Business News Releases

Govt calls for companies to deliver services to help early school leavers get jobs

THE Australian Government is calling on organisations that are well connected in their community to tender to deliver services especially designed to get young early school leavers into jobs.

Minister for Employment, Senator Michaelia Cash today released the Request for Proposal for Transition to Work 2016-2020. The Transition to Work service will target those aged 15 to 21 who are out of work and not engaged in education.

"The Government is committed to ensuring that every Australian who can work is able to find work," Minister Cash said.

"The best form of welfare is work.

"This is particularly the case with young Australians – they are the future of the nation, our businesses and our economy, however they are over represented in the unemployment figures.

"The Australian Government is not prepared to stand by while a generation of young Australians remain without gainful employment.

"Early intervention can mean the difference between a young person taking their first steps into productive and happy working lives – or entering a life of welfare dependency.

"That’s why we’re investing $322 million in the Transition to Work service, to find the best organisations to deliver results for both young people and taxpayers," Minister Cash said.

The Government has taken on board feedback received on the Transition to Work Service Exposure Draft to support greater flexibility for service providers and young people looking to access the service.

The Transition to Work service will provide intensive, pre-employment support to improve the work readiness of young people and to help them into work (including Apprenticeships and Traineeships) or education.

The service will be rolled out between January and April 2016 and it is expected that providers will leverage off their existing knowledge and experience in the youth sector to enable young people to become more work-ready.

"A recent survey by the Department of Employment of 3,000 Australian employers found many young people require support to acquire the core skills that employers require," Minister Cash said.

"This includes improving literacy and numeracy skills, engaging in the workplace and understanding the value of working in a team situation."

"Employers also mentioned that young people need to better tailor their application to the position for which they are applying."

To address these issues organisations will be expected to deliver individually tailored services for young people to help them move into work or further education.

Providers will be required to have regular contact with participants and assist them with a range of services including:

  • developing a Job Plan setting out the types of services the participant will receive and the activities the job seeker will undertake to improve their work readiness
  • assistance with vocational skills development, for example support to address language and literacy issues, to undertake training relating to a specific job, as well as practical skills such as gaining a driver’s licence
  • help to improve foundation skills such as the ability to work in a team, communication skills, motivation, reliability and willingness to work
  • assistance in career advice, preparing a résumé and developing job applications and
  • coaching in interview techniques and personal presentation.

Providers will also be expected to work closely with employers and will be able to offer an Australian Government wage subsidy of up to $6500 over 12 months to assist employers with the costs of hiring and training an eligible young person.

Information sessions for interested organisations will be held in Perth and Sydney (26 October), Adelaide (27 October), Hobart (28 October), Melbourne (29 October), Brisbane (30 October) and Canberra (2 November).

Tenders close at 5.00 pm Australian Eastern Daylight Time (AEDT), 1 December 2015.

To register for an information session or to obtain the tender documents visit https://www.ivvy.com/event/TTWRFP/

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APRA to appear before Economics Committee

THE Chairman and other Executive Members of the Australian Prudential Regulation Authority (APRA) will appear before the House Economics Committee on Friday 23 October in Parliament House, Canberra.

The Chair of the committee, Craig Laundy MP said ‘that the ongoing scrutiny of APRA is an important part of the committee’s oversight role. Some of the issues that will be examined include APRA’s new reporting standards for the superannuation industry, the increased capital requirements for Australian residential mortgage exposures by authorised deposit taking institutions (ADIs), and the new disclosure requirements for ADIs under the Basel III framework.’

On 9 December 2014 APRA issued advice to all ADIs outlining measures to reinforce residential mortgage lending practices. The committee will scrutinise APRA on the effectiveness of these measures.

APRA noted that ‘given the currently very strong growth in investor lending, supervisors will be particularly alert to plans for rapid growth in this part of the portfolio. For example, annual investor credit growth materially above a benchmark of 10 per cent will be an important risk indicator that supervisors will take into account when reviewing ADIs’ residential mortgage risk profile and considering supervisory actions.’

The committee will seek an update on how this particular measure is working to curb investor lending.

