Business NSW has asked the Federal Government to provide a clear pathway for business recovery in its annual Pre-Budget submission to Treasury, with thousands of Central Coast businesses facing bleak times when government COVID-19 business support measures end.
Business NSW Regional Director, Paula Martin, said this year’s Budget needed to be about “accelerating the path to the new normal”.
“In our most recent Business Conditions Survey conducted across NSW, 23 per cent of businesses believed they were at a high risk of failure when supports such as JobKeeper, tax relief, interest waivers and other measures end,” Martin said.
“With 11,000 local businesses utilising JobKeeper on the Central Coast, this rate of unpreparedness could mean job losses.
“Whilst we saw bumper Christmas trade, particularly in our beach towns, some businesses tell me that they are surviving month to month, particularly those in the events and tourism industry.
“This vulnerability will hang over the small business sector for much of the year and will need to be factored into decisions around when and how measures are withdrawn.
“We support the Australian Chamber of Commerce and Industry’s call to introduce a new program of wage subsidy support for businesses heavily impacted by government restrictions, such as those in the travel, tourism and hospitality sectors.”
Martin said the wage subsidy would be set at $450 per week per employee if business turnover is down over one-third, or $700 per week per employee if business turnover is down over two-thirds, relative to the same quarter in 2019.
The subsidy would also be tested quarterly to confirm eligibility, be available to those employed on or before 1 January 1 2021; and retain the industrial relations flexibilities of the JobKeeper payment.
“Many businesses are finding it impossible to plan past March,” she said.
“The new package must provide longer-term certainty for businesses to plan whilst restrictions exist.
“Businesses continue to struggle financially, with more reporting decreases in staff and reduced capital spending than any growth.
“We’ll need much stronger consumer spending for these businesses to begin to rehire and reinvest.”
Meanwhile, Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, is calling on the Federal Government to change JobKeeper rules while the supplement is still available to allow struggling small businesses to replace staff.
Ms Carnell says as the economy recovers from the COVID crisis and more jobs become available, small businesses that are still trying to get back on their feet are losing their staff and cannot hire replacement employees under JobKeeper rules.
“While some small businesses are doing well, there is a significant proportion of small businesses that are still doing it tough,” Carnell said.
“JobKeeper was reduced again on January 4 and with some eligible businesses unable to afford to top up wages, they are having to reduce the hours of their staff.
“It means staff are resigning to go to jobs offering more hours and pay.
“While the JobKeeper program was originally designed to allow businesses to keep their existing staff, the economic recovery is presenting new challenges for some small businesses.
“Under JobKeeper rules, eligible businesses cannot replace their staff with a new staff member and still attract the government payment.
“Unfortunately, this rule has the unintended consequence of increasing the divide between the haves and have nots in the small business sector.
“It’s imperative that the government changes JobKeeper so that small businesses that have been hit hardest by the COVID crisis can replace their staff to help them get their businesses back up-and-running.