1. Employees at risk and retrenched employees
As the global recession hits Australia, the Australian Government is determined to support Australian jobs and the Australians who find themselves out of a job. The Government will not give up on those who lose their jobs due to the global recession.
Providing a fair and flexible work environment that meets the needs of employees and employers is critical. The existence of such a work environment enables employees and employers to design together the workplace arrangements that best support jobs, productivity and fairness.
For those who lose jobs, the Government's aim must be to get people back into employment quickly. This means connecting them with jobs for which they are already skilled or supporting people to retrain for occupations in demand and for the jobs of tomorrow.
Through the workplace, jobs and training initiatives outlined in this chapter, the Government will ensure that we continue to build the national skills and capacity base allowing Australia to grow stronger and fairer as the economy recovers.
Creating fairer and safer workplaces
The passage of the Fair Work Bill 2008 through the Parliament on 20 March 2009 marked the major milestone in the creation of a fair and balanced workplace relations system. The new workplace relations system is designed to balance the needs of employees and employers to ensure Australia is competitive and prosperous without taking away workplace rights and guaranteed minimum standards. Reflecting the Government's commitment to cooperative workplace relations, the Fair Work Act 2009 was the product of extensive consultation with a wide range of stakeholders.
Employers and employees who operate within the federal workplace relations system will be covered by the new laws, which will start on 1 July 2009. Consistent with the Government's election policy commitments, the National Employment Standards and modern awards start on 1 January 2010.
The Fair Work Act 2009 delivers on key government election commitments, and will put in place a new workplace relations system built on:
- a fair and comprehensive safety net of minimum employment conditions
- a system that has at its heart collective bargaining in good faith at the enterprise level driven by productivity gains
- protections from unfair dismissal for all employees
- protection for the low paid
- a balance between work and family life, and
- the right to be represented in the workplace.
There is a clear body of evidence linking collective bargaining with higher rates of productivity growth. Collective bargaining enables employers and employees to negotiate arrangements best suited to their particular needs and to respond to external pressures such as the global economic situation.
In the new system, collective bargaining will be underpinned by a modern safety net, comprising the legislated National Employment Standards and modern awards. The Australian Industrial Relations Commission (AIRC) is currently developing modern awards to operate from 1 January 2010. Modern awards will provide minimum terms and conditions of employment for particular industries and occupations. Transitional provisions in modern awards will provide for any changes to employment standards to be phased in over five years.
Award modernisation is an important national reform that has been pursued for decades. Having awards made on a national basis allows businesses to compete on an equal footing and provides simplicity for employers, especially those operating across state boundaries. For employees, award modernisation ensures that, together with the Australian Government's 10 National Employment Standards, employees have minimum entitlements that are easy to identify and understand.
The Government is continuing to work with states and territories to put in place a national workplace relations system for the private sector, whether through the referral of powers by states or through states putting in place legislation that mirrors the Fair Work Act 2009. A national workplace relations system for the private sector will reduce complexity for employees, employers and small businesses.
Establishment of Fair Work Australia $149.7 million
In this Budget the Government is delivering a fair workplace relations system by establishing Fair Work Australia, the new independent workplace relations umpire.
By streamlining services to better meet the needs of employers and employees, savings of $97.5 million over two years will be achieved.
Fair Work Australia will begin operating on 1 July 2009 to support the commencement of the new workplace relations laws. It will be a modern accessible body based on a user‑friendly culture that moves away from the adversarial and often legalistic processes of the past in favour of less formal processes. The focus will be on providing fairness, efficiency and excellent levels of service to users of the system.
The Office of the Fair Work Ombudsman will provide practical information, advice and assistance on workplace issues and best practice and ensure compliance with workplace laws. These arrangements will ensure a seamless service to all users of the workplace relations system.
Under Work Choices, employers, employees and their representatives were required to navigate their way through seven separate Australian Government agencies to find the right information and advice. These complex arrangements were set to cost taxpayers more than $300 million each year.
Fair Work Australia and the Office of the Fair Work Ombudsman will be established in every state and territory with a total commitment of $966.5 million over four years, a saving of $197.9 million compared to previous arrangements. Both will begin operating from 1 July 2009 to support the commencement of the new workplace relations laws.
The Fair Work Education and Information Program $14.3 million
To help employees, employers and small businesses understand the new workplace relations system, in this Budget the Government is supporting a targeted education and information program. The Fair Work Education and Information Program will cost $14.3 million and provide grants to selected community, employee, employer and small business organisations. The grants will be used to provide information and education services to employees, employers and small business operators about the Fair Work Act 2009 and how it will affect them.
