Category Archives: The Australian

Jobs goal slips out of Tony Abbott’s reach

Work wanted. Source: TheAustralian

The Australian, 15th January 2015

Martin Crowe

THE federal government is falling behind on a key election pledge to create one million jobs over five years, in a blow to its economic agenda as experts warn that the target may never be achieved.

Jobs are being created too slowly to reach the goal, just as Tony Abbott names “jobs and families” as his top priorities for the year ahead after a punishing political fight over last year’s budget.

In the next test of the policy, official figures to be released today are tipped to show monthly jobs growth that is too low to meet the government target.

The setback highlights a broader challenge for the nation as the resources boom fades and the economy cools, forcing the government to consider new ways to balance the budget at the same time as it wants to use public spending to shore up growth.

With job insecurity high and job creation below long-term trends, the nation is set for a steady rise in unemployment that could harm consumer confidence and retail sales.

The government admitted yesterday that there were new pressures on tax revenue after The Australian revealed a $2 billion hit to major gas projects as a result of falling oil prices, compounding the problems of falling iron ore and coal prices.

Employers created about 11,700 jobs each month during the government’s first 12 months in a continuation of the relatively weak jobs growth since the global financial crisis.

Mr Abbott needs job creation to jump to 18,000 every month for the next four years to deliver on his promise, a huge rise that economists now consider to be unlikely.

Employment Minister Eric Abetz stood by the jobs pledge yesterday but conceded that it was going to be difficult to deliver and sought to blame Labor and the Greens for preventing new jobs schemes getting through parliament.

The jobs pledge was one of the first priorities in Mr Abbott’s Real Solutions plan before the last election, promising to generate “one million jobs over the next five years” by forging a bigger and more productive economy.

But, with challenges mounting, economists said the government had been “misguided” to make the promise to voters when it needed a lift in economic growth that was yet to materialise.

“It is hard to see it being achieved, even though 200,000 extra jobs a year doesn’t seem much more than what is implied by population growth,” said Melbourne Institute of Applied Economic and Social Research principal research fellow Roger Wilkins.

“Lower oil prices will probably help growth, but unemployment seems to be inexorably edging higher over the next year or two.

“In any case, it is a misguided — and close to meaningless — policy goal.

“ The real policy targets should be things like economic growth, employment-population rates and household income growth.”

Australia had 11.5 million people in jobs when the Coalition came to office so its formal target needs jobs growth of just less than 1.75 per cent a year, said Bank of America Merrill Lynch chief economist Saul Eslake.

“That would imply that real GDP growth needs to be at least 3.25 per cent per annum in order to achieve the government’s promise,” Mr Eslake said.

But, instead, economic growth this year is expected to be 2.5 per cent.

The government trimmed its forecast for employment in last month’s budget update while it warned of higher unemployment.

Mr Eslake warned that trends in productivity could mean the government would have to boost real economic growth to 4 per cent a year to reach the target, well beyond the levels foreseen in the budget.

“The bottom line is I think this will be a difficult promise to achieve, and one that really shouldn’t have been made in the first place,” he said.

Others praised the government for being ambitious and said the nation needed a big target to keep Australians in work as the population increased.

“We haven’t got enough employment growth to soak up all the people entering the workforce,” said HSBC chief economist Paul Bloxham. “I do think the government’s target is achievable.

“It’s a challenging time to get the economy to grow at its trend levels (about 3 per cent a year) but we remain optimistic that growth will continue to rebalance from the mining sector to the non-mining sectors.

“And, as the economy rebalances, employment should continue to grow.”

The latest monthly jobs figures will be released by the Australian Bureau of Statistics today with Deutsche Bank chief economist Adam Boyton tipping the addition of about 10,000 jobs.

The weaker jobs growth could give Labor a powerful political weapon against the government at the next election, although Bill Shorten has not outlined any alternative policies to produce better growth than the government. While business groups and economists note that employers — not governments — actually create jobs, the Prime Minister’s message to voters was that the Coalition’s economic agenda would generate more growth and encourage employers to hire more staff.

