Free Education Can Rebuild Australia’s Public Universities

If the federal government lifts annual higher education spending to 1% of GDP, it could repair the destruction inflicted by the COVID pandemic and make universities more accessible and affordable for all Australians, according to new research from the Centre for Future Work at the Australia Institute.

The report analyses the current worrying state of Australia’s higher education sector based on current funding and policy trends, and provides an ambitious national vision for higher education that re-aligns the sector with its public service mission.

At the Crossroads, authored by Eliza Littleton, identifies seven key policy initiatives including free higher education for domestic students, that if implemented, would put Australia’s public universities on a path toward full revitalisation.

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We (still) need to talk about insecure work

Business groups and conservative media are happy to discuss insecure work as if it is nothing new - stable and part of a healthy economy that provides workers with independence. But this is not the case, with insecure forms of work - casual, gigs, temporary work and short-term contracts - taking up a growing share of jobs in Australia.

Taking this perspective to task in a piece for The New Daily, Jim Stanford and Mark Dean discuss how a much broader range of forms of insecure work face many workers in Australia today, with the issue not getting any better. This is not even a trend created by unavoidable conditions created by the pandemic; it has rather been a deliberate outcome of the federal government's labour market policies. Simply pretending it isn't an issue won't make it go away; nor will it provide us with sustainable solutions to the precarious situation that will keep facing more and more workers until the problem of insecure work is adequately addressed

This piece originally appeared in The New Daily here.


The election campaign needs to be more than a quiz show

The election campaign thus far has been dominated with gotcha questions that unfortunately have missed the vital need to examine the different policies on offer at a time when Australia's economy is in a state of extreme flux. 

Labour market and fiscal policy director, Greg Jericho writes in his Guardian Australia column that the recovery from the depths of the pandemic has overwhelmingly been on the backs of casual workers. It also has seen a large increase in the gap between people on JobSeeker and the number of unemployed. The rise of low paying, insecure work that has helped bolster the employment figures has also meant people who are working but still earning less than enough to keep out of poverty is remaining high.

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High-Quality Public ECEC Would Lift GDP, Government Revenues

Australia’s economy would get a powerful boost from stronger public early child education and care services, according to new research from the Centre for Future Work at the Australia Institute.

Accessible and affordable child care services would support improved labour force participation and more full time work by women – converging with trends in other industrial countries (especially the Nordic countries, where women’s labour supply is much stronger than in Australia).

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House prices means interest rates do not need to rise much to inflict great costs

The more than a decade long period of the Reserve Bank going without raising interest rates looks set to end. Rising inflation and the unwinding of the pandemic restrictions and border closures means that the emergency cash rate of 0.1% will soon go up. But at the moment the market expects before the end of next year that it will rise to above 3%.

But while that may have been a neutral rate in the past, the Centre's Fiscal and Labour Market Policy Director Greg Jericho, notes in his column in Guardian Australia, recent surges in house prices means such a rise would place an extreme burdon on mortgage payers - one not conducive to an economy still in recovery. 

It took nearly 6 years during the mining boom for the RBA to raise the cash rate by 300 basis points; currently the market anticipates the same rise occurring in 17 months.

That would massively limit economic growth for little purpose at a time when wage rises remains below inflation, and rather unlikely to occur given the Reserve Bank's recent hesitancy to slow the economy until real wage again start rising.

 

 

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A slap-dash budget revealing a government with no idea why it is in power

This year's budget was transparently targeted towards the May election.  

But as Fiscal and Labour Market Policy Director, Greg Jericho notes in his Guardian Australia column, the slap-dash and short-term nature of the measures reveals this government has lost any real reason for governing.

