Budget is a start, but now IR reform has to deliver: Employsure

Published October 07, 2020 (last updated January 25, 2022) -
Budget Changes

The Federal Government’s wide-ranging business incentives unveiled in last night’s budget are a welcome first step, but must be backed by solid Industrial Relations reform.

A key element of the budget focused on bringing down the unemployment rate is the JobMaker Hiring Credit, a wage subsidy available to employers for each new job they create over the next 12 months. Employers will receive $200 a week if they hire an eligible person aged 16 to 29, or $100 a week for those aged 30 to 35.

“Incentives like these only solve one part of the equation. Stimulating job growth is a worthy aim, but without IR reform to complement it we’re still trying to recruit people into a workplace relations system that is fundamentally broken,” said Ed Mallett, Managing Director of Employsure, Australia’s largest workplace relations advisor.

If the Government truly wants businesses to take advantage of these types of incentives, then they need to be backed by a workplace relations system that supports them. Put simply, for the aim of the budget to be achieved, the upcoming IR reform program needs to deliver.

“Until we see these issues addressed through proper IR reform, small business recovery and growth is always going to be stymied. Money alone won’t plug the holes in Australia’s workplace relations system.”

Businesses with a turnover of up to $5b will now be able to write off the full value of any business asset purchased until June 2022. Lowering taxes by more than $50b over the forward estimate, the Government estimates this will create 100,000 jobs by the end of June 2022.

“The idea to give businesses that have become unprofitable because of the COVID-19 crisis a tax break is an interesting concept,” continued Mr Mallett.

“So many good SMEs have been harmed by lockdowns and restrictions throughout the year. Those who have been unfairly harmed could really benefit from this tax-back scheme.”

 As well as job creation, $5.1m in additional funding is being allocated to the Fair Work Commission, to help it handle an increase in the tribunal’s workload as a result of the pandemic. Mr Mallett believes this is proof that Australia’s workplace relations system is fundamentally flawed, and small business owners need greater protection from vexatious unfair dismissal claims in the current climate.

“Rather than throw money at the problem to try and fix it, we need proper simplification of the Awards system and greater protection for SMEs so that cases don’t end up in the FWC in the first place.

“There are more than 120 Modern Awards in the Australian workplace relations system. For some businesses, even small ones, they may have to comply with more than one Award.

“The scope of the IR reform program should identify any overlap in Modern Awards and consolidate where necessary. This will reduce red tape, as well as minimise the types of oversights, errors and honest mistakes that often land employers in front of the Fair Work Commission.

“Businesses who are trying to restructure their operations to survive the COVID-19 crisis are also vulnerable to frustrating unfair dismissal claims. Small businesses need greater protection from the risks of these claims in a time when they may be trying to restructure to save their businesses.”



Further enquiries:

Matthew Bridges

[email protected]

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