MARK COLVIN: Because far fewer jobseekers are registering than had been expected, the Federal Government has now had to guarantee funds to save the jobs of the people who work with Job Network providers.

The Employment Services Minister Mal Brough is blaming unemployed people. He says tens of thousands of them haven't been turning up for job interviews. Labor, though, says it's the fault of the Government, and the Minister should resign.

Alexandra Kirk reports from Canberra.

ALEXANDRA KIRK: Less than two months into the Government's third Job Network contract it struck real trouble.

ANTHONY ALBANESE:  In the transition between Job Network One and Job Network Two, it cost David Kemp his job. Quite frankly this should cost Mal Brough his job. He should resign and put someone in charge.

ALEXANDRA KIRK: According to Labor's Anthony Albanese, the Government has vastly over-estimated the number of jobseekers expected through the Job Network, by 200,000. For job agencies, paid according to the number of people they see, that's spelt a massive drop in income.

Labor says two thirds of employment service chief executives indicated yesterday, they'd be laying off staff and/or considering closing some operations in the next fortnight unless there was a cash injection.

Today, says Anthony Albanese, the Government's been forced to stave off a complete collapse of the system, guaranteeing job agencies payment regardless of outcomes – that is, whether or not they meet their targets for helping Australia's unemployed find jobs.

ANTHONY ALBANESE:  This is an extraordinary bail out by the Government. It resolves the problem for the providers, but it leaves the big question unanswered of how the system will be changed to actually help the unemployed get into jobs.

ALEXANDRA KIRK: The Employment Services Minister Mal Brough is guaranteeing the Government will spend the two and half billion dollars it budgeted for the Job Network over three years.

MAL BROUGH: The money they've received in the first two months is far lower than the money that had been anticipated and modelled.

ALEXANDRA KIRK: How much lower?

MAL BROUGH: Considerably lower. I don't have a figure on me, but we are talking tens of millions of dollars below. And the reason for that is people haven't turned up to interviews after they have been chased for appointments; reappointments have been made; reminder calls have been made; letters have been sent out.

And as it stands today, right now there is in excess of 60,000 job seekers who are activity tested, in other words, are required to attend these interviews because they are receiving payments, who have failed to attend, having had follow up phone calls, letters, numerous other attempts at contacting them.

ALEXANDRA KIRK: So you've guaranteed to the employment agencies that they will be get paid, because it's not their fault that the unemployed are turning up?

MAL BROUGH: That's it in a nutshell. We've said to them you have done what we asked of you, in fact you have done a lot more than what we've asked of you. They have scheduled 900,000 interviews.

There are only 720,000 people on the case loads and far, far fewer than that have actually attended those interviews, so they have staffed, they have built offices, had their IT in place and on top of that they've conducted numerous activities at great expense simply to fulfil what they want to do, and that is to get people in off the streets, talking to them so they can assist them.

ALEXANDRA KIRK: So will this be an extra cost to the taxpayer then and to the Government?

MAL BROUGH: No, that's the clear point Alex, there is no additional cost to the taxpayer, there is not one red cent more that I have to appropriate from the Budget. This is all money which they anticipated coming to them, they have actually dealt with the caseload. The trouble is that the people themselves haven't actually responded positively.

ALEXANDRA KIRK: The Government has yet to indicate how it intends to fix the problem. PM understands job agencies, which until now have been paid once unemployed people turn up for assistance, will now be paid for all the work they do associated with getting jobseekers in the door.

Anthony Albanese says that creates a new problem.

ANTHONY ALBANESE:  It creates a massive accountability problem, we're talking about more than $2 billion of taxpayers money that will now be handed over with no strings attached. This is money for nothing.

ALEXANDRA KIRK: In the longer term the Government needs to find a way to encourage more job seekers to turn up to employment providers. Those subject to mutual obligation face having their dole cut if they don't attend job interviews, but there are another one- or two hundred thousand who are not activity tested and thus under no obligation to turn up.

MARK COLVIN: Alexandra Kirk in Canberra.