The Australian Government also went to the last election with a commitment to safer workplaces through the implementation of harmonised occupational health and safety legislation across all jurisdictions. For decades, successive governments have unsuccessfully pursued this significant reform. However, in July last year the Council of Australian Governments (COAG) signed an historic Intergovernmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety. The timetable set by COAG for the implementation of harmonised arrangements is 2011.
The implementation of harmonised arrangements will boost productivity through improved safety performance and reduced red tape and compliance costs. Improved safety performance also has significant social benefits through fewer injuries and trauma for employees and their families.
Safe Work Australia is developing model occupational health and safety legislation under the auspices of the Workplace Relations Ministers' Council.
Reformed employment services to better assist those in need
On coming to office, the Government announced it would review existing employment services. The aim was to introduce new, simpler, more effective and equitable services nationally. The Government undertook reviews relating to general employment services, services provided to people with disability as well as employment services specifically for Indigenous job seekers. The effect of the global recession has increased the importance of these reviews and made the implementation of new, more effective services both critical and timely.
Job Services Australia: People, Skills and Jobs
A new national employment services system, Job Services Australia, will commence on 1 July 2009. It will provide the right mix of training, work experience and other interventions to help job seekers, particularly the disadvantaged, obtain suitable employment. Under Job Services Australia job seekers will receive assistance tailored to their individual needs and level of disadvantage. Job Services Australia will support job seekers to access training and provide financial incentives for brokers to connect people to training, work experience and other assistance required to enable them to find employment. The Government is investing $4.9 billion over three years in this new system.
Job Services Australia services will be delivered in more than 2000 sites across the nation, an increase of 200 sites on the current system. Some 140 providers will be contracted to deliver services through 116 individual contracts. These providers will be supported by up to 110 subcontractor arrangements The Government has ensured that the most disadvantaged job seekers are supported, with 63 organisations delivering specialist services including for young people, the homeless, those with mental illness, people from culturally and linguistically diverse backgrounds and ex‑prisoners. In addition, over 25 Indigenous organisations have been contracted to deliver specialist or general employment services under Job Services Australia. Reforms to the Indigenous Employment Program are discussed later in this statement.
Disability Employment Services
From 1 March 2010 the Government will be implementing new Disability Employment Services at a cost of $1.2 billion (between 1 March 2010 and 30 June 2012). Under the reforms, places will be demand driven and all job seekers with disability will have access to individually tailored employment services. Participants will receive more personalised employment services better suited to their needs and with stronger links to skills development and training. A new Employee Assistance Fund will better support employers with broader access to workplace modifications and Auslan interpreting services. The new service also provides better support for employees with episodic disability, including mental health issues.
Employer Brokers
Even in a downturn there are still labour and skill shortages in particular locations and industries.
As part of Job Services Australia, a panel of Employer Brokers has been established to ensure that employment services have a strong focus on matching the needs of job seekers with the labour requirements of employers. Brokers will coordinate and target the efforts of employment services providers to better match the labour needs of employers with appropriate job seekers. A first round call for Employer Broker proposals has been issued and outcomes will be announced shortly.
Building skills for the future
The Government is working with industry to meet the workforce needs of today and tomorrow through initiatives such as the Productivity Places Program.
In past economic downturns too little has been done to build a skills base for the future so that when the economy began to grow the absence of skilled labour became a capacity constraint on growth. The Australian Government is investing in our skills base during this global recession to help ensure that when the economy recovers the nation has a skilled workforce ready to fill the job vacancies of employers.
The $2 billion Productivity Places Program is a major long term commitment that will deliver more than 711 000 training places over five years. The Australian Government and state and territory governments have committed to delivering this program through a National Partnership that will support enhanced skills training in a difficult economic climate.
The Productivity Places Program provides participants with new skills and qualifications that can lead to a pathway of further training or employment. Under the program, up to 392 000 places are for existing employees to obtain new qualifications and up to 319 000 places are for job seekers to acquire job‑ready skills demanded by industry. Of the 66 000 additional training places announced for the program since 14 October 2008, some 20 000 training places are available to recently retrenched employees to acquire new skills.
Training and Learning Bonus
Students in receipt of a student income support payment at 3 February 2009 received a one off Training and Learning bonus of $950 in addition to their normal income support payment from Centrelink in the fortnight commencing 24 March 2009.
