Published on the 07/02/2024 | Written by Heather Wright

Minimum wage for reskilling proposed in Australia, while in NZ…

The Australian government is being urged to pay a minimum of $23,000 for over-30s to reskill in technology as part of an ambitious proposal from the Australian Computer Society to tackle tech skills shortages and reskilling challenges.

With countries including Australia and New Zealand grappling with the issue of tech skills shortages, the Australian Computer Society (ACS) says it’s time for the government to splash the cash and pay people to switch jobs, providing those retraining with a minimum wage or half average annual earnings, rather than relying other study allowances.

“The Australian Government could introduce a Career Transition Scheme involving a stipend to address cost barriers to retraining.”

It says the government outlay for the proposed Career Transition Scheme and its proposed stipends would be returned in additional personal income and company tax collections.

Currently students can receive Fee-Help loans to pay all or part of their tuition fees and Austudy also provides a means-tested $29.80 per week for those over 25 years old, but ACS says those payments fall short for employed professionals looking to reskill, with the weekly minimum wage in Australia sitting at $812.60. The stipend would be tied to further tech study to address cost barriers to retraining, ACS says.

The first annual Jobs and Skills Australia Report found 36 percent of all occupations assessed are in national shortage, with technology skills and jobs in particular under pressure.

Deloitte research for ACS has previously shown that Australia is expected to need up to 1.3 million additional skilled workers by 2030 to meet needs, with a shortage of 237,000 forecast. It also noted that 11.2 million Australian workers will need to reskill by 2030.

The Digital Pulse report found that nine percent of professional services workers are interested in moving into a technology role – equating to nearly 120,000 workers who could help meet demand for tech skills if they had retraining opportunities. (No mention is made of the potential impact for the professional services sector.)

“Australian’s are under increasing economic pressure. Most workers cannot fund extended periods of retraining as demands on income increase annually,” ACS’s submission to the Treasurer ahead of the Federal government Budget says.

ACS has proposed a pilot program involving 1,000 people in its first year.

“Based on pilot results, the scheme could be expanded and scaled accordingly.”

ACS says it could target 5,000 participants per year – which combined with the trial year would provide 46,000 upskilled individuals.

“Run over a decade, the present value benefits of 46,000 participants would be over $3 billion through higher wages and business productivity,” ACS says. “Additional personal income and company tax collections over a decade would be the same as the government’s outlays on the scheme.

ACS is also calling for a tax credit program for up to $10,000 per employee for SMEs providing training for staff in key technology areas, but acknowledges it hasn’t modelled the costs of such a tax credit program. However, it says it has identified up to $5 billion in economic benefit from improved labour and business productivity should Australian businesses address the digital skills gap.

A national digital skills strategy to close the digital skills gap, more work to encourage skilled migrants into tech, and a skills platform to match workers with industry needs are also proposed by ACS.

In New Zealand, a briefing document to the incoming Minister for Digitising Government, Judith Collins, has noted the the digital skills and talent shortages impacting both the public sector and wider market.

The briefing document, which is only focused on digitising government, says work has begun to develop New Zealand’s public service digital profession.

Budget 2023 included just over $27 million to the Department of Internal Affairs and MBIE to advance tech skills and talent activities, including $7 million to roll out the global Skills Framework for an Information Age across government.

The document urges Collins to consider further interventions to build the public service digital profession and to work across the Digitising Government and Science, Innovation and Technology portfolios and with the digital tech sector to ensure alignment and collaboration between the public and private sector.