Budget 2013 outcomes for Workforce Planning, Development, VET and innovation

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Whilst the Federal budget 2013-14 talks about investing in Australia’s Human Capital and skilled workers, it’s more of a funding shuffle, apart from the important investment in the NDIS and the schooling sector.

There hidden opportunities for workforce planning, development, Vocational Education and Training (VET) and innovation.

An obvious place to start looking for outcomes is A Plan for Australian Jobs, however many components of the budget have workforce implications.  This blog post is long with headings in alphabetical order to help you navigate the content and I hope you enjoyed budget night (although perhaps didn’t stay up as late as me reading all 948 pages!).  NB. Information has been adapted from the Budget Overview and Budget Paper #2 in particular.

A Plan for Australian Jobs

The plan has 3 core strategies including backing Australian industry to win more work at home; supporting Australian industry to win new business abroad; and helping Australian small and medium businesses to grow and create new jobs.

Finally we see a requirement for any project in Australia worth more than $500 million where it must include an Australian Industry Participation Plan.  I’d like to see this project $ amount be reduced perhaps to around $100 million with all state and territory governments following suit (albeit most states and territories are already supporting ‘local’ suppliers).

Government investment includes:

  • $500 million+ to establish up to 10 Industry Innovation precincts around Australia
  • Small and medium sized businesses and start-up companies will also be provided with expanded business assistance and access to finance through the $378 million Venture Australia package
  • $29.4 million will be provided over five years (including $1.7 million in 2017-18) to establish the Enterprise Solutions Program to help innovative small to medium enterprises become more competitive in bidding for government services and tenders
  • Grants of up to $100,000 for feasibility studies and up to $1.0 million for proof of concept will be provided to enterprises to develop innovative solutions for the future needs of government entities
  • $98.2 million over five years (including $2.1 million in capital in 2013-14) to continue funding for a number of industry assistance programs ($81.0 million)
  • establish a new Australian Industry Participation (AIP) agency to administer these programs ($17.2 million)
  • $3.0 million to continue the existing AIP plan arrangements as well as an additional $6.4 million to extend AIP plans to all major industry projects with capital expenditure of $500 million or more

This measure also includes:

  • $29.1 million to continue funding 11 Supplier Advocates to champion Australian industry in the marketplace;
  • $19.2 million to extend the Enterprise Connect program to the Transport and Logistics, Information Communication and Technology, and Professional Services sectors;
  • $13.2 million to continue funding for a Resource Sector Supplier Envoy and the Resource Sector Supplier Advisory Forum; and
  • $9.9 million to continue activities funded through the Industry Capability Network Limited.

Workforce planning at an enterprise, network and industry level, to identify current and future capability, is critical to support these investments.

Aged Care Workforce

From 1 July 2013, the Government will provide a new workforce supplement for employers who agree to minimum annual wage increases for aged care workers.  A My Aged Care website will be established this year to provide clear and reliable information about the services available.  Coupled with the continued implementation of reforms, all aged care providers should have a workforce plan that supports change management, quality service provision, workforce attraction, retention and development.

Apprenticeships

An Alternative Pathways Program will be established with funding of $68.8 million over four years, to deliver more flexible pathways for 4,000 Australians completing a trade or technical qualification in high demand industries facing skills shortages.  This will be progressed through the National Panel for Economic Reform – a newly formed group that we all need to keep an eye on.

Arts Sector

Initiatives in arts sector include:

  • elite training for theatre, dance and music students with $30.2 million for Major Performing Arts companies and training institutions
  • $25.2 million for the revival of Australian Indigenous languages, professional development and support for Indigenous arts centres
  • $21.1 million vocational training, traineeships, start-up business grants, and representation at community cultural events
  • $41.6 million to attract major international film production including Walt Disney’s 20,000 Leagues Under The Sea: Captain Nemo
  • $3.4 million over four years from 2013-14 to establish the ArtsReady program to support skills development in secondary schools and the arts industry.

