. I could not agree more with the statement:
    “Yet the public narrative still focuses on the supply-side – the allegedly ‘lazy’ and ‘unskilled’ unemployed.
    The unemployed cannot search for jobs that are not there!. It is a cruel hoax to claim otherwise and to punish the victims of the jobs shortage.”
    The question is, why does this narrative keep getting repeated?
    It could be argued that privatisation is a form of corruption aimed at giving advantage to your mates.
    The lucky privateers pick out the good bits of the business (eg Telstra) and spit out the rest. That is
    capitalise your profits and socialise your losses.
    It could also be argued that our levels of government from local council up to the federal government
    are made up of people trying to do their best,but also trying to distance themselves from direct responsibility.
    If something goes wrong with the train system,the education system or job network,the ministers can distance
    themselves from direct reponsibility.
    I suspect the true position is somewhere in between. Either way, it makes sense from these perspectives to
    blame the train vandals, the lazy teachers or those “dole bludgers”,rather than let the buck stop with elected officials.

  8. England copies Australia and Australia copies England.

    So the UK does things now, that did not work in Australia 17 years ago.

    And not having enough jobs in such a wealthy nation as Australia, with its huge mining wealth, with shops filled with business and customers, where in England the town centre shops close more and more, is amazing.

    I never saw an empty store in Melbourne shopping malls, and industrial estates full of factories and warehousing.

    Building sites far out of the city.

    This is exact opposite of 5 years of austerity here in the UK.

    Now our UK politicians have the excuse of being a remote aristocracy with that feudalistic mindset taught them in public schools (the posh private schools) and Oxford and Cambridge, so are remote from the people and have been for 1000 years (1066 AD and all that).

    These politicians go straight from that education direct into politics.

    So UK’s politicians have no comprehension of capitalism and have never known who the poor really are, describing us entirely wrongly.

    In Australia the people must have an interest in government as there are draconian rules on everyone coting.

    In the UK, no-one knows what the politicians are doing and care even less, until it hurts them in pocket and life, when it is too late.

    It appears not even 7 million people voted in 2010, and 2015 is on track to get even fewer voters by indifference and not bothering to keep registered to vote (maybe up to 7 million in 2014).

    Around 16 million did not vote, who were eligible by registration, 9 million of them women in the UK.

    My interest is in my loss of state pension by so-called ‘reform’ that is actually abolition.

    The UK public are not aware that any pension reform is happening, which began in the latter end of the 20th century and will get seriously worse from 2016.

    You might care to inform your UK relatives of what is about to befall them, with the
    information under my petition, in my WHY IS THIS IMPORTANT section, at:

    In the UK there are 1 million 60-64 year olds on some kind of welfare
    and when these are women been denied state penson payout since 2013 from age 60.

    Older men and women with a state pension payout age from 2016, face nil state pension for life.

    1 million unemployed people have been sanctioned each year off any welfare money in the UK.

    And jobs are lost by the slavery of workfare, that is forced labour for 6 months without pay, wasting little benefit on bus fares and less money for food, done by the private work programme providers companies.

    The Greens did have a policy that ended all this nonesense but ran away from it at the first opportunity.

    The opportunity of stimulus investment in the economy of shutting down all the state and private contractors of welfare admin and work programmes, using up billions that is withdrawn from the economy by their cost, and replacing all benefit with:

    – Citizen Income, universal and automatic, non means tested

    – Citizen State Pension, to above Citizen Income, universal and automatic, all same amount, non means tested.

    With all those billions put into the hands of the people, businesses would thrive, jobs would be created and people would be enabled to start up their own small self employed businesses, with the prospect in the future of hiring extra staff.

    Hopefully Labour in Australia, on track to win against the cruelty of Abbott, will take up these policies and once and for all end blaming the poor for the recessions caused by high finance.

  9. Government of the spivs by the spivs for the spivs.
    The irony of the ‘lucky’ country is even more pertinent than it was half a century ago.

