Businesses will be encouraged to create jobs for the unemployed and allowed to write off the full cost of almost all new assets under measures the government says will both save and create jobs.
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The JobKeeper wage subsidy program, introduced in a rush at the height of COVID-19 related shut downs, will be replaced with a new subsidy specifically for employing young people on unemployment payments.
Called the JobMaker hiring credit, businesses will be paid $200 a week if they hire an eligible employee aged between 16 and 29, and $100 a week for an employee aged 30 to 35.
Young people have been hit hardest by job losses in the pandemic and Treasurer Josh Frydenberg has warned against the "scarring" effect on their future jobs and wages.
All businesses apart from the big banks will be eligible for the program, but they must prove the job is a new job being created, adding to the total number of staff rather than replacement.
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The new employee must have been a recipient of JobSeeker, Youth Allowance (other) or the Parenting Payment for at least one month in the previous three months and must work at least 20 hours a week for the business to be eligible for the payment.
In place for 12 months from Wednesday, it's expected 450,000 jobs will be supported by the payment at a cost of $4 billion to the budget.
On top of already announced tax concessions for small and medium businesses, and changes to the fringe benefit tax, business cash flow is set to be supported through temporary full expensing of new assets.
The largest set of investment incentives any Australian government has provided.
- Treasurer Josh Frydenberg
The program will be available to businesses with turnover below $5 billion, more than 99 per cent of businesses, and will allow the full cost of all depreciable assets to be written off, with no limit on their value.
It is "the largest set of investment incentives any Australian government has provided," Mr Frydenberg said.
Assets used or installed before June 30, 2022 will be eligible, and businesses will also be able to claim the full cost of improvements to existing assets.
Small and medium businesses with turnover less than $50 million will be able to claim the full expense of second-hand assets under the measure.
Businesses will also be able to carry back tax losses recorded in the next three financial years to offset profits previously taxed in 2018-19 or later income years, in a move designed to assist businesses that were once profitable but have had their bottom line hit by the pandemic.
Combined, the two measures are expected to reduce tax receipts by $31.6 billion over the next four years, with the extra cash in the economy to create 50,000 jobs.
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Sally Whyte
I report on a range of issues in federal politics and the public service, with a real passion for how decisions made in Canberra affect the lives of Australians.
I report on a range of issues in federal politics and the public service, with a real passion for how decisions made in Canberra affect the lives of Australians.
