Richard Denniss – chief economist at The Australia Institute – has a column at the AFR. This time he has some comments I agree with – getting soft in the old age.
There are 750,000 unemployed people in Australia, up from 690,000 when Tony Abbott was elected in 2013. The unemployment benefit of $267 per week is less than a federal politician gets for spending one night in Canberra. But despite the fact that unemployment benefits account for less than 2 per cent of government spending each year, “dole bludgers” are singled out for a rhetorical and policy thumping. This year it’s drug testing.
No economist really believes that Australia’s rising unemployment is caused by excessively generous benefits.
He goes on to crap on about the bank levy – but let’s just stop there.
The unemployment rate in Australia is a disgrace. The fact that the unemployment benefit is low compared to the staying away from home allowance for federal politicians is also a disgrace. Politicians should not be paid at all to live away from home. But that is another gripe for another day.
Richard Denniss is quite correct to suggest that rising unemployment is not caused by generous benefits. Rather it is caused by poor economic performance by the private sector. That poor performance in turn is caused by increasing levels of poor policy. Various taxes and levies, increasing regulation, red tape, green tape, and high levels of regime uncertainty (usually referred to as sovereign risk).
Now I’m sure Richard and I disagree on the cause of rising unemployment. But we do agree on what is not causing it.