Ian Henschke: Older Australians and retirees can help solve record job vacancies
Article by Ian Henschke courtesy of the West Australian.
Australia is facing a workforce crisis it has never seen before.
Job vacancies are approaching half a million, dragging business and economic growth down and fuelling a cost-of-living crisis.
The hardest hit sectors include agriculture, hospitality, mining, tourism, and the caring industries.
The Federal Government has raised the yearly permanent migration quota by 35,000, but workforce shortages are not going to be solved by immigration alone.
We need to boost participation and support people with limited income and savings to earn more.
We also need to boost tax revenue to pay for health, aged care, and other social services.
To fix these economic and socioeconomic challenges we must let people work.
The Employment White Paper presents the perfect opportunity for the Government to boldly address workforce shortages and create a system where people are encouraged to work.
In the words of the white paper, it will provide a “roadmap to build a bigger, better-trained and more productive workforce — to boost incomes and standard of living”.
Rightly, its terms of reference single out the care economy as one in critical danger of failure.
Difficulties attracting and retaining staff in aged, disability, health and childcare have grown significantly since the first COVID-19 outbreak.
These are unlikely to ease any time soon. In fact, the most recent figures show a shortfall of workers approaching 75,000.
Older Australians on the cusp of relying on aged care services will be nervous about their prospects of getting the help they desperately need.
Equally, sectors such as agriculture continue to face difficulties recruiting workers to pick fruit and harvest crops.
These labour shortages put pressures on food prices, affect supply, and export earnings. National Seniors Australia’s submission to the white paper recommends policies to support workforce participation throughout a person’s life to boost income and savings in later life.
One of the key barriers to workforce participation is our punitive tax and transfer system. Centrelink payment recipients are unfairly punished if they work, creating the biggest sources of inequality in Australia.
We propose the Government adopts a simple, elegant policy to help all Australians on low incomes get out of poverty and boost their savings by increasing their workforce participation.
We can do this by allowing aged pensioners, students, veterans, those on JobSeeker, carers, and disability pensions the right to work and simply pay tax.
Australia has universal health insurance; it now needs a universal right to work for those in need.
This would provide a greater sense of purpose while helping to increase financial independence.
As our political leaders often say, those in need “need a hand up, not a hand-out”. If the Government is worried about cost, it could apply the policy for workers in the care and agriculture sectors, where the mature-aged are more likely to work and where shortages are critical.
Boosting workforce participation among the mature-aged alone will reap enormous economic benefits.
As a Deloitte report The Grey Army Advances, written by respected economist Chris Richardson found, if we increase the over-55 participation rate by 5 per cent it would add $48 billion to Australia’s gross domestic product.
Given we have a tax to GDP ratio of about 23 per cent this represents an additional $11 billion a year revenue for the Commonwealth.
If our participation rate (66.5 per cent) was like New Zealand’s (71.7 per cent), the rate of pension poverty would halve, tax receipts would be boosted by tens of billions annually and most of the 500,000 job vacancies would be filled
As Minister for Social Services Amanda Rishworth said when announcing changes to the Work Bonus: “it is a win for pensioners, for businesses, and for the Government. It demonstrates a clear ability to listen“.
Our policies will help business prosper, help Government balance its books and help those in need fight poverty.
We hope the Government continues to listen and brings in policy changes needed to reward people for working.
Ian Henschke is chief advocate at National Seniors Australia.