ALC lobbies for freight to receive JobKeeper subsidy

The Australian Logistics Council (ALC) has called upon the federal government to extend the JobKeeper Payment scheme to freight and logistics businesses as they are businesses providing essential services.

In a letter to Treasurer Josh Frydenburg, CEO of the ALC Kirk Coningham wrote that while freight and logistics businesses, including freight rail operators, have been deemed an essential service, they have missed out on government support for businesses.

“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 [freight and logistics businesses],” wrote Coningham.

While rail businesses and organisations welcomed the announcement of stimulus in March, some were concerned that the threshold would limit their ability to access the scheme and ensure workers who may need to be stood down are continued to be paid.

Coningham outlined that the particular circumstances of the freight sector means that stimulus is required.

“The reality is that most businesses within Australia’s freight and logistics sector operate on tight margins that flow from high fixed costs associated with the purchase and maintenance of freight vehicles, equipment and infrastructure.”

Since the coronavirus (COVID-19) pandemic has hit Australia, freight businesses in the rail sector have been called upon to ensure that essential goods such as groceries continue to get on the shelves of supermarkets around Australia. Rail has continued to play a role as borders have been closed and in some areas has seen up to a 15 per cent increase in services.

Coningham wrote to Frydenburg that if businesses such as these were allowed to fail there would be significant consequences.

“If major freight transport businesses are forced to close due to financial pressures arising from COVID-19, there will be a range of deleterious consequences for the entire supply chain, and the ability of Australian households to access essential goods in a timely fashion could well be threatened. Moreover, there would also be significant consequences for Australian exporters, who rely on freight and logistics service providers to take their goods to market.”

The ALC recommended that essential service providers be eligible for JobKeeper Payments automatically, that if a threshold is imposed it should be set at 15 per cent for businesses providing essential services, and ensure that the first two JobKeeper payments are done quickly.

Stimulus a welcome boost for rail industry

Yesterday, federal Treasurer Josh Frydenburg and Prime Minister Scott Morrison announced the $130 billion wage subsidy package.

The announcement goes well beyond previous stimulus packages by giving 6 million workers a flat payment of $1,500 per fortnight, through their employer.

The assistance is available to businesses with a turnover of less than $1 billion and have had a reduction in revenue of 30 per cent or more in a month since March 1, 2020. The expansion of eligibility means that many more companies will have access to these funds than previous measures.

For companies in the rail industry, such funding could be a lifeline to hold onto staff who may have otherwise been let go said Dennis Mah – strategy and commercial development – at Sonaray, which supplies lighting to rail projects.

“We will be taking advantage of all the government packages to retain all staff as long as possible. Luckily our over heads are not that high but when there is no or limited cash flow it hurts the bottom line,” said Mah.

Announcing the measures, Morrison noted that the funds will help businesses survive through the coronavirus (COVID-19) pandemic.

“This is about keeping the connection between the employer and the employee and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months,” he said.

“When the economy comes back, these businesses will be able to start again and their workforce will be ready to go because they will remain attached to the business through our JobKeeper payment.”

According to Mah, however, there is further room for companies in the rail sector in particular to complete works now that would otherwise not be done.

“This could be the ideal time to access a lot of areas where normally it is restricted due to high pedestrian traffic.”