ArtsReady will support skills development in the arts sector through clearly defined and accredited vocational training pathways, offering a mix of school-based and full time traineeships to assist students in finding employment opportunities in the arts industry.  Profiling the skills required for various job roles across the sector, to run successful arts businesses and events is an opportunity for training and employment service providers.

Australia in the Asian Century Initiatives

With the aim of increasing Asia?relevant skills in the workforce by better preparing students for success in the Asian Century the following initiatives (many already announced) will be supported:

  • Up to 12,000 Asian Century Awards over five years for Australians to study in the region, and students from regional countries to undertake study in Australia
  • $7.8 million over five years in grants for Australian business organisations to improve links with Asia
  • $2.8 million over four years to the Department of Education, Employment and Workplace Relations to promote partnerships between schools, businesses and the community to increase Asia literacy, including engagement of Asian language speakers in schools.

Asian Century capabilities, mapped to our National Training System and Training Packages would highlight where the system may need changes, new skills and qualifications.

The Government will provide $1.8 million over three years from 2012-13 to support the harmonisation of vocational education and training (VET) standards and skills recognition between corresponding industry sectors in Australia and Asia – now this is interesting!

Carbon Price

All programs funded by the carbon tax will be significantly reduced including:

  • Jobs and Competitiveness Program
  • Energy Security Fund
  • National Low?Emissions Coal Initiative
  • Carbon Capture and Storage Flagships program
  • Clean Technology Programs
  • Biodiversity Fund and;
  • The Australian Renewable Energy Agency will all have funding adjusted and extended over a longer program life.

The Government will reduce funding by $274.2 million over two years from 2015-16 for the Coal Sector Jobs package and will not proceed with further funding rounds for the Community Energy Efficiency program and the Low Income Energy Efficiency program.

Child Care Workforce

The $300 million Early Years Quality Fund will be established for childcare workers. From 1 July 2013, the fund will help eligible long day care providers attract and retain a highly qualified workforce via wage supplements and meet the National Quality Framework.

Recognition of Prior Learning (RPL) for child care workers means that 500 existing early childhood education and care workers working in rural and remote areas will be eligible for rebates of their costs associated with completing the assessment process. Eligible recipients will receive up to $1,500 to assist with the fees associated with assessments and gap training and up to $2,000 assistance for travel costs. Funding will be available to early childhood educators who wish to attain a Certificate III, Diploma, or Advanced Diploma in early childhood education.

Education

A big ticket item is $9.8 billion over 6 years for A National Plan for School Improvement with improved teacher selection, training and mentoring; more early career support and better professional development for teachers; and empowered school leaders and better training for aspiring principals, plus a $1.1 billion investment in early childhood education.  Workforce plans for every school is an initiative that I’d like to see implemented.

Employment

Initiatives for employment include:

  • An additional $15.7 million to continue to engage local employment coordinators in 20 vulnerable labour markets to drive local solutions to unemployment
  • Extending the Connecting People with Jobs program providing support to job seekers who choose to relocate to secure employment or an apprenticeship
  • $15.7 million to extend the Priority Employment Area Initiative for one year to 30 June 2014
  • $4.0 million Flexible Funding Pool will be available to Local Employment Coordinators to implement and support locally driven initiatives that create or facilitate employment, education and training opportunities, and increase the participation of local communities in productive activities
  • $2.1 million will be provided to conduct approximately 10 Jobs and Skills Expos across the Priority Employment Areas.

Regional workforce plans identifying critical job roles and region wide workforce issues with workforce development strategies would be a great demonstration of local solutions.

The Government will increase the visa application charge (VAC) for the Temporary Work (Skilled) — Standard Business Sponsorship (Subclass 457) Visa program from 1 July 2013 to $900.

Farming Sector

$99.4 million over four years will be provided for a new Farm Household Allowance under National Drought Program Reform commencing from 1 July 2014 requiring the completion of individually tailored reciprocal obligations targeted at assisting farmers to better manage their individual situation in the future. Reciprocal obligations could include training or development activities, both on-farm and off-farm, seeking professional advice or succession planning.

