Coronavirus Gold Coast: Fears cuts to JobKeeper program would be ‘disastrous’ for businesses

A Gold Coast business leader and top restaurateur has warned the Federal Government any scaling back or early end to $1500-a-fortnight JobKeeper payments will have disastrous impacts.

A GOLD Coast business leader and top restaurateur is warning the Federal Government any scaling back or early end to $1500-a-fortnight JobKeeper payments will have disastrous impacts on the city’s economy.

Just days after backdated funding began to flow to struggling businesses and their staff, fears are growing the Federal Government is considering slashing the payments or phasing it out earlier than its September 27 expiry.

Options reportedly under consideration include reducing payments, targeting it at smaller businesses or limiting it to industries hardest hit.

Economists have also raised concerns so-called “zombie” firms would have a negative impact on the economy long-term as they would fail once the financial support ends.

The reported JobKeeper rethink – due to Australia’s success flattening the curve – sent shockwaves through the Gold Coast small business sector yesterday with Prime Minister Scott Morrison saying any conversation about the $130 billion scheme’s future was “premature”.

TOURISM BOSSES BATTLE TO KICKSTART COAST AFTER COVID-19

Business have gone under due to coronavirus pandemic.

Popular Broadbeach restaurant Moo Moo is among those using JobKeeper for 44 staff across two venues, shelling out $150,000 itself on wages before the payments kicked in last month.

Moo Moo owner Steven Adams said any attempt to wind it back early would be disastrous: “It is disappointing this is being discussed given it is an important issue for so many businesses at this time.

Moo Moo owner Steven Adams. Picture: Jerad Williams

“We have budgeted it to be in place for six months given that is what the Government said it would be and this is important given we do not know how long the economy will take to get back to normal.

“We made a huge commitment to paying out staff because it is important to keep the team together and have light at the end of the tunnel.”

Gold Coast Central Chamber of Commerce president Martin Hall was also supportive of keeping it in place for its promised term.

“JobKeeper has been a necessity for companies who are truly hibernating with the intention of life after COVID-1 and it is disappointing to hear there are less scrupulous operators out there,” he said.

JOBKEEPER ‘PROPPING UP DEAD BUSINESSES’

Gold Coast Central Chamber of Commerce President Martin Hall. Picture: Richard Gosling

“However, the numbers speak for themselves and this scheme has been a lifeline for many of our members and companies across the Gold Coast.

“We are so close to being able to realise this new life after the pandemic and any backward step would obviously be poorly received. We have to work for the greater good.”

Australian Prime Minister Scott Morrison Picture: AAP Image/Lukas Coch

Responding to media questions after the reported rethink, Mr Morrison said any conversation about the scheme future was “ very premature”.

“We are six weeks in to a six-month program. The impact of the virus, how it will impact on Australia in the months ahead, with a reopening economy, is very much a work in progress,” he said.

“That’s why we put this six-month lifeline in place. What we need to ensure that we do is whatever supports we have are targeted.

Mr Morrison flagged a Treasury review of JobKeeper on Friday, refusing twice to rule out changes to the wage subsidy or winding back separate $550-a-week JobSeeker payments.

But Gold Coast-based Labor Senator Murray Watt said the nation’s small business capital needed certainty.

“It is astonishing the PM is already talking about cutting the JobKeeper payment while it is the only thing which is keeping many Gold Coast businesses afloat,” he said.

Senator Murray Watt.

“The Government’s own forecasts show there will be nearly 10 per cent unemployment until the end of the year.

“It makes no sense to talk about winding back income support at this early stage.

“The big danger if the Government cuts income support too early is that it will hold back the recovery and prolong the pain.”

Yesterday, news.com.au reported it understood JobKeeper was running $20 billion under budget as Treasury officials considered plans to slash the cost further.

The JobKeeper underspend is because just five million workers are covered by JobKeeper, instead six million workers it was originally designed to cover.