Federal Budget 2021: Treasurer announces jobs funding, childcare boost to kickstart economy

Huge spending aims to create 250,000 new jobs

Federal Budget 2021: Treasurer announces jobs funding, childcare boost to kickstart economy

The government has released its 2021 Federal Budget, announcing billions of dollars in funding and policies to stimulate 250,000 new jobs.

The hotly-anticipated Budget marks a sharp U-turn on the Coalition’s pre-pandemic policy approach which was aimed at driving down the deficit. Now, in the wake of the pandemic, the focus is on injecting cash into industries to stimulate jobs growth, as well as reduce childcare costs to get more women back into the workplace.

As a result of the COVID-recession, deficit will reach $161 billion this year, falling to $57 billion in 2024‑25. That figure is $52.7 billion lower than expected in last year’s Budget. Net debt will increase to $617.5 billion or 30% of GDP this year and peak at $980.6 billion or 40.9 per cent of GDP in June 2025.

Treasurer Josh Frydenberg has said Australia’s unemployment rate needs to fall below 5% to see the economy grow and wages increase. But unemployment has not been that low since the 1980s mining boom, meaning significant investment is required to enable jobs creation, upskilling, and higher rates of full-time workforce participation.

Speaking in Parliament, Frydenberg said: “Employment is at a record high, with 75,000 more Australians in jobs than before the pandemic.

“And this budget will help to create more than 250,000 more jobs by the end of 2022‑23. Mr Speaker, this budget secures the recovery and sets Australia up for the future.”

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Key investment areas impacting HR and the workplace:

  • Skilled migration: $550 million will be spent over the next four years to make it easier for businesses to attract talent from overseas. Changes to tax rules will encourage employee share schemes and see simplified tax residency rules for individuals
  • Childcare: A $1.7 billion package will remove the subsidy caps for higher-income earners and reduce the cost of childcare for families with two or more children in care. However, the changes will not apply until July 1, 2022.
  • Digital economy: $1.2 billion digital economy package to encourage growth. It includes a 30% tax relief for video game development projects, a new pilot program for work-based digital cadetships, increased AI and funding to improve cyber security
  • Visa changes: International students working in hospitality and tourism will be able to work up to 40 hours a week, removing the previous 20-hour cap
  • International border opening: Frydenberg has committed to opening the borders to welcome back visitors and migrants as soon as health experts give the go ahead. The government estimates that the nation will be vaccinated by the end of the year and borders will reopen from the middle of 2022
  • Upskilling: $1bn will go to extending the JobTrainer program for another 12 months, offering people free or low-fee courses to work in sectors suffering shortages like aged care, IT, and childcare
  • Deregulation measures: $120 million has been announced to reduce the burden on employers when it comes to regulating with the government, particularly around modern awards. Investment in regulation technology aims to streamline the process of complying with award pay and conditions, making it easier to create new jobs.

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