JobKeeper enters its final stage, but small business advocates call for extension

The JobKeeper payment rate was cut again on Monday, but Peter Strong from the Council of Small Business Organisations Australia (COSBOA) says the government should now be preparing to continue the wage subsidy scheme beyond its expiry in March. 

Since March 2020, thousands of Australian businesses have accessed the JobKeeper scheme, which moved into its final stage this week.

From January 4, the ‘tier 1’ JobKeeper rate for eligible employees and business participants working 80 hours or more each month dropped from $1,200 to $1,000 per fortnight, and the ‘tier 2’ rate dropped from $750 to $650 per fortnight.

To continue accessing the scheme, businesses must complete a new turnover test, with the Australian Taxation Office giving SMEs extra time over the Christmas and New Year period to meet their reporting obligations. 

Approximately 500,000 businesses were still accessing the payments in November, with about 450,000 entities coming off the program in October as the economy began its recovery. 

However, with new coronavirus outbreaks over the Christmas and New Year period, and restrictions once again placed on businesses in New South Wales and Victoria, there are concerns that small businesses remain vulnerable. 

Speaking to SmartCompany, COSBOA chief executive Peter Strong says JobKeeper should be extended beyond its March 28 end date. 

“It should be continued in a different form, by targeting it,” he says. 

“We can collect data about which businesses and geographical areas are suffering the most. That would be a much better use of the funds, to get to the businesses that need them.”

Small business ombudsman Kate Carnell previously told MyBusiness she hopes to see the government continue the payments for businesses in distress. 

“JobKeeper got small businesses with less than 20 employees back to almost the same levels of jobs as pre-March by the end of September. But by the second week of November, there’d been quite a significant reduction in jobs again,” she said during a podcast. 

“And I think that is probably because as people came off JobKeeper, they had to reassess their cashflow, reassess their business capacity to keep people on their books.”

Elsewhere, Strong says the government should also be focused on supporting small businesses to access the new insolvency process if needed, following changes that came into effect on January 1. 

Under the new arrangements, businesses with liabilities of under $1 million will be able to stay in control of their business and continue to trade while they restructure debts. 

Strong says these arrangements will be key for some small businesses when JobKeeper payments end, and so the government needs to ensure the changes are well-communicated. 

Communication with small businesses is also needed in relation to the COVID-19 vaccine, says Strong, who says it is vital business owners understand how the vaccine will be made available and what to do if people within their business do not wish to be vaccinated.