Australian Government, 2009‑10 Budget


Jobs, Productivity and Fairness — A Foundation for Recovery

The Rudd Government was elected with a plan to increase Australia's productivity and make it a stronger and fairer nation by delivering:

  • the Education Revolution to give Australian children the best possible start in life, to drive equity and excellence in schools across Australia, to match education and training to people's ambitions and to give Australians access to a world class tertiary education and research system
  • a better system of matching people, skills and jobs, and
  • fair and productive workplaces.

Each of these elements of the Rudd Government's election plan is focussed on jobs today and jobs tomorrow.

To build a better Australia today, the Rudd Government promised to deliver skills and training, better job matching services and a renewed focus on fairness at work. Together, these policies will support Australians to find jobs, get the training needed for higher skilled jobs and develop workplace arrangements to drive fairness and productivity at work.

The Rudd Government also promised Australians that it would put in place the long term reforms necessary to ensure that the Australia of tomorrow is higher skilled, more inclusive and a winner in the global competition for jobs, investment, productivity and prosperity.

The biggest reform necessary to achieve this vision of Australia's future is the Rudd Government's Education Revolution, a set of linked education policy changes.

Higher educated individuals earn more, are less likely to be unemployed and enjoy better health.

The most recent Australian Bureau of Statistics (ABS) data (Education and Training Experience, Australia, 2005) suggests that there is a benefit to individuals in full time employment of about $100 per week for each extra year of education beyond compulsory schooling.

Those with post school qualifications are also able to work around seven years longer and have higher labour force participation throughout their working life. They enjoy better health and are one third less likely to be obese.

Lifting educational outcomes not only improves the quality of life for individuals but has a positive effect on the broader community and national economy.

Nations with better educated citizens are wealthier nations. The Organisation for Economic Co‑operation and Development (OECD) Growth Project has shown that an increase in the average number of years of education in the adult population by one year has a long term effect on GDP per capita of 3 to 6 per cent because individuals with higher levels of education have higher productivity, are far more likely to participate in the labour force, experience lower levels of unemployment and are less affected by economic downturns (see Chart 1).

Chart 1: Unemployment rates by education attainment, 1980—20081, original data

Chart 1: Unemployment rates by education attainment, 1980—2008       Chart derived using 'school level and highest non-school qualification' data (except for 2001 and 2002 where Highest Education Attainment was used). 'Degrees or higher' refers to attained Bachelor Degree or above; 'VET' refers to Certificate I/II/III/IV/ Advanced Diploma / Diploma / Certificate not further defined; 'Year 12' refers to Year 12 without non-school qualifications and Year 12 with level not determined; and 'Less than Year 12' refers to Year 11 or below without non-school qualifications and Year 11 or below with level not determined., original data`

Source: ABS Education and Work, Cat no. 6227.0, various years.

The Rudd Government's first Budget in May 2008 delivered on our election promises and made substantial progress towards realising our vision for a stronger, fairer and more productive society. It set out a clear agenda for creating the Education Revolution for the jobs of today and the jobs of tomorrow.

Last year, like the rest of the world, Australia began to experience the effects of the global economic downturn caused by the global financial crisis. This crisis began in the United States and quickly spread throughout the world's financial systems.

As a result of the global financial crisis and global recession the economic context has changed radically. The Rudd Government's key focus on the Education Revolution and jobs is now more important than ever as it provides the means to respond rapidly to the worst effects of the global recession and position Australia for the future.

While Australia is better placed than most to weather the global economic storm, the global recession is already having a significant impact on the Australian labour market. Unemployment is rising across the globe and employment growth has stalled at home.

Eight out of Australia's top 10 trading partners are expected to contract in 2009.

The International Monetary Fund (IMF) and the World Bank have recently downgraded the global economic outlook dramatically and Australia is clearly not immune.

The OECD is now forecasting unemployment across advanced economies will increase by around 25 million by the end of 2010.