Public Hearing Details:

Committee: House of Representatives Economics Committee
Venue: Committee Room 1R3, Parliament House, Canberra
Date: Friday, 23 October 2015.
Time: 9.30am to 12.30pm
Webcast: The hearing will be webcast live on www.aph.gov.au/live

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Income product for retirement welcomed by IPA

THE Government’s positive response to the Financial System Inquiry’s (FSI) recommendation (11) requiring superannuation trustees to pre-select a comprehensive income product for members’ retirement, has been welcomed by the Institute of Public Accountants (IPA).

“There is extensive legislation that regulates how much and the manner in which Australians contribute to superannuation, but limited rules relating to how they can withdraw superannuation,” said IPA chief executive officer, Andrew Conway.

“Many retirees take either a partial or total lump sum, with a high percentage of these using a lump sum to pay off a mortgage or purchasing other non-income supporting assets.  A smaller percentage of retirees are investing in a pension product such as an annuity or life pension, or an income earning product such as a bank account.

“While the IPA supports choice in superannuation, the current use of retirement funds is not always appropriate and does little to diminish the future pension burden faced by a shrinking workforce and aging population.

“The IPA therefore believes there should be suitable incentives which encourage retirees to invest in income streams such as pension and annuity products.

“Annuities may be the missing link in people’s thinking between drawing down from their existing superannuation and finding sustainable income streams that support their retirement.

“This would mean that people need to opt out in order to receive a lump sum payment, which is the more common method of withdrawing super currently.

“Annuities support the policy intentions of the superannuation system and will generally better provide for the longer term needs of retirees and protect against cost of living risks,” said Mr Conway.

www.publicaccountants.org.au

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Trifecta of free trade deals to drive Australia’s prosperity

NATIONAL resource industry employer group, AMMA, congratulates the Australian Government and Opposition on reaching an agreement that will underpin the rapid commencement and full implementation of the China-Australia Free Trade Agreement (ChAFTA), to deliver growth and jobs.

“Australia’s resource industry is pleased the Government and Opposition have reached an agreement on implementing ChAFTA. This free trade deal is vital for the future of 23 million Australians,” say AMMA chief executive Steve Knott.

“The ChAFTA will come into force at a time when Australia’s resource industry must up the ante on its international competitiveness and grasp opportunities that would otherwise go to emerging resource destinations.

“As the global resource marketplace becomes even more competitive, this deal will bring the Australian and Chinese economies closer together, resulting in greater investment, growth and job opportunities for Australians.

“Tangible benefits will be felt through the abolishing and phasing out of tariffs on resource commodities vital to building our economy over the coming decades, including coal, liquefied natural gas, iron ore and gold.

“Securing preferred trading status with our largest trading partner, a country that represents 32% of all global GDP growth and about 30% of global capital expenditures, is good for resource exporters and also for Australia’s world-leading resource technologies and service providers.”

Once ratified, the ChAFTA will mark the third deal secured by the Australian Government with a significant Asian trading nation over the past 12 months, and follows the Trans Pacific Partnership recently reached with 11 other countries.

“We congratulate trade minister Andrew Robb for his leadership in achieving the trifecta for free trade with Australia's key partners in Japan, South Korea and now China,” Mr Knott says.

“Coupled with the Trans Pacific Partnership, these exciting arrangements will open new doors for Australia's economic growth and drive our national prosperity into the future.”

www.amma.org.au

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Government response on LRBA welcomed: IPA

THE Institute of Public Accountants (IPA) has welcomed the Government’s rejection of the Financial System Inquiry (FSI) proposal to reinstate the banning of limited recourse borrowing arrangements (LRBA) within an SMSF.

“The IPA has advocated that rather than a ban on LRBAs, there should be more targeted measures to address inappropriate use of gearing linked to poor quality advice,” said IPA chief executive officer, Andrew Conway.

"The IPA believes that the issue is not SMSF borrowing per se, but inappropriate advice provided by unlicensed advisers.

“A sledgehammer approach was never going to be an appropriate way to eliminate the use of poor quality advice relating to SMSF related gearing.

“We agree with the Government’s observation that while some anecdotal concerns over LRBAs exist, there is insufficient data to justify a ban.

“We need better analysis of ways to address the risks surrounding borrowing before merely imposing an outright ban.

“Interestingly, there are also no alternative measures other than an outright ban to mitigate some of the concerns raised.  For example, if they are worried about the diversification, why not consider excluding LRBAs for funds with small balances.

“We welcome the Government’s common-sense approach to this measure,” said Mr Conway.

www.publicaccountants.org.au

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