When the Morrison Government announced its $ billion JobMaker wage subsidy in the October Federal Budget, we cheekily labelled it “JobTaker” because we believed it would incentivise employers to replace full-time workers with insecure part-time workers.
The logic supporting this claim was simple. JobMaker gives businesses $200 a week for each additional employee they hire aged 16 to 29 and $100 per week for people aged 30 to 35.
Therefore, businesses could gain financially if they cut existing employee hours and instead hired a bunch of people aged under 30 or 35 on 20 hours per week. This way, businesses could receive subsidies, reduce their out-of-pocket wage costs and earn fatter profits, all courtesy of the Australian taxpayer. And they could do all this without actually lifting overall employee hours above what would occur anyway as the economy continues to recover.
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With this background in mind, it was interesting to read yesterday that the Australian Treasury is also concerned that JobMaker has incentivised companies to lay-off full-time workers in favour of cheaper part-time workers:
Treasury’s own examples, obtained by the ABC using the Freedom of Information (FOI) process, show bosses could sack a full-time employee on $75,000 and replace him or her with three part-time staff on wages between $22,500 and $30,000, while remaining in front financially thanks to the generous JobMaker hiring credit…
Internal Treasury emails, talking points and an ‘issues register’ listing problems with the scheme go further, outlining how employers will benefit from axing high-wage jobs and suggesting the department will “need to confirm” if the scheme is even legal under laws that aim to prevent age discrimination.
JobMaker is corporate welfare in disguise, since its real goal is to mask the true rate of unemployment and to throw taxpayer subsidies at the Coalition’s business mates.
Taxpayer subsidies should never be used to juice profits and make business owners wealthier, while also pitting younger workers against older workers.