Budget 2020: JobMaker will not be rorted, says Josh Frydenberg

Josh Frydenberg has been forced to defend his $4bn wage subsidy scheme, as employers rejected Senate crossbench and union claims the program was ‘open to rorting’.

Treasurer Josh Frydenberg in question time on Wednesday. Picture: Getty Images

Josh Frydenberg has been forced to defend his $4bn wage subsidy scheme, as employers rejected Senate crossbench and union claims the program was “open to rorting” and could be used to replace older workers with cheaper young casual workers.

ACTU secretary Sally McManus said the JobMaker program would become “JobReplacer” if employers were able to cut the hours of part-time workers or lay off existing casual workers and replace­ them with unemployed people subsidised by taxpayers.

With employers able to claim a double subsidy of $400 a week if they take on two low-paid young casual workers rather than $200 a week for an eligible full-time employee­, ACTU president Michele O’Neil said the program was “really open to being rorted”.

She said the government should insert a condition that exist­ing employees could not be displaced by subsidised workers.

Independent South Australian senator Rex Patrick said he wanted to know what safeguards were in place to make sure the program was not abused, as JobKeeper had been in some cases, while One ­Nation leader Pauline Hanson also cautioned that it would “only lead to more rorting by those who wish to game the system”.

Greens leader Adam Bandt said the “dodgy” JobMaker policy would fuel insecure, low-paid work by throwing money at big corporations to hire part-time workers on the minimum wage.

“McDonald’s will be rubbing their hands at this great big pot of cash. JobMaker will deliver for big corporations but not for young workers,” Mr Bandt said.

It is highly likely that Labor will support the scheme, meaning the bill will be passed by the Senate, but opposition Treasury spokesman Jim Chalmers said the party was concerned that nearly one million unemployed Australians would not qualify for the subsidy.

Australian Bureau of Statistics data shows the unemployment rate has increased the most during the pandemic among those aged 20-24 and 30-34. While more people in the 15-19-year-old bracket had jobs in August compared with March, that group has the highest unemployment rate, 16.9 per cent.

“It beggars belief … when you‘ve got a trillion dollars in debt, you’ve got all of this money being sprayed around, that not just older workers, but workers in their 30s, workers with young families, are being left out and left behind and left in the lurch,” Dr Chalmers said.

Under the government’s plan, which would run for 12 months, an eligible employer would receive $200 per week for hiring a person aged 16-29 or $100 per week for someone aged 30-35, with a maximum benefit of $10,400 per new position created.

The new employees must work at least 20 hours per week.

In order to receive the subsidy, an employer must show the hiring of that person has increased their business’s headcount and wages bill compared with September 30.

“There‘s a double-barrel test for the eligibility for a business to receive that JobMaker hiring credit­,” Mr Frydenberg said.

“The integrity test … is designed­ to support additional people coming on to that business and that will ensure that those 450,000 people that we’re supporting will get the benefit of those businesses taking those incentives to hire and to grow.

Council of Small Business Org­anisations Australia chief executive Peter Strong dismissed the unions’ concerns, saying small businesses would have to spend more time trying to rort the system than running their company.

“I heard Michele O’Neil saying you might put two workers on for 20 hours, creating more casual or part-time work,” Mr Strong said.

“It’s a lot harder managing two staff than it is one. To do that so you can get money is just ridiculous. And it gets people back into work. If there were two people with 20 hours it’s better than nobody­ with no work at all.”

Australian Chamber of Commerce and Industry chief executive James Pearson said taking on a young unemployed worker was a big step for a business.

“Businesses value staff with experience and knowledge,’’ he said.