Mid-Year Economic and Fiscal Outlook 2013-14 – priorities, new initiatives and reductions

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The Coalition’s priorities are reflected in today’s Mid-Year Economic and Fiscal Outlook 2013-14 (17.12.13) including:

  • Agriculture – water infrastructure; Indonesia/Australia Red Meat and Cattle Partnership
  • Defence
  • Gas
  • Indigenous Australians
  • Infrastructure package (focus on land) via a partnership with the private sector, including tourism projects, regional and community infrastructure and a national 1 stop shop for project approvals
  • Manufacturing – self-sustaining exporters
  • Medical (limited – internships)
  • Mining

A Post-Holden plan is yet to be revealed and particularly for South Australia an area to watch closely.Holden

The Government will provide an additional $8.2 billion over six years (including $1.6 billion in 2017/18 and $1.8 billion in 2018/19) for land transport infrastructure projects. This additional funding will encompass the remaining period of the current National Partnership Agreement and the next National Partnership Agreement from 2014/15 to 2018/19, and brings the total funding to be provided over the period 2013/14 to 2018/19 to $34.5 billion. (Appendix A)

The Hon Joe Hockey MP has said that the silver lining in this situation is slower wage growth and opportunities for job creation.  Productivity enhancing projects with co-contribution from the states and territories and reduction in ‘grants’ that the government cannot afford are the main take-aways.  An unemployment rate of 6.25% is forecasted by June 2014 and will remain for the last 2 years of the budget.

There are a number of programs that have been abolished or reduced with a few new initiatives established.  As an example the abolition of Building Strong Communities Fund and the later rounds of the Trades Training Centres:

The Government will achieve savings of $986.5 million over five years (including $375.8 million in 2017/18 and $298.0 million in 2018/19) by ceasing the Trade Training Centres programme.

Savings from this measure will be redirected to offset Students First A fairer funding agreement for schools — Queensland, Western Australia and the Northern Territory. (Appendix A)

A reduction of the public service (14 000+ jobs) was muted prior to the election and the Government will consider natural attrition through the Commission of Audit.

There is reduced funding for Digital Business Kits; Digital Productivity — Digital Communities — Digital Hubs, Local Government and Community Engagement; and New NBN?enabled business models and applications.

The establishment of the Australia-Indonesia Centre where:

The Government will provide $15.0 million over four years to establish the Australia/Indonesia Centre. The Centre will aim to strengthen and deepen Australia/Indonesia business, cultural, educational, research and community links, as well as promote a greater understanding of contemporary Indonesia.

The Centre will be based at Monash University and will initially be a partnership with the Australian National University, the University of Melbourne, the University of Sydney and the Commonwealth Scientific and Industrial Research Organisation. The Centre will receive support from participating institutions and the private sector and is expected to be self sustaining from 2017/18. (Appendix A)

Cessation of the Education Investment Fund regional priorities round and Higher Education Reward Funding reduction with funding introduced for Flexible literacy learning for remote primary schools and Agriculture in Education:

The Government will provide $2.0 million over two years to Education Services Australia to develop online support materials and curriculum resources to help teachers better understand the products and processes associated with food and fibre production. Information resources will be provided through a central website and teachers will be able to participate in workshops to learn how these digital resources can be used in the classroom and linked to the broader curriculum. (Appendix A)

Also gone is the Experience+ Job Bonus, Mature Age Participation — job seeker assistance, and the Migrant Communities Employment Fund.  However there is the establishment of the new Job Commitment Bonus:

The Government will provide $157.1 million over five years (including $57.7 million in 2017/18) to assist long term unemployed young people to obtain employment by providing Job Commitment Bonuses.

From 1 July 2014, job seekers aged 18 to 30 who have been unemployed for 12 months or more and who are receiving Newstart or Youth Allowance (Other) will be eligible for a $2,500 payment if they get a job and remain off Newstart or Youth Allowance (Other) for a continuous period of 12 months.

Job seekers will receive a further $4,000 if they remain in a job and do not receive Newstart or Youth Allowance (Other) for a further 12 months (that is, a continuous period of 24 months). They will also be eligible to receive the Job Commitment Bonus if they are employed in multiple jobs and do not claim Newstart or Youth Allowance (Other) during the Job Commitment Bonus qualifying period.

The Job Commitment Bonus will be paid through the Department of Human Services. (Appendix A)

With a new initiative called the Relocation Assistance to Take up a Job programme:

The Government will provide $16.6 million over five years (including $3.8 million in 2017/18) to assist long term unemployed people relocate to find employment.

From 1 July 2014, job seekers who have been unemployed for 12 months or more, are receiving Newstart Allowance, Youth Allowance (Other) or Parenting Payment, and are participating in Job Services Australia or eligible for Disability Employment Services or Remote Jobs and Communities Programme services will be eligible to participate in the Relocation Assistance to Take up a Job programme.

The programme will cover costs such as air travel and removalists and provide:

  • up to $6,000 for job seekers to relocate to a regional area (either from a metropolitan or another regional area) and up to $3,000 to relocate to a metropolitan area (either from a regional or another metropolitan area with higher unemployment); and
  • an additional $3,000 for families with dependent children.

