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How JobKeeper staff could get sacked anyway

Tony Yoo
·2-min read
A sacked female worker sitting on steps distraught with a box of personal belongings.
Australians receiving JobKeeper could get sacked at the end of the government payouts anyway. (Image: Getty)

About 3.5 million Australians are receiving the JobKeeper payment from employers who have done "the right thing" by keeping them on the payroll rather than sacking them.

And now the federal government has committed to paying JobKeeper for a further six months, to March next year.

But businesses that are reeling from the coronavirus recession are warned to carefully consider whether keeping staff on JobKeeper will eventually push them to extinction.

The Small Business Association of Australia confirmed to Yahoo Finance that employees on JobKeeper still continue to accrue leave and superannuation entitlements.

That means businesses could owe an entire year's worth of leave and super for staff on their books while not much revenue is coming in during the virus-induced downturn.

That's a lot of money that could send many small and medium businesses broke, especially if they're still struggling when JobKeeper payments end in March.

"Unfortunately both groups can be the losers – the worker and the small business owner," said SBAA chief Anne Nalder.

"I know many small business owners would prefer to keep their staff and have their little business continue. [But] unfortunately many small businesses will be going to the wall."

The original JobKeeper, running until September, retrospectively pays $1,500 per fortnight to businesses to pass onto each employee. The extended scheme announced this week sees that amount stepping down until March.

Nalder told Yahoo Finance that this week's announcement of business loans 50 per cent guaranteed by the government would help somewhat with retaining jobs – but how the economy looks in March is highly uncertain.

"It is up to the business owner who will have to make the decision whether their business is viable and can climb out of the current slump," she said.

"If their business is a viable business and can work its way out and rebuild they may decide to borrow – but again they have to be aware as to the long term viability of taking on a loan and also the consequences of having their business shut down through either bankruptcy."

Council of Small Business Organisations Australia chief executive Peter Strong agreed with Nalder's view on the risks of keeping "zombie workers" via JobKeeper.

"Many [businesses] are accruing a debt that they can't pay because they haven't got the income coming in,'' he told Nine.

He suggested some businesses might consider shutting down then coming back when conditions were better, rather than try to fight through while keeping staff.

"Don't put your business at risk because that means everybody loses their job and you lose your home."

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