Priorities for Victoria’s recovery

The national employer association Ai Group has proposed elements of a recovery plan for Victoria which looks beyond the current restrictions to promote a sustained recovery in consumer and business confidence, demand, renewed growth and employment in the state.

Tim Piper, Ai Group’s Victorian Head said: “A recovery plan for Victoria will work most effectively if it is the outcome of genuine consultation that creates a sense of joint Government, community and business ownership of the strategy.”

To this end, Ai Group proposes the following areas of focus for recovery action:

1. Jobs and Skills:

  • Apprentices and trainees: Build on the excellent foundation provided by the recently announced New Apprenticeships and Traineeships – Working For Victoria plan. Nationally, well over half of all apprentices are currently on JobKeeper. In Victoria the trades commencements are down 10% and non-trades down 30% year-on-year. The apprenticeship suspension rate between March and June was five times higher than normal. A strategy needs to be developed in conjunction with business to:
    • Prevent further deterioration in apprentice and trainee numbers as JobKeeper gets wound back;
    • Further stimulate apprentice and trainee commencements;
    • Expand preapprenticeship programs.
  • Youth unemployment: By the end of April there were approximately 100,000 extra 15 to 24 year-olds who were not in employment, education or training (NEETs) than in January. The capacity for the labour market to absorb the high numbers is severely curtailed and another cohort is soon to exit school, vocational education and training and university and add significantly to those numbers. The Victorian Government can get ahead of this looming crisis by creating bold new policy initiatives aimed at linking 15-24 years, especially NEETs to real work. This would involve drawing from the best elements of the apprenticeship’s model and extending it to cadets and interns, especially in higher occupations, that will help drive the recovery. A promptly introduced wage subsidy program is called for.
  • Multicultural employment opportunities: As with youth, particular cultural groups are at high risk of prolonged unemployment and there should be an emphasis on funding multicultural employment opportunities to lift workforce participation and discourage social dislocation.
  • Community and inclusion: Victoria’s schools and universities and disability services have been mostly closed since March. Principals are warning about students needing to repeat this year, especially those already disadvantaged. A serious plan for catch-up is needed or a whole generation of kids face a wasted year. Parents (mostly women) cannot readily return to work until schools and childcare are fully functioning again. If this were to happen again in 2021, there would be an education catastrophe for many disadvantaged children together with an inability of many parents to re-enter paid work. A key part of any recovery plan from the Government is the need to commit to targeted responses to the virus and no further generalised shutdowns of all schools and colleges.

2. Infrastructure and housing: Lift spending on infrastructure and housing including by:

  • Further emphasis on bringing forward smaller projects that can be activated quickly;
  • Tapping into the pool of funds ready to be deployed by superannuation funds and related institutions including on well-developed projects (e.g. airport rail link);
  • Engaging with the private sector including super funds to lift investment on affordable housing.

3. Boosting business cash flow: Initiatives could include:

  • Payroll tax relief;
  • Extending support to Victorian businesses, including Victorian arms of national businesses, that are ineligible for JobKeeper but are, nevertheless, under considerable stress.

4. Rebuilding businesses and consumer demand: Victorian Treasury and Federal Treasury are both forecasting a further 200,000 job losses as a result of the second wave of lockdown. This is on top of the 200,000 jobs already lost since March in the state. Job losses are due to a crash in demand. Rebuilding businesses and consumer demand is key to growing jobs back.

5. Better regulation – less red tape: Accelerating progress on better regulation to reduce unnecessary regulatory burdens.

6. Innovation: Government programs to encourage businesses to re-invest especially in innovative opportunities. For example, innovation coupons available to Victorian businesses for spending on specified innovative activities. Government could also consider reinvigorating the Science and Technology Innovation grants introduced by former Treasurer John Brumby. These Grants (more than 130 over 3 years) provided measurable benefits for the scientific and business community and should be re-considered. It could also include specific encouragement to create improved and close collaboration between industry and tertiary institutions in Victoria.

7. Community focused initiatives:

  • Funding to youth multi-cultural employment opportunities to discourage social dislocation. We are at risk of losing a segment of Victoria’s multi-cultural youth which are now contemplating there being significantly fewer jobs available. Multi-cultural youth have always found obtaining jobs a difficult task; that challenge is going to be greater as more people become unemployed;
  • Funding to companies actively supporting employment opportunities for older multi-cultural cohorts. For example, companies considering training bus drivers;
  • Renewed and improved focus on communications to multi-cultural sectors. Current communications have failed to adequately engage non English speaking communities and have added to anxieties within those communities. Funding should be provided to community groups which have direct interaction with those who are facing challenges in a new environment.

“Mr Piper said: “Success also depends on the following:

  • Accelerate the removal of restrictions on activity;
  • Immediately lift the curfew;
  • Victorian Government should work with NSW to re-open the state border as soon as possible, especially given how few cases there are in regional communities;
  • The Government to articulate a clear return to business strategy that allows businesses and their employees to be ready for how and when activity can resume;
  • The Government needs to base decisions on the clearly stated and evidence-based outcomes it is aiming to achieve;
  • The Government should move out of crisis mode and adopt a balance of risk approach; while taking health advice give fuller consideration to other implications of lockdowns including on domestic violence levels, mental health, suicide rates, higher youth unemployment and long-term unemployment.

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