The US economy shed 663 000 non‑farm jobs in March 2009 and the unemployment rate has increased to 8.5 per cent, the highest in more than 25 years. Around 5 million jobs have been lost over the past 12 months.

The Rudd Government has been upfront with the Australian people about the impacts of the global recession on employment.

According to the ABS seasonally adjusted measures, there were over 614 000 unemployed people in April 2009 and the unemployment rate has risen from a low of 3.9 per cent in February 2008 to 5.4 per cent in April 2009.

Chart 2: Unemployment Rate, 1979—2009

Chart 2: Unemployment Rate, 1979—2009

Source: ABS, Labour Force, Australia, Spreadsheets ( 6202.0.55.001).

This rise in unemployment is reflected in an increase in the number of people receiving unemployment benefits. The number of people on Newstart Allowance and Youth Allowance (other) increased from 505 000 in March 2008 to 593 000 in March 2009.

The Rudd Government knows that jobs, skills and education are at the heart of any effective response to the economic downturn. The Rudd Government also understands the human impact of unemployment and that is why we are acting to reduce the burden on the individuals, families and communities hardest hit by the global recession.

The Rudd Government's response to the global recession was quick. To support working families and jobs the Rudd Government acted decisively to introduce the most significant economic stimulus packages Australia has ever seen.

In October 2008 the Government announced a $10.4 billion Economic Security Strategy to stimulate the economy and support jobs. This strategy added to the Rudd Government's Education Revolution policies by committing $187 million to create 56 000 extra training places in 2008—09.

In past economic downturns too little had been done to build a skills base for the future so that when the economy began to grow the absence of skilled labour became a capacity constraint on growth. The Rudd Government is directly investing in training places and the skills base during this global recession to help ensure that when the economy recovers the nation has a skilled workforce ready to fill the job vacancies.

Even in the midst of tackling the consequences of the global recession and acting to cushion Australians from its full impact, the Rudd Government continues to focus on the Education Revolution and the jobs of tomorrow.

In November the Education Revolution reforms in the May 2008 Budget were built on through the Council of Australian Governments (COAG). At COAG the Rudd Government and states and territories developed a COAG productivity agenda and agreed to new Education Revolution reforms, totalling around $3.5 billion over five years from 2008—09. These included National Agreements in education and skills which are delivering a new era of transparency, new resources and a new approach of genuine partnership with states and territories, schools and training providers. In addition, major new Education Revolution reforms were agreed in interlinked National Partnerships in early childhood education, schooling in low socio‑economic communities, teacher quality, literacy and numeracy and skills and workforce development, as well as the Schools Assistance Act 2008.

In the May 2008 Budget, the Rudd Government had started to address the neglect of tertiary education infrastructure through the $500 million Better Universities Renewal Fund.

In December 2008 the Rudd Government announced a $4.7 billion Nation Building package. In acting decisively to stimulate the economy and support jobs the Rudd Government determined that important new investments should be made in the Education Revolution, the jobs of tomorrow and the future productivity of the nation.

A central part of the December stimulus package was an investment of almost $1.6 billion investment in university, Technical and Further Education (TAFE) and adult and community education infrastructure.

This investment is delivering $1 billion to rebuild teaching and learning spaces at universities and TAFEs, as well as minor capital and repairs to infrastructure for the adult and community education sector. In addition, $580 million was allocated to fund 11 major teaching and research infrastructure projects at Australian universities through the Education Investment Fund (EIF).

In February 2009, in its $42 billion Nation Building and Jobs Plan, the Rudd Government provided further vitally needed economic stimulus to support jobs today while ensuring the resulting infrastructure would support the Education Revolution, the jobs of tomorrow and the future productivity of the nation.

The core of the Nation Building and Jobs Plan is the biggest single school modernisation program ever introduced for Australian schools. The $14.7 billion program is providing better facilities in every school in Australia as part of the Education Revolution.

