The Federal Government unveiled its $130 billion wage subsidy scheme on Monday afternoon, promising financial support to thousands of businesses that keep employees on the books over the months ahead.
Through the JobKeeper scheme, businesses that have lost 30 per cent of their turnover due to the coronavirus can apply to receive $1500 for each employee on their books on March 1.
Businesses with more than $1 billion in sales will need to have lost 50 per cent of their turnover to qualify.
The first round of payments will be delivered in the first week of May, but will be backdated to the end of March. The scheme will run for six months.
The payments apply to full-time and part-time employees, as well as casual workers who have been employed for at least 12 months, New Zealanders on temporary visas and migrants eligible for welfare. Sole traders are also covered. The $1500 covers about 70 per cent of the median wage.
Business Council of Australia chief executive Jennifer Westacott said the stimulus was a “country changing moment”.
“This will allow people to keep their businesses going, to restructure…and rebound their business and keep those people in work when this crisis is over,” Westacott told The Today Show.
“This is just an injection of hope into this country and it’s the hope and confidence that we needed.”
According to AAP, almost 60,000 businesses had signed up to the scheme within hours of being announced.
The JobKeeper scheme will have a particular impact on the retail industry, which saw around 100,000 workers stood down in the last week according to the Shop, Distributive and Allied Employees Association.
However, SDA national secretary Gerard Dwyer is concerned that the payments will miss vulnerable workers, and may come too late.
“The SDA is concerned some retailers will not have the cash flow to survive until May 1st when payments start to flow,” Dwyer said.
“This could mean more workers stood down and more businesses folding than would be the case if payment began more rapidly.”
The retail industry has already seen many businesses fold or retreat into a state of hibernation in the hopes of weathering the COVID-19 crisis – and the difference between a subsidy hitting sooner rather than later could make the difference between collapse and survival for some in the industry.
Additionally, Dwyer said the payment should apply to casuals who haven’t been at an employer for 12 months but could be expected to work now, and the 1.7 million visa holders working across the country.
RMIT professor of workplace law Anthony Forsyth shares this concern, telling The Conversation that, given the sectors hardest hit by coronavirus are those with high turnover, many casual workers will be ineligible.
“Another gap is the hundreds of thousands of workers in the gig economy,” Forsyth said.
“We are relying more than ever on food delivery riders and drivers… JobKeeper will cover self-employed individuals but they must be able to show at least 30 per cent decline in their turnover.
“Most gig workers will not have the business systems set up to demonstrate this.”
Premier Investment chairman Solomon Lew praised the government for the scheme, saying the 9,000 staff his business recently stood down would now be able to access financial support.
“This will give employers like Premier a greater ability to retain team members during the COVID-19 crisis,” Lew said.
“During this challenging time [this scheme] will give businesses the best possible opportunity to bounce back and thrive.”
In The Conversation, Australian National University visiting scholar Steven Hamilton said targeting only businesses experiencing a revenue loss limits profiteering, but could also lead to firms delaying recovery in order to subsidise workers wages.
“For example, for Qantas the subsidy would be almost $600 million, but to receive it, its revenue will need to fall to 50% below where it was this time last year,” Hamilton said.
“That might discourage it from reopening routes, which would slow the recovery.”
Griffith University professor of employment relations David Peetz told The Conversation the stimulus would allow firms to essentially rehire or keep minimum wage workers on for free, though higher paid workers would not feel the same boost.
“For workers on average full-time adult earnings, which are about twice the minimum wage, the subsidy is nowhere near as big. Many are still likely to lose their jobs, as we have already seen,” Peetz said.