From the extra bonus of the low-middle income tax offset with no taper, which is now being used by businesses to argue against raising the minimum wage and the relative lack of concern about those in poverty while trying to exist on JobSeeker, this budget has all the hallmarks of an effort made up at the last minute and where poll numbers were more important than any economic figures

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Budget 2022-23 Wastes Fiscal Windfall on Election Gimmicks

The Commonwealth Government has tabled its budget for the 2022-23 financial year. As the nation emerges from two years of lockdowns and border closures, with less than two months until a federal election, this budget is focused on getting the government re-elected -- rather than addressing the challenges of public health, stagnant wages, and sustainability facing Australia.

This failure is all the more regrettable given the enormous discretionary fiscal resources which the government has at its disposal: the budget projects $133 billion in extra tax revenues over the next five years, compared to its MYEFO projections just three months ago, thanks to strong economic growth and rising nominal GDP. But instead of ploughing those revenues into reforming human services (like health, aged care, early child education, or disability services), undertaking a genuine policy to revitalise domestic manufacturing, or accelerating the energy transition, the government has prioritised one-time cash handouts to entice voters in the upcoming election.

In this comprehensive budget overview, the Centre for Future Work's team of economists unpacks the budget, considers its effects, and suggests alternatives.

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A short-term budget with no vision or coherency

The 2022-23 budget is one of the most shameless election year budgets in memory. 

With the opportunity to use windfall gains in revenue to begin the fix of structural issues in the economy dealing with the low paid and essential services, the government instead has thrown money at voters in the hopes of re-election.

The Centre's Fiscal Director, Greg Jericho, goes through the budget numbers and finds that despite predictions of once again strong wage growth, the underlying assumptions are overly optimistic and would even still leave workers worse off than they were in the middle of 2019 until 2025.

The budget forecasts are for strong growth now, while the money is being pumped out, but once that ends we find yourself back with the same middling growth we had prior to the pandemic. 

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In next week's budget watch out for the tax cut that won't cut your tax

Next Tuesday, Treasurer Josh Frydenberg will deliver the 2022-23 budget. As it is only 2 months from the next federal election, the budget will be even more politically charged than usual.

And while there will be the usual attempts to suggest better wages growth is just around the corner and those on low-to-middle income earners are benefitting the most, we should watch out for the almost guaranteed spin around tax cuts. 

The Centre's Fiscal Policy director, Greg Jericho, notes in his Guardian Australia column that the low-to-middle income tax offset (LMITO) was meant to be discarded when the Stage 2 tax cuts were introduced. However because doing so would have delivered no net benefit to people earning below $90,000 the government extended the offset in the 2020 budget. 

It extended the offset again last year claiming it was providing tax relief to "10 million low-and-middle income earners" despite it actually doing nothing other than keeping the tax rate of those workers at the same level.

We can expect the same to occur next week. 

Budget spin is always a sight to behold, but we are now at the point where income earners are being told they are getting a tax cut that does not actually see them pay any less tax.

Meanwhile the Stage 3 tax cut that will deliver a cut of up to 4.5% for those earning $200,000 remains in place.

Spin and imaginary tax cuts for some; truly excessive tax cuts for others. 


Australia’s Skills System Continues to Crumble After COVID

A new report by Centre for Future Work offers a comprehensive review of vocational education and training (VET) in Australia, confirming Australia’s VET system shows growing signs of erosion, fragmentation and dysfunction. Several high-profile government announcements during the pandemic designed to address skilled labour shortages have not altered the VET system’s worrying trajectory.

Fragmentation & Photo-Ops: The Failures of Australian Skills Policy Through COVID by Senior Economist Alison Pennington reviews official data on VET funding, enrolments, and apprenticeships. The statistics paint a grim picture of a VET system starved of consistent funding or focus, fragmenting into scattered offerings of non-accredited and ‘micro-credential’ courses, mostly provided by private for-profit training companies.

“Continued decline in enrolments and eight years of declining apprenticeship completions make it very clear: Australia’s domestic skills pipeline is in disarray,” said Alison Pennington, Senior Economist at Centre for Future Work and the report's author.

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