Industry News

Retailer groups welcome JobKeeper extension

The retail industry supports the JobKeeper extension in these challenging times

The Morrison Government announced yesterday it will deliver more support for households and businesses to help Australians through the COVID-19 pandemic and bolster the economic recovery. It’s news welcomed by the retail industry as details emerged that the JobKeeper Payment will be extended by six months. JobKeeper was due to finish on 27 September 2020, but will now remain available for eligible employers until 28 March 2021.

Prime Minister Scott Morrison said the extra assistance would continue supporting hundreds of thousands of Australians who are without work, while offering businesses and their workers a lifeline to not only get through this crisis, but recover on the other side.

“We will have Australian’s backs as we face the ongoing impacts of COVID-19,” the Prime Minister said.

“There is no silver bullet and this is about delivering the support Australians need and the policies our economy requires to reopen, recover and create jobs”, he said.

As restrictions ease and the economy reopens, the payment will be tapered in the December and March quarters to encourage businesses to adjust to the new environment, supporting a gradual transition to economic recovery, while ensuring those businesses who most need support continue to receive it. A two-tiered payment will also be introduced from 28 September, to better align the payment with the incomes of employees before the onset of the COVID-19 pandemic. Employees who were employed for less than 20 hours a week on average in the four weekly pay periods ending before 1 March 2020 will receive the lower payment rate.

The introduction of the part time and full time tiering will reduce the number of employees receiving more than their usual salaries on Job Keeper, yet still giving the ability for businesses to keep them employed.

JobKeeper Payment rates from 28 September 2020 to 28 March 2021:

Date Full rate per fortnight Less than 20hrs worked per fortnight rate
28 September 2020 to 3 January 2021 $1,200 $750
4 January 2021 to 28 March 2021 $1,000 $650

The CEO of the Australian Retailers Association, Paul Zahra, welcomed the Prime Minister’s extension of the JobKeeper program, which will provide much needed relief for struggling retailers as they approach the most critical trading period of the year.

Zahra said the revamped program addresses the main concerns raised by the ARA in recent months.

“The October to December quarter is a make or break period for many retailers particularly this year as it includes the all important Christmas trading period and the start of the Boxing Day sales. While at a reduced rate, JobKeeper’s extension will ensure that jobs in the retail sector, many of which are held by women and young people, will be preserved through a period that is vital for retailers’ recovery,” Zahra said.

“JobKeeper, JobSeeker and other support measures have successfully provided an important boost to our economy. This extension of the program, tailored to those in highest need, will support the recovery of the retail sector – which is crucial to our wider economic recovery.

“We are also pleased to see payments more closely aligned with working hours of staff, with a lower payment for employees working less than 20 hours per week which addresses retailers’ concerns about fostering greater workplace cooperation with casuals and part-time staff”, he said.

JobKeeper payments support the ongoing employment of those in the retail and hospitality sectors

“Though we had hoped to be further on the road to recovery at this time, the spike of infections in Victoria and NSW clearly shows us we aren’t out of the woods. Yesterday’s news eases the pressure on many retailers doing it tough and helps them to plan the next six months.

“Pockets of retail will take longer to recover, particularly discretionary retailers or for stores in the CBD and popular tourist locations. These retailers depend on higher foot traffic which we are unlikely to see for quite some time. Ultimately the future outlook for retail is positive, but it will be a challenging and bumpy road to recovery for many,” Zahra said.

The National Retail Association (NRA) also welcomed the government’s extension of the JobKeeper subsidy, but warned that the economic climate remains hostile for many businesses. CEO Dominique Lamb said that retailers welcomed the announcement but that an extension on an industry basis would be more appropriate.

Retail turnover rose by a solid 2.4% in June according to the Australian Bureau of Statistics (ABS) preliminary report, however, Lamb said the road to retail recovery following the COVID-19 wrecking ball remains long and fraught with hazards.

“Retail turnover in June experienced a solid rise in sales following the lifting of several business restrictions. It was the first full month that restaurants and clothing stores had been allowed to trade, with many being forced to close in April and May. We expected a pickup in sales for these businesses but turnover for this section of retail is still well below June 2019″, Lamb said.

Lamb noted that retail remains in a volatile state and the reimposition of lockdowns in Victoria demonstrates that the sector is far from out of the woods.

“The future of thousands of businesses and the jobs they provide remain firmly in the balance. The NRA welcomes the extension of the JobKeeper program until March 2021, but the economic terrain will remain hostile for many retailers,” Lamb said.

“By our calculations, $3.4 billion in retail sales were lost in the month of April during the height of the lockdown restrictions. If we see the same spike we’ve seen in Melbourne occur in other parts of the country, the economics ramifications would be dire”, she said.

“The JobKeeper scheme has undoubtedly saved many jobs, the challenge was always going to be how it would be scaled back.

“We’d have preferred an approach that extended it by industry. Sectors such as retail and tourism were always going to require additional assistance compared to other parts of the economy. Only 1% of retailers are looking to employ more people at present. The extension of JobKeeper until March will hopefully result in a boost to business confidence, but many employers will continue to tread carefully”, she said.

To address the lack of new roles in the economy and the potential of increasing unemployment rates, the government will extend the payment period of the temporary coronavirus supplement for those on income support from 25 September 2020 to 31 December 2020 to continue to provide elevated assistance while the economy is still in its early stages of recovery.

As the economy reopens, the coronavirus supplement will be extended at the rate of $250 per fortnight, previously $550. The extended coronavirus supplement reflects the gradually improving economic and labour market conditions and is designed to ensure there are appropriate incentives for all payment recipients to seek out employment or study opportunities.

The government will also improve incentives to work by increasing the income free area for JobSeeker Payment and Youth Allowance (Other) from $106 per fortnight to $300 per fortnight and will simplify the taper rate from a dual taper of 50 cents and 60 cents to a single taper of 60 cents. This will mean recipients are more easily able to calculate the value of every dollar they earn.

These changes will mean individuals will be able to earn up to $300 per fortnight without foregoing any JobSeeker payment or affecting their eligibility for the Coronavirus Supplement.

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