Last night Josh Frydenberg handed down the 22/23 Federal budget. The rumour mill had been spinning with sneak peaks being dropped daily in the lead up. Businesses big and small would each be affected by the outcome and many industry leaders came forward with their take on what was announced. We wanted to touch on exactly what the budget means for the hiring market as well as what our experts, here at Talent, had to say about it.
The Cyber security boost
Last night, Josh Frydenberg penned $9.9 billion investment in the next decade for new national cyber and intelligence capabilities. The project - Resilience, Effects, Defence, Space, Intelligence, Cyber and Enablers (REDSPICE) - is the largest investment in the cyber capabilities of the Australian Signals Directorate (ASD).
“REDSPICE will substantially increase ASD’s offensive cyber capabilities, its ability to detect and respond to cyber-attacks and introduce new intelligence capabilities,” Minister for Defence Peter Dutton said.
The good and bad news if you are working in tech. This investment will create more than 1,900 new jobs across data analysts, computer programmers, and software engineers, almost doubling ASD’s current size. However, given the rigorous security clearances that candidates need to go through in order to secure these roles in the first place, it may take years to place them as well as the Government needing to poach from its own talent pool.
Anthony Whyte, Talent South Australia Managing Director commented. “I was excited to hear Josh Frydenberg’s announcement regarding REDSPICE on two fronts.Firstly, the significant investment of almost $10b will create close to two thousand specialised tech jobs in Cyber Security. Secondly, the realisation that Australia is constantly on Cyber Security watch and is at risk of a massive breach to which the Federal Government is now prepared to invest in.”
Employee Share Schemes
There had been a few sneak peaks in the lead up to this topic however following last night, the employee share scheme reform is one of the most significant in our nation’s history. If options or shares qualify for the employee share scheme start-up tax concessions, they are not taxed on grant, vesting or exercise. Instead, employees are taxed only when they sell the shares, and any gains will usually qualify for the 50% capital gains tax discount.
Why should we care? Well, this is going to significantly impact Australian start-ups. Australian start-ups have been operating under a regulatory straitjacket, unable to offer meaningful equity incentives to anyone other than investors, senior managers and a small number of other participants. Now, start-ups will be able to offer meaningful equity incentives to all employees, putting us on par with countries such as Britain and the United States. This means employees at all levels will be able to obtain an unlimited number of shares with unlimited underlying value, if certain safeguards are met.
The changes will also indirectly force Australia’s largest listed tech companies to reimagine their employee share schemes as the battle for tech candidates continue.
Something we can all enjoy; the Government have announced a $480 million spend to increase regional internet speeds in thus allowing more customers to access the NBN’s fixed wireless service. The NBN will spend an additional $270 million on the planned upgrade.
Matthew Munson, Talent NSW Managing Director commented. “100mbs speeds for the internet and stable mobile connections for rural Australia was promised as a key pillar of the NBN back in 2009. If the original plans had been rolled out, we would now have one of the best internet infrastructures in the World. Instead, office workers all struggled working from home with unreliable connections during the lockdowns. A $480 million investment is welcome but is long overdue. The project has already cost in the region of $60 billion over 12 years, so this amount is in line with normal expenditure.”
Rising wages and inflation
The Government is predicting the unemployment rate will drop to 3.75 per cent by the September quarter this year, which would mean an additional 1.2 million Australians in jobs, and around 770,000 off welfare payments. If that happens, it will be the first time in half a century.
Opposition Leader Anthony Albanese slammed the plan, saying the data shows the jobs Australians are taking are not sustainable. “The reality out there is that there are almost 2 million Australians who want more work,” Albanese said in Canberra yesterday morning. “What we see is growth in the gig economy, a growth of casualisation, the growth of contracting out and labour-hire companies.What we don't see is a growth in secure work, a growth in the sort of jobs where people can get a mortgage, where people can plan to have a family. That's the problem with the pressures that are on the Budget.”
Talent NSW Managing Director, Matthew Munson, commented on the unemployment rate. “The popularity of low unemployment is ubiquitous, however creating jobs does nothing to assist with an already strained market due to skills shortages. Australia has seen a brain drain over the last 2 years as ex-pats returned home. The only gestures we have seen is to potentially offer permanent residency to some short-term visa holders, the ability to reclaim working holiday visa costs and reassigning 10,000 partner visas to skilled migrants. If the country wants to stay competitive, attract overseas investment, encourage startups to stay based here and to attract the brightest and the best, much more needs to be done. 20 years ago, we had LAFHA which incentivised highly skilled labour to make the move to Australia. Since then, anti-immigration has become in vogue, that needs to change.”
It's time to welcome people back into Australia
We have all seen the effects of borders closing over the last few years. The candidate shortage is problematic for most businesses, especially in tech. Last night the Government has relaxed certain work restrictions for a variety of visas including eligible Working Holiday Maker (WHM) visa holders.
The government has also announced an incentive for these visa holders to bring forward their arrival into Australia by refunding the Visa Application Charge. The Government will also increase country caps for Work and Holiday visas by 30% in 2022/23, increasing overall places available by around 11,000.
This is a good push in the right direction for increasing skilled candidates through our doors.
Robert Ning, Talent ACT Managing Director observed the announcements. “The budget announcement last night had some solid wins for the tech industry, however the demand and need for more skilled workers to enter Australia remains high. We are not seeing the volume required to cater to the pressures created by the ongoing skills shortage in the tech sector. The cyber security boost is a positive announcement, however there is an ongoing challenge in sourcing these candidates given the high-level security clearances that are required to work at security focused government departments. Individuals without these clearances can take years to have their application processed. Circling it back to our candidate-short market, there will be huge amounts of pressure put on hiring managers for these jobs and my prediction is that headhunting for these roles will take a front seat as well as facing ongoing pressure on salary expectations.”
There were some great wins for the tech industry in last night’s budget. Candidates are in high demand so with an upcoming election, it will be very interesting to see how this budget will perform.