Louise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) Share this | Hansard source

This afternoon we rise to debate the government's Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020. From the outset of this pandemic, Labor called for wage subsidies to support vulnerable workers, businesses and communities. We've called for broader labour market programs to promote job creation and to kickstart economic recovery in our nation. Labor welcomed the introduction of JobKeeper, albeit JobKeeper was introduced much later than we would have liked. Labor still very much hold the view that it excluded far too many workers, such as casuals and temporary migrant workers. So it's very disappointing now to see that the government is cutting JobKeeper. You're cutting JobKeeper in the midst of the deepest recession in our nation in nearly a century. You've done all this at a time while unemployment is rising.

In these debates Labor have very much sought to be constructive, to serve the national interest and to not stand in the way of measures. Albeit these measures are not perfect and not as we would have delivered them, they nevertheless deliver things to the Australian people and the Australian economy at this time. We very much reserve, retain and maintain the right to be critical where we see flaws in the approach that the government has taken to economic recovery. In that spirit, today I highlight that Labor support this bill, but we are both very concerned and very disappointed that the government has not learned its lesson from the shortcomings of the JobKeeper program.

Today I put on the record that Labor believe, based on the evidence, that the JobMaker hiring credit will leave many businesses and workers behind. Equally, the government's decision to prematurely cut JobKeeper led to a fall in jobs and a fall in wages in every state and territory. This happened in the first fortnight after the cut. Some 30,000 jobs were lost in the fortnight to 17 October, and 470,000 have been lost as a whole since the outbreak of the virus. What is even further distressing is that we know that 160,000 more Australians are expected to join Australia's unemployment queue by Christmas. That's the prediction. The decision of the Liberals and Nationals to cut JobKeeper, cut JobSeeker and exclude Australians from the new hiring credit scheme means that we have a recession now and a recession that will continue into the future that will be deeper than it otherwise would have been. It will be deeper than necessary and the unemployment queues will be longer than they need to be. The government's slow action on economic recovery and the decisions that this government has taken to exclude Australians from economic support could mean that their legacy from this pandemic will be not only an unheard of level of debt—a trillion dollars of debt—but also a tanking economy and a missed opportunity. This bill is a missed opportunity in that it lacks the ambition to significantly lower the unemployment rate and get more people back into work. What's the point of all that debt if it's not enough to stop the economy from spiralling down and to prevent those job losses?

The enabling legislation before the chamber has little to do, frankly, with the JobMaker hiring credit as this government announced it in the budget. The bill amends the Coronavirus Economic Response Package (Payments and Benefits) Act 2020, and it allows the Treasurer to make payments and create schemes with the primary purpose either of improving the prospects of individuals getting employment in Australia or of increasing workforce participation in Australia. I find it concerning that all the design parameters of the JobMaker hiring credit and any additional schemes the Treasurer should wish to introduce are left to delegated legislation that the Treasurer can, effectively, create with the stroke of a pen.

During the estimates hearings I was not impressed by the level of coordination between Treasury, which is responsible for this new program, and the Department of Education, Skills and Employment or the Department of Human Services, who deal with the existing employment promotion schemes, including wage subsidies, that exist within the jobactive network. There was no real sense of the relativity, the integration or the importance of what's already been delivered through disability employment programs, through jobactive or through any of the other schemes. So it does concern me, and it is alarming, that the Treasurer can now effectively create new programs with the stroke of a pen. We do understand the need for flexibility, but the use of delegated legislation means the only option for parliament to deal with objectionable new rules or unintended consequences is by a disallowance motion—disallowing the scheme itself—rather than targeted amendments as per what would be the normal legislative process. It's a like it or lump it approach.

This is wrong, because the government's record shows that real improvements can be made by this chamber to the schemes that they put forward. We're moving amendments in the committee stage to reflect that the government should not be written a blank cheque by this chamber. The rules made under this delegated legislation should be supported by a resolution of both houses of parliament, and we will move an amendment to that end. We will move that better reporting and evaluation processes should be taking place.

