Title Why JobMaker is doomed to fail Degree of recognition National Media name/outlet Australian Financial Review Media type Web Country/Territory Australia Date 26/10/20 Description The $4 billion JobMaker hiring credit scheme is what you get when economic policy is created by career politicians and academics who have zero experience in running a private enterprise business (‘‘JobMaker credit is no pink batts plan: PM’’, October 8).
This scheme will create very few new jobs and here is why.
The $200 per week subsidy will, at best, cover about 30 per cent of a new employee’s total cost, and only lasts for 12 months. Employers will focus not on the 30 per cent subsidy, but on the 70 per cent cost they are exposed to, going up to 100 per cent after 12 months.
Who buys a product they don’t need just because it has a 30 per cent discount, particularly when all sorts of hoops must be jumped through to qualify?
On the other hand, there will be businesses that are doing well and growing, who would have hired new staff without any government assistance. This is where most of the $4billion will end up, enriching shareholders via dividends and share buybacks. No wonder business has applauded the scheme, just as they applaud tax cuts. For everyone else it is just more debt funded stimulus that will fail to deliver.
Producer/Author Professor Martina Linnenluecke URL https://www.afr.com/politics/federal/letters-why-jobmaker-is-doomed-to-fail-20201022-p567oh Persons Martina Linnenluecke