Employment Plan 2017
Australia
Contents
1. Employment and labour market outlook 3
2. Employment challenges for Australia 4
3. Current policy settings and new commitments 5
Broad economic settings 5
Labour markets and social protection 5
Labour market regulation 5
Workplace safety 6
Social protection 6
Active labour market programs 6
Policy measures targeting labour market disadvantage 6
Women 6
Youth 7
Indigenous Australians 8
Mature age 9
People with Disability 9
Regional areas 10
Workers in industries facing major structural change 10
Skills development 11
4. Monitoring and reporting 13
Key economic and labour market indicators 13
Key policy indicators 13
5. Key policy commitments in the Employment Plan 14
6. Multi-year collective commitments 21
Prepared by the Australian Government Department of Employment, with input from Australian Public Service colleagues, in June 2017. Australian Labour Force Data are at April 2017, and international data are the most recent available. For any enquiries, please contact: .
Australia’s Employment Plan sets out measures which will create more jobs, lift participation in the workforce, and promote safe and productive workplaces, in line with our G20 commitments.
1. Employment and labour market outlook
The Australian economy is in its 26th year of continued expansion, with the Government forecasting the economy to grow by 2.75 per cent in 2017-18 before strengthening to 3 per cent in 2018-19. Employment has increased by 1.6 per cent over the year to April 2017, equal to the decade average growth rate of
1.6 per cent. The unemployment rate for persons aged 15 years and over stood at 5.7 per cent in
April 2017, equal to the rate recorded 12 months ago, and is forecast to remain around 5.75 per cent in the June quarter of 2018, before declining slightly to 5.5 per cent in the June quarter 2019.
Table 1: Economic and labour market conditions, 2008 and 2016
Economic and labour market conditions / Australia (2008) / Australia (2016) / G20 median (2008) / G20 median (2016) /GDP per capita (USD terms) / $40,871 / $43,917 / $33,593 / $34,384
Employment growth (%) / 2.8 / 1.6 / 13.9 / 1.3
Unemployment rate / 4.2 / 5.7 / 6.2 / 5.7
Youth unemployment rate / 8.8 / 12.8 / 13.9 / 13.9 (2015)
Participation rate (15+) (%) / 65.5 / 64.8 / 60.3 / 61.3 (2015)
Female participation rate (15+) (%) / 58.6 / 59.2 / 50.4 / 52.4 (2015)
Working age (15 to 64) participation rate (%) / 76.5 / 76.9 / 70.3 / 72.9
Source: ILOSTAT, OECD.Stat and data provided by the ILO and OECD to the G20 Employment Working Group in April 2017.
Department of Employment calculations based on OECD.Stat short-term labour market statistics.
Table 2: Labour market forecasts for 2017-18
Employment growth / Unemployment rate / Participation rate /1 ½ per cent / 5 ¾ per cent / 64 ½ per cent
Source: Australian Government, Budget Strategy and Outlook: Budget Paper No. 1, 2017-18
2. Employment challenges for Australia
Challenge: Boosting labour force participation
Population ageing poses a challenge to many advanced countries, including Australia. The labour force participation rate for people aged 15 years and over is projected to fall to less than 63 per cent by 2054–55, compared with around 65 per cent today. This is expected to generate fiscal pressures through a smaller labour force and income tax base, as well as increased demand for age-related payments and services. Improving workforce participation rates for groups with potential for higher participation is not only a pathway to boost Australia’s productive capacity, but can improve equity and opportunity for all Australians. For example, women, Indigenous Australians, humanitarian entrants and people with disability have much lower participation rates than the general population.
Challenge: Addressing long-term unemployment
Australia achieved a substantial decline in long-term unemployment by the time of the Global Financial Crisis. Addressing this problem is important; both to ensure thousands of Australians do not face long-term exclusion from work, and to improve the long term economic outlook by avoiding the erosion of skills and job readiness caused by prolonged absence from the workforce.
