To ensure I’m not breaching a copyright, visit Gutter Trash to see the breakdown of the levy, what it will cost and how it is funded, then come back and see my view.
It makes me laugh, only 4000 job seekers when we have have 550000 unemployed, and it doesn’t take into consideration costs of moving. Or if we include underemployment, we have over 1.9 million Australians underemployed. With all economic indicators suggesting a decline in the Australian economy and the government imposes a new tax (the levy) instead of just relying on the deficit.
I continue to laugh when it is clear that this is nowhere near full employment. Unemployment is not low and participation is not rising, the most recent data indicates participation is falling. It was evenly recently reported that for every job interview we shrunk from 4 applicants per position to 3 applicants.
The fact that Gillard said that solely borrowing to rebuild from the floods is a soft option reflects a considerable lack of economic understanding. Especially when borrowing typically means the government borrowing from itself via the RBA.
I note with some distress that they’re going to push the emphasis on bringing in skilled migrants instead of skilling some of the 1.9 million underemployed Australians thus keeping them unemployed and underemployed.
The skilling rebuilding is one of the few good ideas in the package but implemented incorrectly.
Given the alleged housing shortage (there’s not but there is where they want them) I don’t think capping the National Rental Affordability Scheme is helpful to those in the area especially eligible job seekers.
Even Saul Eslake, probably Australia’s most well respected economist disagrees with a levy. He is in favour of a larger deficit and a delayed return to surplus. You can listen to him on the Radio National Breakfast program.
*NB: by skilling I mean training, it was Gillard’s use of the word. I continue to use it in her context
** Underemployment = Unemployed + Underemployed
Update: Economist Bill Mitchell has more to say in the latter half of today’s blog on the issue.
Addendum: No promises but I’m considering another post on the Infrastructure Bonds proposal that Independent Rob Oakeshott has proposed as a possible flood rebuilding solution