My Blog

Tag: Public Sector & Privatisation

  • Feature Interviews: Worker Voice in a Changing World of Work

    Video recordings of the interviews are available here:

    The videos were recorded for a 5-week on-line course Power, Politics and Influence at Work run by the University of Manchester. The Centre’s staff are featured alongside several leading scholars, trade union activists and international agencies such as the ILO/Oxfam.

    Academics and researchers Tony Dundon, Miguel Martinez Lucio, Emma Hughes and Roger Walden designed the course for labour and NGO activists and students interested in labour market equalities, work and employment. Registration is free.

    The post Feature Interviews: Worker Voice in a Changing World of Work appeared first on The Australia Institute's Centre for Future Work.

  • 480,000 Jobs Rely on QLD Public Service, Cuts Would Deepen the State’s Recession

    The report, by the Centre for Future Work, finds that for every 10 direct jobs in state-funded public services, another 4.5 jobs are supported in the QLD private sector. This means that these public services support a total of some 480,000 public and private sector jobs across Queensland. Cuts to public services and staffing would impact private sector jobs and incomes, deepening the recession.

    Key Findings:

    • Some 480,000 positions are supported, directly and indirectly, by the provision of state-funded public services in Queensland.
    • This includes 331,000 direct public sector jobs, as well as over 150,000 more positions in the private sector that depend on the economic stimulus provided by public sector work.
    • For every 10 direct jobs in the state-funded public service, another 4.5 jobs are supported in the private sector.
    • Regional and remote Queensland is the most reliant on state public sector workers – both for the services they provide, and as a source of high-quality employment for local residents. State public sector workers account for almost 12% of total employment in remote and very remote regions of QLD.
    • The report simulates two potential scenarios of fiscal austerity in Queensland. It finds that fiscal austerity (imposed via cuts to public service staffing and wages) would cause substantial harm to Queensland’s economy: including cumulative losses (over three years) of $9-$16 billion in state GSP, and the loss of 20-35,000 person-years of employment in the private sector.

    “In this unprecedented time, the maintenance of public services is surely a more urgent priority than cutting government spending in pursuit of some illusory fiscal target,” said Dan Nahum, Economist at the Centre for Future Work and author of the report.

    “By cutting employment and incomes for public sector workers (and the private sector industries which depend on public services for their own markets), misplaced austerity would undermine economic recovery and reduce GDP.

    “A more constructive and effective response to the COVID crisis is to expand the economic and social footprint of government, including state governments – not shrink it.

    “Attacking public sector employment and compensation, just at the time Queenslanders need more public services, not less, would be a major policy mistake.”

    The post 480,000 Jobs Rely on QLD Public Service, Cuts Would Deepen the State’s Recession appeared first on The Australia Institute's Centre for Future Work.

  • Webinar: How TAFE Can Drive Australia’s Skills and Jobs Recovery

    To mark National TAFE Day and the release of new research by the Centre for Future Work on the economic and social benefits of the TAFE system, The Australia Institute hosted a timely discussion on how the TAFE system can drive a COVID-era skills and jobs recovery with ACTU President Michele O’Neil, Correna Haythorpe, federal president of the Australian Education Union, and Alison Pennington, Senior Economist at the Centre for Future Work.

    The webinar was presented as part of the Australia Institute’s widely acclaimed Economics of a Pandemic webinar series and explored why the TAFE system has been in turmoil, the historic role it has played generating a more skilled workforce and productive economy, and how we can fix it.

    The post Webinar: How TAFE Can Drive Australia’s Skills and Jobs Recovery appeared first on The Australia Institute's Centre for Future Work.

  • TAFE system supports $92.5 billion in annual economic benefits

    The report adopts a multidimensional approach to measuring the wide economic and social benefits of the TAFE system resulting from Australia’s historic investments in public vocational education. Over $6 billion in economic activity and 48,000 jobs are supported by the direct operation of TAFE institutes and the TAFE supply-chain. Through its accumulated contribution to the employability and skills of Australians, the TAFE system generates another flow of benefits worth $84.9 billion per year in higher incomes and productivity. Those benefits are shared by workers in higher incomes, firms in higher profits, and federal and state governments – which receive $25 billion per year in extra tax revenues. Finally, another $1.5 billion in fiscal savings are enjoyed by governments through reduced costs for health and welfare benefits for TAFE graduates. Altogether, the TAFE system drives $92.5 billion in benefits per year – equal to almost 5% of Australia’s GDP.

