Finance Finance News Big cities to feel the pain when JobKeeper ends, Treasury warns

Big cities to feel the pain when JobKeeper ends, Treasury warns

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Australia’s largest cities will feel the pain when JobKeeper expires next week as border closures and increased remote working weigh on CBD businesses.

In a worrying sign for Melbourne, Sydney and Brisbane, new Treasury analysis has found CBD workers are at a higher risk of being laid off when the $90 billion wage subsidy scheme ends on Sunday.

Treasury secretary Steven Kennedy told Senate Estimates on Wednesday that big cities were doing it particularly tough as the government prepared to kick 1.1 million workers off JobKeeper.

“[It’s] not so much the activity restrictions themselves, but the fact that employees are not in their usual places of work, and so they’re not passing by,” Dr Kennedy said.

“Those two areas also received a large proportion of Australia’s international travellers.”

A significant chunk of workers relying on JobKeeper in Australia’s three largest cities are working very few or zero hours, which suggests their employers could not keep them in work without additional support.

“[In CBDs] we tended to have a higher concentration of workers who were on zero and low hours,” Treasury deputy secretary Jenny Wilkinson told Senate estimates.

Between 100,000 and 150,000 people are expected to lose their jobs when the JobKeeper program ends next week.

Although Treasury said the overall impact will be felt across the economy, sectors like tourism and CBD-based hospitality businesses are doing it particularly tough, with many being propped up by the scheme.

Treasury’s latest analysis was based on the number of JobKeeper workers stood down over the December quarter and excludes most of Melbourne’s post-lockdown recovery.

It comes as the mayors of Sydney and Melbourne attempt to lobby the federal government for ongoing financial support.

Sydney Lord Mayor Clover Moore told The New Daily Australia’s largest city was hurting badly from a reduction in international tourism and office towers sitting largely empty.

“Letting JobKeeper lapse at the end of the month will have a disastrous effect on some of Sydney’s hardest hit industries,” Ms Moore said.

She wrote a letter to Prime Minister Scott Morrison late last week pleading for additional help to keep CBD businesses afloat, but Mr Morrison has yet to respond.

“We also joined many business, charitable, religious and community organisations in requesting the government further increase the permanent JobSeeker payment to ensure many are not forced to live below the poverty line,” Ms Moore said.

“Failing to do this will have a social and economic cost for us all.”

Meanwhile, Melbourne Mayor Sally Capp said the decision to allow 100 per cent of Victorian workers to return to offices had boosted confidence, but noted businesses still required ongoing support.

“There’s no doubt that businesses within the City of Melbourne were hit harder than anywhere else by the pandemic,” Ms Capp told TND via email.

“The pain and anguish is real and I’m calling for targeted support for local businesses in Melbourne from all levels of government – particularly those in the hospitality and tourism industries.”

Labor senator Katy Gallagher asked Treasury on Wednesday whether it had considered additional targeted support for CBD workers, but Treasury said such policies would be difficult to implement.

“There’s constitutional issues for the Commonwealth [about] providing funds to particular areas … the Commonwealth can’t unfairly favour one state over another,” Ms Wilkinson said.

“Those issues are probably more appropriate for state governments.”

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