Too many on dole for too long

The resumption of parliament on Monday and the decision on interest rates by the Reserve Bank of Australia board on Tuesday will focus attention on the economy this week. So will the political fight between Anthony Albanese and Peter Dutton over how best to transition more than 300,000 long-term jobless Australians off welfare and into work. Social Services Minister Amanda Rishworth has announced that after incorporating six-monthly indexation, JobSeeker will rise by $56 a fortnight. Mr Dutton would allow welfare recipients to pocket up to $300 in earnings without being booted off the payment. Both options would carry costs and benefits.

It is a sign of the underlying strength of the economy that about 100,000 jobless Australians have moved off welfare since May last year, lowering the overall number of JobSeeker and Youth Allowance (other) recipients to 881,960 at the end of June. Jim Chalmers, who describes long-term unemployment and intergenerational disadvantage as a “cancer in society”, has plenty of both problems in his electorate of Rankin, south of Brisbane. The Treasurer, chief political correspondent Geoff Chambers reports, will release an employment white paper in September, outlining Labor’s long-term workforce blueprint. Much remains to be done, with Department of Social Security data showing that hundreds of thousands of Australians have been on income support payments for more than five years, with an average duration among JobSeeker recipients of 290 weeks. At the end of March, 156,250 JobSeeker recipients had received income support for more than a decade and 150,265 for between five and 10 years. Another 224,575 people had been on income support for between two and five years, and 73,845 for one to two years.

Dr Chalmers says the social security safety net remains vital, despite more Australians being “in work than ever before”. So is the availability of suitable workforce training opportunities. But direct intervention by government has rarely been the surest path to boosting job opportunities in the private sector. Dr Chalmers’ stated goal is “good, secure, well-paid jobs for everyone who is willing and able”. Some of the ways to realising that important ambition involve optimising conditions to encourage business investment and freeing up workplace relations to encourage businesses to hire new staff. BHP Australia boss Geraldine Slattery warned on Thursday that the Albanese government’s “same job, same pay” policy could push up costs in BHP’s South Australian copper business by $200m a year. As a result, Australia was at risk of losing its competitive advantage ahead of the coming critical minerals boom, she said. “Labour productivity has declined by 8 per cent while labour costs have doubled. Clearly, this is not sustainable.” Job creation depends largely on good economic policy that encourages prosperity in the non-government sector.