Coronavirus: Dissent over timing of job hunt contract

Business groups have backed the government’s decision to ramp up mutual obligation requirements, but economists have warned the changes may be premature.

Business has backed the progressive ramping up of mutual obligation requirements, but job market experts remain worried the changes are premature. Picture: AFP

Business groups have backed the government’s decision to ramp up mutual obligation requirements for jobseekers, but labour market experts have warned the changes may be premature given expect­ations that unemployment will continue to rise.

Mutual obligation requirements and associated penalties were suspended earlier this year as the COVID-19 crisis threw hundreds of thousands of Australians out of jobs. The government is now phasing these obligations back in.

Scott Morrison announced on Thursday that from the end of the month those receiving unemployment benefits would be required­ to apply for eight jobs each month, up from four.

There will also be the return of penalties, including the suspension of payments for those who do not meet the obligations. Victoria remains exempt.

Australian Chamber of Commerce and Industry director of skills and employment Jenny Lambert said toughening the rules was “an appropriate res­ponse in the short term”. “It is important that the mutual oblig­ation requirements for JobSeeker recipients rise in line with employment opportunities,” she said.

Council of Small Business Organisations Australia chief executive Peter Strong agreed, saying “nobody gets money for nothing”.

Mr Strong added, however, that it would be important to “make sure those obligations are achievable and reasonable”. Given the challenges associated with an uneven and uncertain post-COVID recovery, the prior­ity must be to give those looking for work the appropriate level of training and support, he said.

Professor Peter Whiteford from the Australian National University’s Crawford School of Public Policy, an expert in social welfare systems, said it was premature to be reintroducing rules and penalties around jobseeking when the labour market remained so weak.

“Trying to have job search requirements while unemployment is rising is like asking people to dive into a swimming pool when the water is draining,” Professor Whiteford said.

Australian Council of Social Service chief executive Cassandra Goldie said asking for eight job applications a month was “too high in the highly competitive jobs market, and the return of work for the dole, which does nothing to improve employment prospects, could put people at risk under COVID-19”.

With the number of JobSeeker recipients more than doubling over the year to July to 1.45 million, Professor Whiteford said he doubted that a lack of willingness to seek and take available work was a major issue behind the elevated unemployment rate. “At the moment there are lots of people who would prefer to actually­ have jobs,” he said. “Many more than there were in the past.’’

He also expressed concern over the potential for penalties associated­ with breaking mutual obligation requirements to compound problems for home owners and renters who might find themselves unable to restart their oblig­ations once loan repayment deferrals and eviction grace periods­ come to an end.

August labour market figures showed a surprise plunge in the unemployment rate to 6.8 per cent, powered by a shock 110,000 monthly lift in unemployment.

CBA senior economist Kris­tina Clifton said whether that momentum would be sustained was an open question, but “if we are starting to genuinely see a recovery in the labour market, then asking people to look for work goes hand-in-hand with that”.

Dr Goldie urged the government “to not return to the punit­ive system of compliance that (marked) the employment ser­vices system before COVID-19”.