The IPA has produced a short and lucid summary of the false assumptions that underpin the ALP policy and the damage that it will do to employment. h/t Wes Goh.
Still, there are legitimate concerns about stagnating real wages. Real wages in the private sector have grown by just 1 per cent during the past five years.
This is partly because of myriad entitlements and conditions included in employment contracts that raise the cost of employment for businesses and lower nominal wages.
But the single biggest hit to take-home pay is income tax. Any attempt to improve wages must include lowering taxes, which in practice means reducing government spending.
Governments cannot legislate Australia’s way to prosperity, or to higher wages. Higher minimum wages simply boost the wages of some at the expense of others who will lose their jobs or be set fewer hours. The best way to increase the take-home pay of Australians is to cut income taxes and reduce the onerous regulations on business that undermine economic opportunity and wage growth.
On the topic of taxation and employment, is there a more stupid and destructive tax than payroll tax?