A Bonus payment of $950 was also made to recipients of the Education Entry Payment (EdEP), in addition to the current EdEP of $208. This bonus is available to eligible recipients who commence a course of approved study between 1 January 2009 and 30 June 2010. The initiative also includes a temporary extension of EdEP to Youth Allowance (other) recipients and the relaxation of eligibility requirements to reduce the current qualifying period for all eligible recipients from 12 months to four weeks for this period. Bonus payments have also been made under administrative arrangements to students who enrolled in full‑time study for Semester 1 2009, but who were not in receipt of income support at 3 February 2009.
Additional Training and Learning Bonus payments will be made available to young people returning to education or training as a result of the change to participation requirements for Youth Allowance (other). Training and Learning Bonus payments will also be available to some recipients of Newstart and Parenting Payment who qualify for a Training Supplement payment.
These payments effectively provide unemployed Australians with a 'sign on' bonus for undertaking training and education.
Training Supplement $74.1 million
This Budget introduces a new Training Supplement to provide support for low skilled unemployed people receiving Newstart Allowance and Parenting Payment (for example, people without Year 12 or an equivalent qualification) to undertake approved education and training. This Supplement will ensure that unemployed workers who are at risk of long‑term unemployment receive:
- an Education Entry Payment and Training and Learning Bonus ($1158)
- a $41.60 supplement per fortnight to study, and
- incentives to access appropriate training including through the Productivity Places Program.
For a six month course these benefits are equivalent to an additional $65 per week and for a twelve month course an additional $43 per week.
Jobs and Training Compact with Retrenched Employees
The Government is determined to support people who lose their jobs. This commitment is embodied in the Jobs and Training Compact with retrenched employees recently announced by the Government.
As part of this compact, retrenched employees will be provided with additional support so that they can participate in training and other activities that will help them maintain their existing skills or enable them to retrain with new skills so they will be prepared when the economy recovers.
Australian employees made redundant can now receive immediate and personalised assistance from employment service providers to help them get back into the workforce. This assistance includes career advice, comprehensive skills assessments, assistance with job applications and skills development training.
This immediate access to employment services is supplemented by additional training and pre‑vocational support measures. Together, these initiatives will provide retrenched employees with the opportunity to gain and improve their work skills.
While unemployment is rising, some sectors of the economy are experiencing a shortage of suitably skilled employees. The new training places will provide an opportunity for employees who have been made redundant to re‑train in areas of skill need.
The Government has also amended the Social Security Act 1991 to increase the Liquid Assets Waiting Period thresholds to allow people with modest levels of liquid assets to access income support sooner. The changes will enable people claiming income support quicker access to payments and allow claimants to retain more of their savings. The new thresholds will apply for a two year period from 1 April 2009 to 31 March 2011 and will be reviewed before the end of this period.
The Government has reached an agreement with the major banks to assist borrowers who are experiencing financial difficulty as a result of the global recession. This agreement will provide mortgage relief for people who lose their jobs. It means the banks will be able to offer a range of assistance to people with mortgages who lose their jobs and fall into financial hardship. Under the agreement the four major banks will be providing maximum flexibility for borrowers suffering temporary hardship through enforced unemployment for the 12 month period ahead. The banks will make assessments based on the borrowers' ability to meet new contractual obligations in the long term.
The Government is committed to ensuring that the new measures for retrenched employees can be easily accessed and deliver what they are intended to deliver. To this end, the Government is providing a new information and advisory service to make it easier for job seekers to access the available support services.
A Compact with Retrenched Workers
Early access to intensive employment services $298.5 million
The Government has this year committed a further $298.5 million to ensure that employees recently made redundant will be eligible for intensive employment services. This brings the total funding for employment services delivered through Job Services Australia to $4.9 billion over three years.
Access to these services has been available from 1 April 2009 for all employees made redundant on or after 24 February 2009. This measure will cease on 31 March 2011.
From 1 April to 30 June 2009, early access is being provided through existing Job Network services. From 1 July 2009 this assistance will be provided through Job Services Australia. Employees made redundant will receive immediate personalised assistance, career advice, referral to available training places and job search help. They will have access to a personal Employment Pathway Plan that will set out the services and training that they need to find and keep a job. The Employment Pathway Plan is underpinned by a $550 credit to pay for the specific assistance that the job seeker needs.
Additional training places for retrenched employees $77.2 million
In addition to early access to personalised employment services, the Government will invest a further $77.2 million in 10 000 new training places at the Certificate III level and above in the Productivity Places Program. This will bring the total number of extra specifically designated places for displaced employees to 20 000. It will ensure those who are vulnerable have the skills they need to adapt to changing economic circumstances and meet the labour needs of employers, now and in the future.
