MUTUAL OBLIGATION AND THE JOB NETWORK: THE EFFECT OF COMPETITION ON THE ROLE OF NON‐PROFIT EMPLOYMENT SERVICES

Abstract

Introduction The six years of Coalition government in Australia have seen a significant shift in the conditions under which unemployed people receive income support. The broad direction of change was set under Labor, with the adoption of the OECD `active society' approach. But since 1996 intensification of the requirements for job search and activity testing, the introduction of `Mutual Obligation' and Work for the Dole, and a massive increase in the level of breaching for non-compliance with these requirements have together produced an environment for job seekers that is qualitatively different from that of a decade ago. Alongside these changes has been the radical reorganisation of the delivery of employment services. From May 1998, the public employment service, which had existed since 1946, was effectively abolished and replaced with a national network of provider agencies competing in a quasi-marketplace (the Job Network). In the second round of Job Network contracts, from March 2000, the corporatised public employment agency, Employment National, lost most of its market share. This meant that the responsibility for reporting non-compliance with job search requirements lies mainly with organisations outside the public sector--many of which are non-profit agencies with a social service background. The creation of the Job Network represented a significant challenge for non-profit, community-based agencies. They had been accustomed to working in partnership with government on a grant-for-services basis, and had begun to adapt to the limited competitive framework of contracted case management under Working Nation. Now, however, they were faced with full-scale competition both with private sector and corporatised public agencies, and with each other. Although many welcomed the additional flexibility that came with outcome-based funding, there was considerable disquiet about the implications of full-scale contestability. There was also resistance to taking on responsibility for policing the activity test, which community-based agencies in particular saw as inimical to their traditional advocacy role. An initial study of a sample of private and non-profit agencies in the early months of the Job Network found some convergence emerging between the sectors (Lyons and Chan, 1999). Non-profits were adjusting to operating in a commercial environment--with some embracing competition wholeheartedly--while some private firms were displaying the kind of social concern about clients and their needs generally associated with the community sector. In a small study of non-profit agencies in Victoria, Laragy (1999) also found that staff had a number of concerns associated with moving from a partnership with government model to a competitive framework. These included the ethical dilemma of becoming more responsible for the policing of clients job search activities and an anxiety that agencies were losing their capacity for advocacy. More recently, Considine (2001) too found evidence of convergence between non-profits and for-profits in a range of activities and approaches--a development he ascribed mainly to agencies' dependence on a pricing structure determined by the purchasing department. These observations raise questions about the nature and role of non-profit providers in a competitive market framework. What does it mean, in terms of service to clients, that an agency is `not-for-profit'? Can the advocacy role that has long been an important raison d'etre for the community sector survive the incorporation into large-scale service delivery for government? As other papers at the Academy Workshop have shown, `mutual obligation' is a slippery concept, as `thick' or `thin', shallow or meaningful as any user wishes it to be. But if it is to have any useful meaning beyond being a subset of activity testing it has to include an obligation on the part of government to provide effective assistance for people involuntarily unemployed and seeking work. …