$10,000 payout scheme for older workers ‘won’t change’ hiring plans
KERRIE SINCLAIR THE COURIER-MAIL MAY 14, 2014
Pam Prowse (left) and Melanie Beech from The Finishing Touch, home services. Pic. Mark Cranitch Source:News Limited
A $10,000 payout to employers hiring older workers is unlikely to change hiring practices, making it difficult for Australians to work longer and leaving the economy facing a huge workforce and revenue shortfall in coming years, employers warn.
The federal government is stretching the retirement age to 70 from 2035 and as a sweetener is to this year start paying employers $10,000 over two years for providing a full-time job to a person aged over 50 and formerly on benefits, or a pro-rata subsidy for part-time hires.
Nick Behrens, general manager of advocacy for the Chamber of Commerce and Industry Queensland, said the bonus is unlikely to change employer hiring decisions.
He said a better action would be an awareness raising campaign on the advantages of hiring mature-aged workers.
“Firstly, it’s four separate payments, four touchpoints between business and government and in business’s view that’s probably four too many,” Mr Behrens said.
He said the Baby Boomer generation’s retirement will mean a massive workforce exodus and the loss of their income tax will leave governments desperately struggling to cover higher healthcare costs.
“So we’re going to need hundreds of thousands of new workers over that time and so the $10,000 incentive payment, well it’s quite simply not enough of an influence to address these issues of the age dependency ratio and really enabling Australians to work to 70 years of age,” Mr Behrens said.
One of Australia’s biggest employers of mature-aged workers said the bonus was just a starting point, given most older workers would not qualify under the scheme.
Melbourne-based packing services company The Finishing Touch employs 220 mature-aged staff nationally, including 20 in Brisbane, and has created 2,400 part-time mature-aged jobs since 1994. Its average employee age is 55.
General manager Steve Hitchings said the federal initiative was a start but more was needed, suggesting state payroll-tax exemptions for older workers.
“While I think it’s a start, the whole issue of mature-age employment can be likened to an iceberg and this initiative, while welcome, only addresses the ‘above the water line’ component, in the visible long term unemployment and disability benefits recipients. There is a far bigger mass of older workers (and hence employers) who will not qualify,” Mr Hitchings said.
He said the company’s mature-aged female workers were loyal, hardworking, reliable, worked well in teams and had an eye for detail, “all attributes that our clients love”. CCIQ’s Mr Behrens said the advantages of hiring mature-aged workers are significant.
“They have extensive networks and experience and, contrary to myth, their productivity is more often than not significantly higher and they have lower staff turnover,” Mr Behrens said.
Mature boost for workers over 50
May 15, 2014
SMALL BUSINESS: Bathurst Mowerland and Heating’s David Morris says the $10,000 incentive to put on a mature age worker is a positive to come out of the Federal Budget. Photo: Brian Wood
THE wage subsidy for employers who take on mature-aged staff is the good news to come out of the Federal Budget, according to David Morris from Bathurst Mowerland and Heating. Business would be paid $10,000 over 24 months for each new full-time worker aged above 50, and part-time workers would attract a smaller subsidy based on hours worked.
The plan is expected to bring 32,000 older job seekers back into the workforce. “It certainly makes it much more attractive to put on someone who meets this criteria,” Mr Morris said yesterday. “I would certainly consider it, without a doubt.
“This not only gives someone over 50 a better chance of a new lease of life with a better shot at a job, as an employer it could also bring in someone to the business with experience and skills that a lot of young people don’t necessarily have.”
Mr Morris said it is fair that the top end of town have to cough up a bit more as a result of the Budget’s new “Temporary Budget Repair Levy” on earners over $180,000, who will have to pay an extra two per cent in tax.
He runs his business as a company, and welcomed the 1.5 per cent cut in company tax from July 1. “We need every bit of help we can get at the moment,” Mr Morris said. “A lot of small businesses are doing it tough and margins are really, really tight.”
Mature Age Worker Tax Offset Abolished
May 14, 2014
The mature age worker tax offset (MAWTO) will be abolished from 1 July 2014. This measure is estimated to have a gain to revenue of $760m over the forward estimates period. A 2012/13 Budget measure began the phase out of the MAWTO from the 2012/13 income year, limiting it to taxpayers born before 1 July 1957. The government considers that encouraging mature age workers to participate in the workforce can be achieved more effectively through direct payments or incentives. Savings from this measure will be redirected to the government’s expanded seniors employment incentive payment called Restart to support mature age job seekers in re-entering the workforce. Under that measure, from 1 July 2014, a payment of up to $10,000 will be available to employers who hire a mature aged job seeker, aged 50 years or over who has been receiving income support for at least six months.
Source: Budget Paper No 2, p 14.