JobKeeper extension welcomed by businesses but many fear they won’t be eligible after September
Hundreds of thousands of business owners around Australia — and their staff — slept better last night knowing that JobKeeper will still be around until March next year.
Many say the scheme, in place since April, has been all that’s keeping their business afloat and their staff employed.
The Government is hoping the economic recovery and new rules around JobKeeper will wean many businesses and their staff off the scheme, forecasting the number of employees covered will fall from 3.5 million to 1.4 million by Christmas.
While some are back on their feet as restrictions ease across most of the nation, others are still struggling and grateful for the continued support.
However, with Melbourne going back into lockdown and the threat of outbreaks and increased restrictions in Sydney, and elsewhere, some businesses are worried the planned support levels from October will not be enough to retain their staff, or possibly even stay open.
The Business spoke to some of these small businesspeople from around the nation who are trying to keep trading through the pandemic.
Cafes and restaurants have been among the hardest hit by the pandemic, with many relying on dine-in customers, office workers and short-term casual or foreign staff, all of which have been hit by COVID-19 or the design of government support.
Gayle Borg runs the Sip Inn cafe in the inner-Sydney suburb of Erskineville. She saw business plummet during the initial lockdown in late March.
“I was ripping up money so I decided to close for a little while,” she says.
She’s now reopened after a six week shutdown.
As a sole trader, she has received JobKeeper for herself but found some of her employees weren’t willing to keep working while receiving the supplement, so she hired new staff who weren’t eligible due to their start dates.
Nonetheless, Ms Borg welcomed the changes to the scheme, saying she was worried about increasing government debt.
“I think it’s a good idea to be monitored [to ensure that] people aren’t taking it unnecessarily,” she argues.
“To be honest, I hope I’m not eligible, which means I’ll be making enough money to cover myself, but it’s good to know the backup is there.”
Dave Moran runs a successful cafe just a few suburbs away in Sydney’s inner-west.
When he spoke to The Business in mid-May, despite a roaring takeaway trade, revenue was down by more than a third during the ban on dine-in eating.
Since the New South Wales Government allowed patrons back, business has picked up. But it hasn’t snapped back to normal.
“We’re still down, but we’re not down by 30 per cent, so for us now moving forward we’re not going to get any further assistance so that definitely is going to affect us,” he explains.
During the lockdown, staff numbers fell from 27 to 13, as many were short-term casuals not eligible for JobKeeper anyway.
As the restrictions have eased, staffing has risen back to 25 and eight of those depend on JobKeeper.
But Dave Moran says he can’t give his staff any certainty about their futures because he has none himself.
“It concerns me, because we don’t know what’s around the corner,” he says.
“You know we’re trying to navigate what looks like a second wave of this pandemic at the moment.”
Florist Matthew Landers has operations in Perth and Adelaide.
While he has kept his two retail stores and two floral academies running, the weddings and events side of his business has ground to a halt.
“Naturally, our turnover’s decreased a huge amount, but the expense of running the day-to-day operation of the business hasn’t decreased really at all, so JobKeeper’s allowed us to keep our team employed and allowed us to carry on as much as possible,” Mr Landers says.
While he’s been able to keep his full-time staff on, he worries for the freelance florists who he says are the backbone of the events side of the industry.
“I would’ve liked to have seen a bit more instant support for some of our freelance workers … we have florists that might work for 10 different florists, one or two days a week or a month … the support was very limited for those people and that’s why we started to see those enormous queues out the front of Centrelink.”
He welcomes the extension of JobKeeper beyond the original September expiry, which he says was a source of anxiety for his industry peers.
Mr Landers decided not to access other support such as loan repayment holidays, as he was worried about being snowed under when the relief expired.
“I was actually approached by our bank, as a good client, to see if we wanted any support,” he says.
“The uncertainty ahead of us was so unclear for such a long period, I didn’t want to just access this finance that was available and just put it off … so we don’t get ourselves into a hole of debt for the future.”