There will be a national approach to the provision of farm business training through a standardised Vocational Education and Training accredited skill set developed by AgriFood Skills Australia and key members of the farming and training sector and delivered through the Vocational Education and Training system by registered training organisations.

I’d like to see a farm business competency framework outlining skills including units of competency from multiple Training Packages, at different qualification levels and structured in a way that represents what is needed to run a successful farm.

Funding for University Places

The Government is expanding this investment by providing an additional $97 million from 2014 to 2017 for additional Commonwealth supported places for sub-bachelor and postgraduate courses.

Housing for Seniors

A new measure of $112.4 million in funding will be trialled to assist senior Australians to downsize to a home more suitable to their needs without reducing their Age Pension and I’m interested to see what affect this may have on the building and construction sector and their workforce skills profile.

Infrastructure

Infrastructure investment with a major project for each state and territory in rail and urban roads, road safety and enhance flood resilience has been included in the budget but additional projects will be needed to support the local workforce.

A new advisory function will be established within the Treasury to provide guidance on the most appropriate financing structures to bring large, complex infrastructure projects to market.

Aside from the Australian Industry Participation plans, an infrastructure project workforce plan would help to identify the workforce requirements over the life of the project and opportunities for workforce development particularly the employment of local talent.

NDIS

$19.3 billion has been committed over 7 years for DisabilityCare Australia, a very important initiative, which will commence operations from July 2013 across four jurisdictions, and from July 2014 in a further two jurisdictions, with major workforce planning and development implications for the Disability workforce.

NBN

Engagement is the key with:

  • $5.7 million over two years to support local governments improve online service delivery
  • $9.9 million over four years to assist senior Australians to participate and contribute online.  Funding of $5.0 million will be provided to community organisations for education and training appropriately tailored to seniors on cyber security issues and the use of multimedia devices.
  • an additional $7.2 million over three years to improve the capacity of small businesses and not-for-profit organisations to engage in the digital economy and take advantage of the National Broadband Network (NBN)
  • expansion of the Digital Enterprise program from the existing 40 locations to an additional 20 regional rollout sites consistent with the NBN rollout plan
  • establishment of a virtual digital enterprise service to support businesses and not-for-profit organisations operating in remote Australia

To build upon the foundation work of the Digital Enterprise Program I’d like to see an intermediate to advanced NBN-enabled capability development program as many businesses are looking for that next level that demonstrates NBN-NBN connectivity.

Regions

$1 billion will be available through the Regional Development Australia Fund to finance infrastructure projects and 1.5 billion under the Remote Jobs and Communities Program for people living in remote areas of Australia.

The Government has also announced more than $22 million to support jobs, skills and accelerated investment in key sectors of the Tasmanian economy and $69.9 million to the 2013 Queensland Floods Support Package.

For further information follow this link: http://www.minister.infrastructure.gov.au/aa/

Superannuation Guarantee (SG)

The SG rate will increase from 9 to 9.25 per cent from 1 July 2013, and will continue to increase each year until it reaches 12 per cent from 1 July 2019.  The Government will also abolish the maximum age limit on the SG from 1 July 2013. This reform will increase the incentive for workers aged 70 and over to remain in the workforce and further boost retirement savings.

My questions are:

  1. Will the increases in super be a reason to downsize your workforce to reduce costs and/or look for improved productivity?
  2. Who wants to work until their 70?  Another important reason to understand your workforce gaps, issues and needs.

The changes in super and productivity targets provide a sound business reason to build a workforce plan.

Research

In this Budget, the Government is providing $135.3 million for 150 four year Future Fellowships to attract and retain the best Australian and international mid-career researchers in areas of crucial national importance.

Skills Connect Fund

$45.0 million will be provided in 2013?14 to establish the Skills Connect Fund, which will streamline access to the five workforce development programs available under Australian Government Skills Connect, on a co contribution basis.

