More jobs and a strong economy

The Government’s economic plan has seen Australia reach its equal lowest unemployment rate since 1974 and our labour market outperform all major advanced economies in the world.

Continued investments in skills, along with support for workforce participation and businesses, has set Australia up for a sustained period of full employment.

The unemployment rate is expected to reach 3¾ per cent in 2022, nearly 3 percentage points below the Budget forecast from two years ago and the lowest level in close to 50 years, driving wages growth to their fastest pace in almost a decade.

A strong labour market benefits all Australians

Australia's plan for a stronger future will create more jobs and a stronger economy by:

Securing the skills we need for the jobs of the future by investing in apprentices and training

Supporting small businesses with tax relief to grow and create jobs

Launching Workforce Australia a one-stop shop for employment assistance

Implementing a National Workforce Strategy to inform workforce policy across government

Reinvigorating recovering industries and supporting priority sectors

Going to plan

A strong labour market with higher wages

Supported by the Government's fiscal strategy including a record $314 billion in economic support, the Australian economy has proved remarkably resilient to the ongoing impacts of the pandemic.

Labour market outcomes have consistently outperformed expectations, with the unemployment rate declining faster than anticipated to reach its equal lowest level since 1974. It is expected to fall further to 3¾ per cent over the forecast period.

This means more Australians are participating and more Australians are employed than ever before. Job vacancies per unemployed person are at a record high and the underemployment rate is more than two percentage points lower than it was prior to the pandemic.

Australia's labour market performance throughout the pandemic stands out compared with other countries, with employment surging past pre‑covid levels ahead of all major advanced economies.

The strong labour market is expected to drive wage growth over the forecast period to its fastest pace in almost a decade, rising to 3¼ per cent through the year to the June quarters of 2023 and 2024.

Unemployment rate forecasts over the past two years

This chart shows the underlying cash balance as at the 2022-23 Budget and the 2021-22 MYEFO. At the 2022-23 Budget, the underlying cash balance is expected to improve from a deficit of 3.4 per cent of GDP in 2022-23 to a deficit of 0.7 per cent of GDP at the end of the medium term. This compares to a deficit of 4.4 per cent of GDP in 2022-23 and a deficit of 1.8 per cent of GDP at the end of the medium term at the 2021-22 MYEFO.

Fiscal strategy on track

The initial phase of the Government's fiscal strategy focused on driving the unemployment rate down to pre‑pandemic levels or lower and avoiding the labour market scarring experienced after the 1980s and 1990s recessions.

Australia's strong fiscal fundamentals leading into the pandemic enabled the Government to respond decisively and achieve this outcome ahead of schedule. Prior to the pandemic, the budget was balanced and gross debt‑to‑GDP was (and remains) at a lower level than in all G7 economies.

The strong economic and labour market recovery has allowed the Government to transition to the second phase of its strategy, focusing on stabilising and then reducing debt as a share of GDP. Rebuilding our fiscal buffers will help to ensure that the nation’s debt remains sustainable over the long term and the Government is in a position to again respond decisively to future shocks.

Gross debt in Australia and G7 economies

This chart compares the gross debt to GDP ratios of Australia and the G7 economies in 2019 and 2022. Gross debt-to-GDP was, and remains, at a lower level in Australia than in all G7 economies.

Note: Across all levels of Government

Investing in our workforce

Through its support for training and apprentices, the Government is developing a skilled workforce for the future

A new skills agreement

The Commonwealth and state and territory governments continue to work towards a new National Skills Agreement, which will provide each jurisdiction with a major boost in funding for skills training in priority areas. The funding boost under the new agreement will be a $3.7 billion increase to the current entitlement of states and territories, which has the capacity to deliver an additional 800,000 training places. A new agreement will increase transparency in the system and lower student fees, ensuring students are able to access high‑quality, cutting edge training to ensure they have the necessary skills for the jobs of the future.

A new more generous apprenticeships incentive system for a stronger economy

Building on the record investment of $13.3 billion in apprenticeships and traineeships since 2013, the Government is investing $2.8 billion over 5 years from 2021‑22 to upskill apprentices, including by introducing a new streamlined Australian Apprenticeships Incentive System, which will provide support to employers and apprentices.

