Posted 12/04/2017 by Matthew Thomas
There have been reports that the Government was considering winding up the Work for the Dole program as part of this year’s Budget. However, in a subsequent media release Minister for Employment Senator Michaelia Cash stated that the Government will not be abolishing Work for the Dole.
This FlagPost provides a brief overview of the program.
Work for the Dole—background
In a June 1986 speech, Prime Minister Bob Hawke raised the idea of a work for the dole scheme:
First, while society has a responsibility to the unemployed, this is a two-way process. The time has come, we believe, when this two-way responsibility will best be served by providing as far as possible the opportunity, particularly for the younger recipients of unemployment benefit, to undertake some community work in return for that benefit.
Subsequently, in a December 1986 speech, the Hon John Howard, then Leader of the Opposition, committed to introducing a compulsory work for the dole scheme upon gaining office. In 1988 Howard reiterated this position, announcing in a media release entitled ‘Working for Australia: An Active Approach to Unemployment’ that the next Liberal and National Party Government would establish a ‘Community Service Scheme’.
This scheme was to:
provide a real and genuine benefit to the unemployed through work experience and training; satisfy general community desire to see the unemployed have the benefits of active work; reduce abuses in the payment of unemployment benefits and encourage the voluntarily unemployed to secure genuine employment.
As such, the scheme was to be based firmly on the principle of mutual obligation, which describes the expectation that income support recipients will participate in certain approved activities to improve their prospects of gaining paid employment and give something back to the community that supports them. (The Hawke Labor Government had earlier introduced the principle of ‘reciprocal obligation’ which required income support recipients to take advantage of assistance offered to them but not to work in return for benefits).
Upon gaining office in 1996, the Howard Government made good its commitment to establish a work for the dole scheme by introducing enabling legislation to the parliament in March 1997. This legislation included in the Social Security Act 1991 detailed requirements and penalties for non-compliance with work for the dole requirements. Following passage of the legislation, the program commenced in December 1997 and has operated continuously—albeit with various changes having been made—ever since.
Does Work for the Dole work?
A number of evaluations of Work for the Dole have been undertaken since the program was introduced. For the most part, these evaluations have found that Work for the Dole has realised, at best, modest employment outcomes.
For example, the most recent assessment of the program, commissioned by the Government in 2014, found that it had resulted in a 1.9 percentage point increase in job seekers’ prospects of gaining employment, from a baseline of 14.1 per cent. This finding is consistent with international evidence for the effectiveness of public sector job creation programs, which typically finds zero or negative effects on labour market outcomes for participants.
Labour market economist Professor Jeff Borland identifies two main reasons for the modest outcomes of public sector job creation programs such as Work for the Dole. The first of these is that the programs ‘do not increase the long-term availability of jobs’ and ‘it is only when extra jobs become available that people who are unemployed can move into sustainable employment’.
The second is that the programs do not provide ‘sufficient opportunity for skill development to make a big difference to employment prospects for the unemployed’. This is a problem especially for disadvantaged job seekers.
To a certain extent, it is to be expected that the Work for the Dole program should not necessarily provide participants with relevant employment experience as a result of a key feature of the program itself: it was always intended that the Work for the Dole program should not cross over into the area of job replacement, with projects selected on the basis that they will not compete with the private sector. This has meant that few of the skills and experiences that are provided by Work for the Dole projects are relevant to, or in demand from, the labour market.
Conclusions
The evidence of reviews points to the Work for the Dole program not being particularly effective as a labour market program. And, to the extent that the work experience gained by participants is not linked to paid work or relevant accredited training, it is difficult to see how this could be otherwise.
Given the Work for the Dole program’s limitations as a labour market program, its main function would appear to be to ensure job seeker compliance with mutual obligation requirements and that participants are giving something back to the community.