CCI Building WA's Workforce for Tomorrow (Final) June 2010

8/8/2019 CCI Building WA's Workforce for Tomorrow (Final) June 2010

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June 2010

Prepared by the Chamber of Commerce and Industry Western Australia

ne 2010J

Building Western AustraliasWorkforce for TomorrowDiscussion Paper


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Page 1

Building Western Australias Workforce for Tomorrow

Contents

About CCI ................................................................................................................................................ 2

Context .................................................................................................................................................... 2

Executive Summary ............................................................................................................................... 3

Recommendations .............................................................................................................................. 5

Economic Context .................................................................................................................................. 8

Labour Force Projections ................................................................................................................... 9

A Human Capital Strategy for WA ....................................................................................................... 12

Building the States Population ......................................................................................................... 12

Migration Policy Framework ....................................................................................................... 14Planning for Population Growth .................................................................................................. 16

Raising Workforce Participation ....................................................................................................... 19

Women........................................................................................................................................ 21

People with Disability .................................................................................................................. 22

Indigenous Australians ................................................................................................................ 24

Older Aged Australians ............................................................................................................... 25

Improving Productivity ....................................................................................................................... 26

Industrial Relations .................................................................................................................... 26

Education Reforms ..................................................................................................................... 28

References ............................................................................................................................................ 30

Endnotes ............................................................................................................................................... 32


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About CCI

The Chamber of Commerce and Industry Western Australia (CCI) is the leading business association in Western

Australia.

It is the second largest organisation of its kind in Australia, with a membership of over 5,500 organisations in all

sectors including manufacturing, resources, agriculture, transport, communications, retailing, hospitality, building

and construction, community services and finance.

Most members are private businesses, but CCI also has representation in the not for-profit sector and the government

sector. About 80 per cent of members are small businesses, and members are located in all geographical regions

of WA.

Context

Australia has been a highly successful and wealthy nation, in large part due to its skilled and productive workforce.

However, with an ageing population, low fertility rates and increasing international competition, it is critical that

appropriate policies be implemented if Australia is to have a workforce that is capable of ensuring the nations

continued economic success.

While Australia faces challenges, the difficulties for Western Australia are even more pronounced given the wealth

of opportunities which lie ahead for the state, and its relatively smaller workforce.

The extent of the states labour force challenges has been illustrated in recent times. During the period of rapid

growth and development last decade, labour shortages emerged as a significant challenge, with around three quarters

of WA businesses consistently struggling to find suitable workers. Importantly, such constraints were not confined

to the booming mining and construction sectors, but have been widespread across all industry sectors, all regions

and businesses both big and small.

While the global economic downturn did have a significant impact on businesses, it provided some short term relief

from labour shortages. However, with an economic recovery now underway, signs continue to emerge that WA will

once again be faced with the chronic labour shortages which have plagued the state in recent times. Given that WA is

expected to return to the rapid r ates of growth that were the norm last decade, this will require a significant increase

in the number of workers in the state to facilitate this expansion.

In this regard, it is imperative that a human capital strategy be developed, which will help increase the size of the

workforce, and improve the productivity of the current workforce.

This discussion paper builds upon CCIsBuilding Human Capital discussion paper, which was released in November

2007. The paper provides further detail about the extent of the labour force challenges which are facing the state,and sets out a proactive policy agenda to ensure that WA can meet its workforce needs.

Executive Summary

Over the last decade, the WA economy experienced a period of economic growth unlike any other in the states

history, courtesy of the unprecedented demand from China for our natural resources. This saw the local economy

double in size, almost 200,000 jobs created and record numbers of people move t o the state to share in the positive

conditions.

While this period of strong growth has created much wealth for the state, it also brought about a range of challenges.

The most pressing challenge was the extremely tight labour market conditions, which resulted in the emergence of

severe and widespread labour shortages.

Although the global financial crisis and associated downturn provided some relief to local businesses from this chronic

issue, this is expected to be short lived. The WA economy is now firmly on the path to recovery, with economic

growth soon expected to return to the high levels seen prior to the global financial crisis. This next wave of growth

and prosperity for the state will be underpinned by the resurgence in the global economy, with the rapid growth in

developing nations expected to drive strong growth in WA for many years to come.

With this return to strong growth and prosperity, the states labour market is also expected to see the extremely tight

conditions resurface, as businesses gear up for the next wave of activity.

A significant increase in the states workforce will be required to facilitate this expansion. CCI estimates an

additional 488,500 workers will be required in the WA economy over the next 10 years, if economic growth is to

be maintained at the average rate experienced since the beginning of last decade. However, these additional labour

needs cannot be met on the basis of the current labour market and population trends. Even with the current strong

rates of population growth, it is estimated that there will still be a shortfall of more than 210,000 workers in WA

by 2020.

With more than $210 billion worth of major investment projects earmarked for the state, it is not surprising that a

significant share of these additional workers will be required in the construction and mining sectors. However, WA

will not only require workers f or these booming sectors. A key aspect of the states future labour needs is that workers

will be required in businesses of all sizes, and across all sectors of the economy. The future labour requirements for

the states services sectors are also considerable, particularly in healthcare and community services, professional

services, and retail.

Labour shortages are not only expected to be widespread across all industries of the state, but across all regions.

While the greatest number of workers will be required in the states capital, the most southern and northern regions

of WA will also have significant labour needs.

The predicted labour shortages will make it difficult (if not impossible) for the WA economy to realise its full potential

in the medium to longer term, unless measures are put in place to ensure that the labour force is able to growth in

line with future economic activity.CCI believes that it is imperative that a human capital strategy be developed, that will help increase the size of the

labour force (through population growth and higher levels of labour force participation), and improve the productivity

of the current workforce.

There is a clear and pressing need to increase the states population. Western Australias labour requirements mean

that it is highly dependent on the migration program to supplement the local population growth and other policies

aimed at expanding the labour market.


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Although the migration program operates at a Federal level, the WA Government has an important role in representing

the needs of the local business community. To ensure that the migration program is suitable for Western Australian

social and economic conditions, the State Government needs to establish supporting policies and programs, while

also advocating for changes to the migration program.

While boosting the states population is a critical strategy to address labour shortages, it will also be necessary to

ensure that WA has the necessary social and economic infrastructure to support this higher population. To ensure

that WA will be able to cope with the influx of people, the Government should develop a strategic direction for the

state, which will provide the private sector, as well as key State Government agencies and trading enterprises, a clear

direction to work towards over the long-term.

A strategic plan for the state would encompass aspects of infrastructure development, the creation of new and additional

housing to support a growing population, and consider the associated support services that would be required, such

as energy, water, waste management, public transport, education and policing. This will ensure that Perth and WA

is, and continues to be, a liveable, attractive and vibrant destination that will attract and retain human capital, and is

well prepared for a growing population.

There is also significant scope to add to the supply of workers by boosting labour force participation. Althoughthe strength of the WA economy and the employment opportunities which have been created in recent times have

provided the incentive for many people to enter the workforce, Australias participation rates still remain relatively

low compared to other OECD nations.

In particular, there is considerable scope to raise participation among specific sectors of the community, including

prime aged males, women (particularly of child-bearing age), people with disabilities, people nearing retirement,

and Indigenous Australians.