The Government is also strengthening the skills pipeline by supporting more apprentices through their training.

  • An additional 2,500 in‑training support places for eligible young apprentices
  • Expanding access to trade support loans to all priority occupations including aged care trainees

Jimmy is going to be an apprentice carpenter and will have a starting salary of $34,000 per year. He will study a 3.5‑year long Certificate III in Carpentry and will commence in July 2022.

As carpentry is an occupation on the Australian Apprenticeship Priority List, Jimmy's employer will receive up to $8,750 in wage subsidies ($3,400 in the first year, $3,400 in the second year, and $1,950 in the third year).

Jimmy will also receive $5,000 in Apprentice Training Support Payments ($1,250 every 6 months for 2 years) to help him with the cost of living while he trains.

Jimmy is also eligible for up to $20,691 in Australian Apprentice Support Loans.

Modernising Australian labour market data

The Government is investing in modern data so that it can better target spending on education and training and help meet skills gaps. The Australian and New Zealand Standard Classification of Occupations will be updated so it better reflects the evolving landscape of the Australian labour market.

Securing quality teachers

Improving teachers' skills so all students receive a world-class education

In response to the recommendations of the Quality Initial Teacher Education (ITE) Review, the Government has announced a new Initial Teacher Education Quality Assessment Expert Panel. The panel will develop new minimum and excellence threshold standards for ITE courses and advise Government on the application of these thresholds to ITE funding. This will improve the quality of graduating teachers and enable our students to perform at their best.

Supporting university and industry partnerships

A $2.2 billion investment in collaboration and innovation to create more jobs

The university research sector has enormous potential to create jobs and contribute to strong economic growth. The sector is a research and development powerhouse.

The Government is investing $2.2 billion to bring universities and industry together to develop the next generation of Australian companies and products.

$1.6 billion to kickstart Australia's Economic Accelerator, a competitive funding program to support research projects with high commercial opportunity

$150 million to expand CSIRO's Main Sequence Ventures which will make venture capital investments in companies linked to Australian research and development

$295 million to establish a suite of Industry PhD and research fellowship schemes

$243 million to support select universities to boost priority research and development

Q‑CTRL is a cloud‑based software for quantum computers and sensors, and includes aerospace and defence applications. Q‑CTRL was spun out from the University of Sydney in 2017. Main Sequence Ventures funded the company at start‑up with a ‘seed’ stage investment. In 2019 the company conducted a capital round to raise US$15 million, led by Square Peg and in which Main Sequence Ventures participated. Q‑CTRL collaborates with the University of Sydney, the Australian National University and the Department of Defence.

Delivering for small businesses

Tax relief to support investment and create jobs

Cutting taxes for small businesses

  • Reduced the company tax rate for small businesses from 30 per cent in 2013‑14 to 25 per cent from 2021‑22.
  • Introduced the unincorporated small business tax discount, and lifted the rate from 5 per cent in 2015‑16 to 16 per cent from 2021‑22 (up to a cap of $1,000).
  • Combined, these changes will deliver more than $21 billion in tax cuts to small businesses from 2015‑16 to 2024‑25, with around $2.6 billion flowing in 2022‑23.

Encouraging business investment and supporting cash flow

  • Reducing the GDP uplift rate for 2022‑23, delivering $1.85 billion in cash flow support for 2.3 million taxpayers, including small businesses.
  • Introduced rules to allow businesses with annual turnover or total income less than $5 billion to instantly write‑off assets to strengthen business investment and create more jobs, and extended them to 30 June 2023.
  • Enabled companies with annual turnover less than $5 billion to offset losses against previously taxed profits to generate a refund, and extended it to include the 2022‑23 income year.

Greater access to tax concessions

  • Expanded access to 10 small business tax concessions by lifting the annual turnover threshold from $10 million to $50 million, providing tax relief and reducing red tape.

Incentivising small businesses to upskill employees

Boosting employees' skills for future business growth

The Government is continuing to deliver for small businesses by introducing the Skills and Training Boost.

