by Jay Coonan

After 52 years in action, Australia’s Commonwealth Employment Service shut down in 1998, to be replaced by the widely hated, privately owned Employment Service Providers. At its best, the CES showed that a public welfare system can treat workers with dignity and respect.

ince the 1990s, Australian governments have developed welfare services designed to punish the unemployed. Although the label for these services has changed repeatedly, from “Job Network” to “Job Services Australia” and finally “Jobactive,” the main instruments of coercion are still Employment Service Providers (ESPs).These privately owned agencies don’t exist to find jobs for the unemployed. In fact, they don’t produce anything or offer any useful services. And yet they still make billions, funded entirely by taxpayers.

ESPs have one purpose: to enforce punitive social security laws. They make claiming an unemployment payment humiliating and difficult, and have power to suspend payments. The point is to make unemployed workers accept low-paid, insecure work.

Marketized Coercion

John Howard’s Liberal government fully privatised employment services in 1998. But the present system had its genesis in the previous Labor governments of Bob Hawke and Paul Keating. In 1989, then-treasurer Keating commissioned the “Working Nation” white paper, which was released in 1994. It already contained many of the proposals that John Howard adopted some nine years later.

The report proposed to spend $2.1 billion (in 1994 dollars) on employment and training programs. Of this total, the white paper envisaged raising $800 million by penalizing welfare recipients for noncompliance. Describing these measures as “savings,” Keating justified the move by claiming it would create an incentive to push people off payments and into employment. He also justified the considerable gap between unemployment benefits and the minimum wage as creating an “incentive” to work.

Today, ESPs require welfare recipients to satisfy “mutual obligations,” often pointless and demeaning tasks, such as attending resume-writing courses or unpaid labor as part of the “Work for the Dole” program. In the Hawke–Keating era, these were known as “activation” requirements.

In those days, unemployment services were still managed by Commonwealth Employment Services. In 1998, Howard transferred the administrative wing of CES to the newly created Centrelink, an umbrella agency. Simultaneously, his government privatized employment services that had previously been publicly owned — spawning today’s ESPs.

However, thanks to Keating, in its final form, CES operated according to the same basic logic as today’s Jobactive Employment Service Providers. Instead of finding jobs for unemployed workers, the CES  “managed” them, pressuring the unemployed to find jobs on their own or face penalties. In its final years, CES even planned to install “Job Search Kiosks” in shopping malls, although thankfully this never materialized.

In sum, it was Bob Hawke and Paul Keating who began the long process of neoliberalizing Australia’s unemployment welfare system. The result of their efforts is a wasteful, punitive, and widely maligned system in desperate need of overhaul.

Read the full article at Jacobin Mag.