Tax incentives: training

Australia's tax system is considerably more complex than NZ, not least of all because of the various deductions available. Earlier in the week, the Australian Financial Review (offline or subcriber only) covered a story suggesting a new deduction, this time for expenditure on accredited training for both employers and individuals.

Some State's favour this approach because it means they don't have to contribute more funding - in NSW, the bill for training 80 percent plus covered by the State, around $1.3 billion, compared with $300 million from the Commonwealth. However this proposal is not without risks, particularly the risk that the tax incentive won't increase training in proportion to its cost - deadweight risk. Also, it may not increase training as much as is required - some NSW experts claim a 2.5 percent per annum increase is needed others, focused on the broader national scenario, say 5 percent.

There are other alternatives, obviously governments could increase funding - in some States this is likely but in others it is not. Income contingent loans are another alternative although politically and practically this is less likely - unless all States' and the Commonwealth agree, any debt/loan scheme is damn near impossible since repayments are best made through the Pay as You Go tax system which is a Commonwealth system.

Whatever the solution, there is a general consensus that training participation rates have to go up to improve workforce participation and prepare for the impact of the aging population.

All sides claim victory - almost

The newly established Fair Pay Commission has made its first determination (reasons for the decisions are here), agreeing to increase minimum wages by around $27 a week. This decision has been curiously welcomed by most parties, unions and the Federal Government particularly, albeit for different reasons.

The ACTU are happy because they'd asked for $30 per week and nearly got there. The Feds are happy because they can claim that their new system is working when its critics, including the ACTU, said it wouldn't.

Employers - well Peter Hendy of ACCI predicts the sky will fall in: pressure on inflation and interest rates and no increase in labour market participation (a more orthodox interpretation is impossible). Heather Ridout of the AiGroup is, as ever, far more sensible however she too notes the risks drawing attention to the likely differential impacts on small to medium enterprises and regional economies. Interestingly, the Commission specifically considered and rejected the option to differentiate the rates for either regions or for industries however, this in part reflects the Commission's mandate to eliminate pay differentials between States over the next three years.

Implementation of Australian VSU

One of the quirks of the current Australian parliament is the power independents and small parties hold in the Senate. Although on paper, Howard has a majority, he's often got some work to do on some bills. Last year, he was forced to do a deal, mainly with the Nats but also with the Dems, to ensure the passage of the VSU legislation including providing funding for student services at regional institutions. How much, oh just a lazy $80M over three years. Sounds a lot but as the NUS point out, the VSU legislation probably costs Students' Associations around $160M per annum. More information on the priorities and process etc is here.

Clearly nothing orginal to say...

Tim at Road to Surfdom points out yet another instance of Bush's idiocy.

O'REILLY: Now Brian Ross of ABC said — reported the CIA water boarded Mohammed. That is dunked him in water, tied him down and then that broke him. Is that true?

BUSH: We don't talk about techniques. And the reason we don't talk about techniques is because we don't want the enemy to be able to adjust. We're in a war.

O'REILLY: Is water boarding torture?

BUSH: I don't want to talk about techniques. And — but I do share the American people that we were within the law. And we don't torture. We — I've said all along to the American people we won't torture, but we need to be in a position where we can interrogate these people.

O'REILLY: But if the public doesn't know what torture is or is not, as defined by the Bush administration, how can the public make a decision on whether your policy is right or wrong?

BUSH: Well, one thing is that you can rest assured we're not going to talk about the techniques we use in a public forum. No matter how hard you try because I don't want the enemy to be able to adjust their tactics if we capture them on the battlefield.

Full interview here.

Tim wonders if Al Qaeda may in fact be investigating recruiting amphibian terrorist... no wonder George is worried.

Bravia

Look, I'll admit what is increasingly obvious, anything cool, anything at all cool, I only know about 'cause of browncardigan... It makes me feel so hollow.

New bravia advert here, better than the bouncy-balls in SF, no shit.

Breathing earth

Here's a link to a flash animation tracking births, deaths and CO2 emmissions; China, India and the US head the competition for emmissions. Australia and NZ hardly register, although Australia in fact has the highest emmissions per head of population but is fortunate that slowing land clearances provides carbon sinks.

Hattip: browncardigan (again again).

Album cover wars

Hell I'm not sure which album cover won this particular war, but Ozzy Osboune seemed to do well, eating Weezer and the B52s before consuming his own head - excellent.

Hattip: browncardigan (again).

Improving workforce participation

A while back I took issue with Lindsay Mitchell who suggested that beneficiaries were taking it easy and avoiding work at a time when there were jobs all over the place. As evidence for her argument, she reviewed her local paper and reported that there was 100+ job ads. Mitchell's solution was to reduce the minimum wage and benefits to stimulate employment and force beneficiaries into the workforce.

There's a simple logic to Mitchell's approach, particularly if you believe beneficiaries are a lazy bunch, however her argument is in fact quite wrong. A tight labour market may actually present fewer opportunities to beneficiaries, particularly when the vacancies are for skilled labour.

