Public coffer swells to cover rise in collapses
The amount of taxpayers' money set aside for employees of collapsed companies has leapt to meet increased demand for the so-called "safety net scheme of last resort".
More than $300 million has been set aside for government payments to workers who lose their job through the liquidation or bankruptcy of their employer. This is an increase on estimates of $202 million, and well above the $195.5 million spent last financial year.
Estimates from the Department of Education, Employment and Workplace Relations show $304 million has been budgeted for the scheme, called the Fair Entitlements Guarantee, but known last year as the General Employee Entitlements and Redundancy Scheme. GEERS payments comprised the bulk of the budget, at $248.4 million compared with $55.63 million for FEG.
A department spokeswoman said: "GEERS and FEG are demand-driven schemes and additional funding was made available to reflect demand being experienced over the first quarter of 2012-13." Corporate collapses since July last year include printing company Geon, confectionery company Darrell Lea and Gourmet Food Holdings, owner of the tomato sauce brand Rosella.
The federal government recently fast-tracked FEG payments to Geon employees owed $10 million "The government's action means families will have money in their bank accounts within weeks to pay mortgages, school fees and put food on the table. Without this, about 678 workers across the country would have otherwise been out of pocket," Workplace Relations Minister Bill Shorten said.
The guarantee provides unpaid or underpaid wages, unpaid annual leave and up to five weeks' payment in lieu of notice and up to four weeks' redundancy pay per year of service. Corporate collapses rose 21 per cent year-on-year to 628 in January.