Tuesday, 10 November 2020
Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020; In Committee
by leave—I move amendments (1) to (3) on sheet 1084 revised together:
(1) Schedule 1, page 3 (before line 5), before item 1, insert:
1A Before section 1
(2) Schedule 1, item 2, page 3 (lines 8 to 11), omit the item, substitute:
2 Before section 7
Part 2—Coronavirus economic response payments
(3) Schedule 1, items 3 to 5, page 3 (line 12) to page 4 (line 10), omit the items, substitute:
3 At the end of the Act
Part 3—Jobmaker hiring credit payment
In this Part:
baseline headcount has the meaning given by subsections 26(2) and (3).
baseline headcount increase amount has the meaning given by subsection 26(4).
baseline payroll amount has the meaning given by subsection 27(3).
eligible additional employee has the meaning given by section 25.
headcount increase has the meaning given by paragraph 26(1) (a).
headcount increase amount has the meaning given by paragraph 26(1) (b).
higher rate days has the meaning given by subsection 29(3).
jobmaker hiring credit payment means a jobmaker hiring credit payment payable to an entity under section 31.
Note: See section 28 for the amount of the jobmaker hiring credit payment.
jobmaker period has the meaning given by subsection 23(2).
jobmaker scheme means the scheme relating to the jobmaker hiring credit payment set out in Part 3.
lower rate days has the meaning given by subsection 29(4).
maximum payable days has the meaning given by subsection 29(5).
payroll increase has the meaning given by subsection 27(1).
total payroll amount has the meaning given by subsection 27(2).
Division 1—Simplified outline
22 Simplified outline
The jobmaker hiring credit payment is intended to improve the prospects of individuals getting employment in Australia and increase workforce participation in Australia by encouraging employers to hire additional workers.
The jobmaker scheme starts on 7 October 2020 and ends on 6 October 2022.
An employer that creates additional employment for individuals aged 16 to 35 years during the first 12 months of the jobmaker scheme can be entitled to a jobmaker hiring credit payment in respect of the individuals' first 12 months of employment with the employer.
The amount of a jobmaker hiring credit payment is calculated on the basis that an employer will receive $200 per week for each additional job that is filled by an individual aged 16 to 29 years at the time of starting the job, and $100 per week if the individual is aged 30 to 35 years.
The jobmaker scheme is administered by the Commissioner of Taxation.
The Commissioner pays the jobmaker hiring credit payment in respect of each 3-month jobmaker period, for an entitlement that arises in the period.
Some of the administrative arrangements for the scheme are set out in this Act.
23 Employer ' s entitlement to jobmaker hiring credit payment
(1) An entity (the employer) is entitled to a jobmaker hiring credit payment for a period if:
(a) the period is a jobmaker period (see subsection (2)); and
(b) the employer qualifies for the jobmaker scheme for the period (see section 24); and
(c) the employer has one or more eligible additional employees for the period (see section 25); and
(d) the employer has a headcount increase for the period (see section 26); and
(e) the employer has a payroll increase for the period (see section 27); and
(f) the employer has notified the Commissioner in the approved form at or before the end of the period that the employer elects to participate in the jobmaker scheme; and
(g) the employer has given information about the entitlement for the period to the Commissioner in accordance with the reporting requirements determined by the Commissioner under subsection (3); and
(h) the employer is not entitled to a jobkeeper payment for an individual for a fortnight that starts in the period.
Note 1: Some provisions of this Act also affect whether an entity is entitled to a jobmaker hiring credit payment: see section 14 (about record keeping) and section 19 (about contrived schemes).
Note 2: The approved form may require further information: see paragraph 388-50(1) (c) in Schedule 1 to the Taxation Administration Act 1953.
Note 3: The Commissioner may defer the time for giving the approved form: see section 388-55 in Schedule 1 to the Taxation Administration Act 1953.
Meaning of jobmaker period
(2) Each of the following is a jobmaker period:
(a) the period of 3 months beginning on 7 October 2020;
(b) each subsequent 3-month period, ending with the 3-month period ending on 6 October 2022.
(3) The Commissioner may, by legislative instrument, determine reporting requirements for the purposes of paragraph (1) (g).
(4) Without limiting subsection (3), the reporting requirements that the Commissioner may determine include the following:
(a) the kinds of information that must be given to the Commissioner;
(b) the period within which the information must be given;
(c) the method by which the information must be given.
24 When an entity qualifies for the jobmaker scheme
(1) For the purposes of paragraph 23(1) (b), an entity qualifies for the jobmaker scheme for a period if:
(a) throughout so much of the period as occurs after the day the entity notifies the Commissioner that the entity elects to participate in the jobmaker scheme (as referred to in paragraph 23(1) (f)), the entity:
(i) carries on a business in Australia; or
(ii) is a non-profit body that pursues its objectives principally in Australia; or
(iii) is a deductible gift recipient that is, or operates, a public fund covered by item 9.1.1 or 9.1.2 of the table in subsection 30-80(1) of the Income Tax Assessment Act 1997 (international affairs deductible gift recipients); and
(b) throughout so much of the period as occurs after the day mentioned in paragraph (a), the entity:
(i) has an ABN; and
(ii) is registered in accordance with section 16-141, 16-142 or 16-147 in Schedule 1 to the Taxation Administration Act 1953; and
(c) at the time (the jobmaker claim time) the entity gives information to the Commissioner about the entitlement for the period (as referred to in paragraph 23(1) (g)), the entity has lodged all of the income tax returns and GST returns that the entity was required to lodge under a taxation law in the 2 years ending at the jobmaker claim time.
(2) However, an entity does not qualify for the jobmaker scheme for a period if:
(a) an amount of levy under the Major Bank Levy Act 2017 was imposed for any quarter ending on or before 30 September 2020 on:
(i) the entity; or
(ii) if the entity is a member of a consolidated group—another member of the group; or
(b) at any time in the period, the entity is:
(i) an Australian government agency; or
(ii) a local governing body; or
(iii) wholly owned by an entity covered by subparagraph (i) or (ii); or
(iv) a sovereign entity; or
(c) if the entity is a company—at or before the end of the period, a liquidator or provisional liquidator has been appointed in relation to the company; or
(d) if the entity is an individual—at or before the end of the period, a trustee in bankruptcy has been appointed to the individual's property.
25 Meaning of eligible additional employee
(1) An individual is an eligible additional employee of an entity for a period if:
(a) the individual is an employee of the entity at any time in the period; and
(b) the individual commenced employment with the entity on or after 7 October 2020 but no later than 6 October 2021; and
(c) at the time the individual commenced employment with the entity, the individual was either:
(i) aged 16 years or over but less than 30 years; or
(ii) aged 30 years or over but less than 36 years; and
(d) the individual commenced employment with the entity no more than 12 months before the start of the period; and
(e) for each whole week (consisting of a period of 7 consecutive days) that the individual is employed by the entity during the period, the individual works an average of at least 20 hours per week; and
(f) the individual satisfies the requirements in subsections (3) and (5); and
(g) the individual is not excluded from being an eligible additional employee of the entity for the period under subsection (7).
(2) For the purposes of paragraph (1) (e), the hours an individual works in a week are taken to include any hours of paid leave, or paid absence on public holidays, that the individual takes in the week.
