Government commitment to reduce unemployment welcome but must focus on under-employment & long-term unemployment, demonisation must stop

The Treasurer’s pledge today to set a goal of reducing unemployment to below 5% as a core purpose of fiscal policy is welcome, and follows calls from ACOSS in its Federal Budget Submission. The key question now is will the Government follow the best evidence and advice about how to achieve this goal, or resort to tired politics of division, whilst looking after vested interests of powerful more wealthy constituents.
ACOSS CEO Dr Cassandra Goldie said:

“ACOSS has urged the Government to set a reduction in unemployment to below 5% as a key milestone and core purpose of fiscal policy, including in this forthcoming Federal Budget. We welcome that commitment. The critical question now is how the Government proposes to pursue this goal.

“Firstly, we need a Budget that follows the best evidence and advice and invests in areas that will generate quality jobs in key areas of public need, and across the country. Instead of leaving people behind in ongoing crisis, the Government should use the Budget as an opportunity to create a fairer future. The Federal Budget needs to invest in income support, high priority human services, and key public infrastructure including social housing and energy efficiency programs.

“We need to generate new jobs in the community service sector so that we can properly resource important services like aged care and childcare. Much of the Government’s economic stimulus has been focused on male-dominated sectors like construction & roads and tax cuts, which are costing about $300,000, and $475,000 each, per job. Yet there are huge unmet needs in female-dominated care services, including aged care, childcare and community services, where the need is acute and where many more jobs can be created for the investment required (about $90,000-50,000 per job, depending on which sector).

“Let us also remember that investments in social security better deliver on women’s economic security, as well as job creation, with increases in working age payments benefiting many more lower income women and their children (about 60%). In contrast, the majority of tax cut dollars are benefiting higher income men. Dollars targeted at people on low incomes are much more likely to be spent in the real economy than more tax cuts for people who already have enough and are more likely to save. Similarly, investment in the caring sector also better delivers on women’s economic security with workforces made of up between 80-90% women in the aged care, child care and community services sector, in contrast to more expensive investments in construction and large scale infrastructure.

“Secondly, we need a Budget that acts on the evidence about how to reduce long term unemployment. Currently about 750,000 people are stuck on unemployment payments for more than 12 months.

“ACOSS is alarmed that the Federal Government appears to be resorting to tired and dangerous political rhetoric, demonising and blaming people for being unemployed and damaging their employment prospects. Ratcheting up pointless job search obligations, employer hotlines, and turning people against each other is the last thing this country needs. There’s currently only 1 job for every 7 people looking. The official unemployment rate masks real problems with underemployment because it is based on one hour of paid work per week. Underemployment and long term unemployment are the biggest challenges Australia faces in building an inclusive recovery that does not leave people behind in crisis.

“The very last thing people on JobSeeker need is stigma and demonisation, with harmful measures from the Government, such as the Employer Reporting Hotline. Many people we’ve spoken to have applied for hundreds of jobs but they face discrimination from employers because of their age or disability. The recent negative portrayal of unemployment is deeply harmful, especially at time when there are not enough jobs for everyone who wants them, and there are not enough hours of work for everyone.

“We need employment policies that evidence shows will work, and local community processes that link employers to people who need paid work, supported by services tailored to individual training and employment needs.”

ACOSS Budget Submission