Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020
Through the early months of the pandemic, JobKeeper was a lifeline for business. Without any time to prepare or adjust, and facing a sudden loss of demand, many businesses were preparing to lay off staff and close their doors. It could have been, and almost was, economic carnage. The JobKeeper subsidy, along with other government support and rent relief, meant businesses could keep going through the worst of the pandemic.
Sadly, even with all of this support, not all businesses have managed to survive, and many of their staff have found themselves seeking new employers at the worst possible time. Many more businesses will fail in the months to come as support is withdrawn or reduced. The cessation, in most states, of the commercial rent moratorium will further exaggerate this. The businesses that will survive are those which are able to adjust to the new reality. This could mean changing the business's products or changing processes, which will often mean having to move staff to new teams or, sadly, cutting back on staff numbers. Absolutely nobody in this place wants to see people left unemployed. Even when the economy is booming, the toll that unemployment takes on a person's financial and emotional position is brutal, and it's even worse when the economy is in recession and opportunities for re-employment are scarce. As a former small-business owner, I've seen firsthand how important it is to adjust your workplace arrangements when you experience a downturn. Being able to move staff around, to adjust your focus and to restructure your business gives you the best chance of long-term survival. Employees might not love the change, and neither do employers, but it's a lot better than having everything taken away from you and losing that business. I don't believe parliament should be preventing people from saving their businesses and their employees' jobs. I know businesses are doing everything they can do to stay afloat, and I believe we should be backing them however we can.
At the present time we are all still dealing with a great deal of uncertainty. It will take some time for the economy to bounce back. It will be a real slog just to get back to where we were at the start of this year. The various state and federal government support packages have helped many businesses to survive and retain staff. They must continue, but they must also change. Freezing the economy has saved jobs, but it's also prevented the adjustments that are needed so we can return to growth after the pandemic has passed. JobKeeper has frozen the labour market. The rent moratorium has frozen the commercial real estate market. Easing back these arrangements is necessary to allow the economy to adjust to the new normal. It will be painful but it will, unfortunately, be necessary so viable businesses can grow and hire staff. It's necessary so our economy can grow.
Under this bill, the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020, the end date for the JobKeeper payment and workplace flexibility arrangements would be extended from the original September 2020 end date to 28 March 2021. The bill also creates a new class of employer: what the government is calling 'legacy employers'. These are employers who no longer meet the threshold to qualify for JobKeeper but who continue to experience at least a 10 per cent drop in turnover, which means they'll be able to access modified workplace flexibility arrangements. These modified arrangements mean, for instance, that instead of being able to negotiate an employee's hours down to any number including zero as a result of the impact of COVID-19 on their business, employers can only ask employees to reduce their hours to 60 per cent of their pre-COVID-19 hours. The modified arrangements also mean employers will have to give an employee seven days notice of any proposed changes to times, days or location of work. This is up from the current three days. Employers must also consult and invite feedback from their employees before making any changes.
Labor's proposed amendments remove the provisions for legacy employers from this bill. This means businesses that no longer qualify for JobKeeper will not have ongoing access to flexible workplace measures, even these modified ones. I agree with Labor that employers who are back on their feet should no longer need to rely on such flexible workplace arrangements. But I don't agree with stripping these provisions from this bill. It is far too soon to wind them back. Not all of these businesses are truly back on their feet. These provisions will be important in helping many of the legacy employers continue to reconfigure their operations over coming months in order to keep their businesses viable. Legacy employers include those whose turnover is just below the eligibility threshold, which for most businesses is a 30 per cent drop in turnover. But an improvement in turnover is not necessarily a recovery. Turnover doesn't equal gross profit, which you use to pay your wages—not in this environment. It is often just a 'less worse' position. Many legacy employers will continue to run at a loss in the current environment. Let's also keep in mind that these reforms terminate in March. They are temporary measures, and I support them because they are temporary, with a clear end date.
Labor also has an amendment that would require legacy employers to ensure that employees are not paid less than the JobKeeper amount, even when their hours are cut. I am truly sympathetic to Labor's argument. We need to have a safety net for these workers, but struggling businesses shouldn't be paying for the top-up; that's the government's role. In the end, I think we can all agree that the best thing for employees is to ensure that the businesses that employ them survive the pandemic. Centre Alliance will therefore be supporting this bill.