Taxpayers facing $1.3bn payout on workers’ entitlements

Taxpayers will pay $1.3bn in wages and entitlements for almost 120,000 workers by 2023 if government forecasts on the COVID recession are correct.

Senator Murray Watt. Picture: AAP

Taxpayers will pay $1.3bn in wages and entitlements for almost 120,000 workers by 2023 if federal government forecasts about the increase in the number of collapsed employers because of the COVID recession are realised.

Officials from the Attorney-General’s Department detailed a big rise in the amount of money expected to be paid out under the government’s Fair Entitlements Guarantee Scheme, with the amount jumping from $162.3m in 2019-20 to a forecast $468m this financial year.

According to projections provided to a Senate estimates hearing on Monday, the amount to be paid out will rise to $500m next fin­ancial year, while the amount budgeted for 2022-23 is $374m.

Under the scheme, the government covers certain unpaid employment entitlements to eligible employees who lose their job because of the liquidation or bankruptcy of their employer.

Officials told the hearing that the number of workers expected to be paid out this financial year would be 34,268, while 33,444 were forecast to be paid out in 2021-22, 24,357 in 2022-23 and 27,248 in 2023-24.

The estimates, prepared in April 2020, are based on demand being two and half times the current claim levels.

Labor senator Murray Watt said the figures showed there was a “tidal wave coming”.

Attorney-General Christian Porter said the stimulus spending in the federal budget would significantly cushion the impact of the pandemic on the economy and assist businesses.

The government announced an extra $35.3m would be spent to provide up to 150 staff within the Attorney-General’s Department to process FEG claims.

“The FEG acts as a safety net of last resort for workers, covering unpaid entitlements such as wages and annual leave that are left outstanding when a business goes into administration and there are insufficient assets to cover final entitlements,” Mr Porter said. “The additional staff will be brought on as necessary to meet demand and ensure Australian workers can access entitlements quickly and accurately when eligible.”

The new figures were disclosed as Master Builders Australia chief executive Denita Wawn said builders were lobbying the Morrison government to take legislative action in response to a CFMEU pay campaign in NSW.

“Since (Scott Morrison) announced the government would no longer pursue the Ensuring Integrity Bill, Master Builders has regularly reminded the government of its commitment to ensure the rule of law on construction sites through an alternative statutory mechanism and we continue to do so,” she said.

Mr Porter said he would have thought the broader union movement would not want to put up with the rampant unlawful behaviour inside key parts of the CFMEU because it damaged their movement and damaged economic growth and jobs “but the legislative response is on pause so we can focus on genuine dialogue around the really important issue: how do you get back a million jobs?”