Small businesses with annual turnover less than $50 million will have access to a new bonus 20 per cent deduction for the cost of external training courses delivered to their employees by providers registered in Australia.

Australia's small businesses employ around 7.8 million workers. The boost will encourage small businesses to invest in the skills of their employees or train new ones. More skilled employees will drive productivity gains and enhance business growth.

The boost will apply to eligible expenditure incurred from Budget night until 30 June 2024, such as a cyber security course delivered by a registered training provider.

This initiative will provide $550 million in tax relief for small businesses, supporting them to invest in their employees and grow their business.

Andrew owns a transport company, Distribute R Us Pty Ltd, that has annual turnover of $30 million and 120 employees.

To upskill their employees, in April 2022, Distribute R Us pays for a registered training provider to run supply chain training courses, costing $200,000.

Distribute R Us pays for its employees to undertake specialist logistics training, costing a further $400,000, across the 2022‑23 and 2023‑24 income years.

Under the Government’s new Skills and Training Boost, Distribute R Us can claim a bonus deduction of $120,000, reducing its tax bill by $30,000. This is extra money that Distribute R Us can use to reinvest and grow the business.

Supporting businesses to go digital

Lifting digital capability and adoption to boost productivity

The Government is providing $1.0 billion to support small businesses to go digital by introducing the Technology Investment Boost.

Small businesses with annual turnover of less than $50 million will have access to a new bonus 20 per cent deduction for the cost of expenses and depreciating assets that support digital uptake, up to $100,000 of expenditure per year.

Around 3.6 million small businesses are eligible to access the new boost, which will apply from Budget night until 30 June 2023.

These changes will benefit small businesses by supporting them to invest in items such as an online sales platform, cyber security enhancements, cloud computing and digital tracking for livestock.

The Government is also investing in digital capabilities through its Digital Economy Strategy. This will support businesses to boost productivity, become more globally competitive and generate rewarding and high‑paying jobs.

Harley owns a furniture manufacturing company, Star Sofas Pty Ltd, that has annual turnover of $35 million and 120 employees.

In April 2022, as part of an overseas expansion, Star Sofas invests $100,000 to develop an online presence and build a digital inventory tracking system.

In July 2022, Star Sofas purchases multiple software subscriptions to enhance customer data analytics and marketing. Star Sofas incurs total expenditure of $100,000.

The Government's new Technology Investment Boost means that Star Sofas can deduct an extra $40,000, reducing their tax bill by $10,000. The company can use the extra money to reinvest and grow.

Since 2020, the Government has invested more than $3.5 billion in digital initiatives

Budget 2020‑21

Digital Business Plan

Driving Australia’s Economic Recovery
  • $419.9 million to implement the Modernising Business Registers program, building on the $60.6 million committed in 2019‑20
  • $256.6 million to develop a Digital Identity system
  • $29.2 million to accelerate the rollout of 5G, including investing in commercial trials and testbeds
  • $22.2 million to support small business operators to take advantage of digital technologies
  • $9.6 million to support Australian fintechs to export their financial services and attract international investment
  • $3.6 million to mandate eInvoicing for all Commonwealth government agencies to encourage adoption by business
  • $2.5 million to connect workers and small and medium sized businesses through a new Digital Skills Finder

Budget 2021‑22 to Budget 2022‑23

Technology Investment Boost

  • $1.0 billion to support small businesses to go digital

Digital Economy Strategy

Building the foundations to grow the digital economy
  • Over $100 million to support digital skills for Australians
  • $113.1 million to accelerate expansion of the Consumer Data Right to new data and sectors, and a further $38.4 million to enhance CDR functionality
Building capability in emerging technologies
  • $124.1 million to enhance Australia’s Artificial Intelligence (AI) capability
  • $111 million to drive growth of Australia’s quantum industry
  • $18.6 million to protect Australia’s national interest in critical and emerging technologies
Digital Growth Priorities
  • $38.4 million to expand the Australian digital games industry through the Digital Games Tax Offset
  • $15.3 million towards enhancing the value of eInvoicing