Building the Education Revolution has commenced and will:

  • build or upgrade large‑scale infrastructure, such as libraries and multipurpose halls, in every primary school, special school, and K‑12 school in Australia
  • build around 500 new science laboratories and language learning centres in high schools with a demonstrated need for upgraded facilities, and
  • provide up to $200 000 to every Australian school for maintenance and renewal of school buildings and minor building works.

The Rudd Government is determined to deliver both the Education Revolution in the classroom through major policy reforms—in the areas of transparency and reporting, quality teaching, additional support for disadvantaged school communities, literacy and numeracy and the development of a national curriculum—and build the Education Revolution through the $14.7 billion Building the Education Revolution plan, the $2.5 billion Trades Training Centres plan and the $2 billion Digital Education Revolution.

This Budget consolidates and builds on the immediate stimulus measures already taken. This Budget also continues the Education Revolution with a particular focus on the future of higher education and research.

This Budget also consolidates and builds on the new support the Rudd Government has made available to people who are looking for work. Those who are retrenched will no longer need to wait before receiving help to get them back into work or into meaningful retraining. The Rudd Government recognises that particular regions and groups within the workforce are always vulnerable during economic downturns. This Budget includes a range of measures to better support the most vulnerable including economically disadvantaged regions and groups such as employees at risk, retrenched employees, Indigenous Australians and young people.

All these measures reflect not only the core values of this Government, but also a well‑developed economic strategy designed to help ensure that economic recovery does not result in particular regions or groups being left behind. The Rudd Government's plans and actions are designed to ensure that Australia does not again face capacity and skills constraints in some regions while in others, the long‑term unemployed languish on welfare or outside the labour force.

In this Budget the Rudd Government is taking further steps to resource a Jobs and Training Compact which includes employees, young people and communities feeling the impact of the economic downturn. This will require a new way of working by Government, which means having confidence in the strengths and strategies of local communities. It will mean lending a hand to Australians who need help during the global recession.

Australia's future will be based on a skilled workforce, communities that thrive, and families with the security and confidence to develop their own future. Australia's future cannot be assured if we allow any group or region to be left behind.

This Ministerial Statement explains how the Rudd Government's plan has been implemented, not just in the 2009—10 Budget but over the past 12 months since the last Budget. The chapters that follow outline both the initiatives delivered over the last 12 months and measures funded in the 2009—10 Budget.

The chapters relate to three groups at the centre of Government thinking in relation to both the task of economic recovery and the Rudd Government's core agenda of jobs, productivity and fairness:

1. Employees at risk and retrenched employees

2. Children and young people

3. Local communities

The final chapter details the Rudd Government's response to the Bradley Review and its major reform plans for the future of higher education and research. Investing in tertiary education and research is a key part of the Government's Education Revolution and productivity reform agenda and is imperative to prepare for the jobs of the future.

The May 2009 Budget builds on the work of the Rudd Government to date to support Australians and Australian jobs today during the global recession while investing in the jobs and Australia of tomorrow.


The Honourable Julia Gillard MP
Deputy Prime Minister
Minister for Education
Minister for Employment and Workplace Relations
Minister for Social Inclusion

12 May 2009

1 Chart derived using 'school level and highest non-school qualification' data (except for 2001 and 2002 where Highest Education Attainment was used). 'Degrees or higher' refers to attained Bachelor Degree or above; 'VET' refers to Certificate I/II/III/IV/ Advanced Diploma / Diploma / Certificate not further defined; 'Year 12' refers to Year 12 without non-school qualifications and Year 12 with level not determined; and 'Less than Year 12' refers to Year 11 or below without non-school qualifications and Year 11 or below with level not determined.

If responds slowly or you are having trouble downloading a document, try one of the Budget Website Mirrors

Note: Where possible, Budget documents are available in HTML and for downloading in Portable Document Format(PDF). If you require further information on any of the tables or charts on this website, please contact The Treasury.