Some of the initiatives handed down in the budget on Tuesday will affect the work of HR practitioners. While the wider implications of the budget will emerge in time, these are some immediate reflections by AHRI’s HR manager Anne-Marie Dolan.
Paid parental leave
New parents will have to wait to see whether they will receive up to $50,000 over six months as part of Tony Abbott’s paid parental leave scheme, which would be funded by a 1.5% tax to big business. This initiative is on hold because it has to walk the two gauntlets of the Senate and ongoing negotiation with the states. If it passes the Senate, it will start from 1 July 2015. Despite some uncertainty, it’s a good time for HR departments to review their current parental leave policy. Approaches can vary across organisations, as some may top up the payment for higher earning employees, others may choose to remove their parental leave payment in light of the government payment and some organisations may continue to offer both their existing policy alongside the government payment.
Young job seekers
An increase in job applications from younger workers may come across our desks following the budget. In his speech on Tuesday night, Treasurer Joe Hockey said that young people must be “earning or learning”. From July 2014, those under 30 must be employed or studying and, if they are not, they will only be able to claim Newstart or Youth Allowance for six months of the year. If not working or studying, they will be required to participate in a Work for the Dole program which aims to help them get into the workforce.
Those studying may have to pay more for university courses with the deregulation of university fees and, while student loans will be uncapped, the interest on debt will now match the government’s borrowing rate, meaning the interest payments will be higher. The thinking is that young Australians, whether they are tertiary educated or not, will be more motivated to participate in the workforce. For your reference, AHRI published a youth employment research report.
Older workers could be staying longer in the workforce with the pension age rising incrementally from 67 to 70 by 2035. There could also be more applications from mature age job seekers seeking to re-enter the workforce stimulated immediately by the scrapping of the seniors’ supplement after the last payment in June this year. Treasurer Hockey has expressed a need for change in the attitude of business towards hiring older workers and we as HR professionals can play a part in advising line managers on the benefits of hiring older workers for an organisation. There’s $10,000 on offer for a business that employs a person over 50 years of age who has been on unemployment benefits for six months or more. The $10,000 will be paid over a 24 month period, and provide an extra incentive to smaller businesses especially to think more seriously about hiring an older candidate when recruiting. AHRI will be following up its 2012 report on mature age workforce participation with another report this year.
The super guarantee will be paused for the next four years. While the rate will increase from 9.25% to 12 per cent as planned, the time frame will change. The rate will increase to 9.5% by 1 July 2014 but will remain there until 30 June 2018.
With 16,500 jobs set to disappear from the public sector over the next 3 – 4 years, we may be seeing an increase in the number of job applications from public sector professionals. For those of us in the private sector, it makes sense to get up to speed with the different roles, titles and levels in the public sector, and how they align with private sector roles and structures. That could assist in recognising appropriate talent and skills when assessing applications for short-listing and making appointments. AHRI will continue working with its public sector reference panel on HR issues this year.
An $11.6 billion investment in infrastructure will create job opportunities across Australia in capital city and regional areas. HR professionals who work in this sector may find they are required to hire more employees and are competing for scarce talent and skills in some areas. This could also lead to a skills shortage in this area, leading HR to explore solutions offshore. The migrant intake will remain unchanged at 190,000 for the year so there will be room there for employers to look at 457 visa options.
There is a $484.2 million program in the budget for entrepreneurs that will provide for loans of up to $20,000 to help commercialise good ideas. And an $8 million allocation over fours years has been made to establish a Small Business and Family Enterprise Ombudsman to replace the present Small Business Commissioner. The intention behind that initiative is to improve dispute resolution and provide a more user-friendly way for cutting compliance burdens and red tape for small enterprises. For small business, AHRI’s subscription initiative, Workforce HQ has been set up to assist small business with people management issues.