The Government and business community should look to implement strategies that will raise the level of workforce

participation, particularly among sectors of those sectors of the community that are underrepresented in the labour

force. These strategies should focus on improving the incentives to work and remove the disincentives to work, and

focus on areas such as taxation, welfare assistance, and education and training.

Raising the productivity of the current workforce will also be an important aspect to developing a human capital

strategy for WA.

Central to improving productivity is to maintain a flexible industrial relations system, which allows businesses to

respond to constantly changing national and global economic circumstances. CCI supports an industrial relations

system that ensures that the relationship between the employer and their employees is paramount, assists businesses

to secure workplace productivity, innovation, flexibility and efficiency; restore the balance between the rights and

responsibilities of employers, employees and unions; and reduces regulation and minimise interference by third

parties in the management of a business.

The current Fair Work Act 2009 is not capable of facilitating the fundamental changes required to allow workplacesto become sustainable and successful in the global economy. However, in the absence of any other system, there are

a number of changes which should be made to the Fair Work Act 2009 to enhance workforce productivity.

A strong education and training system will also ensure ongoing improvements in productivity, by making sure that

young people are provided with the necessary skills for WA to maintain an appropriately skilled workforce. The

education and training system should be internationally competitive, provide choice, and be responsive to the needs

of individuals and industry.

A flexible and competitive education system is critical from the beginning of schooling, with a focus on the basics

of literacy, numeracy, and generic employability skills for every student.

While Governments at both the state and Commonwealth level have a key role to play in developing policies to address

labour shortages, it is also important that the business community adapts to the changing labour market. Businesses

will need to find ways to develop and source appropriate labour, and ensure that they implement initiatives that help

to build a positive culture within their organisation.

Recommendations

Building the states human capital will require a multi-faceted approach, which recognises the unique challenges

faced in terms of labour shortages today, and the longer term challenge of an ageing population and workforce.

The key recommendations aimed at building the states human capital which have been detailed in the discussion

paper are set out below.

Population Growth

A population goal should be introduced for WA, that will ensure suitable labour to meet industry demand and

a smooth demographic profi

le for the state.

A targeted migration program should be developed, that focuses on:

- migrants from key trading partners;

- overseas students;

- foreign holiday makers;

- interstate workers; and

- expatriate Australians.

The Government should develop a comprehensive program to promote WA as a favourable place to live and

work.

Industry and region specific skills audits should be undertaken to determine skills which are in highest

demand.

A number of changes should be made to the migration program, to ensure that it meets WAs needs.

These are:

- market salary levels should be reassessed and removed where not warranted;

- the current skill assessment process should be removed for the temporary migration program and

improved for the general skilled migrants;

- the English language competence requirements on the temporary migration program are unnecessarily

high and should be removed;

- the narrowing of occupations classified under Subclass 457 Visas should be reversed, to allow

businesses to access semi-skilled and unskilled labour on a temporary basis; and

- greater clarity should be provided for labour agreements so that businesses can use them, while providing

suitable flexibility so that all industries have the capacity to attract suitable workers.


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A strategic direction should be developed for WA, to ensure that the long term needs of the state and its population

are met. This should focus on areas such as economic and social infrastructure, housing affordability and vibrancy

and liveability of Perth and the regions.

Measures should be put in place to improve housing affordability, both in Perth and the regions. These should

focus on the supply of land, ensuring sufficient raw materials to support housing construction, and ensuring that

planning mechanisms allow for infill.

Raising Workforce Participation

A range of taxation measures could be adopted to improve overall participation in the workforce.

These include:

- personal income tax reform is critical to improving workforce participation. Key reforms include

increasing the tax free threshold, a flattening of the scales and in the longer term, decreasing the

top marginal tax rate to align with the company tax rate, with thresholds indexed to inflation;

- effective marginal tax rates should be addressed, to maximise the incentives to move from incomesupport payments to increased participation in paid work; and

- greater innovation should be introduced in the education system, including through reforms to funding

arrangements which are based on improving outcomes rather than following processes.

A range of other measures should be adopted aimed at improving workforce participation among specific sectors

of the community which are underrepresented in the labour force.

To improve workforce participation among women:

- changes should be made to allow child care to be salary sacrificed, in the same way that is allowed for

motor vehicles, superannuation and computers;

- ongoing training initiatives should be introduced, that will assist with re-skilling workers that have

previously exited the workforce;

- businesses should look to introduce flexible working arrangements where possible, such as flexible hours,

part time options, and job share arrangements; and

- businesses should implement policies to address pay disparities between genders where appropriate.

To improve workforce participation among people with disability:

- employers should increase apprenticeship placement opportunities for people with disability;

- services are needed to assist people with disability transition from education to employment;

- skills development for people with a disability should be aligned with labour market requirements; and

- ongoing education is needed for employers to dispel myths about hiring workers with disabilities.

To improve workforce participation among Indigenous Australians:

- workforce programs should be developed that are tailored to the individual circumstances of Indigenous

people; and

- expanded language and literacy programs are needed to assist people from diverse cultural backgrounds

and Indigenous individuals.

To improve workforce participation among older aged workers:

- life-cycle learning programs that facilitate the retention of skills and enables the re-training of older aged

cohorts should be introduced;

- funding support for education and training should be provided to employers, in the form of either tax

rebates or training subsidies; and

- the work bonus program should be applied to the income of spouses who are nearing retirement age.

Increasing Productivity

Changes could be made to the current Fair Work Act 2009, which would improve productivity of the

workforce.

- Strict sanctions against any unlawful behaviour should be applied to ensure continuity of production and

supply.

- Agreement making should be designed to encourage flexibility, efficiency and innovation.

- The role of third parties should be to assist businesses and their employees to achieve business objectives

enhancing levels of productivity.

- Union entry to a work site should be subject to the union being a signatory to a site enterprise agreement

ensuring minimal interference to business operations.

The education system should focus on the basics of literacy, numeracy, and general employability skills for

every student, from early childhood education through primary and secondary education.

Resources should be targeted to ensure that at risk individuals and groups are not left behind in the system.

Reforms should be introduced to ensure the sustainability of the education workforce and high quality of teachers,

including reviewing student to teacher ratios, remuneration, and ongoing training.

Reform to the education system should continue, to provide greater autonomy to schools and principals in

delivering education.

Innovation and responsiveness in the WA education system should be encouraged by increasingly linking funding

to outcomes.


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Economic Context

Over the last decade, the WA economy experienced

a period of economic growth unlike any other in the

states history. This saw the local economy double in

size, almost 200,000 jobs created, and record numbers

of people move to the state to share in the positive

conditions.

While this period of strong growth has created much

wealth for the state, it also brought about a range

of challenges. The most pressing challenge was the

extremely tight labour market conditions, which

resulted in the emergence of severe and widespread

labour shortages.

More recently, global events have temporarilyinterrupted the states rapid growth trajectory. 2009 will

be remembered as one of the most severe downturns

the world has experienced, with the fallout from the

global financial crisis driving the world economy into

recession for the first time since World War 2.

Locally, the WA economy was not immune from the

impact of the weaker global economic conditions. The

downturn saw both consumer and business confidence

fall, and economic growth slow considerably. However,

WA was one of few advanced economies to avoid

a recession, with the local economy expanding by

0.75 per cent during 2008 09.

