Startup Advice

Government funnels $1.4 million into supporting young workers in gig economy, but experts believe the move is “dubious”

Dominic Powell /

The federal government has announced a $1.4 million investment to boost young workers’ access to gig economy employment by providing 80 unemployed Australians with jobs through companies that operate in the space.

However, experts have said the government’s involvement what one says is a volatile and poorly-regulated space is “dubious”, and believing the government is “not prepared” to delve into the world of the gig economy.

The funding has been allocated as part of the Department of Social Services’ (DSS) $96.1 million “Try, Test, and Learn” fund, and the program is called “Y4Y Youth Force”.

In a statement released last week, the DSS revealed the $1.4 million spend would be directed at 80 unemployed youths in Melbourne, Hobart, and Perth.

“A digital platform will connect unemployed former students with shortterm employment opportunities in the task-based (gig) economy. Jobs could include gardening, driving and delivery, catering and hospitality and child minding. These jobs will help participants build work experience and give them the confidence to take the next step into longterm employment,” the DSS said in a statement.

“The purpose of these initiatives is to test whether an intervention works to reduce long-term reliance on welfare.”

Applicants will also be given two weeks of general skills training.

Concerns raised about government’s readiness to work with gig economy

Both experts and trade unions have slammed the government’s approach with the newly announced program, with director of the Centre for Labour Market Research at Canberra University, professor Phil Lewis, telling StartupSmart the gig economy was “fraught” with regulatory issues which the government is not prepared for.

“The government probably needs to concentrate more on what they’re going to do on a regulation side with the gig economy because they can’t keep up,” Lewis says.

“There are issues around GST, workers comp insurance for delivery riders, and the whole issue of award rates which the Fair Work Commission is trying to wrap its head around. [The gig economy] is fraught with issues.”

Unions were also unimpressed with the funding, with the Australian Council of Trade Unions tweeting “Instead of properly funding TAFE, the Turnbull Govt is encouraging the expansion of under-regulated gig economy”.

Lewis believes the government would have more success in its other employment schemes, which look to put young workers into traditional jobs such as PaTH, saying he “can’t really see a role” for the government to play in getting workers into gig economy jobs.

“The whole point of the gig economy is that it’s derived from private enterprise almost despite the government wanting to stop it. And now the government has given up on stopping it,” he says.

Last week, Airtasker’s Tim Fung warned gig economy startups that further crackdowns were likely on the way after the Fair Work Ombudsman fined a bike courier company $72,000 for misclassifying an employee as a contractor.

“We think that there should be and will be robust action taken to create the changes required for a number of platforms in the gig economy,” he says.

Lewis also believes the companies that the scheme is targeted at are unlikely to need new workers through this format in the first place, observing gig economy frontrunners such as Deliveroo, Airtasker, and Uber “seem to be doing quite well”.

“People are already talking about a ‘post-Uber’ economy with no middleman, so as soon as the government start supporting one business model and it starts to collapse, they have to protect it,” he says.

“The government shouldn’t have a role in the gig economy.”

The DSS could not reveal what companies it would be placing the 80 workers in to specifically, with a spokesperson saying “the selected service provider will be responsible for determining which gig economy companies will be utilised”. The selected service provider is youth support Whitelion.

“These initiatives will either support students in meeting their academic and employment aspirations through practical work experience, resilience training, goal setting, and counselling, or assist former students with the transition from study to the workforce,” Social Services minister Christian Porter told InnovationAus.

“Investing in trial initiatives through the Try, Test and Learn Fund will build an evidence base that informs future investment in projects that improve the lives of students at risk of unemployment, and as a consequence give taxpayers value for money.”

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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