Workforce Australia job agencies rake in millions more from training contracts

The employment services industry successfully lobbied to stop a proposed rule banning providers from referring jobseekers to their own training courses under the new $1.5bn-a-year Workforce Australia model.

A Guardian Australia analysis of the new Workforce Australia contracts found 19 job agencies or related entities were also awarded contracts in the EST scheme or the similar, older worker-focused Career Transition Assistance (CTA) program. This includes major for-profit companies such as APM, Max Solutions and Sarina Russo.

The department confirmed there were 21 in total, but noted some contracts were for different regions, meaning not all could refer clients to their own courses.

The big winner of the new contracts was the ASX-listed health services giant APM, which capped off its $330m Workforce Australia contract with an extra $67m over five years to run EST courses.

Non-profit Workskil Australia, which was awarded a $266m Workforce Australia contract, also won a $1m CTA contract. Max Solutions, a subsidiary of the multinational human services giant Maximus, was handed an extra $16m in EST contracts on top of the $148m it will get for Workforce Australia.

The training contracts will see as much as $301m in additional revenue flow to companies and non-profits also designated as Workforce Australia providers. The figure covers all fees EST and CTA providers could expect to make from payments. It is unclear how much providers might specifically earn from referrals from their own organisation.

Max Solutions, which held a $1bn contract under Jobactive, also opposed the referral cap, according to its submission to the department.

Experts have argued job agencies are able to bolster their bottom lines by referring job seekers to their own courses, while some jobseekers have told of being made to do such training under the threat of having their welfare payments stopped.