The weaker economic conditions also moderated

labour market pressures, which saw the local

unemployment rate rise from historical lows of less

than three per cent during late 2008, to a peak of

5.7 per cent in September 2009 (Chart 1).

However, the unemployment rate did not rise to the

heights experienced in previous downturns. With

the memory of labour shortages fresh in the minds

of employers, a key trend to cope with the weaker

economic conditions was the tendency of businesses

to cut staff working hours, rather than standing down

workers.

The slowdown in the local economy provided some relief

for local employers from labour shortages. However,

even throughout the downturn, around one fifth of WA

businesses still found labour to be scarce.

While the impact of the global economic downturn

has been significant, this will be only a short term

interruption to the states longer term growth profile.

The WA economy is nowfi

rmly on the path to recovery,with 2010 set to mark the beginning of the next phase

of growth and prosperity for WA.

The resurgence in the global economy will provide an

important boost to the WA economy, and will continue

to do so for some time to come. After supporting the

world economy throughout the global slowdown,

developing nations have led the way to recovery. In

particular, economic growth in both China and India

quickly bounced back to levels seen prior to the global

financial crisis.

These developing nations are expected to provide a

long term impetus for the WA economy, due to their

continued strong demand for the states minerals and

energy resources. WAs longer term growth profile will

also be boosted by more than $210 billion worth of

major investment projects currently earmarked for the

state (in March 2010) (Chart 2).

Chart 1

Unemployment RateWA and Australia, Seasonally Adjusted

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

Apr 90 Apr 94 Apr 98 Apr 02 Apr 06 Apr 10

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

Source: ABS Cat. 6202.0

WA

Australia

As a result, WA will soon see growth return to the

historically high levels seen in recent years. CCIs

March 2010 forecasts predict the WA economy willreturn to growth rates in excess of five per cent per

annum within the next two years (Chart 3).

The states labour market is also expected to see the

extremely tight conditions experienced prior to the

global financial crisis resurface, as businesses gear up

for the next wave of activity.

The December quarter 2009 Commonwealth Bank-CCI

Survey of Business Expectations found that more than

half of all WA businesses believe that labour shortages

will have a negative impact on their operations in a

years time, with around one quarter already describing

labour as scarce.

The tendency of businesses to hold onto labour during

the downturn will mean that the pool of available

workers to facilitate the next wave of growth will be even

smaller, with CCI predicting a return to unsustainably

low unemployment rates within two years.

The extent to which businesses are concerned about

workforce issues was highlighted by the March quarter

2010 Commonwealth Bank-CCI Survey of BusinessExpectations.

The survey revealed that labour-related issues have

again topped the list as the most pressing issue for

WA businesses in the year ahead. Nearly one quarter

of local businesses rated labour shortages as their

primary concern for the year ahead, while around half

rated labour shortages as one of their top three areas of

concern (Chart 4).

With difficulties finding labour expected to be a major

issue in the year ahead, businesses are also concerned

about the implications this will have for their wages bill.Around one fifth of respondents identified wage costs

as the biggest issue facing their business in 2010, while

more than 60 per cent cited wage costs as one of their

top three areas of concern.

Labour Force Projections

In November 2007, CCI undertook economic modelling

around WAs labour force requirements. These

projections found that for the states economy to

continue to grow at the high rates recorded in recent

years, an additional 400,000 workers would be required

in by 2017.

CCIs projections also revealed that these additional

workers could not be met on the basis of current

population and labour market trends, and that WA would

experience a shortfall of 150,000 workers.

While the global financial crisis has had significant

implications for the states labour market over the past

year, this short term interruption to economic growth

will not alter the development of an absolute labourshortage in WA in the medium term.

More recently, CCI has conducted further research

around the states future labour force requirements. These

updated predictions show that WAs labour requirements

will be even greater than earlier estimates. CCIs latest

forecasts now indicate that an additional 488,500 workers

will be required in the WA economy over the next

10 years.

Chart 2

Investment Projects, AustraliaValue by State, March 2010

$0Bn $50Bn $100Bn $150Bn $200Bn $250Bn

Western Australia

Queensland

New South Wales

Victoria

South Australia

Northern Territory

Tasmania

ACT

Source: Access Economics Investment Monitor

Chart 3

Economic Growth, WA & Australia% Change in GSP, GDP

-2%

0%

2%

4%

6%

8%

10%

1 99 6/ 97 2 00 0/ 01 2 00 4/ 05 2 00 8/ 09 2 01 2/ 13

Source: ABS Cat. 5220.0, 5206. 0, CCI WA

-2%

0%

2%

4%

6%

8%

10%

Western Australia

Australia Forecast

Chart 4

Top Priority of WA Business in 2010

% of Respondents

0% 5% 10% 15% 20% 25%

Labour Availability

Wage Costs

Global Economic GrowthWorkplace Relations

Regional Development

Borrowing Costs

State Govt Regulation

Taxation LevelsInfrastructure Constraints

Local Govt. Regulation

Energy Supply

City VibrancyClimate Change

Source: CBA-CCI Survey of Business Expectations


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Again, these additional labour needs cannot be

met on the basis of the current labour market and

population trends. To put this into perspective, on the

basis of current strong population growth trends, it is

estimated that there will still be a shortfall of more than

210,000 workers in WA by 2020.

These estimates are sensitive to changes in the key

economic parameters of economic growth, population

growth and workforce participation (see Table 1).

For example, if economic growth is one per cent

higher than projected over the forward estimates, this

will see the expected shortfall increase to more than

303,000 workers.

With more than $210 billion worth of major investment

projects earmarked for the state, it is not surprising thata significant share of these additional workers will be

required in the construction sector. CCI estimates that

almost 130,000 additional workers will be required in

the construction sector over the next decade, accounting

for more than a quarter of the states future labour needs.

However, CCI predicts the sector will experience an

absolute shortfall of almost 56,000 workers (Chart 5).

Similarly, the mining sector is also expected to require a

significant number of additional workers to fuel its rapid

growth, and meet the strong demand from overseas

for the states resources. Over the next 10 years, CCI

predicts that more than 69,000 additional workers will

be required in the mining sector, representing around

14 per cent of the extra workers needed. This industry

is also expected to fall well short of their labour

requirements, by almost 30,000 workers.

However, WA will not only require workers for the

booming mining and construction sectors. A key aspect

of the states future labour needs is that workers will be

required in businesses of all sizes, and across all sectors

of the economy.

The future labour requirements for the states services

sectors are also considerable.

Healthcare and social assistance will be a key industry

where additional workers are required. In order to

accommodate strong population growth and ageing,

the healthcare and social assistance sector will require

almost 45,000 additional workers - or more than nine

per cent of the states future labour needs. However,

CCIs forecasts show that there will be a shortage

of more than 19,000 workers in the health sector by

2020. CCIs estimates also show that a similar numberof workers will also be required in the professional

services sector.

A significant number of workers will also be required

in the retail sector. CCIs latest predictions show that

more than eight per cent of the states future labour

needs (or almost 40,000 workers) in the coming

10 years will be for the retail sector. However, a shortfall

of more than 17,000 workers is expected to exist in this

sector by 2020.

