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Federal budget’s major policies to drive jobs creation
Treasurer Josh Frydenberg has announced $677 billion worth of spending measures in his 2020/21 economic recovery plan for Australia, with many of the major policy initiatives helping to create new jobs.
“COVID-19 has resulted in the most severe global economic crisis since the Great Depression. Across the world, the equivalent of 600 million people have lost their jobs,” Frydenberg said in his federal budget address last night.
“In the space of just one month, more than one million Australians lost their jobs or saw their working hours reduced to zero.
“The Australian economy is now fighting back. More than half of those who lost their job are back at work. But there remains a monumental task ahead. Tonight, we embark as a nation on the next phase of our journey – a journey to rebuild our economy and secure Australia’s future. Our plan will grow the economy. Our plan will create jobs.”
With Australia officially in recession, Frydenberg said: “There is no economic recovery without a jobs recovery. There is no budget recovery without a jobs recovery.
“This budget is all about jobs.”
It is great to see job creation as a centrepiece of the budget and the key to rebuilding our economy during this uniquely challenging time.
The Treasurer revealed a new JobMaker hiring credit to encourage businesses to hire younger Australians. It will be payable for up to 12 months and immediately available to employers who hire those on JobSeeker aged 16 to 35.
The wage subsidy will partly replace JobKeeper and be paid at a rate of $200 per week for those aged under 30 and $100 per week for those aged between 30 and 35. New hires must work for at least 20 hours a week.
All businesses, other than the major banks, will be eligible. To qualify, employers must provide net additional employment.
Treasury estimates this will support around 450,000 jobs for young people.
Matt Gribble, Regional Managing Director of Michael Page Australia said: “It is great to see job creation as a centrepiece of the budget and the key to rebuilding our economy during this uniquely challenging time.
“In particular, the new JobMaker Hiring Credit will help to accelerate growth in employment during the recovery.”
Gribble said he was also in support of the RCSA’s call for labour market reforms, which will allow easier administration of flexible working for businesses without compromising the health, wellbeing and safety of their workforce.
JobMaker will certainly make hiring younger people more attractive relative to other workers and [therefore] could shift business’s recruitment priorities. It will also encourage more casual or part-time hiring.
Callam Pickering, APAC Economist at Indeed said Australian economic indicators should continue to improve as the economy emerges from lockdown; the announcements made in last night’s budget should support that process.
“The JobMaker scheme will certainly make hiring younger people more attractive relative to other workers and [therefore] could shift business’s recruitment priorities. It will also encourage more casual or part-time hiring,” Pickering told Michael Page Australia.
“A business benefits more by hiring two workers at 20-hours a week rather than a single worker for 40-hours a week.
“In some cases, it may allow businesses to pay workers more than they would normally get, with the subsidy increasing the overall wage. That could attract some workers to industries such as agriculture, which often struggle to attract workers due to low wages.”
Manufacturing gets $1.5 billion boost
The budget papers also outlined a Modern Manufacturing Strategy, comprising six priority areas that will receive funding of $1.5 billion over four years:
- Resources technology and critical minerals processing,
- Food and beverage manufacturing,
- Medical products,
- Clean energy and recycling
- Defence industry, and
- Space industry
Jennifer Westacott, Chief Executive of Business Council of Australia said the investment into these areas will make it easier for businesses to commercialise ideas, grow and create new, highly skilled jobs.
Infrastructure investment to drive more jobs
Frydenberg said the economic rebuilding included building more roads, rail and bridges.
Since the start of the COVID-19 pandemic, the government committed to invest an additional $14 billion in new and accelerated infrastructure projects over the next four years. These projects will support a further 40,000 jobs during their construction.
This investment is part of the 10-year transport infrastructure investment pipeline, which has been expanded to $110 billion and is already supporting 100,000 jobs on worksites across the country.
Continued investments into upskilling and reskilling Australians to plug gaps
The budget also contained a record investment into skills and training, committing an additional $1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them.
This is on top of establishing the $1 billion JobTrainer fund to create up to 34,000 few or low-cost training places for school leavers and job seekers. Another $2.8 billion was also committed to protecting 180,000 apprenticeships and trainees.
Alan Oster, Chief Economist at NAB Group said this year’s budget, which was equivalent to around 7% of GDP, was roughly twice the size of the stimulus announced during the global financial crisis.
The government’s JobKeeper subsidy and boosted JobSeeker payments will end in March 2021.