Backing small business

Government initiatives to make it easier to do business

  • $5.6 million over four years to establish a dedicated small business unit in the Fair Work Commission, helping small business employers navigate their workplace obligations
  • $10.4 million to enhance and redesign the Payment Times Reporting Portal and Register as well as the Government's commitment to pay eInvoices within 5 days will give small businesses greater transparency and help them get paid faster
  • Ensuring small business owners can access support. $4.6 million to extend Beyond Blue's NewAccess for Small Business Owners program and $2.1 million for Financial Counselling Australia's Small Business Debt Helpline
  • Supporting jobs and investment by streamlining business interactions with government and removing inefficient payment, administration and compliance requirements. Deregulation reforms are expected to generate benefits exceeding $21 billion over 10 years
  • At least $6.6 million for sharing single touch payroll data with state and territory governments to improve payroll tax lodgement accuracy and reduce compliance costs by up to $800 million, including by saving time for up to 170,000 businesses
  • Streamlining the administration of fuel and alcohol excise and excise‑equivalent customs duty to lower the costs of doing business in Australia and support local jobs growth
  • Improving administration of the tax system by leveraging technology to automate reporting requirements and align instalment payment obligations with financial performance – reducing compliance costs, improving processing times and supporting cash flow management for SMEs
  • $8 million to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to offer business planning, capacity building and financial literacy
  • Enhancements to the Consumer Data Right will see SMEs (and individuals) save time and money on everyday tasks like making payments, opening and closing accounts and switching retailers

Getting Australians into work

The Government is transforming employment services

Workforce Australia is a new system that will make it easier for Australians to find jobs and for businesses to hire staff.

Workforce Australia will launch on 1 July 2022. It includes a modern digital platform that is designed to become a single front door for all government employment and skills programs and initiatives.

This will help Australians identify all the employment and skills services the Government has available.

It will also assist businesses to hire the staff they need.

To foster a productive and competitive workforce, the Government is equipping Australians with the skills, training and resources they need to gain sustainable and satisfying employment.

Key elements of Workforce Australia

Finding the best employment services pathway for individuals

Workforce Australia will deliver a simple and connected service, where job‑ready job seekers can self‑manage through digital services. Individuals with greater needs will be supported through Enhanced Services Provider‑led tailored and intensive services.

A simpler system for businesses

Workforce Australia will provide a simpler and more connected recruitment service to businesses through improved matching, shortlisting and dynamic servicing based on workforce need through the online services for businesses.

A flexible approach to meeting obligations

The Points Based Activation System is a new way for job seekers to flexibly manage mutual obligation requirements.

Digital and Enhanced Services job seekers will need to meet a points target each month through a choice of tasks and activities, such as job search, job interviews, paid work, study and training.

A new provider model

Workforce Australia provider‑led services will be delivered under a new licensing system.

The licensing system is designed to reward high performing providers that are delivering quality outcomes for the Australian people.

Service providers will be located across Australia, providing tailored support to those who need it most.

Supporting women in the workforce

Ensuring the economic security of Australian women

The share of Australian women participating in the workforce reached a record high of 62.4 per cent in February 2022. Since September 2013, more than one million women have gained employment. As of February 2022, the unemployment rate for women fell to 3.8 per cent, the lowest rate since monthly records began.

The Government is removing barriers to women’s workforce participation and increasing flexibility for working families to manage work and care.

Soaring workforce participation

This chart shows the participation rate, which has rebounded after falling twice – once in early 2020 and again in late 2021 – in response to pandemic-related lockdowns and restrictions that temporarily prevented people from participating in the labour force or looking for work. As of February 2022, the participation rate has reached a record high of 66.4 per cent, compared with its lowest level during the pandemic of 62.6 per cent in May 2020.

Increasing flexibility for working parents

There are more women in work and earning more than ever before. To support today's families, the Government is creating Enhanced Paid Parental Leave. Up to 20 weeks of fully flexible leave will be available for eligible working families to provide them increased choice in how they manage work and care. The Government is also adjusting the income test to increase eligibility and further support workforce participation. Changes also mean eligible single parents will be able to access an additional two weeks of Paid Parental Leave.