Further detail on WAs future labour requirements by

industry can be found in Table 2.

Labour shortages are not only expected to be widespread

across all industries of the state, but across all

regions.

Not surprisingly, the greatest number of workers will be

required in the states capital. CCIs latest predictions

show that around three quarters of the states future

labour needs will be required in the Perth metropolitan

area.

In total, this represents more than 360,000 additional

workers. The shortfall of workers is also expected to be

significant, at more than 156,000 (Chart 6).

A significant number of workers will also be required

in the south of the state. Over the next 10 years, an

additional 53,000 workers will be required in the Peel

region, and a further 46,000 in the South West. Together,

these regions represent around a fifth of the states future

labour force needs.

However, the Peel and South West regions are also

unlikely to reach this target at present. The shortfall of

workers in the Peel region by 2020 is expected to reach

nearly 23,000, while the South West is forecast to fall

almost 20,000 workers short.

There will also be strong demand for workers in the

north of the state. By 2020, the Pilbara region will

require almost 10,000 additional workers, while the

Kimberley will need more than 8,000. However, the

Pilbara is expected to fall short of this target by more

than 4,000 workers, while the Kimberley is likely to

record a shortfall of more than 3,000 workers.

Chart 5

Labour Requirements by Industry% of State Total

0% 5% 10% 15% 20% 25% 30%

Construction

Mining

Health & Social

Professional Services

Retail

Education

Transport

Admin & Support

Manufacturing

Hospitality

Other

Source: CCI

Chart 6

Labour Requirements by Region% of State Total

0% 10% 20% 30% 40% 50% 60% 70% 80%

Perth

Peel

South West

Pilbara

Kimberley

Great Southern

Other

Source: CCI

Table 2WA Labour Requirements in 2020By Industry

Current Workforce Additional Workers % Increase% of WA Total

Requirement

Construction 124,800 129,753 104.0% 26.6%

Mining 74,100 69,351 93.6% 14.2%

Healthcare and Social Services 119,900 44,869 37.4% 9.2%

Professional Services 91,600 44,211 48.3% 9.1%

Retail 112,600 39,516 35.1% 8.1%

Education 94,300 35,035 37.2% 7.2%

Transport 63,100 31,213 49.5% 6.4%

Administration and Support 38,100 26,571 69.7% 5.4%

Manufacturing 91,400 16,640 18.2% 3.4%

Hospitality 70,200 14,924 21.3% 3.1%

Other 230,300 36,417 15.8% 7.0%

Total 1,110,400 488,500 44.0%

Table 1

WA Labour Requirements in 2020

Economic

Growth

Population

Growth

Participation

Rate

Workers

Required

1% Increase 581,470 488,500 488,500

1% Decrease 412,000 488,500 488,500

Total Shortfall

1% Increase 303,300 54,390 206,700

1% Decrease 134,320 350,680 215,000


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A Human Capital

Strategy for WA

If WA is to take full advantage of the wealth of

opportunities which lie ahead, it is critical that measures

are put in place to build the states human capital.

This will require a multifaceted approach that

recognises the unique challenges faced in terms of the

short term critical labour shortages which are expected

to resurface as the economy returns to growth, as well

as the persisting longer term challenge of an ageing

population and workforce.

To ensure that WA will be able to meet its labour needs,

a human capital strategy should be developed which isbased around building the states population, raising

workforce participation, and improving productivity.

It is also essential that measures are put in place to

address the broader policy issues which will enable the

state to attract and retain the workforce that business

requires for the immediate and longer term.

While Governments at both the State and Commonwealth

level have a key role to play in developing policies to

address labour shortages, it is also important that the

business community adapts to the changing labour

market.

The key issue for business will be in promoting more

flexible workplaces, which will provide employees

with more options as to when and how they complete

their work, while ensuring they are still working their

full hours. Some options for improving workplace

flexibility include flexible working hours, home based

work, alternative leave arrangements, part time roles

and job sharing.

Ensuring more flexible workplaces will be centralto improving participation and engagement with the

workforce, and ultimately lead to higher productivity.

Building the States Population

Population growth is considered to be a critical

element to the economic development of a nation. If

the population is not sufficient to sustain the growth in

the economy, this can result in widespread labour and

skill shortages, and hamper the ability of businesses

to grow.

While there is a need to address the ageing population

of the country and encouraging a higher fertility rate

amongst women is not the appropriate channel to do

so. The factors which determine fertility and death

rates are complex, in some cases not well understood,

and not readily manipulated by government. Instead,

the component of demographic trends which the

government can and should seek to influence ismigration.

WAs labour requirements mean that it is highly

dependent on the migration program to supplement

the local population growth and other policies aimed

at expanding the labour market.

The migration program, both temporary and permanent,

requires significant changes to improve their capacity

to address WA business requirements.

Recommendations

There are a number of ways to ensure an adequate

migration policy framework for WA. These are:

a population goal should be introduced for WA,

that will ensure suitable labour to meet industry

demand and a smooth demographic profile for the

state;

a strategic direction should be developed for the

WA, to ensure that the long term needs of the state

and its population are met;

a targeted migration program should be developed,

that focuses on:

- migrants from key trading partners;

- overseas students;

- foreign holiday makers;

- interstate workers; and

- expatriate Australians;

the Government should develop a comprehensive

program to promote WA as a favourable place to

work; and

industry and region specific skills audits should be

undertaken to determine skills which are in highest

demand.

Given that migration is a Commonwealth responsibility,

reviews to the system have not always reflected the

needs of the WA economy.

To ensure that the states labour needs are addressed in

the migration program, the following changes should

be made:

market salary levels should be reassessed and

removed where not warranted;

the current skill assessment process should be

removed from the temporary migration program

and improved for the general skilled migrants;

the English language competence requirements on

the temporary migration program are unnecessarily

high and should be removed;

the narrowing of occupations classified under

Subclass 457 Visas should be reversed, to allow

businesses to access semi-skilled and unskilled

labour on a temporary basis; and

greater clarity should be provided for labour

agreements so that businesses can use them, while

providing suitable flexibility so that all industries

have the capacity to attract suitable workers.

Background

Migration, for practical and moral reasons, is the

component of demographic change that is mostsusceptible to policy influence. The immigration policy

should have as its core objective to balance economic,

social, humanitarian and environmental concerns in a

manner which yields the best outcomes for current and

future Australians.

As discussed in CCIs previously released Building

Human Capital discussion paper, without a strong

immigration program, Australias population would

be expected to peak and then decline in 30 years

(See Box 1).1 While population decline is not an

intrinsically negative event, the research contained in

the paper suggests that it would result in real per capita

income declines.

The migration program has undergone substantive

changes over the past decade. The main objectives

have been to respond to the need for skilled people, the

ageing of the local population, and the globalisation of

the labour market. The migration program has also been

changed substantially in response to emerging economic

and social issues.

Although the migration program operates at a Federal

level, the WA Government has an important role in

advocating for changes that will better meet the unique

needs of the WA economy. To ensure that the migration

program is suitable for Western Australian social andeconomic conditions, the State Government needs to

establish supporting policies and programs, while also

advocating for changes to the migration program.

