Treasury officials have confirmed that the Morrison Government’s $4 billion JobMaker wage subsidy is a failure. Only 5,278 jobs had been ‘created’ by mid-2020, 99% below initial expectations that 450,000 jobs would be created by the end of 2021:
Treasury documents from the middle of this year reveal that just 5,278 people had been hired using the JobMaker hiring credit, or around 1 per cent of the original budget forecast…
The program was one of the big-ticket items in last year’s federal budget, but the amount of people helped into work could be even lower than that number.
Documents from inside Treasury, released using the Freedom of Information (FOI) process further reveal that “the count of individuals may include an employee more than once where they change the employer who is claiming for them”.
When the JobMaker wage subsidy was first announced 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.
The fact that the scheme has had so little take up is actually a good thing, as it means less jobs have been ‘taken’ and lower payouts from taxpayers to businesses.
Be grateful for small mercies.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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