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Jobkeeper Payment Reduction – What You Need To Know

There is no doubt that 2020 has been a huge year for everyone around the globe. In Australia COVID-19 has resulted in job losses across multiple industries, forced lockdowns with businesses closing their doors, and social distancing measures that have changed the way businesses operate. The Government introduced Jobkeeper payments back at the end of March in order to subsidise the wage of workers for businesses that had been affected by the pandemic.

The idea was to keep more Australians in jobs, and less been laid off due to businesses being unable to afford their wages. Months later are we are seeing Jobkeeper payment reduction starting to take place, which has resulted in a large amount of job loss, with retailers struggling to stay afloat as we enter the Christmas period.

Jobkeeper Payment Reduction

The Jobkeeper payment reduction isn’t going to hit all businesses at once. On 21 July, the Government announced that it was going to extend the payment until 28 March 2021 for the businesses who have been hit significantly through COVID. From September 28, all businesses and not-for-profits were required to reassess whether they were eligible to continue receiving these payments.

Only qualifying businesses are able to stay on it until March next year. So what does this mean for everyone else? We have no reached the end of the year and it is no secret that the Jobkeeper payment reduction has had a huge impact on jobs in Australia.

jobkeeper new rules

Jobkeeper Payment Reduction Affect On Australian Jobs

The Jobkeeper payment reduction was inevitable, however, there was no indication of how badly it might affect businesses and the jobs available to Australians. In an ideal world, the Jobkeeper payments were intended to get businesses through the worst of COVID-19, paying a subsidised wage for their employees.

Businesses could then get back on their feet and take overpaying their employees once the Jobkeeper payment reduction began. However, this isn’t what we have seen. In just one week after the Jobkeeper payment reduction took place, we saw the number of payroll jobs drop down by 0.7 per cent. After such a long period of stability, we are now seeing a huge dop take place, which is also bringing wages down with it.

With the Christmas shopping season fast approaching, there is no doubt retailers are being left to face very uncertain times. With job losses and a reduction of income widespread across Australia, there are fears that Christmas shopping will also be cut down, as a result, leaving more jobs in the lurch in the process.

Christmas Shopping

The big question this year is whether or not Australians will be spending up this Christmas. The RBA has high hopes having tracked the money that has been pumped into the economy so far. Not all of it has been spent, with many Australians choosing to save instead. This gives hope that there will be a big wave of spending this Christmas. With social distancing measures still in place and travel restricted, there are many who won’t be able to be with their family this Christmas. Instead, there is hope they will be out buying presents to send to family and friends in lieu of actually seeing them.

Another good indication comes from the Westpac-Melbourne Institute consumer sentiment survey. This survey measures how people are feeling about their individual finances, and the broader economy. It rose by 2.5 per cent in November, indicating a positive trend. Westpac also surveyed people’s spending intentions for this Christmas. 11.5 per cent expected to spend more this year than they had in previous years, while 32.5 per cent stated they would likely be spending less.

There is still a lot of uncertainty in the air, which a high unemployment rate adding to this. As the Jobkeeper payment reduction comes into effect, we may see more people dropping back on their spending as a result.

Of course, retailers have everything crossed that a big spend is on the cards. After such a volatile year nothing is been taken for granted in these unusual times. What are options are there for businesses and individuals who are currently doing it tough?


Extra Help

If you are finding money is a little stretched this year, there are plenty of options available. From looking at getting business loans to keep your business afloat going into the new year, to personal loans for families needing a little cash injection over the holiday period.

Australian Lending Centre can assess your individual circumstances and help you find the right loan for your needs. We have a wide range of different loans, from short-term to long-term, depending on what you are after. It could be just what you need to tide you over into the New Year, and to help give the economy the push it needs this Christmas season. Merry Christmas and happy shopping!


Australian Economy 2020

If there is one thing on everyone’s mind at the moment in the midst of the global pandemic, it’s the health and safety of the entire nation. Coming in a close second is the state of the Australian Economy 2020. The economy took a huge hit as we saw many businesses forced to close while we were sent into lockdown in March, resulting in close to one million Australians finding themselves unemployed and even more with significantly reduced work hours. As we slowly rebuild our lives post lockdown, the fear of a second lockdown is ever imminent, and currently underway in Melbourne. What affect will this have on the Australian economy, and what can we expect to see in the coming months?

How Has The Australian Economy Being Impacted in 2020

While we all rung in the New Year with high hopes of what was to come, we woke up to the news of the South Coast fires that tore through entire communities. Up until February, these out of control fires ravaged Australia, crippling communities and impacting the economy, with many tourists cancelling trips. Just as things started to improve, a global pandemic was set to send Australia into another spin. By the end of March, non-essential businesses were forced to close, leaving many Australians out of work as we entered into lockdown for six weeks. While we have reopened again, it is far from over, with many businesses struggling to make ends meet. So where does this leave the Australian economy in 2020?

economy 2020

Helping the Australian Economy 2020

Treasurer Josh Frydenberg has spoken out and revealed exactly what this pandemic has cost our country. An Australian economy 2020 update shows our budget deficit will hit the $184 billion mark this financial year, which is the biggest blow out since World War II. As the economy took a major hit, the Australian Government stepped up with a number of support packages to keep businesses afloat and help the economy as much as possible. These include the JobKeeper and Jobseeker programs that have become lifelines for businesses and individuals alike. However, these programs are set to end in October this year, threatening to create the fiscal cliff.

What Is The Fiscal Cliff?

When the funding is cut off towards the end of this year, many Australian people and businesses are going to feel the hit. This will then result in a big hole in economic activity, as people tighten their belt buckles, instead of spending money to help the economy. On 22 July, the Government announced an extension of the JobKeeper program until March, under new conditions and with smaller amounts of cash available. While this has helped to lessen the expected fiscal drop, it won’t prevent it.

australian economy

The New JobKeeper

So what exactly has changed under the new JobKeeper payments and what impact will this have on the Australian economy in 2020? Right now, $1500 is being paid fortnight to eligible Australians, with more than $30 billion paid out to date. From September 28, two-tier payments are beginning based on pre-COVID hours. This is $1200 a fortnight for workers on 20 or more hours and $750 a fortnight for those on less than 20 hours. From January 4, this top-tier payment will be reduced to $1000 and second-tier reduced to $650.

Looking At Australia’s Unemployment Rate

Between March and May, 870,000 jobs were lost, while more than one million Australia had their working hours reduced. The unemployment rate is now up at 7.4 percent and is expected to rise before the year is out. The Government has spent unprecedented amounts of money already, and The Grattan Institute has estimated it would cost $70 to $90 billion a year over the next two years to get that figure back to under 5 percent. It’s no secret that the impact of the Coronavirus is far-reaching, and we are still yet to find ourselves out of the woods. Melbourne has recently re-entered a second lockdown amid an escalating number of cases across their city, while Sydney is under the threat of another lockdown with numbers increasing daily. Another hit to the economy could escalate these huge figures even further, with the debt and deficit rising.

What Next?

If you have found yourself in a position of being unable to make ends meet, then it is worth considering taking out a loan to help tide you over. At Australian Lending Centre, we can find the right loan for your personal needs to get you back on track and ensure you stay afloat amidst the looming global pandemic. Right now, getting back into the workforce is a difficult feat. Even with Government payments, it can be hard to get by. A loan is a great way to tide you over in these times. Speak to one of our experts today.