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Dole around the world: how does Australia stack up?

With the latest unemployment rate due to be announced tomorrow, a quick look around the world shows that Australia is not a terrible place to be unemployed, writes freelance journalist Sally Whyte.

Pressure is mounting on the federal government to hike Newstart payments to the unemployed. But an analysis of the unemployment benefits around the world shows Australia isn’t necessarily a terrible place to be out of work.

A single person in Australia who is “looking for paid work” (Centrelink’s euphemistic term for unemployment) is entitled to up to $492.60 a fortnight and could also qualify for $121 in rent assistance a fortnight.

Even the full Newstart allowance combined with rent assistance is $167.40 a week below the poverty line, which is updated quarterly by the Melbourne Institute of Applied Economic and Social Research. The most recent calculation of the Australian poverty line in October sets the minimum income at $474.20 per week including housing costs.

Australia is one of few countries where a person can remain on the dole indefinitely. Across the ditch in New Zealand the unemployed have to reapply after receiving the unemployment benefit for 12 months. A single person in New Zealand receives NZ$229.01 (A$182.74) weekly, A$127.12 less a fortnight than a job seeker on this side of the Tasman.

Australia is also one of few countries among its peers that does not charge a specific tax to employees or employers to fund unemployment benefits. In the UK, Canada, Germany and the US, employees pay to be “insured” against unemployment.

In the UK, employees pay on average 12% of their income as part of their National Insurance Contribution to be entitled to state benefits. The UK’s Jobseeker Allowance is £71 (A$108.13) weekly — significantly less than Australia’s dole, but housing benefits in the UK are more generous. Rates of housing assistance are calculated depending on location and the living status of a person, but the maximum amount for a single person is 250 pounds (A$380.74) per week.

The Canadian Employment Insurance program is not funded by the government but by premiums paid by employees and employers. In a complicated system, Canadians are only entitled to the dole if they have paid the 1.83% tax when they were employed. Their benefit is calculated at 55% of a person’s average insurable income up to C$47,400, meaning an unemployed person could receive up to C$501 (A$481.88) weekly. The period of time that a person can spend receiving the payment depends on the rate of unemployment in their province.

Unemployed Germans have access to €374 (A$473.31) monthly, only if they have previously contributed to the employment insurance scheme. This is almost half the Australian benefit, but the costs of accommodation and heating (it is Germany after all) can be paid in full “if they are reasonable”.

Although jumping through hoops at Centrelink is notoriously time-consuming and confusing, it is nothing compared to the rabbit warren of payments, taxes and food stamps in the United States. The maximum amount paid weekly changes from state to state, from US$247 (A$233) in Louisiana to a possible US$979 (A$926.47) in Massachusetts. It is unclear how many of America’s unemployed receive the full benefits in their home state as rates of payment are calculated by a person’s previous wages and employment.

In most states unemployment insurance can be claimed for a maximum of 26 weeks. Not only does the dole payment fluctuate across borders, but the taxes paid to the system and the eligibility rules to receive a payment are also state based.

The $50 a week rise in Newstart proposed by the Greens would cost the government $7.4 billion between now and 2016-17 and would leave the unemployed on the payment around $100 below the poverty line. The prospect of living on $35 a day is daunting, but perhaps not as daunting as $26 a day in New Zealand or $15 a day in Canada and Germany …

  • 1
    Posted Wednesday, 16 January 2013 at 1:33 pm | Permalink

    This is a good starting point,, but these raw figures need further analysis. Without factoring in purchasing power parity and drilling down into actual comparative housing and utilities assistance rates (not simply listing maximum entitlements), we are left none the wiser as to where our dole sits.

    More detailed analysis please Crikey.

  • 2
    Posted Wednesday, 16 January 2013 at 1:38 pm | Permalink

    Thanks for an interesting article Sally.
    Here are some interesting survey results:

    Australia is the 2nd best place to be born in 2013 just behind Switzerland in 1st and above Norway in 3rd.

    Australia is rank 15th most expensive country to live in the world still behind Germany at 14th and way behind many of the OECD countries.

    Australians are the richest people, wealth per capita is double that of the Norwegians who is at 2nd place.

    Australians are the happiest in the world, most content with their lives. Although one of last year’s survey also found Australians felt more insecure about their financial situations than the Spaniards. Schizo I’d say.

  • 3
    Posted Wednesday, 16 January 2013 at 1:49 pm | Permalink

    If someone could come up with a blend of policies, taking the best part of our current system and the best part of the user pay dole system to formulate a new one, it will be good. I don’t think a fully user paid system is good. A student who has just finished school or uni would not have paid any employment insurance. We also need to accept some inefficiency in the welfare system as sometimes people get lost for a while and take sometimes to get up and take care of themselves, just like we accept the inefficiency of our democratic system.

