On Monday (14 March), the Victorian government announced the $245.6 million scheme that it said would transform casual and contract work in Victoria by providing vulnerable workers with the safety net they need to take time off when they’re sick or need to care for loved ones.
Under the scheme workers are now able to register for the two-year pilot program, and it is anticipated that more than 150,000 workers will be eligible in this first phase.
Eligible casual and contract workers in certain occupations will receive up to five days a year of sick or carer’s pay at the national minimum wage.
However, Victorian head of the Ai Group, Tim Piper, said the scheme has not retracted the government’s previous announcement that businesses will most likely need to fund the huge ongoing cost once the two-year trial is over, through a levy.
“The levy would, in effect, be a tax on employment and would be another deterrent to employers investing in Victoria,” Mr Piper said.
“The scheme provides a sick pay and carer’s pay entitlement to those who are eligible. However, casuals already receive a 25 per cent casual loading in lieu of paid sick leave and carer’s leave and, therefore, the scheme will lead to obvious ‘double-dipping’.
“The very lengthy list of eligible occupations in the Program Guidelines for ‘Phase 1’ includes numerous occupations that cannot be considered insecure such as butchers, chefs, pastrycooks, motor vehicle parts interpreters, motor vehicle salespersons, supermarket workers.”
Mr Piper said the government has cost stage 1 $245.6 million for a two-year period.
“Presumably Phase 2 will involve an even wider set of eligible occupations and a much larger cost,” he said.
“These huge costs will no doubt require a very substantial levy on Victorian businesses if the Government decides to pass on the costs to businesses at the end of the two-year trial, as it appears to be planning to do.
“The scheme is deeply flawed and should be abandoned. The last thing that Victorian businesses need is the prospect of a hefty payroll levy in two years’ time to fund this illogical scheme. The looming levy will kill investment in Victoria and put a hand-break on the [recovery].”
The government said the Victorian Sick Pay Guarantee builds on the temporary measures implemented during the pandemic, including the COVID-19 Worker Support Payment (now the Australian Government’s Pandemic Leave Disaster Payment) and the COVID-19 Test Isolation Payment.
