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Australia’s unique approach to helping the unemployed has delivered good results but challenges remain, says OECD

 

11/12/12 - Australia’s labour market reforms over the past 15 years have boosted employment and cut welfare benefit dependency. But further efforts are needed to help people with a partial work capacity get back to work and to tackle the high rate of people working part-time who want to work full-time, according to a new OECD report.

“Activating Jobseekers: How Australia Does It” says that Australia has the second highest employment rate of OECD G20 countries, at 72.5%, just after Germany (72.7%). The unemployment rate was 5.4% in September 2012, one of the lowest in the OECD.

The report, presented today in Sydney by John Martin, OECD Director of Employment, Labour and Social Affairs, and Kate Ellis, Minister for Employment Participation and Child Care, notes that Australia has a flexible labour market, with high levels of casual and part-time work, but a fairly high minimum wage.

“Australia’s unique approach to activating jobseekers has yielded significant gains to the economy and society,” said John Martin at the launch. “However, it is facing a stress test of a slowing economy and rising unemployment which may necessitate some further finetuning.”

Australia’s system of activation policies to help benefit recipients to find jobs works well overall. This is due in part to the increasing effectiveness of Australia’s unique system of delivering employment services for the unemployed through private and not-for-profit providers, as well a slow decline in the value of unemployment benefits relative to average wages. Exemptions from active job search for some categories of welfare benefits have also been removed.

But a number of challenges remain. The OECD recommends that Australia:

  •  Increase maximum fees for employment service providers that place disadvantaged jobseekers in long-term stable jobs. Current maximum fees are around AUD 6000, which is about one tenth of average annual wages per full-year full time employee. This would encourage providers to invest more in training and hard-to-place jobseekers.

 

  • Consider some reduction in the gap between the value of New Start Allowance and other welfare benefits .

 

  • Cut red tape for employment services by simplifying requirements for data entry and reporting.

 

  • Review job-search requirements for older workers and their exemption from requirement to take part in Work Experience activities.

 

  • Consider shifting towards monitoring the performance of providers of employer services in terms of longer term employment and earnings growth outcomes.

For comment or further information, journalists should contact David Grubb of the OECD’s Employment division (tel. + 33 1 45 24 91 76).

The report can be browsed online or downloaded from the OECD's password-protected website

More information on OECD work on active labour market policies is available at www.oecd.org/els/employment/almp

 

 

 

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