Discuss about the Economics for Tax Incentives and Implementation.
Currently, Australia unemployment stands at 5.6 % as of August 2017 following the creation of 54200 employment opportunities. The average unemployment rate in Australia since the year 1978 and 2017, is 6.9 % (Trading Economics 2017).Predominantly, most economies experience unemployment spells and Australia is no exception. The commonest types of unemployment in Australia are structural, frictional, cyclical, seasonal, youth unemployment, underemployment, long-term unemployment and mature person unemployment among others. There’s structural, cyclical and frictional unemployment. Further, there s long-term, youthful unemployment, indigenous and older persons unemployment in Australia. However, the Australian government has implemented measures to help eradicate unemployment rates in its various states, education, training, tax incentives and implementation of expansionary fiscal and monetary policies has helped reduce unemployment.
In addition to long-term unemployment, there is underemployment in the Australian states which basically implies there’s need for more full-time jobs as opposed to part-time jobs thus the need for the Australian government to advocate for and promote full-time jobs. There s need for flexibility of working hours. Furthermore, the older population in Australia faces unemployment due to their aging disadvantages which require government intervention through anti-age discriminatory practices. Following the closure of major industries in Australia such as the car manufacturing industry, most workers were rendered jobless hence the need for industry diversification and transition agencies to help laid-off workers get back into employment. By and large, the Australian government has tried to create and sustain employment opportunities though much needs to be done, both by the government and the private stakeholders.
Source: Trading Economics,
Noteworthy, there’s youth unemployment in Australia which is contributed by the fact that they lack experience which some employers look for in potential job seekers. Notably, the Australian youth unemployment levels have risen to 13.5 percent with the underemployment rate of 18 per cent which is considered the highest it has been in forty years of Australian history (Davidson 2017).According to the Generation stalled Report, youth between the ages of 15-24 face the highest unemployment rates. Specifically, there were 650000 unemployed youths in February 2017 unemployed and under-employed. The youth are disadvantaged when it comes to jobs due to the transition from education to the workplace and are equally hard hit with the recession (Borland 2014).Particularly in May 2012, youth unemployment rate stood at 18.8 percent for youths between the ages of 15-24 years old.
In addition, there’s long-term unemployment facing both the youth and old persons in the Australian states (Economy watch 2010).For most laid-off workers, commonly resulting from the decline of industries, lack of transition into other sectors of the economy could render them long-term unemployed hence the need to diversify the economy.Older workers in Australia face unemployment due to the fact that most employers prefer energetic workers thus rendering mature-aged workers to face long-term unemployment(Wilson 2013).According to the Australian Bureau of Statistics, about one-third of unemployed matures aged people believe they are unemployed due to their age which is a discriminatory practice.Specifically,140000 persons aged between ages 50 and 64 are unemployed.
Also, the increased number of migrants has contributed to the rise of the unemployed population in Australia(Economy watch 2010).The fact that youths and immigrants are new into the labor market makes it hard for them to be immediately employed thus the need to create more employment opportunities and job placement centers to help them get employed quickly.The increase in the number of immigrants into Australian states increases the demand for jobs and given the fact that most Australians are facing unemployment, there’s bound to arise in the number of unemployed persons hence the need for more employment opportunities.The Australian government needs to create an enabling environment for investments so as to lure investors both foreign and domestic to expand the Australian employment opportunities.
Moreover, underemployment is another challenge facing the Australian economy. According to the Roy Morgan research statistics, over1.28 Australians were underemployed as at May 2017 which translates to 9.8 percent of the employed population.Underemployment is due to the increased number of part-time jobs as compared to full-time jobs(Morgan 2017).Typically, the unemployed population refers to persons looking for work or for more work.More than 1.1 million Australians are underemployed according to the Australian Bureau of Statistics(Patty 2017.Structural underemployment has plagued the Australian industry.Through the creation of more permanent employment opportunities, both unemployment and underemployment figures will significantly reduce.
