Last night’s Federal Budget comes at a critical juncture for the nation.
Along with significant cost of living pressures, the Budget was delivered amidst a tricky geopolitical backdrop, tough economic conditions, a skills deficit and pressing climate change challenges.
All are profound issues, and all intersect with the engineering profession.
Engineers Australia was in Canberra for Budget night, and we will meet with senior members of Government this week – advocating for the profession on skills, STEM, climate and the circular economy.
Engineers Australia CEO Romilly Madew AO says the Australian Government is increasingly recognising that engineers will be at the forefront of delivering on the nation’s key reform opportunities.
This is reflected in the number of new initiatives to address skilled workforce shortages and increase STEM capability.
“The defence, economic and climate challenges facing the nation and outlined by the Treasurer will require an engineering workforce equipped with the skills to deliver the right outcomes.
“This includes for AUKUS, Australian manufacturing and shoring up sovereign capability, rewiring Australia, the national energy transition, net zero emissions targets and delivering on infrastructure projects.
“Engineers Australia looks forward to the opportunity to work closely with the Government in securing a pipeline of engineers to ensure we are ready for these global challenges.”
The Budget outlined an additional $3.7 billion investment in skills, for a five-year national skills agreement to be negotiated with the states and territories helping to reform the vocational education sector as part of the longer-term plan to address the country’s skills shortages.
Ms Madew welcomed the further $9.3 million to help attract, train and retain teachers, in addition to the $328 million committed to in the October Budget, to address teacher shortages.
“We know the domestic supply of engineers is hindered by the performance of Australia’s early and secondary education system. We are in a situation where under-resourcing has meant teachers are teaching outside their field of expertise, including in areas such as mathematics, science and technology.’
The Government also announced that it would extend the Women in STEM Cadetships and Advanced Apprenticeships Program for two years to 30 June 2027, to provide new and existing participants more time to complete their science, technology, engineering and maths qualification while simultaneously continuing their careers.
Identifying avenues for increasing female participation in engineering remains a key focus for Engineers Australia and we welcome funding to support this.
Changes to cut red tape and ease migration pressures to increase the numbers of skilled migrant engineers arriving in Australia are also a positive step to addressing our engineering skills shortfall.
The Government has committed $125.8 million over four years to implement recommendations from the Jobs and Skills Summit to strengthen the migration system and ease critical skills shortages across the economy.
This includes $75.8 million over two years from 2023–24 to improve visa processing and $50 million over four years from 2023–24 for additional enforcement and compliance activities.
A further $163.2 million over two years was allocated to the Department of Home Affairs to boost its visa processing capabilities.
Acknowledging that work is already underway to develop a Migration Strategy, the Budget contained additional funding to boost skilled migration and expand pathways to permanent residence for temporary skilled sponsored (TSS) workers.
Restrictions will be removed to enable TSS visa holders on the short-term stream access to permanent residence pathways through the Employer Nomination Scheme (subclass 186) visa.
Temporary Graduate visa holders with select degrees will receive an extra two years of post-study work rights to improve the pipeline of skilled labour in key sectors.
The Government is re-scoping two skills assessment pilot programs to provide onshore migrants with fast-tracked skills assessments, free employability assessments, and access to further training to improve their employment prospects.
An improved delivery model for the Adult Migrant English Program will be introduced from 1 January 2025 within existing funding to improve English language, employment, and settlement outcomes for migrants. This will address some of the challenges highlighted by Engineers Australia in our research into barriers to employment for migrant engineers.
Analysis of vacancy data shows over the past two years, engineering vacancies have grown by 80 per cent nationally, compared to only 42 per cent for all average Australian occupation vacancies. Engineering skills are in high demand and will continue to be.
Engineers Australia supports the Budget initiative to legislate a national Net Zero Authority.
Supporting workers to access training and supporting regional development are critical for an equitable transition to a clean energy economy.
To remain viable, the energy system must primarily exist for the well-being of Australians and put people at the centre of decision-making processes. The Authority’s work will also help to maintain the social licence needed to achieve the energy transition.
The clean energy sector is experiencing rapid growth and is projected to accelerate. With a shortage of engineers and growing demand, it will be important to retain existing engineers. Given the high skill base of the fossil fuel workforce, mapping their training needs will promote fair access to opportunities that arise from the transition, and play a role in addressing skill shortages. Some research indicates that 80 per cent of the tasks needed in a clean energy economy are already being performed. Some occupations may just require on-the job-training or short courses.