Pre -employment requirement
(3) The requirement is that, for at least 28 consecutive days during the 84 days ending on the day before the individual commenced employment with the entity, the individual was receiving one of the following under the Social Security Act 1991:
(a) parenting payment;
(b) youth allowance (other than on the basis that the individual was undertaking full-time study or was a new apprentice);
(c) jobseeker payment.
(4) For the purposes of subsection (3), an individual is taken to have been receiving a payment or an allowance mentioned in that subsection on a day if the individual would have been receiving the payment or allowance on that day except that the person's payment or allowance rate under the Social Security Act 1991 was nil.
(5) The requirements are that:
(a) the individual has given to the entity a notice in the approved form stating that the individual satisfies the requirements in paragraph (1) (c), subsection (3) and paragraph (b) of this subsection; and
(b) at the time the individual gives the entity the notice, the individual has not given any other entity a notice under this subsection (unless the notice given to the other entity has ceased to have effect under subsection (6)); and
(c) the notice has not ceased to have effect under subsection (6).
Note: If an overpayment results from an individual giving a notice to more than one entity, the individual may be jointly and severally liable to pay the overpayment and any general interest charge on the overpayment: see section 11.
(6) If an individual gives a notice to an entity under subsection (5), the notice ceases to have effect if the individual ceases to be employed by the entity.
Note: This subsection means that, if the individual recommences employment with the entity, the individual will need to give the entity another notice under subsection (5).
(7) An individual is excluded from being an eligible additional employee of an entity for a period if:
(a) the individual is:
(i) in the case of an entity that is a sole trader—a relative of the sole trader; or
(ii) in the case of an entity that is a partnership—a relative of a partner in the partnership or, if a partner in the partnership is a company (other than a widely-held company), a shareholder in or a director of the company, or a relative of a shareholder in or a director of the company; or
(iii) in the case of an entity that is a trust—a trustee or a beneficiary of the trust, or a relative of a trustee or a beneficiary of the trust; or
(iv) in the case of an entity that is a company (other than a widely-held company)—a shareholder in or a director of the company, or a relative of a shareholder in or a director of the company; or
(b) the individual was, at any time in the period of 6 months ending on 6 October 2020, engaged by the entity as a contractor or subcontractor to exercise powers, or to perform functions or duties, that are substantially similar to the power exercised, or the functions or duties performed, by the individual as an employee of the entity.
26 Headcount increase
(1) For the purposes of paragraph 23(1) (d), if the number of employees employed by an entity at the end of the last day of a period exceeds the entity's baseline headcount for the period:
(a) the entity has a headcount increase for the period; and
(b) the amount of the excess is the headcount increase amount for the period.
(2) Subject to subsection (3), an entity's baseline headcount for a period is the greater of one and the number of employees employed by the entity at the end of 30 September 2020.
Baseline headcount to be increased for certain periods
(3) However, if the period is referred to in column 1 of an item of the following table, the entity's baseline headcount for the period as determined under subsection (2) is increased by the greater of:
(a) the entity's baseline headcount increase amount (see subsection (4)) for the period (the corresponding period) referred to in column 2 of the table item; and
(b) unless the period is the period referred to in column 1 of item 1 of the table—the amount by which the entity's baseline headcount was increased under this subsection for the previous period.
Baseline headcount increase amount for corresponding period
(4) An entity's baseline headcount increase amount for a corresponding period is the lesser of:
(a) the entity's headcount increase amount for the corresponding period; and
(b) if the total counted days for the corresponding period falls short of the maximum payable days for the corresponding period—the amount (rounded up to the nearest whole number) worked out using the following formula:
Note 1: See subsection 29(2) for the meaning of total counted days.
Note 2: See subsection 29(5) for the meaning of maximum payable days.
Note 3: See paragraph (1) (b) of this section for the meaning of headcount increase amount.
27 Payroll increase
(1) For the purposes of paragraph 23(1) (e), if an entity's total payroll amount for a period exceeds the entity's baseline payroll amount for the period, the entity has a payroll increase for the period.
(2) An entity's total payroll amount for a period is the sum of the amounts covered by subsection (5) for each of the entity's employees for each pay cycle that ended in the period.
(3) An entity's baseline payroll amount for a period is the sum of the amounts covered by subsection (5) for each of the entity's employees for such number of consecutive pay cycles as is equal to the number of pay cycles that ended in the period.
(4) For the purposes of subsection (3), the consecutive pay cycles must:
(a) all end on or before 6 October 2020; and
(b) include the last pay cycle that ended on or before 6 October 2020.
(5) The amounts covered by this subsection are:
(a) amounts paid by the entity to the employee in the pay cycle by way of salary, wages, commission, bonus or allowances; and
(b) amounts withheld by the entity from payments made to the employee in the pay cycle under section 12-35 in Schedule 1 to the Taxation Administration Act 1953; and
(c) contributions made by the entity in the pay cycle to a superannuation fund or an RSA for the benefit of the employee, if the contributions are made under a salary sacrifice arrangement (within the meaning of the Superannuation Guarantee (Administration) Act 1992); and
(d) other amounts that, in the pay cycle, are applied or dealt with in any way if the employee agreed:
(i) for the amount to be so applied or dealt with; and
(ii) in return, for amounts covered by paragraph (a) for the employee for the pay cycle to be reduced (including to nil).
28 Amount of the jobmaker hiring credit payment
The amount of an entity's jobmaker hiring credit payment for a period is the lesser of the following:
(a) the entity's headcount amount for the period (see section 29);
(b) the entity's payroll amount for the period (see section 30).
29 Calculation of headcount amount
(1) For the purposes of paragraph 28(a), an entity's headcount amount for a period is worked out as follows, subject to subsection (2):
Step 1. Multiply the higher rate days for the period by $200, divide the result by 7 and round up to the nearest cent.
Step 2. Multiply the lower rate days for the period by $100, divide the result by 7 and round up to the nearest cent.
Step 3. Sum the results from steps 1 and 2.
Reduction based on maximum payable days
(2) However, if the sum of the higher rate days for the period and the lower rate days for the period (the total counted days for the period) exceeds the maximum payable days for the period, then the entity's headcount amount for the period is reduced by:
(a) first, reducing the number of lower rate days in step 2 of the method statement in subsection (1) until one of the following occurs:
(i) the total counted days for the period equals the maximum payable days for the period;
(ii) the lower rate days for the period are reduced to nil; and
(b) if subparagraph (a) (ii) applies—then, reducing the number of higher rate days in step 1 of the method statement for the period until the total counted days for the period equals the maximum payable days for the period.
Higher rate days
(3) The higher rate days for a period is worked out by adding together the number of days each eligible additional employee covered by subparagraph 25(1) (c) (i) was employed by the entity during the period.
Note: Subparagraph 25(1) (c) (i) covers an employee who, at the time of commencing employment with the entity, was aged 16 years or over but less than 30 years.
Lower rate days
(4) The lower rate days for a period is worked out by adding together the number of days each eligible additional employee covered by subparagraph 25(1) (c) (ii) was employed by the entity during the period.
Note: Subparagraph 25(1) (c) (ii) covers an employee who, at the time of commencing employment with the entity, was aged 30 years or over but less than 36 years.
Maximum payable days
(5) The maximum payable days for a period is worked out by multiplying the entity's headcount increase amount for the period by the number of days in the period.
