Almost
half the Australian workforce could be paid up to $1,500 a fortnight
for six months through the $130 billion JobKeeper wage subsidy scheme.
But many employers are giving up before a single payment has been sent.
Key points:
- Around 900,000 businesses expressed interest in JobKeeper but so far just over 500,000 have signed up to the scheme
- Businesses are required to pay all their staff at least $1,500 a fortnight to be eligible for a JobKeeper reimbursement
- Many business owners say there are a number of confusing requirements and exclusions that have discouraged them from joining up
Understandably, the most expensive welfare program in the nation's history is having teething problems.
Since
enrolments opened at the start of last week, more than 500,000
businesses have signed up, covering more than 3 million employees,
according to Assistant Treasurer Michael Sukkar.
But that is barely more than half of the 900,000 businesses that initially expressed interest.
Many
are blaming confusing exclusions, uncertainty about which employees
will be eligible and the yawning gap between when they must start paying
staff and getting reimbursement from the tax office.
Children's
entertainer Kathryn Placing is used to holding attention at
sugar-filled birthday parties. But the Adelaide performer has struggled
to navigate the system that aims to pay employers to keep on staff, such
as the 12 workers she uses during festivals and events.
"Because our workers are sub-contractors there's nothing we can do to help our staff," she said.
"Some
of them haven't earned enough on their ABN (Australian Business Number)
with us to qualify for JobKeeper, so they're going to have to go on
JobSeeker and we've been having to hold their hands through it
financially."
Mrs
Placing and her husband have a partnership, but only one partner can be
nominated to receive JobKeeper, so she is aiming to receive the lower
JobSeeker payment, previously called Newstart, which was recently temporarily doubled to $1,100 a fortnight.
The
scope of the JobKeeper program is even broader, aiming to keep workers
'linked' to employers by providing a $1,500-a-fortnight wage subsidy.
It
supports businesses that have seen their turnover drop by at least 30
per cent for smaller firms and 50 per cent for big companies.
The
hope is it will help the economy recover faster when restrictions ease
by lessening the level of unemployment, which most forecasts still
expect to peak above 10 per cent.
But the
liberalised nature of how people are 'engaged' at work – including
freelancing, casual work, contracting and the gig economy – has smashed
into a system that rewards employees who fall into the neat definitions
of permanent full and part-time work.
Pay now, maybe get back later
One
employer – with around 1,500 casual employees and 200 permanent staff –
is not applying for the program because it cannot get straight answers
from the Australian Taxation Office.
"It's all
grey," said a person from the company, speaking on condition of
anonymity because they are not authorised to discuss the company with
the media.
It
seems a so-called 'one in, all in' rule does not exclude seasonal
workers, meaning the company would have to pay casual workers logging
just a few shifts a year.
"And (the ATO) won't
confirm which employees are eligible before you have to pay them —
that's the problem," they added, explaining that it could leave the
employer permanently out of pocket if it paid staff but was not
reimbursed.
The company has opted out of the scheme, meaning casuals will have to apply for the lower JobSeeker payment.
The experience echoes one of the key concerns about applying for JobKeeper.
Businesses
originally had to pay staff the $1,500 by this Thursday (April 30), but
employees eligibility would not be confirmed, and the subsidy paid,
until May.
Australian Small Business and Family
Enterprise Ombudsman Kate Carnell welcomed news that small businesses
have been given an extension to make payments until May 8.
"Small
businesses now have extra time to deal with cash flow pressures as a
result of any delays with their financial arrangements," she said in a
statement.
Still, some businesses will need to
borrow money for the first payments. The four major banks have
established special JobKeeper phone lines to help small business fund
the gap and have promised to fast-track applications.
Businesses have until May 31, 2020, to formally enrol to claim JobKeeper payments.
'Continuous change' in a novel scheme
However, other quirks remain as the Government has tried to define the scheme.
Major banks, universities, state and territory agencies and local councils? Out. International workers, 17-year-old casuals? Ineligible.
Staff at AFL and NRL clubs, the organisational wings of the Liberal Party and the Labor Party? In.
Preeti
Sharma, senior accountant at Sashi Veale & Associates in western
Sydney, is helping small businesses trying to access the scheme.
"The main issue is cash flow," she agreed.
Most clients are using personal or business overdrafts to fund the gap.
One of the other key problems — "continuous change" — is unlikely to go away, as the Government tinkers with the massive scheme.
"Obviously the Government is trying to keep business on its feet, but they haven't had months to plan," Ms Sharma said.
"It's tough for us, it's tough for them, but hopefully it will have the effect it is hoping for."
Fear factor
Mrs Placing has not touched the welfare system since she became a mother and accessed parenting payments.
Twenty-five years earlier she was briefly on Newstart when between jobs.
"Even
when we started out our birthday party business we chose to stay off
the support network and work second jobs … rather than draw on that
program," she said.
"Probably the key factor would
have been the effort-to-reward ratio, like the amount of work that goes
into it for almost no money — it just seemed too hard to be worth
bothering."
The
coronavirus crisis wiping out future income — and the
generously-increased levels of support through JobKeeper and JobSeeker —
has changed her attitude, but the trepidation remains.
"I get scared of being involved with Centrelink," she said.
"You
hear so many stories — robo-debt collections and accidental
overpayments and all of the things. I actually get a bit nervous about
relying on Centrelink in case there's a problem down the track where
I've made a mistake and I'm suddenly in debt to them."
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