04 Oct NT firms to lay off staff while others adapt to federal…
Politicians have dubbed it as Australia’s economic “comeback capital”, but from tomorrow the Northern Territory faces one of its toughest hurdles in maintaining that claim.
- Between April and July, more than 4,000 NT employers received JobKeeper payments
- The Territory’s economy was fragile long before the pandemic
- NT Chief Minister says the NT will be the nation’s “comeback capital”
The Commonwealth’s wage subsidy scheme JobKeeper changes to a new phase on Monday, which will see the payment rate drop and many businesses no longer eligible.
For some, like Darwin car yard manager Shamir Hossain, the changes mean they will be forced to lay off staff just to keep the business afloat.
“We are a team of six people, and definitely because of this change of JobKeeper, we need to lay a few of our staff off to manage the cost,” Mr Hossain said.
His business, Darwin Auto Motors, saw a spike in sales when the pandemic peaked in the NT earlier this year, he said, and those figures pushed him out of the new JobKeeper eligibility threshold.
But since then sales have dived.
“People started buying cars because they got early superannuation access, and government started giving them more money, through tax benefits and other stuff,” he said.
“But now it’s all over.”
Between April and July, statistics show more than 4,000 Territory employers received the JobKeeper payments each month, which pushed nearly a quarter of a billion dollars into the NT’s economy.
NT’s finances fragile pre-coronavirus
The Territory’s economy was fragile long before the pandemic.
The end of major private industry projects and the mining boom has seen it rated as Australia’s worst performing jurisdiction in the most recent CommSec State of the States report.
But having had just 34 cases of coronavirus since the pandemic began and minimal COVID-19 restrictions in place, the NT Chief Minister Michael Gunner has consistently hailed it as having potential as the nation’s “comeback capital”.
However, Mr Hossain said the JobKeeper shift would test this, particularly as the NT heads into its annual wet season lull.
“The wet season is coming, and historically during the wet season time, it’s slow, slow, slow,” Mr Hossain said.
“Darwin has been going through that downturn time for the past few years, and we were just trying to survive through that time.
“This year, with COVID-19, the challenge will be double.
NT tipped to lose $8.5 million a fortnight
Territory MP Luke Gosling, wrote online last week that the changes to JobKeeper would see NT workers lose a combined $8.5 million per fortnight.
“[JobKeeper] is a temporary scheme but we are in a national recession and in the NT going into the quieter wet season,” Mr Gosling said.
“This is exactly the wrong time for the federal Government to be cutting support.”
In a written response to questions about the impact of JobKeeper’s shift on the NT, Treasurer Josh Frydenburg said “the Morrison Government will continue to do what is necessary to cushion the blow and help Australians get to the other side of the crisis”.
Mr Hossain also called on the Commonwealth to judge the NT separately than other states due to its unique seasonal situation, and for the Territory Government to push the case forward.
“The Territory Government has some responsibility to talk to the Federal Government to demand they keep this JobKeeper rolling at least until January,” he said.
Mr Gunner said his government had “pushed hard for JobKeeper to be created and then to be extended”.
“It’s been a job saver for the Territory, and the longer it stays, the more jobs it will save,” Mr Gunner said.
“We are worried that there might not be enough flexibility for businesses in special circumstances who still need support but might fall through the cracks, and we are talking to the Commonwealth about that.
Prime Minister Scott Morrison has previously indicated he wouldn’t consider an extension to the JobKeeper scheme on a geographical basis.
Businesses forced to ‘refocus’ operations
Others in the Territory are optimistic about a post-JobKeeper landscape.
Natalie Bell runs a small Darwin communications agency for the business events sector, and said for her to survive through the pandemic “JobKeeper was an absolute lifeline”.
But since first receiving it, she has been shifting her company to “refocus” for a future without the subsidy.
“Now is the time for businesses to also reassess how they’re operating and to look to the future, to look to virtual and hybrid events as an offering,” Ms Bell said.
Without JobKeeper, Ms Bell said the onus was now on the Commonwealth to ensure promised future support for her industry was swiftly “confirmed, finalised and delivered to industry”.
She also said the Territory’s relaxed coronavirus restrictions meant events were “starting to come back online”, including a mango festival taking place in Darwin next month.
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