Australian Mid-Year Economic and Fiscal Outlook – Workforce Development and Planning implications = good and bad news, funding + and –

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The Mid-Year Economic and Fiscal Outlook 2012-13 Statement by THE HONOURABLE WAYNE SWAN MP AND SENATOR THE HONOURABLE PENNY WONG provides updated information to allow the assessment of the Government’s fiscal performance against its fiscal strategy.

What does it mean for workforce development and planning? Good news, bad news and good n bad news…

Good news:

• The Australian economy continues to outperform every major advanced economy.
• The unemployment rate has remained low and underlying inflation is at the bottom of the Reserve Bank’s target band.
• The Government has announced that it will pursue significant long term reforms to schools and disabilities. The Government will fundamentally reform the model for school funding, with a new system to be phased in over six years from calendar year 2014. Launch sites for the NDIS will commence from July 2013, the first step towards a better deal for Australians with a disability.
• An additional $5.3 billion in funding from 2010 to 2015 for universities will be provided to support the growth in student enrolments resulting from the Government’s reforms. This funding is supporting the additional 150,000 university students that are enrolled in university in 2012 compared to 2007 (a 27.8 per cent increase).
• Tertiary Student Assistance payments which are expected to increase by $381 million in 2012 13 ($2.0 billion over four years), largely reflecting an increase in projected enrolments in higher education and a growing take up of income support payments by higher education students.
• an additional $495.0 million in 2014 15 and 2015 16 for the National Partnership for adult public dental services.

Good and bad:

• The Government is making changes to the Australian Apprenticeships Incentives Program (AAIP) that will better target spending towards areas of high skill need. Changes to the standard incentive payments will ensure that the focus of the AAIP is on encouraging employers to take on apprentices in high skill need areas and train them through to completion. These changes will ensure the $3.3 billion funding over the forward estimates provided through the AAIP is best directed to help address skill shortages and does not duplicate other Government funded initiatives including, for example, the National Workforce Development Funding and the National Partnership Agreement on Skills Reform.
• Wages growth is expected to slow, consistent with moderate employment growth. Aggregate wages have grown solidly over the past year, with the low unemployment rate supporting solid growth in private sector wages.
• Increasing the pension age to 67 by 2023.
• extending the Trade Training Centres in Schools program to 2018 19, rephasing funding to evenly distribute projects over the life of the program. This rephasing reduces payments by $305 million over four years, with overall funding over the life of the program remaining unchanged.

Bad news:

• Some sectors face challenging conditions.
• The Government has designed a package of savings worth $16.4 billion in 2012 13 and over the forward estimates.
• Discontinuing the $1,500 standard commencement incentive, and reducing the standard completion incentive to $1,500, for employers of part time and casual apprenticeships in non National Skills Needs List occupations, decreasing payments by $19 million in 2012 13 ($277 million over four years). This will apply immediately for all commencing apprentices. Employers of ongoing apprentices will continue to be eligible for incentives under the previous arrangements until 30 June 2013.
• Changes in the timing of funding to a number of grant programs across a range of Government portfolios to better reflect the expected timing of payments ($324 million in 2012 13 ($125 million over four years) [Note. Hhmmm I’d like some more detail here as this sounds very open ended].
• Payments to Job Services Australia which are expected to decrease by $150 million in 2012 13 ($376 million over four years) reflecting a reduction in forecast client numbers and a decline in the proportion of jobseekers requiring more intensive employment assistance services. [Note. I predict that a number of JSA’s will lose their contracts and undergo their own labour market adjustment].

You may be interested in the ‘Estimated payments to support skills & workforce development services, by year and State’. Other areas of revenue and savings (mostly 2012-13 figures, so many more millions over the longer term) include:

• Student income support — general interest charge on student income support debt
• National Broadband Network — metropolitan rollout, +$20 million to improve public understanding, address misconceptions and provide updated information about the National Broadband Network.
• Whole of Government Savings from Paused Grants Programs – $157.5 million
• Centre for Workplace Leadership — establishment, +$1.7 million
• Australian Apprenticeship Access Program — reduction, -$3 million
• Australian Apprenticeships Incentives Program – modifications and remove standard recommencement incentive payment for non NSNL workers, -$10.3 million
• Manufacturing Leaders Group – +$0.7 million
• South East South Australia Innovation and Investment Fund — redirection, -$1.4 million
• Targeting skills in need – Better targeting part time and casual incentives, Kickstart for trades, Removing incentives for Diplomas and Advanced Diplomas, Support for Adult Australian Apprentices -amended arrangements = -$19.2 million, +$1.7 million, -$1.8 million, and -$17.6 million respectively
• Textiles, Clothing and Footwear Structural Adjustment Program — redirection, -$2.3 million
• Unique Student Identifier (USI) — establishment of a new USI agency

Opportunities:

The Government will adopt revised implementation arrangements for the $20.0 million Productivity Education and Training Fund (the Fund) established in the 2011 12 Budget. The Fund was established to drive a focus on productivity improvement through enterprise bargaining under the Fair Work framework.

