Contents1 Executive Summary 42 Introduction 6 2. 1 Purpose of Synthesis report 6 2. 2 Structure of this report 63 Context 7 3
Thirdly, the framework has been guidance to the different work packages and structuring the relation between the work packages.
The IPF has been organised in six work packages, each headed by one of the consortium members.
VINNOVA has managed coordinated and the project. Five of these work packages have focused on identifying and developing better practices to support SMES (the WP2,
WP3 and WP5), or to identify and develop better practices that will improve the effectiveness of designing,
methods and common tasks where the main results have been the common framework, the segmentation method, the meeting formats and synthesis of work package results.
1 Executive Summary 1) The proposal submitted by the consortium is denoted INNO-Partnering Forum, or in short IPF in the Synthesis Report IMPROVING INNOVATION SUPPORT TO SMES5 such as the creation of a council.
but that business coaching, training, recruitment support etc. is equally important. Moreover, agencies should evaluate companies'entire business prospects rather than individual projects,
and to provide recommendations for future work. It presents: -IPF as a learning platform that facilitates collaboration and learning among organisations providing innovation support services to SMES.
presenting the background, purpose, the common framework of the project and the organisation of the work.
In the appendices (only available in the web version please look at www. vinnova. se) there is a presentation of the methodological approach that has governed the work processes.
There are also more in depth presentations of the outcomes of the different work packages, with a description of experiences from the processes and recommendations, both with regard to the tools in themselves and with regard to
It was proposed to initiate the twinning concept through an open call for expression of interest addressed to public innovation funding agencies indicating the specific scheme they wish to transfer. 4. Foster mutual learning by facilitating staff exchanges (optional) between public innovation funding agencies
and invited to participate in staff exchange programmes. This activity was carried however never out during the IPF. 5. Contribute to the development of new
Thirdly, the framework has served as guidance to the different work packages, structuring the relation between them.
Finally, the common framework has been a way to structure the relation between the work packages of the IPF and the organisation of the work.
5 WP 6 Work packages Identification and analysis of good practises of policy initiatives Service Delivery System Design Scheme Transferability study Design evaluation
The IPF has been organised in six work packages, each headed by one of the consortium members.
The work has been conducted with an approach to facilitate and maximise networking and exchange of experiences,
and contribute to the work and to incorporate positive group dynamics in to the processes. All groups have worked with the challenges listed in section 3. 2 and addressed these in different ways
as illustrated in Figure 1. Five of these work packages have focused on the identification and development of better practices to support SMES (the WP2, WP3 and WP5),
methods and common tasks where the main results have been the common framework, the segmentation method, the meeting formats and the synthesis of the results of the work package.
The common framework and the segmentation method are presented in the Appendices (chapters 5. 1 and 5. 7). The results of each of the other work packages with regards to the tool
and their findings about good practices are presented in the chapters 5. 2-5. 6. 1. Work package 1 has allocated responsibilities with regard to the management of the INNO Partnering Forum Council
and included the synthesis of the project results. 2. Work package 2 included peer reviews of European agencies
and to analyse good practises of measures with the purpose to support innovation in SMES. 3. Work package 3 included twinning,
4. Work package 4 included evaluating, testing and elaborating new quality management systems that have the purpose to improve efficiency
and effectiveness of innovation agencies and programmes. 5. Work package 5 included peer reviews of good practices at innovation agencies outside of Europe. 6. Work package 6 included improving
working actively in different work packages and also used IT-tools such as Linkedin (www. linkedin. com)
or work processes that guides users on how the language should be applied when analysing and transferring good practices between different policy contexts.
IPF has invited also experts from European innovation support agencies to participate in peer review panels and as hosts for peer reviews.
The work processes have also been positive in generating new networks and broadened the existing ones between the leading agencies, both formally and informally.
The lesson learned is that IT tools need active promotion and support at participants'sites,
and to attract reviewers/experts. The open calls were used also to get support schemes submitted.
This has mainly been used in Work package 2 focused on reviewing policy instruments, but also in Work package 5 and 6. A twinning method used to redesign good practices from one policy context to another policy context.
This tool has mainly been used in Work package 3, focused on transfer of good practices between policy contexts.
EFQM has been adopted to identify and assess good operational practices at innovation agencies, mainly used in Work package 4 on efficiency and effectiveness in agency operations.
Guidelines for design of service delivery systems mainly done in Work package 6 on service delivery systems.
The Conceptual Framework and the Segmentation method developed in Work package 1 can also be regarded as part of the IPFTOOL set.
With regards to the tools, the general experience is that all of them are appropriate and useful for agencies (for more extensive descriptions of the tools can be found in the Appendices (in the electronic verison) of this report) for learning
where the best results have been obtained in the work with identification and analysis of good practises.
and template driven process that works well. The questionnaires, templates and other documents that supports the peer review have been very useful,
The work package has established a model for the conduct of peer reviews. However, there are areas for improvement,
The work package has developed tools and guidelines so that other agencies can start implementing the EFQM model by themselves.
At the same time the experience of the work package is that it is beneficial to work with other agencies in the process
This requires a solid capital foundation to work from and such funds must be able to commit themselves to companies with a high growth potential.
recruitment support etc. is often more important Evaluate companies, their management IMPROVING INNOVATION SUPPORT TO SMES 16 and market context first
There is a need for SMES to work with innovation management and not only in R&d and product development.
like the Swedish regulatory changes that allowed employers to provide their employees with cheap PCS which in turn drove demand of broadband and Internet services.
as well as connected with a potential risk (they are vulnerable to loss of staff and knowledge and quality is often based on the quality of individual advisers).
