Budget 2020: How to take advantage in tourism + hosp

In Business Resources, Customer Service, Government, Harmonisation, Media and Communications, Momentum

The federal government’s lauded JobMaker scheme will subsidise the wage of any person in a new job between 16 and 35 years old who was on certain payments for a minimum of one month before the announcements. The government’s goal is to get people off payments and into a job that will last beyond the pandemic.

In parallel is funding for the Training and Apprenticeships 50% wage subsidy (for one year) which you’ll have to get in quick to take advantage of, as places are limited at 100,000. For the full story on which training and apprenticeships may be applicable to your hospitality business, please see this previous Tourism News story.

Please be aware of the main provisos (not onerous) for JobMaker (excerpted here from The Guardian story below)

  • The key test is that the new employee received the jobseeker payment, youth allowance (other) or parenting payment for at least one month out of the three months before being hired.
  • The employer will also have to prove the overall number of employees has increased, and that the new employee works for at least 20 hours a week, averaged over a quarter.
  • The hiring credit will be paid at the rate of $200 a week for hiring people aged 16 to 29, or at $100 a week for 30- to 35-year-olds. Employees can receive this hiring credit for 12 months. The scheme begins on Wednesday (7th October 2020), the day after the budget.

(and from abc.net.au)

  • They must also be working at least 20 hours a week on average in their new jobs.

  • As for the requirements on businesses, they can’t currently be claiming the JobKeeper payment if they want to take part in JobMaker.

  • Crucially, businesses do not need to have suffered a fall in turnover to be eligible for the scheme.

The Tourism News, 7th October 2020

Budget’s jobmaker hiring credit will pay businesses $200 a week to employ young Australians

The Morrison government will pay businesses up to $200 a week to hire young Australians as part of a $4bn budget measure that aims to reverse an increase in youth unemployment during the recession.

The new incentive will go to firms that employ young workers who had previously been receiving jobseeker – the unemployment benefit formerly known as Newstart.

It follows Sunday’s announcement of expanded training subsidies, with the government pledging to cover half the wages of 100,000 new apprenticeships and traineeships.

Both moves are part of the government’s answer to the question of what will replace the jobkeeper wage subsidy and elevated jobseeker payments, which the government is tapering down despite criticism about the potential economic and social impact.

In question time on Tuesday, Scott Morrison brushed off claims from the Labor leader, Anthony Albanese, that “the Morrison recession” would be longer and deeper because of the prime minister’s cuts to jobkeeper and jobseeker.

“Young people can look at this budget tonight and know that this government has got their backs to get them into a job, not for them to spend a life on welfare,” Morrison said.

The jobmaker hiring credit

The budget papers show the government is earmarking $4bn over three years to encourage organisations to take on additional employees aged 35 or younger.

The key test is that the new employee received the jobseeker payment, youth allowance (other) or parenting payment for at least one month out of the three months before being hired.

The employer will also have to prove the overall number of employees has increased, and that the new employee works for at least 20 hours a week, averaged over a quarter.

The hiring credit will be paid at the rate of $200 a week for hiring people aged 16 to 29, or at $100 a week for 30- to 35-year-olds. Employees can receive this hiring credit for 12 months. The scheme begins on Wednesday, the day after the budget.

The treasurer, Josh Frydenberg, said the budget was “all about jobs” and all businesses except for the major banks would be eligible for this new scheme.

“Treasury estimates that this will support around 450,000 jobs for young people,” he told parliament as he delivered the budget on Tuesday evening.

“Having a job means more than earning an income. It means economic security. It means independence. It means opportunity. We can’t let this Covid recession take that away.”

Apprentice and trainee wage subsidies

Frydenberg also pointed to the government’s plan to create 100,000 new apprenticeships and traineeships, covered by a 50% government wage subsidy. This will come at a cost to the federal government of $1.2bn over four years.

The aim is to “build a pipeline of skilled workers” to support the economic recovery, according to the budget papers.

Businesses will be reimbursed up to half of the cost of an apprentice or a trainee’s wages up to $7,000 a quarter. But rather than being demand driven, the scheme is capped at 100,000 places – a constraint that has already drawn criticism from Labor and others.

The subsidy will be available to businesses of any size between 5 October 2020 and 30 September 2021, and it applies to apprentices or trainees who start during this period.

“The wage subsidy will support school leavers and workers displaced by the Covid-19 related downturn to secure sustainable employment,” the budget papers say.

The government has revealed, however, that it will delay the beginning of a previously announced apprenticeship incentives program by six months to July 2021 to “minimise disruption”.

The budget also earmarks $263m over four years to reform the vocational education and training system.

How do I get JobMaker and how does the Federal Budget’s hiring credit scheme work?

A woman behind the counter at a cafe.
Jobs created from Wednesday will be eligible for the scheme.(ABC News: Brendan Esposito)

From the Morrison Government which brought you JobKeeper and JobSeeker comes a new program with a name that won’t surprise you one little bit: JobMaker.

No prizes for guessing what it’s all about either…

Specifically, the Government wants to get the economy making jobs for young people who are currently out of work and on welfare amid the coronavirus pandemic. Here’s how it plans to do that.

What is the JobMaker Hiring Credit and who gets it?

The first thing to know is that the payment itself goes to the businesses creating the new jobs, not the young people getting those new jobs.

The upshot is that businesses will get $200 a week for each new employee aged between 16 and 29. For new eligible employees aged 30 to 35, they’ll get $100 a week.

The Federal Government says it expects about 450,000 jobs will be supported under the scheme.

However, businesses and employees will need to meet further eligibility requirements to take part.

What are the eligibility requirements?

The main requirement for the new employees is that they must have been receiving one of these three forms of welfare in the three months before they were hired: JobSeeker, Youth Allowance (Other) and the Parenting Payment.

They must also be working at least 20 hours a week on average in their new jobs.

As for the requirements on businesses, they can’t currently be claiming the JobKeeper payment if they want to take part in JobMaker.

The major banks have also been specifically called out as ineligible.

Crucially, businesses do not need to have suffered a fall in turnover to be eligible for the scheme. But the new jobs must be additional — that is, the total employee headcount must have gone up at the business.

How long will this go for and how much will it cost?

Worker cuts a pipe at Alltype Engineering, Perth, July 2016
The scheme is expected to cost $4 billion.(ABC: Glyn Jones)

To be eligible for the new scheme, the new jobs must be created between October 7, 2020 and October 6, 2021.

The hiring credit is then available for 12 months for each of those new jobs (meaning the scheme is set to finally come to an end on October 6, 2022).

As for the cost, the scheme is expected to have a price tag of $4 billion from 2020-21 to 2022-23.

How do I get started?

Employers will be able to register for the scheme from December 7, 2020, via the ATO website.

But don’t worry, businesses don’t need to be registered for the scheme at the time that a new job is created — and again, new jobs are eligible for the scheme from Wednesday.

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