Documents prove JobMaker an ‘incentive to fire workers’, Labor claims

Bosses have been given an incentive to fire workers and replace them with younger, cheaper replacements under a new scheme, Labor says.

Older workers have been “singled out and sacrificed” by a government subsidy that incentivises businesses to sack them, Labor says.

Under the government’s $4bn JobMaker scheme, businesses fire older workers and hire multiple younger employees, according to Treasury documents obtained by the ABC under freedom of information laws.

They show a full-time worker aged over 35 on $75,000 a year could be replaced by three part-timers on wages between $27,500 and $30,000, with the increased cost offset by a hiring credit.

Labor Treasury spokesman Jim Chalmers accused the government of “deliberately excluding” nearly a million Australians aged over 35.

“This isn’t an incentive to hire workers, it’s an incentive to fire workers,” he said.

“These workers haven’t just been left out and left behind by the Morrison government, they’ve been singled out and sacrificed.”

Jim Chalmers says older workers have been ‘singled out and sacrificed’ by the government. Picture: Sam Mooy / Getty Images

Despite the figures, the document said the scheme created no incentive to fire older workers.

“The Hiring Credit does not create an incentive for an employer to replace an order worker with several new part time works,” it read.

Treasurer Josh Frydenberg said Mr Chalmers had been “set up again” after failing to mention the clarification caveat.

“The FOI goes on to say the only situation where the employer is better off, is one which is unaffected by the availability of the hiring credit,” Mr Frydenberg told parliament.

Liberal MP James Paterson stressed any employee being sacked on the basis of age would be unlawful discrimination under the Fair Work Act.

He said the government would “take a very close look” at businesses using the scheme, saying there would be a “very dim view of that kind of behaviour”.

“If people are playing these sorts of games I think it will be fairly obvious,” he told Sky News.

“If you see a business sack an older worker and hire three young workers to do similar work, it’s not going to be all that difficult to go back through the audit trail and demonstrate that.”

Under the JobMaker scheme, businesses are paid $200 per week for each job they create for workers aged between 16 and 29 if they are on JobSeeker or Youth Allowance.

Employers must increase their headcount to be eligible.

The scheme was designed to increase employment but sparked fears employers would be incentivised to replace a single senior worker with multiple junior ones.