Support for training new workforce welcome, but immigration cuts not

Minister Michaelia Cash said Australia’s small businesses do the heavy lifting by strengthening the economy.

An increase in support for new apprentices entering Australia’s workforce is a welcome announcement in the Australian Budget 2019-20, but a decrease in permanent immigration intake is disappointing to some.

On April 2, the Australian Budget 2019-20 was announced with mixed feedback from organisations such as the Australian Industry Group (Ai Group).

The federal government previously announced it will reduce Australia’s annual migration intake from 190,000 to 160,000 places for four years from 2019-20.

According to the budget breakdown, there will be 108,682 places in the skilled stream and 47,732 places in the family stream, including a combined 3,586 places for child and special eligibility streams.

Ai Group chief executive Innes Willox said the reduction in the permanent immigration intake is of considerable concern for the many businesses facing skill shortages across a wide range of occupations.

“Extending the reduction for a number of years carries risks and will lift the dependency on temporary migration.

“Caution should also be sounded over the modest outlook for the budgetary position over coming years,” he said.

“There are real risks around the disappointing cuts to permanent migration, in the modest improvement to the budgetary outlook and in the shortage of measures to substantially boost domestic productivity.

“The budget has taken clear steps to boost confidence and put the economy on a sounder footing, but it is fair to say that much work still needs to be done to boost productivity and build economic resilience,” said Willox.

While the Ai Group sees room for improvement in permanent migration cuts, Willox said an increase in support for new apprentices, by lifting employer and apprentice incentives, is a welcome initiative.

“[It] will help address a number of skill shortages and help provide stimulating career paths for many young Australians. It is very pleasing that the government has listened to industry concerns on our apprenticeship program.”

Over four years from 2019-20, $44m will be allocated to a new Streamlined Incentives Program – aimed at making it easier for employers to take on an apprentice or trainee.

The Program will be responsive to industry and national skills needs with a streamlined payment structure and eligibility criteria, underpinned by a forward-looking National Skills Priority List.

Over the next four years, $156.3m will be allocated to a new Additional Identified Skills Shortage Payment for employers and apprentices in the top 10 occupations where there is a demonstrated need for increased apprenticeship commencements and where the primary entry pathway into the occupation is through an apprenticeship.

This specifically targets new workers to grow the number of apprentices in training to meet future workforce needs and the new payment is expected to support up to 80,000 new commencements over five years of operation.

To further support SMEs, the federal government is increasing the instant asset write-off threshold to $30,000 and expanding access to medium-sized businesses with an annual turnover of less than $50m. These changes will apply from April 2, 2019 to June 30, 2020 and will benefit about 3.4m businesses employing about 7.7m workers.

The threshold applies on a per asset basis so eligible businesses can instantly write off multiple assets.  Businesses will be able to benefit from the instant asset write-off as they grow, providing a direct incentive to reinvest in their business.

Minister for Small and Family Business, Skills and Vocational Education Michaelia Cash said the increase of this initiative will further improve cash flow for hard working Australian small business owners by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations, and replace or upgrade their assets.

“Australia’s small businesses do the heavy lifting by strengthening the economy and supporting our communities. They make up around 99 per cent of Australian businesses and contributed $393b to the Australian economy.

“The 2019-20 Budget continues to put in place a policy environment that makes it easier to establish, operate and grow a small business in Australia,” said Cash.