Pathway to Skills: Australian Apprenticeships Access Program $3.5 million
An additional $3.5 million has been provided to fund 1850 more places in the Australian Apprenticeships Access Program for pre vocational training and support for retrenched employees aged 25 and over.
Building the basics—foundation skills $28.2 million
An additional $28.2 million has already been provided to fund 5888 language, literacy and numeracy training places for retrenched employees over 25 to build on their foundation skills as well as initiatives for the language, literacy and numeracy teaching workforce. This will ensure highly skilled and qualified practitioners are available to deliver adult literacy training.
Changes to the Liquid Assets Waiting Period $25.6 million
This year, the Australian Government introduced changes to the Liquid Assets Waiting Period to give retrenched employees claiming income support faster access to income support payments and enable claimants to retain more of their savings. The Government has doubled the threshold for liquid assets to $5000 for singles without dependants or $10 000 for others for a two year period from 1 April 2009 to 31 March 2011.
Connecting People with Jobs Service $5.2 million
The Connecting People with Jobs Service will establish a one‑stop shop to provide information and advisory support to Australians seeking education and employment options through an integrated web and telephone service. This will be an expert advisory service able to provide considered advice and assistance tailored to individual circumstances. An in‑depth knowledge management system will provide a self service online tool integrated with a telephone service for individual support, including translation services.
Supporting participation
While the global economic storm is currently hitting this country and creating unemployment, our nation must continue to address the future challenge of the ageing of society and our workforce. In 2007, the aged‑to‑working‑age ratio (the proportion of people aged over 65 to people of traditional working age, 15‑64) was almost 20 per cent. This is projected to rise to over 42 per cent by 2047. Over the same period, the child‑to‑working‑age ratio (the proportion of people aged under 15 to those aged 15‑64) is projected to fall by slightly over 3 percentage points. In 2007 there were five people of working age to support every person aged 65 and over. By 2047, there will only be 2.4 people of working age supporting each person aged 65 and over.
Consequently, Australia must address the challenge of increasing the percentage of working age adults who are available to work and in work. Increasing our workforce participation rate will assist in mitigating the increased dependency ratio caused by ageing.
The Government is implementing a range of policies to encourage parents and others to participate in training and employment to increase our ability to meet the challenges of ageing.
Paid Parental Leave
Australia is one of only two developed countries without paid parental leave. The Australian Government's new national paid parental leave scheme will bring Australia in line with most other OECD countries in providing comprehensive paid parental leave.
The government funded scheme largely adopts the recommendations of the Productivity Commission in its March 2009 final report. This report shows that up to one third of mothers employed before childbirth return to work within six months of the birth. The scheme will help parents spend time with their newborns and enhance maternal and child health development.
By international standards, workforce participation by Australian women is low during prime childbearing years. Almost one fifth of mothers in paid work resign around childbirth and many mothers return to work part‑time. The scheme will encourage greater long‑term workforce participation by parents and also promote gender equity and work‑life balance in the community.
The government‑funded scheme also recognises the difficulties experienced by businesses in the current economic climate and imposes minimal new costs on employers. In addition, businesses will benefit in the long term from increased workforce participation of parents and retention of skilled staff.
Paid Parental Leave $730.7 million
Australia's first comprehensive paid parental leave scheme will provide 18 weeks of postnatal leave, which can be shared between both parents, paid at the adult federal minimum wage (currently $543.78 per week).
Those eligible will include individuals in paid work earning less than $150 000 per annum who have worked continuously for at least 10 of the 13 months prior to the expected date of birth or adoption and for at least 330 hours. This equates to someone working about one day a week.
Working women with access to employer funded paid parental arrangements will be able to access the Government's scheme in conjunction with these arrangements.
All new mothers who are not eligible for Paid Parental Leave will continue to receive family assistance (including the Baby Bonus) from Centrelink.
The scheme will be funded in this Budget and implemented from 1 January 2011, and will have a net cost to Government of $730.7 million over five years. The scheme builds on those elements of the new workplace relations system which will assist parents, in particular the National Employment Standards.
Other measures to support participation
The Government will also introduce other measures to increase participation of parents and specific groups of disadvantaged people.
More flexible participation requirements for parents $26.8 million
This initiative will help parents more effectively balance their income support payment participation activities with their family responsibilities.
It will provide a number of positive changes to parents' participation requirements. Low income parents will get greater opportunities to gain additional skills and qualifications to assist them in their efforts to find suitable paid work once their children are at school. The measure will also give parents more scope to focus on their family's needs when higher‑than‑usual caring responsibilities prevent them from successfully engaging in study or work.
