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Mutual obligations: ‘What they're selling is poor people’

Today, senior correspondent for The Saturday Paper Rick Morton on the industry selling poor people.
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Many were surprised when the new employment minister, Tony Burke, announced it was “too late” to end mutual obligations. The decision was made to preserve billions of dollars in contracts already signed with companies that profit from the system.

But there is no evidence it helps people find work. Today, senior correspondent for The Saturday Paper Rick Morton on the industry selling poor people.

Socials: Stay in touch with us on Twitter and Instagram.

Guest: Senior correspondent for The Saturday Paper Rick Morton.

Read Transcript

[Theme Music Starts]

##RUBY:
From Schwartz Media I’m Ruby Jones, this is *7am*.

Many were surprised when the new employment minister, Tony Burke, announced it was “too late” to end the punitive aspect of the welfare system known as mutual obligations.

The decision was made to preserve billions of dollars in contracts already signed with companies that profit from the system. But there is no evidence it helps people find work.

Today, senior correspondent for *The Saturday Paper* Rick Morton on the industry selling poor people.
It’s Wednesday, July 20.

[Theme Music Ends]

##RUBY:
So Rick. Tony Burke is the new Minister for Employment and Workplace Relations. Have you had much to do with him in the past? What kind of politician is he?

##RICK:
Yeah, I mean, I wouldn't say I've had heaps to do with him over the last decade or so, but I do remember working on a story in 2013 just as the Labor government lost at the election about how his last act as Immigration Minister, which he was for only a very few short months, was to release at 4:45 p.m. on a Friday, 24 hours before everyone went to the polls, was to release the last 38, I think it was unaccompanied minors, you know, asylum seekers who were in detention, the kids without adult guardians. So that was kind of his last stroke of the pen. And it shows the power that you do have as a minister. But, you know, he's an interesting guy from the shoppies, he’s backed by the shoppies union. So which is a right wing union. And he's a member of the right wing of the Labor Party. But I've always found it very difficult to place Tony Burke because he is a fairly pragmatic sort of guy from what I can tell. 

##RUBY:
Okay, so he was the Immigration Minister a decade ago for a short period of time and now he's back but taking on a very different area, employment and this portfolio, it's, it's an important one for Labor isn't it. Because people's rights at work and how they engage with the job system is really central to the way that the Labor Party sees itself. So what is the first big test for, for Tony Burke as he takes this on? 

##RICK:
I mean, he's had a couple actually already in the industrial relations portfolio, notably getting the Fair Work Commission or lobbying the Fair Work Commission to agree to a pretty significant increase in the minimum wage for workers. But then you've got a separate system, which is for people who are not workers, people who are unemployed, who have been struggling in the welfare system, I suppose, for want of a better term, and he's facing a big test here now because he's been asked by welfare advocates and anti-poverty advocates to essentially end or at least pause for a very long time, this controversial system called mutual obligation, which is basically a requirement put on to people who are receiving Social Security benefit, saying, we'll give you money, but you have to jump through these hoops. You have to show that you want to work. You have to apply for a certain amount of jobs every month. You have to be engaged in training or study or doing kind of myriad programs that we tell you are acceptable and they will be administered by this outsourced network of job providers. One of those activities is work for the dole, which has been incredibly controversial, has been around for a long time now, and it's still there and it's still mandatory. 

##Archival tape -- Tony Burke:
“…and get working again.” 

##Archival tape -- Andrew Clennell:
“You believe in the concept of mutual obligations?” 

##Archival tape -- Tony Burke:
”Absolutely.”

##RICK:
And Tony Burke, as the Minister for Employment has been put on the spot and told you need to change this.

##Archival tape -- Tony Burke:
“Look, the initial concept of it that had been said a while ago is right, which is to say 20 applications a week being the only measure is the wrong way to go about things.”

##RUBY:
Right, okay. So Tony Burke has inherited this complicated and punitive welfare system, including mutual obligations, and he has to make a decision about what to do with it now that he does have the power to decide what happens. So what do we know about his thinking? 