  • 4
    Posted Wednesday, 16 January 2013 at 1:53 pm | Permalink

    Other things not taken into account in our “Dole payments” are health care cards - which give access to medical treatment but discounts on Energy, Vehicle Rego etc and FTB payments.

    While it is difficult to live on the dole it can be done (plenty of people do it) and it is only intended to be a safety net so of course your lifestyle wil change after losing your job which is why those who say you can only exist on the dole not live are right but they miss the point.

    Interesting points Apollo.

  • 5
    Posted Wednesday, 16 January 2013 at 1:57 pm | Permalink

    Can I put forward another interpretation, of this comparison with overseas unemployment benefits. That it sucks to be on employment benefit here in Australia, but it sucks more to be on unemployment benefits (if you can manage it) overseas.

    One thing we seem to talk little about in unemployment figures, is how nation-states run their economies with the expectations of there being unemployed and desiring an unemployment figure not of 0% (full employment) but instead somewhere around 4%.

    How do when then approach our commitment to those who “must” be unemployed by that economic desire? I find the limiting of unemployment benefits problematic because what happens when an otherwise unemployable person looses financial aid? They have to get necessities from somewhere? Do they turn to crime?

    Our unemployment benefits are not always forever either, just see our homeless people’s stories for the complexities of the situation. The amount of people who are long term unemployed is fairly tiny, even with a very lengthy period of available benefits (ie a negligible drain), so it makes me wonder what people are actually getting at when they demand we get tougher on welfare?

  • 6
    Ryan Ratcliffe
    Posted Wednesday, 16 January 2013 at 2:04 pm | Permalink

    i actually live on the dole. obviously you can live on the dole but it is about what affect living on it has on your ability to get a job. I pay my bills my 220 pw rent and it leaves me with about 60 dollars a week for food. I havnt bought clothes for over 2 years i cant afford to go out or eat out. Like many people on newstart allowance i have a medical condition that makes it hard for to keep employed but i don’t qualify for the disabily payments.
    Its very easy to say look you have it slightly better then other people. Its very hard to live on the newstart allowance!

  • 7
    Posted Wednesday, 16 January 2013 at 2:42 pm | Permalink

    Thanks Jimmy, yeah the healthcare card people always forget to mention.

    Raising the dole by $50 across the board is a bad idea, the people who say the number of long term welfare recipients is small don’t get that poverty is also generational, many grow up repeating the same cycle as their parents and live on the dole. This is an easy breeding ground for more ignorant Westies (I’m not saying that all westies and unemployed people are ignorant), my Irish friend does not like Australian at all after a few accounters with the ockers, she went back to Ireland long before her visa expired. I do agree with Ashar though that unemployment target should be 4%

    Raising rent assitance depending on the cost of the location might have some merit but it’s open for more rorts and become costly, there are plenty of rorts in the current sytem already, unless the government pay directly into the landlords’ accounts and it will also show up it their tax papers.

    The skill training programs that Centrelink provides should be available for inexperienced people who have just finished school or uni within 3 months intead of waiting for so long to be eligible.

    Some people had mental trauma and can’t even be a kitchen hand. Case managers need to know people’s aptitude and don’t waste time sending them to employers unnecessarily, they can plant trees, mow lawns or do piece work like disable people. I have a nephew who got addicted to computer games and dropped out of uni. He lived on the dole for a few years being lazy. When Centrelink pushed him and he was genuine at looking for work because he was not interested in going back to uni, he appl.i.ed for positions beyond his reach. He is naive as an 8 year old and does not have strong social skill but he apply for jobs like car salesman. Eventually, it was one of our little grand niece who pushed him to go back to uni by giving him a lecture and an ultimatum.

    Gotta feed my pets, back in a bit..

  • 8
    Posted Wednesday, 16 January 2013 at 3:06 pm | Permalink

    Ryan - ” Its very hard to live on the newstart allowance!” It’s supposed to be to encourage you to get a job, if you could live on newstart while still eating out and hitting the clubs on a Saturday night then many people (not saying you) would say why work!

    Apollo - “Raising rent assitance depending on the cost of the location might have some merit but it’s open for more rorts and become costly,” Yeah it’s like the woman the Age had on the front page a few weeks back saying she was struggling on the doles while paying something like $400 a week rent in North Fitzroy because she liked the lifestyle.

  • 9
    Posted Wednesday, 16 January 2013 at 3:23 pm | Permalink

    Western society tend to have more depression and mental illness. Some of it might be due to a culture of vanity celebrity obsessed and body image driven or some high expectation of a person to be perfect or successful, in addition bully.ing at school or work place often occur. The society structure also has become fragmented and less communal, causing more disconnectedness and isolation.

