Why Christopher Pyne and Julie Bishop fail the ‘pub test’ with their new jobs



Questions have been raised about the new private-sector roles of former ministers Christopher Pyne and Julie Bishop.
Lukas Coch/Mick Tsikas/AAP

Yee-Fui Ng, Monash University

Labor has criticised former ministers Christopher Pyne and Julie Bishop for taking up new roles related to their government portfolios, saying these actions breach ministerial standards.

Pyne, the former defence minister, was appointed as defence consultant to consulting firm EY a month after leaving parliament, while Bishop, the former foreign minister, was appointed to the board of the private overseas aid consultancy firm Palladium, less than a year after quitting the ministry.

Following the threat by Senator Rex Patrick to call a Senate inquiry into Pyne’s new job, Prime Minister Scott Morrison has sought advice from the head of his department on whether there has been a breach of ministerial standards.

What do the ministerial standards say?

Ministerial standards set out the standards of conduct expected of ministers. The principle underlying the standards is that ministers should uphold the public’s trust since they wield a great deal of power deriving from their public office.

Morrison’s statement of ministerial standards proclaims

All ministers and assistant ministers are expected to conduct themselves in line with standards established in this statement in order to maintain the trust of the Australian people.

In the cases of Pyne and Bishop, the standards further state that ministers must not “lobby, advocate or have business meetings with members of the government, parliament, public service or defence force” for 18 months after leaving parliament on matters they dealt with in their final 18 months as ministers.

It also prohibits ministers from taking personal advantage of information to which they have had access as a minister, where that information is not generally available to the public.

Pyne and Bishop have both claimed their new jobs are consistent with the ministerial standards.

Pyne argued that providing occasional high-level strategic advice in his new role at EY does not equate to lobbying or involve the use of information he had acquired in his portfolio.




Read more:
Cabinet ministers Pyne and Ciobo set to head out door


Bishop, meanwhile, has defended her new role by saying

I am obviously aware of the obligations of the ministerial guidelines and I am entirely confident that I am and will remain compliant with them.

Regardless of their statements of assurances, it can be argued that neither of these new positions pass the “pub test.”

Why should we have cooling-off periods for ministers?

The Grattan Institute has found that one in four former ministers go on to take lucrative roles with special interest groups after leaving politics.

Likewise, as my co-authored discussion paper for the NSW Independent Commission Against Corruption shows, more than one-third of lobbyists are former government representatives (that is, former politicians, senior public servants or ministerial advisers).

There is, thus, a well-established revolving door between government and lobbying due to the extensive and beneficial networks developed by public officials in the course of their duties.




Read more:
Will heads roll? Ministerial standards and Stuart Robert


The post-ministerial employment restrictions have been put into place to reduce the risk of corruption and undue influence by former public officials-turned-lobbyists hoping to sway their former colleagues and underlings and influence public policy for the benefit of their clients.

There are three main ethical and democratic issues underlying this phenomenon.

The first is the possession of confidential information by former officials.

Second, there is the issue of a minister-turned-lobbyist’s access to and influence over key decision-makers in government – connections that can be used to benefit cheque-writing interest groups.

And third, there is the risk that powerful industry groups may approach ministers while they are still in office with promises of lucrative positions after politics if their grants or applications are approved.

Despite these issues, the cooling-off periods for ex-ministers who go on to lobbying roles have been historically poorly enforced. As a result, former politicians are often able to take up roles in breach of these post-employment restrictions without any repercussions.

For example, former Australian trade minister Andrew Robb walked into a $880,000-a-year consultancy with Chinese company Landbridge five months after leaving parliament in 2016. The then-special minister of state ruled that this did not breach ministerial rules, claiming that someone with a broad portfolio like Robb should not be prohibited completely from work after they leave parliament.

How can we fix the system?

The post-employment separation requirements serve a legitimate purpose in reducing the risk of corruption and undue influence in our democracy.

The first step for the government to address the problem is to properly enforce the cooling-off periods. Having these requirements in ministerial standards does no good if prime ministers turn a blind eye to these kinds of appointments. We need to pass a law to give an independent commissioner the power to punish those who are in breach.




Read more:
The Barnaby Joyce affair highlights Australia’s weak regulation of ministerial staffers


For example, Canada has a law mandating a five-year post-separation period for ministers, MPs, ministerial advisers and senior public servants before taking up positions as third-party or in-house lobbyists. This law is strongly enforced by an independent commissioner of lobbying. Breaches are an offence punishable by a C$50,000 fine.

