Today Prime Minister Scott Morrison revealed the components of his JobMaker plan to support the long term recovery of the economy at the National Press Club in Canberra.
In addition to funding for skills development and tax reform, the Government is using this opportunity to also review and simplify how funding is allocated – with a particular focus on ‘return on investment’ and accountability for how funding is spent.
This is certainly the time to do this. It has been nearly 30 years since the “recession we have to have” in 1991. In this time, there has been little imperative to review or change our systems. Against a backdrop of a record deficit, likely peak unemployment of 10%, debt exceeding 30% of GDP and a fall in foreign investment by up to 40% we have more than enough reason to streamline processes and support businesses to better respond with innovation and job creation.
At some point, you’ve got to get your economy out of ICU.
The Prime Minister and Treasurer have been saying for weeks that government support is finite. It is all borrowed money against future taxes. JobKeeper and the enhanced JobSeeker is slated to wind down at the end of September. Even with the $60b underspend on JobKeeper, the Government has said they will not be widening the scope of the scheme.
Opening up will be harder than closing down.
The Prime Minister said this is the most challenging global and local economic environment faced since war times and we can expect unemployment and underemployment to rise before it will fall. However, there is some positivity. Consumer confidence has climbed 80% in 8 weeks.
On what should have been Budget day, the Treasurer was clear that the private sector had an important role to play in getting back to work and creating more jobs. It is on the Government to make this easier and they will do this by supporting an outward looking, open, vibrant and sovereign trading economy.
We will remain part of the global supply chain and invest in what we do well. This includes a thriving service sector, a modern and competitive manufacturing sector, resources and agricultural sector, world-leading scientists, specialists, researchers and technologists.
In addition, and we can expect to hear more about this in future, governments must live within their means and avoid burdening our future generations with impossible debt.
What’s on the JobMaker agenda?
- Tax reform and deregulation
- Industrial relations
- Simplifying the skills system
- Lower energy costs
- Investment capital and finance
- Economic infrastructure
- Federation reform
The Prime Minister covered industrial relations and skills in his presentation today, although did address a question from the floor around taxation, saying that the Federal Government will take a lead on tax reform and there may be a need for higher taxes in future.
Additional details on other elements will be revealed in the weeks and months in the lead up to October.
Simplify industrial relations.
The Prime Minister commended the constructive approach from employers, governments and unions to help keep Australians in jobs during this difficult time. Now is the time to take this collaborative spirit to create more jobs for the future.
The Minister for Industrial Relations, Christian Porter, has been tasked with bringing together representatives from across employers, unions and industry bodies to chart a practical reform agenda. There will be five working groups to negotiate on plans to be tabled in September on the following items:
- Award simplification
- Enterprise agreement-making
- Casuals and fixed-term employees
- Compliance and enforcement
- Greenfield agreements for new enterprises
The Prime Minister said we must move quickly if progress is to be made. The posturing and ideology need to be put to the side at the risk of more people losing their jobs. There is a shared opportunity to create a system with one goal: to create jobs.
Simplify and streamline vocational training to support skills development.
The Prime Minister was open that funding from the Commonwealth to the States and Territories for skills and training has fallen 25% over the last decade. With a clear focus on creating more jobs, there needs to be an investment in educating and training a skilled workforce.
The Commonwealth has a funding commitment of $1.5b to the States and Territories for skills and training. The Prime Minister is proposing simplification of our training programs to create more consistency and accountability for learning outcomes.
A National Skills Commission has been established to ensure that training aligns with business and industry needs. They will produce a publically available annual report on national skills needs for Australia, complemented by “close to real-time” data on the labour market, such as data from single-touch-payroll. This information will be used to identify where the demand is for skills to support investment in new programs.
In addition, industry will have a stronger role in the development of education programs. There are already pilot programs in place for Human Services, Mining and Digital Services which are already producing results and we can expect more of this in future.
The Prime Minister also pointed to the National Health Reform Agreement as a funding model that could be applied to skills and training. The Commonwealth would be prepared to invest more in this approach.
There is more to come, but what has been announced today is ambitious and clearly aimed at long term change.
Full details and costings around the JobMaker program will released in the October budget and will no doubt be a significant investment for the government.