A controversial work-for-the-dole program risks making the lives of Indigenous people harder if the government decides on using private operators to impose penalties on recipients, the main workplace union says.
The Community and Public Sector Union has told a parliamentary inquiry into the government's Community Development Program the Coalition should solve its problems by increasing funding rather than finding businesses to make payments and enforce rules for clients.
Under the program, which covers 35,000 people and 1000 remote, mainly Indigenous communities, participants must work 25 hours over five days to receive welfare, but critics say it has harmed recipients with excessive penalties.
The Australian Council of Trade Unions has labelled the program racist, saying it forces people into labour without employment benefits, while the Greens say it makes welfare recipients work below the minimum wage.
After Indigenous Affairs Minister Nigel Scullion reaffirmed the government wanted to find private operators to deliver the program in December, the CPSU told the Senate inquiry investigating the CDP the government had not explained the benefits.
"While improvements can be made, the CPSU opposes what is effectively privatisation of compliance," it said.
"The government has been unable to explain why privatising would be more effective than increasing resourcing [for the] Department of Human Services to improve service delivery in remote communities in addressing issues such as not understanding obligations or a delay in applying penalties for non-compliance.
"The administration of social security payments and penalties associated with the CDP must remain with DHS because privatising these functions will detrimentally affect vulnerable clients and providers."
The CPSU cited fears that using private operators to apply penalties would create conflicts of interest for services sourcing staff from remote communities, and would contradict their obligation to avoid harm to vulnerable job seekers.
Under the present system, CDP providers helped job seekers in employment activities and reported non-compliance, while the DHS administered penalties, it said.
Outsourcing payments and penalties also set a dangerous precedent for other income support programs, the CPSU said.
The Department of Prime Minister and Cabinet implementing the CDP and providing policy advice on the program said protections stopped participants receiving unwarranted penalties, and that it was no more onerous than non-regional program jobactive.
The Senate committee will hold hearings in Kalgoorlie and Alice Springs in August and expects to report by September, while the national auditor will table a report on the CDP's design and administration that month.