Jobkeeper flaw creates staffing issues for struggling small businesses

Business NWS Central Coast Regional Director, Paula Martin

As 11,000 local businesses face a withdrawal of JobKeeper, a continued review on how and who to support with targeted stimulus is needed to ensure the longer term survival of businesses regionally, says Business NSW Central Coast Regional Director, Paula Martin.

“According to our December Business Confidence Survey, business confidence reached positive territory for the first time since June 2018,” she said.

“The impact of JobKeeper has been great, with business owners citing that without support they would have found it much harder to get through the crisis.

“The Christmas restrictions and border closures highlighted just how fragile business is across sectors and a full recovery remains a long way off.”

Martin said 23 percent of businesses say that they are at a high risk of failure when supports such as JobKeeper, tax relief, interest waivers and other measures end.

“This vulnerability will hang over the small business sector for much of the year and will need to be factored into decisions around when and how support measures are withdrawn.

“The good news is that an increasing number of businesses are looking to expand their capacity to meet demand, with more businesses prioritising expansion than those who are prioritising downsizing their business for the first time since the December quarter of 2019,” Martin said.

Meanwhile, the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, is calling on the Federal Government to change JobKeeper rules to allow struggling small businesses to replace staff.

She said that as the economy recovered from the Covid crisis and more jobs became available, small businesses that are still trying to get back on their feet were losing their staff and could not hire replacement employees under the current JobKeeper rules.

“JobKeeper was reduced again on January 4 and with some eligible businesses unable to afford to top up wages, they are having to reduce the hours of their staff.

“It means staff are resigning to go to jobs offering more hours and pay.

“Under JobKeeper rules, eligible businesses cannot replace their staff with a new staff member and still attract the government payment.

“Unfortunately, this rule has the unintended consequence of increasing the divide between the haves and have nots in the small business sector.

“It is imperative that the government changes JobKeeper so that small businesses that have been hit hardest by the Covid crisis can replace their staff to help them get their businesses back up-and-running.”

Carnell said the national economic recovery would be driven by jobs growth and that’s why it was critical to support small business employers during this difficult time to allow them to survive, grow and hire in the future.

Sue Murray