Yahoo Finance Troubled JobMaker subsidy on chopping block
The Government’s JobMaker wage subsidy was presented as a way to support around 450,000 jobs for young people, but the troubled policy’s days could be numbered.
The $4 billion policy was intended to get workers younger than 35 into jobs by offering employers subsidies of up to $200 to take them on.
However, only 609 new jobs were created in the first seven weeks of its existence.
Now, the Federal Government could move to scrap the controversial policy, according to Sky News reports.
PwC chief economist Jeremy Thorpe said a decision to scrap the subsidy would be unsurprising, given the Government’s stance on its COVID stimulus policies.
“The Government said the stimulus would be targeted, timely and temporary. I think they’ve shown a willingness to try things and ditch them if they thought we needed to move to a different environment because the economy changed or the policies weren’t working,” he told Yahoo Finance.
“I wouldn’t be surprised if they changed it on the basis of it not working.”
These sorts of wage schemes have often been difficult to execute due to the red tape businesses need to contend with to access the cash, he added.
“Companies have just gone, ‘It’s too much work to do, I can’t be bothered.’”
And while the scheme was well targeted in that it focused on young workers, businesses still faced the bigger challenges of hiring and training relatively junior staff, Thorpe said.
Many may have simply decided it wasn’t worth the hassle, even for the extra money. “If they choose to drop [JobMaker], I don’t think anyone would complain.”
Skills focus the next step
The Government’s next challenge will be on how to best reskill the economy to drive growth in other ways, Thorpe said.
He believes the Government would get the biggest bang for its buck by investing in digital skills.
“Upskilling around digital skills is where we’re going to get productivity improvements. After COVID, much more has gone online,” he said.
“Digital has become a much more important element, cybersecurity has become an enormous part of fundamental digital skills.”
The Morrison Government yesterday announced $1.2 billion to boost the digital economy to help businesses get online.
And with the borders shut, Australia is also low on international talent, Thorpe added.
“We need to be retraining for the next generation of jobs, not the current generation of jobs. If there’s that kind of emphasis [in the Budget], that’s a really great emphasis.”
Don’t miss our Federal Budget coverage: Sign up to the newsletter here.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.
