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ANGE:

From Schwartz Media, I’m Ange McCormack. This is 7am.

In Australia, if you’re on welfare your payment can be suspended by a for-profit, private company – even if you’ve done nothing wrong.

With tens of thousands of people being affected by suspensions every week, anti-poverty experts are warning it’s putting already vulnerable people at risk, and are urging the government to act.

Today, senior reporter for The Saturday Paper Rick Morton, on why private companies have the power to put welfare recipients on a suspension.

It’s Tuesday, October 24th.

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ANGE:

Rick, you've been talking to a woman who we're going to call Jennifer for the purposes of this story. Can you tell me a bit about her situation?

RICK:

Yeah, Jennifer's not her real name. I got to make that up. But she's a single mom who had to move back to Perth to be with her ill mother and, you know, was thrown into a bit of turmoil at the time because the rental prices were out of her reach. You know, she's got osteogenesis imperfecta, which is basically brittle bone syndrome that she actually can't work full time.

But even that being the case, she's been working pretty hard labour intensive jobs her whole life, right? And she’s the welfare recipient, she's actually working right now, but she gets a little bit of the jobseeker welfare benefit payment. And in order to get that tiny little fraction of what the full payment would be, because she's working, she still has to jump through the hoops of what they call mutual obligation, so you've got to meet a certain number of requirements every month, you know, look for jobs or enrol in study or training or do some courses. And even having met all of those conditions, she has still had her welfare payments suspended several times. She basically said, you got a text message saying, yeah, your payments have been suspended and on all but one of the occasions that this has happened to her, it's happened because there was a glitch.

So her job agency makes her use a phone application to like log all of her appointments and check-ins and all of that kind of stuff. But the app doesn't always talk to the office. So when Jennifer is at work and, you know, has already spoken to someone saying, I can't come in to this appointment on that day because I'm actually working. Can we do it over the phone? And they're like, Yep, that's totally fine. The app still says that she's failed, and then no one in the office checks that there has been this prior conversation. In fact, she gets an automatic suspension of her welfare payment. But in order to re-engage and stop that suspension from happening, she has to attend a face to face appointment in the office of the job provider, which knows that she has a job that was found while she was with the same job provider. Right. And she has to drive on a good day, 45 minutes in one direction. But it really takes her a couple of hours if it's in the middle of the day just to go and tick a box and she said to me, it just adds a layer of stress that people really can't handle anymore.

ANGE:

And so Jennifer's done nothing wrong yet her payment gets suspended and then she's given this extra burden of having to prove that the payment shouldn't be suspended. Who's making that decision to cut off the payment?

RICK:

This is the thing that I think most Australians who haven't experienced this don't actually understand. It's not done by Centrelink, it's not even done by the government. It's done by the third party outsourced job providers. These are private providers. Many of them are for profit businesses, but even the ones that are not for profit are not part of the government. They're not Services Australia staff or Centrelink staff. They're companies who have the power under these, you know, $6.3 billion dollars worth of Workforce Australia contracts. They have the power to automatically suspend a person's welfare payment if they say this person haven't met their monthly mutual obligation requirements. It's a crazy amount of power for a private organisation to have over the life of an individual.

Audio excerpt – Reporter:

“More than 750,000 people use jobactive to look for jobs and meet mutual obligations. Starting tomorrow, jobactive will disappear, replaced by a new system called Workforce Australia.”

RICK:

And you know, Workforce Australia is essentially this brand new system that was replace the old jobactive, which is still, you know, it's the same thing, right? It's employment services.

Audio excerpt – Speaker 1:

“Workforce Australia, a flexible employment service combining online and provider led services.”

RICK:

The government wants you to do all of this work just to please them and get your government payment, right? You have to be activated, quote unquote.

Audio excerpt – Speaker 1:

“The new flexible points based activation system. Let Seetha adjust her client support and requirements in line with their circumstances.”