  10. I was a Federal Government employee in a Department which was changed into an Agency by the Howard “reforms”. I witnessed these events as a worker from the inside. I was so baffled by what was going on I did my own research into the neoliberal program and how it was affecting welfare. I wrote a paper for my own elucidation and education; to order my own thoughts. This paper was shown to a few people at the time but it was not written for any formal purpose. I still have this paper in printed form only.

    I addressed twelve basic theses in my paper. You will see the strong influence of writers like Michael Pusey and John Ralston Saul in some of my theses. I wrote this paper in 2000/2001 and below are its basic theses in slightly abbreviated form.

    1. Australia is now in the grip of a developing social policy and public adminstration disaster. (This is very derivative from Pusey.)

    2. The root of this disaster lies in neoliberalism and economic fundamentalism and their prescription and program for a particular form of the state and economy. Current directions in Australian public adminsitration cannot be interpreted without an understanding of the fundamental goals of neoliberlism.

    3. In a democracy, the denial of a social and economic role for democratic government other than the minimal Laissez-faire role envisioned by neoliberalism is a denial of the validity of the democratic legitimation of government. It is a denial of the legitimacy of power coming from the people. (This is derivative from the views of John Ralston Saul.)

    4. Where democratic government is so minimised in the modern Western economy, further power transfers to the elite or oligarchic owners and managers of the large corporations. This transfer of power is undemocratic.

    5. As well as using the legal and economic tactics of deregulation, corporatisation and privatisation, the political tactics, as identified by Paul Pierson, are those of obfuscation, divison (wedge politics) and selective compensation.

    6. The emergence of managerialism, or generic managerialism as Brian Easton termed it, is nit incidental to this picture. Generic managerialism is the neoliberal and neocorporatist management method par excellence. The obscurantist rhetoric of generic managerialism cloaks an intent to destroy public and democratic structures.

    7. The curious alliance between “social capital” or “third way” advocates and neoliberalism, particularly amongst advocates in church and charity organisations could be a result, despite their sincerity, of these advocates lacking a full understanding of the methods and goals of neoliberalism.

    8. The CSDA (Commonwealth Service Delivery Agency) was created from DSS and later renamed as Centrelink. It was (at the time of writing in 2000/2001) an intentionally intermediate form. The long term goal was to make government service delivery “contestable over time”. Historical note: This did occur with job search agencies but to date governments have found it too diffcult (politically and technically) to privatise major welfare delivery (Pensions, Benefits, Family Payments and DVA). In my paper I talk about some of the possible difficulties of full privatisation of welfare delivery.

    9.The interim goal of neoliberalism with relation to government welfare delivery is to completely outsource welfare delivery to a melange of private, enterprise, church and charitable bodies. The final goal is to cease completely the provision of welfare by the state. It is this final goal which is being obscured and denied by neoliberal rhetoric. (Note: The neoliberals have not to date been as successful as they wished and the debacle in job services shows what happens when they are successful.)

    10. The rationale for outsourcing welfare delivery is given as the quest for efficiency and cost effectiveness in delivery by subjecting it to market competition. This economic “logic” is easily refuted by a simple consideration of the law of natural monopoly. Integrated national welfare delivery is a natural monopoly because of its requirement for a single, integrated and expensive-to-duplicate infrastructure. The result of breaking up and outsourcing the provision of welfare delivery will be an increase in costs as the benefits of natural monopoly are lost. Savings can be achieved only if the intention and the eventuality is the reduction or cessation of welfare provision and delivery. (Note: To understand this point, you need to understand the difference between welfare provision via the government budget and actual welfare delivery by government or other agencies. Clearly, there are delivery costs – like administrative costs, computer centre costs etc – of welfare provision.)

    11. The entrenched interests of the clients of the welfare state are seen by neoliberalism to be inimical to the efficient and proper functioning of the economy. Retrenching the welfare state is viewed as a return, as it were, to the unimpeded, correct and normal functioning of the free market economy. However, the processes of deregulation, corporatisation and privatisation have themselves served and enriched vested interests in the private enterprise sphere and seen the massive transfer of public wealth (long held in common and used for common benefit) to a relatively small number of individuals.

