Australia’s peak small business group has said the Government’s JobMaker hiring scheme is “lacking in detail” and prone to fraudulence.
Treasurer Josh Frydenberg unveiled the JobMaker hiring credit in last month’s budget to incentivise businesses to hire young job seekers over the next 12 months.
It is expected to create around 450,000 positions for young Australians and cost the Government $4 billion from 2020-21 to 2022-23.
The government has pledged to give eligible employers $200 a week for each additional eligible employee they hire aged 16 to 29 years old and $100 a week for those aged 30 to 35 years old.
However, at a Senate inquiry on Monday union groups said the hiring subsidy was flawed and inadequate, with a “lack of clarity” over how it would work.
CEO of the Council of Small Business Organisations Australia (COSBOA) Peter Strong said he thought the plan “will be successful”, but needed changes.
“When people are desperate for a job, they will sign forms,” Mr Strong claimed.
“You are going to get some people to sign the form who aren’t eligible, without a doubt. And not because they’re evil.”
In a written submission to the inquiry, Mr Strong also questioned the process of applying for the JobMaker hiring credit, saying it would potentially add “onerous administrative burden for small business owners.”
“The scenarios provided as examples in the Hiring Credit Fact Sheet indicate a degree of complexity relating to quarterly reporting and ongoing eligibility, especially as this is affected by staff turnover,” he said.
“Uncertainty about the various permutations may become a disincentive for employers to engage in the scheme.”
COSBOA strategy manager John Grace told the inquiry that COSBOA members were not willing to take the “risk” of hiring new employees at the current subsidy rates.
He added that one employer had rated it only a “5 per cent chance” that he would hire new workers at the current rate.
This sentiment was echoed by the Australian Chamber of Commerce and Industry’s Jenny Lambert, who said is was “highly unlikely” for SMEs to cut back on their experienced workforce to take on someone unemployed for only $100 or $200 a week.
“We’ve got to remember that this is $200 a week or $100 a week, it will tip a balance, but it’s not going to drive … significant changes in employment in the workforce of a particular employer, because there is much more to having a productive workforce than just how much you’re paying them,” she said.
The Department of the Treasury is working to review the JobMaker hiring scheme, after COSBOA revealed their concerns in their submission to the Senate inquiry
The Treasury confirmed that they are currently in a four-week consultation period regarding the credit, which will conclude on November 27.
A spokesperson told Dynamic Business that COSBOA are one of the stakeholders currently involved in meetings with the Treasury.
“[The] Treasury is inviting submissions from interested organisations and members of the public as well as conducting a series of targeted stakeholder meetings.”
“The Government will consider the outcomes of the consultation in the formulation of the final rules for the JobMaker Hiring Credit.”