There's a well researched direct correlation between skills and workforce participation and earnings. In Australia, 80% of men with degrees are in fulltime work compared with only 54% of men with no post school qualifications (reference here). Likewise, compared with those who do not complete school, a person with a Certificate III or IV earns 13% more and someone with a degree earns 43% more (reference here). However the beneficiary cohort tends to have lower skills compared with the workforce and therefore cannot easily obtain work. This problem is likely to get worse - most forecasters predict an increase in the demand for skilled workers and, at best, static demand for unskilled. The solution therefore, involves training (amongst other things, simply increasing and improving the supply of skilled labour does not automatically improve productivity, there also needs to be a focus on increasing the demand for and use of skilled labour).

In NSW, very serious consideration is being given to significantly increasing training over the next 25 years to offset the effects of the aging population and avoid declining productivity. Importantly, the focus of training is not simply on school leavers, but also on existing workers, parttime workers and those who are not in the labour force - this last group are expensive to train.

Some of the commentators on the right also propose reducing minimum wages to stimulate demand for employment but a recent report predicts that this will have less impact than alternative approaches. In Australia, a reduction in minimum wages of 5% will likely lead to around 30,000 people joining the workforce but will also lead to a pay cut for around 1.25 million workers.

Mitchell is like too many commentators, on both the right and the left, who appear pursuaded by rhetorical solutions and unwilling, or unable, to give more serious consideration to what is a complex problem requiring a sophisticated solution.

Live blogging of sorts

I should be working, I've set my screen up so that I can work and watch the Netball test... sod it, I want to have a go at live blogging.

Anthems: How come Netball crowds can belt out both the Maori and English versions of the anthem and rugby crowds are so muted throughout the Maori - are women more likely to be bilingual?

Lineups: No surprises that Liz Ellis is playing on Van Dyk. Both are classy players. Von Bertoch sisters both starting for Australia. Vilimaina Davu is such an imposing character.

Halfway through first quarter: Tutaia is the main target in the NZ shooting circle, shooting 5 from 8 but Van Dyk remains the main defensive target. NZ 100 percent success shooting.

First quarter finished: The difference between the two teams is the conversion rate of shots to goals. The defence on Sharelle McMahon is excellent and the pressure on the shooters is forcing errors. NZ up by two goals.

Halftime: Even, twenty a piece. Scarlett and Davu not doing as well containing the Australian shooters in the second quarter. A typically close match. A wonderfully physical encounter but also well refereed. Avellino commenting for ABC - she used to annoy the hell out of me, always complaining to the umpires but just as aggresive as anyone on court. I don't mind it when competitors push the limits, it is the umpires job to manage, but I don't like players who simultaneously complain and offend. I've hardly ever seen Davu say anything during the game, she accepts that she'll get penalised. Of all the players in all sports, Ricky Ponting must be the worst at this. A brilliant batsman, but an average sportsperson.

3rd Quarter: Dalton on for Tutaia - Dalton who's back in the squad after a year or two away - Dalton who's only a year younger than me and 16 years older than Tutaia. Australia with a break of two goals, 26 plays 24.

NZ timeout in the 3rd Quarter: Australia ahead by 5, shooting much more accurate and midcourt patient. NZ using the zone defence but Australia not panicing.

Late in 3rd Quarter. Davu pulls off critical turnover and NZ not out of things with a centre pass to come.

End of 3rd Quarter. NZ trails 33 - 35. Australia has won the last two quarters but NZ staying with them. Davu's played well but Australia's speed across the top of the circle is the difference. So much for my prediction of a win to NZ by 5, this one will go down to the final seconds and will probably be won by a margin of one or two. Defence on Van Dyk is excellent but isn't creating space for Dalton where it was for Tutaia.

Five to go: Dalton's missed two critical shots, Australia has momentum and the scoring advantage. If they win, it's the first series win in in NZ a number of years...

Fulltime: NZ lose by 6. Ruth Aiken's job is at least safe from me. Australia deserved the win. Third in four games. World Championship's will be tight.

ABC does the right thing

ABC have decided to screen the final Netball test between NZ and Australia live at 4.30pm rather than delayed at 11.30pm. I've been astounded that these tests aren't always live - I've not got time to verify the numbers, but I recall reading that Netball is the most widely played sport by women in Australia and yet the tests don't routinely screen live. The fact that Netball tests are always live on television in NZ may say something about limited participation in other codes, however I think it also says something about the prevalence of sexism in Australia. Hockey screens live, why not Netball? Australia is one of the leading countries in both games - what gives? ABC have done the right thing, I only hope they continue to.

TVNZ meantime are streaming it live.

My tip: Kiwis to win by 5 and take out the series. Watch for Temepara George to again dominate the midcourt.

Sopranos timeslot moved

There's a little story in today's SMH about the latest season of the Sopranos. The very last sentence of the article reads: "It's a shame Nine has shifted the show to this terrible timeslot, but I suppose we should be grateful it wasn't axed altogether."

