The end of JobKeeper is now just 28 days away. Fortunately, for many businesses that initially relied on the wage subsidy to help them through the pandemic, that will be of little consequence.
Business conditions have improved, perhaps faster than many expected, with nearly 3000 local businesses able to transition off JobKeeper. But for the many businesses and their staff in our region, still relying on JobKeeper, the program cut-off on March 26 looms as a significant financial pinch point.
As of December, almost 3600 business in the region were still on JobKeeper, which equates to over 55 per cent of employing businesses who will be vulnerable when JobKeeper concludes.
Business NSW recently spoke with one such business in the travel industry, whose normal revenue has dropped on average by more than 97 percent over the past year as a result of government-enforced COVID restrictions.
Aside from staff that chose to leave, they have managed to retain all their staff throughout the crisis with the help of JobKeeper. However, once the scheme ends, they will have to find another $20,000 a month to pay the wages. It's a massive burden on a small family-owned business which, through no fault of their own, have very little cashflow.
They are not alone, about 23 per cent of businesses believe they are at high risk of failure when supports such as JobKeeper, tax relief, interest waivers and other measures end, according to Business NSW's most recent Business Conditions Survey, which was conducted across NSW in the December quarter prior to the Sydney lockdowns.
Business NSW supports the Australian Chamber of Commerce and Industry call for government subsidies to businesses that have been significantly affected by COVID restrictions to continue after JobKeeper winds up in March.
We support the implementation of an alternative scheme that would provide eligible businesses with varying levels of wage subsidy; $450 per week per employee if business turnover is down by more than one-third, or $700 per week per employee if business turnover is down over two-thirds, relative to the same quarter in 2019.
The subsidy would be tested quarterly and retain the industrial relations flexibilities of the JobKeeper payment.
This would apply to many businesses working in hard-hit sectors such as arts and entertainment, travel, tourism, hospitality and international education.
As well as helping to preserve future jobs and skills, we believe this ongoing wage support for heavily affected businesses would provide much-needed certainty, allowing them to plan beyond the JobKeeper "cliff" at the end of March.
Joe Townsend is the Business NSW regional manager for New England North West
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