Under the revised arrangements, the Fund will be targeted at peak organisations to develop and implement flexible, longer term initiatives that promote productivity growth within the workforce. Grants of $5.0 million will be provided to the Australian Industry Group and the Australian Chamber of Commerce and Industry and $10.0 million to the Union Education Foundation over two years from 2011 12 to achieve the objectives of the Fund.
The Government will provide $12.1 million over four years to establish the Centre for Workplace Leadership. The aim of the institute will be to boost workplace productivity by improving management practices in Australian workplaces, particularly focussing on small to medium enterprises. The institute will:

• develop good leadership and management practices;
• provide access to leadership training across all levels of organisations; and
• lead public and policy debate on the interdependencies between high performing workplaces, effective management practices and quality jobs.

The Government provided $2.5 million in 2011 12 to support the Australian Indigenous Mentoring Experience (AIME).

• AIME is a not for profit organisation that supports Indigenous high school students to acquire the skills and opportunities, belief and confidence to finish school. AIME also connects students with post Year 12 activities, including further education and employment.
• The cost of this measure was partially met from within the existing resourcing of the Department of Education, Employment and Workplace Relations, and partially offset from other general savings.
The Government will change the age of eligibility from 55 to 50 years for the Mature Age Participation — Job Seeker Assistance program announced in the 2012 13 Budget. The Mature Age Participation — Job Seeker Assistance program provides intensive support to mature age people who are unemployed and would like help to re enter the workforce.

• The extension to the age of eligibility will align with other support programs for mature aged people such as the Experience+ Jobs Bonus initiative announced in the 2012 13 Budget measure Economic Potential of Senior Australians — employee assistance.
The Government will provide $0.2 million over four years from 2012 13 to support workers made redundant as a result of the closure of OneSteel’s Kembla Grange oil and gas pipe operations.

• The funding will provide workers with immediate access to intensive employment services and to enhanced levels of Employment Pathway funding through Job Services Australia providers.
The Government will provide $850,000 in 2012 13 to support workers at risk of being made redundant as a result of the restructuring of the Queensland Government’s public sector.

• The funding will provide for a Jobs and Skills Expo in Brisbane and Townsville, and for over 30 workshops to be held across Queensland to provide information to redundant workers on access to jobs support and related services, such as financial and mental health counselling.
• The cost of this measure will be offset by drawing on funding held in the Contingency Reserve to assist individuals, communities and local employers adjust to structural change.
The Government will provide $0.3 million in 2012 13 to increase awareness of the Resources Sector Jobs Board website.

• The Resources Sector Jobs Board website was developed to link Australian job seekers with employers and job vacancies in the resources sector. The website was established on 10 June 2012 and is part of the Australian JobSearch website.
The Government will retarget the Export Market Development Grants program towards emerging and frontier markets, with a focus on Asian markets. This measure complements the recent review of Austrade, which recommended that Austrade’s export promotion work be undertaken in the world’s emerging and frontier markets, where the commercial opportunities are the greatest and where Australian businesses can benefit most from Government support.

• This measure will save $100.0 million over four years.
The Government provided $42.0 million in 2011 12 to assist Alcoa Australia (Alcoa) to restructure its Point Henry aluminium smelter in Geelong and secure its operation until at least mid 2014.

• The funding will support additional investment in skills and training, plant maintenance and repair activities at the Point Henry smelter.
• The grant was made contingent on Alcoa securing assistance from the Victorian Government.
The Government will provide $48.5 million over four years to establish a Tourism Industry Regional Development Fund. The Fund will support tourism industry development projects in regional Australia by providing grants of up to $250,000, with funding to be matched by grant recipients.

• The cost of this measure will be partially met by redirecting funding from the Asia Marketing Fund — establishment measure from the 2012 13 Budget.
The Government will increase its peak investment in NBN Co Limited (NBN Co) by $2.9 billion from $27.5 billion to $30.4 billion. This increased investment is consistent with capital and operating expenditure as set out in NBN Co’s 2012 15 Corporate Plan.

The Government’s investment over the forward estimates is expected to be $4,672 million in 2012 13, $6,119 million in 2013 14, $6,664 million in 2014 15, and $4,760 million in 2015 16, with $5,354 million beyond the forward estimates. This is in addition to the $2,832 million investment already made.

See all the expenses measures for Industry, Innovation, Science, Research and Tertiary Education in detail.

Written by Wendy Perry, Head Workforce Planner, Workforce BluePrint.

 

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