    The report finds despite chronic underfunding, Australia’s historic investment in the TAFE system continues to generate an enormous and ongoing dividend to the Australian economy. Increased public investment in the skills and earning capabilities of Australians will be critical to our post-pandemic recovery.

    Key Findings:

    • Australia’s historic investments in quality TAFE education supports a combined and ongoing flow of total economic benefits worth $92.5 billion to the Australian economy in 2019 — 16 times greater than the annual ‘maintenance’ costs Australia currently reinvests in the TAFE system.
    • The presence and activity of TAFE institutes ‘anchors’ over $6 billion per year in economic activity and 48,000 jobs from the direct operation of the TAFE system and its supply chain, and ‘downstream’ consumer spending impacts.
    • The TAFE-trained workforce generates $84.9 billion per year in higher incomes and business productivity. $49.3 billion is paid in additional earnings to TAFE-credentialed workers (relative to earnings of workers without post-school training); businesses receive $35.6 billion in increased profits from a more productive TAFE-trained workforce.
    • The costs of delivering TAFE are modest – only $5.7 billion per year, or 0.3% GDP. Extra tax revenues received by governments thanks to the superior productivity and incomes of TAFE-trained workers alone are worth $25 billion per year: 4.4 times more than the total costs of running the TAFE system.
    • The TAFE system increases employability and lowers unemployment. TAFE graduates enter the labour force with better employment prospects and skills. The increased labour force participation and employability of TAFE graduates corresponds to additional employment of 486,000.
    • The TAFE system promotes wider social benefits critical to addressing inequality. TAFE helps ‘bridge’ access to further education and jobs pathways in regional areas and for special and at-risk youth groups. TAFE students are more likely to come from low-income households and identify as Aboriginal compared with private VET providers.

    “Australia will squander the demonstrated economic benefits generated by our investments in the TAFE system, and unnecessarily limit our post-COVID recovery if we don’t act quickly to reinstate the critical role that TAFE plays in the VET system,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “The Australian economy is reaping an enormous flow of economic benefits from a VET ‘house’ built by the TAFE system. But the ‘house’ that TAFE institutes built is crumbling. If Australia wants to secure the benefits of a superior, productive TAFE-trained workforce as we prepare for post-COVID reconstruction, the damage must be repaired quickly.

    “Major public skills investments will be best coordinated by TAFE institutes as the longest-standing and most reliable ‘anchors’ of vocational training and must be at the centre of an economic reconstruction process.

    “By providing bridges to further education and jobs for regional, low-income and at-risk youth groups, the TAFE system is critically important to addressing systemic inequality in Australia’s economy and society.”

    The post TAFE system supports $92.5 billion in annual economic benefits appeared first on The Australia Institute's Centre for Future Work.

  • Repairing Universities & Skills Key to Meeting COVID-Era Challenges

    Our Senior Economist Alison Pennington was interviewed by UTS The Social Contract podcast on how COVID-19 is reshaping relations between universities, government and industry. 

    Alison explains how the pandemic economic crisis presents significant challenges to Australia’s fragmented, underfunded and unplanned skills system wounded from decades of failed marketisation policies, and why sustained public investments in skills and jobs pathways will be essential to solving our economic and social challenges. 

    Listen to the episode on Whooshkaa. She is joined by Megan Lilly, head of Workforce Development at the Australian Industry Group.

    The post Repairing Universities & Skills Key to Meeting COVID-Era Challenges appeared first on The Australia Institute's Centre for Future Work.

  • Public Sector Pay Freezes Could Push Economy From Recession to Depression

    Governments are devoting unprecedented resources to protecting Australians against the health and economic effects of the pandemic, but a contradictory push to adopt fiscal austerity measures is also becoming apparent. Leaders of governments at all levels — federal, state and local council – have already announced plans to freeze wages and cancel previously agreed pay raises for public servants.