Senator Abetz said the promise remained government policy. “The government is confident of reaching its job target of one million jobs over five years,” he said.

“However, we do not underestimate the task and the difficulty in achieving it given the ALP/Green tactics of blocking and delaying our job creating initiatives.”

The budget last May forecast employment growth of 1.5 per cent this financial year but this was cut to 1 per cent in the mid-year update in December.

The gloomier outlook has led the government to scale back its hopes for revenue from personal income tax, at the same time that it expects to collect less company tax than planned because of the slump in iron ore and coal prices.

Assistant Treasurer Josh Frydenberg acknowledged the challenges and hinted at more savings in the May budget to respond.

“The numbers will be reviewed when it comes around to the next budget in May but there’s no doubt this is putting pressure on government revenue,” Mr Frydenberg said.

Labor’s assistant Treasury spokesman Andrew Leigh claimed that meant the government was flagging a “fresh round of cuts” in the budget.

“The Abbott government has today confirmed that its only economic strategy is to cut and keep cutting,” Dr Leigh said.

30 years working for dole a reality

THE AUSTRALIAN

MARCH 02, 2015 12:00AM

Sarah Martin

JOBSEEKERS in remote indigenous communities “with no economy” may never get a real job and could spend up to three decades working for the dole.

However, Indigenous Affairs Minister Nigel Scullion told The Australian that as long as jobseekers are taking part in 25 hours a week of meaningful community activities, working for the dole in perpetuity was not a negative outcome.

“I don’t think that is a bad thing,” he said. “They are engaged in purposeful activities in their communities, where they choose to live, and they are choosing to live in an area where there is no economy and a growing population. And while people may say, ‘How can you possibly do this to people?’, there are no alternatives.”

The government is planning to introduce tough new rules for the Remote Jobs and Community Program that aim to end passive welfare and the harmful effects of “sit-down money”.

Under the tightened welfare rules, which come into effect on July 1, jobseekers in remote areas aged 18-49 will be obliged to undertake work-for-the-dole activities for 25 hours a week, five days a week, for most of the year.

Approved activities would include helping getting children to school, aged care, volunteer work, learning to drive and literacy and numeracy training.

Senator Scullion said the scheme could improve living standards, citing unhygienic conditions in remote areas that contributed to chronic disease.

“Many of my communities live on the floor, it is like a cave,’’ he said. “I think that one of the characteristics of civilisation must be that you don’t have to eat at the same level as your animals, it must be something like that. I feel very strongly that we should try to provide furniture.”

On Friday, a Senate inquiry heard there would not be an exhaustive or exclusive list of approved activities as the scheme needed to be flexible enough to meet individual requirements.

Senator Scullion insisted the program would not provide free labour to companies in remote areas, but businesses should be engaged where possible.

He again stressed that the government would take a hardline approach to passive welfare.

“Staying at home like a couch potato with the channel clicker is probably not amongst (approved activities) because this is about moving people from a dangerous and vulnerable place to a more positive place, and ensuring that they are connected with the sort of skill set and the sort of environment that allows them to move into work when it becomes available,” Senator Scullion said.

Consultations on the final design of the scheme — including potential for annual and cultural leave — is continuing with remote communities and job-service providers. The policy will apply to both indigenous and non-indigenous recipients of Newstart and Youth Allowance in 60 remote areas, covering 76 per cent of Australia’s area.

About 37,000 people are covered by the Remote Jobs area, 83 per cent of them Aboriginal or Torres Strait Islander.

Tougher era ahead for welfare recipients

The Australian

January 01, 2015 12:00AM

Sid Maher

National Affairs Editor

Canberra

Rosie Lewis

Reporter

Canberra

New rules. Source: TheAustralian

A WIDENING of the deeming regime for retirees and tougher reporting restrictions for dole and disability support benefits recipients begins today with the start of 2015.

Some of the biggest budget savings will not start as scheduled today, with the GP co-payment bogged in the Senate and the Coalition’s earn-or-learn crackdown for the young unemployed also blocked by the upper house.

