Governments must not neglect the businesses who have survived the pandemic so far
On 22 March of 2020, Prime Minister Scott Morrison stood before the nation and announced for the first time that ‘level one restrictions’ were to be introduced the following day. While millions of Australians were happy to oblige and avoid the mysterious and unfamiliar coronavirus, businesses around the country rose to the challenge with understanding, and did everything they could to be safe, responsible and tolerant of the situation the world now found itself in.
That was almost six months ago.
Since then, in Victoria, we have seen severe restrictions imposed, promised to be eased, only to be followed by harsher restrictions as the virus surged again. As patience and funds have withered away, it is with little surprise so many Victorians are reluctant to put their businesses and their livelihoods on the line.
Patience and hope have become the cornerstones of 2020 for the business community – patience to endure the pain caused by restrictions and hope that it will end and the government will support them through.
While the business community understands that COVID must be controlled, the restrictions that have been in place for the past 24 weeks have already meant the end of some business owners’ businesses and life savings.
A balance must be met.
One of the mottos that came to prominence during this pandemic is “we’re all in this together”. While this is true, the harsh reality of the situation is that Victoria finds itself in a very different situation to the rest of the country.
Through no fault of their own, the crisis continues in Victoria for the business community. Now, more than ever, we need our state and federal governments to back Victorians and help us endure what will be remembered as the greatest economic devastation the world had experienced in 100 years.
The Victorian Government’s economic snapshot of 2018 showed that we represent almost 25 per cent of the nation’s GDP with an unemployment rate below six per cent. Now unemployment threatens to reach 11 per cent by Christmas.
VCCI has called on both the state and federal treasurers to continue to back Victorian businesses to ensure our economic prosperity during and after this pandemic.
In all, the Victorian Chamber has called for 23 separate measures which will be needed to ensure the future of the business community, including tax measures, direct grants and a continuation of JobKeeper.
- Maintain JobKeeper payments at $1,500 for Victorian employers, sole traders and not-for-profit organisations until at least 31 December 2020. JobKeeper 2.0 was developed and announced before the Victorian Government’s response to the resurgence of COVID in the state and this critical lifeline must be preserved as members see it as essential to their future.
- Make immediately available $250 million in emergency funding for Victorian communities, regions and industries most significantly affected by the coronavirus under the existing COVID-19 Relief and Recovery Fund – funding that should be matched by the Victorian Government.
- Extend tax relief measures, including waiving the September and December BAS payments for entities with a GST turnover less than $20 million.
- Introduce loss carry back in the upcoming Budget, with grants or other equivalent assistance extended to business operators unable to access the measure because of business structure (e.g. sole traders).
- Raise the Supporting Apprentices and Trainees (SAT) wage subsidy from 50 per cent to 100 per cent of an apprentice’s or trainee’s wage for all employers, regardless of size.
- Expand apprenticeship and traineeship eligibility to casual workers who work a minimum number of hours per week (e.g. 13 hours) and provide funding for employers to take them on. This measure would be particularly beneficial to Victoria’s hospitality and retail sectors where casuals make up a sizeable share of their workforces.
- Continue flexibility in employment delivered via FWA to allow businesses to scale in accordance with COVID-19 restrictions and help ensure employees remain connected with their employer.
- Encourage the Australian Energy Regulator (AER) to set expectations of energy business to help small business customers impacted by COVID-19 until at least 31 December (currently set at 31 October 2020).
- Provide Victoria with additional funding to accelerate local and state-wide road and other infrastructure upgrades and maintenance work that leverages local content and skills (where health and other government directions permit). For example, local roads, schools, libraries, childcare centres.
- Review Infrastructure Australia’s Infrastructure Priority List to identify Victorian investments with national economic significance that can be reordered from medium term (5-10 years) to near term (0–5 years) projects.
- Continue to encourage financial regulators and financial institutions to help Victorian SMEs under financial stress.
- An extension until 23 November of one-off grants available to eligible businesses under the Business Support Fund ($10,000 for employing businesses in metropolitan Melbourne and $5,000 for employing businesses in regional local government areas (in recognition of many businesses and industries spending longer under restrictions). Applications for the program are currently scheduled to close on 14 September 2020.
- An extension to 23 November of all other initiatives contained in the Business Support Package, including the Regional Tourism Accommodation Support Program, the CBD Small Hospitality Grant, the Hospitality Business Grant Program, and the Night-time Economy Business Support Initiative.
- Reduce costs and investor flight risk by removing payroll tax the remainder of this year for businesses negatively impacted by COVID restrictions, and increase the payroll tax threshold to $1 million and further reduce rates to ensure Victoria is an attractive place to invest and operate under COVID-normal.
- An extension of no less than three months in all existing deferrals and reductions in other state business taxes, fees and charges (Workcover premiums, stamp duty on commercial and industrial property sales, and other regulatory costs). This should include the waiver of various licensing fees and charges for small businesses including tourism operators, bars, cafes, restaurants and self-employed tradespersons.
- To address the unprecedented decline in apprenticeship and traineeships, an immediate payroll tax exemption for apprentices and trainees.
- An incentive payment scheme for employers of apprentices and trainees made redundant by businesses adversely affected by ongoing restrictions. This could include commencement, mid-point and completion payments of $3,000 respectively and should apply irrespective of business size.
- An immediate $1,000 rebate for small businesses with an active electricity account that use less than 100,000 kilowatt hours of electricity per year. Sole traders, sporting clubs, community organisations and charities would all be eligible if they meet this criterion.
- If required, a further extension of the Commercial Tenancy Relief Scheme until the end of March 2021 (currently extended until 31 December 2020).
- Ongoing funding for wellbeing and mental health support for Victorian small business employers, and sole traders.
- The bring-forward of road and other infrastructure upgrades, and any planned procurement across the public service and related organisations that can leverage local content and skills (where health and other government directions permit).
- Increased investment in the state’s training system to reskill and retrain workers in industries and occupational activities that are likely to remain under heavy restriction until the end of the year.
- The fast-tracking of plans that will enable the international students for the education sector to reset and recover.
One of the key outcomes the VCCI is calling for is the shortening of time it takes to reach what has been dubbed ‘COVID-normal’. The business community also needs from the government much greater insight into the operating environment that will see most businesses return to a more ‘normal’, sustainable footing.
We have also called on the Victorian Government for when the time comes for businesses to reopen, that the hospitality and retail sectors are offered more targeted support to help open more safely for them and the public.
As our virus numbers come down, we should look optimistically to reopening and relaxing restrictions. Like you, we hope our message is heard that the road to recovery needs to happen at a faster speed than what was outlined by the Government last Sunday.
The VCCI’s mantra is to get through to ‘COVID normal’ as soon as we can and leave no person, no job, no business behind.