MEDIA STATEMENT: Budget Estimates analysis identifies cut to employment services

Jobs Australia, in analysing the 2019/20 Budget Papers and Budget Estimates, has ascertained a future cut to employment services when the New Employment Services Model is rolled out nationally.

Budget Paper No. 2 clearly stated that $59.4m savings from the New Employment Services Model would be reinvested to assist jobseekers who needed the most help to find a job.

Afterwards during Budget Estimates we learned that in fact this will not occur, and that the savings from digitising services will be cut from employment services.  We estimate that just under $6M from each trial site will be returned to consolidated revenue each year. When the new model is rolled out nationally, if each region returns $6M to consolidated revenue, this will amount to a total of $300M cut from 2022/23 for the services which assist vulnerable Australians to find employment.

The Forward Estimates offered a more conservative figure with a cut of $120M per annum to jobactive from 2022/23.

Our analysis therefore suggests that the New Employment Services Model will therefore herald a reduction in resourcing to support jobseeker between $120M and $300M per annum.

These cuts come at a bad time, with our 2019/20 Pre-Budget submission highlighting that ‘In 2015 Australia spent 0.23% of GDP on employment assistance, which was less than half the OECD average of 0.53%.’ Australia spends less than many other OECD countries supporting jobseekers.

The new revelation of the cut has led to widespread concern amongst our members that the previously expected benefits of digitisation for the most disadvantaged job seekers will not be realised.

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