Tighter conditions around workforce skilling may be cause for concern

Wednesday 10 May, 2017 | By: Default Admin | Tags: workforce skilling, 457 visa, apprenticeships, employment and training

Off the announcement of sweeping changes to skilled migration and the funding for university students, it is unsurprising businesses may be worried about whether they’ll be able to fill their skills needs in the future.

The 2017 Federal Budget delivered momentous changes in the education, employment and training space, hence why CCIQ has called this an “education and infrastructure budget”.

But it is seemingly focused on finding savings and tightening conditions rather than meeting business needs.

Below is CCIQ’s breakdown of some of the major changes in this space and what it might mean for small businesses.

$1.5 billion over four years to establish the Skilling Australians Fund

Off the back of a steep decline (-45 per cent) in apprentice and trainee numbers since 2012, the focus of this fund is understandably about getting more Australians into apprenticeships and traineeships.

The field is also narrowed further to give priority to occupations in high demand that currently rely heavily on skilled migration, future growth industries and rural and regional areas.

The twist is that the State Government is asked to match the funding. It will be interesting to see how the Federal Government will go about “cherry picking” the priority industries.

Businesses with up to $10 million turnover pay $1200 per year for each visa holder

A replacement to the current training benchmarks, users of the temporary skill shortage visa (457 visa) will be required to contribute to the new Skilling Australians Fund with an expected $1.2 billion to be raised over four years.

The applicable fee (which will be $1800 per visa for larger businesses) is three to four times more than the amounts recommended in the Integrity Panel review of 457 visas and much higher than advised prior to the Budget.

Businesses will understandably not be pleased with this announcement.

A one-off fee for small businesses of $3000 for using the new skilled migration scheme

Small businesses will be slugged with a new and hefty fee of $3000 for each employee sponsored under the permanent employer nomination scheme or regional sponsored migration scheme. Big businesses will pay $5000 for each employee.

Another fee and more red tape for businesses already struggling to fill the skills shortage.

Indexation of visa application charges, raising $410 million over four years

The government is increasing annual visa application charges through indexation, increasing a number of visa charges by two per cent from July 1.

In a bid to bring in an extra $410 million across four years, small businesses will indirectly pay through a potential drop in visa applications.

$24 million over four years for rural and regional students

The Federal Government will spend $24 million over four years to establish a Rural and Regional Enterprise Scholarships program, aimed at improving educational attainment, skills development, and employment opportunities for rural and regional students.

This will have positive flow on effects for many businesses in our regional areas as the quality of education and training improves, and the pool of skilled workers living locally should increase.

Lowering the income threshold for repayment of HELP to $42,000

The Federal Government has lowered the income threshold for repayment of HELP debt to $42,000 with a one per cent repayment rate and a maximum threshold of $119,882 with a 10 per cent repayment rate.

Understandably this will be a hit to university graduates, but it has been CCIQ’s view that this particular measure is fair and will be most effective in reducing the massive $50 billion of outstanding student debt.

Many should be optimistic that this ‘budget repair’ measure will indirectly benefit small businesses and communities.

These six major changes that will affect businesses will coincide with a number of changes to school funding, the implementation of the new VET Student Loans, as well as increases in university fees.  

In summary, most of the changes point to “tougher times” for businesses and the workforce, and it will be a matter of how Queensland businesses adapt to these measures that will secure the success of such policy decisions.

The silver lining is that these tough measures will see substantial savings of almost $4 billion over five years in fiscal balance terms.

Whether these savings will outweigh the consequences of these tightened policies - and the flow on effects it will have on businesses - will only be evident over time.








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