Second, the rules need to be tightened to avoid technical arguments about compliance. For example, laws are needed to explicitly ban former ministers, their advisers and senior public servants from carrying out lobbying activities for a certain period of time, whether as individuals, or on behalf of organisations or corporations, including consulting firms.

More broadly, there is also a need for greater transparency in the lobbying industry – specifically, what types of individuals and organisations are successfully gaining access to and influencing government.

Due to concerns over this, the NSW ICAC has launched a public inquiry into the regulation of political lobbying called “Operation Eclipse.” The outcome of this inquiry should provide many options for reform at both the federal and state levels.

The regulation of the revolving door between politicians and lobbying groups has been extraordinarily weak in Australia. The phenomenon of ministers taking up plum positions that create actual or perceived conflicts of interest has continued unabated for many years.

To restore public trust in government, it is time to tighten the rules and be serious about enforcement.The Conversation

Yee-Fui Ng, Senior Lecturer, Faculty of Law, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Morrison commits to 1.25 million new jobs over five years


Michelle Grattan, University of Canberra

A re-elected Coalition government would create 1.25 million jobs over
the next five years, Scott Morrison will promise as he campaigns on
the next stage of the government’s economic plan.

Beginning a tour of south east Queensland on Tuesday, Morrison will
claim the title of “a jobs government” and also foreshadow
announcements of “congestion-busting” infrastructure projects.

With Queensland containing many marginal seats, both leaders are
putting time in there before the return of parliament. Last week
Morrison was in the north of the state. His days in the south east
will include campaigning with the embattled Home Affairs Minister
Peter Dutton who is under heavy assault in his seat of Dickson.

In a major economic address in Brisbane on Tuesday, Morrison will
point out that at the coming election only half of those of voting age
will have been through a recession in their working lives.




Read more:
No surplus, no share market growth, no lift in wage growth. Economic survey points to bleaker times post-election


He will talk up the government’s economic record, and say that “a
strong economy is the foundation for everything else”, including
spending on health, education, the NDIS and drought relief.

A weaker economy – which he claims a Labor government would bring –
“will not produce a fairer Australia. It will not guarantee the
essential services that Australians rely on,” the Prime Minister says
in his speech, released ahead of delivery.

The proof of a strong economy is jobs, he says. “Under our government,
over 1.2 million new jobs have been created.

“Last month, over 20,000 jobs were created taking unemployment down to
5 per cent – the lowest level in over 7 years. This government is
delivering the same high employment economy that the Howard government
delivered,” he says.

“This is a jobs government that is a creating a jobs economy.”

Morrison stresses that “everyone is sharing the benefits”, pointing to
the lowest levels of working age people on welfare in 30 years, record
highs in female participation, and more than 100,000 young people
getting a job last financial year.

“And in what economists call “prime age population” – those aged 25
to 54 – the share employed is at an all-time high – above 80 per
cent.“

In the next stage of its economic plan the government commits to

…keep the budget strong;

…lower taxes;

…back small and family businesses;

…reliable and affordable energy;

…build the infrastructure Australia needs;

…drive all our industries forward, not just the new ones;

…safe and prosperous workplaces;

…work skills for all generations;

…keep big business accountable;

…even more access to overseas markets for exporters.

The plan will be backed by the April 2 budget and other announcements
in coming months, Morrison says.

He says that as he moves around South East Queensland this week he
will make fresh announcements of “congestion-busting investments”.

“Investments that will means families can get around the table at
night for their evening meal, parents can help their kids with their
homework, small business people can spend more time on the job than in
the traffic”.

Morrison says a Shorten government would hit house prices, hurt
business profitability and bring a return of the “old days of
industrial conflict”.

“You can be sure the budget will unravel, because the last time Mr
Shorten’s party delivered a surplus was in 1989!”, he says.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Research check: we still don’t have proof that cutting company taxes will boost jobs and wages



File 20180510 185500 guowse.jpg?ixlib=rb 1.1
There still isn’t clear research showing company tax cuts will increase employment or wages.
Shutterstock

Ross Guest, Griffith University

If you read these headlines you might think we finally have proof that cutting company taxes will boost employment and investment:

These stories are based on analysis of the 2015 company tax cut by consultants AlphaBeta. But the study, as well as some of the media coverage of it, show a worrying misunderstanding of how company tax cuts work.

Simply comparing companies that receive a tax cut with those that don’t isn’t the right methodology to conclude that the 2015 tax cuts created more employment or higher wages.




