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Josh Frydenberg

Australia is seeing a ‘great reshuffle’ not a ‘great resignation’ in workforce: Frydenberg

The Morrison government will ensure COVID tests are tax deductible for workers and exempt from fringe benefits tax for businesses when purchased for work-related purposes.

Treasurer Josh Frydenberg will announce on Monday that the government will remove uncertainty around the tax treatment of these tests, including PCR tests and RATs.

This will require legislation which will be backdated to July last year.

He will also announce the Productivity Commission’s second five yearly productivity review will develop a map for reforms to improve productivity as the country comes out of COVID.

In a speech to the Australian Industry Group Frydenberg says Australia’s labour market is experiencing a “great reshuffle”, in contrast to the “great resignation” that has happened in the United States and other advanced economies.

“Treasury analysis shows that over one million workers started new jobs in the three months to November 2021. The rate at which people are taking up new jobs is now almost 10% higher than the pre-COVID average.

"In the last three months, a record number of around 300,000 workers say they left a job because they were looking for better job opportunities,” Frydenberg says in his speech, released ahead of delivery. The pick up in switching has been across all industries.

“Switching jobs allows workers to move up the job ladder for better pay,” with Treasury’s analysis based on single touch payroll data showing workers who moved jobs typically had pay increases of 8-10%.

“They also move to more productive firms, helping those firms grow.”

In the US 2.8 million fewer people are employed than pre-pandemic, with participation rates there and in the UK, Canada, Japan and Italy now lower than before COVID. In contrast, Australia’s participation rate is near its record high.

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Frydenberg predicts that as the Omicron peak passes, “we will again see the economy surge ahead”.

He also says it is now time to “draw some clear lines in the sand”.

He acknowledges there will be problems with workforce shortages, supply chain disruptions and the return of higher inflation.

But “now is the time to start confidently moving back towards normalised economic settings.

"It is time to let businesses get back to business. Time to get people back safely to our CBDs, back moving freely around their communities.

"And it is time for the private sector, who have taken the baton, to continue to run hard,” Frydenberg says.

“The economy simply cannot be conditioned to the level of unprecedented support that has been required over the last two years.

"This level of government intervention must not become entrenched and become a permanent feature of our system. Continued support at crisis levels would do more economic harm than good.”

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