With the government’s announcement of a reduced and targeted continuation of wage subsidy measures on Tuesday, industry associations have largely welcomed the measures.
Starting in September, full-time workers will only see $1200 of their fortnightly wage subsidised by the government, while part-time and casual employees working less than 20 hours a week will see $750 a fortnight.
In March 2021, these figures will reduce again to $1000 and $650 respectively.
Business Council of Australia chief executive Jennifer Westacott said the council welcomed the changes and said the government was taking a ‘responsible approach’.
“Every dollar of taxpayers’ money we spend needs to go to where it is most productive, help the most in need and deliver the greatest value by setting us up to recover,” Westacott said.
National Retail Association chief executive Dominique Lamb, however, said that while the subsidy would help keep some businesses afloat, the economic terrain created by Covid-19 is extremely hostile.
“The JobKeeper scheme has undoubtedly saved many jobs, the challenge was always going to be how it would be scaled back,” Lamb said.
“We’d have preferred an approach that extended it by industry. Sectors such as retail and tourism were always going to require additional assistance compared to other parts of the economy.
“Ultimately, we need to see a pick up in discretionary spending to prevent many small businesses from hitting the wall.
“That is why careful consideration also needs to be given to programs such as JobSeeker, so that we don’t see an overnight plunge in consumer spending.”
In Tuesday’s announcement the Prime Minister confirmed that the JobSeeker payment would also be seeing cuts, falling from $550 to $250 in September.
This means unemployed Australians impacted by the Covid-19 economic shock will be receiving $815 a fortnight, or $407 a week – below the poverty line of $426.30 a week, as defined by The Organisation for Economic Cooperation and Development – should they qualify for JobSeeker at all.
However, the 1.6 million Australians on JobSeeker will be able to earn up to $300 a fortnight without it affecting their payment, and will be required to actively apply for at least four jobs a month.
According to the ABC, the Treasury expects the number of JobKeeper recipients to fall from 3.5 million to just 1 million by the March quarter.
This means 2.5 million Australians will either find self-sufficient work, or transition to JobKeeper and potentially poverty, within half a year.
Paul Zahra, chief executive of the Australian Retailers Association, said that while the outlook was positive and the extensions welcome, it will be a bumpy and challenging recovery for many – especially through the “make or break” Christmas quarter.
“Pockets of retail will take longer to recover, particularly discretionary retailers or for stores in the CBD and popular tourist locations,” Zahra said.
“These retailers depend on higher foot traffic which we are unlikely to see for some time.”
And with the lockdown re-starting in Melbourne and on the horizon for Sydney, the withdrawal of rent relief when the Mandatory Leasing Code of Conduct ends in September should be on the minds of all retailers presently.
“[It’s] another big concern for retailers in high need categories. When retailers win, landlords win – it’s important we all work together to ensure the survival of retail tenants and the Code has been working well to protect the interests of small to medium size retailers,” Zahra said.
“Though we had hoped to be further on the road to recovery at this time, the spike of infections in Victoria and NSW clearly shows us we aren’t out of the woods.”
