The changes negotiated with treasury mean that instead of the GST returns for the June quarter dictating whether a dealership qualifies for JobKeeper 2, the treasurer has now accepted that the criteria from JobKeeper 2 will the applied to the September quarter.
The January JobKeeper 2 payments will now be based on the December quarter.
In addition, anyone who has managed to put on employees between March 1 and July 1 can now count those people into JobKeeper if they are otherwise eligible.
Richard Dudley, CEO of the MTAA, who played a key role in the negotiations with the government, told GoAutoNews Premium: “They have listened to us. We have won considerable benefits.
“We were very concerned about JobKeeper 2 because the revised criteria for accessing based on GST returns in the June quarter was going to seriously impact the automotive sector and in particular new car retailing.
“The problem was that June was a bit of an anomaly because in some states businesses recovered somewhat and even in Victoria there were signs of a recovery as well.”
He said that what was put to the government was that normal end of tax year surge and the addition of the instant asset writeoff combined to generate sales levels that were unlikely to be repeated in the remainder of the year and that using the June quarter as the basis for measuring real dealer financial performance for the purposes of continuing to qualify for JobKeeper was misleading.
Mr Dudley said that the June quarter also included sight-unseen contractual arrangements between the OEMs and their dealers like hold-back and bonuses which are paid at the end of the financial year but covered activities across the previous six months.
“So some of those hit the books in June as well and when it comes to a GST return, that was an anomaly that makes it look better than it actually was,” he said.
“So we took all that information to the treasury department, the ATO and the Coronavirus Commission with meetings up until Thursday morning pushing very hard on all of those issues with options they might want to pursue and overnight the treasurer has announced exactly that.
“It will make a huge difference nationally but also across the 520-plus dealers across Victoria in particular who can all now plan effectively past September 28 when JobKeeper 1 runs out.
“By changing over from the June quarter to the September quarter there is every likelihood that a very large majority of those businesses will be able to access JobKeeper post September.
Mr Dudley said that one key issue for dealer revenues for the remainder of the year would be stock levels.
“There are some dealers who are doing okay simply because they have stock. But we have done surveys of what the supply chain looks like and it is not a pretty picture.
There are delays beyond six months for certain models because the effects of the factory shutdowns are now flowing through the market.
“There is also prioritisation. It appears some manufacturers are choosing where those vehicles are going before they are sent to the Australian market. It appears we are not necessarily the first destination for orders on car rolling off production lines and that is manifesting itself in dealers having difficulty in getting their hands on vehicles to actually sell.
“Add to the re-emergence of the virus in Victoria and the Stage 4 restrictions which essentially means showrooms have now shut, the situation in Victoria today is significantly worse than it was in March and April.”
Mr Dudley said that possibly as many as 82 per cent of Victorian dealers surveyed by the VACC would be able to take advantage of the changes in the JobKeeper conditions won by MTAA and VACC.
He said that, while the Victorian dealers would benefit most, the concessions won covered all Australian dealers.
He said that while some states were faring better than Victoria, there were still issues for many dealers in the Sydney basin for example and with dealers subject to border closures, especially in Queensland and in spite of better trading conditions in states like WA, stock shortages would become a significant issue from the remainder of the year.
“But our primary consideration was the re-emergence of the virus in the second wave in Victoria and we are very thankful to the government because this was the best possible result we could have hoped for in the circumstances.
“We surveyed 529 dealership in Victoria with the VACC and 82.7 per cent said they would not qualify for the previous JobKeeper 2 eligibility requirements. Some of them may still not qualify under the new terms but we think the vast majority of them will qualify.
“What does that mean in real terms? Prior to this announcement there were above 3200 jobs that could have been in jeopardy in new car retailing in Victoria alone and that does not include motorcycles or farm and industrial machinery and others which are affected by Stage 3 and Stage 4 restrictions across Victoria,” Mr Dudley said.
See: New JobKeeper rules
By John Mellor
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