Coronavirus: Bosses and unions see flaws in $130 billion wage subsidy scheme

Employers have called for assistance beyond the $130bn wage subsidy scheme, and unions say millions of workers will miss out.

Australian Industry Group chief executive Innes Willox. Picture: AAP

Employers have called for “deeper and broader” assistance beyond the $130bn wage subsidy scheme, urging the government to examine easing restrictions on access to the $1500 fortnightly payments.

Unions said the government should broaden access to the scheme to more than a million casual workers who have not been with one employer for a year, as well as an estimated one million temporary visa holders.

More than 285,000 businesses had registered expressions of interest in the subsidy payments with the Australian Taxation Office as at 5pm on Tuesday.

Business groups broadly welcomed the package, with some describing it as a game changer that would prove to be very significant if the economy were to stave off a deep recession.

But employer representatives expressed concern about details of the package, saying the requirement that a business must show a 30 per cent reduction in revenue to be eligible for its employees to receive the payment would have to be reviewed.

Australian Industry Group chief executive Innes Willox said employers were telling the organisation that the conditions and limits on accessing the scheme “mean it won’t have much positive impact for them”.

This included the required decline in turnover, how their workforces were structured and how their business cycles were currently operating.

“They all recognise it’s a really positive step,” Mr Willox told ABC television. “The point we would make is this is probably the first or second step in what will have to be a many-step process that we go through here, and we may need to go deeper and broader. He said the government should be looking at further direct industry assistance, including relief from electricity costs and rental assistance.

Mr Willox said the manufacturing sector had recorded a significant upturn in activity a month ago because businesses were meeting demand, but that activity had now slowed down.

“It’s still quite high so we are in unusual conditions all around so it may well be that as this settles down, and we see how broad the impact of this measure is, that we do have to look to loosen some of the restrictions … to get the full benefit for employees,” he said.

Wesfarmers and AGL Energy non-executive director Diane Smith-Gander said the subsidy was a “very good next step” but she was concerned about smaller companies failing to qualify.

Companies with revenue of less than $1bn a year that can demonstrate a 30 per cent fall in revenue, and bigger companies that can show a 50 per cent fall, will be eligible for $1500 a fortnight for each employee.

While the plan has won support from the business community, Ms Smith-Gander said there could be issues with small to medium-size enterprises.

“What do you do if you’re in a growing business, where you are employing more people today than you were in those periods before, or what if you’ve had a big windfall project?” she said.

“We need to make sure that we don’t carve out a bunch of businesses that really should get the benefit by being too doctrinaire in how we apply the rules.”

ACTU secretary Sally McManus said unions had successfully campaigned for a wage subsidy but also had to “stop and take stock of who the Prime Minister has left behind”.

“Forty per cent of casuals have been in their jobs for less than 12 months — that’s more than one million workers who won’t qualify for a cent of this subsidy,” she said.

“And there’s another one million temporary visa holders who just aren’t in the picture.”

Business Council of Australia chief executive Jennifer Westacott said the $130bn was “nation saving” and an “injection of hope”

Josh Frydenberg flagged further stimulus packages but declared the $130bn wage subsidy announcement would be “hard to top”. He acknowledged the measure would not “save every employee or employer”.

Finance Minister Mathias Cormann invited companies such as Qantas and Virgin to use the wage subsidy to keep their workers on the books.

Anthony Albanese backed the wage subsidy policy, declaring it an “investment in the future”.

“This is a generous package,” he said. “It’s targeted. We haven't seen the legislation, of course, so we'll examine it in detail and work constructively to make sure this can happen.”