UNEMPLOYED people have invisible bar codes tattooed on their foreheads. This makes them commodities in the employment services industry.

When the unemployed sign up with one of the legion of employment service providers licensed under the Job Services Australia system, they suddenly become economically useful to the organisation waving the bar code scanner across their skulls.

The scanner immediately clocks up a sign-up fee for the service provider. And each unemployed person will be good for a succession of payments to their agency. Kerching goes the till.

Employment services in Australia, as throughout the world, is big business funded straight out of public budgets. Millionaires have emerged from this industry.

The great thing about this industry is that the unemployed will come back through the door next year, and you will be able to sweep the scanner over that hapless head once again. Thanks to the high rates of churn, particularly for the long-term unemployed, these people are money for jam.

While the JSA system performs an important function in the national economy, down at the end of the spectrum where I work – the long-term unemployed and regions where youth unemployment is rife even where jobs are available – it is mostly a parasitic churning of clients for fees.

When it comes to the Aboriginal unemployed in the remote communities I am most familiar with, the only purpose served by the JSA is the profitability of the providers. Placing unemployed Aboriginal people into jobs is the least purpose.

The scandalous rates of churn and the poor job-placement outcomes in remote areas are related to the weakness of the work obligation rules and the reluctance – nay, refusal – of Centrelink to enforce breaches where people unreasonably refuse work or fail to comply with their obligations.

This is not a recent problem. While the Howard government started to increase indigenous employment rates, largely by closing the Community Development Employment Program in regional and urban centres where it operated to keep indigenous people out of the mainstream labour market, the churn rates were still very high.

The problem is the incentives of the job-services system for the most difficult, and neediest, end of the unemployment spectrum are weighed to the wellbeing of the industry and not the people it is supposed to serve.

As with all industries built around the outsourcing of government services, many job-service organisations have been established by former bureaucrats with strong connections to people in government. It helps if your former colleagues are on the inside when you’re setting up outside.

Many would say Australia’s privatised job-services system is a world leader. Not down the end of the spectrum that I see.

And however groundbreaking it originally was, like all public-funded industries the job-services system has become more and more subject to bureaucratic straitjackets and red tape that have killed innovation and genuine social entrepreneurship.

Indigenous Employment Minister Mark Arbib and Indigenous Affairs Minister Jenny Macklin have launched a review of remote employment services. They recognise the JSA system is not delivering for remote communities.

Unfortunately, any reforms out of this review are not expected to be implemented until June 2013, when the national JSA tenders reopen. But there is a strong case for the government to take action next year. The system needs a shake-up sooner rather than later.

On a related front, Macklin has been holding the line on resisting restoring the CDEP program as wages for make-work programs in communities. There is a strong push from various quarters for a return to the old paradigm.

Macklin is right to oppose a return to the bad old days when CDEP operated as a make-work dead end for indigenous people. Not only did former workers enter this twilight world, legions of young Aborigines left school with CDEP as their next destination.

This week media reports referred to Aboriginal people in the Anangu Pitjantjatjara Yankunytjatjara lands in South Australia’s far north going hungry. Kirsten Grace, general manager of Mai Wiru, the organisation that runs community stores in the APY lands, told The Australian that while the stores were fully stocked, people were going hungry because they were not managing their income and the high cost of freight.

“There’s plenty of food, the stores are full, but there is regularly the inability to access the funds to buy that food,” she said.

Apparently the Rann government was asked to introduce voluntary income management into APY communities a few years ago. The request was refused. Aboriginal Affairs Minister Grace Portolesi defended the inaction by pointing to the policy of supporting the establishment of market gardens to address food security.

In response to the Red Cross being asked to deliver food to the Fregon community, she went on the defensive: “I know that hunger and poverty are problems on the lands and that’s why I responded with our food strategy. The Red Cross is rolling out a program they have in Adelaide, so why do we have this double standard about what’s going on in the APY lands?”

Macklin’s principled defence of income management in the Northern Territory and Cape York Peninsula has meant the “feast and famine” cycle that is a feature of too many remote communities when it comes to necessities has been confronted with a working solution. She has been vindicated. The people of the APY lands should not go hungry while politicians in Adelaide talk rubbish about market gardens.

READ: The Australian