Date posted: 06/05/2021 4 min read

Simplify JobMaker eligibility to boost uptake, urges CA ANZ

Not enough employers are making use of JobMaker to deliver the boost to employment growth the Government is looking for

In Brief

  • Chartered Accountants ANZ has gathered feedback on the JobMaker program from members and passed that on to Treasury
  • The uptake has been slow because eligibility criteria are too restrictive
  • The Federal Budget is an opportunity for the Government to make it easier to access

With only a few hundred people accessing JobMaker by the end of March, the Australian Government needs to simplify the program and monitor its impact to ensure it can become an effective way to generate thousands of new jobs, says Susan Franks, Senior Tax Advocate for Chartered Accountants Australia New Zealand.

“We asked our members about the uptake of JobMaker and the word is that it’s very low for a number of reasons,” says Franks. “We’ve passed on this feedback to Treasury and we anticipate the Government will seek to address this in the Federal Budget.”

The JobMaker Hiring Credit scheme offers eligible employers an incentive to take on more young job seekers. But Treasury officials revealed in a Senate estimates hearing at the end of March that only 609 people had benefited from the subsidy.

Most businesses accessing the scheme are micro businesses (70%), with the rest small to medium businesses (20%), not-for-profits (8%) and just one person hired by a large business with sales of more than A$250 million.

The Government initially promised the A$4 billion JobMaker scheme would generate 450,000 jobs by offering businesses A$200 a week for every new worker they employed aged 16-29, and A$100 a week for those aged 30-35.

With a general election likely within the next 12 months, the Government has added reason to demonstrate the effectiveness of measures to support business and reduce unemployment and underemployment as the economy recovers from the COVID-19 pandemic.

“If the Government’s intent is to get people working again, then it will need to reconsider the need for an eligible employee to be 35 years of age or less,” says Franks.

Our members have told us that one of the main reasons Jobmaker is not being adopted is because employers want to ensure that they have the right person for a job
Susan Franks Senior Tax Advocate, Chartered Accountants Australia New Zealand

“Our members have told us that one of the main reasons JobMaker is not being adopted is because employers want to ensure that they have the right person for a job,” says Franks. “This may mean that the right person is not under 35 years of age and on JobSeeker.”

JobSeeker assists people aged between 22 and Age Pension age who are unemployed and looking for work or are sick or injured and unable to do their usual work or study for a short time. JobKeeper was a wage subsidy employers accessed to help them keep paying employees as their business suffered during the COVID-19 pandemic.

While Australia’s unemployment rate is improving — it fell to 5.6% in March — underemployment and under-utilisation rates are still a concern, says Franks.

Underemployment in March 2021 decreased by 6 percentage points to 7.9% — 9 points lower than a year earlier — in seasonally adjusted terms. The under-utilisation rate decreased by 8 points to 13.5%1.    

Other reasons JobMaker is undersubscribed include:

  • Perceptions by large organisations that they may be criticised publicly for using the subsidy, as was the case with some big companies that took advantage of JobKeeper yet reported profit growth. Woolworths has indicated it will not access JobMaker.
  • Lack of financial incentives because a business that was obtaining JobKeeper could not access JobMaker, and JobKeeper payments were significantly larger.
  • JobMaker is a more relevant scheme for when business is picking up. That may not be happening yet for many labour-intensive industries such as tourism and hospitality.
  • Difficulties calculating and comparing payroll costs to be eligible for JobMaker.

“Now JobKeeper has ceased operations, it will be interesting to see whether there is a larger uptake of JobMaker as employers take up whatever assistance is available,” says Franks.

Treasury estimates that ceasing JobKeeper will make 150,000 more people unemployed, and this will increase the pool of potential employees for businesses that do seek to benefit from JobMaker, she adds.

1: ABS (The labour force under-utilisation rate is defined as the sum of the number of persons unemployed and underemployed, expressed as a percentage of the labour force.)

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