← Main page

Economic overview Superannuation Aged care Investment Workforce Health


Implications for Australia’s workforce

 

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.
 

Australian Federal Budget

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:
 

  • $9.3 million over four years from 2021-22 to support the implementation of the government’s response to the Respect@Work report.
  • $42.4 million over seven years from 2021-22 to establish the Boosting the Next Generation of Women in Science, Technology, Engineering and Mathematics (STEM) Program by co-funding scholarships for women in STEM in partnership with industry.
  • $38.3 million over five years from 2021-22 to increase grant funding available through the Women's Leadership and Development Program.
  • 5,000 additional gateway service places and in-training support services to encourage and support more women commencing in non-traditional trade occupations.

 


First Nations People

 

  • $63.5 million over four years from 2020-21 to support an additional 2700 places in Indigenous girls academies. These placements will provide culturally appropriate support to girls and young women to graduate Year 12. 
  • The government will provide $243.6 million over five years from 2020-21 to improve economic, social and education outcomes for Indigenous Australians.  
  • $128.4 million over three years for a new Indigenous Skills and Employment Program, which will replace existing programs.


 

Attracting Highly Skilled Talent

 

  • Streamlining visas and visa application to target highly skilled individuals when circumstances allow.
  • To support Australian companies in sharing economic value created with employees (both Australian and overseas ‘best and brightest’), unlisted companies that charge or lend for issuing shares will be able to issue employees with up to $30,000 in shares per year, increased from $5,000. Further, the cessation of employment taxing point for deferred tax Employee Share Schemes (ESS) will be removed.


 

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

 

  • Job Trainer Fund: The government plans to invest up to $6.4 billion in 2021-22 to up-skill the workforce in a post COVID-19 world. $500 million matched by the states and territories will be provided to expand the Job Trainer Fund to 163,000 places and extend the program until 31 December 2022.
  • Apprenticeships:  An additional $2.7 billion to extend the Boosting Apprenticeships Commencement Program. This will provide a 50% wage subsidy over 12 months for newly commencing apprentices or trainees signed up by 31 March 2022.  The subsidy is capped at $7,000 per quarter per apprentice or trainee.


 

Higher Education

 

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

  • $26.1 million over four years from 2021-22 to assist non-university higher education providers to attract more domestic students through offering 5,000 additional short course places in 2021.
  • $9.4 million in 2021-22 to provide grants of up to $150,000 to eligible higher education and English language providers to support innovative online and offshore education delivery models.
  • Education providers will also benefit from financial relief through revised regulatory.
  • charging arrangements in relation to the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS).
     

Support for higher education students

  • The government will also provide $1.1 million over two years from 2020-21 to create new employment pathways for students and boost financial incentives for universities to enrol students in ‘Industry PhDs’. This measure will introduce an additional weighting in the Research Training Program funding formula for PhD students who undertake an industry placement. [This measure will be partially offset by funding already provided for by the government, and by redirecting $11.4 million over four years from 2021-22 (and $0.6 million per year ongoing) from the Higher Education Support program.]
  • Extending the existing FEE-HELP loan fee exemption by six months to 31 December 2021 to reduce the financial burden for eligible students and encourage further demand at private higher education institutions.
  • $197.0 million to enable job seekers to participate in an intensive activity after six months of unemployment, including participating in approved intensive short courses, with some job seekers required to participate in Work for the Dole.


 

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:  

  • $24.7 million over six years from 2021-22 to establish the Next Generation AI Graduates Program to attract and train AI specialists through national scholarships.
  • $43.8 million over three years from 2021-22 to expand the Cyber Security Skills Partnership Innovation Fund. The Fund invests in projects to improve the quality and quantity of cyber security professionals in Australia and the additional funding will be provided to further secure and build capability across national priority sectors identified in the Modern Manufacturing Strategy.
  • $22.6 million over six years from 2021-22 to establish the Next Generation Emerging Technologies Graduates Program to provide up to 234 scholarships in emerging technologies areas.
  • $10.7 million over three years from 2021-22 to trial up to four industry-led Digital Skills Cadetship pilots to develop new and innovative pathways to increase the number of Australians with high level digital skills.

 

Mercer’s Perspective

 

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.

Copyright 2021 Mercer LLC. All rights reserved.

 

 

Discover how Mercer can assist your organisation

 

 

Investment consulting
 

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.

 

 

Superannuation Fund services
 

Has your fund considered its next move? Let us help you imagine a brighter future for your members in a rapidly changing environment.

 

 

Workforce consulting
 

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.

 


Speak with a Mercer Consultant

To learn how Mercer can assist your organisation with the outcomes from the 2021 Federal Budget please complete your details below

*Required Fields

We're Here to Help

We're Here to Help

We're keen to hear from you. To speak with a Mercer consultant about the Federal Budget complete your details below.

*Required Fields