Read more:
There isn’t solid research or theory to support cutting corporate taxes to boost wages


Cutting taxes lets companies keep more of their profits, allowing them to invest in new equipment and premises for example. The company then needs to hire more workers to work with these new assets. The newly created jobs require businesses to compete for workers and this increased demand pushes up wages across the entire economy.

Suppose a retail company gets a tax cut and opens a new store. It advertises for workers, many of whom are already employed by a rival store that didn’t get the tax cut. The first company will need to offer the workers higher wages to entice them away. The rival store will need to consider matching the wages in order to keep the workers.

In other words, even workers in companies that don’t receive the tax cut should see a wage rise.

Going through the AlphaBeta report

In 2015, the federal government cut the tax rate from 30% to 28.5% for businesses with less than A$2 million in revenue. Eligible businesses saved around A$2,940 on average because of the tax cut.

AlphaBeta used transaction data from 70,000 businesses to compare businesses just below the A$2 million threshold to companies that were just above it.

The analysis looked at the differences between the two groups of firms in terms of whether they hired new workers, invested in their businesses, increased worker wages, or kept some of the cash as a reserve.

AlphaBeta chalked any differences between companies that received the tax cut and those that didn’t to the company tax cuts.




Read more:
The full story on company tax cuts and your hip pocket


As reported in The Australian, AlphaBeta found that companies that received the tax cut increased their employee headcount by 2.6%. The companies that didn’t receive the cut increased employment by just 2.1%.

This difference turned out to be “statistically significant”, meaning it is very unlikely to be the result of random chance.

As the Sydney Morning Herald pointed out, AlphaBeta also concluded that 51% of the tax cut was kept as cash, 27% went towards new investment, but only 3% was paid to workers in higher wages.

In other words, wages increased by just A$1.44 per week. This is not only a small amount, it was also found to be not statistically significant.

Problematic methodology

The main issue with this study’s methodology is actually noted by AlphaBeta in the report itself (and echoed in the coverage by the ABC and Sydney Morning Herald).

The problem is that we cannot draw any conclusions about the effect of company tax cuts on jobs or wages by studying a bunch of firms that received them and another bunch that did not, even if the firms are only slightly different.

This is because, as noted above, the effect of company tax cuts on jobs and wages take place in the entire labour market. An increase in demand for labour flows through to all business, and therefore, so do higher wages.

So we should not expect to see wages rising only in those businesses that receive the tax cuts. The finding that an increase in wages is small and insignificant is exactly what we would expect to see from this study.

Another problem is that we do not know whether the characteristics of the companies in AlphaBeta’s sample. Were some industries with particularly pronounced employment or wage increases over represented in one group but not the other, for instance?

Studying the effect of company tax cuts on employment and wages also requires a longer time period – sometimes years – and careful control of other factors affecting jobs and wages in some firms relative to others.

Blind review:

The analysis in this review is generally fair and reaches a sound conclusion regarding the AlphaBeta report. However, the logic behind company tax cut raising wages is somewhat simplified.

A cut in company tax lowers the costs of production and can flow to labour, capital (including equipment and buildings) and consumers. Economics tells us that who actually benefits from a tax cut depends on what is more responsive to the tax – labour, capital or output.

The lower production costs from a company tax cut can lead to greater output and lower prices as consumers buy more goods and services. This depends, of course, on how responsive consumers are to changes in price.

In the short-run labour is more mobile than capital, which is usually regarded as fixed. Therefore, in the short-run most of the benefit is borne by owners of capital (the companies) in the form of higher after-tax profits.

However, over the longer term, companies invest their after-tax profits in the business. So most of the benefit of the tax cut goes to workers though higher wages as the increased “capital stock” (such as equipment) makes labour more productive.

The ConversationIt follows that there is no reason to expect a significant increase in wages over a period of one or two years (as the AlphaBeta report covers). Indeed, such a result would be somewhat surprising. – Phil Lewis

Ross Guest, Professor of Economics and National Senior Teaching Fellow, Griffith University

This article was originally published on The Conversation. Read the original article.

Budget policy check: do we need ribbon-cutting infrastructure for jobs and growth?


Hugh Batrouney, Grattan Institute

In this series – Budget policy checks – we look at the government’s justifications for policies likely to be in this year’s budget and measure them up against the evidence.

In this piece we look at the need for infrastructure projects.


We look set for another infrastructure budget: big new projects that will, we’re told, boost growth, create jobs and tackle the pressures of our booming population. For example, the Turnbull government has already pledged up to A$5 billion for a rail link from Melbourne Airport to its CBD.