    We need a de-fragmentation program for long term unemployed people. Make it compulsory for Social Work students to run practical, four sessions per year with unemployed people. It could be holding weekend BBQ, camping, affordable gourmet cooking class, brewer class for those who like to drink (responsible people hopefully), writing, painting, football, yoga etc. The unemployed only need to make an effort by putting $3 for the occasion and the government will fund the rest. Make sure proper receipts are provided and no fraud. The students can get some money for petrol.
    One problem I find annoying is that people complain about people without degree holding high managerial positions whereas they who have attained degrees and masters are stuck unemployed. Life is about experience, people can leave school early and work hard, become managers and business owners. Stop the insane snobbery that you have a degree and somehow you’re better and should not do ‘menial’ jobs. Australia is quite egalitarian. If you have the attitude and do whatever it takes to support yourselves, willing to take less skilled, less paid jobs to look after yourselves and build up experience rather than rely on the dole then in the future the employers will much more likely to employ you than people who think they are entitled and have been long term unemployed.

    Targeted approach and identify the individual’s need is more sensible. It may cost more in the short term, but it will save money in the long run and build a better society. There are too many ockers in Australia already, we should not increase their number.

  • 10
    Posted Wednesday, 16 January 2013 at 3:24 pm | Permalink

    I’m one of the “lucky” people who got to experience being on the dole in two countries, Switzerland and Australia. And before anyone jumps to conclusions about me just being a dole bludger, these were just unlucky circumstances (employer’s company going under in a recession, etc.).

    Anyway, this gives me a unique chance to compare the systems. Switzerland has always taken the approach that being out of work means you’ve been unlucky rather than being lazy scum, so unemployment benefits are extraordinarily generous. For the first six (I think) months that you’re on unemployment benefits, you receive 80% of your last salary. After that runs out you get shifted to social security where you do get far, far less though.

    This meant that for the three months I was on the dole in Switzerland, life went on without too much of a disruption. I didn’t just have to sit on the couch for fear of spending any money if I went outside or did anything at all. With not being constantly preoccupied with money worries, this actually made searching for another job relatively easy.

    By contrast, when I was on the dole in Australia I started out full of enthusiasm of landing a new job. When that didn’t materialise in the first couple of weeks my savings started running out I had to economise and I ended up leaving the house as little as possible. After two or three months I even had to scale back on job applications. This was in the pre-internet days where you had to send in a physical CV, and getting those printed or photocopied was just too expensive. So I’d only apply to the few jobs where I felt that I’d have a very good chance. Similarly any jobs that looked out of the way were off limits because getting a train ticket there meant my food budget for the day was gone.

    Eventually, after several months with no prospects I had to ask my parents for help. That allowed me to get off the dole and onto the even lower paying Ausstudy, and then get back to uni. Still, there is a happy ending and doing well at uni meant that eventually I ended up in a very high-paying job. But those needlessly tough months on the dole in Australia I do not wish upon anyone else!

    There is one other thing that rarely gets mentioned in the whole Newstart debate. The money that you receive ends up being pumped straight into the local economy. It’s not like you’re hoarding this under a mattress. It’s not a particularly efficient way, but it is an injection of funds into the economy. The effect that this has is that in a country like Switzerland where the dole payment is very high, people still keep spending money during an economic downturn. So the effects of it are far less severe than in Australia where any downturn can quickly spiral into a recession because people stop spending money.

  • 11
    Posted Wednesday, 16 January 2013 at 3:31 pm | Permalink

    Saugoof, unfortunately Australians are not cultured people. The country is full of bogans, yobbos, ockers, westies, deros etc….

    But I support raising tax on the miners, and possibly should bring back 49% marginal tax rate and apply for above $700K bracket, to fund better education, healthcare etc.

  • 12
    Posted Wednesday, 16 January 2013 at 3:33 pm | Permalink

    Jimmy #8
    That whole “It’s supposed to be hard to live on the dole to encourage you to get a job” argument really irks me. Trust me, the general scorn you get from everyone and the dread of having to answer small talk questions like “what do you do for a living” is more than enough incentive! I’ve lived in Switzerland, a country that has extraordinarily generous unemployment benefits, and yet also has one of the lowest rates of unemployment in the world.

    Why do we always feel like we have to be as mean as possible to whole groups of people to appeal to the exceedingly small number that abuse the system?

  • 13
    Posted Wednesday, 16 January 2013 at 3:49 pm | Permalink

    Perceptions and ignorance damage discussions on the dole . Some people who disparage dole recipients would scream blue murder if various governments reintroduced death duties or inheritance tax . All other OECD countries have it as far as I,m aware . We are the only country in the OECD bracket to fund private education so generously , most don,t at all . So a few call out job snobs/bludgers while thinking they are entitled to government largesse such as above including the health subsidy .

  • 14
    Posted Wednesday, 16 January 2013 at 4:03 pm | Permalink

    Saugoof - I too have been on the dole and you misrepresented what I said, I said “many people” so yes there are those who want to work, those who feel guilt or shame or maybe just embarrassment at having to answer the “what do you do for a job” but there are also those who would be happy not to work at all if they didn’t have to give up meals out or night clubbing.
    And we aren’t being as mean as possible.