Note: See paragraph 26(1) (b) for the meaning of headcount increase amount.
30 Calculation of payroll amount
(1) For the purposes of paragraph 28(b), an entity's payroll amount for a period is worked out by subtracting:
(a) the entity's baseline payroll amount for the period (see subsection 27(3)); from
(b) the entity's total payroll amount for the period (see subsection 27(2)).
31 Payment of jobmaker hiring credit payment
(1) If the Commissioner is satisfied that an entity is entitled to a jobmaker hiring credit payment for a period, the Commissioner must pay the entity that jobmaker hiring credit payment in accordance with this Division and this Act.
(2) The Commissioner may, for the purposes of determining whether the Commissioner is satisfied under subsection (1) in relation to an entity, accept, either in whole or in part, a statement made to the Commissioner by the entity under this Part.
(3) To avoid doubt, the fact that the Commissioner pays an entity a jobmaker hiring credit payment under this section does not mean the entity is entitled to that jobmaker hiring credit payment.
Note: If the entity was in fact not entitled to a jobmaker hiring credit payment paid under this section, the provisions about overpayments would apply: see sections 9, 10 and 11.
32 When the Commissioner must pay jobmaker hiring credit payments
The Commissioner must pay the jobmaker hiring credit payment for a period as soon as practicable after the entity gives information to the Commissioner about the entitlement for the period (as referred to in paragraph 23(1) (g)).
Note: For the method of paying the payment, see section 8.
33 When payment constitutes notice
(1) This section applies if:
(a) an entity has given the Commissioner information about the entitlement for a period (as referred to in paragraph 23(1) (g)); and
(b) the Commissioner has paid an amount of jobmaker hiring credit payment to the entity for the period; and
(c) the amount paid by the Commissioner is consistent with the Commissioner:
(i) being satisfied that the entity is entitled to a jobmaker hiring credit payment for the period; and
(ii) having accepted, either in whole or in part, a statement made to the Commissioner by the entity under this Part.
(2) The Commissioner is taken to have given the entity notice, on the day the jobmaker hiring credit payment covered by paragraph (1) (b) is paid, that the Commissioner is satisfied the entity is entitled to a jobmaker hiring credit payment for the period referred to in paragraph (1) (a).
34 Notice of decision on entitlement
(1) This section applies if:
(a) an entity has given the Commissioner information about the entitlement for a period (as referred to in paragraph 23(1) (g)); and
(b) the amount paid by the Commissioner (including nil) is not consistent with the Commissioner:
(i) being satisfied that the entity is entitled to a jobmaker hiring credit payment for the period; or
(ii) having accepted, either in whole or in part, a statement made to the Commissioner by the entity under this Part.
(2) The Commissioner must give the entity notice in writing of a decision covered by subsection (3) as soon as practicable after making the decision.
Note: This Act provides for a review of certain decisions: see section 13.
(3) This subsection covers a decision of the Commissioner under section 31 that the entity:
(a) is entitled to a jobmaker hiring credit payment for a period; or
(b) is not entitled to a jobmaker hiring credit payment for a period.
35 Later legislation may limit jobmaker scheme
An entitlement to jobmaker hiring credit payment under this Part may be cancelled, revoked, terminated, varied or made subject to conditions by or under later legislation.
36 Constitutional basis for this Act
Principal constitutional basis
(1) This Act relies on the legislative power that the Parliament has under the Constitution with respect to matters that are peculiarly adapted to the government of a nation and cannot otherwise be carried on for the benefit of the nation.
Additional constitutional basis
(2) This Act also relies on all other legislative powers that the Parliament has under the Constitution relevant to a kind of Coronavirus economic response payment.
These amendments seek to undo what is becoming an awful trend in respect of legislation that is being brought into this chamber. As I said in my speech on the second reading yesterday, the government has put forward a bill to the parliament that basically has two substantive paragraphs. And those substantive paragraphs seek to grant a power for a minister to set up a scheme that involves the expenditure of somewhere up to $4 billion of taxpayers' money. All of the details of how that money will be spent, who will be in receipt of it and so forth will actually be contained in the rules generated by some faceless official somewhere in the government. The way this is supposed to work is we're supposed to put legislation on the table and have it be debated, contested, talked about openly and voted upon openly so that the people who we represent can hold us to account. But that is not what will happen in relation to this particular bill, because all of the details are in the rules.
The strange thing is: the rules are available. In fact, that's exactly what I've done with this amendment—I've taken the rules and put them into the bill, as should be the case. Part 1 section 1 of the Australian Constitution vests the power for legislating in the federal parliament, not into some official that sits in a back room inside a government building somewhere. There is an effect on the way in which the government is carrying out this particular approach to legislation, and I get it: during the COVID crisis for JobSeeker and JobKeeper it was necessary to grant a power and grant flexibility. Indeed, we granted a $40 billion contingency fund to the finance minister to deal with an emergency. The parliament was being very reasonable in what it did, but crisis time is over. There is no question that the parliament can now sit if there's a requirement to amend anything that the government is proposing in relation to this particular bill. By not including it in the bill, we have to seek to override the rules if we want to make an amendment. Indeed, assuming the bill passes, actually the government can do whatever they like. Sure, things are disallowable, but actually it can be a bit of challenge for the Senate to disallow things. The other thing is, if it's in the primary legislation and the government want to make some change, they can bring a bill forward to the Senate and, at that time, we can also include other measures. We can include other measures that might be as a result of the experience and representations of our constituents. But you can't do that when it's a regulation that is set for disallowance.
In effect, my amendment seeks to place this legislation outside of any constitutional doubt. It will mean that the rules will be part of the main legislation passed in this chamber. I indicated yesterday that I'm not willing to support this legislation on that basis alone, that it is bad practice and that someone has to make a stand. I note that Senator Hanson indicated that One Nation were not happy with the legislation. That actually leaves us in a position where the Labor Party can actually do what an opposition should do, and that is hold the government to account and hold them to a standard in relation to the inclusion of provisions in the primary legislation, rather than by way of delegated legislation. That is the job of the opposition. You, the opposition, actually now, without doubt, have the numbers to force the government to do this, if you want to. So I will be looking forward to your support in respect of this. I know there are many on your side that are in total agreement.
If you don't agree with me, go and have a look at the Scrutiny of Bills Committee report that shows how, by volume, half of the legislation in this country is now delegated legislation and how we've moved from 800 pieces of delegated legislation to 1,700 pieces of delegated legislation recently. This is a trend that must be reversed. It's not in accordance with the way in which the Constitution was set. Delegated legislation is for officials to deal with administrative arrangements in a bill. Delegated legislation is to deal with situations where you have an emergency. But there is an abuse that is now taking place. More often we are seeing legislation come into this place granting a power to a minister to do whatever they like. I am going to look as much to the Labor Party on this as to the government. The Labor Party needs to stand up and hold the government to account, to maintain standards and to make sure that we do the job that has been conferred upon us and that we are bound to do by way of the Constitution. So I urge the chamber to support this amendment.
As I said in my speech in the second reading debate, the Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 grants very broad powers to the minister to basically hand out $4 billion of public money to businesses, and it doesn't do much else. This bill doesn't actually establish the JobMaker hiring credit scheme. It doesn't provide a single detail about the scheme. There's nothing about eligibility criteria or anything else for that matter.
