Bring back the CES

For years I’ve argued Australia should restore a modern version of the old Commonwealth Employment Service (CES). The latest announcement of a “massive overhaul” of Workforce Australia is an admission that the current privatised model has fundamentally failed. It has since its inception.

The Federal Government is now promising the biggest shake-up of employment services in 30 years, with new tailored streams, different mutual obligations and a move away from the “one-size-fits-all” approach. This is a change that won’t make a lot of difference.

Why are we still outsourcing one of the core functions of government?

The current system created multi-millionaires on the back of the long term unemployed and the disadvantaged. The new system will continue to do the same.

The old CES was not perfect. I know I worked there. But its purpose was straightforward: connect employers with workers; identify skills gaps and organise the training needed; provide the disadvantaged with support and a pathway back into employment; assist the workforce with mobility support, as needed, to go from areas of high unemployment to areas where they are needed. And so forth.

The CES was a network that stretched across the nation They knew their communities and were an integral part of Australia’s employment and training history.

It was a public labour exchange, not a compliance industry. It existed to fill jobs, not generate contractual KPIs, consultant bonuses and endless administrative churn.

Today’s system costs taxpayers roughly $2 billion a year and yet even government ministers now openly concede too many people are “falling through the cracks”.

That should alarm every taxpayer.

For decades Australians were told privatisation would make employment services more efficient, more innovative and more responsive. Instead, we built a sprawling industry of providers whose business model often depends less on finding sustainable employment and more on managing compliance requirements. They meet contractual requirements before community and individual needs. Those contracts are designed as though all communities are the same needing the same service. Communities are often quite different from each other. This is not a problem of the private sector as they are following contracts and seeking profit.

Another important strength of the CES was, because they were based in the community, they could spot dodgy employers (every town and region has a couple) or training providers not delivering or misuse of government funds much quicker than the ANAO on its best day. The issues with training organisations and apprenticeships and Vocational Education and Training would be dealt with much better by a network focused on broad outcomes for community good.

The public can see it the problem. Employers can see it. Jobseekers certainly can see it.

Many businesses have complained over the years about unsuitable candidates arriving in their business, simply so application quotas can be met. Jobseekers complain about pointless activities, repetitive appointments and being pushed into jobs unrelated to their skills or circumstances. Even the government now admits people have been forced into “endless” applications that achieve little.

And perhaps most tellingly, many Australians who remember the CES still speak about it positively. Across online discussions about the reforms, one phrase repeatedly appears: “Bring back the CES.”

That nostalgia is not just sentiment. It reflects a deeper frustration with the corporatisation of employment services.

Employment assistance should not operate primarily as a punishment mechanism. Nor should vulnerable Australians become revenue streams inside a quasi-market system.

A modernised CES could look very different from the old paper-card offices people remember. In 2026 it could combine digital matching tools, regional labour market intelligence, apprenticeship coordination and direct employer engagement under one accountable public system. It would be staffed by experts and report to Senate Estimates.

Importantly, it could also separate genuine employment assistance from welfare compliance. That distinction matters.

Helping someone build skills, confidence and work readiness is a legitimate public service. Running an expensive bureaucratic process designed largely to monitor and penalise people is something else entirely. Centrelink already does that.

The government’s proposed reforms may improve parts of the existing model. Tailoring services according to individual needs is sensible. Acknowledging that the current system is failing many participants is long overdue.

But unless Australia is willing to reconsider the privatised structure itself, we risk simply rearranging the machinery of failure.

The broader issue is philosophical. Do we believe employment services exist primarily to support labour market participation and economic productivity? Or do we believe they exist to outsource social control to contracted providers?

The old CES treated employment as a public economic function. The modern system often treats unemployment as a managed administrative problem.

That difference explains why so many Australians - including many who are not even remotely ideological - increasingly believe the country should revisit the idea of a publicly run employment service.

So do I. Because sometimes old ideas return because they still solve problems better than the fashionable replacements.