Yahoo Finance 4 days until JobKeeper axed: Here’s what it means for Aussies
Almost exactly a year after it was first announced, the JobKeeper wage subsidy will officially come to an end on Sunday 28 March.
With more than a million Australians still on the scheme, compared to the 3.6 million in mid-2020 the height of the pandemic, the end of the wage support is expected to result in about 150,000 job losses and a “tidal wave” of business closures, according to Treasury officials and business experts.
Whether you’re an employee, a business owner, or a worker in the tourism or aviation sector, here’s what you can expect once the scheme winds down for good:
If you’re an employee on JobKeeper...
And you’re not sure whether the business you’re working for will make it out on the other side, you may have to come up with a Plan B.
Take steps to think about your career or job prospects as soon as possible, such as refreshing your resume and reaching out to your network, Alison Hernandez from career transition firm Randstad Risesmart Asia Pacific told Yahoo Finance.
“Don’t wait for an event that impacts your job to start thinking about having an up-to-date resume, to be thinking about reskilling and upskilling for the future.”
The end of JobKeeper, compounded by the withdrawal of the JobSeeker Coronavirus Supplement, will heighten the vulnerability of lower-income Aussies, said Jim Stanford, chief economist at thinktank Australia Institute Centre for Future Work.
“It will increase poverty, increase job insecurity, and undermine working hours,” he said.
“If you are in a job which is currently supported by JobKeeper, you can ask your employer what their plans are after March 31. But you should be ready to start looking for another job if the government carries through on this plan.”
It could be the case that employees of JobKeeper-supported businesses will have to apply for income support.
“Once JobKeeper ends those who do lose their jobs may have to rely on JobSeeker until they can find a new job,” said AMP Capital chief economist Shane Oliver.
“The best way to prepare if you think your job may be discontinued when JobKeeper ends is to start looking around for a new job now, use any spare cash to pay down your debts and/or to build up a financial buffer and if you do have a mortgage have a discussion with your bank.”
This sentiment was echoed by Australian Council of Social Services, who urged Aussies who aren’t receiving enough hours to apply to Centrelink (Services Australia).
“Most people will likely receive JobSeeker Payment if they meet the eligibility criteria, including the means test – you have to declare your income and all your assets,” ACOSS senior policy advisor Charmaine Crowe told Yahoo Finance.
Beginning on 1 April, the new JobSeeker base rate – which was increased by $50 a fortnight amid months of intense lobbying from business and social services groups and unions – will be $615.70 a fortnight, or $43.98 a day. That’s compared to the maximum payment of JobKeeper which is currently $500 a week.
Aussies needing income support should also find out if they’re eligible for the Commonwealth Rent Assistance, the Family Tax Benefit, the Carer’s Allowance or Carer Payment, or the Disability Support Pension.
“People should lodge their claims as early as possible, as if they are eligible for a payment, they may be back paid to the date they lodged their claim.”
If you’re a business owner…
If you haven’t already, it’s time to figure out how your business can survive on the other side of the wage subsidy.
This will require having a realistic conversation with yourself, your finance department and a business advisor or insolvency specialist.
“The best form of defence is attack. Get on the front foot, and figure out what [your business’ best] assets are,” said Michael Masterson, Australia managing director of business strategy firm EverEdge Global told Yahoo Finance.
“If you're going to head off that cliff, try to have a soft landing, and talk to solvency practitioners.”
Since the subsidy scheme, receivership firms have had a deficit of work – and Masterson said there has been a “build-up” of companies just on the cusp of going under, with the wage subsidy acting as a “false barrier”.
“There has to be a tsunami building up behind the dam.”
Business owners need to ask their finance department if the organisation will make it, and then get a second opinion.
And if prospects aren’t looking good, start making preparations early. “This is the time for a bulls**t-free shower,” he told Yahoo Finance. “You don’t want to be the one going home to tell your family we don’t have a business anymore.”
It’s also worth doing an assessment of the business’ ‘intangible’ assets, which encompasses intellectual property, patents, customer lists, brand recognition and goodwill. If the business has significant market share, your company may be “worth something to someone”, said Masterson, and the business may be sold for a good price.
If you work in the tourism or aviation sector...
The Federal Government has announced a $1.2 billion rescue package for the tourism sector aimed at supporting regional airlines and tourism operators. More than 600,000 Australians are employed by the tourism sector.
Qantas and Virgin airlines, as well as other small carriers, will be beneficiaries of this package which will offer Aussies 800,000 tickets for half price.
Late last week, Qantas told 7,500 employees that usually work its international routes that they will receive a $500 subsidy from the Federal Government until October, which is when the international travel ban is expected to lift. This comes as part of the $1.2 billion package.
International travel from Australia has been suspended since late March last year, leaving the tourism and travel industry crippled by COVID-19’s devastating economic impacts.
If you’re a young unemployed person…
The Government’s JobMaker hiring credits scheme aims to help Aussies under 35 years of age score a job. They’re doing this by offering ‘hiring credits’ to employers to incentivise them to hire new, young staff. For each eligible worker hired by a business, the business will get between $100 to $200 a week depending on the worker’s age.
More to come.
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