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Issue #1691      July 1, 2015

“Jobactive” – Making unemployment “the worst time”

The Abbott Liberal-National government’s introduction of the Jobactive system on July 1 marks the beginning of “the worst time in Australia’s post-war history to be unemployed.”

Jobactive intends to make the already harsh conditions imposed by government on the unemployed even harsher. From July 1:

  • job seekers under 30 years of age will be forced onto work for the dole schemes after six months – previously it was 12 months;
  • those in this age group will need to work for the dole for 25 hours a week for six months a year, rather than 15 hours a week as it is for other age groups;
  • failure to attend a fortnightly job search appointment without a “reasonable excuse” will incur a fine of $50, with higher penalties for further infringements.

Launched in a jobless economy

These measures come at a time when, ever since the 2008 Global Financial Crisis, unemployment and underemployment have steadily grown in Australia and internationally.

Currently, more than 745,000 people are counted as unemployed in Australia, a growth of more than 300,000 since 2008. Of these, nearly 190,000 have been unemployed for more than a year, three times as many as in 2008. Over a million people are underemployed, an increase of more than 400,000 since that time.

This means about 1.8 million people (14.5 percent of the workforce) are actively seeking work – at a time when job vacancies have dwindled to 158,000, compared with 465,000 vacancies in 2008. There are now 11 jobseekers for every job vacancy, the highest job seeker to job vacancy ratio since records began.

Given that current unemployment benefits are $280 per fortnight below the poverty line and work for the dole (which boosts benefits by $20 a fortnight) is more than $400 short of the minimum wage for the same work, then unemployment is a one-way ticket to poverty for those stranded in the surplus labour pool.

What is more, the conditions in which the unemployed are placed have a direct bearing on the security and condition of the workforce more generally.

A typical instance is that of Southern Downs Shire (Lockyer Valley, Queensland). According to its mayor, the council will help balance its budget by replacing its park management staff with (forced) participants in the Abbott government’s Work for the Dole and Green Army programs, where they can “give back to the community” in return for gaining the skills and experience “that can help them find a job”!

Punitive and privatised

Jobactive is a system of contracted services that will cost $5.1 billion over its first three years (though the contracts are tendered out for five years!)

The privately-owned employment service providers will have unprecedented power to punish job seekers. This power in itself may be in violation of the Social Security Law, which expressly forbids employment services from making social security compliance decisions.

The history of contracted out employment services – initiated by the Howard Liberal-National government in 1996 by privatising the Commonwealth Employment Service so as to create a “market” out of the unemployed – is one of abuse of the system to maximise contractors’ profits.

The unemployed have become the commodity, the raw material out of which the employment service provision corporations generate profits by keeping job seekers “engaged” in job market processes through a largely punitive system of fines, appointments, unpaid work activities, short-term subsidised work and irrelevant training.

Like other privatisations and marketisation processes, often forced on governments through such institutions as the Wold Trade Organisation and trade agreements such as the General Agreement on Trades and Services, the “market” in processing the unemployed is increasingly dominated by multinational corporations specialising in taking over government functions and public sector enterprises.

In handing out its employment services contracts the new Jobactive scheme has favoured US companies. In particular, Maximus Corporation (annual revenue $US1.7 billion), through its wholly owned subsidiary MAX Solutions and Providence Service Corporation (annual revenue $US1.1 billion), in a joint venture with Mission Australia, have won nearly half the Work for the Dole co-ordinator contracts. They have also won generalised employment services contracts for 38 of the 51 employment service regions in which providers may operate.

MAX Solutions’ successes have been associated with its employment at strategic times of senior bureaucrats from the Departments responsible for the programs. A former senior executive, who managed the 2009 tender process which awarded MAX Solutions its dominant market share, was then employed by MAX Solutions a month before tenders for current contracts were opened.

In February 2008, seven months before the start of the 2009 tender process MAX employed the then director of the Department of Education, Employment and Workplace Relations as the company’s general manager of strategy performance, to oversee MAX’s successful bid for contracts.

A diversion from real job creation

The Jobactive system is a diversion from the Abbott government’s lack of any policy to address the jobs crisis in Australia.

Its only gesture in this direction is that its harsh treatment of the unemployed and its encouragement of long periods of unpaid work for job seekers increases the competition for jobs and suppresses wage growth – this apparently stimulates investment and new jobs, according to neo-liberal economics.

A multitude of unmet social demands in present society need investment and a skilled workforce. These demands – for physical infrastructure and social services and most vitally for the urgently needed transition from a fossil fuel based consumer economy to an environmentally sustainable society are neglected or suppressed by pro-capitalist governments such as come to office in Australia and elsewhere. The Abbott government is just the most appalling example of this type of government.

Oppose and resist Jobactive!

The introduction of Jobactive has been greeted with small but significant actions against the scheme. These struggles need to be supported and broadened.

The Unemployed Union of Australia (UUA) is staging demonstrations in Melbourne and Adelaide to launch a “Fight the Fine” campaign, a protest against the punitive fines for the unemployed, which encapsulates much of what is inequitable about Jobactive.

Young Communists have made Jobactive – along with the removal of penalty rates for young workers and high fees for vocational and other courses – priorities for their campaigning.

It is vital that the barriers between the employed and unemployed divisions of the labour force are removed, so the broad labour movement can be united in a strong front against neo-liberal policies of punishment and austerity for workers.

A step in this direction has been the support the National Union of Workers has given the UUA by providing office space and other resources.

Next article – Child detention “at crisis point”

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