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Treasurer defends temporary IR changes in COVID response

Adrian Flores
Adrian Flores
24 July 2020 2 minute readShare
Treasurer Josh Frydenberg

Treasurer Josh Frydenberg says it has called the temporary industrial relations changes as an “absolutely critical” element of its response to keeping Australians working through the coronavirus crisis.

In an address to the National Press Club, Mr Frydenberg noted opportunities provided to workers through schemes such as JobKeeper and JobMaker will not be fully realised unless efforts are made to address the “inflexible industrial relations system”.

“Early survey results of the use of these [IR] provisions indicate businesses have found the changes to be essential to their ability, to adjust and get through these challenging times,” Mr Frydenberg said.

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“Three out of four surveyed employers used the flexibilities provided for by the provisions. Almost all surveyed employees that used the flexibilities have said such access was important to keep their business operating and their employees in jobs.

“And 80 per cent of surveyed employers support the continuation of the JobKeeper flexibilities for a further period of time, with job losses and business closure being the most commonly cited impact of not being able to use the provisions into the future.”

 

As a result, Mr Frydenberg said there is no doubt that the industrial relations system is overly complex and rigid, and that the temporary changes have revealed how big an impact a more flexible system can have in keeping Australians employed.

“For the system to deliver more jobs, it will need to evolve to meet the jobs challenge the country faces,” he said.

“This is the reason why the work that the Attorney-General is leading is so integral to the recovery and why all parties must constantly ask themselves, ‘Will the changes they seek create more jobs or less?’.

“That is the critical question for all participants.”

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Tax changes to support business investment

Mr Frydenberg said the government is already driving reform in taxation by abolishing an entire income tax bracket and delivering the largest personal income tax cuts in more than 20 years.

“Over coming months, our legislated tax cuts will see over $7 billion flow into the pockets of taxpayers as millions of Australians lodge their income tax returns,” he said.

Mr Frydenberg also noted a prioritisation of tax changes that support business investment and will continue to do so, saying there can be no sustained recovery without new investment.

“I’m encouraged by the early discussions I’m having with state treasurers about tax issues at our Council of Federal Financial Relations meetings,” he said.

“We all recognise there is a need and an opportunity for reform in a very complex area with many moving parts.

“Our principles are agreed. We are all in favour of tax reform that delivers a simpler, more efficient and sustainable tax system as a pathway to more jobs and investment.”

Reducing licensing and registration red tape

In addition, Mr Frydenberg pointed to reducing licensing and registration requirements between states as an area “long overdue”, noting that there are over 800 different licences in manual trades alone. 

He said based on their recent discussions, the government is well placed to make substantial progress on this issue.

“We need to trust each other across the federation. If an individual is licensed and registered in one jurisdiction, that should be easily recognised across the country,” Mr Frydenberg said.

“We also need to tackle planning and zoning and push forward long-overdue reforms. As the Productivity Commission has reported, these reforms could unlock around $1 billion of economic activity each year in Sydney alone.

“This shows what practical changes can do to help businesses grow.”

Treasurer defends temporary IR changes in COVID response
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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