However, personal meetings are valued highly by their clients. It seems that human interfaces may be the most efficient way of delivering innovation support in the following circumstances when:
but still need staff to update links and cooperate with other funding agencies. The codification of human knowledge into such an intelligent search system automates human skills and expertise,
leading to efficiency savings and increased consistency but a side effect is the loss of ability of the human expert to innovate
The unique aspect of the IPF is the profile, the membership and the access to leading experts.
which work packages to be involved in. In this approach external experts can be included when needed. However, the ones that apply for participating in projects need to be committed to these processes.
Furthermore when deciding which themes to explore this could either be decided by IPF, the Commission or through calls where applicants are provided with an initial period of time where they can decide which themes to explore.
Work with capacity building in less developed countries and regions. The remaining issues should be discussed
III Executive Summary...iv PART A: THE CASE FOR REFORM...1 Opportunities and challenges in the global economy...
A more skilled labour force...45 Ambition 3: Better economic infrastructure...61 Ambition 4: Industry policy that fosters innovation and entrepreneurship...
94 TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary iii Foreword Strengthening Australia's competitiveness is the key to our future prosperity.
This is just the start because job creation, growth and competitiveness need constant attention. The guiding principle of the Government's Industry Innovation and Competitiveness Agenda is to focus on Australia's strengths,
The Agenda has drawn on the insights of my Business Advisory Council and other experts. The Agenda sets out four ambitions that Australia must pursue:
2. a more skilled labour force; 3. better economic infrastructure; and 4. industry policy that fosters innovation and entrepreneurship.
The Hon Tony Abbott MP Prime minister of Australia TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness iv Industry Innovation and Competitiveness Agenda Executive Summary
Employment growth has been weak and the jobs created have tended to be funded in sectors directly or indirectly by government.
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary v The Government's economic vision The Government through its Economic Action Strategy is refocusing government, revitalising Australia
and workers equipped with the skills and incentives to adapt to changing economic conditions and able to seize new opportunities.
Entrepreneurship and a flourishing start-up community promote job creation and productivity growth. These types of businesses benefit the broader economy by testing new ideas,
entrepreneurship, investment and hard work is important to foster innovation in Australia. Likewise, much will be required of our workforce,
It is also why we are instituting a number of longer-term processes looking in detail at taxation, the Federation, the financial system, competition policy, workplace relations, energy, agriculture and the development of northern Australia, among other issues,
a more skilled labour force; better economic infrastructure; and industry policy that fosters innovation and entrepreneurship.
and Competitiveness Agenda Industry Competitiveness Executive Summary vii The reforms and proposals draw on advice from the Prime minister's Business Advisory Council;
trade, competition, employment and participation. As G20 president, Australia will show leadership in pursuing a new wave of economic reform.
Key Initiatives Encourage employee share ownership (Proposal 15, page 76) Establish Industry Growth Centres (Proposal 13, page 72) Reform the vocational education and training sector (Proposal 10,
returning our workplace relations system to the sensible centre; and helping parents stay in the workforce. 2 Labour force 3 infrastructure To meet our country's economic infrastructure needs for the 21st century,
the Government is increasing public investment and encouraging greater private investment in infrastructure, and improving infrastructure project selection, funding,
Business Environment TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary ix Ambition 1:
The Government will commission advice about the viability of expanding access to the Commonwealth workers'compensation scheme
The advice will consider methods of access for employers who favour one set of arrangements yet would prefer to pay premiums rather than self-insure.
allowing self-insuring national businesses to operate under one workers'compensation scheme right across Australia.
The Government will improve the tax treatment of Employee Share Schemes (more detail under Ambition 4). The Government will deliver a White paper on the Reform of Australia's Tax system,
and reducing taxpayers'compliance costs, including TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary xi by improving regulatory certainty,
improving incentives to work, including through the interaction of the tax and transfer systems; and improving incentives to save.
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary xiii Ambition 2: A MORE SKILLED LABOUR FORCE The Government is committed to increasing the skills of our workforce to better prepare for the jobs and industries of the future by:
improving Australia's education and training system; attracting the best and brightest to Australia; returning our workplace relations system to the sensible centre;
and helping parents stay in the workforce. Improving education and training system Business-relevant, high-quality education and training boosts innovation,
Refocused the delivery of apprenticeship support services on improving participation and completion rates with funding of $200 million per year.
Launched two pilot programmes (at a cost of $44 million) through the youth stream of the Industry Skills Fund to assist in the training and employment of young people in regional Australia and areas of identified higher
levels of youth unemployment or disengagement. TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness xiv Industry Innovation and Competitiveness Agenda Actions to come:
and Territories on system improvements, including a possible refocusing of VET in schools and school-based apprenticeships.
while maintaining protections to ensure that businesses do not bring in foreign workers where Australians are able to do the job.
Increased employer-sponsored visas to meet skill gaps where required skills are not available locally.
while improving programme integrity, to ensure that sponsored workers on 457 visas are a supplement to,
Consistent with the TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary xv recommendations of an Independent Integrity Review, the Government will reform sponsorship requirements;
Returning the workplace relations system to the sensible centre The workplace relations system has an important role in ensuring workers'rights,
and workers must be free to negotiate working arrangements that suit their personal ambitions and circumstances.
