Employers welcome budget

by 27 May 2008

RECRUITERS AND employers have welcomed the Government’s move to address the skills shortage and improve workforce participation in the recent 2008 Federal budget announcement.

Planned investments in education and training, family-friendly work practices and skilled migration will all help to alleviate the strain on employers in the skilled starved market.

The budget, which allocated $5.9 billion over five years to the Rudd Government’s “education revolution” plans to deliver as many as 630,000 extra training places to boost the skilled workforce and $2.5 billion in investment over ten years for trade training centres in schools.

“The Education Investment Fund will see not only universities, but TAFEs and schools, build a skilled workforce for the future,” said Edmund Khalaf, CFO, Vedior Asia Pacific.

“Australian businesses will benefit from a $1.9-billion-dollar package to boost skilled labour where it is needed most – mining and construction, health and community services.”

The government also announced it would spend $19.6 million over four years to "strengthen the integrity of temporary working visa arrangements, including the 457 visa program, by clarifying the obligations and rights of employers and workers". Khalaf believes that this will enable employers to utilise this talent pool where it was once too costly and difficult.

“The planned $20 million to reform the 457 visa scheme to make it more responsive to employer needs has been long awaited, and will mean an additional 31,000 skilled migrants will be able to help build Australian businesses and ease the skill shortage,” he said

However, the RCSA (Recruitment & Consulting Services Association) said that while this increase in skilled migration intake would help to meet employers’ needs, it was not enough on its own.

“The Government continues to refuse to amend the onerous conditions of the on-hire industry’s Labour Agreement, which prevents the majority of temporary contract employers from sponsoring temporary skilled migrants,” said CEO Julie Mills. “This means employers who can’t directly sponsor 457 visas are missing out on the chance to access the overseas workers they need to meet business demands,” she said.

The budget, which included a range of measures aimed at increasing productivity and workforce participation, also including a $12-million package to encourage family-friendly work practices.

Minister for Employment and Workplace Relations Julia Gillard said this would be spent over three years to help small businesses introduce flexible working hours and other measures to improve retention and productivity.

Small businesses will have access to grants of up to $15,000 to help meet the set-up costs of family-friendly policies, such as rosters based on school terms, core working hours limited to 10am to 3pm, unpaid leave for carers or parents of children with special needs, workplace mentoring and "family rooms" at work.

The RCSA believes this is a positive step for employers.

“The plan will benefit our members, many of whom are small businesses keen to provide more flexibility, but challenged by the logistics and costs of doing so,” said Mills. “We also hope it will help our members’ clients to become more attractive employers.”

Tax cuts for low and middle-income workers have also been welcomed, but only increase the need for more incentives and Government support for working Australian families to save, according to consultancy firm Mercer.

Mercer’s superannuation expert, Dr David Knox, said the tax cuts highlight the need to make Australia’s superannuation system fairer by providing low and middle-income earners with more financial support for their superannuation.

“Australians on a low or middle income need to be supported to save for their future,” he said.

From 1 July 2008 the 15 per cent tax rate will apply up to $34,000 (up from $30,000) and the tax-free income level will increase to $14,000 (up from $11,000). However, these people will continue to be taxed at a rate of 15 per cent on their employer superannuation contributions, which is the same or higher than their level of income tax.

“These individuals are receiving virtually no taxation support, even though their superannuation contributions are preserved for many years,” said Knox

Mercer believes the Government has missed an opportunity to present much-needed longer-term superannuation reform.

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