It won't work.

The proposed JobKeeper Payment is designed to provide support to businesses and their employees who have been impacted by COVID-19. The main thrust of the payment was to allow businesses to keep their employees on the books so, once conditions ease and they can re-open or trade to a sustainable level, they are in a position to start up again as soon as possible. Another aim was to reduce the burden on Centrelink systems that were struggling to cope with a massive increase in JobSeeker applicants arising from the shutdown or enforced restrictions applied to the Hospitality industry and other impacted industries.

However, the conditions under which the system will operate make it non-feasible for most businesses affected. Businesses must continue to pay on-costs including holiday pay, leave loading, sick pay, superannuation, workers compensation insurance and payroll tax in relation to these payments. Additionally, payments to employees are taxed meaning that, once additional stimulus payments to welfare recipients are factored in, employees would receive more money by becoming a JobSeeker.

The system must be changed so that a) the payments are not taxed, b) employers do not have to pay leave entitlements, superannuation, insurances and payroll tax in relation to them and c) employers are not obliged to pay any more than the $1,500 per fortnight to an employee. It would also be worth reviewing whether it is necessary and fair to pay $1,500 per fortnight to employees who normally earned less (in many cases significantly less) than this amount, as is currently proposed.

If the JobKeeper Payment system is to work it must be fair, simple and practical and not require employers whose businesses have closed or experienced significant revenue reduction to pay additional costs they simply can't afford.

Federal Cabinet is meeting next week to make these payments law. The JobKeeper Payment system needs to be re-designed before this happens. Now is the time to act.

Declaration: I am an employee in the Hospitality industry who has been impacted by the COVID-19 crisis.