The make-up artist
Like many florists, Sydney-based freelance make-up artist Samantha Lauren has seen most of her work dry up and not return as large events such as weddings are postponed.
“Not knowing what’s going to happen with coronavirus, it’s really difficult to commit to jobs in the future so nobody is really locking anything in,” she says.
She expects to still be relying on JobKeeper past September.
“I would love for it to stay the same, but I would prefer something rather than nothing and I do think its better that it’s being monitored.”
Jason Kiekebosch runs a printing and training business in Melbourne.
Face-to-face training courses were cancelled and the business had to pivot to offering online training.
EXELNetwork employs about 35 staff and Mr Kiekebosch was able to access government support for all but one of his employees.
“Essentially our whole workforce has accessed JobKeeper and that meant a huge amount psychologically, just in people understanding that their jobs are secure,” he says.
“I think there’s also the knock-on effect, that it had a massive impact on our customers, and because our customers had some confidence to ride out that bumpy patch, it meant they were then confident to spend money with us as a business.”
He says business picked back up in June, after the initial slowdown due to COVID-19.
While he says EXELNetwork is now in “recovery mode” and actually looking to hire a few additional workers, he’s still very glad to see the JobKeeper subsidy extended.
“I would imagine that we would be OK without JobKeeper, but certainly a lot of our customers won’t,” he explains.
“I think it’ll increase business confidence, which will have a positive impact on our business.”
But the current lockdown in Melbourne is a cause for concern.
“Looking at this month, we’ve started off OK, but the uncertainty around what’s going on in Victoria, which is where the vast majority of our workforce is located, [means there is] a little bit of apprehension about what lies ahead.”
The tour guide
Tess Atie of NT Indigenous Tours normally takes between 60-80 groups a month through the beautiful Litchfield National Park, outside Darwin.
At the moment, she says business is dead: “100 per cent [down].”
Ms Atie says JobKeeper has been a lifeline for both the business and personally, allowing her to keep up with her mortgage repayments and living expenses.
“It definitely has been keeping us afloat and it is also good because we have a lot of overheads in our business,” she says.
“I’ve got other fixed costs, bills, got to put food on the table — so it’s been a relief for me.”
The reduction in the JobKeeper rate doesn’t concern Ms Atie, who will see her payments fall.
“It still won’t bother me so much. I know $1,500 is great. I know $1,200 is less, but I can still live with that.”
Valerio Domenici runs Zucchero Caffe Bar on Sydney’s lower north shore and found four of his five staff members were ineligible for JobKeeper as they were not permanent residents.
“It has been a small amount of help, because it means I didn’t have to worry about one of those employees as much as I would’ve had to without having any assistance,” he says.
“But of course on a day-to-day basis, we needed to make sure that we did things that kept our doors open so the other [workers] would actually be able to earn some sort of living.”
That involved cutting down hours and transitioning to takeaway only service during worst of the downturn.
Mr Domenici would like to have seen some form of assistance for migrant workers, even if it had taken a different form to JobKeeper.
“They do make up a lot of the backbone of our industry and many other industries alike,” he said.
Despite being largely ineligible for the wage subsidy scheme, he’s confident his business can ride out the uncertainty.
“Given the record over the last month or so, I think we should be able to get through it relatively unscathed, obviously we won’t be kicking any goals,” he said.
The spa manager
Craig Mitchell — chief executive of Peninsula Hot Springs in Victoria’s Mornington Peninsula — is relieved that his 350 staff, two-thirds of them on JobKeeper, will keep receiving support.
Under Victoria’s tough restrictions, the popular thermal baths are completely shut.
“Whilst it’s been reduced, and there’s a ‘tiering’ and a reflection of the casual workforce under 20 hours a week … it will still allow us to do what we had planned to do,” he said.
“It’ll also turn our mind to the future projection and investment that we’ll continue to make in our business, rather than focusing on survival we’ll be focusing on reviving and thriving once again.”