Box 1: Ageing of the Population

The evidence of a fundamental change in Australias

economy is undeniable. The average Australian is

now living longer then ever before, which has meant

that the older aged population is growing in relation

to the rest of society.

The consequence of the ageing population is that

relatively fewer workers will be available to support a

relatively larger older population in the future.

Australias population is projected to grow and

continue to grow older, with the highest rates

of growth experienced in people over 65 years.

According to the mid-series projections by the ABS,

the median age of WAs population is projected to

rise to 45.3 years in 2051, up from just 36.2 years

in 2006. At the same time, around one quarter ofthe states population is expected to be older than

65 years of age, compared to just under 12 per cent

in 2006.

The ageing of the population represents a significant

structural challenge for the WA economy, and its

workforce. These longer term trends will require a

different response to the short term labour shortages

that have been seen since the beginning of the

decade.


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Migration Policy Framework

The State Government has a key role to play in ensuring

an appropriate migration policy framework for WA.

A key aspect of this should be to adopt a population

goal for WA. This population goal should represent the

aspirational number of people the State Government

believes should be living in WA in the future, and should

also be established for key population centres.

The population goal should take into account social

cohesion, infrastructure amenity and sustainability as

well as the projected gap between domestic workforce

growth and anticipated labour demand.

It is also important that the population goal be reassessed

every two years, to ensure that it is still appropriate tothe circumstances of the state.

The State Government should also develop programs

to attract suitable migrants to WA, to bridge the gap

between the natural population growth and desired

population growth. Any programs that are established

for interstate and overseas migration should have

explicit objectives to be achieved, and would form

the basis upon which to evaluate the success of these

programs. These could either take the form of numerical

targets or a percentage of Australias overall migration

quota.

There are several sectors of potential workers that

migration attraction programs should be directed

towards.

The states key trading partners should be targeted as a

potential source of migrants, to further economic ties.

Despite the WAs strong economic ties and close

proximity to Asia, only a small proportion of the states

migrant population (15 per cent) are from this region.

Notably, only 0.4 per cent of the states populationwas born in China - the states largest export market.

Australia has marginally closer migrant ties with

another trading partner of growing importance, India,

with 0.8 per cent of the states migrant population from

there.

Meanwhile, almost 11 per cent of migrants were born

in the United Kingdom, while a significant proportion

also have family ties in the UK. These links provide

a significant opportunity to attract overseas family

members into the state.

Migration attraction programs should also be targeted to

holders of working holiday visas. In spite of restrictions

surrounding work requirements, working holiday

makers represent the largest proportion of visas granted

in WA over the past few years.2 Policies and programs

should be introduced to encourage working holiday

makers to seek permanent residence in WA.

Because of its high quality education system, WA has

a large number of overseas students, which represent

a valuable source of potential labour. Programs should

be developed to encourage overseas students with

management skills to seek permanent residence upon

successful completion of their studies, with a particular

focus on students with degrees that are in high demand

in the local economy.

As well as programs to attract migrants to the state,the Government should also look at ways to attract

expatriates back to WA. Many of the states younger

workers are attracted overseas early in their careers to

take up work opportunities, while a large number also

travel overseas on working holiday visas simply to

experience different cultures. These groups often end

up staying and working overseas for extended periods

of time.

Programs should also be developed to encourage greater

levels of interstate migration, given the number of

people moving to WA from other areas of the country

is relatively low. In particular, these programs should

focus on areas within states such as Victoria or New

South Wales, where there are large pools of people

that are either underutilised or disengaged from the

labour market.

Improving labour mobility would provide significant

benefits to WA and other states, as well as the

Commonwealth through lower welfare payments. In this

regard, further research is needed to determine whether

there is scope for the Federal Government to provide

incentives to encourage these individuals to migrate toWA, and the form that these incentives might take.

A comprehensive marketing program should also be

developed to promote WA as the destination of choice

and provide information about the liveability, and

opportunities that exist in the state. The Government

should be a key driver in the development and

implementation of this program, which should also

include a discrete component on areas experiencing

strong regional growth.

Given that a significant portion of the economic activity

in WA is located in regional centres, programs should

also be developed to attract migration to areas such as

the Goldfields, Pilbara and the Kimberley.

An important part of the migration program should

also be to ensure that it is targeting the workers that

are in greatest demand. To ensure that migration is

targeted towards appropriately skilled workers, regular

industry specific skills audits should be undertaken to

ascertain areas where a shortage may exist. Industry

Training Councils (ITCs) which are funded by the

WA Government, currently perform skills audits as

part of environmental scans that inform industry level

workforce planning. To ensure the currency of this

data, all ITCs should perform regular skills audits using

common agreed methodology.

Issues with the current Migration Program

In recent times, there have been numerous changes

in the temporary and permanent migration programin response to economic and social pressures. As a

consequence, the overall migration program is highly

fragmented, and has led to inconsistent requirements

across different classes of visas.

To address this issue, a comprehensive review of the

migration program should be conducted to ensure that

Australia has a migration system that is capable of

attracting suitably skilled individuals in an international

labour market.

The temporary migration program is particularly

important to WA. Temporary workers have made a

valuable contribution to the supply of labour in WA in

recent times, and have allowed businesses to respond

to changing economic circumstances.

A number of features of the current migration program

will diminish its capacity to meet labour demand.

The market salary level (MSL) requirement for

temporary workers should be reassessed and removed

where not warranted. The MSL means that employers

must demonstrate that they are offering potential

migrant workers the same levels of salary as they

would domestic workers. This creates a considerable

administrative burden if there is no equivalent role

occupied by an Australian worker, which is the case

for many companies.

The MSL must also be above the Temporary Skilled

Migration Income Threshold (TSMIT), a minimum

salary threshold. Removal of these requirements would

improve the overall responsiveness of the migration

program. Currently, the TSMIT is too high, and

employers of some semi-skilled and unskilled workers

are unable to fulfil these requirements. This means

that they are not able to access visas under the skilled

migration program.

The current skill assessment process should be removed

for the temporary migration program and improved

for the general skilled migrants. Businesses have the

obligation to ensure that temporary workers are capable

of doing the work for which they are employed. They

also have the obligation to return the temporary worker

to their country of origin if they are unable to undertake

the work. As a consequence, having a formal skill

assessment process is unnecessarily administratively

burdensome for the temporary migration program.

There is also a need to ensure the English language

competence requirement reflect the level required by

specific industry needs.

The English language competence requirement in

the skilled migration program is unnecessarily highand is the source of inconsistency among different

visa classes. Measured by the International English

Language Testing System (IELTS), potential migrants

must obtain a score of between 4.5 and seven, depending

on the class of visa. In addition, recent changes make

the entry requirements for temporary visa holders such

that vocational English is no longer recognised as being

a valid level.

The current requirements mean that workers who

may have the necessary trade skills are disadvantaged

because they are unable to attain the required score.

To be considered for either permanent or temporary

sponsored migration pathways, employers are also

required to demonstrate their commitment to training

and developing Australian workers, through a financial

commitment of approximately two per cent of their

current payroll.

