ACT Council of Social Service Inc.

Justice | Equity | Social Inclusion | Reconciliation

Opinion: Political & administrative integrity casualties of the flexible labour market

13 January 2017

By Susan Helyar, Director, ACT Council of Social Service (ACTCOSS)

A flexible labour market is the common contextual factor in the biggest political stories so far in 2017 in which the political integrity of a Minister, administrative integrity of the parliamentary travel entitlements scheme, and the digitised Centrelink compliance system have suffered catastrophic injuries.

Many commentators have noted the link between a more flexible labour market and the current Centrelink robo-debt fiasco, with two examples being the Canberra Times article 'Centrelink's automated debacle shows we need to rethink welfare and work' and The Conversation article 'Note to Centrelink: Australian workers’ lives have changed'.

First, a history lesson. Back in the olden days (which to the Millennials in our household is anything beyond about 1975) people either had a full-time job in the formal labour market with an employer they stayed with for years if not decades or they were not working. A job was counted as about an eight hour day and went Monday to a half day on Saturday for most people. People in very senior roles, including public roles such as political leaders, had regular designated time off.

This was the tired old labour market that economic liberalism argued needed to be made more flexible. After 20 years of market, tax and workplace relations reforms we have a very different labour market in which flexibility for employers, and to some extent workers, has been delivered. Under economic liberalism we have witnessed a double movement whereby both employment and unemployment benefits have become less secure, undermining a fundamental relationship between labour market flexibility and social (or income) security.

In 2017 many people work across the seven day week, in industries as diverse as retail, hospitality, health and community services, mining, emergency services, agriculture and construction. Over their lifetime, Millennials can expect to work in seven different fields and to have more than 20 different jobs. Most people will have what is being called a ‘portfolio career’ in which they concurrently juggle two or three income earning activities.

Work is less secure for most people. In many industries employment is for a fixed term, or is offered under casual arrangements where the hours of work vary depending on employer demand, industry activity and worker availability. Some industries have set up sham contracting arrangements in which people do not technically have an 'employer', rather they are an independent contractor with almost no wage or other entitlements.

Many more people now move in and out of work, sometimes in the formal labour market—the jobs with regulated hours, conditions and pay, on the tax radar and with employer contributions to superannuation—and at other times in the informal labour market working cash in hand. A flexible labour market combined with insecure employment means that many people cycle on and off income support (Youth Allowance, Newstart, Parenting Payment Single, Disability pension, family tax benefit, child care allowances). They manage complicated compliance and reporting requirements across tax and income support systems, neither of which are designed or administered in ways that are fit for purpose for current labour market conditions.

Centrelink’s robo-debt recovery program projects a vision of a future marked by increasing automation, replacing the need for human labour. From ICT design to the recovery of debts, the program reflects economic liberalism’s culture of contracting and outsourcing to the market. However, the program was built using policy thinking and administrative design principles that are stuck back in the olden days even whilst they are deploying presumably state of the art digital technologies to intimidate and shake down thousands people who have legitimately received income support. At a bare minimum and as a matter of urgency, Centrelink needs to work out how to factor into their compliance monitoring processes the insecure and irregular work that is offered in our flexible labour market.

People working in professional services, the media, senior executives and politicians work ‘24/7’ (according to American talk show speak) and for many the boundary, if it exists at all, between private and professional life is blurred. This takes a social and emotional toll. It also generates risks to the integrity of workplace entitlement schemes like access to accommodation, hospitality and travel for politicians paid out of the public purse instead of their private bank account.

Whilst we all knew the flexible labour market plan and were coming to terms with the social and economic changes it brought, it seems our administrative systems have not kept up. The parliamentary travel entitlements scheme has failed to adapt to the 24/7 work program in which attending a New Year’s Eve party is able to be claimed as a work event equivalent to a COAG Ministerial meeting. The tax and entitlements system still assumes a job is relatively secure and the hours worked are consistent across a 12 month period.

It is hard to avoid the conclusion that the politics of three word slogans, negative rhetoric campaigns, downward envy and populism were intended to soften up the public on Centrelink debt recovery. Three word slogans make assumptions and embed myths, for example, about welfare recipients—that they are welfare cheats and dole bludgers. The reality is that people don’t choose to be on welfare, but are entitled to access income support and to be treated with respect through compliance checking programs. We have seen lazy politics that leads to flawed policy and incompetent administration of programs.

The Canberra community, who voted for a progressive local government, is not likely to accept the assumptions and myths about people who access welfare. The many people in Canberra who work for the Department of Human Services don’t want to be part of a system that describes digital innovation debacles that victimise people as successful initiatives.

Administrative systems need to move out of the olden days, comply with the principles of transparent, respectful administration of public policy and catch up with the lives we are living now. Our community does not have the stomach for yet another year of political scandal, administrative system failures, digital transformation stuff ups or further erosion of confidence in our political and public sector leadership.