Edition 56, May 2008

Outcomes of 2008 Budget for training and productivity

This month's federal budget outlined significant investments in education and training aimed at increasing productivity and participation.

The core of the government's spending on education and training comes through the establishment of the Education Investment Fund (EIF) which will receive $5 billion.

The EIF is one of three new funds set-up in the budget along with the Building Australia Fund and the Health and Hospitals Fund. The EIF will absorb and extend the Higher Education Endowment Fund, bringing total funding to around $11 billion. It will fund capital expenditure in Australia's higher education institutions including those in the vocational education and training sector.

The government outlined its investment in Skilling Australia for the future which will see $1.9 billion set aside to deliver up to 630,000 additional training places over five years.

The budget saw the government detail its vision for reform of the Council of Australian Governments (COAG) and specify the simplified funding arrangements between the Commonwealth Government and states and territories. As part of that arrangement the government will establish the COAG Reform Fund which will receive funds directly from the federal budget and allocations from the other three funds established in the budget.

Under the COAG reform, productivity will remain firmly on the agenda with skills and workforce development a key priority. COAG is working to implement the Government's election commitments which include the Trade Training Centres in Schools Program, the Digital Education Revolution and the Skilling Australia for the future policy.

The COAG reform will also focus on an accelerated business regulation and competition reform agenda to enhance productivity, innovation and workforce mobility, by cutting the costs of regulation. Those reforms include national harmonisation of occupational health and safety laws and regulation of trade licences.

Regulatory reform will lift productivity growth by: reducing the cost to business of complying with government regulations; enhancing competitiveness; reducing the costs to taxpayers of government agencies monitoring and enforcing regulations; and increasing the rewards from effort, risk taking, entrepreneurship and innovation.

Regulatory reform can also lift workforce participation because rigidities in business regulations among the states and territories can impede the mobility of labour. A highly mobile workforce allows workers to move from one location to another.

For more information visit http://budget.australia.gov.au/2008-09/content/overview/html/overview_01.htm

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