Date posted: 31/07/2020 5 min read

JobKeeper 2.0 likely to change

CAs and their clients shouldn’t take the design of the Australian Treasurer’s recent JobKeeper 2.0 announcement as a done deal

CAs and their clients shouldn’t take the design of the Treasurer’s recent JobKeeper 2.0 announcement as a done deal.

Moves are afoot to lobby for more benign eligibility rules and one only has to look at recent events in Melbourne and the Mitchell Shire to understand why. 

What’s there to lobby about you ask? Isn’t an extension to JobKeeper something everyone supports?

Controversy is building around the Treasurer’s proposed eligibility criteria. As Treasury’s JobKeeper 2.0 Fact Sheet makes clear:

  • “In order to be eligible for the first JobKeeper Payment extension period of 28 September 2020 to 3 January 2021, businesses and not-for-profits will need to demonstrate that their actual GST turnover has significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019). And…
  • To be eligible for the second JobKeeper Payment extension period of 4 January 2021 to 28 March 2021, businesses and not-for-profits will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019).”

That means the chances of some businesses qualifying for the “first JobKeeper Payment extension period” are already shot if business turnover picked-up sufficiently in June 2020. In some parts of Australia where COVID-19 has been contained and lockdowns lifted, the Treasurer’s new eligibility criteria works fine: things have indeed improved and it’s time to wean those businesses off JobKeeper.

But in Melbourne, the promise heralded by any June quarter return to something resembling business normality has been shattered by second wave lockdowns imposed in July and August.

So JobKeeper-wise, many businesses operating in one of Australia’s largest cities won’t be happy with Josh Frydenberg and his Treasury advisers with their JobKeeper 2.0 design.

The political pain could be intense and not just from the Opposition and the cross-benches.

All three Coalition Treasury Ministers – Josh Frydenberg, Michael Sukkar and Senator Jane Hume – call Melbourne home.

Gladys Liu, the Liberal MP for Chisholm in Melbourne’s east holds her seat by just 0.6%.

Including Senator Hume, the Coalition has 6 of the 12 Victorian seats in the Senate.

Get the picture?

Debate on the floor of the House of Representatives rarely reflects regional allegiances: most votes are along party lines. But Melbourne’s COVID-19 disaster may change that.

And State loyalties could really come into play in the Senate, supposedly the “States’ House”.

Hopefully any political argy-bargy can be resolved quickly so CAs and their clients can get on with business turnaround plans.

Will pollies get a chance to debate JobKeeper design?

Good question.

An interesting aspect to all this is that JobKeeper is built on the barest of parliament-blessed legislative scaffolds.

The enabling legislation is bereft of detail, with all the heavy lifting done by Legislative Instruments which the Treasurer is empowered to make.

In fact, the main question for debate in Parliament will actually be about extending JobKeeper.

You see, the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 curently provides that “coronavirus economic response payments” like JobKeeper can only be made in “in respect of a time that occurs during the prescribed period”, defined to mean the period between 1 March 2020 and 31 December 2020.

The time limits aren’t just relevant to JobKeeper. The Coalition is known to also favour a continuation of workplace changes accompanying JobKeeper. But sunset provisions contained in the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 mean that temporary changes to the Fair Work Act which enable (for example) an employer to make ‘JobKeeper Enabling Directions’ expire on 28 September 2020.

So all this is my long-winded way of saying that much of the fine detail on JobKeeper 2.0 may well be debated behind the scenes and not on the floor of Parliament when politicians return to Canberra on 24 August 2020.

Stay tuned for JobKeeper 3.0.

JobKeeper 2.0 - Overview of the changes

The Australian Government has announced cuts to payments under the JobKeeper and JobSeeker schemes but has extended their life spans.

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JobKeeper 2.0 resources

Treasury’s announcement on 21 July 2020 for JobKeeper 2.0

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