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JobKeeper 2.0 – How the Building & Construction Industry has been locked out

How The Building & Construction Industry Has Been Locked Out

You don’t need to be a genius to realise that Building & Construction is a “long lead time” industry. It takes months or years to get a project off the ground, and months or years to complete it.

So, the impact of the “buyer’s strike” created by the COVID-19 recession (and tighter bank lending policies) has taken a while to impact directly on building activity. Projects that were underway when the crisis hit in March are being completed, but there is now little new work to go on with. Projects that have been generated by Government stimulus will take a while to commence, so there’s a gap.

But here’s the rub – businesses that did not suffer a year-on-year decline in turnover of at least 30% in the June 2020 quarter will not be able to qualify for the recently-announced extensions of the JobKeeper wages subsidy scheme, known as JobKeeper 2.0. The extensions apply to the December 2020 and March 2021 quarters, but can only be accessed if the business passed the “turnover test” in the June 2020 quarter.

For a building business that has experienced a delayed impact of the COVID-19 recession, and has recently qualified for JobKeeper, the subsidy may be available through to 27 September 2020. But the business will then be thrown out of the scheme, just when it needs it most. If the business’s June 2020 turnover was not down 30% or more compared to the June 2019 quarter, it cannot qualify for JobKeeper 2.0. It does not matter that its turnover may be massively reduced for the September and /or 2020 quarters. It is just very bad luck, unless the government provide an alternative test.

Let’s hope the Industry Bodies can convince the Government that a fairer qualification test is required for “delayed impact” industries.

Trades & builders

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