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‘Conspicuously missing’: 4 things wrong with the Treasurer’s jobs plan

Jessica Yun
·6-min read
Treasurer Josh Frydenberg holding up budget papers
The 2020-21 federal budget is all about jobs, says Treasurer Josh Frydenberg. (AAP Image/Lukas Coch)

It’s the budget that was meant to be all about jobs.

The Treasurer on Tuesday announced – in a speech that mentioned the word jobs several dozens of times – several billion dollars aimed at creating them, namely for the manufacturing, construction and infrastructure industries, as well as new wage subsidies for young people and apprentices.

Attached to many of the budget policies are claims that thousands of jobs will be created.

But how will that actually happen?

While there is reason for small business owners to feel confident in the future, the Council of Small Business Organisations of Australia (COSBOA) said Morrison Government’s schemes needed to be grounded in reality in order to be successful.

“The ‘big picture’ nature of many of the employment assistance initiatives ... suggests a need to ensure that these measures are delivered in a manner that makes these programs relevant and accessible to small and family businesses (at the local community level),” COSBOA said in a statement.

“This will be particularly important given that much of the job restoration effort will be borne by small businesses operating in local communities around the country - beginning with the imminent labour challenges associated with the summer harvest in regional and rural Australia.”

Programs like the new JobMaker Hiring Credit subsidy scheme would be dependent on the government’s ability to deliver assistance that is relevant and accessible to small business owners, the organisation asid.

“This program must be delivered at the local level, via genuine matching of real jobs with local unemployed people.”

New JobMaker youth wage subsidy creates insecure jobs

Meanwhile, the new wage subsidy for apprentices and trainees would have to take into account “varied economic structures of local communities” rather than using a “broad-brush” approach, he added.

Australian Council of Trade Unions (ACTU) president Michele O’Neil said the scheme was “flawed” and did not “guarantee secure, ongoing jobs”.

“The key to good employment programs is that they deliver secure jobs. So again the problem with this subsidy is that it can be for casual, insecure, short-term, and part-time jobs,” she told ABC RN on Wednesday morning.

It would mean that employers could double the subsidy by giving two people a part-time job rather than giving one person a full-time job, she said.

“And for many young people, particularly those on youth wages, you can't live on a job that gives you 20 hours a week. It's just not enough to put food on the table,” she said.

“It's very short-term in nature, only for a year. It encourages businesses to churn through workers who would be eligible for the subsidy rather than investing in them for the long term.”

But only secure jobs would encourage people to feel confident enough to spend, she added.

Budget lacks long-term vision

KPMG chief economist Brendan Rynn said the budget provided a short-term plan, but failed to outline “medium- to longer-term policy options” to boost productivity.

“Notwithstanding elements such as additional infrastructure spending and upgrades to the NBN, we accept that this Budget necessarily needed to focus on triaging the economic bleeding associated with this COVID-induced recession,” said Rynne.

“We strongly believe the government should be looking to next year's Budget to roll out serious economic reforms.”

John Brazzale, the national chairman of Pitcher Partners National Association, a network of independent business firms, also criticised the government’s lack of long-term vision and echoed calls for structural reform, arguing that the JobMaker wage subsidy would help, but only for a time.

“While subsidies can reduce pressure on businesses, it must be noted that it’s not a long-term solution to the deeper structural issues that need to be addressed,” he said.

“In the midst of domestic and global uncertainty, it is no surprise that the Federal Budget is focused on the here and now, but the measures announced don’t deliver the future vision required for Australia’s long-term recovery.”

The next budget would need to address these issues, said both Brazzale and Rynne.

According to the budget papers, the government isn’t looking to increase migrant intakes currently capped at 160,000, save a one-off hike this year for the Family Stream, which will rise from 47,732 to 77,300.

But this ignores a crucial contributing factor to Australia’s prosperity, Rynne said.

“We know that in times of previous global calamity, Australia has historically benefitted from opening its doors and using the skills and capabilities of migrants to help grow our nation faster than we otherwise could do by ourselves,” he said.

In a post-Covid world, migrants will be looking to move to countries that managed the pandemic better, and Australia is one of those countries.

“We should therefore capitalise on our 'good fortune and good management' and consider how we can restart our foreign migration program.”

Frydenberg’s JobSeeker problem

Several business and union groups have also pointed out that the 2020 budget does not address the uncertainty for thousands of Australians who have been left jobless, despite the wage subsidies.

Plans for JobSeeker’s future beyond the end of this year were “conspicuously missing,” said Rynne.

“The jobs mantra around which the Budget is framed cannot be faulted. However, confidence begets confidence; uncertainty begets uncertainty,” he said.

“Many people have lost jobs through no fault of their own and, despite the expansive incentives on offer to businesses to employ new staff, will remain unsure about their ability to successfully navigate the rapidly changing labour market. People without jobs, or who fear losing their jobs, will still have a cloud of doubt surrounding their financial future after tonight.”

Australian Council of Social Services chief executive Cassandra Goldie said there was “nothing” in the budget after 31 December that fixed social security for those hardest-hit by the pandemic.

“The budget is a crushing let down for people on JobSeeker who are facing the prospects of no confidence, no certainty, no adequacy of their incomes coming to the end of the year,” she said.

“What we've got instead is this heavy reliance on tax cuts and that's giving the most dollars to people who've already got a job from people on higher incomes. We've got a missed opportunity on so many fronts here.

“So we're very worried about people who've got the least. They have been left behind at the moment.”

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