The government announced the second stage of its economic plan over the weekend and reactions are rolling in, with business groups and bodies offering their thoughts and mostly praise.
Below are some of the early reactions to the government’s latest $66.2 billion package, which has seen it increase payments to small businesses and extend measures to sole traders.
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, was one of the first to applaud the government’s package, referring to it as necessary breathing space for overburdened small businesses.
“Ultimately, this package gives small and family businesses some breathing space until circumstances return to normal, which will play a critical role in their survival and the ability for our economy to bounce back,” Ms Carnell said.
“Business owners thank the federal government for this unprecedented support at a time when they need it most,” said Business NSW chief executive officer Stephen Cartwright in a statement release shortly following the government’s announcement.
“This will provide some comfort during these challenging times when business owners are thinking primarily about their capacity to pay their staff, their rent and their existing suppliers.”
He noted also that the government’s latest move re-enforces the long-prosecuted view from Business NSW that business owners need to be supplied with a voucher to receive proper financial advice during this time — otherwise, they could be making critical financial decisions without careful considered advice.
“Employers and their staff are looking to do the right thing — and I’ve been pleased to see a number of innovative measures that various businesses and their staff have put in place to ensure the viability of their enterprise.”
Business NSW is also calling on all local councils to do their part by waiving or deferring rates for small businesses for the next six months to support these important rate payers through the economic crisis.
The Tax Institute strongly endorsed the government’s package of measures, although admitting that it is reluctant to see super savings eroded.
Of particular note, the Tax Institute’s senior tax counsel said the initiative is to provide $100,000 through the tax system to employers to assist them to fund wages during the next few months.
“Understanding the detail of how this works and exactly who will be eligible will be revealed in the fine print of the legislation which the Institute will be studying closely and commenting upon as soon as it is released,” said Bob Deutsch.
“The Institute, while reluctant to see superannuation savings eroded, nonetheless welcomes the ability for eligible individuals in financial stress to access super early — up to $10,000 in the current financial year and in the next financial year. Superannuation was always intended to be for retirement purposes, but the current emergency is of such a nature as to warrant this temporary adjustment.”
“We commend the government for its commitment to doing what it takes to see the country through the health and economic shock of COVID-19, and we restate the importance of building and construction as an essential service,” said Denita Wawn, CEO of Master Builders Australia, the voice for over 32,000 building and construction businesses.
“Economically, it’s one of the main chances of stimulus measures hitting the ground hard and fast,” she said.
“Maintaining building and construction activity around the country is one of the most effective ways of injecting money into the economy at this time of crisis. A shutdown on construction sites will have devastating impact on the economy and the wellbeing of millions of Australians.”
Also issuing a statement, Industry Super Australia (ISA) said it is ready to work through the “all important detail that will enable people suffering hardship access to some of their super in an efficient way that doesn’t undermine our national savings system”.
“As we have been indicating publicly, this is an issue that must be handled very carefully in order to prevent the compounding of liquidity pressures that may be faced by superannuation funds in the current market conditions, and as they support anxious members,” ISA said in a statement.
“Although industry superannuation funds were not consulted in the formulation of this proposal, we stand ready to engage with government and the ATO to make it work. Assisting those in financial hardship will come down to how well the ATO works with the funds, given each superannuation fund will have to manually issue the money.”
Industry Super Australia underlined that effective co-ordination from the government and the ATO will be vital to ensure the scheme works efficiently and “does not frustrate people further”.
Business Council of Australia
While referring to the government’s package as “the right package for extraordinary circumstances”, the Business Council CEO urged the government to lift the regulatory burdens and blockages that put a handbrake on new projects and investments and take a common-sense approach.
“Businesses need as much room to move as possible to keep employees working,” said Jennifer Westacott.
“We will need to lift the regulatory burdens and blockages that put a handbrake on new projects and investments and take a common-sense approach. And we’ll need to make every part of the economy as productive as possible.
“To get through this challenge, all Australians must step up, and our largest companies are doing just that.”
Ms Westacott underlined the need to keep production going, including in the manufacturing, essential retail, energy, mining and resources sectors, along with all of the logistics that support them.
“If we don’t, we will make recovery even more difficult and we will see more job losses.”
Also commenting on the latest news from Canberra, the Australian Retailers Association called on the federal government to deliver an Australian Retail Industry Rescue Package, amid collapsing retail revenues due to the pandemic.
The executive director, Russell Zimmerman, said the COVID-19 outbreak and public reactions to it were fast becoming catastrophic for retailers, and explained that it is imperative the government help save thousands of retail enterprises and hundreds of thousands of jobs.
“The ARA is in constant communication with its members, and early reports were that revenue across the board was down 30 per cent for March compared to last year; our latest feedback is that turnover has fallen much more sharply than that,” Mr Zimmerman said.
According to the ARA, the collapse in consumer spending is indiscriminate, with retailers of clothing, footwear, household goods, personal accessories and cafés just some of the areas affected by the slump.
Maja Garaca Djurdjevic is the editor of My Business.
Maja has an extensive career as a journalist across finance, business and market intelligence. Prior to joining Momentum Media, Maja spent several years unravelling social, political and economic intricacies in Eastern Europe.
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