Five key points for small business and startups in the Employment White Paper

Treasurer Jim Chalmers handed down the Employment White Paper on Monday, laying out how the federal government is preparing for the skills and employment needs of the future.

It also includes a list of more immediate reforms and programs, designed to more effectively utilise the Australian workforce while providing opportunities to those who want them.

Here’s a quick look at some of the changes on offer.

The long-awaited skills passport system

A national skills passport — a uniform, all-in-one document capable of demonstrating a worker’s skillset and qualifications to employers — is on the way.

It will “help people more easily demonstrate their skills to employers and reduce barriers to lifelong learning,” the white paper says.

To ensure the project does not simply cover the same ground as a simple resume or LinkedIn profile, the federal government will convene with employers, unions, and the education sector to discuss the best way forward.

The idea has been circulating around Canberra for some time, with the former Coalition government pledging to spend $5 million on a skills passport project if it won the 2022 federal election.

Accelerating priority apprenticeships

Reflecting the critical need for workers in the care sector, the race to net zero emissions, and the digital economy, the federal government will “accelerate” the take-up of apprenticeships in those fields.

To kickstart the process, the Commonwealth will channel $31 million to a new set of TAFE “centres of excellence”, which will be free to work with industry players and formulate innovative courses.

“Centres of Excellence could develop deep expertise in wind, solar, smart energy systems or hydrogen, and build partnerships with industry to develop innovative training courses,” the white paper states.

“The pace of the transformation means new models of course design and new types of qualifications should be prioritised.”

You can read more about that plan here.

Extra working allowances for aged pensioners

Despite an extended period of historically low unemployment and labour shortages, there are still complicating factors keeping some Australians who want to work more hours from taking on those roles.

In particular, aged pensioners lose out on a portion of their entitlements for every hour they work above a certain threshold.

This can act as a powerful disincentive for older workers with the capacity and desire to take on extra employment.

The Work Bonus policy currently allows the first $300 of fortnightly earnings to be excluded from the aged pension income test.

Any ‘unearned’ portion of that $300 limit goes towards an individual’s Work Bonus ‘income bank’, which accumulates and can be offset against future work which would otherwise count towards the aged pension income test.

Under normal circumstances, aged pensioners could accumulate $7,800 per annum into their ‘income bank’, but that lifted to $11,800 for the 2023 calendar year.

The white paper makes that $11,800 figure permanent, removing barriers keeping willing older Australians from taking on extra work.

Smoothing the support offramp for jobseekers

Jobseekers transitioning out of unemployment will be given a parachute if their new job doesn’t work out.

Like aged pensioners, government payments to jobseekers drop when their earnings cross a certain threshold.

The ‘nil payment period’ begins when those government payments drop to $0 a fortnight, with payments generally being cancelled once six ‘nil payment’ fortnights have passed.

“The ‘nil rate period’ enables job seekers who enter employment to remain connected to the social security system for a period, in case their job does not work out, and to continue accessing concession cards associated with receiving social security,” according to the white paper.

To safeguard those individuals, that period will extend from six fortnights to twelve, giving more certainty to those re-entering the workforce.

“This extension will give income support recipients more confidence to take up work opportunities, with less need to worry about reapplying for payment and associated benefits,” the paper states.

This could encourage more suitable candidates to step up for hard-to-fill roles.

The measure is subject to new legislation.

Rethinking the NAIRU

A major technical change will come in how the government approaches the non-accelerating inflationary rate of unemployment, otherwise known as the NAIRU.

In its simplest form, the NAIRU is a benchmark used by economists to determine how low unemployment can go without sending wage inflation on an upward spiral.

Estimates vary: the Reserve Bank puts the rate around 4.5%, and the Treasury’s latest estimate is 4.25%.

But critics have long claimed Australian benchmarks are broken, given sluggish upticks in wages even through periods of low unemployment.

Opponents also see the NAIRU as a cudgel against vulnerable workers, whose livelihoods become collateral in the war against inflation.

In a major shift, the white paper proposes new ways of thinking about full employment, including a major rethink of the NAIRU target.

“An estimate of the NAIRU can be useful to gauge macroeconomic conditions, prepare medium-term forecasts, or help inform the use of macroeconomic policy across the cycle,” it states.

“But it does not capture the full extent of spare capacity in our economy or the full potential of our workforce.

“The NAIRU should not be confused with, nor constrain, longer-term policy objectives.

“The Government has broader and bolder aspirations for full employment, aimed at increasing the maximum level of employment we can sustain over time, by reducing structural underutilisation.

“Progress in addressing structural barriers will be reflected in lower statistical estimates of the NAIRU, and expand labour market opportunities and our economy’s potential over time.”