Here’s Why Hundreds of Thousands Of Businesses Haven’t Applied For JobKeeper
It’s the most expensive welfare program ever released by an Australian government, however, Hundreds of thousands of eligible Australian businesses are yet to file their JobKeeper application.
Assistant Treasurer Michael Sukkar has confirmed that half a million businesses have signed up to the JobKeeper program, covering more than three million Australian employees. That number would seem comprehensive, if it weren’t for the fact that more than 900,000 organisations expressed interest in the program and haven’t yet lodged an application.
According to a report from the ABC a number of employers are blaming convoluted exclusions, uncertainty on exactly what employees are eligible as well as the potentially unaffordable gap between when business dropped, and when the tax office will produce the funds.
The JobKeeper program is aiming to support small businesses that have witnessed at least a 30 per cent drop in revenue from this time last year, and larger organisations that have seen a 50 per cent drop. The idea is to minimise the unemployment rate, which is forecasted to peak at 10 per cent.
One employer mentioned in the report who spoke on the condition of anonymity told the ABC that “it’s all grey” in reference to the inability to get answers from the Australian Taxation Office, and that their company - who employs 1,500 casual and 200 permanent staff - is not going to apply for the JobKeeper package.
“When [our people] talk to the ATO they’ll get a particular answer… but the ATO won’t write it down, even in an email,” they said. “And [they] won’t confirm which employees are eligible before you have to pay them- that’s the problem,” alluding to the fact that many employers will be significantly out of pocket after paying wages for the ATO to refuse payment.
The ABC’s Daniel Ziffer writes that “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.”
Kate Carnell, Ombudsman at Australian Small Business and Family Enterprise said she was happy the government had extended the payment deadline until May 8, adding that “small businesses now have extra time to deal with cash flow pressures as a result of any delays with their financial arrangements.”
A number of businesses will look to business loans to weather the gap between their application, paid wages and reimbursement, with a number of the ‘big four’ banks establishing JobKeeper phone lines, as well as fast-tracking of applications.
Preeti Sharma, a senior accountant at Sashi Veale & Associates said that “the main issue is cash flow,” adding that “you could pay April and May (salaries) and not get the money until June. Obviously the Government is trying to keep business on its feet, but they haven’t had months to plan. It’s tough for us, it’s tough for them, but hopefully it will have the effect it is hoping for,” she said.
The problem for the government, however, is that this is all complicated by, as Ziffer explains, “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 neat definitions of permanent full and part-time work.”
Kathryn Placing, a children’s entertainer who has been unable to navigate the system to pay the twelve workers she has contracted for festivals, events and birthday parties.
“Because our workers are subcontractors,” Placing told the ABC, “there’s nothing we can do to help our staff. Some of them haven’t earned enough on their ABN 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.”
What makes it more difficult for Mrs Placing is that she started the business with her husband, but under JobKeeper rules, just one partner can be nominated for the payment. To navigate the next few months, she’s looking at joining the JobSeeker program, which has been temporarily doubled to $1,100 a fortnight.