The Government is committed to returning our workplace relations system to the sensible centre. Actions already taken:
Introduced the Fair Work (Registered Organisations) Amendment Bill 2014 to establish a Registered Organisations Commission to better align the responsibilities of,
Introduced the Fair Work Amendment Bill 2014 to: apply good faith bargaining rules to negotiations for,
ensure that the scope for workers and employees to negotiate individual flexibility arrangements is limited not unduly;
reform rules governing union right of entry; and implement a number of recommendations from the 2012 Fair Work Review.
Actions to come: The Government will further amend the Fair Work laws to ensure protected industrial action cannot be taken
unless genuine and meaningful negotiations have occurred, and require productivity improvements to be discussed in enterprise agreement negotiations.
The Government will task the Productivity Commission to review Australia's workplace relations framework, including the Fair Work laws.
Any recommendations accepted by the Government will be taken to the next election. TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness xvi Industry Innovation and Competitiveness Agenda Boosting parents'participation in the workforce The Government aims to ease the labour cost pressures for employers
and the financial pressure for families when a woman takes time off work to have a child,
and to ensure that child care arrangements are affordable and appropriate. Actions already taken: Tasked the Productivity Commission to examine Childcare and Early childhood Learning.
The Government will expand the Paid Parental Leave scheme to provide eligible parents with 26 weeks of replacement wages (up to a maximum of $50, 000), plus superannuation,
to enable them to take time off work to care for their new child. TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary xvii Ambition 3:
BETTER ECONOMIC INFRASTRU CTURE To meet our country's economic infrastructure needs for 21st century,
and improve market access for goods and labour. This includes: $5 billion over five years toward the Asset Recycling Initiative,
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness Executive Summary xix Ambition 4: INDUSTRY POLICY THAT FOSTERS INNOV ATION AND ENTREPRENEURS HIP The Government is refocusing industry policy to drive innovation and entrepreneurship,
The Government, in consultation with industry, will establish Industry Growth Centres at a cost of $188. 5 million over four years to drive growth and job creation, initially for five promising industries.
The Government will improve the tax treatment of Employee Share Schemes from 1 july 2015, at a cost of $200 million over four years, with particular benefits for start-ups,
Barriers to foreign investment and skilled labour have also been reduced, allowing these to move to where the commercial returns
participate in global value chains and access imported business inputs, skilled labour and investor capital.
This means Australia will need to compete hard for sales of goods and services exports, for skilled labour, for investor capital and for a place in the world's global value chains.
as well as contracts to produce Weapon Pylons and Mission Kits for the MH-60r Romeo helicopter and weapon adapters for the F-35 Joint Strike Fighter project.
and there has also been strong growth in Australian investment overseas (Chart 5). Access to international capital, skilled workers,
and labour, including from offshore, into the resources sector. Economic reforms of the past allowed the economy to smoothly absorb the resources boom.
and accounting for more than three quarters of total employment (ABS, 2014b; 2014j). ) While typically associated with the retail trades,
with workers and businesses equipped with the skills and incentives to adapt to changing economic conditions,
allowing care and clinical staff to monitor and report on patient care with real time updates.
The company now has 175 staff in seven offices around the world. Mining companies have turned also to the innovative solutions of VR Space Pty Ltd to help safely plan,
control, operate and monitor complex and hazardous working environments. The company specialises in simulation and visualisation technology,
which allows miners to gain valuable insight and experience in the mines they work in.
2012). 4. Food processing to leverage off Australia's reputation for high quality produce The food and beverage processing sector accounts for around a quarter of manufacturing activity and employment,
as well as for skilled labour, for investor capital and for a place in the world's supply chains.
Education, training and labour market arrangements that provide a highly skilled and adaptable workforce with capabilities in line with business needs
minimise barriers to employment and redeployment, and keep unemployment levels low. Access to public and private infrastructure that facilitates the movement of people and goods,
and enables efficient communications and competitive energy costs. Risk-based regulation making and enforcement systems that target market failures and support relevant social, environmental or economic protections at the lowest cost.
and employment-generating business. The United kingdom has cut public sector net borrowing by a third between 2009-10 and 2012-13
5th for per capita GDP and has the 7th highest employment rate (OECD, 2014a; 2014d). ) Australia also ranks relatively well on the global indexes of competitiveness compiled by the World Economic Forum and the International Institute of Management Development (IMD.
The most recent WEF competitiveness study (2014b) pointed to restrictive labour regulations, inefficient government bureaucracy, tax rates and regulations,
Stronger market sector jobs growth despite increases in jobs in the resources and related sectors, employment outside the public related sectors of the economy has been weak (Box A3.
Weak private employment Australia's employment growth has been weak since the global financial crisis, particularly in the private sector.
