JobKeeper ended last Sunday and, as with most things, this is good and bad.
As an immediate reaction to the crisis that we were suddenly facing this time last year, JobKeeper was extraordinary and necessary. The payments kept many small businesses alive, kept millions of people in jobs and saved the economy, and for that we are very thankful.
But JobKeeper in its current form had to end. Certainly there are industries like tourism, live entertainment and events that are still suffering because of closed international borders and restrictions on crowds, and they will need targeted assistance so they can continue to hibernate. For them, the end of JobKeeper is understandably a major concern.
However, for many other industries, viable businesses can now survive without JobKeeper.
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Instead of propping everyone up, we should focus on assisting owners of non-viable businesses in restructuring or even closing their businesses if that is what’s necessary, and on supporting their staff in finding work elsewhere.
Propping up so-called ‘zombie businesses’ can distort the labour market and make it harder for other businesses to find staff. Ever since the national lockdowns eased in around June last year, COSBOA has been hearing anecdotes about small businesses – particularly in regional areas – doing well in terms of trade and yet struggling to fill job vacancies.
For example, COSBOA recently received this message from a business owner in regional Australia:
“For over a year we have put adverts up for staff and not one applicant. I have actually approached people who have worked for us in the past and have been told that, ‘why should I work for you when I can sit at home and earn the same money?’
“In the past year my wife and I have worked 14 to 16 hours a day for seven days a week.
“This week I put an advert up and alas, I have received 72 applicants for a counter sales person. My personal view is that JobKeeper and JobSeeker has been abused by many and without it will be a great help to many small businesses. I have not spoken to one small business owner who has not complained about the lack [of] people wanting to work!”
This is a common story and a common view of JobSeeker and JobKeeper. (Another explanation we often hear that isn’t mentioned in the above message is the lack of backpackers and international students).
This is a real problem.
There are people out there who are at home receiving JobKeeper from businesses that aren’t viable and don’t have any work for them.
In normal times, the business would have to close, the staff would become unemployed, and they would have look for work with businesses that are doing well. Or maybe the business would have to shed staff, they would become unemployed, and they would look for work with someone who needed them.
A broad approach to financial assistance was the right thing to do when the crisis first started and we didn’t know what the economic impact would be. A year later, it’s not the right approach. We need to target financial assistance to those small businesses in industries that still can’t operate as normal, businesses that would be viable if it wasn’t for COVID restrictions.
Some people have closed their ears to stories like the one above and pointed to statistics about there being more unemployed people than job vacancies. Just because that’s the national average doesn’t mean we should ignore the real small business owners out there who are telling us that they can’t find staff.
What it means is the problem is complicated. It means we need to support businesses in creating jobs. It means we need to support businesses in recruiting staff. And it means we need to support unemployed people in finding jobs.
COSBOA believes that place-based support developed in consultation with local communities is going to be the key.
Many of COSBOA’s industry association members have heard similar stories about businesses struggling to find staff. You can read their thoughts and experiences about JobKeeper, JobSeeker and a range of other coronavirus business support measures in our newly released report, The Small Business Perspective.
This article was first published on LinkedIn.