Wage support worth considering, Ai Group says

National employer association Ai Group has called on Australian governments to consider wage support mechanisms in response to escalating impacts of the coronavirus.

Ai Group CEO Innes Willox said Australia should investigate new methods to mitigate further economic losses.

“To cushion the broader impacts of the virus, a common goal in Australia and other countries is to keep businesses operating, reduce job losses and maintain supply,” he said.

“One proposal that has gained considerable attention is the UK wage subsidy measure. New Zealand is also putting a wage subsidy scheme into place.”

Under the UK scheme, workers who are stood down are entitled to claim 80 per cent of their usual wages, up to $5,000 AUD a month.

Employers in the UK are reimbursed for the amounts paid to their stood down workers.

In Australia, workers who have lost their jobs due to the pandemic are eligible for the new Jobseeker payment and the Coronavirus Supplement for the next six months.

Willox said although the UK scheme was not directly transferrable to the Australian system, the federal government could “weigh up the advantages”.

“These (advantages) include maintaining a valuable connection between employers and their employees,” he said.

“It’s disadvantages include the question of equity, with people who are stood down potentially receiving a greater benefit than those who are unemployed.”

Further incentives such as raising the upper PAYG limit, zero-interest government loans and additional schemes are among the Ai Group’s proposals.

Willox said the New Zealand wage subsidy is “more in line” with an Australian approach to redistribution, and “more broadly available”.

“The Kiwi subsidy is confined to stressed businesses and is less generous for stood down workers than in the UK,” he said.

“In considering either the UK or NZ approach, the Australian Government would need to work out how an additional scheme would mesh with the existing domestic Coronavirus Supplement.”