‘JobKeeper was a lifeline’: As payment ends some charities thrive while others face staff cuts
25 March 2021 at 8:26 am
12 per cent of charities say they will need to retrench staff when the wage subsidy ends
More than one in 10 charities believe they will need to retrench staff when JobKeeper ends next week, according to a new poll, which reveals the support payment has been “a lifeline” for the sector.
As many as 85 per cent of respondents to a Pro Bono News’ reader poll said they had received JobKeeper support in the last 12 months, with more than half (54 per cent) still receiving the wage subsidy.
With JobKeeper set to end next week, there are fears it could have a significant impact on the sector.
Of the respondents, 12 per cent said they will need to retrench staff when the payment ends. A further 25 per cent said they were “unsure”.
This is a lower figure than in our previous reader poll conducted last June, where nearly 60 per cent of respondents said their organisation received JobKeeper support and 15 per cent said they would need to retrench staff when JobKeeper ended (which at the time was expected to be in September). But it still points to likely job losses.
One respondent to the more recent poll said that JobKeeper had kept them afloat but due to ongoing financial restraints and impact on staff they were restructuring and merging with another NFP to retain a part service.
“As part of this merger human resources will not be transferred. Some staff will be transitioned to an expanded part time role in another organisation whilst others including myself have no ongoing role,” they said.
Other respondents raised fears that ending JobKeeper would see more people moved onto JobSeeker, which in turn could put pressure on the sector.
A mixed bag
But the picture is not all bleak. Some organisations seemed to have done better than others.
While 38 per cent of respondents said the financial status of their organisations was worse compared to March last year, 29 per cent said it was the same, and 32 per cent said it was actually better.
See also: The results from our previous poll, which showed nearly 60 per cent of charities were receiving JobKeeper support in June 2020.
Looking ahead to the next 12 months, most organisations had some level of confidence in the financial resilience of their organisations.
As many as 20 per cent said they were “completely confident”, while 33 per cent said they were “fairly confident”. In comparison, 14 per cent said they were somewhat confident, 17 said they were slightly confident, 10 per cent said they were not confident at all.
It emerged that for many organisations the past year has been a rollercoaster.
One respondent said that because they were not immediately eligible for JobKeeper, their organisation had to make two staff redundant, permanently drop some staff hours, and temporarily cut back on all staff’s hours.
“At the start of the pandemic, this created tremendous uncertainty in the organisation’s stability and long-term viability,” the respondent said.
“However, we eventually qualified for JobKeeper, and we are now 100 per cent confident in our long-term operations and have begun to grow the organisation again (we have recruited three new staff, and we were able to cease temporary reduction of hours, earlier than planned).”
Several of the organisations that expressed confidence in the financial resilience of their organisations pointed to significant restructures that were undertaken last year, including cost cutting and in some cases retrenching staff.
“We lacked financial resilience in March 2020. We undertook a significant restructure in June 2020, reducing our wage expenses by 17k per month. Losing six roles then was traumatic but it has put us in a sustainable position now,” one respondent said.
“We judged that waiting until the end of JobKeeper (planned for 30 Sept, as we took the decision) to reduce our costs would lead to a worse outcome in the longer term, and our figures bear this out. We’d be insolvent now without those savings.”
Another simply said: “JobKeeper was a lifeline.“
In total, 148 people from small, medium and large organisations responded to the poll.
Up to 150,000 Aussies could be out of work
It comes as new figures from the Australian Tax Office show there were more than one million employees still relying on JobKeeper at the end of January. This is down from 1.7 million between October and December, and 3.8 million between April and September.
But treasury officials appearing at Senate Estimates hearings on Wednesday confirmed that they expect up to 150,000 people to lose their jobs when JobKeeper is removed.
Per Capita’s executive director, Emma Dawson, said the government’s decision to withdraw the JobKeeper wage subsidy would cause a massive spike in unemployment and threatened to derail Australia’s fragile economic recovery from the COVID-19 recession.
“Just a week after reducing the rate of JobSeeker by another $100 a fortnight, and with an average of eight people already competing for every available job, pushing another 150,000 people into the dole queue will likely see thousands of Australian families thrown into poverty,” Dawson said.