  • 15
    Christopher Nagle
    Posted Wednesday, 16 January 2013 at 4:06 pm | Permalink

    The problem with any social welfare system that enables people to live in relative financial discomfort for long periods of time is that they can get used to it. And this creates the possibility of an intergenerational welfare underclass who live dysfunctional but bearable lives, passing on all its unproductive and parasitic habits to its children. Not a good outcome.

  • 16
    Posted Wednesday, 16 January 2013 at 4:16 pm | Permalink

    Geomac, I take that you are referring to me.

    I don’t need government health subsidy. I get a cold once every four year which I don’t even go to the doctor, I treat it using traditional method. I advocate health care spending for other people.

    People should be able to get the job they enjoy and want as a career but should not keep on being a snob and feel entitled, somehow they are better than those doing the ‘menial’ jobs, it’s degrading for them to do those jobs but it’s ok for them to keep living on other people’s money and don’t try to find a better way. And you ignore the generational cycle of poverty when you don’t have a targeted approach to break the cycle of poverty, I don’t make a broad stroke that all welfare recipients are dole bludgers and don’t deserve help, there are people who fall in unfortunate circumstances and need help but you need targeted help and should not reward and encourage more cycle of those who abuse the system.

    Raising the dole as stimulus? How about building affordable housings as stimulus? And curb negative gearing, if the housing market is still too fragile, it may be good to wait till next year and implement one that will not hurt the market.

  • 17
    Mike Flanagan
    Posted Wednesday, 16 January 2013 at 4:20 pm | Permalink

    They might have a dual impact if they increase their corporate tax take. It might lower the Aussie Dollar ($A).

  • 18
    Posted Wednesday, 16 January 2013 at 4:22 pm | Permalink

    Thanks Mike, I’ve gotta clean the house for my guest from Canada. Have a good one all of you.

  • 19
    Posted Wednesday, 16 January 2013 at 5:00 pm | Permalink

    No reference to anyone individually Apollo and certainly not intended to be . I was referring to Abbott or was it Howard and the job snob jibe which some are happy to take up . Seemed that that sort of conversation went on for a few years with the libs . You know the sort that class everyone in the same boat but think themselves unique individuals .
    An example . My older sister remarked that Sudanese and their 10 children families were a norm and hence a strain on govt. finances . Her husband came from a family of 10 . My wife came from a family of 12 kids . When I was young at least once a year the Sun would have a Dutch family arriving with parents and at least 10 kids . None were from Sudan but were Irish , Maltese and Dutch . So obviously that must mean all Maltese , Dutch and Irish parents have at least ten kids .

  • 20
    Posted Wednesday, 16 January 2013 at 5:03 pm | Permalink

    So does this mean that First Dog was lying when he said Newstart was the second lowest in the Western World? Can’t we even trust the cartoons on our annual Crikey calendars anymore?

  • 21
    Posted Wednesday, 16 January 2013 at 5:30 pm | Permalink

    No reference to anyone individually Apollo and certainly not intended to be . I was referring to Abbott or was it Howard and the job snob jibe which some are happy to take up . Seemed that that sort of conversation went on for a few years with the libs . You know the sort that class everyone in the same boat but think themselves unique individuals .
    An example . My older sister remarked that Sudanese and their 10 children famil i es were a norm and hence a strain on govt. finances . Her husband came from a family of 10 . My wife came from a family of 12 kids . When I was young at least once a year the Sun would have a Dutch family arriving with parents and at least 10 kids . None were from Sudan but were Irish , Maltese and Dutch . So obviously that must mean all Maltese , Dutch and Irish parents have at least ten kids .

  • 22
    Posted Wednesday, 16 January 2013 at 5:39 pm | Permalink

    I figured, on reading this article, that reading the comments would depress me. Well at least *some* of them didn’t. So I guess that’s a win.
    However, a bigger win is reading Matt Cowgill’s latest take on the subject of welfare payments. Well worth a look. http://is.gd/wPvubj

  • 23
    Pedantic, Balwyn
    Posted Wednesday, 16 January 2013 at 5:48 pm | Permalink

    I work with a well known charity that visits the disadvantaged to provide assistance. Each month I meet people who are struggling on welfare payments. No doubt the numbers will increase as the impact of the changes to Newstart take effect.
    No doubt also that there are some needy who are bludgers, but our role is not to judge them, but to guide them to becoming contributing members of our society.

    However, the overwhelming majority of those we visit are not dole bludgers, but people who are ill equipped to find a job; through long term sickness, mental incapacity, former or even current substance abuse, lack of education; the list is sadly very long but factual.

    More importantly these are not people that employers want to employ, even when the stats. suggest that employment is at nearly an all time high and labour is in demand.
    These are the unwanted! Do we simply ignore them or do we as tax payers put our hand in our pockets to help those less fortunate than ourselves?