This amendment from Senator Patrick intends to return some parliamentary oversight to the scheme. This will allow direct amendment of the bill if we require it later on, as opposed to just having to disallow certain things which we think are harmful for the community. We believe that the JobMaker hiring credit should be created through legislation and it should be subject to parliamentary scrutiny. We completely support Senator Patrick's amendment to bring the rules into the legislation, albeit still in an exposure draft sense, but then we can always amend them later if things change. The Greens will be supporting Senator Patrick's amendment.
The Labor Party, of course, understands and very much shares the concerns about the nature of draft rules and putting them into delegated rules. We understand, though, that it's also the role of this place to consider the substantive urgency of the provision before us. It's not the fault of those here that the government has not done its due diligence and got these rules written in time for us to see whether they would need to be disallowed or not. We certainly share the concerns around the role of delegated legislation and, indeed, draw attention to the fact that this government does seem to overly rely on it. However, it's not just about this place getting its due diligence up and running, it's also about the capacity of those out there who are going to use the scheme being able to get organised to make it happen. I understand that's harder to do with rules that are still in consultation and which stakeholders can comment on until 24 November. That doesn't really give the parliament a lot of time to deal with this question.
Without the benefit of understanding that stakeholder feedback, in terms of the highly detailed amendments and putting these in legislation, it's not possible for us to support what Senator Patrick and others have said—to simply substantively legislate all of the draft rules. On that basis, we are opposing this amendment. I call on One Nation and others, if they want to be able to influence the outcomes of this bill before us, in terms of scrutiny and oversight, they should consider supporting Labor's amendments so that there is greater scrutiny on the operation of this legislation, because that is also in the Senate's power today.
I thank senators for their contributions on Senator Patrick's amendment. The government will be opposing this amendment on two grounds. Firstly, the rules are currently the subject of public consultation and, in doing so, the government is enacting and implementing Australia's obligations under the International Labour Organization convention concerning employment policy that requires consultations with representatives, employers and workers. We're undertaking this consultation in good faith. We have made sure the rules are public so that the Senate can see the proposed operation of the scheme. We also want to make sure those consultations are undertaken in good faith so that we do ensure the program operates as intended and without unintended consequences. Secondly, I note that Senator Patrick's intent is to incorporate the rules in the legislation. However, because the exposure draft rules were drafted to be rules that were supplementary to the legislation, they're drafted in that manner. I understand and am advised that were they to actually be incorporated in the legislation, it would require substantial rewriting of some of the provisions and drafting to make them applicable and effective in the context of the legislation, rather than simply cutting and pasting the rules across into the legislation. So there's a technical reason why it is difficult, at present. Regardless of that technical reason, the government is in the midst of finalising the consultation and we wish to achieve and finalise that in good faith with proponents, rather than tie hands through the legislative process. If there are minor issues, and I stress minor—the intention is very much that the rules we have published are about delivering the scheme as we have promised.
I'll address something the Labor Party said and then I'll come to a question to the minister. I must say, I am deeply disappointed with the Labor Party but not surprised. It was a member on the other side of the chamber who said to me, 'We love playing chicken with the Labor Party because they always swerve.' You've never stood up for anything in this place. I'm asking you to stand up for what is in section 1 of the Constitution—that is, the Constitution vests power in the federal parliament to pass laws, not for them to be made by some faceless person in a back room. These are very important principles of democracy.
To suggest that you're worried about urgency is just poppycock. This amendment could be passed, with the support of the chamber, and it could go back to the House who could consider it. Maybe they could make some of those changes that Senator Birmingham says are necessary but the amendment was drafted by professional drafters so I question that, in the first place. But it could go back to the other place and let's see what the government would do. There is no urgency behind this. The start date is announced. It's not an issue. I think the government understands and the public understands that there would be general support for the proposal. I'm not suggesting everyone will support it, but the Labor Party have indicated they will. So there is no urgency. There is no reason for us not to do our job properly, not to hold ourselves to the standards required of us by part 1, section 1 of the Constitution.
With that in mind, Minister, I want to get an understanding as to why you have taken this approach. You've gone to delegated legislation rather than what is demanded by the Constitution—that is, that laws generally be passed by this place, particularly substantive laws that involve expenditure of up to $4 billion. What was the process the government went through to decide that it was best, in this instance, to usurp the normal process? I know you're comfortable with doing delegated legislation now because it says you don't have to worry about the parliament anymore. What was the basis upon which you decided not to properly draft this, in the first place, put the rules into the primary legislation, which is amendable, and then bring it to the parliament?
I'll respond quickly to Senator Patrick. This program is being delivered, albeit, not with quite the same urgency and immediate effect as those we dealt with earlier in the year, with a high degree of urgency and import as we respond to the economic circumstances we face. It is not unusual for governments, particularly in relation to grant type programs, to establish an overarching architecture under legislation for those programs and then to embed the detailed operation within rules that sit alongside them.
That's the approach the government has taken here. We do so consistent with the promises that we've made, in terms of consultation and engagement, on the way through as well. This approach not only is consistent with previous practice and timely but also provides the best opportunity to have certainty that the program will exist and be legislated, delivering on the promises we made in the budget, whilst being able to work in an agile way with stakeholders to make sure that the rules reflect their concerns as effectively as possible.
Noting the words in part 1 section 1 of the Constitution, did the government seek advice in respect of its approach being constitutional, noting the lack of detail in the primary legislation and the weight of the rules in terms of their content and effect?
by leave—I move Greens amendments (1) and (2) on sheet 1064 together:
(1) Schedule 1, page 3 (after line 11) , after item 2, insert:
2A Section 6
underpaying in relation to an employee: see subsection 7A(4).
underpayment event: see subsection 7A(3).
(2) Schedule 1, page 3 (after line 26), after item 4, insert:
4A After section 7
7A Requirements for rules that provide for jobmaker hiring credit scheme — ineligibility for underpaying employees
(1) This section applies if rules are made for the purposes of subsection 7(1A) that provide for a kind of payment known as the jobmaker hiring credit.
Ineligibility for underpaying employees
(2) The rules must provide that an entity is not eligible for the payment if, during the relevant period, an underpayment event occurs in relation to:
(a) the entity; or
(b) an associated entity (within the meaning of the Corporations Act 2001) of the entity.
(3) There is an underpayment event in relation to an entity if any of the following apply in relation to the entity:
(a) a court or the Fair Work Commission makes an order requiring the entity to make payments to one or more of the entity's employees in connection with underpaying the employees;
(b) the Fair Work Ombudsman accepts an enforceable undertaking from the entity under section 715 of the Fair Work Act 2009 in relation to a contravention involving underpaying employees;
(c) the entity is given a compliance notice under section 716 of the Fair Work Act 2009 in relation to a contravention involving underpaying employees;
(d) the Commissioner reasonably believes that the entity is, or has been, underpaying employees.
(4) For the purposes of this section, underpaying an employee means failing to pay the employee the amount or amounts the employee is entitled to be paid as such an employee (whether as salary, wages or other allowances or entitlements, and whether under a relevant award, agreement or other instrument or any other law).
