Monday, November 10, 2014


Cuts to jobless benefits will boost economic growth, Australia tells G20: The Australian government has cited controversial cuts to unemployment benefits as one of the key structural reforms that will increase economic activity by 2 per cent, according to a draft of its growth strategy to be submitted to the G20 leaders' summit.

The reference to the jobless reforms – which include a measure preventing unemployed people under 30 from accessing welfare payments for up to six months – comes even though the changes have been blocked in the Senate.

The objective of boosting economic growth by 2 per cent "above what is currently expected" during the next five years is the main goal of the G20 meeting, to be held in Brisbane at the weekend.
Andrew Leigh is quoted further down in the article:
However, Labor assistant treasury spokesman Andrew Leigh said cuts to
welfare payments such as   the unemployment benefit, family tax
benefits and the pension would act to suppress economic growth.

"If you produce a budget that reduces the income of the poor,
it has an impact on consumer demand because they spend everything
they've got," he said.

"That will detract from economic growth."
When even Judith Sloan was suggesting a few years ago that there was a good case for increasing unemployment benefits (even though I think she doesn't like to repeat this moment of Lefty madness), I think I know which side of the argument has more credibility.   

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