This year’s Federal Budget outlined record investment in skills and training1 to help catapult the Australian economy out of the first recession in 20 years and into a post-COVID rebound.
The Coalition has put jobs and training squarely in the centre of its COVID-19 recovery program, which should pay long-term dividends. It is also welcome support for young people, many of whom have lost their jobs during the pandemic as the hospitality and retail sectors closed as a result of lockdowns.
Moreover, the initiatives outlined in the Budget should help get people back into jobs and address the unemployment rate, which climbed to highs not seen for decades this year. According to the latest statistic from the Australian Bureau of Statistics2 (ABS), in August the unemployment rate dropped to 6.8 per cent from 7.5 per cent in July, a figure that represented a near 22 year high3.
Since then, there have been signs of recovery in the labour market, with the participation rate rising to 64.8 per cent, and employment numbers growing by 111,000 people to 12,583,400 people in employment, according to ABS numbers. However, the underemployment rate sat at 11.2 per cent in August.
On the same day the Budget was handed down, the Reserve Bank of Australia (RBA) kept the cash rate at 0.25 per cent, with jobs a focus of the statement released by the central bank4 at this time to explain its monetary policy decision. According to the RBA, it is “committed to do what it can to support jobs, incomes and businesses in Australia.”
RBA Governor Philip Lowe said in the statement, "The Board views addressing the high rate of unemployment as an important national priority. It will maintain highly accommodative policy settings as long as is required and will not increase the cash rate target until progress is being made towards full employment…"
The combination of the initiatives announced in this year’s Budget to fund training and jobs programs and the RBA’s accommodative monetary policy stance should help create jobs and address the relatively high unemployment rate.
Central to the Federal Government’s jobs and training plan is the new JobMaker hiring program designed to encourage businesses to employ young people. The scheme will pay businesses that employ someone on JobSeeker who is aged 16 to 29, $200 a week and someone between 30 and 35, $100 per week, as long as they work at least 20 hours a week. This should put 450,000 young people into jobs and also reduce reliance on JobSeeker.
The Government has also allocated $1.2 billion to support businesses to employ 100,000 new apprentices or trainees across all industry sectors. Effective immediately, businesses that employ apprentices will be eligible to receive subsidies equal to 50 per cent of the new staff member’s wage, capped at $7,000 a quarter. This is in addition to the $2.8 billion Supporting Apprentices and Trainees wage subsidy that is already in place.
On top of its plan to encourage businesses to hire apprentices, the Government has announced plans for a $1 billion JobTrainer fund, which will create up to 340,000 free or low‑cost training places for school leavers and job seekers.
Funding for three other training programs were outlined at this year’s Budget:
Treasurer Josh Frydenberg noted in the Budget speech the Government is also investing in regional Australia to match people who are looking for work with employment opportunities. Areas of focus include Adelaide, Cairns, Darwin, Gippsland, Hobart, the Hunter Valley, Townsville and Perth.
Additionally, funding for the substantial manufacturing, infrastructure and R&D programs announced in the Budget should also help support jobs growth and reduce unemployment over time.
2 Australian Bureau of Statistics, August 2020, https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release, accessed 06/10/20
3 Trading Economics, 2020, https://tradingeconomics.com/australia/unemployment-rate, accessed 06/10/20
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