  • 24
    Ryan Ratcliffe
    Posted Wednesday, 16 January 2013 at 6:11 pm | Permalink

    i guess we just treat the 95% of people who genuinely want to live a better life like crap to make us feel better about having to pay the 5% who might not want to improve. and i bet that the 5% of people who don’t want to improve think that way because they have never known anything else. so do we help people or do we punish people?.
    To argue that a 50 dollar a week increase in the newstart allowance is going to act as a disincentive for people to get a job is ridiculous in my opinion. Every middle class person in the country crys foul when people talk about removing tax breaks or the baby bonus or puting a means test on things. They say but i have a morgaege and a new car and a boat and i want to live in a good suburbe. so the governemt subsides there life styles while they sit around their pools complaining about doll bludgers and hippys that are ruing their country.

  • 25
    Posted Wednesday, 16 January 2013 at 6:22 pm | Permalink

    I, too, feel a more in depth analysis is warranted. The cost of living and the degree of housing support, for example, must be examined if there is to be any hope of providing a meaningful comparison.

    Apollo’s cited figure of Australia being less expensive to live in than our OECD peers is debatable — compare, for example, the cost of living calculations at http://www.xpatulator.com/cost-of-living-article/Cost-of-Living-July-2012_350.cfm where Sydney ranks sixth in the world, and all the major Australian capital cities lie in the top 40. (I would contend that the only reason that Tokyo ranks higher is that the weighting for accommodation is significant, and per-square metre, Tokyo is very expensive indeed; realistically, though, people simply live much more compactly, and a typical rent is, if anything, much cheaper than locally.)

  • 26
    Posted Wednesday, 16 January 2013 at 7:14 pm | Permalink

    These sorts of comparisons are not that meaningful without factoring in the cost of living in the different jurisdictions, especially housing costs. Still, it is obvious that anyone who is unemployed in one of the larger capital cities would be really stretched finding somewhere to live or hanging onto a home they were renting or paying off while employed.

  • 27
    Lyn Gain
    Posted Wednesday, 16 January 2013 at 8:01 pm | Permalink

    What exactly is the point of this article. So we’re better off than the United States in terms of the dole. We all know we’re also better of in terms of Medicare. Is this another dive to the bottom - the lowest common denominator?

  • 28
    Posted Wednesday, 16 January 2013 at 9:22 pm | Permalink

    If you want to know who’s offering the best overall package you need only look where illegal boat bludgers pay the biggest bucks to enter. We’re right up there at the top of the list of countries asking to be fleeced by those who don’t feel like earning their way in the world.

  • 29
    Posted Wednesday, 16 January 2013 at 9:39 pm | Permalink

    @ Lynn Gain. The point is that someone has to pay for all these things. A $50/week increase in the Newstart payment may be seen as “necessary” by the various welfare groups, but they never tell us where the money is coming from. Currently, an increase of that magnitude will cost around $7.5 billion dollars, so what do you want the government to cut? The NDIS or maybe Gonski? They will each cost around that amount. There are no free lunches!
    Of course, the government could always increase taxes, that should go down well.

  • 30
    David Hand
    Posted Wednesday, 16 January 2013 at 10:18 pm | Permalink

    One of the unforseen outcomes of the establishment of a welfare state was the development of a permanently unemployed uneducated, unskilled and unemployable underclass. It is far worse in the UK than it is here in Australia. Good policy will keep the dole at a level where most people are incentivised to get off it as soon as they can.

    Part of the problem is the changing demographics of job opportunities. As jobs for unskilled workers are taken over by technology, those without an education are unable to adjust and fall out the bottom. This is no reason to stop progress but rather a challenge to lift the education and skills of the workforce.

    It must happen because without change, the capacity of a country like Australia to support beneficiaries will reduce.

  • 31
    Lyn Gain
    Posted Wednesday, 16 January 2013 at 10:25 pm | Permalink

    @CML Go down well with whom? Those who think they have no obligation to contribute to the wellbeing of those less well off? I have no objections to paying increased taxes. And what about other forms of revenue raising apart from personal income tax, e.g., recreating the original mining tax instead of the current farce, re-introducing wealth taxes and other progressive taxes, unlike the regressive GST. Some of us who support Newstart increases are acutely aware that ‘someone has to pay for all these things’. There is a large array of options, none of which involve cutting worthwhile social programs.

  • 32
    Posted Wednesday, 16 January 2013 at 10:46 pm | Permalink

    We are a society that leaves people behind. The old post war consensus that kept unemployment under 2% until 1974 has long since broken down and won’t come back again. So 5% to 10% of individuals and families, mainly those with learning or mental health issues, are pushed out the bottom of the economic heap. The sort of low skilled jobs they may have once performed have long since been exported, automated or are no longer done. So what’s the answer? Free market fundamentalists would abolish the dole and employ them at $100 - 200 per week to do jobs no one else wants to do. Presumably they would live in shanty towns / favelas on the edges of our towns and cities. And expand the jail system as they have done in the USA. Of course that is no answer. We need to somehow find a place in our society for those who are now excluded. I don’t know how.

