Corin,
What absolute rot. The best tax policy is one that puts more "real" money into the ordinary families budget. Is one that taxes mining companies more for exploiting "our" assetts. Is one that repeals the high level of poverty/homelessness in this "wealthy" nation, that is the best tax policy, one where everyone gets a "fair" share. In other words the exact opposite of the current one.

Shonga,

Neville Wran was reputed to have advised Bob Hawke circa 1983, if the greedy bastards wanted spiritualism they'd join the Hari Chrishna - and I think that premise is always worth keeping in mind.

That said, work incentives are better in my view than money in the pocket - though clearly they are similar concepts.

Australia has by world standards as well minimum wage levels that are the highest in the OECD at least measured as regard to domestic median incomes (I believe).

There is little doubt that effective marginal tax rates pushing 60% when welfare is phased out and high minimum wages are keeping the workforce participation rate down. And all Australians are worse off because of this - whether due to higher welfare costs or even just slower economic growth rates, but both in truth.

So - what to do? Well - we could keep minimum wage levels at or below CPI increases but return money into award workers pockets via tax relief (credits).

It has the spin-off of improving employment rates and work incentives at the same time.

Whether it is politically sellable is a bigger question - I think it could be - but would take a very gifted reformer - the best. A proper leader - certainly better than any of the parties have.

Thanks for the response,

Corin

Corin, I know much of the work (and most of the economists) you refer to, and I think you pull it together into a good case. I suspect that many senior advisers such as Don Henry grasp this, whether their "masters" can shift perspective sufficiently is the issue. I can't see it from Beazley, Howard may be too locked in to anti-unionism to accept a greater role for (freely employee-chosen) collective arrangements but he and Costello should recognise the merit in most of what you propose. Howard's "legacy" would be greatly boosted if he shifted the incentives structure for work and education/training so as to bring un/under-employed into employment.

Corin

I believe you presented a convincing argument, particularly in relation to education incentives. I find my biggest gripe with the current government is the barrier they created for mature aged students in studying everything but nursing and teaching. My intention was to do what Amanda Vanstone did and study law part time over 10 years.

What I would add to your argument is to not only provide educational incentives (beyond teaching and nursing) but to add a further incentive in the way of housing concessions to those welfare recipients undertaking tertiary studies. Accommodation costs around university campuses are astronomical.

Possibly, having been granted these incentives, upon completion of studies, the graduates could be available for government service of some sort, such as the doctors who were expected to complete country service for three years upon graduation a number of years ago.

Faustino - cheers for the comments.

Liz - I agree, I suggest you review the work of Fred Argy, he will point you in the direction of well tailored investment schemes for people who need a "chance in life" to excel.

It can be a very lonely road making arguments that are unpopular, such as very high minimum wage levels potentialy hurting the poor (through negative employment effects on the most vulnerable), but being honest is the most vital ingredient, and good societies prosper from proper analysis. At present the current IR debate is a farce on all sides: we should expect more. I would ignore what Howard and Beazley say and read economic opinion. Read the reports I attach in this piece.

Cheers,
Corin

Corin
Sadly Australian dollars will buy a kings ransom in South East Asia, however ordinary families live and budget in this country, with wages and conditions being slashed at the moment, ordinary families who are already struggling to survive, will go under if their wages drop further. Small business will go under with them, as if families have no money to spare small business is the first to feel the pinch.

This is a negative domino effect, one cannot say wages are too high without condemming today's anouncement of another C.E.O. getting a 66% wage increase while the majority of his fellow Australians are chugging along in reverse. Home ownership is becoming more distant for first home buyers, as a result they are slipping into the high rent market, trying to feed clothe and educate 2/3 children on $350.00 net per week, ends are not meeting, as shown by Australians foriegn debt, the only sensible answer is to put more $ in the ordinary families budget, so they can circulate it through our economy.