Labor ditches Coalition’s $2.5m ‘jobdobber’ hotline for employers

The Labor government has “decommissioned” the Coalition’s controversial $2.5m “dobseeker” or “jobdobber” hotline after it found few cases of non-compliance among jobseekers.

The hotline, announced in February 2021 as part of a small uplift to welfare benefits, was set up to let employers report jobseekers who turned down jobs or submitted inappropriate applications.

Quickly dubbed “dobseeker” or “jobdobber” by critics, the phone line was established at an estimated cost of $2.5m in the 2021 budget, prompting criticism from welfare groups, unions and some business leaders.

Related: Workplace reforms back on agenda when parliament returns next week, Tony Burke says

The Coalition government spruiked the phone line through the release of data suggesting “hundreds of people” were “under investigation only weeks after the hotline was opened for business owners”, with the then employment minister, Stuart Robert, citing specific cases reported to the hotline. Robert also read out the hotline number on talkback radio.

The Department of Employment and Workplace Relations later confirmed in Senate estimates that only six people had faced compliance action at that point.

In a response to a question on notice from the Greens senator Janet Rice, the department confirmed the Albanese government “decommissioned” the hotline in September.

The department told Rice the reporting line had received 755 calls between April 2021 and September 2022, including 36 in its last full month in operation.

• Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup

About 650,000 jobseekers are looking for work in the main employment services program, Workforce Australia.

A department spokesperson told Guardian Australia the hotline had received 4,402 reports from employers over the 17 months it operated. Only 544 reports saw “action … taken by Services Australia to suspend the income support payments of participants”.

The department confirmed that $702,844 had been spent on the hotline’s dedicated staff in the 2021-22 financial year, plus $52,290 for IT costs.

It suggests at least $1,388 was spent by taxpayers on the hotline for each instance of non-compliance it uncovered.

The most common reports received related to inappropriate job application submissions – which welfare advocates and some business groups have long warned stem in part from the fact jobseekers must apply for a set number of jobs each month. That requirement has been altered through the new Workforce Australia system.

A further $326,172 had been set aside for the hotline in 2022-23 but its staff were “transferred to the national customer service line to support the ongoing servicing of employers”, the spokesperson said.

Rice said the “jobdobber” hotline was a “cruel and unnecessary measure that left unemployed people with even less power in a broken system that is already stacked against them”.

She said abolishing it was a “great step” but it was “only one cog in the government’s mutual obligations system, which has long been shown to be punitive and ineffective”.

Related: Whose doing was it?: what we’ve learned from the robodebt royal commission

Welfare groups also welcomed the hotline’s abolition. “It demonised people on low incomes who had lost their job, who were struggling to make ends meet on poverty level income support whilst dealing with unrealistic levels of job search requirements,” said the Australian Council of Social Service chief executive, Cassandra Goldie.

An Antipoverty Centre spokesperson and a jobseeker recipient, Jay Coonan, said while the number of reports to the hotline was small, its true intention was to “demonise unemployed people by fuelling the ‘dole bludger’ myth”.

The hotline’s abolition was “low-hanging fruit” compared with the broader “mutual obligations” system of penalties, Coonan said.

The employment minister, Tony Burke, said the hotline had been “set up by the previous government to get a media headline – not to help get people into jobs”.

“There’s now a single complaints line that applies to both clients and providers,” he said.

But the opposition’s employment spokesperson, Michaelia Cash, insisted the closure of the hotline showed the Labor government was “not serious about the principle of mutual obligation”.

The department has not received complaints from employers about the hotline’s closure, according to its spokesperson.