Prohibition on demanding payments from employees if employer is ineligible
(5) The rules must also provide that, if:
(a) an entity is determined to not be eligible for the payment under rules made for the purposes of subsection (2) because of an underpayment event; and
(b) as a result the entity is liable to repay amounts to the Commonwealth;
the entity, or an associated entity (within the meaning of the Corporations Act 2001) of the entity, are prohibited from both of the following:
(c) requesting or demanding payment of an amount from an employee to cover some or all of the repayments for which the entity is liable;
(d) withholding from amounts the entity or associated entity is liable to pay an employee an amount to cover some or all of the repayments for which the entity is liable.
(6) An entity commits an offence of strict liability if:
(a) the entity is subject to a prohibition under rules made for the purposes of subsection (5); and
(b) the entity fails to comply with the prohibition.
Penalty: 60 penalty units.
Over the years there have been plenty of examples of businesses that have denied workers their full pay and their full rights. Many big businesses eligible for the JobMaker hiring credit actually have a history of underpaying their staff and their workers, but this scheme, as it stands at the moment, allows public funds to subsidise those same businesses that have been underpaying their staff. Surely no-one in this place can agree that that should be allowed to happen. Our amendments remove eligibility for businesses that are found to be underpaying their workers while receiving the JobMaker hiring credit. Businesses will be required to repay the total sum of the credit they have received. Our amendments also include protections to prevent employers seeking payments from their workers to cover that repayment. I commend the amendments to the Senate.
We shouldn't be subsidising with a hiring credit employers who have been found to have underpaid workers. They should be ineligible for this scheme, something these amendments seek to implement. We very much support these amendments. We think that they should be prospectively linked to the operation of the hiring credit scheme, whereby employers that have been found to have underpaid workers are excluded. I very much hope the government understands the serious public concern around this issue and the concerns of everyone who is supporting these amendments.
Essentially, I call on the government to support these amendments in scrutinising this legislation—and I know we've had different positions on the various questions in the amendments—and I particularly call on One Nation to say, 'Let's make a very clear decision that employers who underpay their workers should not receive public funds that subsidise the wages of those workers.' Firms that underpay should not be eligible. Therefore, we support these amendments.
Labor have already indicated that we support this legislation passing the House and the Senate. Senator Patrick said, 'Well, show some spine and stand against the legislation as a whole in order to get some more leverage.' I'm sorry, but that is not how this works. It would be a shame to see One Nation, who oppose this legislation, vote against these amendments. I'd really like to see their attendance in the chamber, so that this legislation that we know will pass this place can be meaningfully amended.
I thank the Senate. The government fully understands the intent behind this legislation. There is indeed no excuse for the underpayment of workers and we have in place extensive legislative frameworks to take action against employers who underpay workers, including the Fair Work Act for unpaid wages and the Superannuation Guarantee (Administration) Act for unpaid superannuation.
The Fair Work Ombudsman provides active support and assistance to employers and employees with respect to workplace issues that include underpayment of wages. The Fair Work Ombudsman is continuing to take strong action on behalf of workers, with the agency recovering a record amount of money—some $123 million—for underpaid workers in 2019-20. The government has taken unprecedented action to date to protect vulnerable workers, including by providing more powers and additional resources to the Fair Work Ombudsman and increasing up to tenfold the penalties for lawbreaking employers. The government has committed more than $110 million in new funding to the Fair Work Ombudsman in recent years to complement and drive those increases in penalties and enforcement, and to ensure that employees receive the entitlements to which they are entitled.
However, these amendments would complicate the administration of the JobMaker hiring credit and would also potentially deprive some young Australians of the opportunity to get into new jobs. We have laws to deal with the underpayment of workers by excising businesses from eligibility under this hiring credit. We potentially then narrow the scope of those who may be growing employment, who may be creating new jobs and who, therefore, may be providing that pathway out of unemployment for young Australians. For those reasons, the government opposes these amendments.
The CHAIR: The question is that amendments (1) and (2) on sheet 1064, moved together by leave by Senator Faruqi, be agreed to.
I move amendment (1) on sheet 1105 standing in my name:
That the House of Representatives be requested to make the following amendment:
(1) Schedule 1, page 3 (after line 24), after item 3, insert:
3A After section 7
7A Requirements for rules that provide for jobmaker hiring credit scheme
(1) This section applies if rules are made for the purpose of subsection 7(1A) that provide for a kind of payment known as the jobmaker hiring credit.
(2) The rules must not:
(a) include eligibility requirements that place an upper age limit on individuals to receive the jobmaker hiring credit; or
(b) have the effect of excluding individuals aged 35 years or over from the jobmaker hiring credit scheme; or
(c) provide for a jobmaker hiring credit payment of less than $100 for individuals aged 35 years or over.
Statement pursuant to the order of the Senate of 26 June 2000
Amendment (1) is framed as a request because it amends the bill in a way that is intended to direct funding under the jobmaker hiring credit scheme to additional individuals.
The amendment would restrict the Treasurer’s ability to make rules to exclude individuals over a certain age from the jobmaker hiring credit scheme. Specifically, the effect of the amendment would be to include individuals aged 35 years or over as eligible additional employees when assessing an entity’s eligibility for payments from the Commonwealth under the rules.
As this would increase the number of employees for whom employers would be eligible to receive payments, the amendment will increase the amount of expenditure under the standing appropriation in section 16 of the Taxation Administration Act 1953.
Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000
If the effect of the amendment is to increase expenditure under the standing appropriation in section 16 of the Taxation Administration Act 1953 then it is in accordance with the precedents of the Senate that the amendment be moved as a request.
For the benefit of the chamber, what this amendment seeks to do is to deal with a discriminatory aspect of the bill as it currently stands in conjunction with the rules. The JobMaker scheme will permit a payment of $200 for new employees that are within the age bracket 16 to 29, scaling down to $100 per week for employees that are in the age bracket of 30 to 35.
Last week at the committee that was examining this bill, I tabled some Seek advertisements. Those advertisements were for jobs, and those advertisements had the words in them, 'In order to apply for this job you must be eligible for JobMaker.' In effect, what that was saying was if you are 36 or 37 or 38 or anywhere above 35 you need not apply for this job. That is discriminatory. We have a lot of mature workers in our community who add value and who are also struggling to get jobs as a result of what's happened with COVID-19. This bill offers no help to employers to employ them, so, by its very nature, it operates as an incentive to exclude them, to discriminate against them.
There was a discussion at the committee last week as to whether or not it's lawful to discriminate, and, in the end, I think it's questionable whether or not it is in fact lawful. But what I can tell you is even if it is lawful to do what the bill intends it is not right. Just because the government legislates discrimination doesn't mean that it's okay. What this bill seeks to do is to remove the 35-year age limit and allow anyone above 29 to make application for a job knowing that they will be considered and that the government will assist with the JobMaker. For those reasons, I ask the chamber to support this request.
The Greens will be supporting this amendment. As I articulated in my second reading contribution yesterday, older workers are being very significantly hit by the pandemic. In fact, new research out this morning shows how heavily older workers have been hit by the pandemic and the recession. I also articulated that age discrimination and ageism are significantly affecting older workers trying to find work and that older workers are the fastest-growing cohort of long-term unemployed. It is essential that action be taken to help older workers. While this mechanism will help older workers, they will need additional support on top of it. But this will go some way to helping. With the amendments that the Greens will move in seeking to improve this legislation, this would take away the discrimination that's built into this legislation and assist older workers. More needs to be done about age discrimination, but we will be supporting this amendment.
