Coronavirus: Jobs at risk after CBDs ‘abandoned’
Businesses in CBDs have emerged as the biggest losers in the Morrison government’s targeted support package.
Struggling businesses in Australia’s CBDs have emerged as the biggest losers in the Morrison government’s targeted support package, with warnings that the end of JobKeeper will trigger a new round of retrenchments in hotel and accommodation staff.
The closure of international borders, the collapse of business travel and a plunge in the number of commuters has damaged the country’s city centres.
With a lack of CBD-specific assistance in the Morrison government’s package of support measures aimed at helping COVID-affected industries and regions survive the end of JobKeeper, Accommodation Association chief executive Dean Long said the government had abandoned city hotels that continued to struggle with a collapse in international and business customers.
“Our hotels in these two major international gateways (Sydney and Melbourne) currently have a forward booking rate of less than 10 per cent for the next 90 days and desperately need immediate support,” Mr Long said.
He warned of another round of retrenchments when the wage subsidy scheme ended.
Mr Long said he would continue to lobby for a six-month JobKeeper-style subsidy for accommodation businesses that continued to suffer revenue falls of more than 50 per cent.
He described the SME loan scheme — government-backed loans at low or zero interest rates — as “useless”.
“When there is no certainty on (domestic) borders and no road map for when international borders will open, no business is going to take on additional debt, no matter how attractive,” Mr Long said.
While the rest of the country enjoys the rapid rebound that comes with the easing of restrictions, Sydney and Melbourne’s CBDs, in particular, remain a shadow of their former selves.
Activity data tracked by Google shows travel to and from workplaces was 22 per cent below pre-pandemic levels in Sydney, versus 8 per cent down for the state overall. Similarly, travel to work in Melbourne is 32 per cent under where it was before the health crisis, against 16 per cent for Victoria.
The most recent local government area employment figures from the National Skills Commission show the City of Sydney had an unemployment rate of 5 per cent in the September quarter, double the rate of a year earlier.
Crucially, as Australia began a V-shaped recovery from the middle of the year, unemployment in the heart of the country’s largest city was up on the 3.9 per cent rate in the June quarter.
More broadly, data from online jobs site SEEK showed that in January this year, regional job ads were 33 per cent higher than a year earlier, compared to metro job ads being 4 per cent lower. Nationally, SEEK job ads were up 12 per cent in February year-on-year.
The prevalence of professional services in the CBDs explained the disparity. Professional services roles across Australia over the three months to January were 22 per cent down on the same period 12 months prior, SEEK data showed.
PwC chief economist Jeremy Thorpe, however, said the Morrison government’s newly announced support package was “well targeted”.
More federal support targeted at CBDs risked “crowding out” tailored measures from state and local governments, he said, while support for aviation was more of a national concern that justified commonwealth subsidies.
Mr Thorpe said it was up to CBD businesses to lure workers back to the city by making offices more attractive environments.
“There is some mixed messaging from business leaders; some say get everyone back, some tell them they don’t need to be there.”
Lucy Gunn, a research fellow at RMIT’s Centre for Urban Research, said while popular suburbs outside the Melbourne CBD, such as St Kilda and Fitzroy, were thriving, revitalising the city centre was a bigger task that required more support. “Office workers and visitors are required to bring the city and its economy back to life,” Dr Gunn said.
“Vouchers may inject some temporary buzz back into the city, but it is vaccinations and sustained confidence that comes from having certainty that will bring the city back to its former glory.”
More Coverage
Misconduct finding over WA ombudsman’s globetrotting
Chris Field created a ‘sham’ process to approve his own extensive travel to destinations around the world, WA’s Corruption and Crime Commission finds.
Why should an arts degree cost more than medicine?
Everyone agrees arts courses cost too much. But imagine how increasing what students pay to become teachers and nurses to subsidise humanities courses would go down in the electorate.