Simon Birmingham (SA, Liberal Party, Minister for Trade) Share this | Hansard source

The subsidy relates to new staff being employed and those new staff, in terms of the growth of payroll, adding to payroll. Of course, the wages that they are paid are the wages as dictated in awards, EBAs or other employment conditions. In that sense, what the staff member receives, whether they be an existing staff member or a new staff member, are the wages to which they are entitled.

The payment is designed as an incentive or a wage subsidy. It is an incentive for employers to take on more young Australians. That is the fundamental premise behind this. All the evidence—from the past and recently—is that, when young people get stuck on unemployment benefits, when they get stuck on JobSeeker, they can be stuck for a very long period of time. So this is an incentive for employers so we can avoid that. The evidence from the last recession we had was clear. Youth unemployment took far longer to recover to its pre-recession levels than the overall unemployment rate did. What we are trying to do here is tackle a known problem in previous economic downturns. We are targeting that particular problem and providing an incentive to get young Australians out of the perennial cycle of unemployment that could plague their lives for a long time without this type of intervention.