Employment subsidies ignore the bigger issue

By Leith van Onselen

The Australian is reporting today that some 12,140 businesses received subsidies in 2017 for hiring older workers under a Federal Government scheme that was launched in 2015. The May 2018 Budget also allocated funding for an additional 30,000 places in the scheme, which provides employers with a subsidy for up to $10,000 for hiring mature-age workers, as well as included $19.3m to provide older people with grants to undertake training programs. From The Australian:

A wage subsidy program for older workers that began almost four years ago has doubled its numbers in just a year after an intervention by Jobs and Innovation Minister Michaelia Cash, with funding for 30,000 new places each year set aside in last week’s budget.

The program, which gives subsidies of up to $10,000 to employers, made 12,140 payments last year, taking the total since 2014 to 24,000. The surge came after the program was retooled to allow businesses to be paid earlier so they could invest in training and support for their new hires.

This year’s budget, however, doubled down on support for ­mature workers…

The new $19.3m Skills and Training Incentive will help workers aged between 45 and 70 take up work in new fields by granting them $2000 — matched by an ­employer or the participant — to enrol in accredited training or even unaccredited courses that focus on digital skills or “soft skills”.

But after the success of wage subsidies for older workers, the program will now be uncapped. If demand is too high, places can be funded from the $1bn Employment Fund, which exists to pay for job-related training in the ­employment services sector.

Certainly, the barriers faced by over-50s is a serious matter, with reports of ‘ageism’ and a general reluctance by employers to hire older workers rife in the Australian workplace. This article from Seniors News, published last week, highlights the barriers:

After 18-months of tireless job hunting, Mr Hey is the perfect candidate for an expanded ‘Restart’ wage subsidy announced by federal treasurer Scott Morrison on Tuesday night.

A qualified industrial electrician with management experience, Mr Hey has applied for countless jobs in customer service and labour industries but “can’t even get a look in” with local employers.

“No one looks at anyone over the age of 60,” he said…

Mr Hey has been the beneficiary of such incentives before and the rewards didn’t last.

After 10 months in subsidised position doing contracted maintenance work, Mr Hey was waved goodbye and a younger employer was ushered in to fill his position.

“They got rid of me as soon as the money ran out.”

Mr Hey said being overqualified was a disadvantage and he had even “dumbed down” his resume to make his application more appealing.

In this regard, it is good to see the Government taking proactive steps to improve the employment situation facing over-50s.

That said, one wonders why the Federal Government continues to neglect Australia’s youth, which is arguably facing worse employment prospects? As noted frequently, the underutilisation rate for people aged 15-24 is 30%:

Whereas since the GFC, overall youth employment has fallen by 0.7% in trend terms, despite the 8% lift in the population of 15-24 year-olds over this time, with full-time jobs down an incredible 17.6%:

Surely then, the Budget needs to place a greater emphasis on Australia’s disenfranchised youth, who have been largely forgotten save for a few thousand dodgy internships.

Regardless, the deteriorating employment situation facing both younger and older workers does once again highlight the egregious nature of the Government’s mass immigration program, which has flooded the jobs market with additional workers and deprived the local underutilised workforce of employment opportunities.

As noted by the Treasury/Department of Home Affairs report, Shaping a Nation:

“Recent migrants accounted for two-thirds (64.5 per cent) of the approximately 850,000 net jobs created in the past five years. For full-time employment, the impact is even more pronounced, with recent migrants accounting for 72.4 per cent of new jobs created”.

Australia’s labour-market policy has given up on balancing the interests of employers and workers. The government has given employers what they want and ignored the needs of local underutilised Australians.

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  1. detieriorating youth employment prospects are heavily linked to australia’s broken career progression pipeline, which effectively has made it impossible for anybody without experience to find work. entry level positions are scarce and fiercely fought over, and australian employers are almost uniquely obsessed with work experience, to the detriment of nearly any other quality an applicant possesses. the first and possibly only question employers ask when considering an applicant here is “how little do i have to train this person?” — we have one of the most indolent and greedy employer classes of any country.

    • DominicMEMBER

      While much of what you say may be true, I personally prefer to hire mature-age workers because:

      – they’re, on aggregate, much more reliable and committed to the job
      – they’re more pleasant to be around and are capable of holding an interesting conversation
      – they don’t spend half their working (and waking) day on Facebook, Snapchat, Instagram etc
      – they don’t feel entitled to take 30 sick days a year
      – they don’t cry off work for hangovers
      – their job expectations tend to be more measured / balanced and don’t expect to have an orgasm at work every day, followed by a promotion every month.
      – they’re far more resilient
      – I could go on ….

      Over the years I’ve met a plethora of people in business who’ve experienced similar. Who can say why this is but abysmal parenting has to take some of the blame. I despair for these later generations.

  2. The government has given employers what they want and ignored the needs of local underutilised Australians.

    Theresa May is a hero.

    It is pathetic that 3AW is only concerned with infrastructure congestion and not job market congestion.

    These wage subsidies are better than “degree” subsidies. Voters should get to choose between getting a degree in “sports management” and a wage subsidy.

    I can not believe the guy got sacked after 10 months! Maybe he got replaced by a 457 visa worker on illegal wages?

    It is amazing that an opinion poll on UBI has not been conducted in Australia! They must be afraid that the electorate wants the pension age lowered to 18. The Greens must put it in when they have the ALP over a barrel again.

      • Hardcore! 💰 A self-funded wage subsidy.

        Upfront would be madness. You would want to stretch it out to make it $20k over 2 years rather than 6 months – otherwise you may get tossed out after 6 months.

        A few years ago I read in Domainfax that people in Bali pay $50k to be hired as a police officer!

        Di Natale must lower the pension age to 18.

    • The guy got sacked after 10 months and replaced by someone else on a subsidy. Gives the employer subsidised wages for eternity. Doesn’t really help the unemployed all that much though

      • But a “degree” subsidy lasts for 4-5 years per student. So that is $80k per useless “degree”. Far better to just give the guy $80k and he can either spend it on a wage subsidy or buy a flat in Bangkok for that much and collect rent – which would be a better investment than a “degree”!

      • DominicMEMBER

        Quelle surprise! The unintended consequences of (yet) another bullsh*t government ‘scheme’.

        Let’s vote them in again and give them all a raise. I insist.

  3. i am sure ive been subject to age discrimination.
    10 years ago i walked into a office for an interview, could not see a single person over 30 in the entire room.
    The guy who would have been my boss if i had got the job was maybe 25.
    In the end i was told i didnt fit thier culture. I mean talk about snobs.
    Cant imagine what it would be like now.
    But lets face it any business that actively seeks out wage subsidies to employ people isnt going to keep anyone on after the subsidy ends. The best you can hope for is when the money stops that youve made yourself so useful that they would find it too much trouble to replace you. But that isnt likely.