Nationally, employment growth has averaged just 1. 4 per cent over the past six years, around three fifths of the rate of the previous 10 years.
employment has fallen actually (ABS, 2014j). Over half of the jobs created have been in public administration and safety, health care and social assistance,
-200 0200 400 600-2000 200 400 6002008 2010 2011 2013 Non-market*Market No. of employed persons('000) Chart 9:
Job creation in market and non market industries since the global financial crisis*'Non-market'comprises Public Administration and Safety, Education and Training,
The Government is also establishing Trade Support Loans to help increase completion rates among Australian apprentices in priority occupations,
To improve our workplace relations system the Government is amending the Fair Work Act 2009
and will reestablish the Australian Building and Construction Commission. To improve infrastructure, the Government is delivering an $11. 6 billion Infrastructure Growth Package,
and will focus on reforms in investment and infrastructure, trade, competition, employment and participation. As G20 president, we will show leadership in presenting a new wave of economic reforms.
or work practices before they spread more broadly through the economy. The competition that this elicits challenges incumbent firms to do better.
Less government activity will reduce The Reform Agenda TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness 23 competition with private businesses for labour, land and capital.
2. a more skilled labour force; 3. better economic infrastructure; and 4. industry policy that fosters innovation and entrepreneurship.
develop and embrace new technologies or work practices, and respond profitably to economic changes. Indeed, small businesses are ideal test beds for driving innovative ideas and processes,
productivity, employment and export penetration (ABS, 2014l; Palangkaraya et al, 2014. More generally, while there is a case for government to facilitate business coordination
The knowledge and experience of a founder and his or her staff particularly their management competency and technological proficiency, affects the growth of the firm.
and 85 per cent have fewer than five employees (Connolly et al, 2012). The need to keep up-to date with so many regulatory requirements is an additional burden for the local newsagent, drycleaner, baker and butcher,
different work health and safety laws also add to the complexity of operating a multi-jurisdiction business.
These covered an array of areas include general health and safety issues, mining, dangerous goods, electrical safety, transport workers, compensation, gas and others (Boral Ltd.
allowing self-insuring national businesses to operate under one workers'compensation scheme right across Australia rather than having to operate in up to eight different jurisdictional schemes;
Expand access to the Commonwealth workers'compensation scheme The Commonwealth Government has a rolling agenda of reforms to the Commonwealth workers'compensation system (Comcare.
The Safety, Rehabilitation and Compensation Amendment Bill 2014 was introduced into Parliament in March 2014 to broaden the types of organisations that can opt-in to the Comcare workers'compensation and work health and safety regime.
For employers operating in multiple Australian jurisdictions this means complying with just one set of rules for all of their operations.
As not all employers are able to cover risks themselves, an alternative may be to allow other private employers to access cover under the Commonwealth laws as premium payers rather than self-insurers.
The Government will commission advice about the viability of expanding access to the Comcare workers'compensation scheme
and work health and safety laws. The advice will consider methods of access for employers who favour one set of arrangements yet would prefer to pay premiums rather than self-insure.
This will enable employers to choose TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness The Reform Agenda:
Ambition 1 33 Reducing the burden of taxation The Government wants taxes that are lower, simpler and fairer.
For large companies, the reduction will offset the cost of the Government's Paid Parental Leave levy.
and should boost real wage growth and employment. The Government is committed to a simpler and more sustainable tax system.
improving incentives to work, including through the interaction of the tax and transfer systems; and improving incentives to save.
and removing the requirement for employers to re-offer choice to their employees when superannuation funds merge.
Improve taxation arrangements for Employee Share Schemes TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness The Reform Agenda:
Competition also gives workers a greater array of employment options. In a competitive jobs market
and excellence as well as improve employees'skills to retain good employees. Initiatives to increase international competition and improve market access In the 1980s, 1990s and early 2000s,
and contribute to growth, employment and transfer of new skills and technologies. To ensure that Australia is open for business,
and work with the States as necessary to reduce the cost of, and improve access to,
this means that the coastal shipping regulations are undermining the incomes and jobs of many onshore businesses and workers.
A more skilled labour force To make Australia more internationally competitive, the Government will increase the skill level of the Australian workforce by:
returning our workplace relations system to the sensible centre; and boosting the workforce participation of parents.
engages employers and workers in decisions about training provision, and maintains the quality and relevance of training.
While education is about more than just readying people for work, relevant skills acquisition must be a focus at all levels of the education and training system.
This is why the Government is committed to work with State and Territory governments and the sector to improve the whole education system from primary education to higher education
Effect of education on hourly wages(%)Average marginal increase (per cent) in hourly wages compared with education to year 11 or below.
fewer than one in three Australian researchers work in industry, which is half the OECD average and less than in the United states;
and a further $1. 4 billion per year in Commonwealth funding to support participation in apprenticeships
A survey of employers by the National Centre for Vocational education Research (2013b) indicated that satisfaction in the ability of the system to deliver job ready employees declined 6 percentage points, to 78 per cent, between 2011 and 2013.
flexibility and accessibility of training is needed to support the increasing geographic and occupational labour mobility required in the modern labour market.
With only around 50 per cent of apprentices completing their training, and particularly poor completion and employment outcomes for lower level qualifications, the system also needs to pay more attention to the needs of trainees and employers alike (NCVER, 2013a).