Infrastructure can play an important role, but behind the rhetoric some fundamental investment principles are missing.

Are investing in infrastructure and economic growth a sort of virtuous circle that feed each other?

Through a stronger economy, you can also invest in important infrastructure that again drives stronger growth in our economy … but also delivers the infrastructure that busts the congestion in cities, that makes rural and regional roads safer.

– Treasurer Scott Morrison

Yes, sometimes infrastructure spending and economic growth form a virtuous circle. In new suburbs and rapidly growing cities, infrastructure is needed to connect people to jobs and that in turn drives economic activity.

But we shouldn’t be fooled into thinking any spending is good spending. There are many examples where the opposite is more likely true: where poorly targeted infrastructure wastes resources and weakens economic growth.

If we want to identify the best projects, a good place to start is our biggest cities. Big cities have a productivity advantage because they match workers to jobs better and faster than smaller cities and towns. Transport infrastructure is key to this matchmaking.

But in many cases, the enormous costs of construction in big cities – acquiring land, disrupting traffic, and the physical challenge of constructing in densely developed places – often makes it hard to justify the incremental increases in accessibility that a project generates.

Instead, policies and projects targeting better use of existing infrastructure can have greater economic impacts. The trouble is, these projects usually don’t involve cutting a ribbon.

Changes to the way we set prices for the use of roads and public transport, for example, can help us get more out of the infrastructure we already have. Charging public transport users different amounts depending on the time of day they travel can reduce peak-period overcrowding on our trains. With much lower capital costs, policies like this often deliver a bigger bang for the buck than major new investments.

Are these road and rail projects the sort of infrastructure that supports growth?

Whether it’s the Tulla Rail or the M1 up in Queensland or indeed in my home city of Sydney around Western Sydney Rail from the airport and the road infrastructure that goes around that in particular, we are making important national investments in infrastructure that will support growth, bust congestion in our cities and make our transport – rural and regional roads – safer.

– Treasurer Scott Morrison

Infrastructure undeniably plays a role in supporting the economy. But not every project will add to the productivity of our economy.

On the face of it, the economics of airport rail in Melbourne look thin. Infrastructure Victoria has said upgrading airport bus services should be investigated first, because at A$50-100 million it’s a much cheaper way to tackle the same problem. It has also said that the rail line should be delivered within 15-30 years.

The perceived urgent need for airport rail in Melbourne may stem from the slow and unreliable travel to the airport over the past 18 months. This is a byproduct of the Tullamarine Freeway widening project, which is now almost complete. Responding to a short-term pressure with a multi-billion dollar investment – in the absence of a detailed business case – is a depressing example of poor policy-making.

And the Treasurer’s enthusiasm for the Western Sydney airport rail is also concerning, given that a recent state government study indicated the project wouldn’t be needed to cater for customers and workers at the airport until 2036, at the earliest. Infrastructure Australia has been clear that a rail corridor, running north-south through the airport site, needs to be preserved for a future rail line. But that is a long way from justifying billions of dollars of infrastructure that isn’t needed for nearly another 20 years.

Does Australia need infrastructure to create jobs?

Our national economic plan for jobs and growth has been getting results…A $75 billion national infrastructure investment plan that is building the runways, railways and roads Australia needs to remain competitive, and create jobs.

– Treasurer Scott Morrison

At certain points in the economic cycle, infrastructure spending can help create jobs. New projects create jobs for workers involved in planning, building and deploying each project, as well as for the suppliers of equipment and materials needed as inputs.

And in the longer term, the Treasurer is right to say that infrastructure is essential if our cities are to remain competitive.

But again, context is everything.

Infrastructure can put people to work when there is “slack” in the labour market – when there is unemployment or underemployment, in other words. But if there is little slack in the labour market, then the workers required to get a project off the ground will be drawn from other productive activities. In that case, there may be no boost to jobs or economic growth, because one activity is merely displacing another.

With national unemployment currently around 5.5%, there does appear to be some slack in the labour market right now. However, firms are now finding it more difficult to access the labour they want. And the slack doesn’t appear to be in the parts of the economy that would benefit most from new projects: as the RBA reports, the construction sector recently reached its highest share of total employment since the early 1900s.

What’s the verdict?

Eminent urban economist Ed Glaeser once said, “if you have a focus on jobs and macroeconomic effects, it leads to infrastructure in the wrong place”. Australia should focus on a project-by-project approach; that’s the only way we can be assured that investments represent the best possible use of available funds.

