New policy thinking and concerted action, led by the next federal government, is needed if Australia is to reduce the unacceptable number of Australians who are jobless or on the margins of the workforce at a time of record employment.

The Business Council of Australia today launched a paper outlining the need for cooperation between governments, business and the community if Australia is to lift the bar on job creation and opportunity for those missing out on prosperity.
 
Engaging our Potential: The Economic and Social Necessity of Increasing Workforce Participation, estimates that more than a million Australians are able to work but can’t due to barriers such as financial, tax, infrastructure and child care impediments, and employer perceptions on issues such as age or time out of the workforce.

“Australia’s long run of economic prosperity has created the conditions for lifting our participation rate to new highs so that more people can share in the benefits of a healthy economy,” the Chairman of the BCA’s Employment and Participation Taskforce, Charlie Lenegan, said.
 
“We need to think about Australia’s employment goals in terms of the participation rate, rather than just the unemployment rate, if we are to unlock the capacity of people who are currently prevented from joining the workforce,” Mr Lenegan said.

“By focusing on unemployment rates, rather than employment and participation rates, we are inevitably setting limits on policy thinking, options and action.

“We must move beyond many of the assumptions that currently underpin employment policies and focus our attention on removing barriers to employment for the many Australian’s who are left out.

“Shifting our mindset on employment generation to a more aspirational approach will be a critical factor in meeting the challenges of an ageing population in years to come and better sharing the benefits of our continued prosperity.

“If new policies were adopted to encourage an additional 1 million people to join the workforce, Australia’s participation rate would rise to nearly 71 per cent.

“That’s not only 1 million more Australians earning their own income and gaining access to greater opportunity, but also a large number of people no longer reliant on welfare,” he said.

Despite one of the longest periods of unbroken growth in the nation’s history:

• One in seven Australian children live in jobless households (that is, households in which no residing parent is employed);
• The participation rate for adult Indigenous Australians is about three-quarters of that of non-Indigenous Australians; and,
• There are just five workers paying income tax for every one person reliant wholly or mainly on welfare payments, compared to 22 workers for every welfare participant in the mid-1960s.

The paper says current employment policies and practices would benefit from a more integrated approach and greater co-operation and knowledge sharing between government the community sector and business in order to address what are often complex barriers to participating in the workforce faced by many people.

Reflecting the need for greater focus on participation as well as employment outcomes, the BCA will:

• Review policy settings as they relate to the participation of women and mature-age workers with a particular focus on the affordability of, and access to, caring options for dependants; and
• Support the broader dissemination and take-up of best-practice workplace strategies to achieve higher rates of participation and retention among women, mature-age workers and Indigenous Australians, building on the work that a number of businesses have already undertaken.

“We all need to recognise that with employment shortages and record job numbers, there’ll never be a greater need and incentive to dismantle employment hurdles still faced by millions of Australians,” Mr Lenegan said.  

“But concerted action requires government, business and the community more broadly to shift its thinking on employment policies and practices.

“If serious inroads are to be made, we have to move away from policies that focus on aggregate outcomes to policies that can be tailored to help the individual circumstances of people who often face multiple barriers to joining and remaining in the workforce,” he said.

Engaging our Potential: The Economic and Social Necessity of Increasing Workforce Participation