The country's peak community body is calling on the Abbott government to use the May budget to divert funds from the work for the dole scheme into a fund that better helps long-term unemployed people.
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In its 2015 budget submission, the Australian Council of Social Service says $350 million earmarked for work for the dole schemes over the next two years should be transferred to an Employment Pathways Fund, which would help the unemployed find work experience, training and other help to improve their job prospects.
ACOSS would also like to see $750 million spent over the next two years on providing "credits" to the employment fund when job seekers become classified as long-term unemployed, after twelve months.
ACOSS argues that the government's high-profile work for the dole policy has "little or no impact" on people's job prospects, citing a June 2014 survey that found only 19 per cent of those in the scheme had a job three months later.
"Creating opportunities for those looking for paid work, supporting them to develop new skills and linking them with real employers and real jobs must be at the heart of the government's welfare reform and employment agenda," chief executive Cassandra Goldie said.
As of December 2014, Australia had an unemployment rate of 6.1 per cent. Some 60 per cent of those receiving the dole are classified as long-term unemployed (at more than 12 months), while 45 per cent have not finished high school, 10 per cent are indigenous and 15 per cent are from non-English speaking backgrounds.
In its submission to the Coalition as it heads into four months of budget preparation, ACOSS is also calling on the government to provide $135 million over two years to better support young people who leave school early and try and get them to engage with training that will help their job chances.
This comes after funding for the "Youth Connections" program - which helped teenagers reconnect with school or work - was cut in the May 2014 budget.
The peak body would also like to see the government set up a social security commission to advise the government and Parliament about the "financial needs of people relying on social security payments".
"We urge the new minister [Scott Morrison] to get behind people trying to get a job, and give them hope," Dr Goldie said.
