Business and commerce representatives say pensioners could solve workforce crisis
Representatives from national, state and territory chambers of commerce have called on the Federal Treasurer to incentivise greater participation in the workforce by allowing age pension recipients to earn more without impacting their pension.
This increased participation could solve critical skills shortages in a number of sectors including early childhood education and care, the representatives believe.
Currently there are significant barriers for aged pension recipients to re-enter the workforce, they noted. Under the Work Bonus, a pensioner can earn an average of $480 a fortnight – or $12,840 a year – before their payments are reduced, at an effective marginal tax rate of at least 50 per cent. This is the equivalent of only one day a week at the minimum wage before their pension is reduced.
While the Work Bonus program allows more flexibility, raising its threshold would encourage greater participation, bringing more workers into the jobs market, and address critical skills shortages.
“Businesses of every size, in every industry, in every corner of the country, are experiencing the worst skill and labour shortages in more than two decades,” the representatives said in a collectively published letter.
“Without access to workers, Australian businesses cannot compete in the global economy.”
The new COVID-19 Omicron variant has also delayed the reopening of the international border to skilled migrants, working holiday makers and international students, and in the absence of these arrivals, getting older skilled workers into the labour force “will be key to Australia’s economic recovery”.
“Even when our borders do reopen, the global war for talent means we will be in fierce competition for skilled workers. Countries that can bolster their local workforces will be best positioned to boost productivity and realise their economic potential.”
“There is an army of older workers, ready and willing to return to the workplace. However, skilled aged pension recipients have very little incentive to re-enter the workplace,” said Andrew McKellar, Chief Executive, Australian Chamber of Commerce and Industry.
“In raising the Work Bonus threshold, pensioners would be allowed the opportunity to earn more, while businesses who are struggling to find staff would have access to workers, filling thousands of job vacancies.”
“As the national, state and territory chambers of commerce, our united demand reflects the fact that businesses right across the country are crying out for workers. This is a simple step the Federal Government must take to grow our workforce, boost our productivity and drive our economic recovery.”
The statement was released by:
Andrew McKellar, CEO, Australian Chamber of Commerce and Industry
Daniel Hunter, CEO, Business New South Wales
Greg Ireland, CEO, Chamber of Commerce Northern Territory
Stephen Tait, CEO, Chamber of Commerce and Industry Queensland
Martin Haese, CEO, Business South Australia
Michael Bailey, CEO, Tasmanian Chamber of Commerce and Industry
Paul Guerra, CEO, Victorian Chamber of Commerce and Industry
Chris Rodwell, CEO, Chamber of Commerce and Industry Western Australia
To read the statement in full please see here.
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