“The ultimate goal of the welfare system should be to get Australians into work, which provides a path to self-sufficiency, stable income, and dignity”, said Daniel Wild, Director of Economics at the free market think tank the Institute of Public Affairs.
This week, the Australian Council of Social Services (ACOSS) called for the Newstart Allowance to be increased by at least $75 per fortnight, to $625.20 a fortnight from the current payment of $550.20.
“Poverty in Australia is a great moral challenge, and the only path out of poverty is work. Any change to the welfare system must have as its objective to get as many Australians into work as possible.”
“The unemployed and disadvantaged should be viewed as assets that need to be developed, not liabilities that need to be managed. The way to allow Australians to reach their potential is through policy settings which are aimed at getting them into work and off welfare.”
“It is fairly straightforward: Australians who have work are far less likely to be in poverty than those who are without work.”
“One of the primary reasons why there are 680,000 Australians without work who want to work is Australia’s high statutory minimum wage, which is amongst the highest in the world.”
“To boost employment opportunities, the government must slash red tape and reduce Australia’s high business tax rate. This will increase business investment, which will increase the demand for workers, and create more jobs and higher wages.”
“Consistent with countries such as Sweden, Denmark, and Norway which do not have a national minimum wage, Australia’s minimum wage should eventually be phased out.”
Australia’s workplace relations system is very cruel to Australia’s youth and the unskilled. Australia’s minimum wage laws make it unlawful to work for anything less than $18.90 per hour. Increasing the Newstart Allowance to $625.20 a fortnight, as suggested by ACOSS, would be the equivalent to receiving $8.20 per hour on full time hours. This means it would be lawful to receive $8.20 an hour for not working, but illegal to earn $18.80 per hour for working. The effect of this high minimum wage is to push many Australians out of work onto to a very modest Newstart Allowance.
“Governments should look to re-orient education funding away from universities and toward technical education to help the hundreds and thousands of Australians who have been restructured out of heavy industry to find work again,” said Mr Wild.