Women in leadership

The Government is committed to encouraging more women into leadership positions in the private and public sector. Notably, women now hold a record 50.2 per cent of Australian Government board positions. To support women's leadership, the Government is investing $9.4 million to further support women into board positions and expand the Future Women's Jobs Academy. To further drive change in sport, the Government is investing $31.0 million in a number of initiatives to create pipelines for women to progress into leadership positions in sport.

National gender pay gap

Over the past decade there has been a substantial decrease in the national gender pay gap. The gap is currently the second lowest it's ever been, slightly above its record low in November 2020. The Government is providing $18.5 million to support the Workplace Gender Equality Agency to progress gender equality in Australian workplaces.

National gender pay gap

Line chart showing the national gender pay gap between November 2000 and November 2021. The gender pay trended upwards to a peak of 18.7 in November 2014, and has since trended downwards, averaging around 13 to 14 per cent in recent years. It is currently 13.8 per cent.

Working with Indigenous Australians

Delivering on the National Roadmap for Indigenous Skills, Jobs and Wealth Creation

This Budget provides more jobs and skills training for Aboriginal and Torres Strait Islander people

  • $13.9 million for the Puggy Hunter Memorial Scholarship Scheme for up to 300 training places in carer professions
  • $37.5 million to support native title holders to gain greater economic benefit from their land
  • $21.9 million for leadership and governance training to increase the number of Indigenous leaders
  • $3.2 million to extend the Time to Work Employment Service, expected to benefit over 3,000 Aboriginal and Torres Strait Islander prisoners

More Indigenous rangers caring for country

The Government is providing $636.4 million over 6 years to expand the Indigenous Rangers Program.

This will deliver regional jobs and environmental outcomes, as well as bolster disaster resilience and recovery. This initiative will fund more than 1,000 additional ranger jobs in regional and remote Australia. It will also fund capacity‑building activities and increase opportunities for women to become Indigenous rangers.

Working as a ranger provides meaningful employment and financial resources. It also contributes to strong culture, health and wellbeing for rangers and their communities.

Ranger groups hold deep knowledge of their lands which is contributing to modern environmental science and land management approaches.

Helping younger Australians

Investing in more initiatives to support younger Australians gain employment

ReBoot

The Government is investing $52.8 million to establish ReBoot and support Workforce Australia to create a pathway to employment for young Australians.

ReBoot is expected to support 5,000 young Australians at high risk of becoming long‑term unemployed.

ReBoot will build life and employment skills in disadvantaged young Australians, providing a pathway to employment by building confidence, discipline and capability.

It will complement existing Government services such as:

  • Transition to Work ($1.4 billion investment over 5 years from 2021‑22), which has provided more than 147,000 young people with pre‑employment support since 2016
  • Youth Jobs PaTH ($445 million investment over 5 years from 2021‑22), which has provided more than 139,000 young people with employability skills training, internships and job placements since its inception in 2017

ReBoot will help disadvantaged young Australians find their next steps on the path to employment

Increased engagement with employment and training
Direct connections to employment and education, or to employment and training pathways
More awareness of and connections to existing Government services, with ongoing support to find a job

National Workforce Strategy

Meeting future workforce needs and opportunities

The Government has developed a National Workforce Strategy to guide workforce development and ensure a more coordinated and aligned approach to workforce issues.

The National Workforce Strategy outlines a vision for a more dynamic, responsive and capable workforce to be realised through its guiding principles.

The Strategy will inform and shape the development of workforce policy and sector‑specific strategies across Commonwealth agencies.

The Strategy's three key areas of workforce policy:

  • Increasing workforce participation and economic security of women, Indigenous Australians and people with disability
  • Ensuring a skilled workforce is available to support critical sovereign capability
  • Growing and supporting the care and support workforce to meet the needs of the ageing population and people with disability

More jobs in priority sectors and recovering industries

Supporting growth in the care and support sector and the recovery in the tourism and arts industries

Growing the care and support workforce

Australia’s care and support workforce is growing, up 46 per cent between February 2015 and 2021. The Government is continuing to build and train this vital workforce to meet the care and support needs of Australians now and in the future.

