Referral of the bill
1.1
On 7 October 2020, the Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 (the bill) was introduced in the House of Representatives and read a first time.
1.2
On 8 October 2020, the Senate referred the provisions of the bill to the Economics Legislation Committee (the committee) for inquiry and report by 6 November 2020.
Purpose of the bill
1.3
According to the Explanatory Memorandum (EM), the bill amends the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (the Act) to allow the Treasurer to make rules for a coronavirus economic response payment that is primarily intended to improve the prospects of individuals getting employment or increase workforce participation.
1.4
This amendment facilitates the JobMaker Hiring Credit scheme that was announced by the Commonwealth Government as part of the 2020-21 Budget. This scheme will operate until 6 October 2022.
1.5
On Wednesday 7 October 2020, the Assistant Treasurer and Minister for Housing, Mr Michael Sukkar MP, further explained the intent of the bill:
The Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 makes a narrow extension of the current time limit on payment rules authorised by the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 which allow the Treasurer to establish the JobMaker Hiring Credit scheme.
As announced last night, this scheme will operate from 7 October 2020 until 6 October 2022. Youth unemployment has increased due to the COVID-19 pandemic. The JobMaker Hiring Credit will help to accelerate growth in employment during the recovery by giving organisations incentives to take on additional employees that are young jobseekers aged 16 to 35 years old.
The JobMaker Hiring Credit will be available to employers for each new job they create over the next 12 months from 7 October 2020 for which they hire an eligible young jobseeker. This will help young people access job opportunities and rebuild their connection to the labour force as the economy recovers from the effects of the coronavirus. This payment is a key part of the government's plan to assist the economic recovery from the coronavirus pandemic.
Background
1.6
The Coronavirus Economic Response Package (Payments and Benefits) Act 2020 was introduced as a bill into both houses of Parliament on 8 April 2020; passed that same day; and was given Royal Assent on the following day. The Act was introduced with the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020; Appropriation Bill (No. 5) 2019-2020; and Appropriation Bill (No. 6) 2019-2020 to respond to the economic impacts of the coronavirus pandemic. The Act established a framework for the Treasurer to make rules which provide for the Commissioner of Taxation (the Commissioner) to make coronavirus economic response payments to eligible entities for the period from 1 March 2020 to 31 December 2020.
1.7
The Act was, according to that Act's EM, a key part of the Commonwealth Government's response to the potential national emergency arising from the spread of the coronavirus. It provided a framework for financial support to be provided by the Commissioner to assist businesses and their employees through the downturn.
1.8
The Act established a framework to administer the coronavirus economic response payments. Under the framework, the Treasurer is able to make rules to provide for payments administered by the Commissioner. This allowed flexibility for the payment arrangements and ensured the robustness of the eligibility criteria to appropriately respond to the pandemic's impact.
1.9
The JobKeeper Payments announced on 30 March 2020 supported businesses with the intention of keeping more Australian workers in jobs through the course of the pandemic.
Summary of the bill
1.10
The following table provides a succinct summary of the bill's impact:
Table 1.1: Comparisons of key features of the current and new law
|
|
|
|
The Commonwealth is authorised to make payments in relation to a prescribed period that occurs from
1 March 2020 to 28 March 2021. This rule facilitates the JobKeeper scheme.
The Commonwealth is also authorised to make payments that are for the primary purpose of improving the prospects of individuals getting employment in Australia. Such payments must be in relation to a relevant period that occurs from 7 October 2020 to 6 October 2022.
|
The Commonwealth is authorised to make payments in relation to a prescribed period that occurs from 1 March 2020 to 28 March 2021. This rule facilitates the JobKeeper scheme.
|
Source: Explanatory Memorandum, p. 6.
Provisions of the bill
1.11
The bill contains only one Schedule.
Schedule 1–Amendments
1.12
Schedule 1 to the bill amends the Act to provide for an additional kind of payment authorised by the Act during the newly defined 'relevant period' of 7 October 2020 to 6 October 2022. This change facilitates the JobMaker Hiring Credit scheme which will operate from 7 October 2020 until 6 October 2022.
1.13
The substantive amendments introduce a new provision that authorises payments by the Commonwealth to an entity in respect of a time that occurs during the relevant period. Such payments must be for the primary purpose of:
improving the prospects of individuals getting employment in Australia; or
increasing workforce participation in Australia.
1.14
The amendments are restricted to facilitating payments under the JobMaker Hiring Credit scheme, which will support businesses to hire additional employees and expand their organisation to ensure young people can access new employment opportunities as the economy recovers from the pandemic.
1.15
The EM explained that rules will be made by the Treasurer to establish the JobMaker Hiring Credit scheme, including setting out:
which employers qualify for the payment;
the employees to which payments relate;
the amount payable and timing of payments; and
the obligations for recipients of the payment.
1.16
The definition of ‘relevant period’ limits the time in which payments, that are authorised under the new provision, can be made.
1.17
According to the EM, the amendments do not alter the existing provisions that authorise the JobKeeper scheme, including the 28 March 2021 limit for the period in relation to which payments under the JobKeeper scheme can be made. The EM explained that further amendments to the Act would be required in order for the Treasurer to be authorised to make further rules in relation to any other types of payments, or to extend the period in relation to which payments under the JobKeeper scheme can be made.
Consultation
1.18
The committee notes that Treasury is currently seeking submissions on the exposure draft of the JobMaker Hiring Credit rules over a four-week period, starting 30 October 2020 and closing on 27 November 2020.
Compatibility with human rights
1.19
The EM argued that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, and thus the bill does not raise any human rights issues.
Financial impact
1.20
According to the EM, the JobMaker Hiring Credit measure is estimated to involve a cost of $4 billion over the 2020-21, 2021-22 and 2022-23 financial years.
Regulatory impact
1.21
No regulatory impact is reported in the EM and no Regulatory Impact Statement (RIS) has been provided.
Conduct of the inquiry
1.22
The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting written submissions by 23 October 2020.
1.23
The committee accepted and published 21 submissions which are listed in Appendix 1.
1.24
The committee held one public hearing on Monday, 2 November 2020 for the inquiry. The names of witnesses who appeared at the hearing can be found in Appendix 2.
Acknowledgements
1.25
The committee thanks all individuals and organisations who assisted with the inquiry, especially those who made written submissions and participated in the public hearing.
Notes on references
1.26
In this report, references to the Committee Hansard are to the Proof Hansard and page numbers may vary between Proof and Official Hansard transcripts.