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Teenagers who did not get JobKeeper set to benefit most wage subsidy

Daily Mail logo Daily Mail 8/10/2020 Charlie Moore, Political Reporter For Daily Mail Australia
a man and a woman standing in a kitchen: MailOnline logo © Provided by Daily Mail MailOnline logo

Teenagers who missed out on JobKeeper are set to benefit hugely from the government's new wage subsidy scheme, experts predict.

Tuesday's federal budget contained a hiring credit policy to get young JobSeekers back into work after the coronavirus recession.

The scheme pays companies $200 per week for every JobSeeker they hire aged 16 to 29 and $100 per week for every new worker aged 29 to 35, as long as they work 20 hours.

a person standing in front of a store: Next year, Woolworths (pictured) plans to open up to 20 new supermarkets and 30 Metro stores, creating thousands of new jobs © Provided by Daily Mail Next year, Woolworths (pictured) plans to open up to 20 new supermarkets and 30 Metro stores, creating thousands of new jobs

Dr Shane Oliver, Chief Economist at AMP Capital, said teenagers stand to benefit the most.

'I think it will mainly help the ultra young with part-time jobs such as teenagers working at supermarkets, restaurants and in retail generally,' he told Daily Mail Australia.

'These people may otherwise have been locked out of the workforce so in that sense I think it's a positive move.'

Casuals who worked for the same company for less than a year did not qualify for JobKeeper and were instead forced to claim JobSeeker.

Dr Oliver said the subsidy scheme, which at $4billion is far cheaper than the $100billion JobKeeper policy, is about getting those people off the dole and back into work.  

Some economists have said a subsidy may not help because hiring is driven by demand which is down during the recession - but Dr Oliver dismissed those concerns.

'The government would say that's why it's part of a package including measures to stimulate demand such as tax cuts and investment incentives,' he said.

'The budget has delivered $160billion of stimulus this year alone. It's hard not to see people spending some of their tax cuts and companies investing more.' 

a person standing in front of a store: Tuesday's federal budget contained a hiring credit policy to get young JobSeekers back into work after the coronavirus recession. Pictured: A cafe worker in Sydney © Provided by Daily Mail Tuesday's federal budget contained a hiring credit policy to get young JobSeekers back into work after the coronavirus recession. Pictured: A cafe worker in Sydney

ACTU president Michele O'Neil has raised concerns that companies will rort the scheme by sacking workers and replacing them with young JobSeekers to get the subsidy.


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'The concern is that the scheme will be rorted to replace existing workers and to have multiple insecure jobs,' she said.

But Peter Strong, CEO of the Council of Small Business Org­anisations Australia, said those claims were overstated. 

'It's a lot harder managing two staff than it is one. To do that so you can get money is just ridiculous,' he said.

The scheme only lets a company qualify for the subsidy if their overall headcount and payroll total is increased.  

Experts say companies that typically employ lots of young workers, have high rates of staff turnover and are in a position to hire more people will benefit the most. 

Coles and Woolworths hired 20,000 new workers as shopping surged in the first few months of the coronavirus pandemic.

a stack of flyers on a table: Fast food chains like McDonald's (pictured) and supermarkets stand to benefit hugely from the government's new wage subsidy scheme © Provided by Daily Mail Fast food chains like McDonald's (pictured) and supermarkets stand to benefit hugely from the government's new wage subsidy scheme

Next year, Woolworths plans to open as many as 20 new supermarkets and 30 Metro stores, creating thousands of new jobs.  

McDonald's, which has 105,000 employees and 80 per cent under 21, also stands to benefit.  

The fast food chain is planning to open another 25 stores and is expected to be hiring in the coming months, with each store creating about 100 jobs.

A franchise that takes on 20 new workers who qualify for the $200 subsidy will get $208,000 a year from the government. 

The policy will allow franchisees to pay an 18-year-old on 20 hours just $5 an hour, with the government making up the rest of the $15 wage.

A McDonald's spokesman said there will be more jobs available for Australians over the next year.

'We will continue to grow our business and open new restaurants in the year ahead,' the spokesman said. 

Prime Minister Scott Morrison said on Wednesday that the policy, which lasts for one year, is designed to reduce youth unemployment and get people off benefits.

The youth unemployment rate is 14.3 per cent, more than double the general 6.8 per cent rate. 

'Youth unemployment sets people up for a life of welfare dependency,' he said.

a screen shot of Scott Morrison in a suit and tie: Prime Minister Scott Morrison (pictured) said on Wednesday that the policy, which lasts for one year, is designed to reduce youth unemployment and get people off benefits © Provided by Daily Mail Prime Minister Scott Morrison (pictured) said on Wednesday that the policy, which lasts for one year, is designed to reduce youth unemployment and get people off benefits Read more

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