  • 33
    Posted Wednesday, 16 January 2013 at 11:21 pm | Permalink

    Australia is rank 15th most expensive country to live in the world still behind Germany at 14th and way behind many of the OECD countries.

    I find that difficult to believe. I travel reasonably widely and I’m struggling to think of many places I’ve been to where living costs are higher than Australia (Switzerland is the only one that springs immediately to mind). The costs of living in this country are out of control, and the ridiculous premiums attached to most consumer goods (eg: cars, clothes, furniture) are just laughable.

  • 34
    Posted Wednesday, 16 January 2013 at 11:24 pm | Permalink

    I should add that this has changed markedly in a relatively short period of time. When I relocated from Sydney to Zurich in 2007, I took a 20% pay rise to cover cost of living differences. When I came back from Phoenix to Brisbane 4-odd years later, I reckon Brisbane is damn near as expensive to live in as Zurich was (with a few marked examples of eye-wateringly expensive items in Switzerland, like beef).

  • 35
    Posted Wednesday, 16 January 2013 at 11:32 pm | Permalink

    It’s supposed to be to encourage you to get a job, if you could live on newstart while still eating out and hitting the clubs on a Saturday night then many people (not saying you) would say why work!
    I don’t think anyone is arguing someone on Newstart should be able to live a high life, but not having to count every penny, and being able to save some sort of nest egg for emergencies by living frugally is not an unreasonable goal to strive for - it certainly used to be possible in the past.

    The idea that some meaningful proportion of people will choose bare survival on a livable dole, over substantial quality of life improvements with a job, is both offensive and completely unsupported by evidence. The vast, vast majority of people want to live at least comfortably, and are happy to work a fair 40 hours a week to attain it. The real problems here are the diminished profit share of labor (ie: depression of wages) after a couple of decades of neoliberal economic policies and a massive real estate bubble sucking up disposable income such that even people in the top income quintile often “feel poor”.

  • 36
    Posted Thursday, 17 January 2013 at 3:40 am | Permalink

    @ Lyn Gain - I actually agree with your sentiments, but let’s face it, we would belong to about 5% of the population who would be willing to pay more tax.
    As for your other revenue raising suggestions - ANY government (only Labor would try) who introduced these measures would be run out of town and possibly, tarred and feathered! Then when the “Tories” are returned to their “rightful” place - running the country - they would very quickly set about reversing all such measures. In other words, big business runs this country, so no government is going to commit political suicide by upsetting them. If you don’t believe me, watch the excellent series on the mining industry “Dirty Business: How Mining made Australia”, currently screening on SBS1.
    These bast+ards have been getting rid of Labor governments and Prime Ministers in this country since federation. Do you remember a bloke called Kevin Rudd? The MSM likes to spin the yarn that Rudd was hopeless, useless etc., that the factions removed him, that Julia stabbed him in the back, that all his cabinet colleagues wouldn’t work with him,(and many of them helped the mining bosses out by saying just that) and on and on it goes. But why did all this happen? Because the mining industry chiefs wouldn’t wear his version of the mining tax. That’s why.
    And still the bogans vote for the coalition, who couldn’t give a damn about people on welfare, the working poor and the homeless. They will all be much worse off if the predicted coalition victory comes to pass later this year. Go figure!

  • 37
    Posted Thursday, 17 January 2013 at 3:58 am | Permalink


    This attack on dole seekers in Australia is in my view mean spirited and reflects much of what the country has become. We crack down more and more on the “scum” dole seekers at the same time as we do nothing about the rapidly increasing inequality within our society. We are also spending more on the military and on punishing asylum seekers. Clearly our priorities are not on the people in need but on the people in power.

  • 38
    Posted Thursday, 17 January 2013 at 9:43 am | Permalink

    Dr Smithy - Yes most people want to work (and given the sustatined period of low unemployment most do) but my argument is against those who say the dole is only “existing” and I can’t eat out, or pay $400 a week for my inner city apartment while I am on the dole which has been a feature of the commentary on this issue in both major papers - Guess what I work full time and I can’t afford to eat out or pay $400 a week in rent.

    And given the sustained period of low unemployment what proportion of people on newstart are on their long enough to need to save for a “nest egg”?

    ”. The real problems here are the diminished profit share of labor (ie: depression of wages)” Please provide evidence of the lack of real wages growth in the past 20 years!

  • 39
    Posted Thursday, 17 January 2013 at 11:29 am | Permalink

    Easy Jimmy - just take a look at the share of GDP that goes to workers today, as opposed to what it was 20 or more years ago. In the 1950-60’s, that share was 50%+, now it is in the low 40’s%.
    The rich just keep on getting richer! And as I pointed out above, the rich (big business) run this country, not the government of any persuasion. So don’t expect anything will change in the near future. At least not until we have a more discerning electorate. Up the revolution!!

