Economic development should contribute to social inclusion. In particular, the Economic Development Plan should support the Tasmanian Social Inclusion Strategy1. Other government responsibilities such as health and education are major contributors to this strategy. Economic development contributes to inclusion by creating jobs and improving participation rates and skill levels, all of which help to reduce poverty and inequality.
The Economic Development Plan priorities for social sustainability are:
- Literacy as a pathway
- Social inclusion
- Breaking the cycle of intergenerational poverty
- Structural adjustment and communities in transition
As a whole, Australia ranks highly (frequently in the top five)2 against international benchmarks of general wealth, wellbeing and human development. Although Australia’s performance is strong, there are disparities among and within the states and territories that reveal that not all Australians (including Tasmanians) are benefiting from the strong national economic growth rates. For example:
- In April 2011, 14 400 Tasmanians were classified as unemployed and our unemployment rate was 5.7 per cent, compared to the national rate of 4.9 per cent3.
- In the year to April 2011, the unemployment rate for Tasmanians aged between 15 and 19 years was 16.3 per cent4, with the rate of unemployment higher for those living outside the capital city. In addition, 15 to 19 year olds account for around 21.9 per cent of the state’s unemployed persons in the year to April 20115.
- The state’s participation rate in April 2011 of 61.4 per cent continues to be below the national average of 65.7 per cent6. Research undertaken by the Department of Treasury and Finance in 2005 estimated that around 40 per cent of the difference between the Tasmanian and Australian participation rates is due to the State’s age structure.7
- According to the 2006 Census, only 31.3 per cent of Tasmanians aged 15 years and over had finished year 12 or equivalent schooling, the lowest share of all states and territories. In addition, Tasmania ranks second lowest out of all states and territories in the proportion of 20 to 24 year olds with year 12 attainment;8
- Around 64 000 persons (or 13 per cent of Tasmanians)9 are living on or below the poverty line, the highest of all other states and territories and is above the national average of 11.1 per cent.10
- Approximately 34 per cent of Tasmanian household income is derived from unemployment and student allowances, retirement pensions and family support payments compared to the national average of 23 per cent.11
- In September 2010 there were an estimated 35 600 Tasmanians not participating in the labour force who wanted to work.12
The graphs below highlight these key data.
The following graphs show sources of income as at 2008 and educational qualifications as at 2009 in Tasmania:
Source: ABS,Household Income and Income Distribution, Cat No 6523.0, 2009
Source: ABS, Australian Social Trends, Cat No 4102.0, 2010
The following graphs highlight employment since June 2000 and skilled vacancy rates since June 2006 within Tasmania:
Source: ABS, The Labour Force, Australia, Cat No 6202.0
Source: Department of Education, Employment and Workplace Relations, DEEWR Vacancy Report, 2011
DEEWR: Department of Education and Employment Workplace Relations
These statistics indicate that not all Tasmanians are sharing in our state’s prosperity and that their level of economic engagement is lower than that of other Australians.
The Australian Government is the major player in providing income support, labour market programs and skills development. For example, the Department of Employment, Education and Workplace Relations currently spends more than $70 million dollars annually in Tasmania on labour market programs. Many of these programs are demand or entitlement based, and include the Australian Apprenticeships Access Program, Disability Employment Services, the Indigenous Employment Program, Job Services Australia, Youth Connections, and the New Enterprise Incentive Scheme.
This investment in Tasmania’s workforce is set to expand. The 2011-12 Federal Budget has a major focus on improving participation rates and skill levels nationwide, and is aimed at getting more Australians into work and improving productivity levels. For example, over the next six years, the Australian Government will spend $3 billion on skilling the nation’s workforce with an emphasis on ensuring that all Australians can experience the benefits of work. This increased investment by the Australian Government will include:
- wage subsidies for the very long-term unemployed and disabled
- accelerated apprenticeships and apprentice mentoring
- improved work incentives for Youth Allowance and Newstart recipients
- expansion of the jobseeker’s Language, Literacy and Numeracy program
- more assistance for mature-age workers
- the establishment of a National Workforce Development Fund
- the development of regional education, skills and jobs plans
- the establishment of a new National Partnership to support long-term reform in the vocational education and training sector.