I return now to discussing the lack of ambition in this bill and the gaps the government has created due to the eligibility criteria, and I put on record what we discovered in estimates: of the 450,000 jobs expected to be supported by the hiring credit, only 45,000 are expected to be new jobs; and 928,000 Australians have been deliberately excluded from the JobMaker hiring credit as announced in the budget. Just 10 per cent are expected to be new jobs, so how this program can be labelled 'JobMaker' is, tellingly, very debatable. Businesses, in particular small businesses, that have struggled during the pandemic and relied on JobKeeper are very unlikely, in many senses, to be in a position to recover from the coronavirus impacts, where accessing JobKeeper has been necessary, and then take on new staff and expand as the JobKeeper subsidy is withdrawn. I draw on research from the Grattan Institute in putting forward this argument. The institute estimated one million employers that received JobKeeper will effectively be excluded from the hiring credit scheme.

Again, during the Senate estimates committee hearings, Treasury officials were unable to provide estimates of or assumptions for the numbers or types of firms that have lost or will lose JobKeeper, either in its revised form or upon completion of the program when it expires in March, and will therefore either make JobKeeper subsidised workers redundant or will be able to take advantage of the hiring credit. A business has to be in a position to earn enough income to support its existing workforce in order to be eligible for the hiring credit, so it's quite clear that the scheme is not going to be sufficient to make a meaningful dent in unemployment to help our Australian economy to recover. It will be interesting to see the uptake of the scheme and whether businesses that really deserve the support and would otherwise be economically viable suffer because they have been unable to access this hiring credit.

The Council of Small Business Organisations Australia, COSBOA, in evidence to the Economics Legislation Committee inquiry into these issues, which I was delighted to participate in, said that the subsidy was not high enough to incentivise employers to take on new staff and that members had indicated that the hiring credit wage subsidies were too low. COSBOA said in its submission:

Given the apparent complexity of the hiring credit administration processes, for small businesses, in particular, the subsidy amounts are insufficient to motivate the additional hiring.

We note that the hiring credit may well be used by more businesses that did comparatively well during the coronavirus epidemic and recession, so the businesses that did well might now be in a stage of business growth. But the issue here is that 90 per cent of these jobs would have been created even if the hiring credit were simply not there for businesses to take up. This is confirmed by Treasury's own evidence.

Most concerning is that some workers will miss out because of the narrow eligibility criteria of the government's design. The scheme has been limited to workers aged 35 years and under and in receipt of the JobSeeker payment or youth allowance in the preceding three months. We know that youth unemployment is far too high in this country, far higher than it should be—this was the case prepandemic—but the solution in current labour market conditions shouldn't be such narrow targeting, particularly when we know there are many other workers who are also missing out. Employment scarring is, as we know, a real problem for younger workers. We see it in the data, we see it in the literature, we see that these workers are worse off in the long term. They are usually on lower wages and will be more welfare dependent as a result of long-term unemployment from a recession. We very much support the idea that labour market programs should be created and activated throughout economic recovery. That is what the Keating government did with the Working Nation plan in the 1990s.

There are not complementary labour market programs to help workers over the age of 35 except for, in mere passing comment, the Restart Program aimed at workers over 50, where not even half of the participants remained in employment after six months. The hiring credit has incentivised employers to hire those who fit the criteria as part-time or casual workers. The ACTU's submission to the inquiry detailed:

… under the programme as currently written, an employer with a number of vacancies which together represent 3 FTE (Full-time Equivalent) roles could hire 3 full-time workers and receive a subsidy of $600 a week. Alternately, they could hire 6 part-time or casual employees to fill the same vacancy and receive a subsidy payment of $1200 a week … virtually the same outlay for the employer. This programme appears to be designed to produce insecure jobs …

This government should be resourcing agencies to ensure employees are able to raise matters with enforcement agencies and have confidence those concerns will be investigated but also protect workers who are at risk of employment discrimination or having their hours reduced. Labor will not oppose this bill, but we do not— (Time expired)