Budget impact on employers and HR : Australia 2022/23
Last night, the Labor Government revealed the 2022-23 Federal Budget, its first Budget in Government.
Australia’s economic and fiscal position shows that we are not immune to global economic headwinds. Whilst our Gross Domestic Product (GDP) is projected to grow by 3.5 % in 2022-23, it will fall to 1.5 % in 2023-24 as the cost-of-living pressure weighs on households and the broader economy.
Additionally, inflation is forecast to peak at 7.5% in the December Quarter 2022, and will persist for longer than previously expected, easing to 5.75% by the middle of 2023 and 3.5% by June 2024. Whilst wages will increase to 3.75% in 2022-23 and 2023-24, it will be mid-2024 before wages are expected to outpace inflations.
Labour market outcomes have been stronger than expected, with the unemployment rate at a near 50-year low of 3.5% in September and expected to average 3.75% for 2022-23. With economic activity forecast to slow, unemployment is also expected to rise to 4.5% in 2023-24.
Rather than increase spending on top of an already large deficit post- COVID-19 and natural disasters, the Government has prioritised reducing Government spend and cutting back on former Coalition Government’s programs. It will redirect savings towards pre-election commitments and policies.
This includes the already announced commitment to cut Government spend on external labour, including labour-hire, government advertising, travel, and legal expenses. In doing so, they have put together $21 billion in Budget savings over four years.
Among the key announcements, these were the most relevant Recruiters and HR Professionals.
$43.2 million over 4 years from 2022–23 (and $11.1 million per year ongoing) to update workplace laws to get wages moving, boost job security, address gender inequity and create more opportunities for Australians, including:
$20.2 million over 4 years from 2022–23 (and $5.3 million per year ongoing) for the Fair Work Commission to establish the Pay Equity and Care and Community Sector expert panels, and a specialised research unit.
$15.1 million over 4 years from 2022–23 (and $3.8 million per year ongoing) to include an explicit prohibition on sexual harassment in the Fair Work Act 2009.
$7.9 million over 4 years from 2022–23 (and $1.9 million per year ongoing) to implement changes to the small claims process in the Fair Work Act 2009.
The commitment to automatically sunset agreement-related instruments made prior to the commencement of the Fair Work Act 2009 and during the ‘bridging period’ (1 July to 31 December 2009), commonly referred to as ‘zombie agreements’, to ensure employees can access entitlements available under modern awards.
Remove unnecessary complexity and make the Better off Overall Test simple, flexible and fair by streamlining the enterprise agreement approval process and consideration by the Fair Work Commission of whether an employee is better off under the proposed award.
Increase the capacity of the Fair Work Commission to proactively help workers and businesses reach agreements by reducing the level of disputation required to access arbitration.
$12.9 million over 3 years from 2022–23 to establish Jobs and Skills Australia to provide national leadership and advice on Australia’s labour market, and skills and training needs.
Employment and Skills
Increasing the aged pension WorkBonus by $4,000, to $11,800 per year.
$20 million in grants to help employers hire more disabled people.
$1 billion agreement with the states to deliver 180,000 fee-free TAFE places in 2023.
$5.4 billion to increase the childcare subsidy rate by up to 90% for the first child, accessible for all families earning up to $530,000. Families with two or more children in childcare will continue to receive the 90% subsidy rate.
$600 million per years to increase paid parental leave entitlements from 20 weeks to 26 weeks, the allowance to be shared between both parents and eligibility will be expanded through the introduction of a $350,000 income test.
$1 billion agreement with the states to deliver 180,000 fee-free TAFE places in 2023 • $50 million TAFE Technology Fund to modernise TAFEs and update IT.
5-year National Skills Agreement to begin in 2024.
Jobs and Skills Australia to strengthen workforce planning.
$485 million to fund an additional 20,000 university places to tackle skills shortages in Nursing Engineering and IT, with 4,000 reserved for teaching programs.
$2.0 million over 3 years from 2022–23 to develop a Carer Friendly Workplace Framework to assist employers to develop and adopt practices to support employees with caring responsibilities to enter and remain in the workforce, with the cost of this component met from within the existing resourcing of the Department of Social Services.
$3.4 million over 4 years from 2022–23 to support the development and delivery of education, technical advice and support services targeting the needs of small business employers to support the implementation of the Government’s election commitment to legislate 10 days of paid family and domestic violence leave.
$62.6 million to support SMEs in improving their energy efficiency.
$42.2 million over two years from 2022–23 for the Department of Home Affairs to increase visa processing capacity and raise awareness of opportunities for high-skilled migrants in Australia’s permanent Migration Program.
Extension of the relaxation of work restrictions for student visa holders and secondary training visa holders until 30 June 2023.
Health and Aged Care
$143.3 million over 4 years to support access to healthcare in rural and regional areas by investing in primary care services, training, workforce incentives and trials for innovative models of care. Funding includes:
$74.1 million to introduce tiered financial incentive payments to recognise doctors with additional recognised skills practising in rural and remote regions, as part of the doctor stream of the Workforce Incentive Program.
$29.4 million to expand the list of eligible health professionals and increase the rural loading in the practice stream of the Workforce Incentive Program.
$8.4 million to provide 15 additional hospital-based training posts per year for rural generalists and rural general practitioners to attain specialist and advanced skills in regional and remote Australia.
Access the Australian Chamber of Commerce and Industry’s (ACCI) Budget-in-Brief and Budget-in-Depth to understand more about what this year’s Budget means for you and your business.