Yesterday’s rumour mill was running hot with speculation that the federal government’ JobKeeper subsidy scheme would likely only be extended until Christmas – Today, the big announcement has been made that the scheme will, in fact, be extended until 28 March 2021 with two phases of payments.
After all of the rumour mill chatter yesterday about what JobKeeper 2.0 might look like and how long it would be extended, the government has today officially announced that JobKeeper will be extended until 28 March 2021 at least.
What’s more, the full-time employee fortnightly payment, previously rumoured to be dropping from $1500-a-fortnight to $1000-a-fortnight, will in fact, now only be lowered to $1200-a-fortnight for the first three months and then down to $1000-a-fortnight from January until March 2021.
While this is in no way the answer to the travel industry’s problems in light of state and national border closures, it is still hugely welcome news as it provides a further lifeline to help business’ bottom line to trade and innovate through the immediate and ongoing uncertainty of the COVID-19 crisis.
What does JobKeeper 2.0 mean?
- Until 27 September 2020, approximately 960,000 businesses and 3.5 million workers will keep receiving the JobKeeper wage subsidy as it stands.
- All businesses on JobKeeper will then be subject to a “fresh eligibility test” for companies and individuals to approve them for JobKeeper 2.0.
- The second eligibility test will be based on the current criteria of companies having to prove that their turnover is down by at least 30 per cent.
- Any affected companies that have bounced back from COVID-19 shutdowns by 27 September will be removed from JobKeeper 2.0.
- From 28 September until 3 January 2021, the JobKeeper 2.0 payments will be $1200-a-fortnight for full-time employees and $750-a-fortnight for part-time and casual employees who work less than 20 hours a week.
- A third eligibility test will be undertaken at the beginning of January 2021 and based on the current criteria of companies having to prove that their turnover is still down significantly.
- From 4 January 2021 until 28 March 2021, the JobKeeper 2.0 payments will reduce to $1000-a-fortnight for full-time employees and $650-a-fortnight for part-time and casual employees who work less than 20 hours a week.
In recent weeks, the entire industry and associations have been fervently rallying politicians, media and anyone else who would listen to recognise the severity of fate the travel and tourism industry would have faced had JobKeeper not been extended.
Appearing on Sky News last week, Platinum Travel Director Andy Buerckner highlighted the urgent need for further government financial support.
“I’m very grateful for the support we’ve received to date, but frankly, without that support, I would say 98% of travel agencies in Australia would be gone. And that’s talking about Australia only.”
Speaking after today’s announcement, ATIC Executive Director Simon Westaway said:
“JobKeeper 2.0’s 6-month extension provides certainty to keep tourism business doors open because most still await visitor recovery with a firmly closed international border and ongoing domestic border restrictions in place across States and Territories in response to COVID-19.
“Australia’s border constraints remain critical in both tourism’s and our economy’s ability to effectively recover. Today’s announcement cannot mask this obvious ongoing economic impediment which drove our call-out for JobKeeper’s targeted extension.
Simon Westaway, ATIC Executive Director
“ATIC will engage with Government and Opposition parties to assess how regular seasonal employees are treated in JobKeeper’s future two-payment tiered calculations, particularly recognising northern Australia, and remaining responsive to the clear ongoing uncertainty over our international border’s ability to reopen.” He said.
As part of the stimulus plan, the government will also boost its $40 billion ‘SME Guarantee Scheme’ which offers cheap loans to keep businesses afloat.
Five-year loans of up to AU$1 million will replace the previous three-year ones of up to $250,000. The first six months will remain interest-free, but the eligibility requirements will be expanded to include new investment.
Today’s news will provide some relief for the travel industry. In so many ways, it feels, sadly but understandably, as if JobKeeper is all we’ve been talking about for months.
Now at least, businesses can get on with making the necessary adjustments to their business models with a small safety buffer for the next six months at least.
What needs to happen now is for the government to publicly outline their plan, however tentative for international borders reopening.
For all the most up to date JobKeeper information and applications, head to: www.treasury.gov.au/coronavirus/jobkeeper