The Government is working with State governments and industry to improve the VET sector to ensure that subsidies provided through training providers are flexible,
address the needs of employers and lift completion rates. The COAG Industry and Skills Council has agreed on objectives for reform of the VET system,
The Government has established a taskforce to work with key stakeholders, including State governments, registered training organisations, industry groups and employers,
to develop a reform plan that creates a more agile and industry-focused VET system by:
and increasing flexibility for training providers to meet employer needs. As an initial step, the 2014-15 Budget provided $476 million to establish the Industry Skills Fund to support the training needs of small to medium enterprises not readily met by the national training system.
innovative work practices, new and emerging opportunities, opening export markets and emerging economies. Larger companies may apply to access the Fund,
The Government is also providing eligible apprentices with financial assistance of up to $20, 000 over the life of their apprenticeship, through the Trade Support Loans programme, for those undertaking qualifications leading to occupations listed in the Trade
Apprentices will be required to commence repaying the loans when their income exceeds a minimum repayment threshold ($53, 345 in 2014-15), consistent with the arrangements for university students under the Higher education Loan Programme.
Apprentices who successfully complete their training will receive a 20 per cent discount on the amount to be repaid.
Trialling a new, innovative pathway from education to work To help develop the next generation of Australian innovators and job-ready graduates,
-year associate degree to help young people successfully transition from education to work with the knowledge and capabilities
Workplace learning subjects including workplace visits, project-based learning and internships will be embedded in the curriculum and school timetabling.
employers will be involved actively in the design and delivery of the courses. Importantly students will have identified pathways to employment with the school's industry partners.
Students will be able to graduate with a Year 12 qualification, but will be supported actively to complete further study
or advanced diploma with opportunities for employment with the businesses involved in the programme. The Government will look to locate the programme in an area with access to industry but high youth unemployment.
Proposal 10: Improving the Vocational education and Training system As part of the Competitiveness Agenda, the Government is introducing the next wave of reforms for the VET sector.
A new model for apprenticeship support services The Government will implement new arrangements for delivering support to Australian apprentices and their employers from 1 july 2015.
The Australian Apprenticeship Support Network will provide a one-stop shop for employers looking to hire a new apprentice suited to their business.
connecting apprentices and employers through targeted job matching; providing advice about different course and training delivery options;
delivering personalised mentoring and support to‘at risk'apprentices; providing guidance to businesses taking on apprentices,
including on their roles and responsibilities; TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness The Reform Agenda:
Ambition 2 53 managing the administration of an apprenticeship, including the training contract; and administering the Australian Apprenticeships Incentives Programme,
including employer incentives and trade support loans. Pilot training scholarship programmes under the Industry Skills Fund The Government is trialling a new approach to funding training,
by investing in two new innovative pilots that will enable young job seekers in regional communities to acquire a job
and provide employers the skilled employees they need to grow their business. Training for Employment Scholarships:
7, 500 scholarships will be provided to smaller employers who take on a new worker, aged 18 24,
in regional Australia and areas where youth unemployment is high. Approved employers will be able to engage a training provider of their choice
and be reimbursed for the cost of up to 26 weeks of training once their employee completes their training.
Youth employment Pathways: This will provide support for training 3, 000 disengaged young people, aged 15 18 in regional Australia and areas of identified higher levels of youth disengagement.
Community groups would be eligible to receive funding for each person they put through a job-ready youth programme.
The full value would only be redeemable once the trainee goes into employment or further study after completing their training.
Streamlining Governance and Regulation Further steps will be taken to ensure a role for industry at all levels of the training system,
to improve VET regulation and reduce unnecessary red tape. These include: moving the national regulator, the Australian Skills Quality Authority (ASQA), to a new risk based model with improved information and education services, better recognition and greater autonomy
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness 54 Industry Innovation and Competitiveness Agenda Ongoing work programme The Government is working to address additional issues in the VET sector
and possible reforms focusing on VET in schools and school based apprenticeships. The Government is working with States and Territories through COAG,
generating jobs and incomes for Australian workers too. Skilled migrants also often bring capital or can help to attract it,
Highly skilled workers are becoming increasingly internationally mobile. As their skills are in high demand globally
these workers have a great many choices about where they work. Australia needs to maintain a welcoming attitude towards skilled migrants and minimise the roadblocks to their migration,
many Australians have concerns that large inflows of foreign labour could place pressure on wages, conditions and jobs.
or other difficulties attaining and retaining employment. This highlights the importance of focusing on skilled migration,
which can increase the employment prospects and incomes of lower skilled Australians. Business groups have emphasised the importance of skilled migration for increasing the skills of Australian workers,
and for the viability and competitiveness of operations in Australia more generally. TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness The Reform Agenda:
It offers business an avenue to quickly access skilled workers, where genuine skills shortages exist, to enable projects to proceed.
Employers overwhelmingly prefer to hire Australian workers as it is cheaper and faster to fill skills requirements locally where there are suitable workers.
to examine how to maintain the programme's integrity as a means of filling genuine skills gaps in the local labour market
which increased the burden on businesses accessing temporary skilled workers. The Review heard that the current design of the programme delays
and compliance within, the programme to ensure that Australian workers have priority. The Government will:
and managed in a way that grows employment opportunities for Australians. In the 2014-15 Budget, the Government reconfirmed its focus on skilled migration,
The Government also announced a reorientation towards employer-sponsored visas, assisting employers to find workers to fill vital positions where they have been unable to find local workers.
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness 56 Industry Innovation and Competitiveness Agenda provide greater flexibility in relation to English language testing and skill requirements for 457 applicants
We will continue to work with industry to ensure that the process of recruiting overseas workers is less cumbersome and expensive.
At the same time, the Government will improve employment opportunities and outcomes for Australians. Changes to give effect to these decisions will be rolled out in phases during 2014-15.
