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Newcastle staff face stand down without JobKeeper

written by Adam Thorn | September 11, 2020

Staff at Newcastle Airport face being stood down without access to JobKeeper because the business is ineligible for the government subsidy.

Australian Aviation understands the business can’t claim for the handout because of its local government ownership structure, which mirrors a similar situation faced by Victoria’s busiest regional airport, Mildura.

Newcastle Airport chief executive Dr Peter Cock said on Thursday he has applied to the Industrial Relations Commission to allow the business to temporarily stand down workers, with a hearing set for 25 September.

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“This is something we hoped we would never need to consider, however, the ongoing economic impact of closed borders has made our situation untenable,” said Dr Cock.

“Our passenger traffic and related income have been decimated since late March, however, to date, we have managed to keep most of our permanent staff employed throughout the pandemic.

“Unfortunately, in the short term this cannot continue, though for the sake of the region we need to be able to ramp up quickly to take advantage of the recovery when it inevitably occurs.

“We have been unsuccessful in securing JobKeeper funding, despite continuing to prosecute our case with the ATO. This has clearly placed more financial strain on the business.”

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The JobKeeper package was introduced to provide coronavirus-effected business with an initial $1,500 per employee, per fortnight.

Companies are then legally obliged to pass that payment onto workers in a bid to keep the economy active during the pandemic.

However, the scheme has proved problematic for much of the aviation industry.

Many airport workers, such as those at Newcastle, are locked out of the financial package because their firms are council-owned; while staff at dnata were similarly told they were no longer eligible because their company is owned by a foreign government.

In May, the chairman of Mildura Airport has become Australia’s first airport boss to call for the JobKeeper scheme to be extended after it emerged the initiative was $60 billion under budget.

“We are owned by the government but we’re a private company with one shareholder, which is Mildura City Council,” explained O’Donnell. “We’ve never gone to the council for operational support. We’ve been fully self-sufficient but we can’t access any of the support.”

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5 Comments

  • Steve

    says:

    There are 3 levels of Govt in Australia. The Feds are looking after many businesses with JobKeeper, and state governments are also kicking in so surely the third tier of Govt – Councils – should do their bit too!

  • Td

    says:

    All the companies that create webs of ownership for company, share, management,funding and tax purposes have now webbed up genuine Australian employees to the extent they miss out on genuine entitlement s. Webs end up being rolled into a ball by the elements and slowly disintegrating with their contents. What a shame.

  • Adrian P

    says:

    Where does this leave the company directors?
    Will they have to put the companies into voluntary administration?
    Would the administrator subsequently sell to predatory capital investment companies?
    If Australia had Chapter 11 laws or similar, companies in short term difficulties would have protection while resolving their financial issue.

  • Linda Weaving

    says:

    Perhaps it’s time for executive staff to take a pay cut. The CEO salary alone could probably pay every employee they want to stand down for a year!

  • Adrian P

    says:

    The councils as owners are putting in their bit.
    That is why the airports are refused JobKeeper.

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