The federal government has proposed one of the most significant reforms to employment services in decades, planning to restructure the current Workforce Australia system that assists unemployed people. The changes will affect more than one million Australians receiving the JobSeeker unemployment benefit.
The government said the current system is too rigid and has failed to effectively help jobseekers return to work. It will therefore shift to a needs-based, tiered support model, while also reforming incentive structures for private employment service providers and “mutual obligation” requirements.
Employment Minister Amanda Rishworth said in a National Press Club address that the current system uses a “one-size-fits-all” approach, leaving many jobseekers without appropriate support and wasting resources. She said the system is “no longer able to respond to the real needs of modern unemployed people.”
Under the reforms, jobseekers will be classified into three tiers. Tier 1 will include lower-need individuals who primarily use online platforms to search for work; Tier 2 will target those who need skills development and confidence-building support through in-person services; Tier 3 will cover high-need individuals, including those facing mental health issues, disability, or long-term unemployment, and will integrate multiple social services.
The government also plans to adjust the payment model for private employment service providers to reduce incentives that prioritise “quick placements” over suitable job matches. The system has long been criticised for encouraging providers to place jobseekers into any job rather than roles aligned with their skills and background.
Australia’s unemployment rate is currently around 4.5 percent, with about one-fifth of unemployed people classified as long-term unemployed. Government data shows that in the 2024–2025 financial year, only 11.7 percent of jobseekers secured long-term stable employment through these services.
The reform has also sparked criticism. The Community and Public Sector Union (CPSU) said the government has failed to address the privatisation of the system, arguing that outsourcing employment services to for-profit providers is fundamentally flawed. The Australian Council of Social Service (ACOSS) argued that mutual obligation requirements should be abolished, saying they place additional pressure on low-income individuals.
The government has committed A$312 million to implement the reforms and will establish an expert advisory panel and conduct public consultations. Further details of the system are yet to be released.