The five programs are the National Workforce Development Fund, the Workforce English Language and the Literacy Program, the Investing in Experience (Skills Recognition and Training) initiative, the Accelerated Australian Apprenticeships initiative and the Australian Apprenticeships Mentoring Program.

What’s not clear is how this will work, does Skills Connect replace the existing programs or is it more of an umbrella ‘brand’, which is how it currently works.

Funding for this measure will be provided by a redirection of funding from within the Vocational Education and Training National Support program (but from where exactly?).

Vocational Education and Training

For ASQA, the Government will redirect $15.0 million over two years from the National Training System Commonwealth Own Purpose Expenditure to offset a projected shortfall in cost recovery revenue in 2012-13 and 2013-14, allowing ASQA to gradually transition to full cost recovery.

The Government will redirect $5.9 million in 2012-13 from the Vocational Education and Training (VET) National Support Programs to support the Food, Soil and Water Research Centre project at Charles Sturt University.

Support for industry, joint Commonwealth/State funding for group training, equity funding and VET system support. Support for the VET sector will continue to be provided through the $1.75 billion National Partnership Agreement on Skills Reform and the National Agreement on Skills and Workforce Development, which commenced on 1 July 2012.

Key concepts for VET = redirection, states/territories to match or step up support, no new funding.

Youth Attainment and Transitions

The Government will provide $127.7 million over two years to extend programs currently funded through the Youth Attainment and Transitions National Partnership for 12 months until the end of 2014.  The Youth Connections, School Business Community Partnership Brokers programs and initiatives under the National Career Development (NCD) Strategy will be extended under this proposal.

Balancing your age profile, engaging, developing and retaining young people should feature as a workforce development strategy in just about every workforce plan.

Other Outcomes

  • Closing the Gap – The Australian Government will provide $777 million for a new National Partnership (NP) on Closing the Gap in Indigenous Health Outcomes.
  • $25.7 million over four years to the Office of the Fair Work Ombudsman (OFWO) to provide compliance, education and advisory services in support of the national workplace relations system.
  • $100.0 million over five years from 2012-13 for the Murray-Darling Basin Regional Economic Diversification program.
  • $1.5 million over four years from 2012-13 to establish an Enterprise Connect Innovative Regions Centre (IRC) in Western Sydney, expanding the number of innovative regions across Australia to 11.
  • $5.0 million over three years (2013-14 to 2015-16) to assist the Australian shipping industry to meet its future workforce training needs. Funding will be provided for: a national maritime training co-contribution subsidy of $10,000 per integrated rating trainee and $20,000 per deck and engineer officer trainee; and seed funding for three years to cover the development costs of the national demand aggregation model, undertake biennial workforce censuses, support a national industry training body, and to support the Maritime Workforce Development Forum’s ongoing operation.

Redirections

  • work related self education expenses with an annual $2,000 cap on these expenses from 1 July 2014. This measure is estimated to provide savings to the Budget of $514.3 million over the forward estimates period.  Savings from this measure will be redirected to the Better Schools — A National Plan for School Improvement package.
  • reprioritising programs in Health Workforce Australia (HWA) from 2013-14 saving $80.0 million over four years.
  • redirect funding for the Australian Skills Centres of Excellence program from 1 July 2013, to provide savings of $18.0 million over three years.  Savings will be redirected to the establishment of the Apprenticeships — Alternative Pathways program.
  • redirect funding of $32.3 million over four years from the Biodiversity Fund to other Government priorities, including the Tasmanian Forests Agreement.
  • savings of $38.1 million from the Jobs Fund — Infrastructure Employment program as a result of the Cairns Entertainment Precinct project not proceeding.

Major initiatives in the budget are summarised here.

In conclusion, the budget reinforces the need to have a workforce plan, to take a proactive approach and to future proof your organisation, project, industry sector or region, and to optimise your human capital.

For assistance with workforce planning and development please contact Workforce BluePrint – working all around Australia and internationally, we look forward to working with you.

Written by Wendy Perry, Head Workforce Planner, Workforce Blueprint, 14 May 2013.

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