Half-a-million Australian jobs could be lost in the coming weeks as the coronavirus takes a stranglehold on the economy – with hospitality workers, travel agents and airline employees the first on the chopping block.
Despite the panic-buying hysteria sweeping through supermarkets across the country, COVID-19 has sparked a huge downturn in consumer spending.
Casual workers have had their shifts slashed, while employees in customer-based roles face an uncertain future with crowd events banned and social distancing measures in place.
More than two million Australians are employed casually, mostly in the hospitality, retail and tourism industries, all of which have entered uncharted territory.
Council of Small Business Organisations Australia CEO Peter Strong predicts about 500,000 will be forced out of work as a direct result of the coronavirus.
The tourism sector, still reeling from the bushfire crisis, is grappling with coronavirus travel bans and a 14-day self-isolation period for anybody arriving in Australia.
International visitor numbers have plunged and would-be holidaymakers have cancelled their flights in droves.
Adelaide-based travel agent Holly Velardo broke down in tears revealing she didn’t know where her next pay cheque will come from.
Adelaide-based travel agent Holly Velardo cried as she said she doesn’t know where her next pay cheque will come from
‘When airlines and operators are offering full refunds, it means we’re offering refunds as well, so we’re working for absolutely no money,’ she told 9 News.
‘Now I have nothing, so it’s very scary.’
Ms Velardo said she applied for a series of casual jobs to try and make ends meet.
Federal Tourism Minister Simon Birmingham said the coronavirus crisis was an ‘incredibly difficult time’ that could see almost eight per cent of workers out of a job.
CORONAVIRUS CASES IN AUSTRALIA: 455
New South Wales: 210
South Australia: 32
Western Australia: 31
Northern Territory: 1
Australian Capital Territory: 2
TOTAL CASES: 455
‘One in thirteen Australian jobs rely on the tourism and hospitality sector and those employers, those businesses and those jobs are all on the line right now,’ he told The Australian.
‘Ultimately, we’re not going to be able to save every single business or every single job either. This is a terrible, terrible event that we’re dealing with. It’s something that has never been encountered before.’
While casual employees normally don’t have the same holiday and sick leave entitlements as their full-time and part time counterparts, Attorney-General Christian Porter successfully campaigned to amend the rules in the face of the crisis.
Accordingly, casual workers who have been forced out of their jobs due to COVID-19 will get support through the welfare system.
Prime Minister Scott Morrison and Treasurer Josh Frydenberg are working to give financial aid to at-risk businesses.
One of the industries hardest hit by the coronavirus crisis is hospitality (stock image)
A $715m package to help Qantas and Virgin Australia will be announced on Wednesday.
Qantas boss Alan Joyce announced a 90 per cent cut to international flights and a 60 per cent reduction to domestic flights.
He described the coronavirus crisis as the ‘single biggest shock’ in the history of Australian aviation.
The Morrison government is also considering a second round of measures to add to its $17.6billion economic boost announced last week.
‘We’re looking at some pretty significant options that we would never have considered in the past,’ Finance Minister Mathias Cormann told Seven on Tuesday.
‘We are working our way through that as we speak.’
Aviation and tourism workers are losing money after mass cancellations amid the coronavirus crisis
Qantas boss Alan Joyce announced a 90 per cent cut to international flights and a 60 per cent reduction to domestic flights (stock image)
Mr Cormann said the hospitality and tourism sectors would be among the hardest hit.
‘We are focused on supporting those businesses and workers most affected by the downturn of the coronavirus,’ Senator Cormann said.
The initial rescue package targeted relief for small and medium businesses, along with cash payments to people on welfare.
The government intends to pass both tranches of its support package when parliament sits next week.
Scott Morrison’s stimulus package
Stimulus payments to households to support growth
· $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.
Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.
Delivering support for business investment
· $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.
· $3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.
These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term.
Cash flow assistance for businesses
· $6.7 billion to boost cash flow for employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Installment Activity Statement from 28 April with refunds to then be paid within 14 days.
· $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Assistance for severely-affected regions
· $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks.
It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.