The government’s signature jobs policy is “perplexing”, “lacking in detail” and prone to rorting, Australia’s peak small business group has said.

Employers and union groups told a Senate inquiry on Monday that the JobMaker hiring subsidy was flawed and inadequate, with a “lack of clarity” over how it would work.

Treasurer Josh Frydenberg unveiled the JobMaker hiring credit in last month’s budget to encourage employers to hire young welfare recipients.

The government has pledged to chip in $200 a week for the wages of workers under 29, and $100 for those aged 30 to 35.

Mr Frydenberg said it would support more than 400,000 jobs, but Treasury officials admitted last week in Senate estimates that as little as 10 per cent of those would be newly created jobs.

The budget centrepiece is “perplexing”, a leading business group said. Photo: AAP

On Monday, the Council of Small Business Organisations Australia (COSBOA), representing some 1.3 million small businesses, said it had concerns about the wage subsidy.

CEO Peter Strong said he thought the plan “will be successful”, but needed changes.

“There are numerous things about it that are, as yet, unclear,” said COSBOA strategy manager John Grace.

Mr Grace and Mr Strong both voiced concerns that employers needed more “clarity” on which employees were eligible for the subsidy, citing onerous regulations on eligibility and application.

Mr Grace said application forms were prone to “error”, meaning an employer might hire a worker who was ineligible for the plan, and thus ineligible for the wage subsidy.

“When people are desperate for a job, they will sign forms,” Mr Strong claimed.

“You are going to get some people to sign the form who aren’t eligible, without a doubt. And not because they’re evil.”

He also claimed that employers may look to take advantage of the subsidy plan to employ ineligible family or friends.

In an earlier written submission to the inquiry, Mr Strong said COSBOA members were “somewhat perplexed about how the hiring credit scheme was designed, and by whom”.

The subsidy may not be enough for small business, the association says. Photo: Getty

“There is real concern that the hiring credit scheme appears to have been designed without detailed consultation with organisations representing [small and medium enterprises],” he wrote.

Mr Strong also said the subsidy rate needed to be 50 per cent higher.

Mr Grace told the inquiry that COSBOA members were not willing to take the “risk” of hiring new employees at the current subsidy rates.

He added that one employer had rated it only a “5 per cent chance” that he would hire new workers at the current rate.

This was backed up by the Australian Chamber of Commerce and Industry’s Jenny Lambert.

She told the inquiry that she doesn’t expect companies to significantly change their teams because of the program.

“The idea that an employer would cut back on their experienced workforce to take on somebody who’s been unemployed and bring them into the business for the sake of $100 or $200 a week is highly unlikely except in very marginal situations,” Ms Lambert said.

Unions and social groups fear discrimination

Ahead of the hearing, Australian Council of Social Service CEO Dr Cassandra Goldie called for the JobMaker credit to be extended to all unemployed workers, including those over 35 who had been out of work for more than a year.

ACOSS' @pagdavidson & @charmainecrowe coming up at the Senate Inquiry hearing on JobMaker wage subsidy shortly.
ACOSS is calling for it to be extended to people over 35 in long-term unemployment.
Watch here: https://t.co/Vtw7wawz8Z
More info: https://t.co/X8h7w8m7yS#auspol

— ACOSS (@ACOSS) November 2, 2020

At the hearing, Australian Council of Trade Unions president Michele O’Neil reaffirmed earlier concerns that the plan would disadvantage older workers.

Seniors’ advocacy groups recently told The New Daily of their fears of age discrimination.

Ms O’Neil is concerned about older employees having their hours and wages cut to make room for younger workers.

The ACTU is urging the government to tweak the scheme so affected workers have access to arbitration through the Fair Work Commission.

“It’s a great shame that this program is so flawed,” Ms O’Neil told the inquiry.

“The JobMaker hiring credit was an opportunity to start building the economy back in a positive manner, prioritising long-term secure jobs … what is being delivered appears to do the opposite.”

Senator Rex Patrick noted that some job advertisements were asking people to apply only if they were eligible for the JobMaker scheme.

.@AusUnemployment spokes @kristin8X appearing at the JobMaker Senate Inquiry hearing – "We’re the people hurt by the lack of jobs" & calls for the JobMaker subsidy to be "fairer and more ambitious" so that it looks at who is locked out of the workforce and why #auspol pic.twitter.com/Rnno3qRdon

— ACOSS (@ACOSS) November 2, 2020

Australian Unemployed Workers Union spokesperson Kristin O’Connell said the JobMaker credit left out many people who were currently without work.

“The hiring credit will encourage companies to make bad jobs … it will completely fail longer-term unemployed people, and mean that newly unemployed people will return to worse jobs than they had before,” she said.

“The scheme should be redesigned to be fairer and more ambitious.

“The dramatic reshaping of the economy gives the government an opportunity to invest in communities and people.”

The AUWU’s submission to the inquiry said the credit was insufficient to encourage employers to hire more staff, and claimed it would be open to “manipulation” by large employers.

Ms O’Neil said the ACTU wanted the subsidy to be made not available to employers who had been caught underpaying workers or breaching occupational health and safety rules.

-with AAP