Call for clarity over NSW’s COVID support scheme for small businesses

jobkeeper, lockdowns
Business center closed due to COVID-19, sign with sorry in door window. Stores, restaurants, offices, other public places temporarily closed during coronavirus pandemic. Economy hit by corona virus.

The NSW government’s new COVID-19 business support package should help struggling small-business owners, but workplace relations advisors Employsure are concerned it may cause confusion over who is eligible for it, and what they need to do to receive it.

Under the scheme, eligible employers and sole traders across the state with fewer than 20 full-time equivalent employees who experience a 70 per cent decline in turnover, can access $10,000. Those who have experienced a 50 per cent decline can access $7000, and those with a 30 per cent decline can access $5000.

Eligible employers are required to provide evidence of the downturn through an accountant and lodge through Service NSW. In addition, the decline in business turnover must be recorded across a minimum two-week period after the commencement of major restrictions on 26 June, before they receive their relevant payments from 19 July.

Employsure have raised concerns that the requirements may not sufficiently cover the small businesses that need the support the most.

“We called on the state government to offer more support for small businesses and it delivered,” Nicholas Hackenberg, Business Partner at Employsure, said. “However, while this will act as a temporary safety net for some employers, others with more than 20 employees may not qualify. While this eligibility factor doesn’t appear to affect hospitality and tourism businesses, for other SMEs, it could be an issue when trying to apply for the grant.

“Some who have managed to stay open during lockdown may also not have recorded enough of a downturn to be eligible,” Hackenberg added. “Should they risk closing their doors for a few days just to meet the threshold, or should they continue operating as normal? This is a risk vs reward situation some business owners may find them in, and it could lead to disappointment.”

Employsure is also urging the government to be flexible with providing additional support where it’s needed if the COVID-19 situation gets worse as some businesses see the cost of running a business is far greater than the support being offered, and a lockdown extension will increase the financial stress they are under.

“Small business is the key to economic recovery and without adequate support, struggling employers will have no choice but to close their doors,” Hackenberg said. “While some businesses are resilient and have gotten good at shifting operations online where applicable, for others, this lockdown might be the final one that breaks them, even with the financial support being offered to them.”