Calls have been made to scrap the “punitive” mutual obligation system for Australia’s jobseekers.

Several job agencies involved in the Australian government's employment services program, Workforce Australia, are advocating for a review or overhaul of the mutual obligations system, with one even calling for its complete abolition. 

A parliamentary inquiry is currently investigating the scheme, including the controversial ParentsNext program, before reporting to the employment minister, Tony Burke,

The first interim report from the inquiry called for its abolition. 

As the inquiry turns its attention to the larger $7 billion Workforce Australia system, job agencies have raised concerns about “punitive” compliance measures, with some suggesting the government should consider ending the work-for-the-dole scheme.

Wise Employment, a non-profit provider, has suggested removing mutual obligations from the system altogether and replacing it with incentives for jobseekers. 

It also called for an overhaul of the system so that employment services are open to all job seekers, not just those receiving welfare benefits. 

Sarina Russo Job Access, a for-profit player, has recommended that the work-for-the-dole program be replaced with short-term subsidised job opportunities. 

Meanwhile, Joblink Plus, another non-profit provider, has called for an immediate review of the mutual obligations system, describing it as “punitive and potentially harmful”.

While some job agencies expressed support for mutual obligation, there are concerns that the current system is too complex and places too much emphasis on compliance. 

Labor has indicated support for some form of mutual obligation, while industry experts have suggested that compliance should be carried out by Services Australia rather than job agencies. 

The Workforce Australia contracts signed last year aimed to limit jobseekers referred to job agencies to those considered disadvantaged or longer-term unemployed, with those considered “job ready” simply reporting their job search efforts to an online portal.

The inquiry must hand down its final report no later than March 29.