Current criteria not seen as conducive to transport business viability
Industry bodies see a need to adjust the provision of JobKeeper payments to adequately cover transport and logistics businesses affected by the Covid-19 downturn.
The scheme supports businesses significantly affected by the coronavirus and is open to eligible employers to enable them to pay an employee’s salary or wages of at least $1,500 per fortnight.
The Australian Trucking Association (ATA) says trucking businesses and other providers of essential services should be automatically eligible for JobKeeper payments if they need to stand down staff.
Under the current JobKeeper rules, businesses with a turnover of $1 billion or less are eligible if their turnover falls 30 per cent, and those with a turnover of more than $1 billion are eligible if their turnover falls 50 per cent.
In a submission to federal treasurer Josh Frydenberg, ATA uses financial modelling developed by the Queensland Trucking Association (QTA) to show that a representative trucking business would not be viable if its turnover declined 15 per cent.
“It would not be able to retain enough staff to do enough work to meet the financing cost of its fleet,” ATA CEO Ben Maguire says.
“Trucking and the provision of trucking services involve high fixed costs and low margins, because of the cost of keeping modern, reliable trucks and fully equipped depots and workshops.
“The continued operation of these businesses needs to be a national priority.
“The ATA believes that government policy should not force businesses to close when they are trying to hang on, keep trading and keep as many of their people employed as possible.”
In the submission, the ATA calls on government to:
- allow the tax commissioner to establish an alternative test for essential service providers such as trucking businesses, so that any essential service provider that stands down staff is automatically eligible for JobKeeper payments
- alternatively, if it is considered that a turnover reduction test for essential service providers, including trucking, is needed, the test should be aligned with the 15 per cent decline in turnover test for ACNC registered charities.
- ensure that the first and second fortnightly payments under JobKeeper are made as early as possible.
The ATA has previously urged the Government to remove the $1 billion breakpoint in the JobKeeper scheme.
How industry originally responded to the JobKeeper announcement, here
Similarly, the Australian Logistics Council (ALC) CEO Kirk Coningham wrote to the treasurer requesting that eligibility for the JobKeeper Payment Scheme be extended to those providing essential services, such as freight and logistics services, such that any essential services provider that stands down staff is automatically eligible for JobKeeper.
“ALC believes that the essential nature of the services our industry provides should be reflected in measures the federal government has put in place to protect jobs in the current pandemic,” the council says.
“The reality is that most businesses within Australia’s freight and logistics sector – whatever their size – operate on tight margins that flow from high fixed costs associated with the purchase and maintenance of freight vehicles, equipment and infrastructure.
“ALC is concerned that the blunt application of a reduced turnover test at 30 per cent for small and medium businesses and 50 percent for larger businesses to qualify for the JobKeeper Payment fails to adequately account for this.”