Investing in the Future? How the 2025 Budget Impacts Workforce and Skills for SMEs
The 2025 Federal Budget places a notable emphasis on workforce development and skills, areas that are critical for the long-term success and sustainability of small and medium-sized enterprises (SMEs). From apprenticeships to healthcare support, several measures outlined in the budget have the potential to directly or indirectly impact the recruitment, training, and overall well-being of the SME workforce.
The BCA has consistently advocated for policies that support a skilled workforce, and the Budget reflects some of these priorities. The increase in funding for the new schools agreement and the focus on “explicit instruction, year one phonics testing and more school counsellors” are steps towards strengthening the foundational education of future employees. As BCA Chief Executive Bran Black noted, “We welcome the increase in funding for the new schools agreement and particularly support the reform for explicit instruction…” A more educated and skilled pool of potential employees benefits all businesses, including SMEs.
Furthermore, the Budget includes specific incentives aimed at addressing skills shortages in key sectors. The $10,000 incentive for building apprentices is a direct response to the housing crisis and a welcome move for SMEs in the construction and related trades. Mr. Black highlighted the importance of this, stating, “Getting more tradies into our workforce is critical to building more homes and we have long called for more incentives to address the housing crisis, and so we support the $10,000 incentive for building apprentices.” SMEs in these trades should actively explore how they can leverage these incentives to attract and train new talent.
Beyond specific trades, the government is also taking steps to support the broader workforce. The ban on non-compete clauses for low and middle-income workers is a significant development that could increase labour mobility and allow employees to more easily seek better opportunities. This could indirectly benefit SMEs by creating a more dynamic labour market.
The Budget also addresses cost of living pressures through measures like tax cuts and healthcare support. The reduction in the cost of medicines on the Pharmaceutical Benefits Scheme (PBS) and the increase in bulk billing for GP visits can contribute to a healthier workforce, reducing absenteeism and improving overall productivity. As the Albanese Government stated, “Helping with the cost of living is the number one priority…and that’s what our energy rebates will do.” A financially and healthily supported workforce is a more productive workforce.
However, SMEs should also be aware of the challenges highlighted by the BCA. The increasing cost of training tradies remains a concern, and businesses need to work collaboratively with the government and industry to find sustainable solutions. As Mr. Black pointed out, “As businesses are the engine room for training new apprentices, it’s critical that the Government and Opposition work with industry to address the increasing cost of training tradies.”
In essence, the 2025 Federal Budget presents both opportunities and considerations for SMEs regarding their workforce. The focus on education, apprenticeships, and cost-of-living relief offers potential benefits in attracting and retaining employees. However, businesses must remain engaged with industry bodies to address ongoing challenges like the cost of training. By understanding and strategically leveraging these initiatives, SMEs can invest in their most valuable asset – their people – and build a stronger, more resilient future.
Insight for SME Business Owners: Review your current recruitment and training strategies in light of the new incentives and broader workforce support measures. Consider how you can position your business to attract and retain skilled workers in a more competitive labour market.
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