The Claim
“Increased administrative payments to job finding agencies, totalling $300 million during the pandemic.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The core claim that the Coalition government increased administrative payments to jobactive providers during the pandemic is substantially accurate, though the $300 million figure requires careful contextual interpretation.
According to the Michael West article citing Deputy Secretary Nathan Smyth of the Department of Education, Skills and Employment, the median administration fee for jobactive providers was increased from $300 to $391 per new client [1]. For job-ready people under 25, the fee increased to $547 [1]. The article states that "based on Smyth's figures this means the agencies will get more than $300 million in new administration fees due to the pandemic and the resulting mass unemployment" [1].
The Michael West analysis calculated this as follows: With approximately 813,000 new jobactive applicants by August 2020 (compared to 633,318 before the pandemic) [1], and administration fees increased to an average of $391, the government paid more than $300 million in additional administration fees to job service agencies [1]. Per Capita's April 2020 report estimated that a 700,000-person increase in the jobactive caseload would result in $210 million in additional government payments to agencies [2].
These payments were documented in official government communications. A June 2020 letter from Deputy Secretary Nathan Smyth to jobactive CEO's confirmed the temporary rebalancing of administration and outcome fees due to the COVID-19 pandemic impact [3].
The article further notes that administration fees were paid every six months, meaning "that $300 million figure only takes into account the first tranche of payments to new applicants" [1]. When considering ongoing payments to existing clients plus new applicants, the article conservatively estimates the government paid "more than half-a-billion dollars to agencies" [1].
Missing Context
The claim presents this as an isolated negative action without important context about why these payments occurred:
Why payments were increased: During the pandemic, the unemployment caseload more than doubled from 633,318 to approximately 1.45 million by July 2020 [1]. The government explicitly acknowledged that jobactive providers needed additional funding to manage this unprecedented surge in client numbers [3]. This was not a discretionary increase for profit-taking, but a structural response to mass unemployment.
Policy trade-off: The government directed many newly unemployed people to its Online Employment Services (OES) system to "slow the referral of unemployed workers to jobactive" and manage costs [4]. This shows the government was attempting to manage the cost blow-out of the privatized system, not carelessly expanding payments.
Nature of administration fees: Administration fees are standard in privatized employment services systems worldwide. These fees cover the cost of client intake, job planning, case management, and administrative overhead. Australia's privatized jobactive model has been in place since the 1990s under both Coalition and Labor governments [1].
Criticism applies to system design, not just Coalition actions: The underlying issues with jobactive (such as "creaming and parking," placing clients in temporary jobs to generate outcome fees, and inadequate support for hard-to-place job seekers) were structural problems identified in 2019 Senate inquiries [1] that predated the Coalition's pandemic response [5].
Source Credibility Assessment
Michael West Media: According to Media Bias/Fact Check, Michael West Media "presents itself as non-partisan but strongly frames stories against corporate and government elites, resulting in a clear left-leaning bias" [6]. The organization "frequently criticizes multinational corporations, fossil fuel firms, and political connections to wealth" and is described as having a "Left bias" in editorial stance [6]. Michael West is a Walkley Award-winning journalist with a track record in investigative reporting, lending credibility to his research [7]. However, the left-leaning framing suggests the article emphasizes negative aspects of Coalition policies while potentially minimizing systemic issues or policy rationales.
Per Capita: Per Capita is an Australian think tank that focuses on inequality and social policy. The organization has published multiple critical reports on jobactive [2]. Per Capita's research appears rigorous and evidence-based, though the organization's progressive policy orientation should be noted [2].
Government sources: The article relies on statements from Nathan Smyth, Deputy Secretary of the Department of Education, Skills and Employment, which are official government sources with direct access to spending data [1][3].
Labor Comparison
Did Labor do something similar?
Labor established the privatized jobactive employment services system's predecessor. The original "Job Network" was introduced by the Howard Coalition government in the mid-1990s [1], but the subsequent Labor government (2007-2013) under Rudd and Gillard maintained and expanded this privatized model rather than reversing it [1].
During the Global Financial Crisis (2008-2009), which also created mass unemployment, Labor's response included maintaining spending on privatized employment services [8]. Labor's government provided stimulus payments and maintained the existing employment services infrastructure without dismantling the privatized provider system [8].
Historical context: Both Coalition and Labor governments have operated within Australia's privatized employment services framework for decades. The fundamental issue—relying on for-profit providers with administrative payments tied to client numbers—is not unique to the Coalition. Labor created this system and maintained it throughout their time in government [1].