Care and support workforce development

  • Up to 5,250 more clinical placements in aged, disability and veterans care
  • 15,000 more JobTrainer places
  • More opportunities for clinical placements in aged care in rural and remote communities
  • More opportunities for Aboriginal and Torres Strait Islander people to train for care and support jobs
  • More opportunities for mental health student placements in allied health, nursing, psychology and psychiatry
  • Coordinated action with a new National Care and Support Workforce Strategy
We have committed $220m through the Restart Investment to Sustain and Expand Fund
Supporting more than 540 projects across Australia
Supporting more than 200,000 jobs in the creative economy ecosystem

Reactivating the arts sector

Australia's art and cultural sector is vibrant and valued. The Government's $500 million Creative Economy Support Package supported jobs and the sector through the worst of lockdowns and restrictions.

$20 million towards the Restart Investment to Sustain and Expand (RISE) Fund will help reactivate more events. To date, the RISE Fund has boosted investment and ticket sales in the sector, supporting more than 540 projects, such as Moulin Rouge! The Musical and Sculpture by the Sea.

Rebuilding the tourism industry

With the reopening of Australia's border to international tourists, the Government is kick‑starting the tourism recovery with the release of its THRIVE 2030 strategy and a $60 million Tourism Marketing Recovery Plan. A $2 million employment and skills online platform will also be established with Government support to match job seekers with employers while also training and upskilling staff in the visitor economy.

Welcoming back skilled migrants

Addressing labour market shortages and supporting key sectors

Since the reopening of borders on 1 November 2021, over one million people have entered Australia, including more than 130,000 international students, 190,000 tourists, 70,000 skilled migrants and 10,000 working holiday makers. This is providing welcome support to the international education and tourism sectors and helping address workforce shortages.

In addition, Skill stream places will account for around 70 per cent of the 2022‑23 Migration Program, increasing planning levels for the Skill stream to 109,900.

2021
November
1 November 2021 removed travel exemptions for fully vaccinated Australians and permanent residents
2021
December
15 December 2021 opened borders to fully vaccinated international skilled and student cohorts, humanitarian, working holiday maker and provisional family visa holders
2022
February
21 February 2022 all fully vaccinated visa holders able to enter Australia

Supporting migrants and employers through COVID‑19

The Government has made over 70 changes to migration and visa settings in response to COVID‑19 and to assist with economic recovery. These include:

Relaxation of the 40 hours per fortnight working condition for international students

Exempting working holiday makers from the 6‑month single employer work limitation, and increasing country caps for the Work and Holiday visa in 2022‑23 by 30 per cent

Introducing the Priority Migration Skilled Occupation List

Providing a refund of the visa application charge for students and working holiday makers if they arrive in Australia before 19 March 2022 and 19 April 2022, respectively

PALM − Delivering benefits for Australian employers and Pacific partners

The Pacific Australia Labour Mobility (PALM) scheme provides both seasonal and long‑term options for employers under a more flexible and efficient program.

More than 20,000 Pacific and Timorese workers are in Australia, the largest number ever.

By April this number is expected to grow to over 25,000 workers, almost trebling pre‑COVID numbers.

Creating an Agriculture Visa

In addition to the PALM scheme, the Australian Government has created the Australian Agriculture Visa to help secure the future of rural and regional Australia.

Investing in regional skills and employment

The Government is maximising opportunities in the regions

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Over $600.0 million to help farmers increase agricultural output to $100 billion by 2030
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$1.3 billion to upgrade the speed and coverage of regional telecommunications services
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Upskilling trainees with $405.7 million for regional apprenticeships and universities
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Increasing jobs and regional output through a $500 million Regionalisation Fund
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Increasing access to child care for families in regional and remote areas by assisting with the establishment of up to 20 new child care services
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$150.3 million to support medical training in rural and remote Australia
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$7.1 billion including for 4 frontier regions: Northern Territory, North and Central Queensland, Pilbara (WA) and Hunter (NSW), to help Australia push into new areas of production and growth
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$7.4 billion to enhance water infrastructure across Australia
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$930.3 million to increase supply chain resilience and modernise manufacturing and recycling