A new report by the Australian Council of Social Service (ACOSS) has found entry-level jobs have declined while long-term unemployment has significantly increased, prompting calls for an overhaul of Australia’s employment services system which is systematically failing.

The report, Faces of unemployment 2024, found that since interest rates began to rise in mid-2022, employment at the lowest skill level has lagged, increasing only 1.9% compared with 7.8% overall. Job vacancies for that skill level have dropped by 39% compared to a 30% decline overall.

In that period, the number of people unemployed or underemployed per job vacancy increased from 2.9 to 4.9.

The report, supported by Ecstra Foundation, also found the share of entry level jobs – which people on income support mostly rely on – has reduced more than a percentage point since 2020 and nearly four percentage points since 1998, now making up 38% of employment.

Meanwhile, the proportion of people on unemployment payments who have been receiving them for more than a year has risen substantially from 51% in 2012 to 60% today.

A total of 557,000 people have been receiving unemployment payments for more than a year and 190,000 have been receiving them for more than five years. Of those on unemployment payments for over a year, 50% have a health condition, the majority are women and nearly a third are aged 55 and over.

The research, which analyses official government data over time, also found Workforce Australia is failing to help people into work, with only 11% of participants finding employment that takes them off income support for at least six months.

“We have a mismatch in the labour market with fewer entry-level jobs available, making it harder for people on income support to transition back into paid employment,” said ACOSS CEO Dr Cassandra Goldie.

“We know that people with partial work capacity, older people and First Nations people experience significant barriers to accessing paid work, including workplace discrimination, location and suitability of work. We have also seen the government shift people with disability or chronic health conditions from the Disability Support Pension to unemployment payments, subjecting them to harsh and inappropriate mutual obligations.”

“People are also held back by woefully low payments, which force them into poverty and deprivation, and the broken employment services system which is focussed on compliance and monitoring rather than actually helping people find work.”

“Australia’s unemployment payment is the lowest among wealthy nations and we spend less than most of our peers on labour market policies such as wage subsidies which are highly effective.”

“We urgently need a complete overhaul of employment policy, including much greater investment in employment programs, lifting income support payments to livable levels, a commitment to ambitious full employment targets, and ending harmful automated payment suspensions.”

Caroline Stewart, Ecstra Foundation CEO said: “The Faces of Unemployment report includes the stories of real people trying to navigate their way through complex systems and agencies, seeking support to live with dignity in an environment where the barriers to work are increasing. ACOSS continues to advocate for practical solutions that the government should adopt to afford more people in Australia the opportunity to participate in work and build a base level of economic security and resilience.”

There are 920,000 people currently relying on unemployment related payments, such as JobSeeker and Youth Allowance. The report showed the chances of getting back into work diminish the longer a person is out of work. Only 8% of people unemployed for five years or more transition off payments, reflecting the structural barriers they face.

Australia spends just 0.4% of GDP on labor market policies, significantly less than many other wealthy countries, including Denmark and New Zealand who both spend 1.7%.

ACOSS is calling for the government to:

  1. Commit to ambitious full employment targets incorporating unemployment, under- employment and a ratio of job vacancies to people unemployed.
  2. Increase JobSeeker, Youth Allowance, Parenting Payment and related payments to at least $82 a day, in line with pension payments.
  3. Publicly commit to the major directions for reform outlined in the Hill Report and set clear goals and principles for reform. Specifically: (i) Establish advisory arrangements to guide the reform effort, which should include employers, service providers, community organisations, and people with lived experience of employment services. (ii) Set out a strategic roadmap for the reform agenda, which establishes the sequencing of policy changes.
  4. End automated payment suspensions in employment services and introduce a new unemployment payment compliance system informed by a human rights framework and natural justice principles.
  5. Lift direct investment in national employment capacity-building programs such as wage subsidies and vocational education and training that underpin Workforce Australia services and make a difference for people unemployed long-term.
  6. Establish an independent quality assurance body for employment services.
  7. Establish trials for local partnerships between government, employment service providers, employers, training organisations and local community services to assist people and communities facing labour market disadvantage.

 

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