RICK:

And so Workforce Australia was meant to make it a little bit more flexible, a little bit more easy for people to make it through the system and, you know, maybe get some skills at the end of it. The one thing that they thought might, you know, help people whose payments have been suspended automatically was to build in a two day window in which a person could argue, hey, there's been a mistake or there's an error. Oh, please don't suspend my payment. But it has barely changed the numbers at all. So in just three months to the end of June this year, 240,000 people had their benefits suspended, a total of 436,000 times. That's almost half 45%, we're talking of every single jobseeker in the Workforce Australia system.

ANGE:

And so you've got these private for profit job services suspending people's payments, and this is affecting a huge amount of people, as you've just said. Do we know if these suspensions are for legitimate reasons?

RICK:

Well, it depends how you define legitimate, right? You know, every day you hear stories of people who have organised with their job provider to rearrange a meeting or to reschedule an appointment that they have to turn up to and the job providers agreed. But then something's been lost in the communication channel, and then all of a sudden they get a text message saying you didn't turn up to your appointment. Your payments are suspended. That's a breach. And so we know there are a lot of those errors and those are real, real problems for people because, again, the the government has outsourced the compliance to the providers, but then the providers, when they suspend these payments, outsource the admin to fix it to you, the person on jobseeker.

But even beyond that, there are real issues with the so called points based activation system, which is a new element of Workforce Australia where they they set a target essentially it's 100 points a month to tick off the box and you've done your mutual obligation. So you can get 20 points for enrolling in an education course that is run by that provider, your job services provider, and for which they get paid money, extra money from the government to do. You can get 20 points for doing work for the dole, You can get 15 points for doing a career transition assistance program. But even if you were to do work for the dole for four weeks in a month, you couldn't get 100 points. It's only 80. And the problem is, if you don't meet that monthly target of points, then you get penalised and your welfare payment gets suspended in order to re-engage before that suspension takes effect. There are additional points imposed upon the person that they then have to try and meet.

And so we're actually seeing people lose their welfare payments at a time when they need to be paying rent, they need to be paying bills and need to be actually having money in their bank account to get to appointments, whether it be via public transport or paying petrol, which is exorbitantly well, you and I both know it's a cost of living crisis, right? And so we're talking time and expense for people who have almost none of either.

And this has led ACOSS, which is the Australian Council of Social Services, the peak body that lobbies to end poverty in disadvantage, to write to Tony Burke, the Minister for Employment, saying you've got to stop this because it's hurting people. And the letter lays it out in black and white and says nobody should be penalised in the first instance with a suspension under those circumstances. And certainly they told the minister this power, this power to upend someone's life like that should not rest with the private job agencies.

ANGE:

So, how will the government respond? That’s coming up, after the break.

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ANGE:

So, Rick, the government has been made aware that tens of thousands of people a week are getting their payments suspended by private providers, with ACOSS sending Tony Burke a letter about it. What has he said in response?

RICK:

Yeah, he wrote back to ACOSS early last month and he said that the policy that really complex they intersect with all elements of government is like taxation and social services and all the rest of employment. And he said that changes that have not been properly considered can have significant, unintended and unexpected consequences which can have substantial negative effects. It's essentially saying, yeah, let's not move things around because something bad might happen. And that's interesting in its own right.

But then you've got another Labor MP, Julian Hill, who is the chair of the House of Representatives Select Committee, the chair of the parliamentary inquiry which is looking into the entire workforce of Australia's system. And he gives a speech to the industry, said to the privatised providers peak body in Brisbane on the 11th of October, so very recently. And he said that the data on payment suspensions and cancellations is frankly shocking. He said suspending or cancelling payments are not decisions that should be automated or ever taken lightly. And he said that this method of outsourcing government work to the private sector was a mistake. And I'm quoting him. “It's obvious that full privatisation has failed.” And Julian Hill is kind of trying to get ahead of an issue here that has been brought up in Parliament over and over again, particularly by the Greens Senator Janet Rice, whose questioning on this has been non-stop and pretty thorough.

Audio excerpt – Janet Rice:

“Over the past year, we've heard evidence from unemployed advocates, income support recipients and employment providers that mutual obligations are punitive and counterproductive.”

