Navigating our path to recovery
Pandemic Recovery Budget
This is a budget tabled by a Federal Government with its focus fairly and squarely on super charging the recovery by driving a lower unemployment rate while increasing workforce participation across sections of Australian society. However with record budget deficits into the foreseeable future, the government has set aside fiscal discipline to ensure Australia continues on the pathway to recovery. With international borders closed well into 2022, the government is clearly concerned that pandemic recovery could taper as employers struggle to find the right talent for their business or organisation.
Following is an overview of key workforce and related initiatives from the Federal Budget that underscore the government's focus on pandemic recovery.
Child Care Rebate
A further and targeted $1.7 billion investment in childcare which will increase the affordability of childcare for low‑and middle‑income families.
250,000 families will be better off by an average of $2,200 each year. This will give more parents, especially women, the choice to take on extra work. From mid-2022 the government will reduce the $10,560 cap on the childcare subsidy and increase the subsidy for second and subsequent children.
Support for Women
With the pandemic disproportionately impacting women's employment, the government wants to get women into the workplace, targeting STEM, leadership & development and non-traditional jobs. In addition, providing support to respond to sexual harassment in the workplace. Measures include:
First Nations People
Attracting Highly Skilled Talent
Helping All Sectors of the Economy
International students currently in Australia will be able to work more than 20 hours per week if they commit to the hospitality and tourism sectors.
As part of the COVID-19 recovery there is a strong focus on the aviation sector, with $1.2 billion set aside for various programs focusing on supporting the transition to recovery and stimulating tourism.
Planes, Trains and Automobiles
The government has already outlined a 10 year, $110 billion investment pipeline. Additional infrastructure spend is $15.2 billion over 10 years – which will create more demand for highly skilled workers, including engineers, construction, professional services and materials manufacturers.
$774.8 million over two years from 2021-22 has been allocated to extend the HomeBuilder program to increase home ownership and support jobs in the residential construction sector.
Upskilling and Re-tooling the Workforce
The government will continue to support education providers and create new study options for students. This will ensure the diversity of Australia’s education system is maintained and providers can respond to new opportunities in international education arising from the impacts of COVID-19.
Support for higher education providers
Support for higher education students
An Eye for the Future
Patent Box: To encourage investment in, and the retention of Australian medical and biotech technologies the government has created a 'patent box’. From 1 July 2022 the patent box will tax income derived from Australian medical and biotech patents at a concessional corporate tax rate of 17% compared to the 25-30% for SME and larger corporate entities.
Artificial Intelligence and Digital capability: The government is focusing on developing Artificial Intelligence and Digital capability by providing training opportunities in these skills for now and the future:
Mercer welcomes the government’s focus on initiatives that enable increased workforce participation rates, and build the skills of the future. Significant investment in developing the productive capacity of the workforce is critical for the development and competitiveness of the Australian economy into the digital age. We note that with the economy returning to positive growth in 2021 and forecast to grow above 4% in 2022, the expansion of the workforce and rapid development of future skills will be crucial if the economic recovery is not to falter due to workforce constraints. We expect to see some intensification of skill shortages in high demand areas such as digital capabilities and infrastructure-related skill sets in the short-term leading to significant remuneration pressures. In our view the government will also need to find ways to increase access to skilled migration prior to the planned re-opening of Australia’s borders towards the end of 2022.
This content is intended to inform clients of Mercer’s views on particular issues. It is not intended to be provided to any person as a retail client and should not be relied upon or used as a substitute for professional advice specific to a client’s individual circumstances. Whilst Mercer believes the prospective information and forward looking statements made by Mercer in this report are based on reasonable grounds, they are predictive in character and may therefore be affected by inaccurate assumptions or by known or unknown risks and uncertainties. This content has been prepared by Mercer Consulting (Australia) Pty Ltd (MCAPL) ABN 55 153 168 140, Australian Financial Services Licence #411770. Any advice contained in this content is of a general nature only and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this content you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering and seek advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. ‘MERCER’ is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.
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