Wages stagnate as unemployment rises

Issue 

The long-term average rise of the Australian Bureau of Statistics (ABS) wage price index is 3.6%.

In the first half of this year, it increased at an annualised rate of only 1.7%. The latest National Australia Bank quarterly business survey shows labour costs have been rising at an average annualised rate of 1.5% since the last quarter of 2012. This compares with an average of 3% a year between 1998 and 2008.

The lowest wage growth in 25 years is accompanied by data from the National Centre For Social And Economic Modelling at the University of Canberra, which finds that in the year to June, household incomes decreased by 0.2% after taking account of cost-of-living increases.

Unemployment is continuing to rise: ABS data shows the total number of hours worked has been stagnant for the past three years, and the official ABS figures estimate that 14.4% of the labour force is either unemployed or underemployed.

Poverty is also on the rise and is set to increase, in part because the federal government is continuing an initiative of the Julia Gillard Labor government.

This was the introduction of changes to the Disability Support Pension (DSP) that required those recipients under 35 to regularly attend Centrelink on the implausible premise that they would be assisted in getting employment. Not to be outdone, the Coalition has added the penalty of cancelling payments for non-compliance with the stricter eligibility rules that it has introduced to the ALP’s program of punishment.

Now the Social Services Minister, Kevin Andrews, has announced that next year he will extend the crackdown on DSP recipients to those over 35. About 835,000 people receive the DSP and 80% of these are over 35, so this proposed policy could affect more than 665,000 people.

Andrews is also pressing ahead with his plan to make the unemployed wait six months before receiving the Newstart allowance, although he did concede that opposition to this in the Senate could lead to him accepting a “compromise” of scaling this back to just one month.

The other proposal that will increase poverty comes from the Committee for Economic Development of Australia (CEDA), whose chief executive is Stephen Martin, former Speaker of the House of Representatives in Paul Keating’s government.

CEDA’s solution to Tony Abbott’s government stripping $80 billion from long-term education and health funding is to introduce a series of taxes that will shift the burden of funding to taxpayers.

CEDA has proposed the introduction of a land tax, putting tolls on exiting freeways in cities, and increasing the rate of the goods and services tax as well as extending its coverage to include fresh food, education and healthcare. This last measure alone would increase the living costs of an average family by about $100 a week.

Abbott wants a “national discussion” on tax reforms. Great idea, a dialogue with a government deaf to the needs of the disadvantaged is bound to work.

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