Page 4529 - Week 14 - Wednesday, 23 November 2005

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sector—the low skilled and low-income workers. There may be other reasons, such as a slight disability or family circumstances, as to why they are not able to get into jobs, or perhaps those jobs do not exist for them. We do not know for sure why that is. Our work was informed by Professor Bob Gregory’s work, which points to some of the disincentives for people on welfare to move to work.

There have been a number of attempts to improve the situation. The federal government I suppose is using the neoliberal economic model, which uses what could be called a fashionable analysis. There have been enough critiques of it to know that this micro-economic analysis does not work. It relies on a so-called market approach. If you follow that, it means deregulate the labour market because that means that wages would fall for the disadvantaged and there would be more jobs. That is the argument. Along with the real wage falls, the level of welfare payments needs to go down, because you have to boot people out as well as provide a place for them to go.

That is the model I think the federal government is working on, but then we have the problem of skills. We all think the ACT has a skills problem where we do not have enough people with certain skills. That is a universal problem; it is not just in this precinct. What about more training, then? We have people staying on at school for, on average, two more years but we still have the problem. Obviously, that is also going to require more fine-tuning too, rather than just throwing education at it—especially when we are going to charge more and more for that education and foster the public’s fear that the government offers less money for education for the groups of people we are talking about. It is not just putting people who are on welfare out to work; it is a double-barrelled approach; it is across society.

One of the main impediments to people going off welfare is the fact that, as we know, they lose money. We have high effective marginal tax rates and this is where the government needs to act. This is a simple one. Let us get rid of the disadvantage that one has to leap into a much higher income bracket to be able to live at the same standard one lived at when on Centrelink payments because of the various advantages that go with those payments. We need to get rid of that margin. It is very strange that the government is not tackling that. I do not understand it. They are lowering taxes for everyone else at the top end. I prefer the use of incentives and supports rather than punishments and deterrents. I would like the broader community to become more aware of the welfare-to-work reforms and the problems they set.

MRS DUNNE (Ginninderra) (4.09): To refresh people’s memory, Ms Porter’s motion on the surface seems fairly innocuous. It reads:

That this Assembly recognises the effect of proposed Federal welfare reform legislation on members of the Canberra community.

I think we should reflect upon and not go in for the, I suppose expected, cliches Ms Porter started off with, such as the punishing crusade of the Howard Liberal government. It is a classic. Everything done by the federal government is brought into this place and trotted out by members opposite as a means of beating people around the head. What Ms Porter did today was a logical extension of the things Mr Mulcahy was complaining about this morning: we’ve got to find an opportunity to beat the Howard

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