On January 15, cars and a range of electrical goods could become cheaper as tariffs are cut on imports of Japanese products as the Australia-Japan FTA comes into effect. The entry into force of the FTA should also provide a boon to exporters.

From today, retirees who buy allocated pensions and account-based pensions will find themselves facing the same deeming treatment as those on the Age Pension. However, arrangements that are already in place will not be affected under grandfathering provisions.

Under the new rules, the money held in the allocated pension will be subject to deeming and the amount deemed to have been earned will be used to assess income when calculating the pension.

Untaxed superannuation will also be included in the assessment of income for the federal seniors health card. From today, a means test will be applied to the Schoolkids Bonus, with only families on $100,000 or less receiving it.

The passage of the government’s social services bill in November also means that from today DSP recipients will generally be paid for up to only four weeks in a year if they are absent from Australia.

There will be limited reasons why students on welfare can travel overseas without losing payments.

DSP applicants will be required to be assessed by a government-approved doctor.

From today, the government will end indexation of the clean energy supplement for welfare recipients because of the abolition of the carbon tax.

Under tougher provisions, applicants for Newstart, sickness, widow or youth allowances, or parenting payments will have to wait a week before receiving payments.

Newstart recipients who have their payments suspended because they missed an appointment with an employment service provider will be required to attend a rescheduled appointment before the benefits are paid again.

The fee for Partner Visas in the permanent family migration scheme jumps 50 per cent from about $3000 to more than $4600.

New initiatives that start from today include free flu vaccinations for indigenous children aged between six months and five years.

From today, a $476 million industry skills fund will begin to support training needs of small and medium-sized businesses

The government has also announced 150 bursaries for young carers to help them continue studies by relieving pressure to take up part-time work.

The opposition’s acting families spokeswoman Jan McLucas said Labor had stopped the government punishing young jobseekers by kicking them off Newstart for six months.

Labor would continue to fight Tony Abbott, who wanted to shift young people under 24 from Newstart on to the lower Youth Allowance, which would leave them $48 a week worse off.

Welfare to work drive has zero gain

The Australian January 02, 2015 12:00AM

Sid Maher

WELFARE-to-work programs promoted by federal governments over the past decade have failed to have any substantial effect on the pool of about one million Australians not in work.

Research by the country’s leading demographer reveals the extent of the economy’s shift from an unskilled to a skilled workforce — and the political challenge of finding jobs for the long-term unemployed.

Peter McDonald, professor of demography at the Crawford School of Public Policy at the Australian National University, said analysis showed the net effect of welfare-to-work programs was “zero”.

Tougher era for welfare recipients

The proportion of men aged between 25 and 54 who were not in the workforce had not changed from about 9-10 per cent from 2000 to the present day, he said.

Peter McDonald

“Even though successive governments have had major welfare-to-work programs, the net effect is zero,’’ Professor McDonald said. “The problem with Australians out of work is a problem of lack of skills in an increasingly skilled labour market.’’

Work-for-the-dole initiatives were first introduced by the Howard government in 1998. They were toughened in 2006 and have been used in various forms by both Labor and Coalition governments. The Abbott government has cracked down on eligibility for the disability support pension, to ensure people capable of working do so, and is seeking Senate backing to toughen access to unemployment benefits.

Tony Abbott announced an earn-or-learn initiative under which people aged under 25 would no longer be entitled to receive Newstart and those under 30 would have to wait six months to receive the benefit. The measures have failed to win support from Labor or the crossbench in the Senate.

The Rudd government maintained so-called mutual-obligation policies, although work-for-the-dole numbers fell under Julia Gillard premiership.

Professor McDonald said unskilled male workers were the first hit by a downturn and welfare-to-work programs did little to prepare them for economic shifts. “They haven’t developed the skills to allow them to adjust to the changing nature of employment,” he said.

Research by Mark Wooden from the Melbourne Institute of Applied Economic and Social Research has found that unskilled workers make up a shrinking proportion of the workforce. Labouring jobs dropped from 12.9 per cent in 1993 to 10.8 per cent in 2008 and 9.8 per cent in 2013. Over the same period, professionals’ share of the workforce increased from 16.9 per cent in 1993 to 20.9 per cent in 2008 and 22.1 per cent in 2013.