Returning the workplace relations system to the sensible centre Workplace relations regulation has become too rigid
The workplace relations system has an important role in ensuring workers'rights, pay and conditions are fair and appropriate.
and workers must be free to negotiate working arrangements that suit their personal ambitions and circumstances.
and our workplace relations system must do the same, otherwise our businesses and workers will be left behind.
The Government is committed to returning the workplace relations system to the sensible centre. The Fair Work Act 2009 provides the legislative framework underpinning the national workplace relations system,
which covers the majority of Australian workplaces. The Government is committed to keeping the Fair Work framework,
but we want to ensure it helps build a more stable, fair and prosperous future for Australia's workforce, businesses and the economy.
To this end the Government has promised that the Productivity Commission will be asked to undertake a comprehensive review of the workplace relations framework,
including the Fair Work laws. This will include an assessment of the impact of the framework on productivity,
how it could be improved to promote more jobs, better wages and living standards, make workplaces operate better
and reduce red tape. The Commission's recommendations will inform any workplace relations policy the Government takes to the next election.
In the meantime, consistent with our pre-election commitments, we have a significant agenda we are advancing in this term of government.
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness 58 Industry Innovation and Competitiveness Agenda First
yet the previous Government replaced the ABCC with Fair Work Building and Construction (FWBC), which has fewer powers and a 30 per cent smaller budget.
with reduced days lost to industrial disputes, greater productivity in key parts of the industry and better management-worker relations.
The new ABCC and higher penalties for unlawful conduct will again ensure work is carried out fairly, efficiently and productively.
Second, the Government introduced legislation to deliver better protection for members of Australia's trade unions
and employer organisations by better aligning the responsibilities of, and penalties for, the officers of Registered Organisations with those of company directors.
Third, several problems are being addressed through our Fair Work Amendment Bill 2014, which aims to restore balance to the workplace relations system by:
Removing the capacity of unions to frustrate greenfields agreements bargaining through unsustainable claims and delays Negotiations for greenfields agreements (for new projects) have been exempted from the good faith bargaining rules that apply to existing workplaces.
Submissions to the 2012 Fair Work Act Review showed some unions have exploited this exemption for greenfield agreements to pursue excessive wage claims
and delay the commencement of projects, creating doubt over whether a project will proceed (Mccallum, Moore, & Edwards, 2012).
the employer will, subject to appropriate safeguards, be able to have the Fair Work Commission approve the agreement.
Restoring union workplace access rules and reducing excessive right-of-entry visits by union officials The current right of entry provisions are broader than under previous workplace relations legislation.
Under the Fair Work Act, union officials with an entry permit have TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness The Reform Agenda:
Ambition 2 59 a right to access workplaces including those that do not have any members.
The 2012 Fair Work Act Review found this has led to frequent use of entry rights by some unions.
The Review notes that during the construction phase of BHP Billiton's Worsley Alumina plant,
visits by union officials increased from zero in 2007 to 792 visits in 2010 (Mccallum et al, 2012).
The Bill provides that a union is entitled to enter a workplace for discussion purposes only if it is covered by an enterprise agreement,
Further, the Bill ensures the Fair Work Commission can properly deal with excessive right of entry visits for example,
Improving workplace flexibility by enhancing the scope for employees to make individual flexibility arrangements that meet their genuine needs Under the Fair Work Act employees
and employers should be able to achieve flexibility in the workplace through individual flexibility arrangements (IFAS).
However, the Fair Work Act currently allows enterprise agreements to restrict the use of IFAS.
This means that employees covered by an enterprise agreement may be denied the opportunity for more suitable workplace arrangements
even if their employer agrees. The Bill provides workers with fair flexibility by ensuring IFAS can be made in relation to a minimum of five key conditions.
Closing the‘strike first, talk later'loophole in the good faith bargaining rules The Fair Work laws enable industrial action in support of claims for a new enterprise agreement before bargaining has commenced.
The Bill ensures industrial action cannot be the first step in the bargaining process. The Government will further amend the Fair Work legislation to ensure that protected industrial action can only happen after there have been genuine and meaningful talks between workers
and business during enterprise bargaining and only in support of claims that are not manifestly excessive
and would not have a manifestly adverse impact on workplace productivity. We will also require employees
and employers to consider productivity improvements when bargaining for an enterprise agreement. Boosting the workforce participation of parents The Government aims to boost women's workforce participation to help increase Australia's labour force and GDP,
and this will be supported by the proposed Paid Parental Leave (PPL) scheme and informed by the Productivity Commission review of Childcare and Early childhood education.
The gap between women's and men's labour force participation rate is 16.7 percentage points for those aged 25 to 34 years and 11.9 percentage points for those aged 15 years and older (OECD, 2014b.
Closing the gap in the participation rate between women and men is estimated to boost Australia's GDP by 13 per cent (Toohey, 2013).
The availability of paid parental leave and affordable childcare are supported strongly by international organisations to assist women's workforce participation (OECD et al, 2014;
Elborgh-Woytek et al, 2013. TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness 60 Industry Innovation and Competitiveness Agenda The Government has committed to introducing a new national PPL scheme.
Under the scheme, eligible parents would be able to receive 26 weeks of payment at their wage (up to a maximum of $50, 000) or the national minimum wage,
whichever is greater, plus superannuation (at the Superannuation Guarantee rate), providing parents with greater financial support to care for their new child.
