The New South Wales business support payment, announced by Treasurer Dominic Perrottet (pictured) on Tuesday, is one of generous proportions, said Gavan Ord, senior manager of business and investment policy at CPA Australia.
“It recognises that businesses are often on the receiving end of our public health responses and it’s appropriate to compensate them for their sacrifice,” Mr Ord said.
The support package will see small businesses with fewer than 20 full-time employees, and payrolls up to $1.2 million with turnover of $75,000 a year, receive support payments of up to $10,000.
Businesses that suffer turnover reductions of more than 70 per cent and meet the eligibility criteria will receive the full payment of $10,000, while those that suffer a reduction of 50 per cent will receive $7,000, and those that suffer a reduction of 30 per cent will receive $5,000.
“Providing different amounts of support depending on decline in turnover is sensible,” Mr Ord said. “It will ensure that businesses which are the most affected receive the greatest amount of compensation.”
It’s an approach that also makes sense for Tony Greco, general manager of technical policy at the Institute of Public Accountants. But it’s one that will be accompanied by more heavy lifting from the accounting profession, who will be left to prove declining turnover.
However, for others, it may still be too soon to tell whether grants of up to $10,000 are enough. Susan Franks, senior tax advocate at Chartered Accountants Australia and New Zealand, said it will depend on how long the lockdown lasts and the size of the affected business.
Mr Ord said that, if the NSW government extends the state’s lockdown, the amount offered to businesses will need to be increased accordingly. But, he said, it’s perplexing that a federalised effort hasn’t already been mounted to ensure businesses are certain they’ll be taken care of in the event of further lockdowns.
“We think that by now, as part of a government’s planning for lockdowns, such plans would also include a support package for business,” Mr Ord said.
“Businesses need certainty. Entering a lockdown not knowing what government help is available significantly adds to a very stressful situation for business and their staff. Support should be available quickly, giving those affected greater confidence in managing through the lockdown.
“A standardised business response should have been developed by national cabinet by now. Other countries have developed standardised support packages for the business sectors.
“Lockdowns are an Australia-wide issue. We want state, territory and federal governments to work together to roll out COVID support to businesses when lockdowns are announced.”
It’s also important that when they are announced, Mr Ord said, that they aren’t exclusionary and so prescriptive that impacted businesses are left without support.
“Some businesses may be able to trade but be indirectly impacted, for example by the loss of tourist clientele,” he said. “These businesses also need assistance and should not be excluded.”
Echoing Mr Ord’s sentiment, Ms Franks urged businesses looking to apply for support to ensure their listed business address is accurate, as payment eligibility hinges on businesses being listed as based in NSW, to avoid missing out.
“The importance of keeping your records accurate and up to date has been highlighted once again, with easy access to the support being dependent upon your business address in the Australian Business Registry being recorded as being in NSW,” Ms Franks said.
“We have been urging businesses to ensure that this vital piece of information is correct.”