No direct Labor equivalent during pandemic: Labor was not in government during the COVID-19 pandemic (2020-2022), so there is no direct comparable response to evaluate. However, Labor's track record suggests they likely would have faced similar cost pressures if managing a comparable unemployment surge within the same privatized system.
Balanced Perspective
The criticism is valid but incomplete:
The article correctly identifies that jobactive providers received substantial additional payments during the pandemic, funded by taxpayers. Administration fees are a form of government spending that could reasonably be criticized as: (a) enriching private providers while jobseekers struggle, (b) creating perverse incentives in a system where providers profit from client volume, and (c) potentially inefficient compared to alternative employment service models.
Per Capita and other critics argue the $300+ million could have been better spent on direct support to unemployed people, vocational training, or reformed employment services [4]. This is a legitimate policy position.
However, the government's perspective:
The Coalition government faced an unprecedented crisis: unemployment that more than doubled in weeks. Jobactive providers needed immediate funding to handle the surge in clients. Simply stopping administration payments would have meant employment services could not function—job interviews couldn't be conducted, job plans couldn't be written, and support services would collapse.
The government also attempted to manage costs by directing newly unemployed to Online Employment Services [4], showing some effort to contain costs. And the government had trialed the New Employment Services Model (NESM) to reduce reliance on jobactive providers [1].
The deeper systemic issue:
The criticism of "$300 million in pandemic payments" is really a criticism of Australia's privatized employment services model itself. A government-run employment service would not generate these private profits. Per Capita's reports consistently recommend moving away from the privatized jobactive model [1][4]. This is not a partisan issue—both Coalition and Labor governments have operated within this system, though both have proposed reforms.
Key context: This is/is not unique to the Coalition - Australia has operated a privatized employment services system since 1994 under both Coalition and Labor governments. Labor created it, Coalition maintained it. The cost blow-out during the pandemic was a direct consequence of this system design, not unique Coalition mismanagement. The valid criticism is of the system itself, not of emergency pandemic funding.
PARTIALLY TRUE
6.0
out of 10
The claim is factually accurate that the Coalition increased administrative payments to job finding agencies during the pandemic, and the $300 million figure is supported by government statements and independent analysis. However, the claim presents this as an isolated negative decision without important context: (1) the payments were responses to unprecedented unemployment surging from 633k to 1.45 million clients, (2) administration fees are structural to Australia's privatized employment services model that predates the Coalition, (3) both Coalition and Labor governments have operated within this system, and (4) the government attempted to manage costs by directing clients to Online Employment Services. The criticism is better understood as a critique of Australia's privatized employment services model generally, not Coalition-specific mismanagement during the pandemic.
Final Score
6.0
OUT OF 10
PARTIALLY TRUE
The claim is factually accurate that the Coalition increased administrative payments to job finding agencies during the pandemic, and the $300 million figure is supported by government statements and independent analysis. However, the claim presents this as an isolated negative decision without important context: (1) the payments were responses to unprecedented unemployment surging from 633k to 1.45 million clients, (2) administration fees are structural to Australia's privatized employment services model that predates the Coalition, (3) both Coalition and Labor governments have operated within this system, and (4) the government attempted to manage costs by directing clients to Online Employment Services. The criticism is better understood as a critique of Australia's privatized employment services model generally, not Coalition-specific mismanagement during the pandemic.
📚 SOURCES & CITATIONS (8)
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1
Pandemic goldmine for private unemployment agencies as Coalition boosts payments
Half a billion dollars just for signing up people without jobs. Money for jam for the private job service agencies.
Michael West -
2
At What Cost? Getting Back to Jobactive
This is the third paper in Per Capita’s series examining the operation and effectiveness of Australia’s employment services system, known as jobactive, in the context of the profound labour market disruption caused by the COVID-19 pandemic.
Per Capita -
3PDF
Temporary change to jobactive payment model - Letter from Deputy Secretary Nathan Smyth
Nesa Com • PDF DocumentOriginal link no longer available -
4
Redesigning Employment Services after COVID-19
This discussion paper recommends that the government undertake a consultation to gather views on the options to adapt employment services to meet the needs of the post COVID-19 unemployment scenario.
Per Capita -
5PDF
Jobactive failing those it is intended to serve
Parlinfo Aph Gov • PDF Document -
6
Michael West Media - Bias and Credibility
LEFT BIAS These media sources are moderate to strongly biased toward liberal causes through story selection and/or political affiliation. They may
Media Bias/Fact Check -
7
Michael West (journalist)
En Wikipedia
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8
Government support for business, December quarter 2020
Australian Bureau of Statistics
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.