A file photo showing office workers
The federal government says there are many Australians who want to work more than they are. Image by Mick Tsikas/AAP PHOTOS
  • politics

Smashing barriers key to Labor’s full employment vision

Poppy Johnston September 23, 2023

Unlocking spare capacity in the workforce and helping workers realise their full potential is central to the federal government’s vision for Australia’s job market.

The Albanese government’s employment white paper, due on Monday, is the product of roughly 12 months of work in the wake of the jobs and skills summit last year.

Back then, the economy was in recovery mode after the pandemic and employers were facing acute labour shortages. 

Fast forward to today and not much has changed, with unemployment still hovering at record-low levels and more vacant jobs than workers to fill them. 

Despite the strong labour market, the government says there are still millions of Australians who want to work more but are facing big barriers to employment.

Treasurer Jim Chalmers said the employment plan was built on the notion of sustained and inclusive full employment.

“Our government’s objective is a more secure, fairly paid job for everyone who wants one without looking for too long,” he said on Friday.

The white paper will include a new, broader objective for full employment rather than focusing on a narrow, statistical unemployment rate target.

The non-accelerating inflation rate of unemployment, often referred to as the NAIRU, is viewed as a legitimate tool for the Reserve Bank to use to control inflation.

But excerpts from the paper assert that a broader suite of measures is needed to track full employment “aimed at increasing the maximum level of employment we can sustain over time, by reducing structural underutilisation”.

Underutilisation refers to people who want to work or are not getting as many hours as they want, or are not using their skills and qualifications to their full potential.

“The white paper helps us better understand what full employment looks like in practice and the kinds of policies we need to enable more Australians to grab the opportunities on offer,” Dr Chalmers said.

The road map comes as Australia’s workforce faces some fundamental demographic shifts.

Demographics Group co-founder Simon Kuestenmacher said workforce shortages were likely to endure.

A large baby boomer cohort was retiring and being replaced with another smaller cohort of new workers, reducing the supply of labour.

Exacerbating the problem was millennials having families and spending some time out of the workforce. 

“Even in a high migration regime, we will be seeing quite significant skills shortages,” Mr Kuestenmacher said.

He said the government would need to get really smart about making sure Australia has enough workers.

“One way would be migration, one way would be ensuring that people work for longer or work earlier, and we probably need to be smarter in terms of how we channel people into certain kinds of degrees in terms of jobs,” he offered.

The employment white paper is expected to bring together several reform agendas, such as changes to the migration system, under one banner.

A handful of new policy measures have also been promised.

RMIT Online chief executive Nic Cola hoped the government would address two market failings stopping people from upskilling – training affordability, and the pay gap associated with switching careers.

“Maybe there are some programs or some things that can happen that incentivise employers to ensure that employees have time to be able to study or time to go out and improve themselves,” Mr Cola said.

Parenthood chief executive Jessica Rudd hoped to see Australia’s paid parental leave lengthened in line with the other advanced economies. 

Ms Rudd said getting enough skilled people into jobs and keeping them there was holding back labour productivity.

“At present, we have a system that generates enormous barriers for a large chunk of Australia’s would-be workforce: parents of young children,” she said.