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Issue #1727      April 20, 2016

Turnbull escalates war on the poor

Unemployed and underemployed Australians can be issued with on-the-spot fines by privately owned job agencies under a tough new government proposal, writes Owen Bennett*.

Next month the Turnbull government will be asking the Senate to support one of the most devastating attacks launched against poor and vulnerable Australians in recent memory. The Bill – entitled Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 – proposes to give privately run job agencies unprecedented new powers to financially penalise unemployed and underemployed Australians. If passed the fines will come into effect on July 1, 2016.

Under the proposal, Australians receiving the dole can be fined 10% of their income support – increasing by 10% each day until they “re-engage” – if they:

  • Fail to sign a job plan at their first job agency appointment; or
  • Are found by their job agency to have behaved inappropriately at an appointment (“inappropriate behaviour” is defined as acting in a manner “such that the purpose of the appointment is not achieved”); or
  • Fail to attend a Work for the Dole or Training exercise without an excuse deemed reasonable by the job agency.

All fines (roughly $55.00) will be deducted immediately. Unemployed Australians who feel they have been unfairly fined will be required to go through Centrelink’s arduous appeals process to get their money back – a procedure that can take up to four months.

This means that even if an unemployed worker successfully appeals against a fine – and thousands do every year – they will still be forced to endure up to four months without a significant portion of their income support.  As privately run job agencies can effectively impose these financial penalties on unemployed workers before having to provide any concrete proof, the Coalition’s proposal gives privately owned job agencies the power of life and death over unemployed workers.

With the dole already $391.00 below the poverty line according to the Melbourne Institute, for many unemployed workers a 10% deduction of their income support will place them in severe financial distress. If this proposal is passed next month, unemployed Australians will be just one unfair penalty away from extreme poverty and even homelessness.

The dole has already been proven to be not enough to live on. A recent report showed that one in four people on the dole were forced to beg on the streets for more than a year, while 6 in 10 were required to approach a charity for help. Escaping this poverty-trap has become almost impossible for unemployed Australians – according to official government figures there are 11 job seekers competing for each vacancy, even more when you consider low-skill jobs.

With unemployment already a one-way ticket to poverty for many Australians, why is the Turnbull government introducing a bill that will make it considerably harder for unemployed workers to survive?

To answer this question, it is necessary to understand the employment services industry. Comprised of for-profit and not-for-profit companies ranging from billion-dollar corporations like Max Employment to charities like the Salvation Army, the employment services industry has become a highly lucrative business.

Under the Coalition government’s four-year $6.8 billion Job-active program, government payments to employment services are tied to a variety of “jobseeker outcomes”. The most efficient way for job agencies to maximise outcome payments is to ensure that their unemployed “caseload” are, at a bare minimum, compliant with appointments and activities. Clearly the employment services industry has a financial interest in obtaining increased powers to penalise the unemployed.

With these perverse financial incentives already firmly in play, there are a number of well-documented cases of job agencies bullying unemployed workers. Every day, the Australian Unemployed Workers’ Union receives new cases of Australians being bullied into unfair activities or appointments by money-hungry job agencies.

Even if unemployed workers are able to muster up the courage to demand that their rights be recognised, job agencies use the threat of sanctions to ensure compliance. With the continued failure of the Department of Employment to effectively regulate the industry and bring bullying job agencies into line, unemployed workers have nowhere to go. This has created a culture of fear and intimidation throughout the employment service industry.

By proposing that job agencies should be given new unprecedented powers to financially penalise unemployed workers, the Turnbull government is sending a clear message to the employment services industry that these tactics are not only acceptable but should be intensified.

If you have been unfairly fined by your job agency, join the Australian Unemployed Workers’ Union legal challenge against this unfair compliance system by contacting them on contact@unemployedworkersunion.com. You can also participate in the AUWU’s Fight the Fine campaign against this bill.  Visit the AUWU’s Facebook page for more info.

* Owen Bennett is the president of the Australian Unemployed Workers Union, an organisation dedicated to fighting for the rights and dignity of the unemployed. He is also writing his PhD thesis on the unemployment services industry.

The Beacon

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