Restarting Australia’s economy
The 2020 Budget casts a wide net that both builds on previous initiatives and introduces new programs that aim to protect jobs by stabilising today’s workforce and reinforcing the viability of the workforce of the future.
Significant investment in public infrastructure across all states and territories, along with support for residential housing, roads and community infrastructure projects will create and/or support ongoing direct employment across a number of sectors over an extended timeframe. Critical skills that will be required to deliver these projects will be developed through programs targeting the creation of new apprenticeships. Also of significant note, given the proportionally higher impact of COVID-19 on women’s employment, is the second Women’s Economic Security Package.
While the above measures will provide indirect benefits over time, bringing forward changes to personal income tax will have a much more direct impact on low and middle income earners as it effectively increases their take-home pay. The significance of these changes to the tax regime cannot be understated, particularly given many employers’ ability to provide a remuneration uplift via either CPI or annual merit increases has been severely hampered as a result of the impact of COVID-19 on company revenue.
Implications for employers
To be eligible, the employee will need to have worked for a minimum of 20 hours per week, averaged over a quarter, and received the JobSeeker Payment, Youth Allowance (other) or Parenting Payment for at least one month out of the three months prior to when they are hired.
Implications for individuals
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.
Copyright 2020 Mercer LLC. All rights reserved.
No matter your industry, we’re here to help you find the extra value in your investments so you can stay focused on your business and priorities.
Has your fund considered its next move? Let us help you imagine a brighter future for your members in a rapidly changing environment.
An effective talent strategy means embracing the needs of a diverse workforce while navigating the future of work. Let’s make your people your best asset.
To learn how Mercer can assist your organisation with the outcomes from the 2020 Federal Budget please complete your details below
We're keen to hear from you. To speak with a Mercer consultant about the Federal Budget complete your details below.