I'm guessing that it was poor editing that meant the article didn't mention that Nine are not in fact showing the Sopranos at the usual shitty timeslot, Wednesday's at 11.30pm, but instead at the even shitty timeslot of midnight Monday! Bastards!

When I rang Nine to check why the Sopranos wasn't on tonight, I was told that due to "poor audience interest", the show was moving... nicely on message but what bollocks. The show would be a hell of a lot more popular if it weren't for the crap timing - I realise it needs to be screened after kiddies are in bed but midnight sucks arse!

Tough being a parent

I regularly read the blog of Heather Armstrong, Dooce, me and 3,599 others at least. Heather's writing is absorbing, not least of all because it often deals with the challenges of being a parent - challenges I'm acutely aware of. This link takes you to Heather's monthly letter to her daughter, Leta, letter 32. Leta, who is gorgeous, bright and creative, is a lucky girl to have a mother such as Heather.

Every parent must have moments where they wonder about how they're coping and about how their children might be affected when things are a struggle as they are from time to time - God knows I do - I'm going to make sure my wife knows how much I admire her, how much I love her and how grateful I am.

Tribute to loss

An unimaginable loss.

Commonwealth fesses up...

It was not surprising to see another story in today's, Wed 4 October's, press about training and migration. This story at least is based on some more credible information and clearly a more sensible journalist (editor?) has at least found time to link it to Commonwealth policies.

I find the Australian Industry Group's estimate of a 240,000 shortage of skilled workers over the next decade a bit challenging although the NSW training system turns out about this many graduates per annum, close to a third of the national effort, so this figure is not unreasonable.

Training goes offshore too!

Though it hardly deserves the front page, in the news Tuesday morning is a story about TAFE NSW training Chinese nationals offshore - worse still, training them in trades which could lead to domestic jobs going offshore (like Qantas jobs for instance).

The story is frankly thin, full of unsourced quotes from unranked "officials", it is also hardly news. Australian training providers have been very active offshore, universities and TAFE, for ages. Their activities are partly driven by Commonwealth funding policy - policies that have explicitly encouraged training providers to diversify and to develop export education markets to raise commercial revenue and reduce reliance on public funds.

More recently, the Council of Australian Governments explicitly agreed to increase offshore training in order to increase and improve skilled migration into Australia. Specifically, Education and Training Ministers agreed to establish:

"A single, pre-migration, off-shore assessment process to meet skilled migration and licensing purposes and be accepted for licensed employment throughout Australia for intending migrants from any country where there are >100 applications per year per assessing body"

Therefore how can anyone be surprised by this? How on earth can the NSW Minister for Industrial Relations, John Della Bosca, be surprised - did he miss the debrief?

"We are now seeing entire workforces imported into Australia working for less than Australian rates of pay and conditions."

Yeah, bit of an overstatement, but then I guess we're only months out from an election a God knows the unions run the public sector, however seriously Minister, your Premier and Cabinet signed off on the COAG resolution!

Corporate espionage

I've always assumed that there's a degree of espionage that occurs in political campaigning; by both the left and right. I assume that the bigger the stakes, the more likely but also the more sophisticated and, possibly, defensible (maybe I mean defended rather than defensible, defended rather than denied?). So, at the risk of becoming a Four Corners junky/flunky/groupie, they've done it again... producing a compelling hour of television during which AMCOR subversives (I don't think the word is misused in this instance) confess to all manner of under-handed tactics in order to maintain their business chipping native forests.

A transcript of the full show will no doubt be posted - I hope Kakariki saw it in Melbourne.

IT, globalisation and immigration

Qantas have announced they'll be sending 300 jobs offshore to India. Their rational is about the limited availability of skilled workers but I'm not at all convinced.

The federal Department of Work and Employment closely tracks* the IT labour market - it is an incredibly volatile market because the industry is so dynamic and globalised - and as at September 2006 reports that though demand has increased this year, it is still considerably lower than in 2000 reflecting changes in the industry as well as the impact of various measures developed to improve the skill base. Also, although forecasts predict stronger growth in demand for IT employment, changes to the skilled migration scheme and a renewed focus on training for skill shortages may be sufficient to fill any gap.

As an aside, some work I did a while ago showed that the NSW training system is incredibly attuned to changes in the IT industry with enrolments closely tracking vacancy trends with very little lag time.

Qantas is relocating these jobs to save on wage costs - exploiting the low wage economy of India compared with the high wages paid in Australia. This is the price of global labour markets, we need to accept it and plan accordingly.

*DEWR tracks skilled vacancies and reports on trends. It's important not to conflate the existence of persistent vacancies with skill shortages. Skilled workers may choose to not apply for work because they can get more money elsewhere or because they don't like the work. Nursing is an example of an industry where there is a labour, not a skill shortage. There are plenty of trained nurses, more than enough to fill reported vacancies, however they choose alternative employment for numerous reasons (see the report Stop Telling Us To Cope on this page).