I’m currently working on an article looking at how states could engage in "healthy interstate competition", by using wage subsidies (or negative income taxes) to encourage low-skilled workers into the workforce. Given the substantial fall in male full-time employment over the past 30 years, boosting the employment rate seems a more pressing policy need for the states than scrapping stamp duties. And what better time to introduce employment carrots than at a point when the federal government is putting in place a sticks-only welfare package?
At present, it looks to me as though wage subsidies in Australia are almost exclusively supplied by the feds (with the exception of payroll tax exemptions, which are usually focused on new businesses rather than unskilled workers). Has anyone heard of states offering wage subsidies in the past?