Gas Week

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Aboriginal person moving from the CDEP scheme to work-for-the-dole will lose welfare payments when they earn extra money

Posted by gasweek on 26 September, 2007

Paul Conlon, the managing director of Titjikala’s Gunya tour­ism venture which provide luxury tent accommodation to well-heeled travellers – aided by millionare Macquairie Bank retiree, Bill Moss – looking for an authentic Aboriginal experience, said his workers would normally have:

• worked about 10 hours a week each for $15 an hour taxed at 30 per cent;

• after the same workers were transferred to work-for-the-dole or Newstart payments, the same amount of work would attract an effective marginal tax rate of 69.8 per cent on the additional income of $150, leaving them a little over $45 in the hand at the end of each week.

The combination of income tax on the extra earnings and the loss of welfare benefits creates what is known as high effective marginal tax rates (EMTRs). “The federal Government is on the verge of a huge mistake,” Moss said. “We’re calling on John Howard to have a major rethink.” According to Simon Keaerney, Aboriginal people who hold down casual jobs to supplement their welfare payments could earn less than $4 an hour under changes introduced as part of the federal Government’s interven­tion in the Northern Territory. The changes, according to a group of business leaders includ­ing former senior Macquarie Bank executive Bill Moss, could have a devastating effect on local indigenous businesses, reported The Australian, 22/9/2007, p. 9

Moss the local baron: “Moss has helped a small Aboriginal community, Titjikala, 120km south of Alice Springs, create a tourism venture that is making a profit and employing large numbers of locals. The effects on the town have been dramatic, increasing self-esteem and introducing entrepre­neurial spirit. Moss recently released a green paper outlining an indigenous economic dev­elopment scheme based on the encouragement of such cottage industries across Aboriginal com­munities”.

Work-for-the-dole topples Moss investments: “But he said the axing of the long-running Community Development and Employment Program in Aboriginal communi­ties in favour of work-for-the-dole had placed his scheme and others like it at risk. The problem is that an Aborig­inal person moving from the CDEP scheme to work-for-the ­dole will lose welfare payments when they earn extra money. “This is going to take away the incentive for people to work,” Moss told The Week­end Australian.

The Australian, 22/9/2007, p. 9

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