This means starting with some basics: the government should not commit to expensive new infrastructure projects until it has commissioned a detailed look at the economic impacts of the investments, and it has made public the results of that analysis.

The ConversationThat’s how infrastructure policy would be done in an ideal world. But sadly, in a pre-election budget, we can probably expect politics to triumph over policy, yet again.

Hugh Batrouney, Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

Why we are still convinced robots will take our jobs despite the evidence


Jeff Borland, University of Melbourne

The tale of new technologies causing the death of work is the prophecy that keeps on giving. Despite evidence to the contrary, we still view technological change today as being more rapid and dramatic in its consequences than ever before.

The mistaken view that robots will take our jobs may come from a human bias to believe that “we live in special times”. An absence of knowledge of history, the greater intensity of feeling about events which we experience first-hand, and perhaps a desire to attribute significance to the times in which we live, all contribute to this bias.

History repeating

In the 1930s, John Maynard Keynes envisaged that innovations such as electricity would produce a world where people spent most of their time on leisure activities. In the United States in the 1960s, Lyndon Johnson established a Presidential Commission to investigate fears that automation was permanently reducing the amount of work available.

Australia has not escaped the prophecy, with similar concerns about the future of work expressed in the 1970s.

In their history of Monash University, Graeme Davison and Kate Murphy report that:

In 1978, the historian Ian Turner, organised a symposium on the implications of the new technologies. The world, he predicted, was about to enter a period as significant as the Neolithic or Industrial revolutions. By 1988, at least a quarter of the Australian workforce would be made redundant by technological change…

Some years later, Barry Jones continued the gloomy forecasts in his best-seller Sleepers Wake!:

In the 1980s, new technologies can decimate the labour force in the goods producing sectors of the economy…

Of course, none of this came to pass in Australia; just as work did not disappear in the 1930s in the United Kingdom, or the 1960s in the United States.

Yet today, we are seeing the resurrection of the prophecy. Commentary on the Australian labour market abounds with claims that the world of work is undergoing radical and unprecedented change.

The increased application of computer-based technologies in the workplace is suggested to be causing a reduction in the total amount of work available; or to be bringing a more rapid pace of substitution of machines for humans than has been seen previously.

No evidence for the death of work

In recent research with Michael Coelli, we argue that the prophecy is no more likely to be realised in the 2010s in Australia than in the 1970s.

Certainly, there is no evidence that the death of work is at present underway. Since the mid-1960s the aggregate hours worked by the Australian population (on a per capita basis) has remained stable.

In particular, there has been no long-run decline in the aggregate amount of work that matches the timing of the progressive introduction of computers to the workplace since the early 1980s.


https://datawrapper.dwcdn.net/Oyytg/1/

Source: Borland, J. and M. Coelli (2017), ‘Are robots taking our jobs?’, Australian Economic Review, forthcoming, Figure 3


Moreover, the pace at which workers are churning between jobs in the Australian labour market is not getting quicker. Not only is there no evidence that more workers are being forced to work in short duration jobs, but what is apparent is that the opposite has happened. The proportion of workers in very long duration jobs has increased over the past three decades.


https://datawrapper.dwcdn.net/BnUxP/1/

Source: Borland, J. and M. Coelli (2017), ‘Are robots taking our jobs?’, Australian Economic Review, forthcoming, Figure 9


Why work is not disappearing

There are good reasons why we should not expect new technologies to cause the death of work. New technologies always cause job losses, but that is only part of the story. What also needs to be understood is how they increase the amount of work available.

One way this happens is through the increases in incomes that accompany the application of new technologies. With the introduction of these technologies, it may take less labour time to produce what used to be consumed, but higher real incomes, together with an apparently unlimited human desire to spend, bring extra demand (for existing products as well as for new types of goods and services), and hence for workers to provide those extra goods and services.

As well, new technologies are likely to substitute for some types of workers, but to be complementary to, and hence increase demand for, other types of workers. Computer-based technologies appear to be complementary to workers who perform non-routine cognitive jobs.

In a report on the digitally enabled workforce, Stefan Hajkowicz and co-authors suggest a range of examples for Australia – such as an increase in demand for photographers at the same time as demand for photographic developers and printers has decreased; an increase in demand for graphic designers versus a decrease in demand for printers and graphic press workers; and a decrease in demand for bank tellers simultaneously with an increase in demand for finance professionals.

The ConversationThe end of work is no closer in Australia today than at any time in the past. So, perhaps there is a need to keep disproving the prophecy, to change our mindset.