I have a question. I want to know if there was any modelling done on all the jobs out there and the age groups they employ. Was any modelling done on that? Let's look at the transport industry for one. A lot of them are older people; they stay in that industry. There are going to be people out there who are discriminated against not just about age but about what job they're doing, so was there any modelling done on that area as well? That's all I'm asking.
I thank Senator Lambie for the question. I'll deal with the amendment simultaneously. In terms of analysis, the government, in the targeting of this program, has relied very much on the experience of past recessions and the modelling and analytical work undertaken in that regard. The experience of the last recession was that it took a long time for youth employment to recover, far longer than for employment levels overall. Indeed, it took a full decade after the 1990s recession to get the unemployment rate down from where it started to six per cent, but it took 15 years to get the number of jobs for young people back below where it started. We also have data and analysis that show that if those young people stay for a prolonged period of time as recipients of the social safety net then they are likely to be stuck, potentially, in that so-called welfare trap for an ongoing period. That's what we are deliberately seeking to avoid here.
We responded in the immediacy of the pandemic with economy-wide wage subsidy measures, as has been acknowledged. As we transition out of the immediacy of the pandemic—and we've seen more than 460,000 Australians back in jobs in recent months—we seek to target and tackle what we know are some of the high-risk problems we face, and endemic and prolonged youth unemployment is seen as very much a high-risk problem. That's why this program is targeted in that sense.
It's also why the government opposes Senator Patrick's amendment, which would remove this program's intended target of addressing the unemployment of young Australians. I do note that the program operates alongside a number of pre-existing government programs—programs like Career Transition Assistance, the Restart wage subsidy and the skills checkpoint—intended to provide support to some of those older workers in different industries that Senator Lambie referred to. Those programs are intended to provide ongoing assistance, recognising the disruption that some older workers face in their careers due to impacts of health, economic restructure—all the different factors, which we know are real. That's why we had, pre-pandemic, those types of programs in place, but this one is targeted very much at ensuring we don't end up with a long and prolonged tail of youth unemployment that potentially leaves people struggling for much of a lifetime in terms of their entry point into the workforce.
I just have to say: we're looking at a recession 30 years ago. Computers weren't even about then, mobile phones weren't there, jobs were very different and we had manufacturing. So exactly what are you modelling off, with these young people and their unemployment? Thirty years ago we had manufacturing all over the place. How are you doing this when times are so different?
We do know that young people who leave school and don't get a job or who complete training in the years after school and don't get a job tend to then be in receipt of welfare for prolonged periods of time. We also know that, in the current coronavirus context, for people aged between 15 and 34, from March to September this year there was a 6.1 per cent decrease in the number of jobs, or some 307,000. In contrast, in the same time period, the decline in jobs for those aged 35 and over has been 1.4 per cent, or 109,000 jobs. If we look just at what has happened during the pandemic, without contemplating another year of school leavers, another year of leavers from the vocational system and another year of leavers from universities, we see that the most profound impact already has been on young workers. It's the old adage—last in, first out—that seems to have applied. When we add together the different analyses, be it from the last recession—yes, about the fact that youth unemployment took much longer to recover—be it from this pandemic or be it just the ongoing analysis, the fact is that if we don't get young people into some form of work and activity quickly, it has far more longer term consequences. That's not to downplay the consequences for older Australians. That's why we have the range of the other measures in place.
What modelling have you done on whether small businesses can afford to do this, considering JobKeeper will be finishing at the end of March? Where's your modelling on how all these are going to combine with each other—with what you're doing now and then throwing this on top? Do you still think your numbers are going to come out the same? People will be finishing JobKeeper at the end of March. You're saying, 'Here's an extra $200.' I don't know where you've been, Minister, but for small businesses in Tasmania, I can tell you now, to give them those hours and give them that $200—they can hardly afford a PO box, let alone putting on extra people. So has the stopping JobKeeper been taken into the equation? How many small businesses have you actually been out there to speak to about this, to come up with this solution?
Yes, all elements of the government's budget modelling have taken into account the fact that JobKeeper is scheduled to conclude at the end of March. There is the conclusion of JobKeeper, but there is the start-up not only of this measure but also of a number of the tax measures announced in the budget that are intended to provide additional incentive for investment and are all designed to help with that transition. As I referenced before, we've seen more than 460,000 jobs come back over recent months, as parts of the country, including Tasmania, have started to reopen. That reopening phase is obviously ongoing, particularly in terms of borders and access to support for other industry sectors. This is seen, as we move from the pandemic period of support, which has basically been universal, into the phases beyond, where we target the identified problems that exist, whilst also trying to stimulate more business activity—be that in terms of investment as well as in terms of hiring and tackling problems like youth unemployment that we know to be a likely or high-risk prolonged problem.
Do you think it's fair to ask us to vote on a bill when you haven't finished the rules? I know that we've done this with JobSeeker and JobKeeper. We've now been doing this for seven or eight months, and you're still asking us to vote on things with very little substance. I am really concerned. How long is this going to go on for—where you want us to vote on bills and put our trust in you, with nothing of substance and the rules aren't finished?
We did canvass this issue a little bit earlier, but I appreciate you weren't in the chamber at the time. The government has published the draft rules. We are in accordance with our responsibilities under international labour conventions for consulting on the rules, given the employment impact of these types of measures. We're consulting in good faith.
The rules as they are published are intended to give effect to the program as the government announced it and they are there for senators to see and scrutinise, but they're not embedded in the legislation so that we can have that proper period of consultation with employee organisations, employer organisations and other stakeholder groups who have a vested interest in ensuring that the program works as it's intended to work without any other side effects or consequences. That is the rationale behind trying to move as quickly as we can post budget to legislate and give certainty to the program, but the rules are providing, as is often the case with grant type programs, the flexibility for us to be able to make sure that there aren't unintended consequences that come through the quick passage of legislation but instead the adaptability from those types of rules to be able to address issues in response to any stakeholder concerns.
I am just asking one question. Is this going to be the new status quo? Is this the way we are going to operate during COVID-19? Can you see the future operating like this? Or are we going to start going back to doing things properly and in the way they should be done in this chamber? Do you see a future where we are going back to doing things properly, correctly and by the book and not doing things off the cuff?
Senator Lambie, it is very much a case of horses for courses. At the very outset of the pandemic, there were circumstances where these types of bills were put through without even the rules available for scrutiny at the time. This one has been able to be dealt with through a more orderly process. We still think it is valuable to be able to consult on the rules and to actually finalise that consultation in a proper and timely manner while having the certainty that the government is delivering on its budget promise of implementing this program and supporting youth employment in this way.
Yes, of course, we hope that over time we can make sure things are done in a normal, orderly way. I do note that it's not historically unusual for framework legislation to exist, particularly for grant type programs, and then rules adapted to circumstances to operate underneath them. But I take your point entirely. I think this is a progression from the earlier stage of the pandemic. It is not that there aren't draft rules for senators to see. There are. So we have made sure that transparency is there. But I understand the point you're making. Where it is possible and appropriate in future programs, I would expect to see detail embodied where it can be.
