Companies should have to reapply for JobKeeper, Business Council says

Business Council of Australia president Tim Reed is encouraging the government to extend the $70 billion JobKeeper program beyond September for hard-hit industries while winding back the flat rate wage subsidy for those getting more in their pay packet than before the pandemic began.

The business lobby group said the federal government should get companies to reapply for the scheme to prove their turnover was still down enough to qualify and asked for a close examination of the "overpayment" of staff who were previously paid less than the $1500-a-fortnight they are now receiving under the scheme.

Business Council of Australia president Tim Reed is encouraging the government to extend the JobKeeper program beyond September for hard-hit industries.Credit: AAP

"We think a very targeted stepping down [of the] program is warranted," Mr Reed told the Senate Select Committee on COVID-19 on Wednesday morning.

"JobKeeper has been an enormous success and as a nation we should congratulate everyone involved," Mr Reed said, acknowledging it has helped with the wellbeing of employers and employees.

However, he said it had been an "enormously expensive program" for the country and should be phased down after September, when it is currently scheduled to end.

"The billions of dollars that have been invested ... have been borrowed and will have to be paid back in the future. And therefore, at some point in time we do need to stare into the fact that it will need to be reduced," he said.

For sectors not yet able to open or to recover he said there could be an extension but all businesses should have to reapply to prove they were still financially suffering due to the pandemic.

The coronavirus welfare supplement is also scheduled to stop in September, which would see the JobSeeker payment drop from $1100 a fortnight to $550.

Mr Reed said the dole payments would be "inadequate" and should be increased from 65 per cent of the age pension, worth about $850, to within the range of 75 to 90 per cent.

Council of Small Business Organisations of Australia chief executive Peter Strong agreed JobSeeker should be higher than where it was before as he was concerned about "horrendous unemployment figures".

"We've also said that Newstart [now called JobSeeker] should have been higher. We're saying it should be a lot higher than what we've said before," Mr Strong said.

"We are going to have quite a few people unemployed and we want them to be in a mental place where they can pursue work, where they can go and get training and be ready to go back to work and to do what you need to make sure you've got the money to survive."

He also backed a targeted approach to JobKeeper, with some businesses increasing sales during the coronavirus pandemic and varied performance within industries themselves.

Earlier during the public hearings Ai Group chief executive Innes Willox also encouraged the government to consider increasing JobSeeker to help support people through the recession, adding he expected the economy to take three years to recover from the immediate impact of the virus.

"A lot of businesses have their eye very firmly on the end of September, a period which we perceive to be the next time of great risk," Mr Willox said.

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