Businesses back JobKeeper subsidy but some fear it won’t go the distance

The chief executive of the company behind Bunnings, Kmart and Target warns the federal government’s “generous” $130 billion JobKeeper wage subsidy will only go so far and businesses may need extra help at the end of the coronavirus pandemic.

Wesfarmers chief executive Rob Scott told The Age and The Sydney Morning Herald while yesterday’s announcement of a $1500 fortnightly wage payment for nearly six million Australian workers was “very generous”, the subsidy “only goes so far”.

Wesfarmers CEO Rob Scott said the government's JobKeeper payment was "very generous".
Wesfarmers CEO Rob Scott said the government’s JobKeeper payment was “very generous”.Credit:Trevor Collens

Wesfarmers is one of the nation’s biggest employers and operates Bunnings, Officeworks, Kmart and Target, among many other businesses. Mr Scott said the package was critical for the economy, and there was an “important need” for support to keep businesses alive and operating once the immediate coronavirus threat passes.

“We should all be mindful while the JobKeeper subsidy certainly helps workers for businesses that are essentially shut down, we all need to brace ourselves for what is likely to be a more significant downturn in GDP and the economy,” he said.

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“The more we can do to keep businesses operating and help businesses big and small manage the cash flow burden in the months ahead, that will be important.”

Treasurer Josh Frydenberg dismissed claims the package was the result of work by ACTU boss Sally McManus and former Labor minister Greg Combet, who is now advising the government.

“The JobKeeper package was developed by the Prime Minister, myself and the Finance Minister with the outstanding support of the treasury secretary and his department and other agencies including the ATO,” Mr Frydenberg said.

As of 4pm on Tuesday, there had been 276,937 registrations for the JobKeeper subsidy.

A spokesman for Flight Centre, which stood down 3800 staff last week, said it seems “like a really good program” and the business was looking through the details.

“It will also allow companies like us to preserve more roles now, while demand is significantly lower than what it would normally be. Naturally, we welcome this kind of initiative,” the spokesman said.

Theme park and cinemas operator Village Roadshow chief executive Clark Kirby said the company had registered for the program and was in touch with the government, labelling it an “incredible opportunity”.

A number of other businesses told The Age and The Sydney Morning Herald it was too soon to comment on the subsidy’s merits as many were still seeking information on how the payments worked, and which staff members would be eligible.

Wesfarmers is not currently planning to take advantage of the subsidy unless its businesses are forced to shut, in which case Mr Scott said the $1500 fortnightly payment would not cover the loss of wages for many of his employees.

Other businesses and employment groups have taken issue with the scheme’s treatment of casual workers, who are not eligible for the payments unless they have been with their employer for over 12 months.

Data from Curtin Bankwest Economics Centre shows nearly one million casual workers will be ineligible for the payment because they had been with their current employer for less than a year, as JobSeeker requires.

Unions have pointed to employees who work in construction or for labour-hire firms, saying they are likely to start new jobs with each project, preventing them accessing the payments.

Curtin Bankwest Economics principal research fellow Rebecca Cassells said there were also issues with other casuals getting the same amount of money as full-time workers, arguing it raised “equity questions”.

Kate Streeter, co-owner of Newcastle party supplies business Shindigs, backed the wage subsidy plan but raised similar concerns.

“Our more experienced staff that we can utilise and get involved with projects and other work, as the PM wants, those guys will be potentially be working 30 hours a week, which equates to $1500 a fortnight and getting paid the same as someone who is not working at all.”

“They’re left carrying the can so to speak. I don’t understand why there’s no room for employer discretion to say ‘let’s make sure that everyone is earning what they would’ve been earning before’.”

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