The global economic crisis has serious implications for the nation and particularly my home state of Western Australia. While there is no denying that action from the Federal Government is required if we are to head off the storm, this must be targeted to the needs of the community.
Western Australia is uniquely vulnerable to the global economic melt-down. Our economic growth has been driven by the mining boom and while housing prices and the cost of living have continued to climb, wages outside of the resources sector have stagnated. Once the mining bubble bursts, the state's economy could quite possibly nose-dive. More jobs will be lost and housing prices will drop. Those that bought houses when the market was buoyant may be forced to sell them when it is sagging. Loss of jobs and a falling housing market will mean hardship for thousands of Western Australian families.
This is the unfortunate consequence of Western Australia's boom and bust style economy. What we need is an economy that is built on jobs that are sustainable in the long term, not vulnerable to the ups and downs of one particular sector. By investing in the future, we can steadily grow a new, greener economy of the 21st century, a resilient and 'shock-proof' economy that isn't dependent on running down our resource base and stealing from future generations.
We are committing a huge amount of resources to fending off a global financial crash. While the need to do so is clear, there is a very real risk that once these resources are spent more will be hard to come by. We can expect to experience a protracted economic downturn, during which our capacity to dedicate resources to tackling other problems and investing in the industries of the future will be severely limited. Where will the money come from to invest in water infrastructure, to address climate change, to repair our natural environment, to help the most disadvantaged in our community?
As part of the committee inquiry into the Government's recent economic stimulus package, the major church welfare providers submitted a report from Access Economics. The first paragraph of the conclusion of the report said:
"Despite a period of sustained economic growth in Australia, acute pressures have mounted on certain parts of the community. Australia's two-speed economy has seen divergences in incomes across sectors, across states and across different parts of the income distribution. Evidently, Australians have not shared equally in the nation's recent economic prosperity."
In a time of economic uncertainty, we must ensure that those hit hardest by this economic crisis and most disadvantaged in our community are assisted. Prior to the impacts of the current global financial crisis (in the middle of what we were being told was an economic boom) many social service agencies, delivering frontline services to people in crisis, were reporting disturbingly high levels of unmet need. These included residential aged care, housing & homelessness, family relationship services, emergency relief and financial counselling.
During 2006/07, prior to the earliest impacts of the financial crisis, social services providers were forced to turn away over 77,000 eligible Australians seeking their support. These already overstretched services are now being strained to breaking point by the impacts of this latest crisis. In recent months service providers have reported a doubling of demand for emergency financial services across the board, with this demand quadrupling in some areas.
Last year, a support agency in Perth reported that they had to turn away a staggering 1778 people seeking emergency relief and financial counselling support, with demand growing substantially since then. As this pressure increases, it is these services that will bear the burden of providing support. These services urgently need additional funding from Government.
Unfortunately the predictions are that a lot more people are going to lose their jobs but if we can keep people in employment then there will be less impact on our social safety net, the housing market and the strength of the economy. If it costs us the same amount to keep someone in productive employment as it does on Newstart Allowance - then the better choice is to help them to continue in that job to play a productive role in the economy, delivering the goods and services that keeps the engine of the economy ticking over. Wouldn't it make more sense to invest in labour market programs?
For those unable to stay in employment they face the prospect of having to survive on the Newstart Allowance. Could you survive on $243 a week with a family to feed and a mortgage to pay? The Newstart Allowance urgently needs raising.
In a time of crisis we need to look to our social safety net. We should be targeting support services to low income earners - those who are credit limited, are struggling to get by and are thus most likely to spend any Government money immediately on the means of day-to-day life. We need to ensure we are investing in quality social infrastructure and thinking about the future.