    Key findings:

    • At least 35% of the purported ‘savings’ from freezing public service pay is offset by the loss of direct tax revenues that would have been collected as a result of higher income and spending by public servants. And considering other tax revenue losses from the resulting slowdown in broader wage growth, even more of those ‘savings’ are never realised.
    • Pay freezes in the public sector spill over into weaker economy-wide wage growth through three key channels: a composition effect, a demonstration effect, and a macroeconomic effect.
    • Freezing pay for even short periods reduces the lifetime income and superannuation savings of public sector workers by tens of thousands of dollars, because it permanently reduces their lifetime wage trajectory.
      • A 6-month pay freeze for a typical federal APS worker will reduce career earnings by an estimated $23,500, and superannuation accumulations by another $4000 or more. The longer 2-year freeze contemplated for Brisbane local council workers would reduce career earnings by over $100,000, and superannuation accumulations by $17,500.
    • Misguided public sector wage restraint in the aftermath of the GFC short-circuited an initial recovery in private-sector wage trends in 2010-11, and helped lock in a lasting deceleration of national wages after 2013. Since then Australia has experienced the slowest sustained wage growth in the entire post-war era.

    “Pay freezes are being imposed at the very moment when public sector workers such as healthcare workers, first responders, teachers and social service providers are performing vital tasks, at personal risk to themselves, to support Australians through the pandemic. Freezing pay for these essential workers is not just morally questionable — it’s also a major economic mistake,” said Dr. Jim Stanford, Director of the Centre for Future Work.

    “The motivation for public sector wage austerity seems more ideological than fiscal or economic: pay freezes are justified with appeals to ‘shared sacrifice,’ and a symbolic desire to ‘tighten the purse strings’ at a moment when governments are about to incur their largest deficits in history.

    “However, our research shows these arbitrary pay freezes are both unfair and economically counterproductive. Government policy should be driven by economic reality, not political optics.

    “Public sector wage austerity imposed after the Global Financial Crisis helped ‘lock in’ historically slow wage growth in the private sector in the years that followed. Since then, wages in Australia have grown at their slowest sustained rate in the post-war era.

    “Australia cannot tolerate a further deceleration of wage and price inflation. Inflation was already close to zero, chronically falling below the RBA’s inflation target, even before the economy was hit by the double shock of bushfires and COVID-19.

    “Economy-wide deflation is associated with long-term depression. Australia cannot risk letting any COVID-19 recession turn into a depression. At this pivotal moment, governments’ priority should be anchoring price expectations, supporting nominal incomes, and contributing to aggregate demand. Normal wage gains should be implemented in the public sector and encouraged in the private sector.”

    The post Public Sector Pay Freezes Could Push Economy From Recession to Depression appeared first on The Australia Institute's Centre for Future Work.

  • University-to-Job Pathways Key to Boosting Graduate Employment Outcomes

    New research shows active strategies to directly link university degrees to a job are needed, to better support university graduates as they negotiate a rapidly changing labour market.

    The report, by the Australia Institute’s Centre for Future Work, shows that employment outcomes for university graduates have deteriorated significantly since the Global Financial Crisis, with only 73% of recent university graduates finding full-time employment within 4 months of graduating – down from 85% in 2008.

    Key Findings:

    • At the individual level, a university degree is still very valuable: people who hold a university degree are more likely to be employed, more likely to be employed in a stable job, and earn higher average wages and salaries. Half of new jobs created in the coming 5 years will require a degree.
    • However, many recent graduates report being underemployed or in insecure jobs that do not utilise their specific skills—including graduates who studied technical skills or STEM subjects.
    • The report makes 9 recommendations to improve university-to-work transitions for future graduates, including establishing a national higher education planning capacity, and creating a timely and high-quality labour force information system.

    Alison Pennington, Senior Economist, Centre for Future Work:
    “Employment outcomes for university graduates have deteriorated significantly since the GFC,” says Alison Pennington, Senior Economist at the Centre for Future Work and co-author of the report.

    “Finishing tertiary education and finding a job in your field is a difficult and haphazard experience, which is leaving many graduates in jobs that do not fully, or even partially, use their hard-won and expensively acquired skills.

    “Vocational degrees, which are tied to specific occupations like health care, engineering or teaching, have the best employment placement rates. As seen in these professions, directly linking degrees to jobs through paid placements, occupational licensing and accreditation would greatly improve the situation of graduates.

