THE FEDERAL Government’s attitude to keep women with small children in the workforce has been labelled as ‘ambivalent’, according to Saul Eslake, chief economist at ANZ Bank.
THE FEDERAL Government’s ‘preference’ for keeping women with small children in the workforce should be regarded as “ambivalent”, according to a senior economist.
Saul Eslake, chief economist at ANZ Bank, has said there is a half-hearted attempt in the recent Budget statement to reduce the disincentives facing women who are thinking about moving back into the workforce after a period of caring for children. The response has occurred due to the fact they currently must pay tax while also losing family tax benefits.
However, Eslake has claimed the Government is ambivalent about whether it wants these women to return to the workforce. “It knows that there are some shortages of skills and that some women would like to go back to work,” Eslake said. “On the other hand – and this is the whole point behind the family tax benefit system – it would really prefer, for social reasons, that women with children stay at home, and that men who are rich enough to allow their wives to make that choice are not dissuaded to do so by anything that’s in the tax system.”
According to Eslake, the Federal Government could and should have done better in terms of preparing for the future.
“We are in a position where the labour market is tight and likely to remain so, but the Budget doesn’t do anything to address that,” he said.
As a result, he believes there has been a stick approach as part of the measures to encourage those on benefits; namely, for those on disability pensions and supporting parents benefits to return to the work force. Meanwhile, women with children in married couple families were said to be on the carrot end in terms of incentives.
In order to lift Australia’s long term growth potential, Eslake suggested, the Government could have undertaken investments in areas such as education and skills training, research and development and taken further steps to encourage people to become part of the work force who currently do not partake in it.
“The Budget does represent a very significant missed opportunity,”he said.
Despite this, the unemployment rate is at about 5 per cent, the lowest it has been since 1976, Eslake noted. However, having the skills is seen as essential to reaping the benefits, as those who lack the skills are regarded as virtually unemployable.
“We are in a market where skills are in demand, where employers are willing to pay premia, either to retain the skills they have or pinch them off other employers,” Eslake said.
