Western Australia Hardest Hit By Worker Shortages

Written by:
23 June 2023
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“Job number one for Premier Cook is to fix Western Australia’s worst-in-the-nation worker shortage levels, which is stifling business performance and punishing customers,” said Saxon Davidson, Research Fellow at the Institute of Public Affairs.

Today, the Institute of Public Affairs has released new research that shows Western Australia is the hardest hit by worker shortages, which is holding the state back in uncertain economic times.  

Western Australia’s ‘Job Vacancy Crunch Rate’ (the number of job vacancies as a share of the working-age population not in the labour force) sits at 10%, close to double states such as South Australia.

“We are calling on Premier Cook to lead the charge in National Cabinet to have discriminatory tax and red tape barriers that are preventing our pensioners, veterans, and students removed to alleviate this crisis and he deserves bipartisan support,” said Mr Davidson.

“According to the Australian Bureau of Statistics, there were 438,500 reported job vacancies nationwide in February 2023 and one quarter of businesses cannot find enough workers. In WA, there were almost 53,000 job vacancies, almost double the number prior to the COVID-19 pandemic.”

A recent survey by National Seniors revealed that 20% of all pensioners would consider re-joining the workforce if tax and red tape barriers were eased. Currently only 3% of pensioners in Australia work compared to one quarter in New Zealand, where tax and red tape penalties do not exist.

“If just one-in-five West Australian pensioners re-joined the workforce, the number of job vacancies in the state would decrease by over 90%,” said Mr Davidson.

Currently, a pensioner or veteran who earns just $226 per week loses 50 cents on the dollar in welfare payments and must pay a 19% tax rate on combined benefits and income, which means they face an effective marginal tax rate of 69%.

Students on Youth Allowance who earn just $288 a week, face a debilitating tax rate of 79%, which is why fewer than half of this cohort work.

“Western Australia is a go ahead to get ahead state but is being held back by punitive tax and red tape on some of the state’s most experienced workers.”

“Removing unfair barriers on pensioners, veterans, and students is a no-regrets policy which will get more Australians who want to into work, more money into local economies, while increasing tax revenue, and providing a critical source of dignity and self-esteem to our most experienced Australians,” said Mr Davidson.

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