According to a paper released by Per Capita, the Australian taxpayer will foot a $210 million bill, with the think tank calling for a review of the current system.

Under the current system, about 40 privately run employment agencies and not-for-profits receive fees for each jobseeker placed on their books, as well as incentives for those on their books that are placed into a job.

“A review is needed to design employment services that are fit for the post-COVID-19 unemployment scenario and that are also responsive to the long-term economic challenges ahead,” said report author Simone Casey. 

“The focus of the review should be a consideration of how to provide effective job counselling and case management as well as ensuring the best online tools for job searching are accessible to all.”

“It should identify the services and strategies needed to prevent youth unemployment and to support those who are most vulnerable to ongoing insecure employment.”

The think tank said the jobactive model already in use is under significant reform due to high demand, with the “new employment services model” created not fit for purpose post-COVID-19.

“However, it is Per Capita’s view that neither the existing jobactive system nor the new employment services model is a good fit for the post-COVID-19 unemployment scenario. This is because both models are hamstrung by a dependency on job outcome payments, which leads to under-investment in the needs of people most at risk of long-term unemployment,” the paper stated.

Instead, Per Capita said there is a need for broader partnerships that secure the supply and demand for labour, stimulate job creation projects and build a labour market that is resilient to economic shocks.