The Australian unemployment rates are based on various factors. The decline of various industries has created massive unemployment spells. For instance, the closure of car manufacturing plants in Australia translated into massive layoffs. The Toyota, Holden group of companies’ closure of their manufacturing plants led to many workers being laid off. Moreover, the lack of other diversified industries to absorb the retrenched and laid off workers widens the gap for the underemployed thus the need to boost the existing and diversify the industries(Adelaide 2015).Predominantly, the recession is the commonest cause of unemployment whereby due to slow or declined economic activity workers are laid off. During the recession, there s less economic activity,low investment which would promote layoffs.
Moreover, immigration creates unemployment in the sense that there’s a scramble for the already existing jobs with the increase in the number of job seekers. Typically, an increase in the number of people seeking jobs should be met with equal employment opportunities. Immigrants are new job seekers in the Australian economy thus it takes time for them to be absorbed into the Australian labor force(Sebastian 2015).The uncontrolled flow of immigrants is likely to flood the Australian labor market and rendering indigenous Australians jobless. Usually, migration of labor is due to search for greener pastures. There s need for strict immigration laws to control the influx of immigrants into Australia and creation of more employment opportunities. Largely, technological advancements have been incorporated into the labor market industry due to its fast, large volumes and efficient outcomes thus rendering some workers irrelevant in some industries.
In addition, the expansion of multinationals from Australia has denied some Australians employment opportunities. In most cases, multinationals are expected to employ more workers from the host country as opposed to home country thus creating employment opportunities for foreign nationals as opposed to indigenous Australians. Offshoring has largely contributed to the high unemployment levels in Australia. There s need for more local investments to create and expand employment opportunities for the Australian population.
Primarily, increased economic activity is likely to create and maintain jobs thus eradicating the unemployed population. In the event that there s a conducive and enabling business environment, most investors are likely to operate in Australia thus creating jobs for the Australian population. Further, there s need for domestic stimulated demand for goods and services to create the gap for employment and economic activity which sustains employment opportunities. Regarding youth unemployment, there’s need for the Australian government to implement target programs which are aimed at preparing the youths for the labor market (Borland 2014).Further, there need to invest more in placements and corporate-based training. Further, it is imperative for there to be a partnership between educational institutions and the corporate world to provide the learners with the requisite skills for the labor market.
In addition, the Australian government ought to incorporate industry based education partnerships with the corporate world for the benefit of the future task force. Also, the education curriculum for learners should conform to the labor market requirements so that the learners are adequately prepared for the job market once out of educational and training institutions (Chohan 2016).There need to prevent over qualification of the youthful labor force for the Australian job market. There s urgent need for learners to choose courses and careers based on the jobs available in the market to prevent structural unemployment due to the mismatch of skill set between the laborer and the requisite job (Gottliebsen 2014).The investment of government in education and training will empower the Australian population with the skill set and readiness for the labor market (Amadeo 2017).
Notably, to curb long-term unemployment, laid off workers from declined industries can join other sectors of the economy such as the service sector. There’s need to put into place, transitional agency and placement centers to help retrenched automotive industry workers to gainful employment (Spoehr 2017).There s need to create short-term jobs such as construction while creating more permanent employment opportunities. Similarly, there s need to promote vocational education and training to prevent structural unemployment.Further, there need for the Australian government to implement investor-friendly policies to attract investments which will, in turn, create employment opportunities. Moreover, there s need to invest more in infrastructure to create conducive and enabling a business environment for investments thus creating jobs (O.E.C.D. 2014).
Furthermore, there should be anti-age discriminatory laws and oversee agency to protect laborer rights despite their differences based on age and other disadvantages .Also, there need to regulate the flow of immigrants into the country to help eradicate instances of unemployed immigrants who contribute to frictional and structural unemployment through job searching transition time frame and mismatched skills respectively.To reduce frictional unemployment, the establishment of job placement centers and readily available information on employment opportunities will go a long way in eliminating this type of unemployment.For recession based unemployment, the Australian government ought to initiate demand-based policies and supply based policies to eliminate structural unemployment(Pettinger 2017).
