Labor policy a ‘danger to Jim Chalmers’ jobs fix’

Jim Chalmers’ employment blueprint to get more Australians into work has been attacked for ­failing to set clear targets and backing IR reforms that undermine the pursuit of more jobs.

Treasurer Jim Chalmers released the Employment White Paper on Monday, guiding future government policies. Picture: NCA NewsWire / Martin Ollman

Jim Chalmers’ employment blueprint to get more Australians into work has been attacked by ­business leaders, social services advocates and economists for ­failing to set clear targets and backing ­industrial relations ­reforms that undermine the pursuit of more jobs.

The Treasurer’s 252-page ­employment white paper, including 31 long-term reform directions and a new union-endorsed definition of “sustained and inclusive full employment”, was headlined by incentives encouraging pensioners, veterans and long-term unemployed to enter the labour market.

The Working Future employment manifesto endorsed the ­Albanese government’s IR ­reforms because “a more inclusive, fair and productive labour market is key to achieving our ­objectives for full employment and wage growth”.

Business groups said the promise of higher productivity growth and job opportunities were undermined by the IR overhaul, which they claimed would “kill off ­flexible work” and force thousands into insecure employment.

The white paper, featuring nine reforms that will be immediately actioned, largely reflected the government’s existing policy agenda, with no new major policies for women or Indigenous Australians.

The Australian Council of ­Social Service welcomed the ­aspiration of decent jobs, but called for “clear goals and targets to reduce unemployment and poverty to make those aspirations real”.

“Without clear targets for unemployment and under­employment, the aspiration of full employment will struggle to become a reality. Official estimates have unemployment rising by 150,000 people to 4.5 per cent next year,” ACOSS chief executive Cassandra Goldie said.

“The other crucial gap in the white paper is the lack of a clear commitment to reduce poverty, especially among people affected by unemployment and under­employment.”

The white paper’s release came as new Fair Work Commission fortnightly data revealed average pay rises in new enterprise agreements have risen to 4.7 per cent, the highest for 2023.

With wage increases in new deals at 4 per cent or more for six consecutive weeks, the FWC data shows average pay rises in agreements lodged in August increased from 4.4 per cent to 4.7 per cent across 174 agreements covering 65,553 workers.

Seeking to tackle intergenerational long-term unemployment and combat severe labour shortages, Dr Chalmers announced that older Australians and veterans would be able to keep more of their pensions if they re-entered the workforce or increased their hours. About 138,000 welfare ­recipients annually will also be encouraged to move off social ­security by extending access to benefits including concession cards and childcare subsidies for almost six months.

Dr Chalmers said the white paper was a roadmap to “ensure more Australians can make the most of the big shifts under way in the economy and our society over the coming decades”.

“The government’s vision is underpinned by five ambitious ­objectives, including a new, bolder full-employment objective. We want to create an economy where everyone who wants a job is able to find one without having to search for too long,” Dr Chalmers said.

“We want to make sure the stepping stones are in place to enable more Australians to take up a job or work more hours.”

The white paper rubberstamps the government’s Closing Loopholes legislation because it will provide “greater certainty, fairness and a level playing field for both business and workers”.

The Australian Chamber of Commerce and Industry, Australian Industry Group, Master Builders Australia, Minerals Council of Australia, Business Council of Australia and other employers said the IR overhaul ­undermined the white paper’s ­objectives.

“The white paper talks up workplace flexibility, but the government’s workplace relations changes will do the opposite,” said ACCI chief executive Andrew McKellar. “The government’s industrial relations proposals are designed to kill off flexible work that suits both employer and employee, including casual employment, labour hire and independent contracting.”

Unions hailed the white paper’s promotion of job security and strong sustainable wage growth as core objectives, arguing that was why the government’s changes to labour hire and casual employment are necessary.

ACTU president Michele O’Neil said the white paper showed why tackling insecure work and the Closing Loopholes bill was an essential part of achieving full employment and growing wages. “Insecure, labour hire and gig economy workers need a fairer system and minimum standards. The rapid emergence of new, insecure forms of work needs intervention to stop living standards sliding backward,” Ms O’Neil said.

Under pressure from unions to overhaul the longstanding ­Reserve Bank of Australia and Treasury definitions for full employment, the white paper outlined the government’s plan to achieve “sustained and inclusive full employment”.

With unemployment at a historically low 3.7 per cent, new RBA governor Michele Bullock came under fire from unions in June after declaring the jobless rate would need to hit 4.5 per cent to rein in sticky inflation.

The white paper said the Non-Accelerating Inflation Rate of Unemployment (NAIRU), which is used by the RBA and Treasury and currently sits around 4.25-4.5 per cent, is not the only measure that should be considered.

“History has shown that significantly misjudging the current maximum sustainable level of ­employment, or failing to take ­adequate account of short-term constraints, can lead to serious policy mistakes that cause higher underutilisation rates in the economy,” it says. “How we define, measure, and pursue full employment has significant consequences for our economy and people.”

Australia’s third white paper, following previous Labor governments releasing employment manifestos in 1945 and 1994, said “while more people are participating in paid work than ever before, there is still considerable untapped potential”.

“There are around three million people in Australia who want work, or want to work more hours – equivalent to a fifth of the current workforce. Labour market outcomes vary significantly across cohorts and regions. This indicates more can be done to reduce structural underutilisation, expand employment ­opportunities and increase economic potential.”

An RBA spokeswoman said they supported the white paper’s full employment definition and don’t believe that it will be an “impediment” to containing inflation.

“We agree with the government that our approaches to measuring unemployment are complimentary. We share the same goal of driving down the NAIRU over time,” the spokeswoman said.

Business Council of Australia chief executive Bran Black said “we believe full employment is best achieved through creating a more dynamic economy”.

“Pushing faster growth in the economy to achieve lower unemployment risks fuelling inflation, necessitating higher interest rates. Ultimately, this would hurt the very people the more inclusive employment objective is trying to help,” Mr Black said.

AiGroup chief executive Innes Willox said the white paper shifted the focus on dealing with ailing productivity to treating the issue as a ­national challenge.

“However, the overall ambition of making it easier for people to enter the workforce does not sit well with the government’s deeply problematic workplace relations agenda which adds enormously to the complexity of employment for employers and creates new barriers to employment,” he said.