Business SA says JobKeeper must be extended until at least the end of the year for heavily affected businesses

Business SA says the government, which has mandated restrictions on many businesses, has a duty to ensure they protect vulnerable jobs by extending JobKeeper.

Business SA chief executive Martin Haese.

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Businesses in a range of industries could be “wiped out” unless JobKeeper payments are maintained past the current September cut off date, Business SA says.

Business SA chief executive Martin Haese has written to Federal Treasurer Josh Frydenberg and Premier Steven Marshall, suggesting a more targeted JobKeeper scheme, in place until at least the end of December, could help businesses survive while accepting that they also need to be “weaned off” over time.

Mr Haese has also suggested reforms to the scheme to save money, including reducing payments for some casual workers who are currently effectively receiving a pay rise under the $1500 per fortnight JobKeeper scheme.

Mr Frydenberg will release an economic and fiscal update next Thursday and has foreshadowed a revised income support package for workers affected by the COVID-19 pandemic.

Mr Haese told The Advertiser that rigidly sticking to the current September 27 cut-off date for JobKeeper would have huge ramifications, especially for sectors such as tourism and hospitality.

“There is no doubt businesses will have to be weaned off JobKeeper,” said Mr Haese.

“But to simply turn off the tap could have devastating consequences with businesses choosing to lay off staff or close up all together.”

Business SA has suggested that a more targeted JobKeeper scheme should maintain the $1500 per fortnight payments for businesses which are affected by government-mandated social distancing and travel restriction measures, which it has dubbed the “ongoing heavy impact” category.

Such businesses include travel agents, inbound tour operators, event venues, and hire firms, as well as businesses in locations heavily reliant on international tourism such as Kangaroo Island.

Mr Haese said many of these businesses had experienced sales drops of around 70 per cent, and the new scheme should stay in place until December 31, and “possibly beyond’’.

For businesses which have experienced a 30 per cent fall in revenue from pre-COVID levels - the current cut off for JobKeeper eligibility for small to medium-sized businesses - Business SA is suggesting JobKeeper be scaled back to 75 per cent of the current payment, or $1125 per fortnight.

“Business SA is the first to acknowledge that JobKeeper cannot go on indefinitely,’’ Mr Haese’s letter says.

“In addition, tightening is also valid for casual employees that were otherwise working

considerably less than what equates to a $750 per week salary.

“Notwithstanding, with ongoing Government restrictions continuing to limit trade, there needs to be a proportionate extension to JobKeeper.’’

Business SA has also pointed out that the current scheme discriminates against some businesses simply on the basis that they are sole operators or set up in a partnership structure.

“The choice of legal operating structure for a business should not dictate its eligibility for support when the Government introduces health restrictions which severely curtail a businesses’ ability to operate,’’ the letter says.

“A future targeted extension of JobKeeper beyond September, while needing to be sector or sub-sector specific, should have the capacity to assist all employees and working owners of businesses which can provide a demonstrable link to a market place which remains significantly restricted.’’

Mr Haese also reiterated Business SA’s previous call for the Federal Government to introduce

a fringe benefits tax (FBT) exemption for meals and entertainment expenses to provide broad support for the hospitality sector.

Business SA said it was opposed to the idea of a state or territory-specific JobKeeper policy.