10 things employment service providers need to know about the federal budget

As the famous budget tree at Parliament House shed its flaming red leaves, Treasurer Jim Chalmers unveiled the 2024-25 budget. This financial year, the Albanese government is set to deliver a $9.3 billion surplus, marking the second consecutive year of surplus. However, this is expected to be followed by double-digit deficits for the next four years. Here are the ten key spending figures that employment service providers need to know:

1. New Specialised Disability Employment Program

The Government has committed an additional $227.6 million, bringing the total to $5.4 billion over the next five years, for the new specialised disability employment program, set to replace Disability Employment Services (DES) from 1 July 2025. This funding includes the cost of a “modern” digital platform and the procurement process for providers.

2. Disability Employment Centre of Excellence

An investment of $23.3 million over four years will establish the Disability Employment Centre of Excellence. This initiative aims to build the capacity of providers to deliver more effective services, following last year’s consultation on the proposed Centre.

3. Australian Apprenticeships Incentive System

The Government will invest an additional $265.1 million over four years in the Australian Apprenticeships Incentive System. This funding supports apprentices in priority occupations, including $5,000 incentives for both apprentices and employers.

4. Clean Energy Occupations

The Government will also invest $91 million over four years to improve the capacity of the clean energy training system and increase the number of trainees and apprentices in clean energy occupations.

5. Real Jobs, Real Wages

As part of a new employment pathways package, the Real Jobs, Real Wages initiative will invest $32.1 million to support individuals at risk of long-term unemployment. This initiative includes wage reimbursements for employers for up to six months, with a focus on secure job placements.

6. WorkFoundations

Also part of the new employment pathways package, WorkFoundations will invest $21.9 million to assist individuals with complex barriers to employment. This funding supports social enterprises and businesses in providing paid employment placements of up to six months, with tailored support. Importantly, all placements in the employment pathways package will be paid at the relevant Award or enterprise agreement rate, with legal entitlements including superannuation.

7. Workforce Australia IT system

The Government will provide $10.9 million over four years for critical improvements to the Workforce Australia IT system. This funding aims to reduce the administrative burden on employment services providers, allowing them to focus more on delivering employment supports.

8. Prison to Work for First Nations people

A new employment program, with an investment of $76.2 million over five years, will improve the transition from prison to work for First Nations people. This program builds on the Time to Work Employment Service, offering pre-release and post-release supports.

9. Governments Savings Impacting Employment Services

The Government will save $47.3 million over five years by ceasing the Harvest Trail Services and Harvest Trail Information Service programs. Additionally, funds will be redirected to the employment pathways package by reducing Employment Fund credits and ceasing the Workforce Specialists initiative. Existing Workforce Specialist projects will continue to be delivered until completion.

10. Remote Jobs and Economic Development Program

The Government will provide $777.4 million over five years (and $255.5 million per year ongoing) to establish the Remote Jobs and Economic Development Program. This program aims to create 3,000 jobs in remote Australia and support income support recipients in transitioning to paid employment.

Treasurer Jim Chalmers indicated in his budget speech that the Treasury expects inflation could return to the Reserve Bank’s target of 2% to 3% “perhaps even by the end of this year.” He says he’s taking the “responsible middle path” by helping people struggling with the increasing cost of living while keeping Australia out of a recession.

Economic growth is forecast to be 2% in the next financial year and 2.25% in 2025-26. However, employment growth is expected to slow from 2.25% this financial year to just 0.75% in 2024-25. With a growing population, this will mean the unemployment rate rises to 4.5% by mid-2025.

The budget papers say the “Government is taking incremental steps in the 2024–25 Budget towards larger scale reform” and further change will be necessary to improve employment services in the longer term.

Just as the red leaves of the budget tree signal a time of change, we know there’s more change to come for employment services. Prospert will keep you updated as we learn more about these changes, what they mean for your particular organisation and options available to either capitalise on these changes or manage risk.