APSCo AU calls for further action from Australian Prime Minister.

Open Letter.

Lesley Horsburgh, managing director of APSCo Australia has written an open letter to the Australian Prime Minister in the light of the coronavirus outbreak. We are punishing it below:

I write to you today in reference to the devastating economic impact of COVID-19 to Australian business. We are making an urgent appeal to the Prime Minister & Treasurer to recognise, along with other sectors, the vital importance of the recruitment and professional staffing sector to the Australian economy. As the Managing Director of the Association of Professional Staffing Companies (APSCo) in Australia, our members place highly skilled individuals such as engineers; IT specialists; and medical professionals – to name but a few – into the Australian labour market.

We are a critical industry, impacting the economy, communities and individuals. When we do finally come out of the other side of this crisis, the economy is going to need recruiters to get people back into work very quickly.  Corporate Australia will not get back up and running if large numbers of recruitment companies have gone out of business and the Government will not have any chance of jump starting the downturn that we will soon experience if there are no resources to deliver them.  Historically we’ve always been seen as a bellwether of the economy. Consequently, there needs to be a live recruitment market to get people back in work and projects back up and running.

Many recruitment businesses are experiencing their business activity literally falling off a cliff – permanent hiring is almost at a standstill and assignments are being terminated daily. Recruitment businesses have to pay workers before they themselves are paid and so cash flow, which even in a business-as-usual scenario is a fine balancing act, is now even more business critical. The reality is that recruitment businesses may need to begin laying off staff.

So, we need support and we need it now. The stimulus packages announced earlier in the week and yesterday are all well and good, but they do not address critical cash flow issues that will impact business up to 28 April 2020 – this is an immediate emergency and businesses cannot wait. In addition, many recruitment businesses have contracting books where turnover is greater than $50m but their EBITDA to revenue ratio is as low as 2% or 3%. These businesses will not be able to access the incentives designed to elevate cash flow pressure. We would urge the Government to look at measures such as relaxing Superannuation Guarantee payments or GST relief.

In addition, we appeal to the Prime Minister to apply pressure on the State Premiers to provide additional Payroll Tax relief for businesses with payroll up to $100m. The current measures across all states (except Queensland) only cover small businesses and are not consistent with the Federal Government incentives.       

We would also suggest looking at what other Governments have done around the world in terms of help with the payment of salaries – recruitment is a service industry and so salaries are by far the highest cost, but with no revenue coming in, the ramifications are obvious.

We would also ask the Government for clarification on how they will support self-employed professionals as it seems their only route at the moment is the benefits system.

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