JobMaker, aimed to boost the employment prospects of 16 to 35-year-olds, sailed through Parliament on Wednesday despite strong opposition from Labor and members of the crossbench who argued that the scheme is not ambitious enough and demanded it be made more transparent.
Labor was worried that businesses could fire or cut hours from current staff to qualify for JobMaker.
The government, however, rejected all amendments, deeming them unnecessary.
Speaking to Nine’s Today Show on Thursday morning, Treasurer Josh Frydenberg explained that current protections from the Fair Work Act will apply under JobMaker.
“There are significant legislative protections in place, in terms of the legislation that went through the Parliament last night, which is a big win for the job prospects of hundreds of thousands of Australians,” Mr Frydenberg said.
The Treasurer announced the legislation’s Parliament success in a statement, noting that the aim of the measure is to help reverse the rising youth unemployment brought on by the COVID crisis.
“Youth unemployment was particularly impacted by restrictions imposed as part of the health response to the COVID-19 pandemic, with the JobMaker hiring credit specifically designed to encourage businesses to take on additional young employees and increase in employment,” said Mr Frydenberg.
The JobMaker hiring credit is a fixed amount of $200 per week for an eligible employee aged 16 to 29 years and $100 per week for an eligible employee aged 30 to 35 years paid quarterly in arrears by the Australian Taxation Office.
To be eligible, the employee must have been receiving JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months, assessed on the date of employment.
Employees also need to have worked for a minimum of 20 hours per week of paid work, averaged over a quarter and can only be eligible with one employer at a time. As for the employer, they must increase their headcount and payroll.
“The JobMaker hiring credit will ensure hard-working Australians and businesses have the support to get back to work and is part of the government’s economic recovery plan to create jobs, rebuild the economy and secure Australia’s future,” Mr Frydenberg said.
Earlier this week, Labor senator Louise Pratt argued that the hiring credit 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.
Who is eligible?
The entity elected to participate in the JobMaker scheme must:
- carry on a business in Australia or pursue objectives as a non-profit body principally in Australia, or be a certain public fund; and
- have an ABN; and
- be registered as a withholder in accordance with the Taxation Administration Act 1953.
Moreover, the entity must not have any outstanding income tax or GST returns that have become due in the past two years at the time that it gives information to the commissioner about its entitlement for the period.
Additionally, 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.
For more from our Tax and Accounting Special please click here.