    12. Most ominiously, those resources which a government does not put into the welfare of its citizens (in the broadest sense of the term “welfare) seem almost inevitably to be put into warfare against its own citizens or citizens of other nations. Rather than seeing any real shrinkage of the state under neoliberal practice, the resources which come out of health, education and welfare will go into the coercive apparatus, into expanding the courts, prisons and military. That which does not go into welfare will go into warfare.

    Final Note: I wrote the above in 200/2001. My prediction of “that which does not go into welfare will go into warfare” seems to be holding up very well, given the history of the last 15 years, our involvements in endless and pointless wars and Abbott”s current intention to increase oppressive surveillance and security measures domestically. We can also note the Patriot Act in the US, the NSA, Wikeleaks and Snowden revelations.

  11. Bill, just the name, alone, gives me the creeps…. “The Jobs Game” -it sounds to me like a name born of neo-liberal mischief-invented by persons incapable of understanding the problem they claim to be solving….and it is little wonder it is riddled with scandal….In America, our current obsession is to understand why persons become “radicalized”, and then become terrorists….and the tie-in to the above…[the root problem is the same]….our failure to recognize a lost human right….the right to be a productive member of society… a birthright….It was a given in primitive societies, but lost in the age of industrialization and advent of the corporation, and more recent made worse by the neo-liberal systematic destruction of “employee rights” in the U.S. [and suspect this is also true in Australia]-to expand briefly:

    President Obama/Council of Economic Advisers:

    Why do we not look upon unemployment the same as we do cancer, or polio…..a disease for which we are dedicated to find a cure….in the case of polio, eradicated in America in 1994….

    That is, a disease we need to eradicate because of its pernicious impact on the market…..and given “automation”, alone, in our modern market economy-unemployment will become an epidemic, unless corrected—the further we advance into the 21st Century, to wit:


    “3% is the zero-sum threshold above which unemployment triggers inflation by diminishing labor training and skills, under-utilizing capital resources, reducing the rate of productivity advance, increasing unit labor costs, reducing the general supply of goods and services–and the loss in income to the Market is compounded exponentially with each percentage point of increase in unemployment, above 3%”.

    Unemployment is a “No On Wins” proposition: The jobless lose, the market loses, and it is a breeding ground for terrorists….

    And yet, as a result of a major paradigm shift in the world economy in the 1970’s “High and persistent unemployment has pervaded almost every OECD country since the mid-1970’s.” [per every credible economist] -With double-digit unemployment common in the Eurozone, to this day….

    The U.S., however, took a pro-active role in addressing this paradigm shift, and in 1978, President Carter signed into law
    15 USC § 3101-which provides America with the “legal authorization” to limit our jobless rate to “3%”, henceforth….

    When Carter did not, then, move to enforce this “legal authorization”, and, in fact, reduce our UE rate to 3%–it cost Carter the 1980 election-and unwittingly ushered in the ill-winds of neo-liberalism which plagues America to this day!

    86% of Americans believe that “anybody wanting to work, should be able to find a job”, and yet we still, to this day, labor under the erroneous neo-liberal propaganda that “the market can provide anybody wanting a job, with a job”….it is BS……

    As VP Biden observed on 2/23/15, America is the “dominant economic force” in the world today-the rest of the world looks to us to eradicate unemployment in this decade….


    Jim Green, Democrat opponent to Lamar Smith, Congress, 2000

  12. Agencies also make you unemployable on paper when they have decided to park you in order to justify their uselessness.
    As a very long term unemployed person I have only recently found out that I was someone with “drug dependencies” and “prone to psychotic outbursts.” Or so my file with an agency I am no longer with said. I’m certain that place is responsible for not receiving a job interview for four years now, they are absolute scum.