Challenge: Youth unemployment
Young people are particularly vulnerable to unemployment during periods of economic and labour market softness, as they tend to have less education, skills and experience than older members of the population. The youth unemployment rate was 12.8per cent in April 2017, more than double the national rate. Improving youth participation in employment, education or training is therefore a priority for the Australian Government.
Challenge: Boosting Indigenous employment
Australia’s Indigenous population face more barriers to employment on average relative to the rest of the population. While gains in employment outcomes for Indigenous Australians have been hard won, concerted effort must still be made across government and big business to bring the Indigenous population into employment. Indigenous Australians experience much lower labour force participation and higher unemployment rates, particularly youth and women. Improving education and labour market outcomes for Indigenous Australians is a significant priority for the Australian Government.
Challenge: Supporting job creation
Job creation was slow following the Global Financial Crisis, with Australia’s unemployment rate reaching almost 6per cent. This partly reflected the challenge of managing structural change between industries with varying labour requirements. Strengthening job creation will require a strong commitment to boosting economic growth and opening up employment opportunities through innovation and new forms of work. Investment in education, skills and training are essential to ensure existing and new entrants to the workforce are able to quickly adjust to changing labour market demands - including rapid advances in digital technologies and disruption to existing industries.
3. Current policy settings and new commitments
Broad economic settings
Australia’s policy framework has played an important role in fostering macroeconomic stability. The main pillars of this framework are a flexible exchange rate, an open capital account, an inflation-targeting independent central bank and fiscal policy focused on transparency and medium-term sustainability.
Australia’s G20 Growth Strategy provides a more detailed overview of Australia’s macroeconomic policy framework and recent commitments.
Regulation, finance, incentives, investment, innovation and entrepreneurship
The Australian Government believes that private enterprise and private investment are key drivers of economic growth and national prosperity. Excessive regulation has the effect of discouraging business investment and entrepreneurialism, as well as distorting investment decisions and damaging productivity and jobs growth.
The Australian Government has made the following policy commitments to increase competitiveness, strengthen incentives and support investment, innovation and entrepreneurship:
· A ten-year enterprise tax plan will be delivered to boost new investment, create and support jobs and increase real wages.
· $70 billion has been committed from 2013-14 to 2020-21 to transport infrastructure better connecting Australian products to domestic and international markets, improving productivity as well as improving safety.
· The National Business Simplification Initiative, launched in November 2016 is saving businesses time, freeing them up to focus on growing their business, creating jobs, and innovating.
Labour markets and social protection
The Australian Government is continually assessing labour market policy and social protection measures based on the current economic climate. Currently, Australia’s social security system is being strengthened through revised activation mechanisms and incentives to work, to ensure that everyone who can participate in work is required and encouraged to seek employment.
Labour market regulation
There is a safety net of ten National Employment Standards set out in the Fair Work Act 2009 and awards providing for minimum pay and conditions in all industries. The system is overseen by an independent body – the Fair Work Commission – which sets the minimum wages and working conditions in awards, and can act as an arbiter in industrial disputes. The approach of decentralised bargaining between employers and employees, is underpinned by a safety net and an independent umpire, has the benefit of allowing individual businesses to establish agreements that suit their specific circumstances, while providing employees with security in the labour market.
Workplace safety
WHS laws operate within a nationally harmonised framework, and generally apply to workers in all industries and to all areas of employment. Businesses in Australia have a broad duty of care under model WHS laws to protect the health and safety of all workers. These laws are underpinned by the Australian Work Health and Safety Strategy 2012-2022 which is consistent with priorities set out in the G20 Statement on Safer and Healthier Workplaces adopted by G20 Labour and Employment Ministers in 2014. More detailed information addressing the G20 commitment is provided in the section of this document addressing progress towards multi-year G20 collective commitments.
Social protection
Australia’s social security system and labour market programs are closely aligned, and have a strong focus on assisting people with the capacity to work to enter employment. The purpose of the system is to protect basic living standards of all Australians (individuals, families and communities), and increase their social and economic participation. The coverage and targeting of these measures is consistent with the policy recommendations adopted by G20 Labour and Employment Ministers in 2016.