RICK:

Senator Rice has, you know, spoken quite clearly about the evidence that they've been hearing from unemployed advocates and income support recipients and providers that mutual obligations broadly are punitive and counterproductive.

Audio excerpt – Janet Rice:

“In fact, wise employment itself said in its submission to the Workforce Australia inquiry that removing these measures from the system would improve engagement from jobseekers.”

RICK:

And Queensland, Senator Murray Watt is the latest Labor Government member really to speak on this issue in Parliament last week he was saying that, you know, the Albanese Government, they do support mutual obligation.

Audio excerpt – Murray Watt:

“and the Albanese Government does support the concept of mutual obligation. However, we do not support it being undertaken in the punitive manner that the system has built into it after ten years of Coalition government.”

ANGE:

I want to know how we got to this point of this level of privatisation and power being handed to the private sector, really failing and making the system worse. How did it get like this?

RICK:

I mean, it's a story as old as Western democracy, I think. We've seen this kind of creeping desire to get something out of people who are on poverty payments. And it became particularly pernicious with the marketisation of services that actually began really in Australia under the Hawke Keating years when they were trying to bring the Australian economy in line with the rest of the world that floated the dollar. And that just then became the new baseline, which got a hell of a lot worse under John Howard when he was Prime Minister and it was John Howard that got rid of the Commonwealth Employment Service, which used to be an on the ground, local level Commonwealth public service effort grounded in local communities to try and find people actual real work as opposed to an outsourced, privatised sector whose incentives were really almost entirely about churning people through the system to get government payments.

That's the system that has steadily built up and we've had different iterations of it, but it has always been essentially the same, which is a huge network of outsourced private providers. And whether they're non-government or not, they're still trying to make money by servicing poor people. And we have this system now that is so big that the providers themselves have been called stakeholders. And so any little change can affect that industry, which has grown so big and so powerful because of decades now of government policy.

ANGE:

And Rick, how urgently does this need to be addressed? You know, you've got Tony Burke saying this is really complicated, but we're investigating it. But meanwhile, people are still right now being caught up in these errors, aren't they?

RICK:

Yeah. Every week, you know, on average, 35,000 welfare payments are suspended. We're talking about people who are already living on the edge, who are then made to administer a failure of this system. It might not even be their fault. But even if it is, quote unquote, their fault, it's because the system itself is so blocky, like it doesn't account for individual circumstance at all.

And, you know, just to take Jennifer's case, I'd like she works harder than anyone. She was like, look, you might be able to live for a week on these payments, but can you live for six months? Can you live for a year? Can you do it for five when you've got car tyres going, engine blowing up fuel costs, soaring rents going up $100, $200 a week when your kids got dental needs or medical bills. And she said something really sad at the end of our conversation. And she basically said, you know, the one thing that will drive me to the point of exhaustion is this need to prove that I am worth it. And she said it's simply because people have the attitude of you're on Centrelink, you're a heap of shit.

But we're talking about life. Sometimes shit happens and things get bad. And what do we do when people are in that situation? We put them in front of this thing and tell them you got to get 100 points like like the world's worst frequent flyer program. But for like managing your own poverty and people are trying to gamify their mere existence, it's like it's just bizarre. And the only solution is to get out of people's way. Don't ask them to dance for the money. Give them the help they need and let them go on their way. It's a it's a no brainer to me.

ANGE:

Rick, thanks so much for speaking with me today.

RICK:

Thanks Ange. Always a pleasure.

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ANGE:

Also in the news today,

The Prime Minister has landed in Washington DC for a 4-day official state visit with President Joe Biden.

The leaders are expected to discuss a climate and energy deal they signed earlier this year, and discuss military aid to Ukraine and Israel. Albanese will also lobby Congress members to pass Biden’s bill for the AUKUS submarine program.

And

UN agency for Palestinian refugees says that 29 of its workers have been killed in Gaza after 16 days of fighting.

Meanwhile, the Israeli military has released an updated count of hostages it believes are being held by Hamas. It’s now believed 212 people were taken back to Gaza after the October 7th attack.

I’m Ange McCormack, this is 7am. We’ll be back again tomorrow.

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