Junior explorers feeling a little left out by Australia’s JobKeeper scheme
Barely a day has passed since the Australian government announced its $130bn JobKeeper program and by midday Tuesday just under 200,000 businesses had already registered their interest.
The scheme, which is designed to incentivise companies to keep their employees on the books and paid for the next six months, has received kudos for those it would benefit and brickbats from those that won’t – such as casual workers who have been employed for less than 12 months.
While broadly supportive of the scheme, which it described as a desperately needed injection to sustain employers and their employees through the COVID-19 pandemic, the Association of Mining and Exploration Companies (AMEC) also had a brick to toss.
AMEC noted that the eligibility criteria meant that many small explorers would not qualify as they didn’t have any turnover.
Companies with a turnover of less than $1bn need to prove that their revenues have fallen by 30 per cent or more compared to this time a year ago.
“Small mineral exploration companies don’t have revenue or turnover. They exist on their ability to raise investment from which they fund exploration and employ staff,” AMEC chief executive officer Warren Pearce said.
“As a result, they do not have a turnover to reduce by 30 per cent, meaning that they do not fit a key test to qualify for support under the JobKeeper initiative despite clearly needing it.”
The same is also true of biotech companies that are still putting their drugs or products through the clinical trial stages and startup technology companies.
Pearce said he believed the government probably did not intend to exclude companies that employed and supported staff and survived by raising funds from investment.
“Collectively, these companies employ hundreds of people and many of these jobs are in serious jeopardy, as their ability to raise investment to support operations is no longer possible as a result of COVID-19,” he added.
“Employees are being stood down now as these companies prepare for a very baron 2020. Just like so many other industries across Australia, we need this support now.”
Australia’s mineral explorers are primarily small ASX-listed companies that use the capital they raise on the market to explore for future mines.
Mineral exploration companies fit the definition of small businesses. The Australian Taxation Office defines a small business entity as having less than $10m aggregated turnover. For employment purposes, Fair Work Australia defines a small business as one that has less than 15 employees.
“AMEC is calling on the government to widen the criteria, to ensure that small mineral exploration companies can access the financial support that they need, and so that they are not unintentionally excluded,” Pearce said.