Jeff Borland, Professor of Economics, University of Melbourne

This article was originally published on The Conversation. Read the original article.

The costs of a casual job are now outweighing any pay benefits


Joshua Healy, University of Melbourne and Daniel Nicholson, University of Melbourne

Low wages growth has been a spectre hanging around the Australian economy for some time. In our series What We Earn we unpick the causes for this and why some workers might be feeling it more than others.


Workers aren’t being compensated as much as they should be for precarious work in casual positions.

One in four Australian employees today is a casual worker. Among younger workers (15-24 year olds) the numbers are higher still: more than half of them are casuals.

These jobs come without some of the benefits of permanent employment, such as paid annual holiday leave and sick leave. In exchange for giving up these entitlements, casual workers are supposed to receive a higher hourly rate of pay – known as a casual “loading”.

But the costs of casual work are now outweighing the benefits in wages.

Costs and benefits of casual work

Casual jobs offer flexibility, but also come with costs. For workers, apart from missing out on paid leave, there are other compromises: less predictable working hours and earnings, and the prospect of dismissal without notice. Uncertainty about their future employment can hinder casual workers in other ways, such as making family arrangements, getting a mortgage, and juggling education with work.

Not surprisingly, casual workers have lower expectations about keeping their current job. For example the Australian Bureau of Statistics (ABS) found 19% expect to leave their job within 12 months, compared to 7% of other workers. Casuals are also much less likely to get work-related training, which limits their opportunities for skills development.

The employers of casual workers also face higher costs. High staff turnover adds to recruitment costs. But perhaps the main cost is the “loading” that casual workers are supposed to be paid on top of their ordinary hourly wage.

Australia’s system of minimum wage awards specifies a casual loading of 25%. So, a casual worker paid under an award should get 25% more for each hour than another worker doing the same job on a permanent basis. In enterprise agreements, the casual loading varies by sector, but tends to be between 15 and 25%.

The practice of paying a casual loading developed for two reasons. One was to provide some compensation for workers missing out on paid leave. The other, quite different, motivation was to make casual employment more expensive and discourage excessive use of it. However this disincentive has not prevented the casual sector of the workforce from growing substantially.

Casual jobs aren’t much better paid

One approach in determining whether casual workers are paid more is simply to compare the hourly wages of casual and “non-casual” (permanent and fixed-term) employees in the same occupations. This can be done using data from the 2016 ABS Survey of Employee Earnings and Hours.

We compared median hourly wages for adult non-managerial employees, based on their ordinary earnings and hours of work (i.e. excluding overtime payments). If the median wage for casuals is higher than for non-casuals, there is a casual premium. If the median casual wage is lower, there is a penalty.

The 10 occupations below accounted for over half of all adult casual workers in 2016. In most of these occupations, there is a modest casual wage premium – in the order of 4-5%.

https://datawrapper.dwcdn.net/9OfmG/2/

The size of the typical casual wage premium is much smaller, in most cases, than the loadings written into awards and agreements. Only one occupation (school teachers) has a premium (22%) in line with what might be expected.

Three of the 10 largest casual occupations actually penalise this sort of work. And overall for these 10 occupations there is a casual wage penalty of 5%. This method of analysis suggests that few casual workers enjoy substantially higher wages as a trade-off for paid leave.

Taking a closer look involves controlling for a wider range of differences between casual and non-casual workers. One major Australian study in 2005 compared wages after taking account of many factors other than occupation, including age, education, job location, and employer size.

All else equal, it found that part-time, casual workers do receive an hourly wage premium over full-time, permanent workers. The premium is worth around 10%, on average, for men and between 4 and 7% for women.

These results imply that most casual workers (who are in part-time positions) can expect to receive higher hourly wages than comparable employees in full-time, permanent positions. However, the value of the benefit is again found to be less than would be expected, given the larger casual loadings mentioned in awards and agreements.

It seems that while there is some short-term financial benefit to being a casual worker, this advantage is worth less in practice than on paper.

A recent study, using 14 years of data from the Household, Income and Labour Dynamics in Australia Survey (HILDA), finds no evidence of any long-term pay benefit for casual workers.

The study’s authors estimate that, among men, there is an average casual wage penalty of 10% – the opposite of what we should see if casual loadings fully offset the foregone leave and insecurity of casual jobs. Among female casual workers, there is also a wage penalty, but this is smaller, at around 4%.

