The Albanese Government delivered its first Budget on 25 October 2022. In it, the government announced new measures around paid parental leave, greater workforce participation and Australia's skilled migration program.

Budget implications: employment and the workplace

Paid parental leave

The federal government recently announced it will extend the entitlement to paid parental leave to six months from July 2026. Accordingly, this Budget has allocated $531.6 million to the paid parental leave scheme over the next four years, with a further $619.3 million per subsequent year.

The current entitlement to paid parental leave payments is 18 weeks for the primary caregiver and two weeks for the other parent. The government intends to expand this to a total of 26 weeks to be shared between both parents, with two additional weeks being introduced per year from 1 July 2024 until the full 26 weeks entitlement is implemented from July 2026. Single parents will be able to access the full 26 weeks.

This reform, aimed at supporting Australian families with rising costs of living, is also hoped to increase workforce participation by providing parents with greater flexibility as to when and how they return to work following the birth of their child. This includes facilitating periods of concurrent leave and allowing families to make their own decisions on dividing the leave entitlements between them. While employers are not directly responsible for the costs of the paid parental leave scheme, these changes are likely to impact on the amount of time new parents will take off work – in both directions.

Enabling more Australians to find work

Several Budget entries are directed at facilitating greater workforce participation, a need made more acute than ever as a result of the COVID-19 pandemic lowering migration intake and making thousands of businesses struggle to find workers. These include:

• Facilitating more parents to return to work by allocating $4.7 billion over four years (and $1.7 billion per subsequent year) to delivering cheaper child care. This includes increasing the maximum Child Care Subsidy rates and tasking the Australian Competition and Consumer Commission to undertake an inquiry into the costs of child care.
• Assisting older Australians to work more hours by increasing the amount pensioners can earn from $7,800 to $11,800 (for the 2022-2023 financial year) before it will reduce their pension benefits, at an overall cost of $61.9 million over the next two years.
• Upskilling workers, with $921.7 million over five years dedicated to providing 480,000 fee-free TAFE and vocational education placements in industries and regions with skill shortages. This also includes modernising TAFE infrastructure and facilities, as well as providing a further $485.5 million over four years for 20,000 additional Commonwealth-supported places at higher education providers such as universities.
• Incentivising participation in 'New Energy' apprenticeships by allocating $95.6 million over nine years to placements and making support payments.
• Introducing the Australian Skills Guarantee, a commitment of ensuring that one in ten workers on a major Commonwealth-funded project is an apprentice, trainee or paid cadet, which the government believes it can fund at cost neutrality by way of existing resources.

Strengthening the Fair Work Commission

The government estimates that its plan for abolishing the Registered Organisations Commission (ROC) and allocating its functions to the Fair Work Commission (FWC) can be achieved with cost-neutrality by utilising existing funding of the FWC. However, it also intends to provide the FWC with an additional $20.2 million over four years (and $11.1 million per subsequent year) for establishing two new Expert Panels, one in pay equity and the other dedicated to the care and community sector, as anticipated under the upcoming Secure Jobs, Better Pay Bill.

Achieving Budget savings

The government estimates that it will save $61.1 million over four years, with a further annual saving of $20.4 million, by abolishing the Australian Building and Construction Commission (ABCC). It intends to offset the loss of the ABCC by providing additional resources to the Fair Work Ombudsman (FWO) to regulate the building and construction industry within the realms of the Fair Work Act 2009 (Cth).

Other cost-saving initiatives outlined in the Budget include redirecting funding from under-performing employment, skills and training programs, and ceasing to provide work experience and internship programs through the Workforce Australia employment service currently delivered by the Department of Employment and Workplace Relations.

Budget implications: migration and global mobility

The government announced a number of new measures regarding Australia's Skilled Migration Program, as well as a reiteration of commitments made at the Jobs and Skills Summit.

These include:

• Reduction of visa processing times – The government reiterated its commitment made last month for additional funding to boost visa processing capacity. We are already seeing faster processing of applications, particularly the subclass 400 Temporary Work Activity visa and the subclass 482 Temporary Skills Shortage (TSS) visa.
• Increased permanent migration – The government reiterated the increase of its permanent migration planning levels from 160,000 to 195,000.
• Pacific Engagement Visa – Creation of a new permanent Pacific Engagement Visa for nationals of Pacific island countries and Timor-Leste. Up to 3,000 places per year will be made available to eligible Pacific nationals in addition to the existing permanent Migration Program, to commence from July 2023.
• Pacific Australia Labour Mobility - Additional investments to expand and enhance the Pacific Australia Labour Mobility (PALM) scheme, including the expansion of the aged care skills pilot program.
• Ukraine - Allocating additional three year Temporary Humanitarian Concern (subclass 786) Visas to Ukrainians citizens and extending access to Medicare for a 12 month period for Ukrainians (and immediate family) who hold a Bridging Visa E.

Further and more significant changes to the Skilled Migration Program are expected as a result of the Employment White Paper following the Jobs and Skills Summit. Public consultation is already underway, with public submissions due on 30 November 2022. 

Find out more about our Federal Budget 2022/23 Highlights.