The Australian Chamber of Commerce and Industry (ACCI) yesterday called on the Federal Treasurer to incentivise retirees to rejoin the workforce to fill the gaps in labour demand.
State and territory chambers of commerce joined the ACCI in suggesting that by allowing age pension recipients to earn more without losing their pension, Australia could address its skill and labour shortages problem.
Labour shortages
The Australian Bureau of Statistics reported in August that job vacancies in Australia are at an all-time high. In the year to August, listings have increased by 61.8 per cent.
Since then, the crisis is sure to have worsened as businesses try to lure back staff to cope with the post-lockdown and holiday rush.
Labour shortages are surfacing across various industries, from hospitality to the professional sector. The ACCI believes allowing aged pensioners to work with losing the pension would be a net gain solution.
Chief executive, Australian Chamber of Commerce and Industry, Andrew McKellar, said, “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.
“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.”
Aged pension
Under the current system, there are significant barriers for aged pension recipients to re-enter the workforce. A pensioner can earn an average of $240 a week, 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.
Mr McKellar said, “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.
“It’s something that we believe really doesn’t cost the budget anything, that these people are on a pension anyway. In fact, we can come up with a very fair solution, a very equitable way to encourage people with great experience to come back into the workforce. And we really need that at this time.”
According to the ABS, there would appear to be a significant untapped demand for the over 65s to return to work. In the past two years, the number of additional hours worked by people over 65 has surged from 685,000 hours to over 978,000 hours.
Omicron border delays
Concern about the Omicron variant is causing uncertainty around if international borders will open as planned on the 15th of December.
The emergence of the variant has highlighted the need to invest in a domestic labour force to ensure businesses can source the staff they need.
McKellar said, “We’ve been pushing now for some time to reopen the international borders. We believe we could do that safely. Obviously, with the Omicron variant coming forward, we have agreed that it’s appropriate to pause until the 15th. Let’s see what the data says. The health experts are getting access to that information now and over the coming days.”
The ACCI stressed that even when our borders reopen, the global demand for skills means Australian businesses will face fierce competition for workers. Countries that can bolster their local workforces will be best positioned to boost productivity and realise their economic potential.
Mr McKellar continued: “As they have the chance to analyse that, then a decision can be taken. The signs, I think, are hopeful. And I think this will be a big boost to the Australian economy if we can start to fully reopen those international borders from that time.”
Read more:RBA holds cash rate at 10 basis points; says Omicron unlikely to derail Australia’s recovery
Read more:More than 25 industry associations take aim at labour shortages
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