Coronavirus Australia: Retailers call for UK-style wage subsidies

PM urged to reverse opposition to direct wage subsidies to ensure employers can keep paying workers, with unions warning of massive job losses.

ACTU secretary Sally McManus has called for wage subsidies of up to $5200 per worker per month to help businesses and employees through the coronavirus crisis. Picture: AAP

National retailers have backed union calls for taxpayer-funded wage subsidies for displaced workers, as the ACTU warns up to two million jobs could be lost in weeks.

The small-business lobby also called on the government to consider British-style direct subsidies, warning employers were finding the new welfare support measures too complex and a simpler system was needed to support workers.

Following a groundbreaking agreement in the hospitality sector, employers and unions representing clerical and restaurant workers are seeking to strike deals that would allow businesses to cut employee hours and send workers on leave at half pay with 24 hours notice.

ACTU secretary Sally McManus wrote to Prime Minister Scott Morrison on Wednesday calling for wage subsidies of up to $5200 per worker per month.

Ms McManus said the scale of the coming jobs crisis can be gleaned by considering the size and importance of the sectors most affected by the initial health-ordered shutdowns of business.

We need a guaranteed wage subsidy to support workers through COVID-19.

If the UK can guarantee up to 80% of people's wages .... Australia can too. pic.twitter.com/K4UquSybbf

— Unions NSW (@unionsnsw) March 25, 2020

Five of the industries — retail, hospitality, transport, personal services, arts and recreation — account for 3.3 million jobs or 26 per cent of total employment.

“The severe downturn already occurring in those sectors is sufficient to cause a major recession (destroying 1-2 million jobs in coming weeks),” she said.

Ms McManus said the delay in delivering the coronavirus supplement until April 27 would cause unnecessary hardship for many Australians who were out of work and it should be backdated to March 22.

Australian Retailers Association executive director Russell Zimmerman said wage subsidies should be funded by the government especially if it wanted retail businesses to remain open.

Mr Morrison reiterated his opposition to direct wage subsidies on Wednesday, saying it would require a new payments system and the best way to support workers and employers was through existing payment channels.

Industrial Relation Minister Christian Porter said the British-style wage subsidies have been considered by the government but treasury was strongly opposed.

“Having to invent from scratch, an entirely new system of calculation, application, delivery mechanisms, totally outside anything the government’s ever done before was put to us as simply being too difficult and complicated to do in all of the circumstances as a practical measure,” he said.

This is one of the many stories we're hearing from workers in the arts and entertainment industries.
Sign the petition telling the gov we need a wage subsidy like the UK, NZ and others around the world are implementing and we need it NOW!https://t.co/gNk3VR432E#saveourcreators pic.twitter.com/u2aEXh6EUG

— MEAA (@withMEAA) March 25, 2020

“The lessons that Treasury and the government’s learned during the GFC is that if you step outside the normal realms of delivery mechanisms, you run into all sorts of problems.”

But the small-business lobby said direct wage subsidies should be considered as current arrangements were proving to be too complex for employers.

Council of Small Business Organisations of Australia chief executive Peter Strong said:

“They are fine but they have become too complicated now. We have had to send out a lot of documents as have all industry organisations trying to explain how it works to people. It has become very complicated.

“If the direct subsidy removes complication and gives certainty to people it should be considered, yes.

“I’m not saying have one. I’m saying it’s got to be on the table. It can’t be rejected.”

He said workers had not been retrenched but displaced from their jobs.

“We are saying this is not an economic thing, this is caused by a virus and we have got to approach it from a different angle,” he said. “At the moment they are displaced workers and we have to respond to that. Treat them as though they are still working but they have gone home and they get money paid until we get back to normal.”