Wage subsidy just the start of the road to recovery

On Monday afternoon Prime Minister Scott Morrison and Federal Treasurer Josh Frydenberg announced a $130 billion wage subsidy scheme to support Australian businesses and workers through the faltering economy.  

The scheme, which will pay a minimum fortnightly subsidy of $1500 per employee to businesses that have seen turnover fall by 30 per cent or more, will start on May 1 and be backdated to March 1.

“We want to keep the engine of our economy running through this crisis,” Morrison said.

The ‘job keeper’ scheme is set to cover full-time, part-time, sole traders and casual workers who have been employed in their jobs for 12 months or more. It will also cover those who were stood down on or after March 1, as well as New Zealanders living in Australia.

Dominique Lamb, chief executive of the National Retail Association (NRA), told Inside Retail Weekly such a wage subsidy would take some stress off Centrelink, as retail is one of the biggest employers in the country.

And while this subsidy will come as welcome news to the industry, with many businesses having seen turnover drop as much as 70 per cent in recent weeks, it is but one part of the NRA’s 10-point plan for retail recovery.

“We’ve seen hair and beauty, tourism, fitness, hospitality and retail really affected [by COVID-19], and I think there needs to be a targeted response in those industries to get them moving again,” Lamb said.

Beyond wage support

The NRA’s plan outlines various ways the Government can support the flagging retail industry, such as ensuring a more consistent approach to national rental relief, and a deferral of the annual minimum wage review.

Lamb said while it was comforting to see the PM speak in relation to rental relief on Sunday, the fact that such measures were likely to be administered by state governments was of some concern.

“Many of our members are national, and it would be better to have a consistent approach in each state so there is not any further confusion,” Lamb said.

Additionally, both the Australian Retailers’ Association and the NRA have recommended that the Fair Work Commission (FWC) delay the annual minimum wage review until the economy has settled.

The FWC has pushed parts of the review back, and has noted that further timetable changes will be necessary to allow parties an opportunity to comment on the rapidly changing environment and new economic data as it is released.

Other measures Lamb recommended included further financial support for sole traders, micro and small businesses; a nationwide freeze to land tax payments; banks to freeze loan repayments and avoid deferring to compound interest; an investment in digital upskilling of workers; a federal fund to support significantly impacted industries; helping businesses open as soon as it is safe to do so; and, finally, reassuring consumers that when it is safe to shop again, they should support local retail.

“I think it’s possible to start a retail recovery plan prior to all this being over, and in order to do that, we need to make sure we can encourage people to shop locally and support those businesses – not just any business that’s online in Australia.”

This story first ran in Inside Retail Weekly. Given the current crisis, we have decided to unlock all premium content related to COVID-19. If you would like to support Inside Retail, please consider subscribing here.

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