I just have a question for the minister. I'm looking at some Roy Morgan data that talks about the age spread of union members. This is three years old. It shows that 35- to 49-year-olds are 19 per cent of the unionised work force, those who are 50 to 64 years old are 25 per cent of the unionised workforce and then those 65 years and above are 15 per cent of the unionised workforce. I just wonder if this is in some way also discriminatory against those who are members of unions. Has there been any consideration in respect of this bill consciously targeting union members who will not be eligible for this JobMaker supplement?
In relation to the amendment requested by Senator Patrick, I understand that this amendment takes out the age limits in relation to this program. Labor are very concerned about employment scarring for young Australians in the context of this recession. We, therefore, don't support this amendment. However, I very much want to place on record today that the government is not doing enough for older workers and that amending this legislation will not fix that issue substantively. Why? Because it provides a wage subsidy for everyone, not the targeted older workers who are more likely to experience that age discrimination if they're over 50. So lifting that for people who are 40, 45 or 48, who have good prospects of finding new work, doesn't address the particular question of employment scarring in older generations of people. In that context, we don't support this request for an amendment.
I do highlight that the government has a great deal of work to do. It draws attention to the Restart Program, which is completely undersubscribed and has a miserly amount of money attached to it compared to this scheme. It highlights the fact that the government has not interrelated its jobactive employment program and the disability employment programs with this particular scheme that will be transacted between business and the tax office.
I move Greens amendment (1) on sheet 1088:
(1) Schedule 1 , page 3 (before line 27) , before item 5 , insert:
4B After section 7
7B Requirements for rules that provide for jobmaker hiring credit scheme—ineligibility for paying increased dividends
(1) This section applies if rules are made for the purposes of subsection 7(1A) that provide for a kind of payment known as the jobmaker hiring credit.
(2) The rules must provide that an entity is not eligible for the payment at any time during the relevant period if:
(a) during the period beginning on 1 March 2020 and ending at the end of the relevant period the entity pays dividends to shareholders of the entity; and
(b) the Commissioner is satisfied that the amount of the dividend exceeds the amount of the last such payment made by the entity.
There is nothing in this bill stopping companies that have paid increased dividends during the pandemic while receiving—
Honourable senators interjecting—
Sorry, Senator Faruqi, could you resume your seat for just a moment. I remind senators that debate continues. If you wish to have private conversations, please move outside into the lobby or leave the chamber. Thank you very much.
We are moving this amendment because there is nothing in this bill that stops companies paying increased dividends during the pandemic while receiving JobKeeper. These companies will be allowed to use and abuse public money in the same way under the JobMaker hiring credit scheme. That is just obscene. This amendment will make sure that businesses who have paid increased dividends from 1 March 2020 through to the end of the scheme, which is currently 6 October 2022, will be ineligible for the JobMaker hiring credit, because they should be. It is public money in this scheme that is being used to provide employment—insecure, I might add, and precarious employment—to people, but public money should in no way be abused in this obscene way, where shareholders get dividends for it. I commend this amendment to the Senate.
I rise to speak in support of the Greens amendment. The fact of the matter is that, under the JobKeeper scheme, a number of companies accepted JobKeeper and then, we found out later down the track, they went on to pay higher dividends to shareholders than they had paid in previous years and they were able to pay bonuses to executives. In effect, that was a funnelling of taxpayers' money from the taxpayers' purse into a company and then on to shareholders and executives. Most people in Australia were disgusted by that. It may have been within the scope of the law, but it wasn't within the scope of social licence.
When we were dealing with amendments to the JobKeeper program, I recall asking the Senate to do something similar to this amendment. I put it to Minister Cormann back then that the government should alter the laws to make sure that these sorts of rorts did not happen, and that was effectively greeted with an arms-in-the-air 'I don't know what to say' response. Here we have another scheme being brought into place to assist businesses, and the Greens are moving an amendment to make sure that taxpayers' money does not flow again from consolidated revenue into the hands of a company that then uses that money to pay increased dividends. I understand that companies exist to make a profit; there is nothing wrong with that. But they must do so in a way that has integrity, that doesn't abuse the social licence. It's for that reason that I'll be supporting this amendment.
I might just ask the minister if it is his view that companies should be able to take money from the taxpayer, seek this assistance and then, effectively, use that money to fund shareholders. Is that an acceptable proposition within the moral framework, the integrity framework, of the government, to your mind?
The short answer to Senator Patrick's question is no. This subsidy is intended, though, to support businesses to employ additional young Australians, and the additionality is a key element of this. I hear the criticisms of those opposite. The government certainly calls upon all parts of Australian business to do their bit, during these tough times, in terms of investing and helping to create more jobs. That's why we've structured policies like this one—to incentivise them to do just that: to invest, as our tax policies encourage them to do; to grow and create jobs; and, in this case, to target employment opportunities to young Australians. But they are additional employment opportunities, and the credit being provided is to support those new take-ups and jobs that are being created.
Could the minister explain what measures there are in this bill or in law, or what powers are within, say, the tax office to deal with the situation where taxpayers' money is taken from the public purse and handed, through the scheme, to shareholders of the company?
There's nothing wrong with a company making a profit. I want to be very clear about that. We want profitable businesses in Australia. The subsidy exists through the rules and structure of this program. It is based on the condition of the employment of a young Australian who was not previously employed in a role, the filling of a role that was not filled by somebody previously and the funding being there as a wage supplement to support an employment opportunity being created for a young Australian. It doesn't negate the fact that a company can go on and make a profit and pay dividends to shareholders, and dividends being paid supports many other Australians. In fact, they support virtually all Australians through the operation of the superannuation programs and many others who rely upon those sorts of dividends or other support.
Whilst, as I say, we certainly urge all Australian businesses to do their part in trying to help through the pandemic—and many have in the way in which they have helped maintain jobs at very difficult times during the course of this year—we also recognise that business needs to be profitable to survive in the long term. This is not intended as a profit subsidy, though, and that's why it is structured in the way it is—to support and underpin employment.
Labor very much acknowledged the concerns around the dividends that were distributed by large firms that used the JobKeeper program. However, it is our view that this hiring credit is substantively different in both its intent and its design, particularly in relation to ensuring that jobs are additional. So we do not seek to support amendments that would prohibit the distribution of dividends when a firm has taken on eligible employees and sought to expand the level of employment within their company or small business by using this incentive. I think it's also important to note that dividends are not received just by super wealthy people but are received by low- and middle-income shareholders. I would hope that—and I would believe that they do—they support the companies that they have invested in also investing in the hiring of new workers. On that basis, we don't support the amendment.
I move Greens amendment (1) on sheet 1066:
(1) Schedule 1, page 3 (before line 27), before item 5, insert:
4C Before section 8
7C Requirements for rules that provide for jobmaker hiring credit scheme—ineligibility for firing employees etc. to obtain payments
(1) This section applies if rules are made for the purposes of subsection 7(1A) that provide for a kind of payment known as the jobmaker hiring credit.
(2) The rules must provide that if:
(a) an entity terminates the employment, or reduces the ordinary hours of work, of an existing employee of the entity; and
(b) a purpose of doing so (whether or not the sole or dominant purpose) is any of the following:
(i) to engage one or more other employees in respect of whom the entity can claim the payment;
(ii) to facilitate an associated entity (within the meaning of the Corporations Act 2001) of the entity engaging one or more other employees in respect of whom the associated entity can claim the payment;
(iii) to otherwise enable the entity or associated entity to be eligible for the payment or increase the amount of the payment to which the entity or associated entity is entitled;
then the entity, and the associated entity (if any), are not eligible for the payment in respect of any employees.
