Australia's Gambling Industries - Productivity Commission

Unemployment benefits are a transfer to the unemployed
The payment of unemployment benefits to those who change jobs as a result of their
gambling represents a transfer of some of the cost of being unemployed from the
unemployed to the taxpayer. It does not represent an additional cost above what the
Commission has already estimated the loss on income as a result of unemployment.
The Commission has assumed that the pattern of job change for those changing jobs
as a result of their gambling is the same as that of the general population. The
average length of unemployment is estimated to be some 6 weeks, with half having
a period of unemployment of 2 weeks or less and are thus not eligible for
unemployment benefits. The average period of unemployment of the remainder is
estimated to be 11 weeks, 9 weeks of which would be eligible for unemployment
benefits. The rate of unemployment benefit varies depending on whether the job
change was voluntary or involuntary. For those who resigned, Newstart payments
are 18 per cent lower for the first 26 weeks. For those who were unemployed
involuntarily, the full Newstart allowance is payable.
The Commission has estimated the amount of payment on the basis of eligibility for
the Newstart allowance, partner allowance and rent assistance (a fortnightly
payment of $402) for those who are unemployed for greater than 2 weeks (half of
the number who change jobs), and on the basis that they receive payments for 9
weeks.
The Commission estimates that the annual cost of unemployment benefits for
gamblers who change their jobs as a result of their gambling is $4.1 million. This
compares with an estimated loss in income over the same period of $24 million.
Summary of key data used to estimate the cost of job change (unemployment) as
result of gambling
The key data used to estimate the cost of unemployment due to gambling activities:
• an estimated 5600 people changed jobs as a result of their gambling in the last 12
months;
• no people identified themselves as having been dismissed from their job as a
result of their gambling in the last 12 months. This is certainly an
understatement, but in the absence of any information on this matter, the
Commission has not included any estimate in this area;
• an expected average length of unemployment of 6 weeks for each person
changing jobs;
MEASURING COSTS J.17