Bill’s Costings, exposed!

“Bill Shorten faces down hostile questions in solo Q&A appearance”

“Shorten again said Labor would consider an increase in the Newstart payment after a review undertaken if Labor wins, but declined to put a dollar amount on it”.

Source: The Guardian

Nothing new here – he consistently declines to put costings on major policy changes. The problem for BS is that every major Labor policy affects the Newstart expenditure – not the allowance – but the total expenditure on Newstart expenditure.

In June 2018, according to the DSS Annual report there were 727,533 claimants for the Newstart allowance (NSA)[See 2]. By May 2019, a contracting Building industry had already shed 40,000 workers[See ABC Report].

Last October, The Australian reported:

Labor’s $32 billion plan to end negative gearing for existing homes and slash the capital gains discount would lead to a fall in new housing construction of up to 42,000 dwellings over five years and 32,000 fewer jobs across the country, according to independent modelling of Bill Shorten’s key property policies.

In March, the AFR Reported[See 6]:

Labor’s planned 45 per cent cut to Australia’s carbon emissions could hit the economy more than three times harder than Coalition climate policies, costing 336,000 jobs and causing an 8 per cent drop in wages under a worst-case scenario.

Assuming ‘climate target’ jobs are lost over a 5 year period and assuming that all of the job losers become Newstart claimants, then additional Newstart claimants will be the red bars in the chart:

Conclusion: 503,600 people added to the unemployed by 2025, all of them potential Newstart claimants. Each claimant, paid approximately $600 per fortnight for 25 fortnights per annum, or $15,000 per annum, totalling over $7.5 BILLION per annum, or $22,5 BILLION over the next 5 years and another $45 BILLION for the following 5 years NOT accounting for inflation (Newstart increases) or nett present value.

UNEMPLOYED PEOPLE DON’T PAY INCOME TAX

THIS DOES NOT ACCOUNT FOR THE LOSS OF INCOME TAX PAYMENTS BY THE 503,600 UNEMPLOYED WORKERS.

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References:

1. Newstart Allowance Payment Trends and Profile Report, see link
2. DSS Annual Report 2017-18, see link
3. “Construction slowdown a major threat to the economy” – ABC
4. “Labor risks $12bn housing hit over ending negative gearing” – The Australian
5. “Job losses, less building and more affordability issues: Industry groups say Labor’s tax plans will make problems in Australia’s housing market even worse” – Business Insider
6. “Labor climate target risks 336,000 jobs”- AFR
7. DSS Payment Trends and Profile Reports – data.gov.au