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ECONOMIC DOWNTURN IS NOT THE TIME TO REVERSE TOUGH WELFARE RULES
The current economic downturn is a dangerous time to unwind tough welfare rules and labour market flexibility, which could intensify rising unemployment, says a new report being released on Wednesday.
Policy reform and good economic conditions have meant that the number of jobless families in Australia has dropped since the 1990s. But as the country slides into recession, the government must remain vigilant or these gains will be reversed, says the Centre for Independent Studies’ new report Breaking the Cycle of Family Joblessness, by Jessica Brown.
‘Despite experiencing a lower unemployment rate than most developed countries, Australia has the second highest proportion of jobless families in the OECD, with one in eight children living in a family where no parent works,’ says Jessica Brown.
‘Children suffer damaging effects growing up in jobless families. They have more health problems than those with working parents, and they are at increased risk of social and emotional problems.’
A ‘welfare culture’ can develop within a family (or a whole community), which leaves children of jobless parents with a propensity to be jobless and welfare dependent themselves as adults.
This report recommends:
- Despite budget pressures, the Rudd government must not abandon its tax cuts. By implementing broad-based tax reform that allow low-paid workers to keep more of their earnings, the government will make work seem more worthwhile compared to claiming welfare payments.
- The Rudd government should resist winding back mutual obligation requirements to prevent an increase in the number of jobless families.
- Wage setting and industrial relations policies must be governed by a ‘jobs first’ policy, with a key objective being the continued creation of low-skilled jobs. During a downturn, it is preferable for people to have the option of lower-paid jobs, rather than simply being forced onto the unemployment queue.
‘While the recession seems inevitable, good public policy means that a jump in the number of jobless families needn’t be,’ says Brown'
Jessica Brown is a Policy Analyst at the Centre for Independent Studies.
She is available for comment.
