Woolworths, Australia’s largest private employer, says it will not participate in the government’s $4 billion JobMaker wage subsidy scheme as it believes it would not be appropriate to claim the aid given record supermarket sales.
In a memo circulated to staff on Wednesday, seen by The Age and The Sydney Morning Herald, Woolworths chief executive Brad Banducci and chief people officer Caryn Katsikogianis said the retailer would not be signing on to the initiative, which offers employers between $100 and $200 a week for hiring new staff between the ages of 16 and 35.
The executives said they supported the spirit and design of the initiative, but it would not be appropriate for the $49 billion retail behemoth to seek any benefit from the scheme.
“We believe our current circumstances – where we’re fortunate to be trading strongly and are entering our usual business cycle of hiring for Christmas and summer – requires us to be thoughtful in what government programs we access,” they said.
Woolworths has been a major winner from COVID-19-induced panic buying. In August it reported bumper sales for the 2019-20 financial year, with revenue rising 8.1 per cent to $63.6 billion.
The JobMaker hiring credits were announced last week as part of a broader $74 billion plan unveiled in the budget to create jobs and stimulate spending in the economy. However, the plan drew criticism over its apparent neglect of older workers, who would not qualify for the scheme.
Mr Banducci and Ms Katsikogianis said that new roles, especially those recruited over Christmas, would be provided to workers of all ages, including many young people entering the workforce for the first time.
“These are opportunities we’ve offered to young people for generations and will continue to do so proudly,” they said.
Woolworths’ decision also hinged on it not wanting to undercut its existing employees’ hours through the hiring of subsidised workers, with the memo noting there was “strong appetite” from staff for additional hours over Christmas.
The retailer employs 215,000 people, many of who are under the age of 35, across its supermarket, liquor and Big W department store divisions and would have been a prime beneficiary of the JobMaker hiring credits. Woolworths wasn’t able to claim payments under the federal government’s JobKeeper scheme as it didn’t qualify because of its business performance through the pandemic.
It’s understood the federal government has been notified and “fully respects” Woolworths’ decision.
However, major rival Coles, which employs around 118,000 workers, said it was planning to use the credit. Chief executive Steven Cain said on Wednesday the supermarket intended to use the scheme, but only in certain circumstances.
“It has to be permanent team members and it has to be an increase in your actual workforce,” he said. “And as we go into Christmas, a lot of the increase in team members we typically see are casuals.”
“So, we’re looking carefully at it, and, clearly, if we can be supportive and put more people in permanent jobs, we will be.”
Retailers have been broadly supportive of the budget, with the accelerated tax cuts for low- to middle-income earners, along with the job creation measures, predicted to boost spending.
However, some businesses had been holding out for additional industrial relations reform which was not delivered on in the budget. Mr Cain said he was still hopeful changes could be made in that area, backing recent efforts by the Business Council of Australia.
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