This requirement is a blunt instrument that is used by

the Government to address its policy objectives at a cost

to business, and should be abolished. This condition

acts as a disincentive for business to recruit migrantsto fill vacancies, and disproportionately impacts on

smaller businesses that have less capacity to justify the

administrative requirements.

The narrowing of Subclass 457 visa classifications

should be also reversed, to allow for occupations

classified as Australian Standard Classification of

Occupations (ASCO) five to seven. Given that WA

is the largest user of semi-skilled workers classified

under ASCO five to seven, this will ensure that local

employers can access semi-skilled and unskilled

workers on a temporary basis.


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Another avenue for employers to access unskilled

workers is through labour agreements. However, the

process of establishing labour agreements has not been

clear and has not been widely used by employers, with

only 19 agreements in total in place for WA.

To improve consistency, responsiveness and

administrative efficiency, greater clarity should be

provided around the requirements of labour agreements,

and enhanced transparency in establishing the

conditions of the labour agreement between the business

and government. There should also be sufficient

flexibility in the process to ensure that the requirements

of different industry sectors can be addressed

Planning for Population Growth

Encouraging and achieving a sustainable level of

population growth will require the coordination of

activities across a range of areas that impact both the

public and private sector.

A recent review of state and territory policies to support

population growth, conducted by the Department of

Immigration and Citizenship, found that WA lacked

articulated policies in a wide range of key areas.3 As a

consequence, the State Government was found to lack

the policy framework required to support population

growth.

To ensure that WA will be equipped for a higher

population, the Government should develop a State

Strategic Plan, which would provide the private sector,

as well as key State Government agencies and trading

enterprises, a clear direction to work towards over the

long-term.

A strategic plan for the state would encompass aspects

of infrastructure development, planning for the

release of additional land for housing and consider the

associated support services and utilities required tosupport a growing population. This includes energy,

water, waste management, telecommunications, public

transport, education and policing.

A critical aspect of developing a strategic direction

is that it would need to remain dynamic and adjust

according to changing needs and demands of the state.

The strategic direction would need to be reviewed

annually, to ensure that it is still relevant and consistent

with the Governments priorities.

Recommendations

There are a number of measures that could be adopted

by the Government to ensure that WA is well prepared

for a higher population in the future. The State

Government should:

develop a clear strategic direction for the state, to

ensure that the state is able to meet the needs of

a growing population. This should pay particular

attention to land use planning and provision of

economic and social infrastructure to enhance

vibrancy and attract new residents to WA;

engage with the private sector where appropriate

to improve delivery of cost effective community

services, such as health and education;

ensure planning mechanisms allow for urban infill

to encourage higher living densities, to manage

urban sprawl, particularly in the inner suburban

zone of Perth;

plan and release as required additional land

zoned residential and residential-deferred in

the Perth metropolitan and regional areas, having

consideration for urban infill at least in line with

demand;

investigate the barriers which inhibit or restrict

the development of land zoned residential on the

margin of the urban areas;

allow more market-based decisions to be made in

relation to determining block size;

protect the supply of basic raw materials are made

available to support construction activities in the

housing sector;

ensure that effective buffer zones that accommodate

for the expansion of industrial and commercial land

are integrated into the states planning, to avoid

community conflict with businesses and poor social

outcomes for residents; and

reduce the amount of regulation and compliance

that impacts upon small business, allowing them

greater freedom to focus on creating vibrant places

through entrepreneurial business activity.

Infrastructure Development

High quality economic infrastructure, appropriately

placed suitable land and efficient planning processes are

key enablers for industry growth and the attraction of

business investment to WA, particularly for industries

where the investment location is flexible. Appropriate

economic and social infrastructure will also be

necessary to ensure that WA can meet the needs of a

growing population.

The WA Government plays a critical role in the

facilitation and development of vital social and

economic infrastructure, and it is important that such

infrastructure is provided in a fiscally responsible

manner.

There will always be numerous competing infrastructurerequirements that must be prioritised and funded within

a sound fiscal framework. It is for this reason that CCI

has long supported the development of a medium

term infrastructure plan, to provide a gr eater degree of

certainty as to the likely future infrastructure projects

that will be undertaken in the state and assist in

de-politicising the prioritisation process.

Such a plan is also necessary to ensure that the state is

prepared to support a higher population. An increasing

population will bring greater demand on service

and support infrastructure. The delivery of water,

electricity, gas, telecommunications, transport and

waste infrastructure and services, and other community

services are all aspects that will need to be considered

and planned for as part of an overall human capital

strategy.

Ensuring that the state has sufficient economic and

social infrastructure would assist with social cohesion,

by allowing migrants to better integrate into the local

economy. It would also maintain WAs capacity to attract

and retain workers based on the lifestyle and amenityof the location. In this regard, a state infrastructure

plan should be based around supporting the states

economic and population requirements, and focus on

both economic and social infrastructure.

A growing population will place increasing pressure

on the states essential infrastructure and services. It is

critical that a plan is set out for these services, to ensure

that acceptable levels of service are available, and at a

reasonable cost to consumers.

The Perth metropolitan region is already large.

Fortunately, early planning for future city growth,

including the reservation of transport corridors to help

guide suburban growth, has enabled Perth to spread

without facing unbearable traffic congestion. A new

phase of planning is now required to ensure additional

growth will not create undue traffic congestion which

would limit mobility, and add further cost and time

barriers to commuters.

A plan for the states future infrastructure needs

should include consideration of future traffic flows,

and assessment as to how current arterial roads can be

enhanced and extended, as well as developing a plan for

how public transport can be more effectively utilised to

ease the burden on road infrastructure, and minimise the

amount that needs to be expended to support a growingpopulation.

Successful delivery of necessary community services,

including health, education and law and order will

be affected by the growth in WAs population. The

private sector is well placed to deliver a number of

these services to ensure that supply is able to meet the

level of demand, particularly in the areas of health and

education. Government should seek to engage with the

private sector to ensure that these services are able to be

delivered at a high standard and at a competitive price

for a growing population.

It is also critical that the future development of regional

centres is planned carefully. This will ensure that these

areas grow in a managed way that supports not only the

centre itself, but also the entire region that they serve.

These communities have similar infrastructure needs to

the Perth metropolitan area, including the need for basic

utilities and social infrastructure. However, there are

some unique challenges in the delivery and operation of

regional infrastructure. WAs unique aspects, which see

significant business activity occurring in isolated areas,

must be accounted for from a planning and developmentperspective.


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Housing

A key element in attracting people to WA is for there

to be affordable housing. The rising cost of land and

housing is having a serious impact on the capacity

of employers to attract workers to Perth and regional

centres.

WA has lost its attractiveness as a place where people

on moderate incomes can buy a home at a reasonable

price.

In 2001, Perth was the most affordable mainland capital

city in the country while WAs regional centres were also

affordable relative to their eastern state counterparts.

Since 2001, housing affordability has declined

significantly - a trend that needs to be addressed if Perth

is to be an attractive destination for migrants.Housing affordability is also a key issue in regional

areas of the state. In some key regional centres, housing

affordability has become a critical issue as median house

prices have soared above the level being experienced

in the metropolitan area (Chart 7).

CCI believes that the WA Government must act urgently

to improve housing affordability in the state.

The government should recognise that increasing

population will likely result in higher living densities,

particularly in the inner suburban zone of Perth.