Given the growing complexity and massive scale of the energy transition, initiatives that help manage an orderly transition are needed. The Net Zero Authority is a crucial element for success.
Ms Madew said plans for the Authority to work across government, regional bodies, unions, industry, investors and First Nations groups to help manage the transition is important and engineers must have a seat at the table.
“Government should support re-training/up-skilling for those working in fossil fuel-based industries as part of an equitable transition and to fill skills gaps,” Ms Madew said.
The Budget outlined additional funding from the $1.9 billion Powering the Regions Fund to support existing industry – including rail and aviation – and new clean energy industries, with the creation of a $400 million Industrial Transformation Stream.
It contains measures to help reduce the effect of increased energy bills on consumers, including relief in the form of credits to eligible people on income support, pensions, recipients of the family tax benefit and to small businesses.
Energy is vital for the economic prosperity and wellbeing of Australians. It supports every aspect of our lives. The energy transition represents a critical pathway to invest in economic growth and tackle electricity prices.
Engineers Australia supports the Government’s investment in building a better future through targeted infrastructure of national significance.
The Government announced a refocusing on infrastructure investment priorities. This includes the independent strategic review of its $120 billion infrastructure pipeline.
A further $200 million will be provided for the development of major project business cases.
Ms Madew says a review of the infrastructure pipeline will provide an opportunity to target investment to ensure best value for money is achieved. Additional investment to develop robust business cases for strategically significant projects is critical to enhance productivity in the infrastructure sector.
A $1.8 billion investment over 10 years will be made to support productivity and jobs, including $1.1 billion to continue existing road maintenance and safety programs.
Other funding outlined:
- A further $13.5 million is being provided to improve aviation safety. This will be used to upgrade remote airstrips to improve the amenity of remote and regional communities.
- $3.4 billion over 10 years for investment in the Brisbane 2032 Olympic and Paralympic games venue infrastructure.
- $159.7 million for the urban Precincts and Partnerships Program. This program will help transform cities and suburbs.
- The $211.7 million Thriving Suburbs Program which will provide investment in community and economic infrastructure to enhance liveability and prosperity in suburban communities.
- $150 million to improve water security for regional and remote First Nations communities through the National Water Grid Fund.
- $45 million investment to repair and protect culturally and environmentally significant sites in Sydney Harbour.
The transport sector will receive $7.8 million to develop a Transport and Infrastructure Net Zero Roadmap and Action Plan. This plan will help to reduce emissions across the transport sector.
National critical priorities
It was great to see the Government invest in Australia’s manufacturing capability. The National Reconstruction Fund is designed to build on our industrial capability, with a focus on seven priority areas:
- renewables and low emissions technologies
- medical science
- value-add in the agriculture, forestry and fisheries sectors
- value-add in resources
- defence capability
- enabling capabilities.
“Australia remains an underperformer when it comes to our ability to commercialise engineering innovation,” Ms Madew said.
“This level of investment, which is considered to be the largest investment in manufacturing in Australian history, is exactly what we need to start capitalising on our strengths.”
$392.4 million is being invested in the new Industry Growth Program, supporting Australian small, medium enterprises and startups to commercialise their ideas and grow.
Additional investment is also being made in strategic industries:
- $3.4 billion funding over the next decade to establish the Advanced Strategic Capabilities Accelerator, transforming Australia’s defence innovation ecosystem to urgently deliver advanced technologies for Australia national security.
- $101.2 million to support the growth of critical technologies, including quantum and artificial intelligence (AI) technologies.
Many manufacturing businesses in Australia are small to medium enterprises. To support these businesses further, the Budget provides $23.4 million to support small business build resilience to cyber threats.
As always, Defence was a cornerstone of the Federal Budget with several key initiatives announced as part of the preparedness for AUKUS.
Pleasingly, it was great to see investment in the skillsets that will be required to ensure AUKUS is implemented correctly. This includes $127.3 million over four years to fund 4000 additional university or higher education places for courses that support the skills requirement of nuclear-powered submarines, with a focus on STEM and management skills.
There was also $4.2 billion set aside over 10 years for the establishment of the Australian Submarine Agency, $3.4 billion over 10 years to establish the Advanced Strategic Capabilities Accelerator and $7.9 million for the establishment of the Australian Nuclear-Powered Submarine Safety Regulator.
As Engineers Australia continues to advocate, the engineering voice needs to be engaged early and often to enable the successful delivery of Australia’s nuclear-powered submarine program.
Image: CEO Romilly Madew AM and Group Executive, Policy and Public Affairs Damian Ogden in front of Parliament House, Canberra.