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The axe falls: four days to go before JobKeeper bites the dust

March 25, 2021 Headline News No Comments Email Email

Despite pleas from the travel industry, JobKeeper faces the axe from Sunday, with Australia’s Federal Treasury estimating the program’s termination will cost the jobs of up to 150,000 people.

Figures from the Australian Tax Office show more than a million workers were still depending on the wage subsidy at the end of last month.

Treasury secretary Steven Kennedy continues to view this weekend as an appropriate time to end the JobKeeper program. Kennedy told a Senate Estimates hearing JobKeeper had done its job, supporting the economy during Covid-19 restrictions.

“We believe that in the order of 100,000 to 150,000 JobKeeper recipients may lose employment at the completion of the program, though there is a wide band of uncertainty around this estimate,” Channel Nine quoted Kennedy as saying.

Kennedy expects many of the people who find themselves jobless will go on to find other work.

Travel agents are focussing on the $130 million second round of the Covid-19 Consumer Support Grant. The Australian Federation of Travel Agents (AFTA) met with Tourism Minister Dan Tehan in Canberra last week to discuss the workings of the grant.

Chief executive Darren Rudd and AFTA director David Smith stressed the need to ensure the balance of the $128 million first round of the grant was distributed “appropriately and urgently” to travel businesses desperately needing support.

Kennedy admitted that “we could see a bump in the unemployment rate as the JobKeeper program comes to an end this month, perhaps through March/April. But that bump might not be as much as we feared.”

Labor Senator Katy Gallagher disliked Kennedy’s use of the phrase “a bump in the unemployment rate”, pointing out that “one person’s ‘bump’ is another person’s livelihood”.

Convening in Canberra, from left: Federal Tourism Minister Dan Tehan; AFTA chief executive Darren Rudd; AFTA director David Smith; Member for Cowper, Pat Conaghan.

The decision to kill JobKeeper abruptly has drawn criticism. Shadow treasurer Jim Chalmers reminded the government that small businesses and employees had warned for months that terminating JobKeeper would cost jobs, but the pleas had fallen on deaf ears.

The Canberra Times quoted Chalmers saying that if the Morrison government “hadn’t wasted hundreds of millions of dollars on companies which didn’t need JobKeeper, there’d be more room to support those small businesses and workers which still do”.

RECENT DISCLOSURES HAVE SHOWN that the government’s very generous $93 billion JobKeeper program actually boosted the underlying profits of about 10% of the sharemarket’s top 300 listed companies.

According to a report by Melbourne-based Ownership Matters (a commercially savvy governance advisory service for institutional investors), Qantas was the company which received the most in JobKeeper payments. It secured $726 million, along with additional government subsidies, accounting for about 30% of all JobKeeker payments going to listed companies.

After Qantas came Crown Resorts (according to Ownership Matters, as reported by Accountants Daily). Crown is said to have received $254 million – $95.2 million of which was paid to staff who continued to work, according to the casino operator. Crown was followed by Australia’s biggest travel agency chain, Flight Centre, at $195 million. Next came Star Group at $152 million.

These companies accounted for at least half of all JobKeeper payments going to listed companies.

Since JobKeeper was introduced in April, more than 2.7 million workers and about 680,000 businesses have left the scheme, a 72% reduction.

Treasurer Josh Frydenberg said Australia’s economic recovery was broad-based across all states, regions and industries and the final JobKeeper numbers for January had confirmed that.

“We know that some families and businesses are still doing it tough and our message is that the Morrison government continues to have your back,” Frydenberg said.

 Written by Peter Needham

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