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JobKeeper extension throws business a lifeline

Release Date: 21/07/2020
The Hunter Business Chamber has welcomed the continuation of wage subsidies for businesses affected by COVID-19 but says some businesses will be challenged by the reduction in payments available under the Federal Government’s revised JobKeeper arrangements.
Payment rates after September 27 will drop from a flat $1,500 a fortnight per eligible employee to $1,200 for those working more than 20 hours a week and $750 for those who average less (based on hours worked during February 2020). The payments will drop to $1,000 and $650 respectively for the March 2021 quarter.
“The Government’s decision to ease back JobKeeper support rather than stopping it altogether will avoid the economic cliff that was looming in late September,” Chamber CEO Bob Hawes said.
“But it is a lifeline, not a rescue package, and it is important that businesses who are relying on the subsidy take this opportunity to seek advice and reappraise their business models where necessary.
“When the first phase of JobKeeper was announced, we all hoped it would be an interim measure that would help see businesses through to better times. Following the resurgence of the virus in Victoria and elsewhere, we now know there is no quick fix to the situation we are in and the challenges will be longer term.
“Businesses cannot assume that there will be a return to what they know as normal trading conditions any time soon. With that in mind, some will decide to continue and others to close – either way, the extension of the program gives them six months to plan for that outcome.”
A report issued by Business NSW earlier this week, based on responses by more than 1,000 businesses, revealed that one in three had not planned how they would continue operations after JobKeeper payments stopped and about half did not think they would be able to retain current staff numbers without the subsidy.
The Back on track report showed JobKeeper had been overwhelmingly the single most helpful policy measure for business and highlighted the need to gradually wind the program back rather than ending it abruptly.
Mr Hawes said the implications of the reduced payments would be most significant for the many businesses in the Hunter who relied on part-time and casual workers.
The new version of JobKeeper would also put a higher administrative burden on recipient businesses, which would now be required to provide evidence of reduced downturn through activity statements and actual GST turnover, rather than simply relying on projected turnover.
“It is a necessary evolution of the program for governance purposes but it will put more demands on business at a time when many are working around the clock just to stay open,” Mr Hawes said.

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