Active labour market programs
The Australian Government provides employment services through a network of private and community sector entities. There are three main employment programs: jobactive for mainstream job seekers, Disability Employment Services for people with disability, injury or health condition, and the Community Development Programme for job seekers living in remote areas.
Policy measures targeting labour market disadvantage
Australia works to address labour market disadvantage by addressing issues as they arise through policies, programs and anti-discrimination regulations.
Women
The Australian Government’s approach to increasing female participation includes a flexible, affordable and accessible child care system; improving workplace diversity and flexibility; workplace support; and protection through our labour laws. Policy measures are underway to ensure Australia is on track to meet the G20 goal to reduce the gender gap in labour force participation rates by 25 per cent by 2025, agreed by Leaders under the Australian G20 Presidency in 2014. More detailed information addressing the G20 goal is provided in the section of this document addressing progress towards multi-year G20 collective commitments.
Key commitments to improve women’s economic participation include:
• Increased support for parents who want to work, or who want to work more.
• A total investment of around $37 billion on child care support over the next four years. This includes support for the implementation of the Jobs for Families Child Care Package.
• Delivering the ParentsNext program Australia-wide to assist parents of young children, who may be at risk of welfare dependency, to plan and prepare for employment by the time their children are at school.
• Implementing a Launch into Work program which will deliver pre- employment projects targeted at women that provide training, mentoring and work experience to assist job seekers to become work ready.
Youth
Young people are the most vulnerable, of all age groups, to wider economic and labour market conditions. A key strategy in addressing youth unemployment is to raise the overall rate of job creation. Reforms to encourage participation and improve the outcomes of Australia’s education system, discussed later in this plan, will also contribute to ensuring that young people gain skills which are relevant to employment opportunities. These strategies will contribute to meeting the goal of reducing the share of young people who are most at risk of being permanently left behind in the labour market by 15 per cent by 2025, as adopted by G20 Leaders at the 2015 Antalya Summit. More detailed information addressing the G20 goal is provided in the section of this document addressing progress towards multi-year G20 collective commitments.
Key commitments to address youth unemployment include:
• An investment of $855 million over four years through the Youth Employment Package, which includes the new Youth Jobs PaTH program.
• Measures to encourage entrepreneurship among young people, including as part of the expansion of the NEIS program.
• The Transition to Work service, assisting young people aged 15-21 who have disengaged from work and study and are at risk of long-term welfare dependence.
• Empowering YOUth Initiatives, which provides $50 million in grant funding to eligible not-for-profit, non-government organisations to trial innovative approaches to support young people.
Indigenous Australians
Relative to the rest of the Australian population, Indigenous Australians experience low labour force participation and high unemployment rates. The Australian Government is implementing measures to help accelerate progress towards achieving parity in employment outcomes between Indigenous and
non-Indigenous Australians.
Key commitments to improve Indigenous employment outcomes include:
• The $55.7 million Closing the Gap – Employment Services package which includes measures to increase the number of Indigenous Australians engaged in the labour market and build the capacity of employment services to better connect Indigenous job seekers to jobs.
• Implementing the Employment Parity Initiative which involves working with large employers to increase the number of Indigenous Australians employed in the private sector, with a target of
• 3 per cent of their employees being Indigenous by 2020.
• Increasing representation of Indigenous Australians across the Australian Government public sector to 3 per cent by 2018.
• Implementing an Indigenous Procurement Policy applying to the Australian Government’s domestic procurement to drive demand for Indigenous businesses and increase Indigenous employment.
• Establishing an Indigenous Entrepreneurs package comprising targeted support for Indigenous entrepreneurs and small Indigenous businesses.
• Implementing an Indigenous Employment and Supplier-use Framework that is expected to apply to all new Australian Government-funded, state-delivered infrastructure projects from mid-2019.
Mature age
The Australian Government recognises the value of mature aged workers, who have often built up knowledge and skills during their time in the workforce which are easily transferable, and have valuable mentoring and training skills to offer.
Key commitments to improve employment outcomes for mature aged Australians include: