Small businesses are in financial distress as a result of the COVID-19 lockdowns. The reality is some of them won’t survive.
The current JobSaver support is welcome - very welcome. But it won’t be enough on its own to save small businesses and their employees. Continued support is needed to transition from lockdowns to economic recovery. That’s why COSBOA is proposing a “Business Rebuilder’ program to provide cash flow assistance to eligible SMEs once the Job Saver program has ceased.
COSBOA believes that the program should be national and build upon the support mechanisms that worked for small businesses in 2020. The components could be:
BAS Forgiveness for the first two quarters after the program starts
Existing measures such as JobSaver, sole trader & micro support extend into the rebuilding phase of the economy, with a gradual step-down approach as the economy recovers
Continued, tailored support for severely impacted industries (such as events)
Waiver of Payroll Tax for the first two quarters after the program starts
A meaningful rent relief mechanism incorporating mediated outcomes to support recovering businesses and the provision for ‘no fault – no penalty’ early termination for businesses that cannot reasonably continue to trade
Eligibility contingent upon maintaining staff headcount for at least one quarter
JobSaver headcount is maintained through best endeavours
COSBOA CEO Alexi Boyd said “Recovery takes time, but the JobSaver program is only available when there is a Commonwealth hotspot declaration in place. Unlike JobSaver, the financial distress small businesses are experiencing won’t suddenly stop the moment lockdowns and hotspot declarations are lifted. Financial support should be dialed down gradually as businesses get back on their feet.
“The critical time for business survival and job protection is the period immediately after the lockdown is lifted. Without post-lockdown assistance, we might see businesses having to shed staff in order to survive but such assistance should continue to require the maintenance of headcount as an extension of the ‘in lockdown’ Job Saver objective.”
Ms Boyd concluded “COSBOA’s members have sung the praises of previous assistance measures such as state and federal cash grants, rent relief programs, payroll tax waivers, and incentives to keep people employed. They kept many small businesses alive last year. We know they work, so let’s keep them going as we transition from lockdowns to rebuilding the economy.”
View our Business Rebuilder proposal here.