- The federal government promised its JobMaker credit, a wage subsidy valued up to $200 for workers under the age of 30, would deliver 450,000 jobs.
- Treasury reneged on those figures this week, as it reveals its own calculations point to as few as 10% of that number.
- While difficult to accurately predict, Treasury’s stance suggests the government may struggle to produce anywhere near the amount of jobs it promised via the scheme.
- Visit Business Insider Australia’s homepage for more stories.
The federal government promised the world in its post-pandemic budget but may struggle to stick the landing.
Delivering its belated budget, hinged on a nearly $1 trillion debt, earlier this month Treasurer Josh Frydenberg promised Australians the government would get them back to work.
“This Budget is all about jobs. Starting tonight, there will be a new JobMaker hiring credit to encourage businesses to hire younger Australians,” Frydenberg declared.
The credit, valued at $200 per week for most workers under the age of 30, would “support around 450,000 jobs for young people”, the Treasurer promised.
Fast forward a few weeks however and the figures at the heart of that pledge are beginning to look more than a little inflated as the country heads towards a projected 8% unemployment rate.
During Senate Estimates on Monday, deputy secretary of Treasury’s fiscal working group Jenny Wilkinson acknowledged it remained “very hard to judge” whether the JobMaker credit would actually be responsible for creating all of those jobs.
“In costing this we’ve made a conservative assumption that about 10% of employment is genuinely additional. [That is] it would not have happened but for the hiring credit,” she said.
It would suggest that as few as 45,000 jobs could be safely attributed to the program, which will phase out the more generous JobKeeper wage subsidy, a flat payment of $1,500.
Of course, there remains a “very wide” margin of error for those estimates, Wilkinson acknowledged, but it at least makes the prospect of hundreds of thousands of new jobs seem distant.
“The Australian government has been sprung giving false hope to 400,000 young workers in this country,” Shadow Treasurer Jim Chalmers said on Tuesday.”We have a budget that tracks up $1 billion in debt, spends $100 billion, and still means unemployment will be too high for too long.”
It wasn’t the only piece of policy that looks like it may end up not delivering. Chalmers said the federal government’s manufacturing policy and the technology roadmap – which increases investment to shore up jobs – was “also a sham”.
“Treasury has had no role in it, they are not numbers included in the budget, they are numbers that have just been plucked out of the air,” he said.
With employment ranking as the number one economic priority of both government and the RBA, just how many new jobs the government can create will remain its measure of success.
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