Archives for posts with tag: welfare state

Is the Australian labour market today in worse shape than it was during the Great Depression? There were about half a million unemployed people in 1932, at the height of the Depression, but around 730 000 unemployed in January this year. The second number is certainly larger than the first number, so does that mean we’re in sub-Depression territory? Of course it doesn’t. The population is about 4 times larger than it was back then and the labour force is about 4.7 times bigger, so comparing the number of unemployed people today and in 1932 doesn’t really tell you much about the relative health of today’s labour market. There’s a reason why people look at the unemployment rate rather than the number of unemployed people when they want to make comparisons over time.

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I’ve written a new piece for Guardian Australia, in which I draw upon my own experiences to defend the Australian welfare state against its critics.

Part of the theme of the piece is the way that income support payments can help to promote social mobility. Without family payments and Youth Allowance, it would be much harder for kids from working class backgrounds to go to university, and so on.

This is part (but only part) of the reason I get so exasperated by the absurd “aspirationals” language that Mark Latham and others use. Aspirationals are, at least implicitly, contrasted against some other group, who presumably don’t aspire to much at all. Income support recipients can’t be ‘aspirational’, particularly not if they receive Newstart or Youth Allowance (FTB gets a pass). This is self-evidently piffle, and part of the aim of my piece was to show how income support can help people ‘climb the ladder of opportunity’ or however you wish to phrase it.

Anyway, please read the piece.

I appeared on a panel about a month ago at the Progressive Australia conference in Sydney, organised by the Chifley Research Centre. Although this wasn’t a stand-alone presentation (I was speaking in response to a keynote speech by Patrick Diamond), I thought my slides might be of interest.

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My previous post summarised the findings of a recent paper published in Agenda about the extent to which the Australian welfare state is biased towards older households. Peter Whiteford from ANU left an important comment:

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Over the past thirty or so years, the Australian welfare state has become tilted much more heavily in favour of the elderly, away from people of working age. That’s the finding of a paper in the latest edition of Agendaan ANU public policy journal.

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Peter Martin has an interesting piece regarding the Commission of Audit in today’s Fairfax papers. He looks back at the 1996 Commission of Audit to draw some lessons for the current Commission. He notes that the 1996 Commission recommended scaling back tax expenditures to businesses and high-income households, reducing politicians’ entitlements, and changing the model of school funding.

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Real NSA payment rate

When the Hawke Government came to power in March 1983, the unemployment benefit for a single adult was worth $192 in today’s dollars. By the time Labor left office in 1996, it had lifted the real (inflation-adjusted) benefit, renamed Newstart Allowance, to $245 a week. Over the course of those 13 years in office, the Hawke and Keating Governments raised the real value of the unemployment benefit by $53 per week, a 27.4% rise. Contrary to the recollections of some, increases in unemployment benefits were part of the “Keating model”.

Since Keating left office, the unemployed haven’t fared as well.  It’s worth $252.70 a week now, including the Clean Energy Supplement, a $7.70 or 3.2% increase over 17 years.

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I delivered a short presentation recently at an event organised by Victorian Progress on the topic ‘Middle class welfare: What’s all the fuss about’. I spoke alongside David Hetherington of Per Capita and John Roskam of the IPA, and we were introduced by John Brumby. I don’t think it was recorded, and I didn’t read my remarks, but I thought I’d try and summarise my key points here, along with the slides I used on the night.

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