This will require specific strategies to manage urban

infill, which may impact zoning regulations and local

government by-laws.

In particular, the Government should look to establish

more realistic and achievable infill targets and

remove any barriers to their development. In addition,

regulations should be changed to allow for increased

construction of multi dwelling units.

There are a number of measures related to the supply of

land and housing, which would help improve housing

affordability in WA.

Barriers which inhibit or restrict the development of

land zoned residential on the margin of the urban areas

should be addressed. Adequate planning for the future

release of land when supply dries up is essential.

To ensure that housing is affordable in regional areas

of the state, it will also be important to ensure that

sufficient land is made available in regional areas

of WA.

A key aspect of boosting the supply of land and housing

will also be to allow more market based decisions to be

made in relation to determining block size.

An important aspect of ensuring housing affordability

will also be to ensure the availability of competitively

priced construction materials, which will allow new

housing to be constructed at a reasonable price. Thiswill require establishing a state approach to planning

for raw material extraction, which will avoid conflicting

objectives from town planning schemes, and regional

plans.

The Government should also ensure that effective buffer

zones that accommodate for the expansion of industrial

and commercial land are be integrated into the states

planning, to avoid community conflict with businesses

and poor social outcomes for residents.

Liveability

Another important way to attract people to migrate

to WA is to improve the liveability of Perth and the

regions.

Perth needs to improve its attractiveness as a place to

live and work, to encourage talented people to migrate

to WA. This requires addressing matters such as

removing current restrictions on retail trading hours,

investing in economic and social infrastructure, and

addressing the intangible elements that make a city or

region liveable.

There remain a number of challenges to Perths

vibrancy. Despite some recent moderate efforts at

reform, excessive regulation remains a problem that

is impacting upon the ability for business to create

enhanced vibrancy in Perth.

Western Australias retail trading hours regulation

impedes competition by prescribing when shops can

trade and allows some business to trade outside of

regulated hours as long as it is small and/or located in

a certain area and/or trades in a very restricted set of

goods or services.

Reform of the taxi industry to encourage greater

flexibility, and allowing supply to match growth in

demand, is important. This requires greater capacity for

new entrants into the taxi market and reduced barriers

to entry, both regulatory and economic.

WA simply has too many local governments, which leads

to inherent difficulties for industry. This overabundance

of councils, each with their own proliferation of town

planning schemes and other associated regulations, acts

as a substantial barrier to development and business

innovation.

For Perth to establish itself as a significant city, a critical

component of that is ensuring the provision of adequate

social and economic infrastructure. While progress is

being made on a number of key infrastructure projectsin WA, including the upgrade of Perth airport, the

western foreshore development and Northbridge Link,

there are others that remain non-committed, including

a modern multi-purpose outdoor stadium. In addition,

the attraction and retention of public and private events

and festivals can add significantly to the vibrancy of

Perth and regional areas.

Liveability refers to the existence of basic conditions

that constitute a sustainable community and are expected

in an industrialised nation such as Australia. The major

issue confronting regional WA is not vibrancy, but

having sufficient access to infrastructure and services

to establish sustainable, liveable communities.

The significant economic expansion in regional WA

is placing severe strains on local communities. The

consequence is a generalised break down in services.

With many non metropolitan local governments

unable to maintain their infrastructure at current

levels, they are unable to maintain existing physical

and social infrastructure, let alone provide what their

rapidly expanding communities require. If regional

communities are to realise their potential, they willrequire assistance from state and federal government.

Raising Workforce Participation

Although the strength of the WA economy and the

employment opportunities which have been created

in recent times have provided the incentive for many

people to enter the workforce, Australias participation

rates still remain relatively low compared to other

OECD nations.

In particular, participation rates are relatively low

among specific sectors of the community, including

prime aged males, women (particularly of child-bearing

age), and people nearing retirement.

As a result, increased workforce participation is an

important strategy to boost human capital, and ensure

the states future labour needs are met. The Productivity

Commission has estimated that if Australia closed the

participation gap with the highest ranking comparable

OECD country for each of these labour market

segments, this would boost participation nationally by

around 600,000 additional people.4

Raising the participation rate could play an important

role in ensuring that WA has the workforce that it needs.

However, raising the states participation rate alone will

not be sufficient to meet the states future labour force

needs. In this regard, raising workforce participation

is just part of an overall strategy to boost the states

labour force.

Recommendations

The Government and business community should

look to implement strategies that will raise the level of

workforce participation, particularly among sectors of

the community that are underrepresented in the labour

force.

Key strategies to boost workforce participation

include:

personal income tax reform is critical to improving

workforce participation. Key reforms include

increases to the tax free threshold, a flattening of

the scales and the longer term reduction of the top

marginal tax rate to align with the company tax

rate;

addressing effective marginal tax rates to maximise

the incentives to move from income support

payments to increased participation in paid

work;

Chart 7

Median House Price, December 2009Selected Regional Centres, in $'000s

$300 $400 $500 $600 $700 $800

Karratha

Broome

Port Hedland

Bunbury

Albany

Perth

Esperance

Geraldton

Kalgoorlie

York

Carnarvon

Mandurah

Source: CCI


12/19


Page 20 Page 21


implementing programs aimed at facilitating

greater mobility between states and within states;

introducing greater innovation in the education

system, including through reforms to funding

arrangements which are based on improving

outcomes rather than following processes.

There are also targeted policy options to increase

participation among sectors of the community that

are underrepresented in the labour force, particularly

women, people with disability, Indigenous Australians,

and older aged workers. These options are outlined in

the following sections.

Background

Increasing the level of workforce participation will go

some way to addressing labour shortages in WA.

One of the key ways to boost participation rates is

to improve the incentives to work and remove the

disincentives to work. Broadly speaking, the key policies

which influence workforce participation are taxation,

welfare assistance, and education and training.

There are a number of reforms that will be necessary

in order to ensure Australias taxation system remains

internationally competitive and encourages greater

labour force participation.

Personal income tax reform is critical to improving

workforce participation. Key reforms include increases

to the tax free threshold, a flattening of the scales and

the longer term reduction of the top marginal tax rate

to align with the company tax rate. Potential reform

options for personal income tax are outlined in the

Henry Review of Australias tax and transfer system.

Such reform would ensure that the nations income tax

system does not act as a disincentive to people moving

to Australia to take up job opportunities, nor result inan increasing flow of people from Australia to other

countries with more generous taxation regimes.

Addressing high effective marginal tax rates (EMTR)

is also important to enhance workforce engagement.

A high EMTR can mean that, looking at financial

benefits alone, for some it is simply not worth entering

the workforce, or working longer hours because the

combination of their loss of benefit and/or greater

income tax liability diminishes the increase in income

they receive from an increase in earnings.

The recently released Henry Review into Australias

taxation system focussed considerable research and

analysis into reforms to the tax and transfer system,

which ensure that there are appropriate incentives

for workforce participation and skills formation. This

significant body of research should form the basis of

any reform to the tax and transfer system.

Further investigation should also be undertaken to

determine ways in which certain forms of government

assistance can be modified to actively assist and

encourage people to migrate to and take up jobs in areas

where labour shortages are particularly pronounced.