The new PPL scheme will encourage female workforce participation by supporting women to remain engaged with their employer.
In addition the Government aims to ease the administrative burden on employers by taking responsibility for making payments to eligible employees.
The Productivity Commission's review is examining the contribution that affordable, quality child care can make to increased workforce participation (particularly for women), children's learning and development, the current and future need for child care in Australia,
It connects business with skilled labour, facilitates information and technology transfer, and allows greater specialisation by businesses and workers.
Better economic infrastructure can also reduce or eliminate travel time and job search costs, allowing workers to access more distant workplaces.
These benefits are particularly important for Australia due to its geographical size dispersed population, and distance from overseas markets.
and allocated $300 million for pre-construction works in the 2014-15 Budget. The Budget also provided:
The outcomes of this work may be considered in the Developing Northern Australia and Agricultural Competitiveness White papers.
Airports are unique among transport infrastructure in that they provide employment for more people in operation than they do in construction.
Ambition 3 65 Alongside this work, the Government has commissioned Infrastructure Australia to audit critical water, energy, communication and transport infrastructure in northern Australia and separately across the nation.
These independent audits will help to inform the approaches and work programme on water supply and use over the coming years.
The private sector delivered more than half of the engineering construction work done for the public sector in recent years,
But success ultimately required hard work, networking and knowing the market. Founder and Director, Penny Street, says‘being the first audio tour company in India didn't mean we enjoyed instant success'.The company researched the country's most visited sites
Ambition 4 69 Austrade provide reliable information about markets, technology and business models to small and medium enterprises, accelerating industry growth and job creation.
including business management advice from experienced private sector experts; help small and medium businesses become more competitive by working with the research sector to develop new ideas with commercial potential,
Upgrading the skills of all types of workers, including managers, is central to firm performance in knowledge-based economies.
innovative work practices, new and emerging opportunities, opening export markets and emerging economies. Larger companies may apply to access the Fund,
which will provide apprentices with financial assistance of up to $20, 000 over the life of their apprenticeship.
The Fund will assist automotive employees to have recognised their skills and provide training for new jobs,
and assist automotive employees to secure new jobs; assist automotive supply chain firms capable of diversifying to enter new markets;
Funding will be provided on a competitive basis. Success of the Centres will be measured by increased investment, employment, productivity and sales, reductions in red tape,
and ensuring research training prepares researchers to work with industry and bring their ideas to market.
Improve taxation arrangements for Employee Share Schemes Job creation and productivity growth don't just happen in a vacuum,
which employees have an ownership interest are more productive than those that do not (Employee ownership Australia and New zealand, 2014).
An Employee Share Scheme Where an employer provides a financial interest in their company (usually through shares or options) to their employee (s) in relation to their employment.
Ambition 4 77 Employee Share Schemes (ESS) are used in many countries to attract and retain high quality staff to innovative start-up companies by providing them with a financial share of the potential upside of success of the company.
This is usually provided either by way of shares in the company a person works for (that is,
an actual ownership share in the company) or as options (a right to purchase shares at some future point,
at a‘strike price'set out in an options contract). Under the general income tax law, if an employee is provided with shares or options through an ESS,
any discount that the employee receives by acquiring the shares or options, relative to the market price, is a benefit relating to employment
and so would usually be considered income of the employee. Prior to 2009, employees could choose to have qualifying ESS shares
or options taxed up-front or at a deferred taxing point (subject to certain conditions). In 2009, changes were made to how the ESS arrangements are taxed.
Shares provided under an ESS are taxed currently up-front (when provided to the employee) unless there is a risk that the employee will forfeit the shares, in
which case taxation is deferred until the shares‘vest'(that is, are provided unconditionally to the employee). Options provided under an ESS are taxed generally
when they‘vest, 'rather than when the employee decides to exercise the options to purchase shares in the company,
as was previously the case. The tax treatment of options is particularly problematic because it taxes employees before they have the opportunity to convert their options to shares
and realise any actual gain by selling the underlying shares. The 2009 changes effectively ended the provision of ESS options to employees, particularly by start-ups,
and stakeholders have noted that the changes detracted from the goal of commercialising good ideas in Australia.
Successful entrepreneurs also stated that the changes have reduced their ability to use ESS as a key remuneration tool to find talent in Australia
which has contributed, in turn to driving entrepreneurs offshore (Farquhar, 2014. The difficulties that start-ups face in administering ESS
rather than when the employee receives the options. This will defer the taxing point to a point at
which most employees can take some practical action to realise the benefits of the underlying share.
eligible start-ups will be able to offer ESS shares and options to their employees at a small discount,
as long as the shares or options are held by the employee for at least three years. Tax on the discount provided by the employer may be deferred
or exempt depending on whether the employee receives options or shares. Criteria will define eligibility for this concessional treatment
including the company having aggregate turnover of not more than $50 million, being unlisted and being incorporated for less than 10 years.
000 up-front tax concession for employees who earn less than $180, 000 per year will be retained. This initiative will cost $200 million over four years.
Making it easier for employees to have a stake in a business The owner of start-up XYZ Pty Ltd wants to give his six employees a stake in the future growth of the business,
He wants to do this so the employees have a strong incentive to help the business grow.
if the employees accept the options then they will have to pay tax on the free options in the income year they are provided the options,
This means the employees would have to pay tax before they have the ability to get a cash return by selling shares.