(3) To avoid doubt, this section and rules made for the purposes of this section do not limit the Commissioner's powers under section 19 (contrived schemes).
This amendment is co-sponsored by Labor. As the bill currently stands, there is no dispute resolution process for resolving issues relating to the JobMaker hiring credit. Those issues include workers who might be fired, for instance, or who have their hours reduced. This will leave workers without access to necessary protections.
An opposition senator interjecting—
Absolutely, that's on sheet 1086.
The TEMPORARY CHAIR: You have indicated that you are moving amendment (1) on sheet 1066. Do you wish to speak to that amendment?
I do. I will speak to the safeguards. This amendment is also co-sponsored by the Labor Party. This amendment is about introducing safeguards in the bill. We have deep concerns that, as the bill currently stands, there is a real possibility that workers will lose their jobs or might lose hours as a result of the scheme. We are very concerned that a business will be able to fiddle with its staffing structures or its numbers to increase its headcount and it will also be able to fiddle with its payroll in order to receive this hiring credit, for instance. We want to make sure that that can't happen, and this amendment introduces those safeguards for workers.
The amendment prevents the firing and hiring of workers in order to receive the credit and it protects ordinary working hours of workers who already work for those companies, to make sure that their hours aren't reduced to make way for the minimum 20 hours of credit for eligible workers. It's a pretty straightforward amendment. It provides safeguards for the workers who are currently working within those companies. I hope that my colleagues can support this amendment, so we can at least improve this pretty terrible bill a little bit. I commend the amendment to the Senate.
Yes, the Labor Party co-sponsored this amendment with the Greens, and we are pleased to work constructively with them. During the Senate estimates process, Treasury said that the design of the scheme, particularly the dual requirements on total headcount and total payroll increasing, plus time costs and other behavioural factors, meant that businesses were unlikely to fire existing staff or reduce their hours. However, we note, particularly with large companies, there could still be plenty of scope for and a capacity to incentivise the displacement of staff, including by reducing their hours, and to motivate unfair dismissals.
Reading this amendment in conjunction with the amendment on sheet 1086, it's very important that the rules of the scheme make entities that terminate employment or reduce ordinary hours for existing workers ineligible for the scheme. In addition, I think it's worth speaking to the amendment on sheet 1086, which we are also co-sponsoring with the Greens. Again, in the context of the very real problem of incentivising unfair dismissals, the displacement of existing workers and the reduction of hours, it's critical that the Fair Work Commission has the ability to resolve disputes, which we think will inevitably arise. The Fair Work Commission is the best place for these disputes to be heard and resolved, because the disputes intersect with the idea that the scheme has been misused, which the ATO needs to have oversight of, with the motivation for an employer to unfairly dismiss someone or improperly reduce the hours of a casual worker. We want the rules to provide for arbitration as a means to resolve disputes, and this amendment ensures that.
Every senator here, including those in the government, says they want to ensure that existing workers are not displaced. So it's important that there is scrutiny by the Fair Work Commission on jobs and hours, and the dispute resolution process, and indeed that, as covered by the amendment on sheet 1066, there are very real safeguards to ensure that businesses uphold their obligations under this legislation.
The government opposes the proposed amendment. We do so on the basis that, as proposed, the program has a number of safeguards firmly in place. To be eligible for the hiring credit, an employer must have increased their headcount—that is, the number of total employees in the business must have gone up. In addition, an employer must have increased their payroll—that is, the amount that they are paying their employees in totality must also have gone up. So a business will not be able to sack somebody and replace them with somebody else, or multiples of somebody else, because in the end both the total number of employees and the total payroll need to increase for an employer to be eligible under this scheme. They're the additionality provisions about ensuring that it helps to support new jobs for young people in Australia. There are detailed record-keeping arrangements in place to ensure that those provisions can be enforced and are adhered to. I also note that all of the provisions of the Fair Work Act in relation to matters of unfair dismissal and general protections continue to exist and apply to protect existing employees.
Senator Faruqi, I'm just seeking from you a little information. I noted that you commenced your remarks about the amendment on sheet 1086 and then you moved to sheet 1066. I note also that Senator Pratt has already made her remarks with regard to the amendments on sheets 1066 and 1086. If you so wish, you may speak to the amendment on 1086 separately, or you can seek leave to move both of the amendments together. What would you like to do?
I move Greens amendment (1) on sheet 1086.
(1) Schedule 1, page 3 (before line 27), before item 5, insert:
4D Before section 8
7D Requirements for rules that provide for jobmaker hiring credit scheme—Fair Work Commission powers to deal with disputes
(2) The rules must provide for the Fair Work Commission to be able to deal with disputes that arise in relation to or in connection with the scheme for the payment, including (without limitation):
(a) disputes about the termination of the employment of an employee of an entity; or
(b) disputes about a reduction in the ordinary hours of work of an employee of an entity; or
(c) disputes about other conduct of an entity that adversely affects employees; or where the termination, reduction or other conduct is for the purposes of, or connected with, an entity seeking to become entitled to payments under the scheme, or to increase the amount of payments to which the entity is entitled under the scheme.
(3) The rules must provide for the Fair Work Commission to deal with such disputes on application by any of the following:
(a) an employee;
(b) an employer;
(c) an employee organisation;
(d) an employer organisation.
(4) The rules must provide for the Fair Work Commission to be able to make orders in relation to such disputes, including (without limitation) any of the following:
(a) an order for reinstatement of an employee;
(b) an order to reverse a reduction in an employee's ordinary hours or work;
(c) any other order that the Fair Work Commission considers appropriate.
Additional function of the Fair Work Commission
(5) The functions of the Fair Work Commission include dealing with disputes as referred to in this section.
Note: Other functions of the Fair Work Commission are set out in section 576 of the Fair Work Act 2009.
(6) For the purposes of section 595 of the Fair Work Act 2009 :
(a) this section and rules made for the purposes of this section are taken to be a provision of that Act; and
(b) the rules must provide that the Fair Work Commission may deal with a dispute by arbitration.
Note 1: Under section 595 of the Fair Work Act 2009, the Fair Work Commission may deal with a dispute only if expressly authorised to do so under or in accordance with another provision of the Act.
Note 2: In addition to arbitration, the Fair Work Commission may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2) of the Fair Work Act 2009).
This amendment is about the Fair Work Commission and dispute resolution. It's co-sponsored by the Labor Party. It is about making sure that workers have adequate protections, because as the bill currently stands there is no dispute resolution process for resolving issues that might come up. Workers who have been fired or who have had their hours reduced or undercut will have no avenue. This amendment will make sure that the Fair Work Commission has the power to deal with disputes relating to this particular scheme that the government is creating at the moment. With this amendment, workers, employers, unions and employer groups can lodge a dispute. That's a bare minimum that workers need to be allowed to get, and this scheme currently doesn't have that, so I commend the amendment to the chamber.
The CHAIR: The question is that amendment (1) on sheet 1086 moved by Senator Faruqi be agreed to.