This study also finds that the size of the negative casual wage effect tends to reduce over time for individual workers, bringing them closer to equality with permanent workers. But very few casual workers out-earn permanent workers in the long-term.

Inferior jobs, but fewer alternatives

The evidence on hourly wage differences leads us to conclude that casual workers are not being adequately compensated for the lack of paid leave, or for other forms of insecurity they face. This makes casual jobs a less appealing option for workers.

This does not mean that all casual workers dislike their jobs – indeed, many are satisfied. But a clear-eyed look at what these jobs pay suggests their benefits are skewed in favour of employers.

Despite this, the choice for many workers – especially young jobseekers – is increasingly between a casual job or no job at all. Half of employed 15-24 year olds are in casual jobs.

The ConversationIn a labour market characterised by high underemployment and intensifying job competition, young people with little or no work experience are understandably willing to make some sacrifices to get a start in the workforce. The option of “holding out” for a permanent job looks increasingly risky as these opportunities dwindle.

Joshua Healy, Senior Research Fellow, Centre for Workplace Leadership, University of Melbourne and Daniel Nicholson, Research Assistant, Industrial Relations, University of Melbourne

This article was originally published on The Conversation. Read the original article.

Shifting the tax burden to middle-income earners will undermine jobs and growth


Patricia Apps, University of Sydney

The government’s idea of raising the Medicare levy, while also removing the 2% budget deficit levy on incomes above A$180,000, is less “transformational” and more signature Liberal policy. It shifts the tax burden towards middle income earners, as opposed to Labor’s plan to direct higher tax rates towards higher income earners. The Conversation

Rather than introducing a simple flat rate rise of 0.5% in the marginal tax rate across all taxpayers, the government has chosen to increase the Medicare levy. The reason lies in the fact that the levy contains the equivalent of a low-income tax offset due to the phasing out of the low-income exemption.

For example, in the current financial year, the thresholds for the phasing out of the Medicare levy exemption is A$21,665 for singles and A$36,541 (plus A$3,356 for each dependent child/student) for families. At these thresholds, tax rates rise by the rate of the withdrawal of the exemption, which works out to be 8% (calculated as 10% less the 2% Medicare levy rate).

In the case of a two-child family, this means an 8% rise in the marginal tax rate at an income from A$43,253, to an upper income limit of A$51,803. If a Medicare levy increase of 0.5% were introduced in the current tax year, the upper income limit for the higher marginal tax rate would rise to A$54,066.

In combining a rise in the Medicare levy with the removal of the budget deficit levy, the government is therefore proposing a rise in marginal tax rates across a wide band of middle incomes and a marginal tax rate cut for the top.

This direction of tax reform is a continuation of the incremental shift in the overall tax burden towards middle income earners over recent decades. And because the threshold for the Medicare levy exemption is based on family income, the reform will reinforce the move towards higher effective tax rates on low income second earners in a family.

This shift in the tax burden from top to middle income earners, and to middle income families, will undermine aggregate demand and, in turn, “jobs and growth” in the future.

In contrast to the government’s policy, Labor’s policy limits the rise in the Medicare levy to incomes above the top two bracket points and retains the budget deficit levy. Raising taxes on top incomes is not only a fairer policy, but a more efficient one in the conventional economic sense.

The impact of taxes on hours worked declines as earnings get higher, and has close to no effect on the hours worked by those with top incomes. And by avoiding higher taxes on second family earners, Labor’s policy should have a less negative effect on second earner hours of work and therefore the tax base.

The government’s and Labor’s tax reforms therefore represent very different policies.

Patricia Apps, Professor of Public Economics, Faculty of Law, University of Sydney

This article was originally published on The Conversation. Read the original article.

Three charts on: the incredible shrinking renewable energy job market


Paul Burke, Australian National University

This is the first piece in our new Three Charts series, in which we aim to highlight interesting trends in three simple charts. The Conversation

Australia is embarking on a transition from an electricity system that relies largely on coal to one that may one day be 100% renewable. Last week’s closure of the Hazelwood coal-fired generator was an important milestone on this path.

The development of the renewables sector has not, however, been a smooth ride.

Estimates released by the Australian Bureau of Statistics suggest that the number of direct full-time equivalent jobs in renewable energy activities has continued to fall from its 2011-12 peak. Over a period in which the Australian economy saw around 600,000 additional people get jobs, employment in the renewables sector has been going backwards.

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A small employer

The renewables sector is estimated to have directly provided only 11,150 full-time equivalent jobs in 2015-16. The Australian labour force exceeds 12.6 million people. The sector thus makes a small contribution to national employment, although one that is quite important in some local economies.

