Tourism & Transport Forum CEO Margy Osmond warns that the tourism industry will shed another 318,000 full-time jobs by the end of 2021 if it does not receive government support after the JobKeeper scheme ends.
The TTF wants a $7.74 billion industry-specific wage subsidy to replace JobKeeper, via a two-tier payment structure based on the impact of COVID-19 on revenue.
Osmond says Australia will not have a tourism industry by this time next year unless the government provides financial assistance.
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[TFF] pitched a nine-month, $7.74bn program starting in April that it estimates would help 77 per cent of the industry’s businesses.
Those that suffered a 30 per cent to 49.99 per cent downturn in the June, September and December 2021 quarters compared to the March 2019 quarter — a year before COVID-19 hit — would receive $1000 fortnightly payments for employees.
Businesses with a turnover decline of 50 per cent or more would be handed the original JobKeeper rate of $1500 a fortnight.
JobKeeper has been systemically rorted by Australian businesses, who have manipulated their turnover to meet the eligibility rules. As noted in The Guardian yesterday:
At least 11 billionaires last year received dividends totalling tens of millions of dollars from companies that received jobkeeper subsidies…
[Billionaires] Solomon Lew and Gerry Harvey were among those receiving the payments…
“Jobkeeper was meant to protect the jobs of battlers, not boost the wealth of billionaires… millions of dollars have gone to dividends, enriching billionaires” [Labor’s Andrew Leigh said]…
“In referring jobkeeper misuse to the auditor general, Scott Morrison claims I’m engaging in ‘the politics of envy’. In reality, this is about fairness.”
type of rorting will only continue if JobKeeper is extended to the tourism industry beyond March.
Rather than picking industry-specific winners (or losers), policymakers should instead permanently lift JobSeeker from its poverty level of $40 a day to the Aged Pension Level ($61.50 a day). This way, taxpayer dollars would go where they are truly needed and displaced workers, regardless of industry, would receive adequate income support.
Let’s be honest. The impacts of COVID could last for years. All industries will need to adjust to the new “COVID normal” and not all businesses will remain viable.
Extending JobKeeper to the tourism industry will only delay the inevitable and keep unviable businesses alive on the taxpayer’s teat.
By all means, provide income support to displaced workers. But don’t keep zombie firms afloat. Let creative destruction run its course and the economy adjust.
Raising JobSeeker up to the Aged Pension level achieves these goals and is also more equitable and targeted than extending JobKeeper wage subsidies to specific industries.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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