The federal and NSW governments have upped the ante on support packages for small businesses following the extension of the current lockdown to August 28.
The extended lockdown has moved both state and federal governments to deliver an expanded COVID-19 Business Support Payment to assist businesses that are doing it tough.
Prime Minister Scott Morrison said the support package is in line with federal support for Victorian businesses in lockdown last year and will cost the Commonwealth government $750 million a week.
“It is basically what we were doing last year in Victoria. So it is a commensurate level of support. Three quarters of $1 billion per week, and I want to acknowledge, that is just the Commonwealth government,” he said.
“The State Government is also putting in significant supports beyond that as well. So there is a great deal of economic support going on.”
Morrison said the government has been working on options in partnership with the NSW state government to support businesses. The new ‘JobSaver’ program will help businesses remain viable during the pandemic.
“These businesses are the ones we all need still standing to drive the recovery on the other side,” he said.
“Our support has never been set and forget and even before Service NSW had started to deliver the support on Monday that we announced earlier this month, my government had been looking at what else businesses would require to strongly emerge on the other side of this lockdown.
“Whether you’re a worker who has lost their income or a business that’s suffering, even more help is on the way.”
Expanded Business Support payments
Under the expanded payment, eligible entities, which includes not-for-profits, will now receive payments of between $1,500 and $100,000 per week based on the level of their payroll with the maximum turnover threshold increased from $50 million to $250 million.
To be eligible for the payment businesses must show a 30 per cent (or more) decline in turnover. The payment will continue be calculated based on 40 per cent of payroll For non-employing businesses, such as sole traders, the payment will remain set at $1,000 per week.
More businesses eligible
The new thresholds will mean more businesses will be eligible to receive payment with the government suggesting the expanded package will now cover more than 400,000 businesses employing 3.3 million workers in NSW. The payment will also provide more substantial support for businesses to cover unavoidable costs such as rent, insurance and maintenance as well as employee costs during an extended lockdown.
Maintaining jobs a key
The expanded support will continue to be conditional on businesses maintaining their employee headcount as at 13 July (covering permanent and long-term casual employees) by not taking active steps to terminate their employment. The government believes this will allow a continued connection between employers and employees, allowing the economy to bounce back once restrictions ease.
When do payments start?
The expanded payment will take effect from 18 July 2021, the start of the program. Businesses that have already submitted an application will not need to do anything, their payment will be automatically adjusted consistent with the expanded program.
Workers who have lost hours will also continue to be supported by the COVID-19 disaster payment with more than 812,000 claims granted in NSW to date with more than $411 million in weekly payments.
NSW Premier Gladys Berejiklian said the additional support would help deliver businesses and individuals the financial assistance needed during the necessary extension of the lockdown.
“We know these restrictions are tough but necessary to get the current situation under control and that is why we are coming to the table to help businesses and individuals with more financial support,” she said.
“We don’t want people to have to worry about how they are going to keep the lights on or reopen their businesses when restrictions ease, which is why we are investing billions to give people that piece of mind.”
Applications for JobSaver opened on Monday with more than 14,000 applications already received and almost $28 million approved for payment so far. Payments are expected to start hitting bank accounts from July 31.
Businesses can expect to receive funds in their accounts within five to ten business days from their approval date, and the arrangements announced today will be backdated, so businesses that have already received a first payment on previous settings will be topped up when their next payment is made.
Businesses should contact Services NSW or visit the Service NSW website for more information.