JobKeeper Over the past 24 hours, the press has been citing...

JobKeeper Over the past 24 hours, the press has been citing potential upcoming changes to the JobKeeper (JK) scheme – which are expected to be formally announced with the Government’s economic update this Thursday.Our interpretation from the many articles is that the current JK scheme will remain unchanged until the end of September (companies that currently qualify for JK will receive continued support until the end of the original legislated term of Sept-end). Post Sept, JK is expected to be extended, but with changes to the eligibility criteria, tiered not flat payments and more frequent testing of eligibility.Overall, we think this is a sensible approach and probably not too far away from the market’s expectations. However, if our interpretation is correct, it does remove a key unknown in that companies who currently quality will be guaranteed further support until the end of September.We had been somewhat concerned that the Govt would adjust the current scheme prior to its legislated term and have not factored in a full 3-months of JK support for our eligible retailers in 1Q21. This clearly provides decent upside to FY21 forecasts, although we have seen the market reluctant to capitalise these stimulus tailwinds for obvious reasons.Setting earnings and consumer spending tailwinds aside, it is obviously a major benefit for retail balance sheets.Key beneficiaries in our coverage: MTO, APE, ADH, AX1, LOV, NTD, MHJ.Overall, a positive for the sector in our view with a moderated extension past Sept. As we understand it (subject to change pending Thursday’s economic update)Current form to continue until Sept-end – as currently legislated, JK will continue in its current form (A$750/wk) for those eligible.Post-Sept JK – a new version of JK will be in place from Oct-Dec. The eligibility requirement is expected to change, potentially be more frequently tested and with tired payments to perhaps better reflect the person’s pre-COVID income (ie payments likely to be below the A$1,700/fortnight currently paid).