Audit Commission attacks idea of minimum wage

Date
    May 1, 2014


The Commission of Audit has recommended a drastic cut to the minimum wage, and a radical overhaul of the national system.      

The minimum wage is now $622.20 a week, which is 56 per cent of average weekly earnings.

But the commission wants to cut the minimum wage to about $488.90 a week, which is 44 per cent of average weekly earnings.      

It wants to phase the change in over 10 years.


The commission says the new lower minimum wage should then be used as a “minimum wage benchmark” and states and territories should be able to set their own minimum wages – using the benchmark as a guide – to compete against each other for labour and business.

The proposal attacks the very idea of a national minimum wage.      

“Having a single national minimum wage disadvantages workers attempting to gain a job in states like Tasmania and South Australia where wages and the costs of living are generally lower than in other states,” the report says.

“The commission recommends that a different minimum wage apply in each jurisdiction.”

Since there are big differences in economic conditions in each state, the wage rates in each state ought to be able to match conditions, the report argues.

“There are wide differences in wage rates between states. While the minimum wage is around 45 per cent of the Australian Capital Territory average weekly earnings, it is around 65 per cent of average weekly earnings in Tasmania,” it says.

It proposes that the minimum wage in each jurisdiction be equal to the minimum wage benchmark by 2023.

After that, the wage in each state could then increase in line with growth in that jurisdiction’s average weekly earnings.

But one question ought to be asked.

Why has the Commission of Audit touched the minimum wage at all, when it has little to do with government spending?

Well, the commission has allowed itself to do so by nesting it with government payments and assistance for the unemployed, such as Newstart and the Youth Allowance.

It argues that, if minimum wages are lowered, then more people will find work, particularly younger people, and that will mean the cost of government unemployment assistance will fall, therefore reducing government expenditure.

But it has not produced a figure showing how much the government can expect to save from the changes.

The commission has also recommended that, rather than have the Fair Work Commission set the minimum wage, the setting of the minimum wage ought to become an “administrative process”, possibly set by the Department of Employment.

And the commission has also recommended big changes to income support payments.

It argues that, if the level of income support is too close to the minimum wage, then people will lack the incentive to look for work.

It therefore recommends increasing the income test withdrawal rate to 75 per cent for Newstart recipients and other related allowances.

It has also recommended that single people aged 22 to 30 without dependents or special exemptions should have to relocate to higher employment areas if they don’t want to lose access to benefits after a period of 12 months on benefit.

Read more: http://www.smh.com.au/federal-politics/political-opinion/audit-commission-attacks-idea-of-minimum-wage-20140501-zr2lc.html#ixzz30RhrXmBz

So much for this ultra conservative commissions credibility - all gone with one statement.

Talk about pontificating from an ivory tower.

Or more to the point, making a patron pleasing report. This Audit commission always was intent on adding some sort of credibility to the ultra conservative bumbling agenda of the Mad Monk. The Audit commission was never intent on being an objective investigation or reporting.

Even the most rusted on Liberal Party supporter must be concerned about this blatant misuse of government.

The knighthoods put Australia back 30 years. This will put the egalitarian flat Australian society back 200 years.

The Mad Monk maybe an ultra conservative idiot, but he would be one of the most dangerous idiots to have trod upon Australian soil.

Ex Dame Pansi wrote on May 1^st, 2014 at 5:45pm:


Another question ought to be asked.

How do you propose these individuals pay for relocation if they are earning minimum wage or on unemployment benefits (most likely living from pay to pay)?


Quote:


What a way to kill the small country town...remove the 22 to 30 yr old population with the majority never to return. On the other hand, what a great way to centralise populations -  sure makes it easier and cheaper to keep tabs, centralise services and reduce rural expenditure.

Yay for big city life.

Grendel wrote on May 1^st, 2014 at 6:26pm:

No.

There maybe an argument to change some conditions or make some allowances but this policy is 'throwing out the baby with the bathwater' - it will create more problems than it solves.

This is just classic narrow minded ideologically driven lazy Mad Monk bumbling 'make it up on the run' policy.

I', surprised Abbott didn't do what Newman did and get Costello to do the audit


the govt. pays some monkey to write a report outlining all their ideals , so they can then announce policy and blame it on the audit. 

OldnCrusty wrote on May 1^st, 2014 at 7:01pm:

Sigh...
What was my question again crusty?
Did I ever say I agreed with or disagreed with anything?
want me to ask it again so you can have a think this time before replying?

OldnCrusty wrote on May 1^st, 2014 at 7:01pm:


I'd say all the idea of wages/cost of living at state level means that some areas need to reduce their living costs - not necessarily that others need to raise theirs to be 'equal'.