State of the Nation Highlights

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Economy

Michaelia Cash: recovering from the greatest economic challenge since The Great Depression

Federal Minister for Employment, Skills, Small and Family Business, Senator the Hon. Michaelia Cash told a CEDA livestream that the crisis precipitated by COVID-19 is “the greatest economic challenge that we have effectively faced since the Great Depression.”

Ms Cash was joined by Hudson Managing Director and Chief Executive Officer, Mark Steyn; Deloitte Chief Transformation Officer, Robert Hillard; and Seek Managing Director Strategy, Product & AI, Asia Pacific & Americas, Simon Lusted, to discuss the topic of ‘rebuilding Australia’s workforce’.

Ms Cash began by outlining the government’s current policy priorities.

“The first is to fight the virus. You won’t get any arguments in relation to that. The second is to deliver the economic lifeline that Australians need to get through COVID-19. Thirdly, to re-open our society and our economy with a very clear road ahead and to continue to build the confidence and the momentum in our economy. And of course, ultimately to reset, and to help grow the economy for the years ahead,” she said.

Ms Cash praised Australians for their resilience in the face of the “twin crises in health and economics.”

“While sadly as of today 104 Australians have lost their lives due to COVID-19, thankfully the actions that we took as a country have limited the loss of life in Australia,” she said.

“In terms of where we have been, from the government’s perspective Australians have shown absolute resilience in the face of the twin crises in health and economics.”

Ms Cash then turned to discuss the damage that COVID-19 has wrought in her own portfolio of employment.

“COVID-19 has radically affected the Australian labour market and of course has come at a significant economic cost. We have seen an unprecedented fall in employment, a dramatic drop in the number of hours worked, an increase in underemployment and a record number of people leaving the labour force,” she said.

“From my perspective as the Employment Minister, every job that is lost is devastating, but what it highlights is that real need to open up our economy in a COVID safe manner.

She said now that we have effectively flattened the curve, “the government has a very clear job: get one million Australians back in to work. That is the curve that we are now addressing and it is certainly one that we need to address collectively with industry.”

“In particular, we want Australians who are not working to transition quickly to upskilling and employment opportunities and employers an industry need to be able to quickly and easily access the skilled workers they need,” she said.

“In terms of our emergence from the COVID-19 crisis, skills and industrial relations reform, infrastructure investment, and deregulation will play a critical role in returning Australians to work and returning Australia’s economy to growth.”

Ms Cash concluded by discussing the “disproportionate impact of COVID-19 on certain groups.”

“We all know that certain groups already experience disadvantage and are therefore disproportionately affected by economic downturns and shocks,” she said.

"COVID-19 is having a particularly acute impact on young people, mature age jobseekers and women. Our experience recovering from the Global Financial Crisis highlights the need to actively engage all jobseekers to maintain their skills, help them remain connected to the labour market and ensure that people are ready for work as employment opportunities improve,” she said.

 

Using the Global Financial Crisis as a point of comparison, Hudson Managing Director and Chief Executive Officer, Mark Steyn, offered his perspective on why the COVID-19 crisis was particularly devastating for the labour market.

“The GFC was primarily a demand shock…in relation to the workforce we think the COVID-19 impacts we are seeing will cause structural shifts in workforces around the world that we did not see post the GFC,” he said.

“Secondly, we are absorbing the shock from a less than robust base because companies and households are still recovering from the GFC, with persistent underemployment, job insecurity, rising wealth inequality and stagnant household consumption since the GFC.

“My question and challenge to all of us is: what are we doing to help the impacted individuals through this upheaval? What are we doing to help jobseekers navigate these unplanned transitions and accelerate their re-employment? Getting people back to work with speed is essential for economic recovery and to avoid creating more long-term structural unemployment.”

Deloitte Chief Transformation Officer, Robert Hillard, also discussed the disproportionate affects of the COVID crisis and said that it should inform our recovery policy.

“If we’ve lost a large amount of jobs that are particularly weighted towards disadvantaged groups, we have to be careful that the infrastructure we create doesn’t create jobs for a different group. If we are talking about physical infrastructure, we can often have a disproportionate creation of jobs for male workers and leave behind a lot of female and mature age workers we need to focus on,” he said.

“We also need to make sure that we are creating the jobs that are going to create the Australia that we want in the future. So in addition to thinking about infrastructure, we think it is particularly important to think about digital infrastructure, to have the courage for us to take on some of the most complex and challenging and frankly scary projects that will be important for our nation’s future.

“When we talk about digital its easy to think about the connectivity that we all depend on but that’s just the tip of the iceberg. Digital health infrastructure that closes the last mile between the clinician and the patient is a good example.

“Digital education infrastructure would enable us to lock in so many learnings from this period of transformation – bringing the best educators to students to give them the best experience they can have and create a hybrid environment.”

Mr Hillard also spoke about how COVID-19 will affect the future of work.

“We have developed digital muscles over the last three months that we didn’t know we had. We have got the ability to create that distributed life that so many governments have wanted us to have to take the pressure of our big cities and enable regional centres to create collaboration hubs. The challenge here is still to ensure that new jobs we are creating are distributed across the country.”