Overall, the workforce share of the lowest skill levels dropped by 3.4 points to 22.5 per cent between 1993 and 2013, while the share of jobs requiring top skill levels increased 5.5 points to 24.6 per cent.

Professor McDonald’s work found growth in jobs had been narrowly focused, with only seven of 19 industries accounting for 80 per cent of additional jobs between 2009 and last year. Nearly 40 per cent of jobs growth was in health, social services and education.

Healthcare and social services recorded the biggest increase of 193,000 jobs for an annual growth rate of 3 per cent. It was followed by education and training (113,000, and annual growth of 2.6 per cent) and mining (110,000 and annual growth of 10.8 per cent).

Jobs in “other services’’ rose by 65,000 during the period for an annual growth rate of 1.4 per cent while accommodation and food rose 59,000, or 1.6 per cent, a year.

Calculations performed by Professor McDonald, using Australian Bureau of Statistics data, show migrants have been playing a crucial role in filling job vacancies as the workforce increased by 800,000 between June 2009 and June last year. Migrants in that five-year period accounted for 600,000 of the increased employment while 330,000 jobs went to workers older than 55.

About half the increase in jobs for workers older than 55 was attributable to people in that age group staying in work longer, the other half was attributable to the growing number of people in that age group, Professor McDonald said.

This meant that for workers who were not migrants and were not aged over 55, there were 130,000 fewer people employed at the end of the same period. Much of this could be attributed to people aged under 25 staying longer in tertiary education.

In the same period, unemployment rose by 11,000. All of this net increase could be attributed to middle-aged women taken off the sole parents pension and placed on unemployment benefits.

With no expected future growth at the younger ages of the workforce, Australia would have to rely on migration for any increase in employment, but migrants were not taking jobs from unskilled Australian workers, Professor McDonald said: “The types of jobs skilled migrants are getting are not jobs these Australians would get.’’

WA plan to hit fine defaulter welfare ‘unfair’

SONIA KOHLBACHER

The Australian

January 14, 2015 12:00AM

A WEST Australian government plan to raid welfare payments and increase jail time for fine defaulters will unfairly affect people on low incomes, according to a lobby group.

Corrective Services Minister Joe Francis said he would examine the option of compulsorily deducting payments for unpaid fines from welfare recipients and extending jail time to make imprisonment a less appealing option.

WA Council of Social Service chief executive Irina Cattalini said the approach was unfair and would target the poor.

“There are some real inequities and systemic failings that make it difficult for people who are on low incomes to pay that in the first place.”

Ms Cattalini said it was inequitable for the government to use levers in the welfare system to force people to pay off fines.

She questioned whether fines were an appropriate method to curb offending and whether the government offered flexible payment options.

A woman known for cultural reasons as Miss Dhu was never given a custodial sentence by any magistrate, her full court record shows.

The 22-year-old was ultimately incarcerated for not paying a fine that a Geraldton magistrate imposed on her as an alternative to prison.

When she died in a Pilbara lockup on August 4, Miss Dhu was serving out a $1000 fine for a clash with a police officer 4½ years earlier, when she was 18.

Police took her to the Hedland Health Campus three times over the three days she was in the watch-house. The first two times she was deemed by medical staff as fit to return to her cell. On the third occasion they took her, a day before she was due to be released, she arrived with no pulse and was declared dead within an hour.

Labor’s corrective services spokesman Paul Papalia said fines were “cut out” at a rate of $250 for every day spent in prison although it costs taxpayers $345 a day to keep a person in jail.

Mr Papalia said one-third of all women jailed in WA were there for unpaid fines and, of those, two-thirds were Aboriginal.

“It does not get people to pay fines and it does not change their behaviour,” he said.

Deaths in Custody Watch Committee secretary Marc Newhouse said the state government was monetising the issue of unpaid fines and had failed to address the circumstances that led to fines.

“It would be far more to the point to be able to address the offending behaviour,” he said.