##RICK:
All right. So basically where we're at now is that Labor are in government. Tony Burke is the Minister for Employment and he's essentially saying it's too late to change anything. And it's really bizarre thinking because finally he's in the big chair, he has the power to change these things, and he’s saying he can’t.

##Archival tape -- Tony Burke:
”…it's actually too late to not have a point system at all. It's about getting inside it and making it logical and making sure that when all these contracts take effect in a couple of weeks time…”

##RICK:
So, just a couple of months before the federal election, the Coalition signed $7.1 billion worth of contracts to private and non-for-profit employment service providers.

##Archival tape -- Unknown person 1:
“Whether you're a JobSeeker. An employer.”

##Archival tape -- Unknown person 2:
“Or you want to work.”

##Archival tape -- Unknown person 3:
“At a new disability employment services provider, choose AimBig. Bigger than employment.”

##RICK:
So this is the complete outsourcing of the old role of the Commonwealth and which is meant to help people who are on welfare, who are on unemployment benefits, to get a job, to get into study and training.

##Archival tape -- Unknown person 4:
“So Asuria has supported us through, you know, finding the candidate, you know.”

##RICK:
But really, what they do is they police the mutual obligations and decide on behalf of Centrelink in many cases whether you should get penalised or, you know, for non-compliance with the system. 

##Archival tape -- Unknown person 5:
“Know, supported us financially by, you know, find a candidate who are suitable but as well as has a wage subsidy attached with us.”

##RICK:
Now because those contracts were signed and they were announced on March 24, so only just a few months ago, and the system began on July 1. There is already a whole industry existing that is, you know, managing this part of the welfare system and it's a really powerful industry.

##Archival tape -- Advertisement:
“If you need to hire staff. APM has jobseekers ready to start right now.”

##RICK:
And I think we are going to lose money. And Minister Burke has decided that change, substantial change, is too difficult because it will upset a powerful lobby and that the people who are on the welfare system really don't have a lot of power to fight back. So that's the decision that seems to be made for now. 

##Archival tape -- Advertisement:
"Contact your local APM team and find the staff you need right now.”

##RUBY:
We’ll be back in a moment.

[Advertisement]

##RUBY:
Rick it sounds like the new government, the new Employment Minister intends to keep the system of mutual obligations in place for people who are unemployed. To what extent do you think that decision is based on the interests of the private companies that essentially run that system, for profit? 

##RICK:
I asked the department, I said, you know, hear me out here. Like if, you know, were you to end mutual obligations tomorrow or pause them for a long time, would that hurt the profits of this private network of job providers? And I was expecting them to kind of just ignore the question or not answer it. But what they said was that we don't expect this current round of pauses, which is only four weeks, to have any material impact on the profits of these providers. But, and this is really important and quite instructive, I think. But they said we are monitoring the situation very closely. Now that, to me, tells me that they know that substantial change here will hurt the sector and that they have essentially decided that it's too much to rock the boat when it comes to the industry. And we're not going to make substantial change here, especially around mutual obligations. And that's important because mutual obligations actually insures a certain amount of profit for this sector that wouldn't otherwise be there. 

##RUBY:
And the very concept of mutual obligations, of having to provide some sort of work or service in return for unemployment payments, obviously it can be complex and punitive. But there is another issue here, and that's efficacy. Does this system actually work at its stated goal, which is to get people off government payments into jobs?

##RICK:
Do you know what? It actually doesn't. There was some research only I think last year that came out that said jobseekers subject to mutual obligations, actually take longer to find work from a couple of researchers at James Cook University and elsewhere. So it actually doesn't work. It's punitive. It tends to harm people, particularly people who are really sensitive to the structural barriers that have put them onto the unemployment queue in the first place. Now, the average time that people spend on jobseeker, the unemployment benefit is five years. Now, remember, this is a payment that is well below the poverty line. Five years. And I’ll let you in on a little secret, they're not there by choice. 

Now people are in the system. A lot of them actually have disabilities. And there's a host of other barriers, such as the fact that people don't live near any work. They can't afford to live near where their work is. They don't have access to transport. They might have caring, unpaid, caring work that they do in their own extended family. And here's the crux of it. Whatever mutual obligations is required of these people, they must do a set amount of activities every month to get points to keep their payment. And those activities are completely run by, policed by and in many instances offered by related entities to the job providers. And they get paid bonus fees, outcome payments, placement fees from the government, from the taxpayer to put jobseekers into these various programmes that are required by the mutual obligations. 

