A new Australian report has criticised the country’s long-running privatised employment services system, arguing that it has become structurally dysfunctional. The report claims the system has failed to effectively help unemployed people return to work, while allowing large corporations and private investment funds to generate substantial profits through government contracts. It recommends that employment services be returned entirely to the public sector.
The Centre for International Corporate Tax Accountability and Research (CICTAR) said that under the federal government’s Workforce Australia program, contracts worth around A$5.5 billion have been awarded to 45 organisations, making it the largest government procurement program outside of defence. Many recipients of unemployment benefits are required to participate in these employment services.
According to the report, nine for-profit providers collectively hold contracts worth approximately A$2.1 billion. It alleges that some companies rely heavily on government funding to sustain their operations while generating profits through dividend payments, offshore transactions, tax arrangements, and complex corporate structures. The report also questions political donations made by some contractors to major political parties, warning that such contributions could create conflicts of interest and undermine transparency and public trust.
CICTAR argues that the privatised model has failed to improve employment outcomes and has instead turned taxpayer funding into a source of corporate profit. It calls on the government to return mainstream employment services to the public sector, remove profit incentives, and improve accountability and service quality. Non-profit organisations, however, would continue to provide specialised services for groups such as Aboriginal communities, refugees, and people leaving the justice system.
The report also recommends that, before broader reforms are completed, the government strengthen oversight of existing contractors by publishing full contract details, increasing financial disclosure requirements, restricting companies that engage in aggressive tax avoidance from bidding for government contracts, and banning companies holding major government contracts—and their executives—from making political donations to reduce the risk of conflicts of interest.
The Labor government has previously announced the most significant overhaul of Australia’s employment services system in 30 years in an effort to address long-standing problems. However, the new model still allows for-profit providers to participate. CICTAR argues that unless the government moves away from a privately dominated system, its fundamental problems will remain unresolved, and has called for the establishment of an employment services framework centred on the public interest.