The initiative will provide more flexible methods for parents to report their earnings and participation efforts to Centrelink through expanded access to telephone‑based Integrated Voice Recognition and web‑based channels.
This 2009‑10 Budget initiative responds to the report from the Participation Review Taskforce, chaired by Ms Patricia Faulkner AO, which was tasked by the Government to examine how to better balance participation requirements for parents and mature age employees with their family and community responsibilities.
Job Capacity Assessment program — transfer to DEEWR $697.0 million
This Budget provides for the responsibility for the Job Capacity Assessment program to be transferred from the Department of Human Services to the Department of Education, Employment and Workplace Relations (DEEWR) from 1 July 2009. This will improve coordination of the assessment and support for people with disability and other barriers to work. The net increase in funding for this program this Budget is $183.2 million.
A Job Capacity Assessment is a single, comprehensive assessment of a person's capacity to work. The assessment identifies any barriers to work and any interventions that may be needed to help them overcome these barriers.
Disability Support Pension Employment Incentive Pilot $6.8 million
This pilot, funded in this Budget and to start on 1 March 2010, will be established to trial a new way of encouraging employers to provide sustainable jobs of at least eight hours a week to people who receive the Disability Support Pension. These people are among the most highly disadvantaged in the labour market.
Employers who provide a job to a person receiving the Disability Support Pension will receive an employment incentive of $3000 after the person has been in employment for six months. Employment incentives will be available for up to 1000 jobs.
One of the most impenetrable barriers to employment for people with disability is the persistence of myths about the safety and productivity of people with disability. By providing jobs to people who receive the Disability Support Pension, employers can gain a positive experience of employing people with disability, who will in turn get the chance to demonstrate that they can do the job. The pilot is part of the National Mental Health and Disability Employment Strategy.
Disability Support Pension Review: impact on DEEWR programs $275 million
Assessment processes for the Disability Support Pension, including the Impairment Tables, will be reviewed and improved.
Changes will ensure that people who are seeking income support and who are able to work part‑time, receive a more appropriate income support payment instead of receiving the Disability Support Pension. If they receive an activity‑tested payment, they will be required to participate in activities that improve their chances of finding work.
This will result in additional cost for DEEWR programs, including employment services and activity tested payments such as Newstart Allowance.
This measure is an overall net saving to the budget of $7.2 million.
Changes to employment services to more effectively support job seekers into work
In February 2009 the Minister for Employment Participation announced funding of $21 million in the 2008 09 Budget to support changes to the Job Network contract to more effectively support job seekers into work. This initiative comprises:
- a one‑off adjustment to the quarterly service fees paid to Job Network providers, as rapid increases in job seeker numbers have exceeded the current formula for payment, and
- in light of reduced job vacancies, allowing extra time for Job Network to find alternative work for job seekers and still qualify for an outcome payment, to apply for a period of two years.
- more flexibility and reduced red tape in the use of Job Seeker Account funding for assisting job seekers into work. This increased the immediate ability of providers to deliver quality assistance to job seekers at a time of increasing concerns with unemployment.
Strengthening the safety net
Changes to the Assets Test Hardship Provisions for non‑student income support payments $4.2 million
As part of this Budget, changes will be made to make it easier for people to access income support where they have assets that cannot be realised, by increasing the amount of readily available funds a person without children can have from the current level of $6000 to $11 785.80 from 1 July 2009. Comparable thresholds for single people with children and allowance couples will also be increased.
General Employee Entitlements and Redundancy Scheme
Where employees lose their job as a result of their employer going into bankruptcy or liquidation and there are insufficient funds to pay their outstanding entitlements, the Australian Government provides protection for certain employee entitlements under the General Employee Entitlements and Redundancy Scheme (GEERS). While it is difficult to forecast the impact of the global recession on the expenditure of GEERS, DEEWR has recently recorded an increase in demand for GEERS. As such, the GEERS appropriation was increased by $70 million (to $152.8 million) through the Portfolio Supplementary Additional Estimates Statements to support the projected increase in demand for GEERS.
1 Chart derived using 'school level and highest non-school qualification' data (except for 2001 and 2002 where Highest Education Attainment was used). 'Degrees or higher' refers to attained Bachelor Degree or above; 'VET' refers to Certificate I/II/III/IV/ Advanced Diploma / Diploma / Certificate not further defined; 'Year 12' refers to Year 12 without non-school qualifications and Year 12 with level not determined; and 'Less than Year 12' refers to Year 11 or below without non-school qualifications and Year 11 or below with level not determined.
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