Federal Budget Insights 2020-21

Future of Work

A country-led recovery that’s built on the future of work

There’s no doubt that COVID-19 has highlighted existing workforce challenges across the country, while making them more urgent and complex.

Even pre-COVID-19, technology was predicted to shake up the very nature of work. In light of the pandemic, this is now compounded by an increase in unemployment and the inability for businesses to access skilled migration. As a nation, we need to take a deeper look at the future of work, jobs and reskilling local workers. 

It hasn’t all been doom and gloom. There are some silver linings and positive gains that have been accelerated by the pandemic, including new ways of working, digital adoption and collaboration. At a policy level, this has been supported by the JobMaker, JobKeeper and JobTrainer plans that have been enacted at pace. 

The 2020 budget is an opportunity to build on this momentum while looking beyond the pandemic by using jobs and skills as a key foundation for economic recovery.   

A mindset shift is required; away from a ‘war over talent’ and towards partnership to build a world-class labour market. Now is the time to rethink the investments that are needed and the role of government to make this happen.

Meaningful impact can be made in these areas:

  • Continuing to support the most vulnerable across society. The impact of COVID-19 is not evenly felt. The budget can look to address opportunities to support job creation for individuals, regions and industries that are most impacted by COVID-19.

    The mental health implications of the crisis have been profound. Since the pandemic began, Australia has seen more than a million new people looking for work. While governments have protected employment through the JobKeeper scheme and supported select industries through JobMaker, higher unemployment rates are expected for some time.

    Employees in retail, arts, food, travel and accommodation services have been most impacted. They are often faced with lower wages, less industrial protection and less JobKeeper support. Those working across the non-permanent workforce (i.e. the gig economy) are vulnerable to labour market displacement.

    First Nations Australians also experience disproportionate impacts and a lack of employment opportunities, compared with Australia’s non-Indigenous population. Unemployment is most likely going to impact people at the extremes of their working lives – younger and older workers – and also adversely impact females. The drop in female participation was initially twice that for males and the largest changes in jobs (since the week ending 14 March) was for people aged 20-29 (7.9% decrease) and 70+ years (11.3% decrease). Supporting those disproportionately affected is essential.

    COVID-19 has highlighted the value of essential services, such as healthcare professionals and teachers, among many others. Often undervalued pre-COVID-19, the crisis has highlighted how much the country relies on these workers.

    A re-evaluation of continued support of essential services, supporting people struggling with the mental health impacts of COVID-19 and supporting people to re-enter the workforce will be required. 

    The impact of COVID-19 is unequally shared when we consider the digital divide. For people who face accessibility, affordability or ability issues, there isn’t equal and readily available access to computers, the internet or the digital infrastructure – especially in regional communities. Preventative policies targeted at people in at-risk roles, regions and demographics are critical. 
  • Embedding microcredentials. Skills will underpin the post-COVID economic recovery. This ranges from an extension of the JobTrainer scheme beyond trades to enable broader reskilling, supporting the development of capabilities like digital literacy and resilience that have become more profound in recent times, and removing barriers to adult education in an environment of mass unemployment.

    An impact can be made in relation to a national credentialing system that embraces shorter-form incremental upskilling. It is positive to see that the Australian Governments Skills Council is considering recommendations around microcredentials. Smaller chunks of learning allow people to fill the gaps – and fast – in industries where there is demand. They’re accessible and can have an immediate economic impact.

    In developing incentives and programs to support microcredentials, the government in partnership with industry and employee representative bodies and other stakeholders can assist through: funding, working with education providers to develop open access to courses, reducing the administrative burden, and simplifying the system. Individuals can then easily engage with upskilling opportunities and a culture of lifelong learning is utilised for workers to remain relevant. 
  • People movement and skilled migration. COVID-19 has accelerated the way people think about regional and remote working. Work doesn’t have to be within a big city; from a government perspective, supporting a regeneration of the regions, enabling services and supporting infrastructure – including digital infrastructure – can support growth, economic inclusion and social mobility.

    Many businesses rely on skilled migration to fill local gaps. The closure of international borders means that migration is expected to be 85% lower in the coming year* (an increase of just 36,000 people).

    Australia’s net migration figure has exceeded 180,000 every year since 2006. In 2018-19, the Australian Bureau of Statistics reported that the country population grew by nearly 240,000. If predictions are correct, then Australia will experience the lowest population increase in more than 40 years.

    The limited immigration intake resulting from COVID-19 will require a review of the visa system and the manner in which it supports closing the skills gap. This does not mean more skilled migrants for the sake of having more. Care needs to be taken to support and drive better forecasts with skills aligned to the government agenda and industry activity, segmented by those that cannot be met domestically and oriented towards driving economic growth.

    Australia needs a recovery that’s built on the future of work, on supporting job creation and upskilling supported by government initiatives.

    In the budget we look forward to seeing the government build momentum on some of the good work that is underway. Subscribe for our in-depth analysis of the 2020-21 Federal Budget.  

*Scott Morrison (2020a), Prime Minister of Australia, ‘Press Conference - Australian Parliament House, ACT, 1 May, available at https://www.pm.gov.au/media/press-conference-australian-parliament-house-act-1may20

Contact us

Caitlin Guilfoyle

Senior Manager, Future of Work, PwC Australia

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