Budget will increase talent migration, create super confusion
Many employers will be faced with a new battle to retain their best workers after the Federal Government announced plans to invest $22 billion of its 2009/10 budget in the nation's infrastructure, says Hewitt's Australia and New Zealand managing director, David Brown.
Baby boomers left short with superannuation instabilityA reduction in the concessional contribution tax limit - from $50,000 to $25,000 - could leave workers closer to retirement with less opportunity to top up their super and make up for recent significant investment losses, according to Mercer's chief executive, Peter Promnitz.
Long-term changes to pension-age policy are necessary, Promnitz says, but the concessional cuts appear to have been made in isolation from a clear retirement-income framework.
"Tinkering with the system and making piecemeal changes will potentially damage Australians' confidence in the stability of superannuation rules," he says.
"Halving the cap on concessional contributions may provide short-term budgetary relief but lacks a long-term plan or foresight.
"Anyone playing catch-up for their retirement income - baby boomers nearing retirement or women out of the workforce for extended periods - will be hit by these changes."
HR must "recalibrate" retirement planningBrown says that HR personnel will now need to "recalibrate and think a little harder about retirement planning", with changes to the superannuation platform and the increase of the retirement age likely to be the areas where the budget has its biggest impact.
The new super rules will affect organisations at all employment levels, he says, leaving employers with the difficult task of determining how to factor in contributions and how to "fit" super into job offers or frame it as a perk.
He says the budget papers also hint at the restriction or removal of executive share options, in line with the general tightening of executive remuneration, although the language used in the budget does not make the nature of the new restrictions particularly clear.
Brown notes that the increased retirement age will be a boon to baby boomers who haven't yet prepared for their exit from the workplace, but that it could create a "squeeze" as Gen X employees, working their way through the ranks, are blocked from opportunities they would have otherwise expected.
Mixed feelings from business advocateACCI chief executive Peter Anderson says that while a boost in infrastructure spending is a "big plus" for employers, the budget doesn't go far enough to take the pressure off the cost of doing business at a time when the private sector is "doing it very tough".
Cuts to the skilled migration program could damage labour-market efficiency, he says, and the paid parental leave scheme will expose employers to indirect labour and administrative costs.
"It's a budget aimed at these tougher times," he says, "but the mix of big spending and moderated saving is a risky high-wire act."
Employee advocates are a little more enthused.
"This is a budget for jobs, jobs and jobs, with a bit of tough love on the side," says ACTU president, Sharan Burrow.
"The achievement of a national paid maternity leave scheme is an historic win for working women."
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