JobMaker passes into law — but proposed amendments are kicked into the long grass

Frydenberg-federal-budget-2020

Treasurer Josh Frydenberg arrives to address the media, ahead of budget 2020 at Parliament House, in Canberra on Tuesday, October 6, 2020. Source: AAP Image/Mick Tsikas.

The federal government’s JobMaker hiring credit has passed in parliament, giving businesses access to credits for hiring workers aged between 18 and 35.

The hiring credit will be backdated, and will apply to new hires appointed between October 7, 2020, up until October 6, 2021.

Businesses can claim the credits up to 12 months from the date the position is created.

However, the bill passed without proposed amendments from the Senate, that would have prevented businesses from letting employees go, in order to hire new ones and claim the credits.

The stimulus measure, introduced in the federal budget last month, was intended to counter the effects of COVID-19, which has had a particular impact on unemployment among younger workers.

Businesses hiring new, eligible employees can claim a fixed credit of $200 per week for those aged between 18 and 29, and $200 for those aged between 30 and 35.

According to a report in The Guardian, the passing of the legislation follows something of a backflip from One Nation’s Pauline Hanson.

One Nation, along with Labor, The Greens and senators Rex Patrick and Jacqui Lambie, initially voted to add an additional safeguard to the legislation, in order to protect older workers from being ousted to make way for younger ones.

But, on Wednesday, the party reversed its decision and voted with the Coalition to pass the bill as is, delivering a majority vote.

The amendment would have made employers ineligible for the wage subsidy scheme if they terminated an existing employee, or reduced their hours, in order to engage a younger employee and claim the payment.

Treasurer Josh Frydenberg has argued that such protections are in place under the Fair Work Act.

And, JobMaker’s existing eligibility criteria would make it difficult too.

The credits are only available for businesses that are increasing their total employee headcount.

That means credits are only available for new jobs. A business cannot claim the credit for a new employee who has simply replaced an old one.

Businesses must also be able to demonstrate an increase in payroll, compared to the three months leading up to September 30, 2020.

Tight criteria and onerous admin

Passed in the historic October budget as a measure to boost the Aussie economy post-pandemic, the JobMaker scheme hasn’t been without critics.

The proposed legislation was referred to a Senate committee in mid-October, as tight eligibility criteria emerged.

Along with the criteria around headcount and payroll, it emerged that the subsidy would not be available to businesses claiming either JobKeeper payments or apprentice wage subsidies.

To be eligible for the JobMaker scheme, employees must have been receiving JobSeeker, Youth Allowance or the Parenting Payment for at least one of the three months prior to the date of employment.

That means workers on temporary visas, who are not eligible for these schemes, are also not included in the JobMaker package.

While the government originally claimed the packed would support about 450,000 jobs, Treasury estimates have since revealed that number looks more like 45,000.

Accountancy body CPA Australia, for example, has suggested the credits won’t be suited to many small businesses.

In a submission to the Senate enquiry, the Council of Small Business Organisations Australia (COSBOA) also raised what it called ‘serious concerns’ about the design of the program.

“Given the apparent complexity of the hiring credit administration process, for small businesses, in particular, the subsidy amounts are insufficient to motivate additional hiring,” COSBOA said.

The submission also suggested the requirement to continually confirm eligibility on a quarterly basis was “onerous” for small businesses and would create a significant administrative burden.

Trending

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments