THE 2021 GOVERNMENT LOCKDOWN SUPPORT PACKAGE FOR SMALL & MEDIUM BUSINESSES IS INADEQUATE.

Unless meaningful support is provided, many small businesses will not survive the latest extended lockdowns. This will have devastating consequences to employment and the NSW & Australian economy.

The 2020 NSW Lockdown lasted 5 weeks.

The Federal & NSW Governments provided meaningful support measures to ensure business survival throughout and beyond the 5-week lockdown period. In fact, Government Assistance measures were progressively phased out over 11 months.

As a result, most businesses survived, tens of thousands of jobs were saved, and the economy appeared to recover strongly.

The main features of the assistance in 2020 were;

• Job Keeper
• Cash Flow Boost
• Payroll tax deferrals, Other fees and charges waivers
• Rent relief Code of Conduct involving waivers and deferrals

Apart from Job-Keeper, the most significant assistance was the Cash Flow Boost Initiative that saw Businesses retaining funds that would otherwise be remitted to the Government by way of tax.

These funds were then used to meet, at least in part, the significant ongoing costs of a business such as rent etc.

Both Business & Government combined and contributed appropriately to achieve a positive outcome for the community and the economy.

Sydney's Second Lockdown commenced on 26 June 2021.

8 WEEKS SO FAR  - AND LIKELY TO CONTINUE WELL PAST 28 AUGUST

The Federal & NSW Government announced a joint package of support 3 weeks after lockdown commenced (many businesses have applied but not yet received the assistance).

The main features of the assistance are: 

• A One-Time Grant up to $15,000 for businesses affected 70% or more.
• Job Saver - a 40% contribution towards a Business' weekly wages where it has been impacted 30% or more over a two week period because of the Public Health Orders
• Payroll Tax Deferral until 7 October 2021
• Land Tax Support reduction dependent upon amount of rent waiver provided by landlords

The Lockdown was meant to be short and sharp with the support measures designed accordingly.

However, this lockdown is already 3 weeks longer than that of 2020 with no real end in sight - and businesses already struggling are entitled to  significantly less support.

The main issue is that while Job Saver is a contribution of 40% towards wages, a business is expected to:

• pay the balance of 60% of wages to maintain relations with their employees: and
• remit the tax withheld from all wages paid

BUT

• Many Businesses are completely shuttered or affected more than 70% by way of reduced turnover.

Affected Business is saying the assistance of a "one off grant", while appreciated, is inadequate in this regard and that without 2020 style measures, such as the Cash Flow Boost, they will not survive this time. The support designed for a short and sharp lockdown needs urgent review.

There is no criticism of the Government’s power or decision to lockdown, only a genuine concern that many more Businesses who are not adequately supported this time will fail with wider consequences for the community and the economy such as tens of thousands of employees (and former employers) becoming unemployed and requiring social welfare.