    “A hands-on and direct approach that channels graduates directly into relevant career opportunities is needed. Australia could learn a lot from other countries, especially in Europe, where this is already being achieved through forecasting future skill requirements and planning higher education offerings accordingly.”

    Noel Edge, Executive Director of Graduate Careers Australia:
    “The overwhelming message from this report by the Centre for Future Work is the need for further research in graduate employment,” says Noel Edge, Executive Director of Graduate Careers Australia.

    “Research to explore the emerging work environment for tertiary education students in Australia, beyond basic government labour-market forecasting and graduate outcomes reporting, simply does not exist.”

    The report was commissioned by Graduate Careers Australia.

    The post University-to-Job Pathways Key to Boosting Graduate Employment Outcomes appeared first on The Australia Institute's Centre for Future Work.

  • Rebuilding Vocational Training in Australia

    Ironically, the manufacturing recovery could be short-circuited by looming shortages of appropriately skilled workers. This seems unbelievable — given so much downsizing in manufacturing employment that occurred between 2001 and 2015. But a combination of structural change within the sector, the ageing of the current workforce, and the failure of Australia’s vocational education system (crippled by a bizarre experiment in publicly-subsidized private delivery) means that recovering manufacturers may be unable to find the skilled workers they need.

    A recent feature article in Australian Welding magazine highlighted the Centre for Future Work’s research into the problems of the current VET system, the implications for manufacturing, and 12 key reforms urgently needed to repair the situation.

    The feature article is extracted from a detailed paper (co-authored by Tanya Carney and Jim Stanford) on the evolving skills requirements of the manufacturing sector, and the failure of a privatised, fragmented VET system to meet those needs. That paper was unveiled at the 2018 National Manufacturing Summit in Canberra.

    “Stable, well-funded, high-quality public institutions must be the anchors of any successful VET system. Public institutions are the only ones with the resources, the connections, and the stability to provide manufacturers with a steady supply of world-class skilled workers.”

    Please see the full 4-page article in Australian Welding magazine with our proposals for rebuilding a high-quality, modern VET system to meet the needs of manufacturing and other Australian industries.

    We are grateful to Australian Welding and Weld Australia for permission to reprint this article!

    The post Rebuilding Vocational Training in Australia appeared first on The Australia Institute's Centre for Future Work.

  • Advanced Skills for Advanced Manufacturing

    Australia’s manufacturing industry is at a crossroads. After years of decline, the sector has finally found a more stable economic footing, and many indicators point to an expansion in domestic manufacturing in the coming years. Manufacturing added almost 50,000 new jobs in the last year – making it one of the most important sources of new work in the whole economy.

    However, one key factor that could hold back that continuing recovery is the inability of Australia’s present vocational education and training system, damaged by years of underfunding and failed policy experimentation, to meet the needs of manufacturing for highly-skilled workers. The skills challenge facing manufacturing is all the more acute because of the transformation of the sector toward more specialised and disaggregated advanced manufacturing processes. This naturally implies greater demand for highly-trained workers, in all its occupations: production workers, licensed trades, technology specialists, and managers.

    To sustain the emerging turnaround in manufacturing, the sector has an urgent need for a concerted and cooperative effort to strengthen vocational education and training. This report contributes to that process: by cataloguing the emerging skills challenges facing manufacturing, reviewing the failures of the existing approach to vocational education in this sector (and across Australia’s economy as a whole), and proposing twelve key principles for reform.

    This report, by Dr. Tanya Carney and Dr. Jim Stanford, was prepared by the Centre for Future Work for the Second Annual National Manufacturing Summit. The Summit, held at Parliament House on 26 June 2018, will gather leading representatives from all major stakeholders in Australia’s manufacturing sector: business, unions, universities, the financial sector, suppliers and government. They will consider the industry’s prospects and identify promising, pragmatic policy measures to support a sustained industrial turnaround. It is a highly appropriate forum at which to begin a discussion about multi-partite efforts to rebuild vocational education and address the looming skills challenges facing manufacturing.

    The post Advanced Skills for Advanced Manufacturing appeared first on The Australia Institute's Centre for Future Work.