The persistent challenges surrounding labour and staffing have been a significant source of apprehension for numerous businesses over an extended period. The unprecedentedly low unemployment statistics underscore the tight labour market, and the surge in sick leave stemming from COVID-19 cases has further exacerbated the predicament. Recognizing the impact, the Reserve Bank of Australia (RBA) acknowledges that labour-related issues are curbing production and contributing to the escalation of prices and inflation. Consequently, the recent Jobs Summit garnered considerable attention from businesses, as they eagerly sought signs of potential alleviation.
In this update, we delve into the latest developments stemming from the Government's Jobs Summit and how the landscape of truck finance can interlace with the discourse surrounding labour challenges. For business operators, it's increasingly evident that truck finance could serve as both a focal point of labour-related discussions and a potential avenue to capitalize on the emerging opportunities presented.
COVID Isolation rules bring some relief to labour shortages
Before getting into the details of the Jobs Summit, there is some good news for businesses which may offer some immediate relief. National Cabinet has agreed to reduce mandatory isolation rules to 5 days rather than 7 days for COVID-19 positive cases. This will likely bring at least a small sigh of relief from business owners that have been struggling with labour shortages due to staff absences on COVID sick leave. Ensuring at least an additional 2 days that workers will be back at work may be significant to achieving production schedules and output.
But a recent report indicated up to 3 million days of work have been lost due to the effects of long COVID. So the pandemic can still cause issues for business. If your business is experiencing cash flow pressures due to staff absences as a result of COVID-19, Get A Quote about finance solutions to ease that pressure.
Jobs and Skills Summit
The Jobs and Skills Summit was convened by Prime Minister Anthony Albanese and relevant ministers and brought together a wide range of organisations. Employer groups, unions, government and other groups were represented at the 2 day event. According to Treasury, the goal was to find ‘common ground’ around building a better-trained and a more productive Australian workforce as well as boosting wages and creating opportunities.
A Transport Jobs and Skills Roundtable was held prior to the Summit with the HVIA represented by Todd Hacking to present the transport sector’s issues in regard to labour shortages. This forum would inform the Jobs Summit which was held later.
The Summit was a two day event and the reports coming out of the first day appeared to focus on more long-term plans and policies related to building skills in many sectors. But late on the second day, the Prime Minister and relevant ministers did release policies and updates to address the more immediate labour shortage issues being faced by Australian businesses.
Highlights of the Summit announcements include:-
- Extension of time to stay in Australia for international students graduating from Australian universities.
- Extension of the time that temporary workers can stay in the country.
- Raising income threshold for temporary workers.
- Increase in the number of skilled migrants to 195,000 from the current level of 160,000.
- Increase of $4,000 in how much those receiving the age pensions can earn before impacting their pension. Bringing many older and experienced workers back into the workforce. Pensioners could then earn up to $12,000 pa without impacting their pension.
- Actions to address processing visas which currently has a backlog.
- In addition, individual states have announced policies including with TAFE courses to build much needed skills into the future.
Some of the actions will require legislation and clearly may take some time to take effect.
Relevance of Truck Finance
With all this talk around labour issues, what is the relevance of truck finance in the discussion? We see the relevance in two main areas:
- Refinancing options to ease immediate cash flow pressures created by lack of staff.
- Financing new vehicle acquisitions to take advantage of longer-term opportunities as a result of the Summit outcomes.
While the surge in migration and the changes to age pension provisions may offer businesses some short to medium term relief, considering strategies such as Refinancing Truck Finance Balloon or Residual could present an avenue to alleviate immediate cash flow pressures by reducing monthly loan commitments.
The longer term prospects will likely be more positive for many operators and may represent opportunities for your business. If so, then now may be the time to invest in new vehicles.
To ease labour shortage finance pressures or capture opportunities from the Jobs Summit operators may consider cheaper truck finance through Jade Truck Loans
Timing for new acquisitions with finance are critical. Price increases are being seen across many sectors – in short, the price of new trucks will likely rise as time moves on. This may be partly due to increase in component costs globally and inflation domestically.
Acquiring new trucks with finance now may also mean cheaper truck loans interest rates prior to further interest rate rises. Rising prices, soaring inflation and falling unemployment have led the RBA to act on interest rates over the past few months. With these conditions persisting and indication are for further interest rate rises before the end of 2022. RBA increases flow through to various lending markets and cause increases to truck finance interest rates.
Acquiring new vehicles in this financial year with Chattel Mortgage for trucks and commercial finances also presents the option of taking advantage of temporary full expensing.
We can assist all types of businesses with the full range of truck finance options as well as other commercial finance options. Our consultants will discuss your individual requirements and structure the appropriate finance product to address your specific needs and objectives.
Contact Jade Truck Loans on 1300 000 003 to discuss how we assist operators with cheaper truck finance to ease pressures associated with labour issues.
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