- A new $400 million package to almost 100,000 businesses has been announced
- Most payments will be made automatically to eligible businesses
- CPA has called for backdated business support since the last lockdown
In light of Victoria’s sixth lockdown, the Commonwealth and state government have announced a jointly funded package it says will support small and medium-sized businesses.
The $400 million package includes automatic payments to almost 100,000 eligible businesses – including sole traders – to ensure funds are distributed and received in a fast manner.
This new package follows another $400 million Commonwealth/State injections announced last week while building on over $950 million in support grants by the state government since June.
“Since the start of the pandemic the Federal Government has delivered more than $45 billion to Victorian families and businesses to support them in their hour of need,” said Federal Treasurer Josh Frydenberg.
“This will help cushion the blow of the recent lockdown and provide hope for the future.”
According to Victorian Treasurer Tim Pallas, over $7 billion in direct economic support for Victorian businesses has also been provided by the state government since the pandemic began early last year.
“Every step of the way since this global pandemic began, Victoria has not shirked its responsibility to back our business community – this is immediate and targeted support right now, when it is needed most.”
Tim Pallas, Victorian Treasurer
“Decisive action is required to tackle this incredibly infectious strain of coronavirus, but we know it doesn’t come without a cost. This support will help the worst-affected businesses pay their bills and plan for a strong recovery,” added Victorian Minister for Industry Support and Recovery, Martin Pakula.
Five elements of the support package
Firstly, there will be Covid-19 Disaster Payments for eligible workers who lose hours due to the lockdown. As this is a government payment, it will be delivered by Services Australia. The Victorian government will fund payments in areas not declared a hotspot by the Commonwealth.
Secondly, 90,000 businesses will be automatically paid a grant of $2,800 under the Business Costs Assistance Program Round Three. This will cost $288 million.
Payments varying from $5,000 to $20,000 will be paid automatically to over 8,900 hospitality venues that received funding via the Licensed Hospitality Venue Fund during the previous two lockdowns. This program will total $68.8 million.
Grants of up to $8,000 from the Small Business Covid Hardship Fund will be paid to small businesses not eligible for support under existing programs that have experienced a 70% reduction in turnover.
Lastly, an extension of the Alpine Business Support Program will see alpine businesses receive $5,000 (off-mountain) and $20,000 (employing businesses, on-mountain). This will cost $10.6 million.
CPA urges backdated support
Before the announcement of further support for Victorian businesses, CPA Australia urged the government to deliver immediate and backdated support for business.
“Businesses are not light bulbs; you can’t just switch them on and off,” said CPA Australia Chief Executive Andrew Hunter.
“Victorian businesses have not had time to re-establish their cashflow and many are still re-building their perishable inventory. It’s frankly heartbreaking what they’re going through right now.
“The brevity of Victoria’s re-opening on this occasion will significantly compound business losses.
“Lockdowns are important public health measures. At the same time, they deny or reduce a business owner’s ability to earn a living. They need to be compensated appropriately for their sacrifice.”
Andrew Hunter, CPA Australia