Coronavirus: Hotels call for post-JobKeeper wage subsidy

Australia’s hotels industry has seized on new data to warn there must be further economic support once JobKeeper ends next month.

The AHA wants a replacement wage subsidy program once JobKeeper ends in March and the government to suspend the fringe benefits tax for three years. Picture: Adam Ward

Australia’s hotels industry has seized on new data, revealing South Australia’s three-day lockdown caused more than 10,000 employees to go without work for five weeks, to warn there must be further economic support once JobKeeper ends next month.

With political leaders acknowledging snap lockdowns will be ongoing this year, the Australian Hotels Association has used its pre-budget submission to demonstrate the economic and social harm caused to the industry’s employers and workers as a result of government restrictions.

Citing new research by the University of Adelaide’s South Australian Centre for Economic Studies, the submission says there were 20,000 fewer jobs a day at the height of the lockdown between November 19 and 25 (equivalent to 2.4 per cent of the state’s employment) and 12,500 fewer jobs a day from November 26 to the end of December.

The industry’s turnover was $100m lower during that five-week period, and between $7m and $10m worth of food and alcohol was wasted because they had to be disposed of quickly once the lockdown was announced.

Accommodation businesses lost between $4.5m and $15.5m in revenue in the month following the lockdown, which began on November 19.

“In the last 74 days alone nearly 10 million Australians have been locked down across four CBD areas (in Adelaide, Sydney, Brisbane and Perth). In Perth they still are,” AHA chief executive Stephen Ferguson told The Australian.

“The prospect of more border closures and lockdowns keeps employers all awake at night and their employees. If you’re a casual employee working for an employer not covered by JobKeeper, our society has to take account of those people.

“We’ve got to have measures in place that look after the businesses that are forced by public health orders to close down.”

The AHA endorsed the Australian Chamber of Commerce and Industry’s proposal for a two-tiered wage subsidy program to replace JobKeeper from April, with businesses whose turnovers have reduced by a third compared with the same quarter in 2019 or last year to receive $450 a week for eligible employees.

Businesses with turnover that reduced by two-thirds would receive $700 per eligible employee.

They must be businesses heavily affected by government-imposed COVID-19 restrictions.

Reserve Bank governor Philip Lowe said on Wednesday lockdowns and restrictions had not been “as depressing on expending activities” as expected because Australians found other ways of using their money.

He said Australia had done a “remarkably good job” at managing trade-offs between people’s health and the economy.

The AHA also asked the government to suspend the fringe benefits tax for three years on meals, beverages (excluding alcohol) and accommodation.

According to EY modelling, the FBT exclusions for all businesses would cost government $457m across three years or $312 for small and medium enterprises only.

Mr Ferguson said this would deliver a much-needed boost to the struggling sector, increase GDP and employment, and stimulate the wider economy.