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The Forum > Article Comments > Budget give and take for welfare's poorest > Comments

Budget give and take for welfare's poorest : Comments

By Cassandra Goldie, published 27/5/2011

For the Australian Council of Social Services the 2011 budget had to be tough on waste, not welfare, especially if it wants to get the budget back to surplus.

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Simplification of the rules is usually a good thing, but I question whether subsidies are going to help reduce poverty in the long term. Seems to me that when there is some money coming from the government or municipality, there will be less need for the unemployed to seek work and certain "experts" will be able to manage even without trying. The solution to the elimination of poverty is to change the quality of job opportunities and not to make it easier to stay poor and unemployed.

The key to this is demand for consumer goods. With present low demand it is no surprize that jobs are scarce. Prices are too high for demand to rise and the three factors of production namely: land labour and durable capital investments should require smaller returns so as to reduce costs. The first one, the cost of access to land is the worst because of the ability for land speculators to drive up ground rents and stop availability to sites in which they are speculating. The other two, wages and interest on investment are less amenable to change, nor is this desirable for either of them. What have the land owners done to deserve a rise in the value of his site, except sit on it and wait for the (tax generated) improvments to be made to the surroundings?

What is needed is to tax land values, not incomes, and drive down the costs of occupying and using over-priced land.

Posted by Macrocompassion, Tuesday, 31 May 2011 1:03:21 AM
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