  • 40
    Posted Thursday, 17 January 2013 at 11:53 am | Permalink

    CML - “The rich just keep on getting richer!” Yes but that doesn’t mean the average worker is going backwards.

    Given the rapid growth in mining magnates wealth over the past decade or so it is very possible that the average worker has seen wages growth of say 7% (well above inflation) but becuase the top end have seen their fortunes growth by 50% then the GDP percentage will fall.

    That is very different from Dr Smithy’s depression of wages claim and very different from what has happened in the US over the past 40 years where real wage growth has flat lined (at least partially due to Reagan smashing the Unions) while the top 5% have grown massively.

  • 41
    Posted Thursday, 17 January 2013 at 1:21 pm | Permalink

    There are major problems with the journalistic standard of this article. Apart from the failure to consider the impact of Australia’s extremely high cost of living, which has been noted by other commenters here, it’s clear that the author’s research was far from adequate. I’m not sure about the other countries listed, but I know that unemployment benefits for most unemployed people in Germany are much higher than what the author has described. This is because benefits there are based on the person’s previous wages and employment, similar to what the author says applies in the USA. Most people in Germany will receive a benefit equal to about half their previous salary (!) for a period of up to two years, depending on how long they were previously employed. The benefit the author describes for Germany is only applied once this initial benefit runs out, if the person is still unemployed at that time - and of course most people won’t be.

    Given the gross inaccuracy of the author’s information about Germany, I am not inclined to believe any of the rest of the information presented here either. As far as I’m concerned, this article is essentially useless.

  • 42
    Posted Thursday, 17 January 2013 at 1:35 pm | Permalink


    I think you are right in your analysis of the difference between how Australia’s inequality has widened as compared to the US (a basket case). That of course lessens the “burden” of inequality in this country but really we should be aiming to reverse this trend altogether through whatever means available if we are to remain a cohesive society into the future. We have to ask ourselves “by what right do mining magnates, CEO’s and others claim an ever increasing share of our total wealth?” Along with the increased share of the total slice comes an increased hold on power which in turn allows the elite to wrest ever greater shares of the total pie from the rest of us.

    Right at the bottom of the rung are the unemployed often, as noted by others, people ill equipped to find a job. By trying to “incentivise” them by providing only minimal support we are among other things helping to increase inequality and play into the hands of the powerful.

    I for one am quite willing to pay more taxes so as to help provide these people with something more than a mere existence. As for the bludgers; well some of them I admire like those feral tree huggers willing to live precariously on the smell of an oil rag in order to fight for what the believe in.

    I address this response to you not because I think you begrudge higher payments to dole seekers but because you raised the question of rising inequality here versus in the US.

  • 43
    Posted Thursday, 17 January 2013 at 2:36 pm | Permalink

    Ian - “by what right do mining magnates, CEO’s and others claim an ever increasing share of our total wealth?” Well I think you have to differentiate the categories there, mining magnates do get to claim there share because they risk their assets to gain their fortune and I can’t see how you can discourage that as they create wealth for more than just themselves.
    CEO’s are a different kettle of fish, how they can earn million dollar salaries and get more in golden handshakes even if they drive the company into the ground is beyond me.

    By trying to “incentivise” them by providing only minimal support we are among other things helping to increase inequality and play into the hands of the powerful.” But that isn’t all we are doing, public education is free (or pretty much free), you can go to Uni and only pay for it after you are earning a good income, I had a client in the other day who was going to pay less than 25% of a TAFE course (a $3k discount) because they were on a Health Care Card, my wife used to work for a “job Network” Centre where they would actually buy clothes for their clients (actually take the client shopping) to wear to a interview and at the very least subsidise extra training for them.

    SO it isn’t just the stick.

    And again compare the unemployed’s ability to get healthcare or higher education here to the US.

  • 44
    Posted Thursday, 17 January 2013 at 4:11 pm | Permalink

    So, the 6-7% of employees who work in the mining industry are better off? What about the other 93-4%? If you have a look at the ABS GDP split between workers and bosses, you will see that what I say is correct.
    And what about the huge gap in wages evident between men and women in the workforce? As far as I’m concerned, if you take into account the high cost of living in this country, wages for all should be a lot higher than they are, and those at the top could do with a whole lot less. As far as the mine owners “risking their capital” argument - can you name any of them who are on the breadline? All indications are that most of them are billionaires. No hard luck stories in that lot! If they were made to pay their fair share of tax, we wouldn’t have a problem with increasing the Newstart allowance, funding the NDIS and Gonski.
    For reasons I explained in an earlier post, that ain’t going to happen, no matter what the complexion of the government is. This whole situation reminds me of a book I read at Uni some 40 years ago called “Future Shock” - (I think the author was Alvin Toffler?). Well the “future” has arrived, just as he predicted! And it can only get worse, if the current pathway continues and the coalition is returned to government. Most people don’t understand that. They just keep listening to the spin merchants and vote against their own best interests. Give me a break!!