  13. Typically, the ABC allowed Bill to outline the problem but did not give him the opportunity to address the solution (Job Guarantee. He managed to slip that in on less well known Radio National country broadcast. Unfortunately, it was too dangerous for 4 Corners. Good programme.

  14. Daniel D.,

    Thanks for link.

    Is fantastic to see Bill getting published in the Guardian. Its been a long time coming, but nevertheless great to see a UK mainstream paper publishing MMT (albeit in their Aussie section).

    Here’s hoping they invite Bill to write too on Greece upon the publication of his new Euro book.

  15. [Bill Edit: Three Job Service Providers …] and the stunningly corrupt [and] all evil and just using and abusing jobseekers. Had personal experience with all three.

    [I edited out the names because no hard evidence was provided and I didn’t want to be publishing unsubstantiated rumour. But I respect the angst]

  16. I am an avid fan of your work and the journalists on four corners yet I was disappointed that four corners didn’t dedicate more time to a discussion of potential solutions. They had you on and didn’t raise the topic of how they could move the wasted money spent on the JSAs and implement a JG or something along those lines. They spent 99% of time on the problem and only 1% on the solution. Opportunity missed in my opinion.
    Keep up the great work. Hopefully we can carve out more spaces in our public sphere for solution-based conversations.

  17. Bill, it is dead easy to beat geoblocking – so much so I wonder why people bother doing it****. Installing Hola or any of the other popular automated VPN packages takes only a few minutes and once installed its just one or two clicks to teleport you (so far as the internet knows) to another country, and another click to return you.

    **** Actually I think I know why it is so easy to beat – many sites PREFER it that way. The ABC typically gains nothing from geoblocking but do it for all their programs because it is a contractual obligation with those they’ve purchased from others. IOW they’re just going through the motions.

  18. You should direct your folowers to a blog called ( a Guardian blogger, who explains Global “rules” re unemployed, great ideas from American, who have no idea how to look after their own people especially workers.

  19. There are additional factors at work for example the immigration policy that wishes to drive indirect revenue – do the math on the cost of applictions and issuing of visas for new residents this not only increases unemployment figures but also decreases the number of jobs available – freeze immigration for 5 years allow the economy to correct itself even if it is at the low end pay scale. I came here 5 years ago never not having worked in 35 years; my partner an Australian has a job I am educated I was 50 year old corporate director type – no dmaned work, no one interested at all, they all wanted local people with local degrees and local experience – I no more would have come here than gone to Mars despite liking many things – the ageism and work environment and I came from an employment at will country is ridiculous. The work situation in Australia is dire, a blind man could see it, this country is only now experiencing things that went on under neoliberalism in the UK and USA (two places I have worked) in the 80’s and 90’s – 20 years late as always and this country is too small to lose core sectors. Outsourcing the scurge of modern business will kill this country it will end up on the scrap heap, so very sad for believe it or not the Labour party here which actually tries to believe it supports workers and trust me on this is nowhere near as right wing as the UK Labour party or the US Democrats does a far better job and yet they are clueless as for the Liberals well when you have a lawyer in charge of the budget it really says it all for a country so big on training this seems to get overlooked. Three simple solutions, one freeze immigration, two governments need to stop awarding private sector contracts to those companies not employing local staff whereby jobs go interstate or worse overseas, and three greater incentives to companies to employ over 50’s this will the retain intellectual acumen in the workforce reduce burden on unemployment as this sector is second to the 20 years old for unemployment and also reduce cost on social services namely Newstart or Unemployment benefits. It’s as if the government failed basic macroeconomic theory and the mutliplier effect.

  20. Hello my name is Paul Scerri I have been treated very badly by MAX EMPLOYMENT in Brunswick and I ran 2 separate storys in the NEW MATILDA. PLEASE READ THE LINKS BELOW.

