Let people work

By Chief Advocate National Seniors Australia, Ian Henschke

AUSTRALIA is facing a workforce crisis it’s never seen before.

Job vacancies are approaching half a million, dragging business and economic growth down and fuelling a cost-of-living crisis.

The hardest hit sectors include agriculture, hospitality, mining, tourism, and the caring industries.

The federal government has raised the yearly permanent migration quota by 35,000 – but workforce shortages are not going to be solved by immigration alone.

We need to boost participation and support people with limited income and savings to earn more.

We also need to boost tax revenue to pay for health, aged care, and other social services.

To fix these economic and socioeconomic challenges we must “let people work”.

The Employment White Paper presents the perfect opportunity for the government to boldly address workforce shortages and create a system where people are encouraged to work.

In the words of the white paper, it will provide a “roadmap to build a bigger, better-trained and more productive workforce – to boost incomes and standard of living”.

Rightly, its Terms of Reference single out the care economy as one in critical danger of failure.

Difficulties attracting and retaining staff in aged, disability, health and childcare have grown significantly since the first COVID-19 outbreak.

These are unlikely to ease any time soon. In fact, the most recent figures show a shortfall of workers approaching 75,000.

Older Australians on the cusp of relying on aged care services will be nervous about their prospects of getting the help they desperately need.

Equally, sectors such as agriculture continue to face difficulties recruiting workers to pick fruit and harvest crops.

These labour shortages put pressures on food prices, affect supply, and export earnings. National Seniors Australia’s submission to the white paper recommends policies to support workforce participation throughout a person’s life to boost income and savings in later life.

One of the key barriers to workforce participation is our punitive tax and transfer system.

Centrelink payment recipients are unfairly punished if they work, creating the biggest sources of inequality in Australia.

We propose government adopt a simple, elegant policy to help all Australians on low incomes get out of poverty and boost their savings by increasing their workforce participation.

We can do this by allowing aged pensioners, students, veterans, those on JobSeeker, carers, and disability pensions the right to work and simply pay tax.

Those eligible should receive a lower income test taper rate of 32.5c in the dollar on their Centrelink payment – if they work.

This would act as tax withheld and no ongoing reporting of income required once they meet the eligibility conditions (e.g., limited income and assets).

This is not a universal basic income, nor is it a universal pension.

Rather, it is a universal right to work through an incentive for those who live in poverty or close to poverty.

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