Monetary based policies aimed at propelling aggregate demand for goods and services will stir economic activity thus creating and expanding employment opportunities thus eradicating unemployment.Moreover, tax incentives through cuts and breaks will stimulate demand for goods and services the creating employment opportunities.Further, through vocational education and training, laborer skills will match the jobs they are into thus eradicating structural unemployment.Through the implementation of favorable tax breaks, employers might be encouraged to permanently sustain employment opportunities thereby reducing unemployment.Also, flexible employment arrangements will keep many workers in employment as opposed to restrictive employment practices.
Notably, Cyclical unemployment can be minimised through stimulated demand for goods and services.Stimulated aggregate demand for goods and services can be achieved through expansionary fiscal and monetary measures.In furtherance of stimulating demand, the Australian government ought to incorporate investment friendly practices to encourage investment and in the process create and secure employment opportunities(Investopedia 2015).Fiscal policies that offer tax incentives through cuts and breaks avails investment capital which stimulates aggregate demand for goods and services. Primarily, the extension of retirement age for mature workers will reduce the overall unemployment rates in Australia(Sheen 2012).Currently, the maximum retirement age for older workers is 65.
Particularly, the existence of friendly working environment for older matured workers will keep matured workers in work for longer periods of time.In addressing long-term unemployment, there s need for implementing education and training initiatives to sharpen the skills of workers for the available jobs.The availability of wage-based subsidies for displaced workers and government absorption of the long-term unemployed through availing employment opportunities will go along way in reducing unemployment rates.Further, the implementation of full-term employment policies by all employers will reduce unemployment and underemployment(Plumer 2013).There’s a part of Australia s indigenous population which is unemployed thus the need to address the issues involved to reduce the overall unemployment rates in Australia.
Largely,job location, structural labor condition changes, and employment discrimination have prevented most indigenous people from being employed thus there s need for the Australian government to bar any employment discriminatory practices against indigenous folks.Alongside these laws, education and training accessibility to indigenous Australian will improve their employability chances(Birdle, Hunter, and Yap et.al 2016).Also, the implementation of pre-employment evaluations, cross-cultural job training, and policies that create a friendly working environment for indigenous workers will largely increase employment opportunities for indigenous Australians.
Conclusion
Unemployment is a challenging problem for most economies and Australia is no exception. The Australian population faces recessive effects of the global financial crisis, frictional, cyclical and structural unemployment like other economies.Particularly, Australi faces specific problems, long-term unemployment, older persons unemployment youth unemployment and underemployment.Largely, Australia s unemployment problems are due to low aggregate demand for goods, a decline of industries, offshoring effects, uncontrolled immigration and low investment effects.There’s need for the private and public sector to create employment opportunities in Australia.The Australian government has tried to eradicate unemployment through investing and advocating for education and training to help equip workers with the requisite skills for the available employment opportunities.There’s need to advocate for flexible working hours, full-time employment and fair wages to eradicate high unemployment rates in Australia.
Typically, the implementation of job placement centers all over Australia will go along way in eradicating frictional unemployment and general unemployment.There s need to create an investment-friendly environment through favorable foreign investment policies and tax incentives to promote investment which in turn will create employment opportunities which will, in turn, radicate unemployment levels in Australia.There s need for the private sector to invest more thus creating employment opportunities for the vast Australian population.Further, there s need for controlled immigration into Australia because uncontrolled migration contributes to the already high unemployment rates in Australia.Part of Australia’s indigenous population is unemployed thus the need for equity in employment.All in all, the Australian government has recognized unemployment as an area of interest and has implemented policies to help eradicate it which is a commendable move, but more needs to be done.
References
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