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JobMaker expected to become law this week despite numerous misgivings

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
10 November 2020 2 minute readShare
JobMaker expected to become law

While the $4 billion JobMaker hiring credit is expected to pass Parliament this week, the opposition has argued it is not ambitious enough and will see thousands of workers miss out due to its stringent eligibility criteria.

Labor has warned the government that JobMaker would not go far enough in cushioning the jobs blow created by the COVID-19 pandemic.

Under the JobMaker scheme, qualifying entities can only receive the payment for eligible additional employees, defined as employees aged between 16 and 35 that commenced employment between 7 October 2020 and 6 October 2021.

Employees are also required to work a minimum of 20 hours per week, and must have received the JobSeeker payment, Youth Allowance (other) or Parenting Payment for at least 28 of the 84 days before the commencement of their employment.

Due to the apparently stringent eligibility criteria, Labor senator Louise Pratt argued on Monday that the hiring credit will leave many businesses and workers behind, opining that “the bill is a missed opportunity” in that it lacks the ambition to significantly lower the unemployment rate and get more people back into work.

“I put on record what we discovered in estimates: of the 450,000 jobs expected to be supported by the hiring credit, only 45,000 are expected to be new jobs; and 928,000 Australians have been deliberately excluded from the JobMaker hiring credit as announced in the budget.

“Just 10 per cent are expected to be new jobs, so how this program can be labelled ‘JobMaker’ is, tellingly, very debatable.”

She drew on research from the Grattan Institute in putting forward her argument, noting that the institute estimated 1 million employers that received JobKeeper will effectively be excluded from the hiring credit scheme.

“A business has to be in a position to earn enough income to support its existing workforce in order to be eligible for the hiring credit, so it’s quite clear that the scheme is not going to be sufficient to make a meaningful dent in unemployment to help our Australian economy to recover,” Ms Pratt continued.

The JobMaker hiring credit was the subject of a Senate committee, which approved the legislation on Friday despite many ongoing concerns.

The Council of Small Business Organisations Australia (COSBOA), in evidence to the committee inquiry into these issues, said that the subsidy was not high enough to incentivise employers to take on new staff and that members had indicated that the hiring credit wage subsidies were too low.

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

Moreover, the Australian Council of Trade Unions has said that “many Australians aged 35+ have also experienced significant economic shocks, with more likely to occur in 2021 when many of this cohort who are currently relying on JobKeeper are likely to see that support end”.

But despite these misgivings, the Senate committee has recommended that the bill be passed, with the economic legislation committee chair, Senator Slade Brockman, concluding the inquiry with the words: “Given the status of unemployment as a result of the pandemic — and in particular the status of youth unemployment — the committee recommends that bill be passed.”

For more from our Tax and Accounting Special please click here.

JobMaker expected to become law this week despite numerous misgivings
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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