Around half of the jobs in renewables in 2015-16 were in installing (and maintaining) rooftop solar systems. Hydroelectricity generation provides 1,840 full-time equivalent jobs, a number that is likely to increase if pumped storage is to make a larger contribution to smoothing Australia’s electricity supply. Biomass provides 1,430 full-time jobs, and the wind industry around 620.

The fact that renewables is a small employer – especially once installations are up and running – is not a bad thing. If renewables were labour-intensive, they would be expensive.

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Up then down

The rise and then fall in renewables jobs is primarily a result of what has happened to installations of rooftop solar. The annual number of small-scale solar installations (PV and solar water heaters) skyrocketed over the four years to 2011. This rapid growth was spurred by generous feed-in-tariffs, rebates, and rules for federal government solar credits. There was also a national program to install solar panels on schools.

When these arrangements were curtailed, uptake fell. Annual installations of small-scale solar PV and water heaters are down by more than 60% from their peak. We are still installing a lot of new systems (more than 183,000 in 2016), but fewer than before. Employment estimates for small-scale solar closely track installation rates. The decline in employment in the wind energy sector is also worth noting.

The largest fall in renewables jobs has been in Queensland, a state that substantially tightened its feed-in-tariff scheme for rooftop solar in several steps from 2011 on. Queensland also holds the title of having Australia’s highest residential rooftop solar PV penetration rate (32%). South Australia is not far behind, at 31%.

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Ramping up large-scale renewables

Recent years of policy uncertainty and backtracking have not helped the rollout of large-scale renewables. The termination of Australia’s carbon price and downwards renegotiation of the Renewable Energy Target had chilling effects on investment.

Those events are now behind us. With continued reductions in the cost of renewables, brighter days for the sector appear to be ahead, especially if our governments get policy settings right.

We can expect particularly rapid growth in jobs installing large-scale solar PV. Just last week, for example, it was announced that South Australia is to have a large new solar farm.

Paul Burke, Fellow, Crawford School, Australian National University

This article was originally published on The Conversation. Read the original article.

Article: Are Some Professions Off Limits to Christians?


The following article seeks to discuss the question of professions for Christians and whether any are off limits to Christians – what do you think? Are there some jobs that Christians simply shouldn’t do?

http://www.christianpost.com/news/are-some-professions-off-limits-for-christians-72017/

Thousands of trafficked girls found in Mali slave camps


Nigerian girls are being forced to work as prostitutes in Mali "slave camps," Nigerian officials say, reports CISA.

The girls, many of them underage, are often promised jobs in Europe but end up in brothels, said the government’s anti-trafficking agency. According to BBC correspondent, the brothels are run by older Nigerian women who prevent them from leaving and take all their earnings.

Nigeria’s National Agency for the Prohibition of Traffic in Persons (Naptip) said officials visited Mali in September to follow up "horrendous reports" from victims, aid workers and clergy in Mali.The agency said it was working with Malian police to free the girls and help them return to Nigeria.

They said there were hundreds of brothels, each housing up to 200 girls, run by Nigerian "madams" who force them to work against their will and take their earnings.

"We are talking of thousands and thousands of girls," Simon Egede, Executive Secretary of Naptip, told a news conference in Abuja, adding that they were between 20,000 to 40,000.

He, however, did not give details as to how the figure had been reached.

In a statement, Egede said girls were "held in bondage for the purposes of forced sexual exploitation and servitude or slavery-like practices."

"The madams control their freedom of movement, where they work, when they work and what they receive," he said.

The trade is centred on the capital Bamako and large cities, but the most notorious brothels are in the mining towns of Kayes and Mopti, where the sex workers live in "near slavery conditions," said Naptip.

Many of the brothels there also had abortion clinics where foetuses were removed by traditional healers for use in rituals, said Egede.

Most of the girls were reported to have come from Delta and Edo States in Nigeria.

Many were lured with the promise of work in Europe, given fake travel documents and made to swear an oath that they would not tell anyone where they were going.

On arrival in Mali, they were told they would have to work as prostitutes to pay off their debts. Prostitution is legal in Mali but not if it involves minors.

Naptip said it had also uncovered two major trafficking routes used to transport the women from Nigeria through Benin, Niger and Bukina Faso to Mali.

Egede said Naptip was working with the police in Mali to return the girls to Nigeria safely, shut down the trade and prosecute the traffickers.

Report from the Christian Telegraph