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Australia’s Federal Budget: 3 Key Changes for HR

Australia’s Federal Budget: 3 Key Changes for HR

Australia’s Treasurer Jim Chalmers has delivered the 2023-24 Federal Budget, outlining key changes that will impact both employees and employers. 

With a focus on easing the cost-of-living pressures facing Australians, investment in Medicare and an increase in support payments, it is Labor’s first Budget under Anthony Albanese’s leadership.

It aims to deliver on many of the party’s election campaigns, including a pledge to increase wages for aged care and other low-paid workers, and the need to address the high levels of inflation that are hitting the hip pockets of many Australians. 

ELMO’s recent Employee Sentiment Index underscored the impact the cost-of-living crisis is having on the nation’s workers. More than half of employees said it is having a negative impact on their mental health, and that figure was even higher for women. Many are taking action to reduce their outgoings, as well as shouldering more responsibility at work to secure their jobs.

In this blog, we explore some of the key HR-related reforms announced in the Federal Budget last night.

1. Lifting the salary threshold for skilled migrants

During the election campaign there was plenty of talk about how to ensure Australia is accessing the right level of skill through its migration programs and to ensure those workers are fairly paid.

The Budget has confirmed that from July 1 2023, the Temporary Skilled Migration Income Threshold will increase to $70,000. 

To prepare for the change, employers with workers who are on a Temporary Skill Shortage visa should conduct a salary review and ensure that from July 1, they are complying with the new threshold.

More reform to Australia’s migration program is currently underway and the Government plans to deliver the final Migration Strategy later in 2023.

2. Lifting wages for aged care workers

Improving the aged care industry was a major tenet of Labor’s election campaign, promising to deliver funding to raise standards within the sector and support some of Australia’s most important workers. 

There has been a chronic problem of understaffing in the aged care sector for many years, which was only made worse by the border closures during the pandemic. Now, many aged care organisations are struggling to both retain their current staff and attract new workers into the field. 

The Budget has allocated $11.3 billion to support the Fair Work Commission’s decision to provide an interim increase of 15% to minimum wages for many aged care workers. The Government says more than 250,000 workers will benefit from the move.

Those roles include direct care and some senior food services employees in the aged care sector and the increase will come into force from 30 June 2023. The increase covers eligible employees within the following Awards:

  • Aged Care Award
  • Nurses Award
  • SCHADS Award

For employers in the sector, it’s important they ensure the increase is applied to all impacted employees and their payroll is updated to avoid underpayment. The increase takes effect from the start of the employee’s first full pay period on or after 30 June 2023.

3. Aligning superannuation payment with wages

The Government is cracking down on employers that hold onto employees’ superannuation by bringing the payment dates in line with wages and salaries.

That means employers will have to pay the Superannuation Guarantee at the same frequency as an employee’s wage, making it easier for workers to track their entitlements. 

The Budget says: “This will simplify the tracking of superannuation payments for employees and support early intervention against underpayment. These changes will improve retirement outcomes for around 8.9 million employees, including for young and low-income workers who are most likely to have unpaid super.”

Under the current system, employers are required to pay the Superannuation Guarantee into an employee’s nominated account at least every three months. This can make it difficult for employees to easily keep track of their super payments and means they’re less likely to realise if their super is underpaid.

As well as the change to payment dates, the Government has pledged to give the ATO stronger powers to clamp down on unpaid super. The Government also recently introduced the Protecting Worker Entitlements Bill that will allow employees who are not covered by a modern award or enterprise agreement that contains a right to superannuation to pursue legal action to recover unpaid super.

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