Budget’s employment content emphasises training

Analysis

Budget’s employment content emphasises training

The 2011 Federal Budget aims to achieve an unemployment fall from 4¾% to 4½% and training has figured prominently in the government’s plans.

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The 2011 Federal Budget aims to achieve an unemployment fall from 4¾% to 4½% and training has figured prominently in the government’s plans.

For the Budget papers, click here

Workplace and Fair Work announcements
 
Modern awards and competency based progression
 
The government has announced a plan to implement competency-based progression in Australian. Apprenticeships will affect the modern award system with part of $100 million over four years being directed towards the development of a legal clause to be incorporated into modern awards.

The government has indicated it will consult with industry on how it expects to progress towards competency-based progression.

Work health and safety
 
The government will provide $14.7 million over two years, to implement nationally harmonised model work health and safety laws within the Commonwealth’s jurisdiction by the end of 2011.

The funding will be directed towards education activities and service delivery, including harmonised guidance material and reporting. This announcement follows the NSW Government introducing corresponding work health and safety laws into
NSW Parliament.

Superannuation
 
The government has provided significant funding to implement its reforms to the superannuation industry — MySuper and SuperStream.
 
The government will provide $44.5 million over four years to introduce MySuper, a low-cost, default superannuation product, and to facilitate the transition to SuperStream, which standardises how superannuation contributions are processed. These measures will be partially funded by an increase in the levy on superannuation funds.

A Federal Budget measure will allow refunds of excess concessional superannuation contributions of up to $10,000 for first-time breaches from 1 July 2011. A number of employees have been caught with heavy tax penalties for inadvertent excess payments into super funds.

Training and skills
 
The Budget provides for $359.3 million over four years as part of the establishment of the National Workforce Development Fund.
 
The Fund will support enterprise-based training in critical occupations in identified ‘high need’ sectors in the economy. Industry will be required to make a co-contribution towards the cost of training places based on the size of the enterprise.
 
The Budget provides for $25 million over three years to establish the National Workforce and Productivity Agency.

Australian apprenticeships
 
$100.0 million is set aside over four years to assist industry in developing and implementing strategies that lead to the incorporation of competency-based progression in Australian apprenticeships.

$101.4 million is set aside over four years to provide mentoring support services to Australian Apprentices.

The government will realign the Australian Apprenticeships Incentive Program to better target incentives.

Skilled migration
 
The government will increase the 2011–12 Migration Program to 185,000 places, up from 168,700 places for 2010–11. The program will comprise 125,850 skill stream places, 58,600 family stream places and 550 special eligibility places.

The program will allocate 16,000 skilled migration places to the regions, complemented by Regional Migration Agreements for communities with skill shortages, and introduction of Enterprise Migration Agreements for large resource projects, in return for a financial contribution to train Australians for the future.

Training reform
 
The Budget provides for a review of the Commonwealth’s $1.4 billion per annum investment in the National Agreement on Skills and Workforce Development, to secure reform outcomes and develop a whole-of-government commitment to training.

$1.75 billion will be provided over five years from 2012–13 under a new National Partnership with the states and territories, conditional on reforms to the VET system.

Foundation skills
 
$20.0 million is set aside over four years to expand the Workplace English Language and Literacy program to support businesses who want to boost the basic employment skills of their workers.

$143.1 million (including capital funding of $1.3 million) is provided over four years to fund approximately 30,000 additional training places under the Language, Literacy and Numeracy Program (LLNP).

Workforce participation
 
The Budget provides $80 million for additional training places for single and teenage parents.
 
$20 million is set aside to ensure disadvantaged job seekers can access the Australian Apprenticeships Access Program.
 
The Budget provides for extending the ‘Earn or Learn’ requirements and eligibility for Youth Allowance (other) to unemployed young people aged 21, and increasing their rewards to work.

$45.2 million over two years is provided to extend the current Priority Employment Area initiatives, including Jobs and Skills Expos and Local Employment Coordinators, to 30 June 2013.

Youth transitions
 
$67.6 million is set aside over four years (including capital funding of $0.3 million in 2011–12) to deliver transitional activities for early school leavers aged 15–21 years who do not have a year 12 certificate or equivalent qualification.

