Private employment agencies are in the news, after it was revealed that companies are engaging in fraudulent claims and not helping job seekers to find work. The Federal Government reported that it had retrieved more than $41 million worth of money spent on falsified claims and dodgy accounting.

Private companies are now a part of Australia’s delicate welfare system. The privatised system know as Job Services Australia is designed to “encourage” the unemployed to find work, but recent investigations by the ABC’s Four Corners have revealed that the system is mired in false reporting and obvious rip-offs. The end result is billions of dollars worth of stolen taxpayer money and a generation of unemployed and unassisted Australians.

According to a confidential source who appeared on the program, the rampant fraud includes falsifying forms, doctoring records and conflating unreasonable claims. The source (who is a managing director of a private employment agency) told Four Corners: “There are incentives to be involved in sharp practices from a financial and performance perspective. We had to do the same thing [because] everyone was doing it. The Government does not want to expose the whole industry.”

Over the past few years, there have been several inquiries into the practices and illegal conduct of several JSP’s. One such investigation found that the rate of failure was alarmingly high, indicating that the system did not function smoothly. The inquiry also addressed the rampant over-charging and falsifying, noting that a meagre 40 percent of claims could be confirmed by testimonial and documentary evidence. And for those who think a corporation’s status as a charity is enough to indemnify them against behaving illegally, think again. The Salvation Army (among others) have been investigated several times for dubious conduct.

Introduced under the Howard Government, the welfare to work scheme has long drawn criticism for the fatal flaw within its logic. “The welfare to work program patently hasn’t worked,” Professor Bill Mitchell, director of Newcastle University’s Centre of Full Employment and Equity, told the ABC. “It’s an impossible task … there’s not enough jobs to go around. You can’t make people search for jobs that aren’t there, and that’s the dilemma of the whole system. We’ve had a demand-side constraint – not enough jobs – and all this vigorous energy and money being poured into a supply-side initiative as if that’s the problem.”

For those who’ve had some experience using a job service provider, the news might not have come as a surprise. In fact, many job seekers are all too used to the chaos that defines their day to day lives, the endless meetings, phone calls and letters that clutter their minds and take up a majority of their time. But keep your eyes wide open at all times and don’t fear the prospect of making a timely phone call to the Department (if you think something is fishy).

Check back for more as it develops….


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