    How Job Agencies Bully The Unemployed and Get Away With It – New Matilda

    Max Employment Bulling Unemployed Man – Jobvoice

  21. Yes, Job Network providers are useless waste of tax payers money.
    This is a belated comment.
    Mental Health Week, Yes, well stop these JNP from mentally tormenting their so called Clients and get rid of these useless JNP
    They degrade and debase people and cause stress interfer with jobs, cost people jobs.
    Demand payslips for jobs they had nothing to do with People getting.
    How many People suicide or attempt suicide on or directly after JNP appointments they cause PTSD also.
    (Not on Centrelink Benifits,but have been in the past, a very dehumanizing experience.
    Also this extreme waste of tax payers dollars on these private colleges with very poor standard of training.
    Get rid of them.
    CES and TAFE, less expensive and do things legally and properly unlike private colleges rubbish courses and these JNP.

  22. My Daughter is a temp for many years, as it’s easier to get these type of jobs than full time permanent work, which she has no luck at all in getting even to present day. Since my husband died, it took all my daughters money and left her with nothing, forcing her on Newstart, every time each contract ended. The first time she had a Job Provider at the end of 2015, she requested on the 1st day, if she could use their computers to find work and print up her resume. The Job Provider stated, that the computers were booked for job seekers goups and so if she was at a spare computer using it, she had to give it up. Sounds crazy! They want people to get jobs day 1 and here is this Job Provider, saying to my Job Seeker daughter, give it to another Job Seeker with a compulsory appointment. You would think that a Job provider would be more accommodating and have a lot of spare computers available for people in desperate need for them Day 1, than just for an appointed group. Apparently not! Okay, further on she finally gets a appointment in mail with the Job Provider, who is going to help her reduce the size of her Resume for about 4 weeks and what does he do, NOTHING! Then next all the Job Provider does is sent her original Resume to jobs, where theirs no response back. So basically it’s becomes a appointment with the Job Provider, to only be told when you get their, here’s the date of your next appointment. How about that, a appointment for another appointment. What a lot of waste of millions of dollars the government has spent. Their was a lot better money spent on Job Seekers, when they went to TAFE and received Apprenticeships or Traineeships in the days that TAFE education was cheap and free for those on the dole.

    The other day I had what might be best described as an argument with my job agent / employment provider (an oxymoron if ever there was one).
    While she is a very nice individual, in the space of about two and a half years she has not really helped me at all. In person she has only recommended me 3 different jobs. One was packing shelves throughout the midnight shift around the busy Christmas period. Another involved call centre work and still another involved working at huge clothing apparel store more than an hour by public transport from where I live. Most of the time when I go for my monthly appointments we spend about 10 minutes together. I hand in my employment record sheet, she asks me if my situation has changed or had any job interviews and then she books me in for another appointment next month. Then I walk out. I spend most of my job hunting time on the internet at my local library or cold calling stores down the local malls or elsewhere. Technically one is supposed to look for 10 jobs per fortnight. If you multiply that out for a whole year that is 260 jobs a year!!

    I am 46 years of age. I have one degree and three diplomas. Twice I have been overseas and well read. In fact I love books and reading which is why I am looking for library work or something similar in the book trade. The job agency has really not helped me. In fact my job agent pretty much told me that I maybe let go and forced to go to another job service provider/job agency as I have been with them too for long. The other day, whilst on the phone, in despair I told her my age and qualifications, head up against the wall, exasperated, close to tears saying that I don’t want to end up a cleaner. I know I can do so much better. Nor do I think I am being unreasonable.

    In fact I left Australia from 2005 to 2010 to teach English in Japan. I had one interview and I was accepted. And I did not even have teaching diploma. Nor had I ever been too another Asian country, let alone Japan. I came back to Australia and when my money ran out and had to go back to the dole I could not even get a job in a shoe store!

    I like to think I have enough creativity and intelligence and humor and passion to make something of myself in life. I don’t want to waste my life doing menial work. Once upon a time I did work in a warehouse and in a busy remaindered book shop and now I currently volunteer at two different locations. I have worked hard.

    I just wish the government would leave me alone, pay me my benefits and write those novels I keep telling myself I should write.

    Anyone else feel the same way?

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