Participants who leave employment within six months of relocating without a reasonable excuse, will incur a 26 week non payment penalty before becoming eligible to receive unemployment benefits again.

The measure is estimated to achieve savings of $56.4 million over five years (including $19.5 million in 2017/18) by assisting eligible long term unemployed income support recipients to find a job and remain off unemployment benefits.

The Relocation Assistance to Take up a Job programme Bonus will be paid through the Department of Employment.

Plus the new Seniors Employment Incentive Payment:

The Government will provide $197.5 million over five years (including $59.0 million in 2017/18) to establish a wage subsidy for mature age job seekers.

From 1 July 2014, a payment of $3,250 will be available to employers who hire a mature age job seeker (aged 50 years or over) who has been receiving income support for at least six months.

Payments to employers will only commence after the job seeker has been employed for at least six months. Thereafter, payments will be made in fortnightly instalments over six months until the full amount has been paid.

For Tasmania the Tasmanian forestry workers assistance project has ceased and a new Tasmanian Jobs programme will be piloted:

The Government will provide $6.9 million over three years to establish a wage subsidy pilot for Tasmanian job seekers.

From 1 January 2014 to 30 June 2016, the Tasmanian Jobs programme will provide up to 2,000 one off payments of $3,250 to any Tasmanian business that hires an eligible job seeker and continues to employ them on a full-time basis for at least six months.

To be eligible, the job seeker must be receiving Newstart Allowance, Youth Allowance (Other) or Parenting Payment, and must be participating in Job Services Australia or Disability Employment Services. Job seekers must also physically reside in Tasmania for at least six months before the job commences to attract the payment.

Sustainability in exporting particularly for manufacturing sees additional funding for the Australian Manufacturing Export Base via Export Market Development Grants; a refocus for the Tourism Industry Regional Development Fund; and the design of The New Colombo Plan:

The Government will provide $100.0 million over five years (including $42.9 million in 2017/18) to establish a New Colombo Plan, an Australian undergraduate study and internship program aimed at lifting knowledge of Asia and the Pacific in Australia and strengthening Australia’s people to people and institutional relationships in the region. The Department of Foreign Affairs and Trade will provide strategic oversight of the New Colombo Plan with the Department of Education delivering the scholarship and student mobility programmes.

Commonwealth Medical Internships gain some additional funding and for Paid Parental Leave there is the removal of the mandatory obligation for employers to administer payments.

Other areas for reduction in funding include:

  • Automotive Transformation Scheme
  • Buy Australian at Home and Abroad
  • Carbon Capture and Storage Flagships
  • Clean Technology programmes
  • Former Department of Climate Change and Energy Efficiency
  • Industry Innovation Precincts programme
  • Latrobe Valley economic diversification
  • Low Carbon Communities
  • Aged Care Service Improvement and Healthy Ageing Grants Flexible Fund
  • Building Better Regional Cities
  • Community Investment Programme
  • Education grant programmes
  • Financial Management Programme

The Government will achieve savings of $500.0 million over four years (including $75.0 million in 2017/18) by reducing funding for the Automotive Transformation Scheme. Funding of $1.3 billion over eight years will remain available to support investment in the Australian automotive industry. (Appendix A)

With the National Workforce Development Fund there is a redirection of funding from community services workforce assistance and enhancing high technology manufacturing.

The Government will achieve savings of $30.6 million over two years by not proceeding with funding for the National Workforce Development Fund — community services workforce assistance measure, announced in the Pre election Economic and Fiscal Outlook 2013.

The Government will achieve savings of $35.6 million over two years by not proceeding with funding for the National Workforce Development Fund — enhancing high technology manufacturing measure, announced in the Pre election Economic and Fiscal Outlook 2013.

The Community Development Grants programme establishment seems to be offset with the Community Infrastructure Grants — cessation; and Regional and the Rural Research and Development Grants also cease.

Better employment outcomes for Indigenous Australians of $45 million and re opening access to the Indigenous Employment Programme in remote areas are a priority.

The Government will provide $45.0 million over two years to establish at least four Vocational Training and Employment Centres to provide up to 5,000 Indigenous Australians with practical training and guaranteed employment.

Based on the GenerationOne model, these centres will provide Indigenous job seekers with training and support to prepare for available job opportunities. The centres will be established in areas where there is high demand for Indigenous employees and a significant population of Indigenous job seekers.

The Government will re open access to the Indigenous Employment Programme for employers in remote Australia by redirecting up to $40 million of existing programme funding over two years from 2013/14. This funding will ensure that employers can access the support they need in order to offer employment and training to Indigenous people. (Appendix A)

Where was much of this outlined previously?  Well in the Coalition’s Policy to Create Jobs by Boosting Productivity and a Game Change Webinar facilitated by Workforce BluePrint in the week after the election on what you could expect.

Written by Wendy Perry, Head Workforce Planner, Workforce BluePrint and VET Strategist for WPAA, Speaker, 17 December 2013.

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