Govt incentives encourage job agency rorting, report says

The Government's system of rewarding job agencies that delay help to the unemployed until they are out of work for more than 12 months exacerbates long-term unemployment and provides incentives for the agencies to "stretch the ethical boundaries", a Catholic Social Services report says.

The Sydney Morning Herald reports that cash-strapped Job Network agencies are resorting to unethical and even fraudulent practices to stay in business in a near full-employment economy that has left them with the hard-core jobless.

According to Catholic Social Services Australia (CSSA), the Federal Government's system of paying job agencies and rating their performance is outmoded.

CSSA says the most disadvantaged job seekers are being let down as agencies "play the system" to survive.

The system rewards agencies that delay help to the jobless until they are out of work for more than 12 months, thus exacerbating long-term unemployment. It further rewards agencies for then placing them as quickly as possible into any job.

As well, Job Network had "extraordinarily high" administrative costs with the Department of Employment and Workplace Relations, spending $252 million a year - or 15 per cent of the Job Network appropriation - and employing 1200 public servants to monitor 1100 agencies.

The CSSA report, A Job Network for Job Seekers, calls for a rethink of how agencies are rewarded at a time when the financial viability of the program is estimated to have fallen by at least 25 per cent in three years, and the clientele has changed.

"Too many job seekers are placed in poor quality and shorter term jobs that do not realise the aspirations of job seekers " it says.

It claims agencies in the profit and non-profit sectors are "buying" good results by the misuse of wage subsidies. They pay employers as much as 100 per cent of a wage to place the unemployed into poor quality jobs that would not exist without the subsidy.

In about 40 per cent of cases, job seekers return to the unemployment benefit within 13 weeks. Yet it would take at least 40 weeks of employment after the subsidy ended to recoup the costs to taxpayers, the report says.

CSSA said some agencies made deals with employers to avoid docking workers for absenteeism. Full payment to the agencies depended on people having a 13-week unbroken employment record; some agencies fraudulently reimbursed employers for time lost, disguising the nature of the payment.

The report says faced with questionable practices by their competitors, ethical providers, including Centacare, the Catholic Job Network agency, could be forced from the industry with its financal viability "estimated to have fallen by at least 25 per cent" in three years.

Executive Director Frank Quinlan said: "The market is now very different from when Job Network was created. And we don't think maximum assistance is being provided to disadvantaged job seekers."

"We want the incentive system rejigged so that it supports Job Network providers to get clients into jobs that last, to get them into those jobs quickly and to get people in from a whole range of target groups that are especially disadvantaged, such as the disabled."

Cash-poor job agencies have given ethics the sack: report(Sydney Morning Herald, 23/11/06)
The Victims of Job Agency Rorting (The Age, 23/11/06)

LINKS (not necessarily endorsed by Church Resources)
Catholic Social Services Australia

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23 Nov 2006