SYDNEY, Oct 6 (Reuters) - Australia will spend A$4 billion over the next year to pay businesses that hire those under the age of 35, Treasurer Josh Frydenberg said on Tuesday, as part of an ambitious plan to boost jobs and growth.
Australia has been widely lauded for limiting the spread of COVID-19, but strict lockdown measures forced shut entire sectors of the economy, sending unemployment to a 22-year high of 7.5% in July.
The impact on younger Australians is even worse, with recent data showing the unemployment rate for 15- to 24-year olds was hovering near 20%.
As part of the government’s hiring credit scheme, Canberra will pay businesses A$200 a week for the next a year if they employ a person under 29.
Businesses will get A$100 per week if they employ a person aged between 30-35.
Eligible employees will have to work for at least 20 hours a week.
“Having a job means more than earning an income,” Frydenberg told Australian lawmakers in Canberra. “It means economic security. It means independence. It means opportunity. We can’t let this COVID recession take that away.”
The A$4 billion spending is part of Frydenberg’s long-awaited 2020/21 budget in which the government has pledged A$98 billion in fiscal stimulus to support jobs and overall economic growth.
The Treasurer expects the largess would help lower the unemployment rate to 6% by June 2023 - a level at which the government would consider tapering fiscal support.
The job boosting plan comes as Australia’s central bank left interest rates unchanged at a record low earlier in the day, saying lowering unemployment was a national priority.
Earlier in the day, the government announced a A$1.2 billion spending plan to pay 50% of the wages of 100,000 new apprentices or trainees under the age of 35, over the next 12 months.
Reporting by Colin Packham; Editing by Sam Holmes
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