Small business advocates are urging the federal government to rethink JobKeeper for industries still affected by COVID-19, including hospitality, in the final months before the wage subsidy ends.
Restaurant and Catering Industry Association of Australia CEO Wes Lambert, along with small business and family enterprise ombudsman Kate Carnell, are in discussions with the federal government about how JobKeeper should evolve in order to help the businesses lagging behind in the coronavirus recovery.
Lambert yesterday put forward “HospoKeeper” to Treasurer Josh Frydengberg and Minister for Trade, Tourism and Investment Dan Tehan.
Lambert tells SmartCompany that the scheme would target hospitality businesses affected by future lockdowns that are likely to occur due to local COVID-19 outbreaks, such as what happened in the Northern Beaches.
HospoKeeper would work like JobKeeper, in that it is paid to businesses by the ATO, after businesses have submitted business activity statements (BAS) proving they experienced a 15 to 30%, drop in turnover — depending on the business — over a four week period when restrictions were enforced.
Eligible businesses could then receive $1,000 per full-time employee and $650 for each part-time employee.
“We know that 100% of the time, when restrictions are put in place, they are always placed on restaurants, pubs and clubs,” Lambert says.
Lambert says unlike other industries such as mining, professional services and telecommunications, the three industries that are always heavily hit by restrictions are accommodation and food services, arts and entertainment, and the transport and tourism industry.
“HospoKeeper allows the JobKeeper mechanism that’s in place now to deliver that targeted, bespoke stimulus, exactly where it’s needed,” Lambert says.
Small business ombudsman Kate Carnell shares the view that there should be some form of support for industries still struggling after the $101.3 billion JobKeeper program winds up in March.
“Areas like the travel industry, travel agents, the live music industry, large events and independent cinemas — there are a range of businesses that are going to take longer to recover,” Carnell tells SmartCompany.
Carnell believes the federal government should seriously consider a scheme like HospoKeeper, however, she does think a measure should be set up to ensure subsidies are not paid to so-called “zombie businesses”.
“We’ve been suggesting that the government should provide some funding to accountants to do a viability assessment on businesses to help them with cashflow and determine whether they should continue to operate or not,” she says.
One problem with the current form of JobKeeper, which Carnell believes is an unintended effect of the program’s design, is that businesses cannot claim JobKeeper for newly hired staff members.
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As the economy recovers and more jobs become available, small businesses that are still struggling are losing their staff and cannot claim JobKeeper if they hire replacement employees under the current eligibility rules, Carnell says.
“JobKeeper was reduced again on January 4, 2021, and with some eligible businesses unable to afford to top up wages, they are having to reduce the hours of their staff,” she says.
“It means staff are resigning to go to jobs offering more hours and pay.”
Carnell says JobKeeper’s current eligibility criteria is unintentionally “increasing the divide between the haves and have-nots in the small business sector”.