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Where are the humans?


At a time when we need as many people in the workforce as possible to see us through the recovery from the pandemic and drive sustainable, long-term growth – we are presented with a budget that delivers little to solve the skilled labour shortage - a major limiting factor in our recovery.  The Budget effectively has a 6-week horizon – enough time to buy votes for the next election. 

With unemployment set to dip as low as 3.5% by June, lack of meaningful change to make it easier and more attractive for workers of all types – carers, working mums, etc – to join the workforce, and little to no changes to migration levels to supplement the need for essential skills – the maths in the Budget simply do not add up.  This is a supply-demand issue where focusing on how to drive greater participation of labour in the right places at the right time could not be more important than it is now. 

Workforce Skills/Labour - we are in catch up mode from COVID-19 yet the human buffet remains the same

Talent retention remains fragile and organisations will really need to improve their game on the employee experience. The employee experience encompasses everything from career opportunities, skill development, flexibility and balance – making work work for them, wellness and health. Culture is king and simply paying well is no longer enough, when it is the employees’ market. Employers are going to have to raise the stakes.

Below we provide an overview of how the 2022/23 Federal Budget might address some talent shortages and critical skill development and provide further employment opportunities for the future ahead. But does it go far enough?

Topic 1: Skilled workers now and in the future 

The Budget contains four central themes: apprenticeships, jobs for regions, positioning for the future, and small business. Measures include:  


  • Invest a further $2.8 billion to support Australian apprenticeships, building on the $13.3 billion spent on apprenticeships and traineeships since 2013.

Positioning for the future - a raft of initiatives

  • Numerous schemes and programs for seasonal jobs, the aged care sector, investing in the employability of 5,000 disadvantaged young Australians and making over 70 changes to migration and visa settings in response to COVID‑19 and to assist with economic recovery. These include specific visa validity extensions, removal of work restrictions and visa application charge waivers or refunds.

  • The Government is also redistributing 10,000 places in the 2021/22 Migration Program from the Partner visa category within the Family stream to the Skill stream, thereby increasing the Skill stream ceiling from 79,600 to 89,600. This redistribution recognises the sharp fall in the number of on hand Partner visa applications and will further support the economic recovery by increasing the places available for skilled visa holders.

The focus on jobs for regions includes:

  • The $2.5 billion Modern Manufacturing Strategy, which includes more than $1 billion of new investment in this Budget.

  • Of this, $500 million of funding will drive growth and innovation in our regional manufacturers through a new Regional Accelerator Stream of the Modern Manufacturing Initiative.

  • Investing $200 million in a Regional Accelerator Stream of the Supply Chain Resilience Initiative to assist regional businesses to address supply chain vulnerabilities.

Small business – implications of the tax relief

  • Deliver more than $21 billion in tax cuts to small businesses from 2015‑16 to 2024‑25, with around $2.6 billion flowing in 2022/23. This includes reducing the company tax rate for small businesses from 30 per cent in 2013-14 to 25 per cent from 1 July 2021, the lowest level in 50 years.

  • $1.0 billion for a new Technology Investment Boost to encourage small businesses to go digital.

  • Small businesses will have access to a new 20 per cent bonus deduction for eligible external training courses for upskilling employees. The Skills and Training Boost will apply to expenditure incurred from Budget night until 30 June 2024, providing $550 million in tax relief.



Mercer’s Perspective


All of these elements are primarily targeted at funding more places for young, disadvantaged, aged care sector, seasonal and regional workers. Yet the reality of this investment is that it will likely take years before we see dividends and - with the exception of seasonal workers and a net 10,000 additional skilled workers visas – it doesn’t necessarily address the critical shortages in labour supply we are seeing now. It remains to be seen whether small business will take on more staff, invest in training or utilise the difference to make up for their losses incurred during the COVID years.




Topic 2 – Aged Care workforce


  • Funding increase of $49.5 million over two years to subsidise 15,000 training places for new and existing sector workers. This will provide low and fee free training places in aged care courses under the JobTrainer Fund

  • $215.3 million over 2 years from 2021 22 to provide bonuses of up to $800 to aged care workers in residential aged care and home care




Mercer’s Perspective


Whilst incentivisation to grow the workforce within aged care is absolutely essential, these measures do not go far enough and do not address the fundamental problem of a workforce shortage:

  • Where will these additional 15,000 individuals join from? Given the expected historically low unemployment rates, will low or fee free training places really be enough to attract an in-demand talent pool?

  • Training takes time, we will not see fully competent additional aged care workers entering the workforce in the short term as a result of this Budget announcement

  • Aged care has itself is facing unprecedented attrition and an aging workforce;15,000 training places will be a drop in the ocean compared to the 1 in 5 staff members expected to leave the sector in the next year

  • An $800 bonus will not go far to reward, or to incentivise, employees to remain within the aged care sector




Topic 3 – Creating opportunities for women to fulfil their potential


The Government’s approach looks at five central themes: boosting female participation, improving women’s safety, investing in health and wellbeing, boosting economic security and creating pathways for women leaders. Measures include:

  • $482 million to help women advance their careers and improve their economic security.

  • Funding of $56.2 million to assist women to transition into the booming tech industry and into jobs in manufacturing, as well as to develop entrepreneurial skills.

  • $40.4 million for a range of initiatives to support more women into senior roles and leadership positions. This includes expanding the Future Women’s Jobs Academy to provide mentoring support and skills training to help women to transition into management and leadership positions.

  • Enhancing Paid Parental Leave for working families to provide increased flexibility to manage work and care, including access to combined 20 weeks of paid parent leave for working couples as well as single parents being able to access the full 20 weeks. This is good news for both parents and their families. 



Mercer’s Perspective


We are keenly interested in the measures and how they translate into workforce impact that benefits women. The question is “Is this enough and will it materially change lives and outcomes, not only for women themselves, but for those around them?”  Whilst some of these numbers might look impressive on paper, in reality they just aren’t big numbers at all. We are not addressing wage disparity in the short term and this will continue. We need to do more to truly advance women’s participation and investing in their futures.



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