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V2.0: JobKeeper Likely To Be Extended Until Christmas

The positive news is that the federal government' JobKeeper subsidy scheme is like to be extended until Christmas, but it will look different from its current form.

The positive news is that the federal government’ JobKeeper subsidy scheme is like to be extended until Christmas, but it will look different from its current form.

With a formal announcement and budget update due on Tuesday from Treasurer Josh Frydenberg, the good news for the ‘crisis-hit’ travel and tourism industry is that speculation is leading to JobKeeper being extended until the end of December.

However, payments will be at a tiered and reduced rate from $1500-a-fortnight to $1000-a-fortnight for companies that qualify for the scheme under a new, stricter, eligibility test when the current scheme ends on September 27.

Currently, companies currently need to prove that their turnover is down by 30 per cent but only needed to prove it once to qualify for payments until September.

Affected companies that have bounced back from COVID-19 shutdowns will reportedly be removed from the second phase of the program.

While not confirming the specific figure for JobKeeper V2.0, Mr Frydenberg told news.com.au that it was clear that ongoing support will now be required, particularly in Victoria.

“As we have highlighted there will be another phase of income support. It will stick to the principles that have guided us well. It will be targeted, it will be proportionate, it will be scalable, and it will be using existing systems,‘’ he said.

“The JobKeeper payment is an economic lifeline to millions of Australians and hundreds of thousands of businesses.

Melbourne-laneways
Melbourne

“Barring the spread of the virus in significant numbers beyond Victoria, we expect to see the other state and territory economies continue their recovery towards a COVIDSafe economy.”

Industry bodies and individuals have been lobbying hard in recent weeks and asking for JobKeeper to be extended for another six months until March 2020 in light of international and now state borders remaining closed.

Appearing on Sky News last week, Platinum Travel Director Andy Buerckner highlighted the urgent need for further government financial support.

“With no certainty of any international borders opening or no certainty of timelines, the only certainty we do require is 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.”

Meanwhile, The Australian Tourism Industry Council (ATIC) has made a final call to arms for the Federal Government to maintain and extend JobKeeper for six months with 10,000 people proactively petitioning for the Program’s future to sustain tourism businesses and thousands of jobs.

ATIC Executive Director Simon Westaway said the collective economic impact of our international border closure and changeable State and Territory border constraints has smashed Australian tourism.

“Our industry needs far greater time than JobKeeper’s September deadline to allow for a meaningful recovery.”

Simon Westaway, ATIC Executive Director

“Despite the positives of Queensland, the NT and South Australia’s border re-openings to most Australians, any upswing for our national visitor economy is neutralised and worsened by the absence of Victoria and people from many areas of Sydney. The retention and extension of JobKeeper is not negotiable beyond September if we want a recovering tourism sector.” He said.

It’s also anticipated that the government will 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.

Whether or not travel businesses will be keen to take on more debt remains to be seen. According to Business Insider, under the first iteration of the scheme, only just over 15,000 loans worth $1.5 billion were approved.

Some breathing space until December at least? Tuesday is looming as a massive day for the travel and tourism industry.