No JobKeeper: big business workers heading for dole

Many big companies will need to tell employees to rely on JobSeeker payments during the shutdown.

Australian Industry Group chief executive Innes Willox hit out at Victorian government directions issued to industry for the lockdown. Picture: AAP

Tens of thousands of Victorian workers will be forced on to unemployment benefits for up to six weeks as major employers ineligible for the JobKeeper scheme are forced to close workplaces and stand down employees.

With 250,000 workers to be affected by the stage-four restrictions, Australian Industry Group chief executive Innes Willox told The Australian that many big companies would need to tell their employees “you have to essentially go on the dole” and rely on JobSeeker payments during the shutdown.

Wesfarmers, which employs 25,000 workers across Bunnings, Officeworks, Kmart and Target in Victoria, is ineligible to claim JobKeeper because it does not meet the scheme’s revenue loss criteria.

The company’s chief executive, Rob Scott, said stood-down employees would receive two weeks’ pay but if they had no leave available, they would have to apply for government assistance through JobSeeker payments.

Mr Willox said many other businesses would ask their workers to apply for JobSeeker.

He hit out at state government directions issued to industry for the lockdown, saying they had left business “concerned, confused and frustrated” and many companies did not know whether they could stay open or needed to shut.

He said scaling down industries such as construction to a “pilot light” level was “deeply problematic” and could require changes to the Fair Work Act or JobKeeper provisions to allow businesses to stand down workers without completely shutting down.

“The Victorian economy is going to go into a coma and a lot of businesses going into a coma are not going to wake up,” he told The Australian.

“We are going to see mass unemployment, we are going to see a lot of insolvency, a lot of business closures. Victoria went through the worst of the early 1990s recession. This is a different scenario but the outcome will probably be worse.”

Unions have called for JobKeeper and JobSeeker to be kept at current levels for Victorian workers beyond September.

Victorian Trades Hall Council secretary Luke Hilakari said the restrictions would be a “massive challenge” for Victorian workers but closing workplaces and businesses was necessary to beat the coronavirus.

“For many working people this comes as a blow,” he said.

“We had hoped these measures wouldn’t be needed, but Victorian workers will step up and do whatever is needed to beat this virus. If that means more workers need to work from home or industries need to be temporarily shut, then that is what should happen to protect our health and lives.”

Josh Frydenberg on Monday flagged he was open to easing eligibility requirements for JobKeeper to allow newly affected firms to receive the wage subsidy beyond September.

JobKeeper 2.0 will begin on September 28, with businesses having to prove a 30 per cent decline in turnover for the June and September quarters to be eligible.

Labor has already called for the Morrison government to reconsider eligibility criteria.

“JobKeeper should be tailored and responsive to the conditions in the economy,” Labor’s Treasury spokesman, Jim Chalmers, said.

The commonwealth will on Wednesday release details of a three-way guarantee for Victorian parents, childcare centres and their staff. That package will attempt to ensure centres can keep operating and parents who keep their children at home will not be left out of pocket.

KPMG modelling obtained by The Australian earlier this week estimates the stage-four restrictions across Melbourne would cost the Victorian economy $830m in lost output in August.

Mr Willox said he expected Victoria’s handling of the crisis, and the actions of the Morrison government, would be subject to an “inevitable” royal commission so the country could learn from the health and economic crisis.

“There is just enormous confusion around how business can stay open or not, frustration that rules aren’t clear and concerns about what that will mean for business viability and workforces as soon as Thursday morning.”