The government plans to revise the number of projects to be funded from the Trade Training Centres in Schools Program between 2011–12 and 2014–15. This will provide savings of $102.8 million over four years. This measure will impact both government and non-government schools.

Regional education
 
$500 million is to be provided over five years to strengthen regional higher education and vocational education and training institutions, through the regional priorities round of the Education Investment Fund.

$109.9 million is to be provided over four years for universities with regional campuses through increased and better targeted loading payments to regional areas.

$690 million is set aside for regional higher education, training and research infrastructure through the Education Investment Fund.

The government plans to strengthen national education policies to ensure they meet the needs of regional students.

The Budget provides $19.1 million over three years to engage 34 Regional Strategists to develop regional education, skills and jobs plans, aimed at improving access to education, training and employment in 34 non-metropolitan Regional Development Australia areas.

Industry support
 
The government will continue to fund the Education Training Advisors program which provides funding for industry associations to employ education advisers, whose role is to increase their members’ understanding of the apprenticeship system and to promote increased take up of Australian Apprenticeships.

The Budget provides $20.1 million over two years to establish the Productivity Education and Training Fund to enhance employee and employer understanding of the benefits of productivity growth and to encourage a commitment to achieving productivity growth within the workforce. The Fund will provide up to $10 million to employer organisations and up to $10 million to unions to enable them to provide tailored information and education resources to their membership.

Indigenous education
 
The Budget provides for $171.3 million over two years to 2013-14, to extend Indigenous education support programs funded under the Indigenous Education (Targeted Assistance) Act 2000 (IETA Act) until the end of 2013.

Other employment issues — FBT on cars

As part of the Henry Tax Review, the government had announced changes to the Fringe Benefits Tax applying to vehicles, removing the unintended incentive for vehicles to be driven further than they need to be driven.

The government will replace the current rates with a single flat rate of 20% that applies regardless of the distance travelled.

Compared to the current statutory rates, a single rate of 20% will:
  • increase the tax concession provided for vehicles driven less than 15,000 kilometres a year
  • maintain the current tax concession provided for vehicles driven between 15,000 and 25,000 kilometres a year
  • decrease the tax concession provided for vehicles driven more than 25,000 kilometres a year.

Some comments  

NSW Business Chamber noted:
‘We applaud the Government’s commitment to increase Australia’s yearly skilled migration intake by 16,000 workers a year.
 
Australia currently has over 200,000 vacancies, including 80,000 jobs in NSW. This decision will strengthen the economy and take pressure off wages growth.
 
Whilst business acknowledges that overall funding levels and direction of the Government’s approach to training and skills is sound, we do have grave concerns about the decision to redirect training incentives from occupations perceived to be of “low economic value”. Many of these positions are in entry-roles and the Government is running the risk of harming the most vulnerable in our workforce.
 
Whilst business acknowledges that overall funding levels and direction of the Government’s approach to training and skills is sound, we do have grave concerns about the decision to redirect training incentives from occupations perceived to be of “low economic value”.’
AMMA Resource industry employers are urging the Federal Labor Government to stand firm in the face of demands from both The Greens and the union movement opposed to increasing the level of skilled migration announced in the Federal Budget last night.
 
The Treasurer’s desire to create opportunity to spread opportunity is fully supported by the Association of Mining and Exploration Companies (AMEC).
 
‘This is essentially what we have been saying all along during the debate surrounding the additional tax on mining,’ said Simon Bennison, AMEC chief executive.
 
‘We have consistently said that the Government should have developed a long term strategic reform program that addresses macro-economic issues and promotes national growth; rather than propose a short term tax grab from the mining sector based on an apparent “resources boom”.
 
The Tax Institute’s Senior Tax Counsel, Robert Jeremenko, welcomed the 2011–12 Federal Budget measure to allow refunds of excess concessional superannuation contributions of up to $10,000 for first time breaches from 1 July 2011.
 
‘The Tax Institute has been a strong advocate for reforming the excess superannuation contribution laws so that inadvertent breaches of the caps are not unfairly penalised,’ Mr Jeremenko said.
 
‘The Government is to be congratulated for listening to tax professionals’ concerns and taking this positive step to introduce some flexibility.’
 
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