Small business ombudsman backs JobKeeper extension

In a recent MyBusiness webcast, the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, expressed hope that the government would find value in extending the JobKeeper wage subsidy for businesses in distress, beyond the current 28 March 2021 hard cutoff date.

Ms Carnell’s opinion is based on jobs statistics, with the ombudsman explaining that JobKeeper allowed small businesses to hold onto their workforces until the end of September, with many then forced to make cuts following the end of the first phase of the wage subsidy.

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

“But medium to larger businesses are tracking along quite well. So, I think what we’re seeing is what I talked about before and that’s businesses as they come off JobKeeper having to really reassess the number of staff they’ve got. For many of them, they can afford to pay and that will result in a reduction in employment.”

She expects a similar trend to occur in January and February, as yet more businesses fall off the wage subsidy.

“I must admit I’m hopeful that the government will extend JobKeeper for those industries that are still doing it really tough, but they certainly haven’t announced that,” Ms Carnell said.

“And that’s just me personally. I feel incredibly concerned about those businesses like travel agents... and helping shops in major office buildings, adventure tourism operators, large events operators,the list goes on.”

According to data from the Treasury, currently there are some 500,000 businesses in JobKeeper after some 450,000 businesses lost their eligibility when JobKeeper entered the second phase. This number is expected to decrease significantly with the launch of the second part of the second phase on 4 January.