This situation has discouraged the provision of options under employee share schemes, to the detriment of productivity growth and innovation.
the employees of eligible small start-up businesses will not pay tax on any discount when the options are provided to them they will only pay tax on any discount
For employees of businesses that are not eligible for the start-up concession the tax can
start-up businesses to offer shares at a small discount to employees and that discount would be tax-free.
More details and examples are available in the Employee Share Schemes fact sheet attached to the related joint press release.
subject to certain conditions, the employee could choose between up-front and deferred taxation. For options, a deferred taxation point occurred
when the employee exercised the options by converting the options into shares. Default position is up-front taxation for both shares and options.
Deferral of tax is limited to schemes where there is a risk of the employee forfeiting the shares or options,
when the employee exercises the options. Going forward-start-ups only Options and shares that are provided at a small discount by eligible start-ups will not be subject to up-front taxation.*
'including that the company offering the ESS is the recipient's employer (or employer's holding company) and that the employee not hold more than a 5 per cent interest (or 5 per cent of voting rights) in the company.
TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness The Reform Agenda: Ambition 4 81 Proposal 16:
develop and embrace new technologies or work practices, and respond profitably to economic changes. Indeed, small businesses are ideal test beds for driving innovative ideas and processes
and retain talented employees, and compliance burdens generally have a larger proportionate impact on small businesses.
On the big issues for competition policy, workplace relations and taxation, the Government has committed to major reviews.
To this end, the Productivity Commission will be asked to undertake a comprehensive review of the operation and impact of Australia's workplace relations framework.
and improving incentives to work and save. Implementing the Competitiveness Agenda The Competitiveness Agenda focuses on
creating a more skilled labour force; building economic infrastructure to drive productivity; and fostering innovation and entrepreneurship in our industries.
October 2014 3. Expand access to the Commonwealth workers'compensation scheme The Minister for Employment will oversee further consultations to identify the viability of
and best way to expand access to the Comcare workers'compensation and work health safety and laws to eligible private employers as premium payers.
and Competitiveness Agenda Industry Competitiveness IMPLEMENTING OUR ECONOMIC ACTION STR ATEGY 89 Reform Consultation pathway Projected timeframe A more skilled labour force 9. Increasing the focus on STEM
Improve taxation arrangements for Employee Share Schemes The Department of the treasury will conduct stakeholder engagement to refine legislation prior to introduction.
Export Finance and Insurance Corporation ESS Employee Share Schemes FWBC Fair Work Building and Construction GDP Gross domestic product IFA Individual Flexibility Arrangements IIASA
and Development PIV Premium Investor visa PPL Paid Parental Leave P-TECH Pathways in Technology Early College High school Pwc Pricewaterhousecoopers QS Quacquarelli
Labour force, cat. no. 6202.0. Australian Bureau of Statistics. Canberra: Commonwealth of australia. TPO00007 Industry Innovation and Competitiveness Agenda Industry Competitiveness REFERENCES 95 ABS. 2014j.
Labour force, Detailed, Quarterly, cat. no. 6291.0.55.003. Australian Bureau of Statistics. Canberra: Commonwealth of australia. ABS. 2014k. Managed Funds, cat. no. 5655.0.
The Dynamics of Employment Growth: New Evidence from 18 Countries. OECD Science, Technology and Industry Policy Papers no. 14.
The Role of Entrepreneurship in US Job creation and Economic Dynamism. Journal of Economic Perspectives, 3-24.
Women, Work and the Economy: Macroeconomic Gains from Gender Equity. International monetary fund. Elms, D. K, . & Low, P. 2013).
) Employee Share Schemes Their Importance to the Economy. Employee ownership Australia and New zealand. Farquhar, S. 2014, February 18.
Productivity Commission Staff Working Paper. Canberra: Commonwealth of australia. Geoscience Australia. 2014). ) Australia's Identified Mineral resources 2013.
) Conclusions on skills for improved productivity, employment growth and development, International Labour Conference. Geneva: International Labour Office.
International labour organization. 2011). ) A Skilled Workforce for Strong, Sustainable and Balanced Growth: a G20 Training Strategy, 2011.
Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation, 2012. Canberra:
Commonwealth of australia. Mckinsey Australia. 2014). ) Compete to Prosper: Improving Australia's global competitiveness. Mckinsey. Minerals Council of Australia.
) Completion and Attrition rates for Apprentices and Trainees. Adelaide: National Centre for Vocational education Research. NCVER. 2013b).
) Employers use and views of the VET system: Statistical Report. Adelaide: National Centre for Vocational education Research.
Labour force Statistics by Sex and Age Indicators (Stat Extracts. Paris: OECD. OECD. 2014c. OECD Economic Surveys:
) Geographic Labour mobility, Research Report. Canberra: Commonwealth of australia. Productivity Commission. 2014c). ) Productivity Update 2014. Canberra: Commonwealth of australia. Productivity Commission.
Australian Securities Exchange (ASX)- istock Page 47 Students reading-istock Page 49 Construction worker-Michele Mossop, Engineers Australia Page 63
distribute, transmit and adapt this publication provided that you attribute the work. A summary of the licence terms is available from http://creativecommons. org/licenses/by/3. 0/au/deed. en.
Overtext Web Module V3.0 Alpha
Copyright Semantic-Knowledge, 1994-2011