So it is essentially a self-fulfilling prophecy from the point of the government where they say, this isn't here to help you and we will pay for the system to help you when really what they're doing is they're paying for the system to churn people through and then come out the other side. They're still on income benefits because they'd been there on average of five years and they go back into the system again.

##RUBY:
Right. So it doesn't work because people are facing these structural barriers that a programme like this isn't even really designed to address, and it's also costing the government more than $7 billion. So aside from I suppose, the ethical issues, is it straight-up just a waste of money Rick?

##RICK:
I've long argued that it is. I mean, there was an old system, Commonwealth Employment Services, that was around in the 1990s that was axed by John Howard. And it was a little bit more expensive than what this current system is, but it actually worked. It had flaws. Every government program does. But for the most part it worked. And it dealt with people and what they needed in the moment to get access to work, to get over the barriers that were keeping them, and of course that whole system was outsourced. And so not only does the current system, which is called Workforce Australia, not work. I suspect the reason it's still there is because if it was gone, then suddenly we've got this whole industry that is, you know, it's what they're selling is poor people. So this industry wouldn't exist without the poor people. But of course, there are, you know, tens of thousands of workers in this industry now. And so if that ended tomorrow, then the unemployment queue would go up again. 

##RUBY:
And so what does Labor's decision to continue on with this mean then for the people who have to try and live within the system, who have to to go back and forward with these private providers knowing that there isn't really a point to it for them. 

##RICK:
I mean, it's pretty it's pretty wild. All of this is in the context of rising cost of living, right? And then they're also required, hundreds of thousands of people are required to go through these hoops. Right. 

The idea that there's welfare queens or people who would like laughing it up or milking the system is true of corporate crime and corporate fraud and rorting of government systems when it comes to the NDIS and home care and aged care and things like that. But for individuals who are just trying to survive, that has almost never been the case in the welfare system. 

So most people and this is something that I think we struggle to get across in Australia to discuss, is that most people who are kind of on the margins of society are not there by choice and in fact the things that keep them there are often the things that we think ought to help them out. 

And, you know, I think if you talk to anyone who doesn't pay particular attention to the deep entrails of Australian Government policy and who could blame them, I think they would think. But we've got a $7.1 billion employment services industry and we've got the welfare system that gives people free money. 

They would assume that that stuff is built in a helpful way and it's not. At the moment, in fact, we discovered this with the COVID 19 pandemic. The moment, people who had jobs most recently ended up jobless and having to queue outside Centrelink and those queues were enormous because the Government hadn't prepared. That was what prompted reaction, because suddenly people who were outside the system were seeing what that system was like from the inside and going, holy shit, this is no way to treat human beings. 

And I think it's very easy to forget that for the people who are on average in the system for five years, they're not necessarily the ones with the megaphone, with the voice in public politics. And of course, we kind of just ignore them. 

##RUBY:
Well, it's lucky we have you, Rick, to look into the deep entrails of government policy and tell us about what's happening.

##RICK:
Oh, look, I wouldn't spend my time any other way.

##RUBY:
Rick. Thank you so much.

##RICK:
Thanks Ruby.

[Advertisement]

[Theme Music Starts]

##RUBY:
Also in the news today,

The Therapeutic Goods Administration has provisionally approved the Moderna vaccine for children aged 6 months to 5 years.

The TGA recommends the less concentrated paediatric dose of the vaccine be administered to children as two doses, at least 28 days apart. 

And the Minister for the Environment, Tanya Plibersek, has announced the federal government's plan to expand Australia’s national estate.

In a speech at the National Press Club on Wednesday, Plibersek said the government will set a goal of protecting 30 per cent of Australian land and 30 per cent of the country’s oceans by 2030.

Plibersek said the government will “explore the creation of new national and marine protected areas, including by pursuing the east Antarctic marine park”.

I’m Ruby Jones, this is *7am*. See you tomorrow.

[Theme Music Ends]

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