Australian House committee pushes digital retraining fund for displaced workers

The committee has also recommended a digital grants program for small businesses to take part in the digital economy.
Written by Chris Duckett, Contributor
(Image: iStock)

The Australian House of Representatives Standing Committee on Industry, Innovation, Science and Resources has said customer-facing workers in the traditional retail sector will be especially hit with the rise of online shopping in Australia, and has recommended a fund to help retrain displaced workers.

Writing in its Internet Competition Inquiry [PDF] report tabled on Wednesday, the committee said internet-based competition, while disruptive, is more likely to be positive for the Australian economy, with jobs in warehousing, transport, and logistics outnumbering those lost in customer-facing retail roles.

"The experience in the United States, where online shopping is much more established, is that the jobs created by ecommerce comfortably outnumber the jobs lost in the traditional retail sector," the report said.

Among its dozen recommendations, the committee said the government should create a "digital retraining fund" to boost digital literacy and skills of workers before they are displaced.

"Many Australian workers already have advanced digital skills, or have the means to comfortably support themselves to undertake training. Therefore, the funding should be targeted at Australian workers with relatively low-level digital skills or in occupations at significant risk of being replaced by digital processes," the report said.

"This includes many Australians currently employed in customer-facing retail roles."

The report also recommended that Canberra form a small business digital grants program that would be "small scale" and match the funds put up by business to "increase their capacity to take advantage of digital economy opportunities". The committee called out the small business grants from the Queensland government of up to AU$10,000 as a model for the new program.

"Given the significant contribution of small businesses to Australia's economy, it will be particularly important to ensure these businesses are supported to engage in the digital economy," the report said.

Citing figures from the Bureau of Statistics, the committee said 96 percent of retailers are small businesses, and small businesses make up 94 percent of all businesses with at least one employee. 61 percent of small businesses are sole traders with no employees, it added. Thus far, online retail accounts for less than 1.2 percent of all retail employment, and is estimated to be 6.4 percent of all retail turnover.

The report further called for the Department of Industry, Innovation and Science to develop education materials for small businesses on new technology and digital platforms.

"These education materials should also include information to help Australian businesses strengthen the protection of their data by improving data security processes and adopting appropriate cybersecurity technologies," the report said.

On the basis that it is possible to accurately forecast what skills will be needed in the economy, the committee called for funding and research to remove the lag between when skills are first needed, and when graduates posses them.

While internet commerce can allow for an increase in competition, the committee warned that it can also lead to a lack of competition, and said the government should be prepared for reforms in the future.

"In some industries, one or two digital platforms are beginning to dominate the market. There is a risk that monopolies or duopolies could form and potentially distort the market," the report said.

"For example, two companies have come to dominate the market for making accommodation bookings. As they have increased their market power, they have also rapidly increased the commissions they charge accommodation providers placing pressure on many Australian businesses."

Amazon came under fire for its use of data collected on small businesses on its Marketplace platform, and was held up as an example of large technology firms collecting, using, and monetising data in "possibly anti-competitive ways".

"The committee does not believe that it is appropriate for digital platforms to use data collected on small businesses in any way that is detrimental to these businesses' operations," the report said.

Similarly, the report said Canberra should keep an eye on the gig economy, and its impact on employment within Australia.

"It is vital that we support Australian businesses to invest in the digital technologies, while demonstrating advantages of the virtual marketplace based in regional areas where infrastructure like the NBN is available and overheads such as rent can be much cheaper, that will enable them to take advantage of internet retail opportunities," former Deputy Prime Minister Barnaby Joyce said in a statement.

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