  • 45
    Posted Thursday, 17 January 2013 at 4:24 pm | Permalink

    CML - “As far as the mine owners “risking their capital” argument - can you name any of them who are on the breadline?” No you can’t name them because nobody ever hears of the bloke who went broke, but look at Nathan Tinkler now going through some pretty big financial issues, or Twiggy Forrest after the Anaconda Nickel debacle.

    So, the 6-7% of employees who work in the mining industry are better off? What about the other 93-4%? If you have a look at the ABS GDP split between workers and bosses, you will see that what I say is correct.” My point is you are looking at the wrong figure, there has been real wages growth in this country for a prolonged period, the minimum wages has been increasing at least in line with inflation and inflation has been contained for well over a decade.

    You say the cost of living in this country is high but can you give us some figures to back that up? The tabloids and the opposition love to discuss “the cost of living pressures” but when inflation is running at below 3% and interest rates are at an all time low where are the figures to support this claim?

  • 46
    Hamis Hill
    Posted Thursday, 17 January 2013 at 7:07 pm | Permalink

    Switzerland is reputed to have ordained full employment.
    Could those posters with direct experience confirm this?
    If so what sort of jobs exist in Switzerland that do not exist where unemployment levels are high.
    We might be able to use some of those jobs in Australia.
    But there is a trade off in high unemployment as it is supposed to create a pool of unemployed who compete with each other to gain employment by accepting lower wages.
    In Bengal under the “John” Company such competition to load and unload the company ships had workers accepting as their reward just enough money to avoid starvation overnight.
    The resulting lack of money in the country led to interest rates of 48% which is how these merchant adventurers managed to beggar one of the, then, richest nations in Asia.
    In Australia,it is being done with a $trillion mortgage debt, with its benighted denizens strangely unable to read and learn what the father of economics wrote on wage levels and interest rates, just before the founding of Australia.
    The relatively higher interest in OZ is linked to the lower wages starting with Hawke’s Accord, consensus wage freeze which averted a flight of capital which would normally happen with a “Communist” government takeover.
    The latter being the conservative reaction to any Labor government.
    Could we instead import some of that notorious “Protestant Work Ethic” from Swizerland and give everyone gainful employment?

  • 47
    Posted Thursday, 17 January 2013 at 7:16 pm | Permalink

    Jimmy - I don’t care what the odd “wage rises” have been over the past 20 years, or what sections of the economy have benefited from such rises. The fact remains that the GDP split, as measured by the ABS, is now at least 10% lower in real terms than it was 40 years ago. Someone is getting that “extra” money, and it ain’t the workers.
    And my heart bleeds for the likes of Twiggy Forrest et al, NOT!
    Cost of living - for example, just about every economist in this country worth their salt has been saying for years now, that a sizeable number of the WORKING citizenry will never own their own homes. This has always been seen as mandatory if you want to exist adequately when you retire. We have been fortunate in that regard, but some of our friends who don’t own their homes are really struggling. And rents are a killer for those on fixed or low incomes, at any time during their life. There are many other factors which impact on people in these categories. Wages are just too low for them to be secure, and there are just too many people who have more than they need. We could do with a bit of balance here.

  • 48
    Hamis Hill
    Posted Thursday, 17 January 2013 at 7:21 pm | Permalink

    Jimmy, you will have to concede that “Assett Price Inflation”,or the rise in the price wage earners need to put a roof over their head, and which is not included in the Consumer Price Index on which you base your inflation figures, distorts the accuracy of your arguments.
    You know, those empty boats returning to Indonesia might be more productive if they could be filled with those who wallow in their ignorance of matters economic like pigs in scheiss.
    Call it the East Timor solution.
    In anticipation of your reply.

  • 49
    Posted Thursday, 17 January 2013 at 7:23 pm | Permalink

    CML - there’s no reason why the split in the GDP should remain consistent over time. In fact, I’d expect labour’s share to decrease over time with efficiency gains.

    I’m sure this’ll all blow over in a month or so given I cant see the government having the guts to increase Newstart to the benefit of such an easily demonised group as jobseekers, especially when there’s such sensitivity on the government expenditure side.

  • 50
    Lyn Gain
    Posted Thursday, 17 January 2013 at 8:03 pm | Permalink

    @CML My heart doesn’t bleed for Twiggy either - and as for risking assets, don’t make me laugh. However, I suspect Jimmy may be on to something about the current cost of living. I’m sure I read somewhere last year that we’ve never had it so good in terms of income levels and costs but I’m too lazy to try to research it. My feeling is that all the media and Opposition hype about working people never having to do it so hard is just that - aimed at creating the perception in people’s minds that the Government is making them poor, e.g., the carbon tax rubbish.