Sunday, 3 August 2014

Politics vs Economics - it's about the facts.

The government want to reduce welfare spending and appointed a multi-millionaire to look at Indigenous welfare and employment to advise them on how to do it. You might think that's an odd choice.

Even odder is that Andrew Forrest decided to report on all welfare spending, not just Indigenous welfare.

He reported that basically welfare is wasted and it should be cut. The trouble is there is not really any evidence to back up his claims that 'welfare spending is out of control'. Nor is Australia's welfare spending large by international comparison, its actually quite similar as a proportion of total government spending.

The argument put forward by government is a supply-side one. If welfare is cut people will be more inclined to work.

However I don't need to bang on about this because below is an article which explains it very clearly. 

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