Australia's biggest private employer group has warned Australia is now a two-speed economy and more jobs will be lost in Victoria's critical retail sector if the dole is cut back before the critical Christmas trading season.
Australian Retailers Association chief executive Paul Zahra has warned more retail jobs will go if there is a reduction in JobSeeker at the end of this year, with the coronavirus supplement worth $550-a-fortnight due to be cut back to $250 in September.
Australian Retailers Association chief executive Paul Zahra is concerned about cutting back JobSeeker.Credit: Nic Walker
This supplement has effectively doubled the unemployment benefit and is given to 2.2 million people, including those on Youth Allowance. It is not guaranteed beyond December.
"We are conscious that support measures including superannuation withdrawals and JobKeeper and JobSeeker payments have been stimulating much of the retail spend around the country in recent months," Mr Zahra said.
The proportion of joblessness is also likely to rise above 10 per cent by the end of the year due to the shutdowns in Melbourne to limit the spread of the virus. But the $325 billion sector's lobby group boss warned reductions in spending on services and goods due to a reduction of government support could hit retail hard.
"We were hoping to be out of the woods come September - but recent events in Victoria make that unlikely," Mr Zahra, who is the former David Jones CEO, warned.
"If retailers hit the wall, as Australia's largest employer, many more jobs will be lost."
Labor spokeswoman for families and social services Linda Burney warned on Monday reducing JobSeeker back to the original rate would cut $326.9 million worth of spending from the retail sector. This includes $80.1 million in Victoria and $95.8 million in NSW on a fortnightly basis.
The government committed to reviewing JobSeeker during its economic update in July and Treasurer Josh Frydenberg said he was "favourably disposed" to an extension to the supplement payment if necessary.
Mr Zahra said hard-hit areas were not tracking well, particularly in parts of Victoria under tough lockdowns such as Melbourne CBD.
"We are starting to see emergence of a two-tiered or two-speed economy - those recovering and those continuing to suffer," he said.
"We know that people without paid work are spending their income on getting the basics, like groceries, utilities, and warm clothing for their kids.
"We would like to see a permanent and adequate increase that ensures people on JobSeeker, Youth Allowance and other income support payments can cover the basics they need."
He declined to say how much the rate should be, but said the previous figure was "dangerously low and needs to be permanently changed".
Retail workers union the Shop, Distributive and Allied Employees Association wants JobKeeper and JobSeeker at their higher levels beyond Christmas. JobKeeper has been extended but will be reduced to $1200 for full-time workers and $750 for part-time workers in September and down to $1000 and $650 respectively in January.
"Demand is the key to economic recovery - if consumers don't spend, even more businesses will fail and even more workers will be without jobs," SDA national secretary Gerard Dwyer said.
"Withdrawing JobKeeper and JobSeeker at Christmas would not only mean a less than festive season for millions of Australians, but leave a significant number of the 1.2 million workers employed in retail without work or the means to put food on the table, let alone to buy presents for their kids."