The Australian Government recently announced another strategy to promote participation rates by tripling the tax free threshold to $18 200 on 1 July 2012. This important reform that was picked up from the Henry Tax Review, removes a key barrier to increasing labour supply, improving incentives to work, and removing inefficiencies from the tax and welfare systems13.
This strategy is part of the Clean Energy Plan announced on the 10 July 2011 to offset the higher costs of goods and services likely to be brought about by the carbon price and it is contingent upon the carbon price legislation being passed by Parliament. However, it will also facilitate improved workforce participation by allowing people to work up to three days a week without paying income tax; this is particularly directed to people receiving income support including students and mothers of young children currently not engaged in the workforce.
Under the Economic Development Plan, the Tasmanian Government will continue to work collaboratively with the Australian Government to maximise these benefits for Tasmanians. In order to avoid duplication of effort, the Tasmanian Government will phase out its Workforce Participation Program to free up resources for other priorities under this Goal such as social enterprise facilitation.
We need short, medium and long-term strategies to address inclusion so that we do not leave parts of our community behind. The Skills and Social Inclusion Strategies are examples of government action to address these issues. As the government’s response to the Social Inclusion Strategy states14, it is hard to be socially included if a person is trapped on subsistence welfare and has no opportunity to move out, irrespective of how enterprising they may be.
The Social Inclusion Strategy centres on enabling low-income Tasmanians to be financially included through access to micro-finance, building individual capacity to participate in the labour market via micro-credit business development, and contributing to the community through social enterprise development. Social enterprises are businesses where all profits are reinvested in the enterprise or redistributed to develop services and resources that are often unmet in a community. Social enterprises tap into the knowledge, ability and energy of people on low incomes and communities. This is an enormous resource. Social enterprises can also provide the skills and confidence for people to transition back into the workforce. This work will be expanded under the Economic Development Plan.
1There are 10 strategies outlined to increase social inclusion. See Adams, D., A Social Inclusion Strategy for Tasmania, Tasmanian Government, 2009, available at: www.dpac.tas.gov.au/divisions/siu
2Legatum Institute, The Legatum Prosperity Index 2010, Accessed June 2011, at: http://www.prosperity.com. In 2010 Australian ranked fourth out of 110 countries. See also United Nations Development Program (UNDP), Human Development Indicators 2010, UNDP, accessed June 2011 at: http://hdr.undp.org/en/. In 2010 Australian ranked second out of 169 countries.
3Australian Bureau of Statistics (ABS), Labour Force, Australia April 2011, Cat No 6202.0.
4ABS, Labour Force, Australia Detailed – Electronic Delivery April 2011, Cat No 6291.0.55.001.
6ABS, Labour Force, Australia April 2011, Cat No 6202.0.
7Department of Treasury and Finance, 2008-09 Budget, Budget Paper No 1, Chapter 2, Tasmanian Government, 2008, available at: http://www.budget.tas.gov.au/past-budget-papers
8ABS, Australian Social Trends, March 2011, Cat No 4102.
9Adams, D., A Social Inclusion Strategy for Tasmania, Tasmanian Government, 2009, available at: www.dpac.tas.gov.au/divisions/siu
10ABS, Survey of Income and Housing Data for 2005-06, quoted in Saunders, P, Hill, T, and Bradbury, B, Poverty in Australia: Sensitivity Analysis and Recent Trends, commissioned by Jobs Australia on Behalf of the Australian Council of Social Service, SPRC Report 4/08, Social Policy Research Centre, Sydney, 2008.
11ABS, Household Income and Income Distribution, Australia, 2007-08: Detailed tables, Cat No 6523.0.
12ABS, Persons Not in the Labour Force, Australia, September 2010, Cat No 6220.0.
14Tasmanian Government, Tasmania’s Social Inclusion Strategy: Prelimimary Response, Social Inclusion Unit, Department of Premier and Cabinet, October 2009, p21, available at http://www.dpac.tas.gov.au/divisions/siu/strategy/strategy