This should involve assistance through the taxation

system to encourage labour mobility between states

and within states, and encourage people to migrate to

and take up jobs in areas where labour shortages areparticularly pronounced.

Education is also a key area where both the

Commonwealth and State Governments should focus

to improve workforce participation.

Governments should work to implement programs

which aim to improve the educational attainment of

specific segments of the workforce, including older

workers, the long term unemployed, people with

disabilities, and indigenous Australians.

Educational attainment will also be enhanced by

introducing greater innovation into the education system,

including through reforms to funding arrangements

which are based on improving outcomes rather than

following processes.

There also needs to be greater involvement and

engagement by government in developing vocational

education and training courses that meet business needs.

Programs should result in formal qualifications, involve

local businesses to ensure the skills are relevant, be of

sufficient intensity to develop valuable skills, and becompetency based.

Women

Recommendations

There are a range of policy options which could facilitate

greater labour force participation among women.

In addition to the aforementioned options to increase

overall workforce participation, there are a number of

targeted measures that would allow for greater female

participation in the workforce.

In particular, the Government should look to:

allow child care to be salary sacrificed, in the

same way that is allowed for motor vehicles,

superannuation and computers;

introduce ongoing training initiatives that which

will assist with re-skilling workers that have

previously exited the workforce.

However, the business community also has a key role to

play in ensuring that it is responsive to a changing labour

market. In this regard, businesses should look to:

introduce flexible working arrangements where

possible, such as flexible hours, part time options,

and job share arrangements; and

implement policies to address pay disparities

between genders where appropriate.

Background

While female labour force participation rates in WA

and across Australia have already risen considerably

over time, (particularly among women between 45 and

64 years of age), they still remain lower than for males.

At the same time, labour force participation among

women in WA and across Australia also falls below that

of many other developed nations.If labour force participation among females in WA were

to increase to the average of the 10 OECD countries

whose female participation rates are higher, this would

lead to over 119,000 additional females being employed

or looking for work in the state. 5

However, in order to achieve such an increase, there

are a range of barriers to female participation which

need to be addressed. A survey conducted by CCI

in October 2008 revealed that these barriers include

balancing work and family commitments, outdated

skills and a lack of confidence in their own abilities

(see Box 2).6

Box 2: Female Perceptions of Barriers

to Employment

In 2008, CCI conducted a survey of female

workers to gain a clearer understanding of issues

surrounding female workforce participation. A key

issue canvassed by the survey was in relation to

females exiting the workforce, and the barriers

which they faced upon their return.

The survey found that nearly half of respondents

had left the workforce at some stage in their career.

The most common reason was to care for children,

although other reasons cited included travel, or

further study.

Of those women which had exited the workforce,

the majority had not returned to the same

occupation. Nonetheless, most felt that they werestill in a position where their true skills and abilities

are being fully utilised.

The main reason that women chose to return to the

workforce was due to financial pressure. However,

other women returned to work because they were

looking for new challenges, or career opportunities.

Balancing work and family life is a considerable

barrier to women participating in the labour force,

with the return to work for many women limited by

caring for children. A lack of training, qualifications

and experience, and inadequate salary and

compensation was also a key issue for many

women.

When asked about the single greatest obstacle

faced in the return to work, balancing professional

and family life, managing childcare, regaining

confidence, and updating skills were the main

issues identified.

Chart 8

Measures to Attract Female Staff

% of Respondents

10 % 2 0 % 3 0 % 4 0 % 5 0% 6 0% 7 0% 80 % 90 %

Flexible Hours

Comparable Pay

Career Development

Training

Paid Maternity Leave

Affordable Childcare

Accessible Childcare

Salary Sacrifice of Childcare

Work From home

Accessible Parking

Unpaid Maternity Leave

Source: CCI


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Page 22 Page 23


International experience has revealed that the policies

implemented to address these barriers have a significant

effect on female labour force participation. Many of the

developed countries with a higher female participation

rate than Australia offer a range of incentives, such as

cash benefits, leave provisions and childcare to improve

gender balance in the workforce.

There are a range of strategies which could be used to

boost the overall level of female workforce participation

in WA and across Australia. While some of these, such

as taxation and welfare schemes would be effective

in boosting the participation rate for both males and

females, there are a range of more gender specific

options which could prove effective in increasing the

female participation rate in WA and across Australia.

Flexibility in the workplace has consistently been

identified as the single most important measure to

attract and retain female workers (Chart 8). Flexible

arrangements would provide employees with more

options as to when and how they complete their work,

and provide greater opportunities for women to balance

work and family responsibilities.

In this regard, the business community has a key role

to play in adapting to the evolving labour market, and

ensure that options such as part time roles, flexible

hours, job sharing, and alternative leave arrangements

are available.

Policies used by employers to address pay disparities

may also increase the potential supply of labour.

The Government also has an important role to play in

boosting female workforce participation.

The Government can play a role in terms of ensuring

affordable and accessible childcare, which is critical to

allow working parents to balance their work and family

commitments.

While both the Child Care Benefit and Child Care

Tax Rebate are important ways that the Government

can assist with the cost of childcare, changes to salary

sacrifice options are also necessary. The Government

should allow child care to be salary sacrificed in the

same way permitted for motor vehicles, superannuation

and computers. It would also address the disparity

whereby childcare facilities provided on an employers

premises are exempt from Fringe Benefits Tax (FBT),

but a broader FBT exemption for employees is not.

Given that there is significant evidence to suggest that

a paid parental leave scheme will benefit business

through improved retention rates, CCI supports

the implementation of a government funded and

administered scheme of paid parental leave.

Education and training also has an important role to play

in boosting workforce participation among females.

Life-cycle learning that facilitates the retention of skills

and enables the retraining of older women will facilitate

greater female participation and engagement with

the labour market. These programs should be held at

convenient times, result in formal qualifications, involve

local businesses to ensure the skills are relevant, and be

of sufficient intensity to develop valuable skills.

People with Disability

Recommendations

Further investment is needed in targeted measures

which improve workforce participation among people

with disability. In particular, focus should be on:

engaging employers to increase apprenticeship

placement opportunities for people with

disability;

services to assist people with disability transition

from education to employment;

ensuring that skills development for people

with a disability is aligned with labour market

requirements;

ongoing employer education about hiring workers

with disabilities.

Background

Despite targeted policy measures to improve educational

and employment opportunities and outcomes over the

past three decades, people with disabilities continue to

be underrepresented in the labour force.

The participation rate for working age Australians

with a disability is just 53 per cent, compared with

81 per cent for people with no reported disability. At

any given time there are at least 4,000 to 6,000 people

with a disability nationally who are ready for work

and are on an employment service program with the

Commonwealth Rehabilitation Service (CRS).

People with a disability face significant barriers

to workforce participation. The main barriers to

employment have been identified by the Human Rights

and Equal Opportunity Commission as employer

concerns about the potential financial and other risks

associated with employing a person with disability as

well as the possible costs, and an absence of easily

accessible and comprehensive information and advice

to assist employers. However, these concerns about

financial and other risks associated with employing

people with disabilities are largely unfounded.

A number of specific areas have been identified

which will assist in

CCI Building WA's Workforce for Tomorrow (Final) June 2010

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