The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed changes to the JobKeeper eligibility criteria, saying it will help support more businesses, particularly those in Victoria facing the impact of tighter restrictions.
The changes to the eligibility test outlined by Treasurer Josh Frydenberg this morning mean businesses are only required to demonstrate a significant reduction in turnover in the September quarter, compared to the same quarter last year.
“The adjustments to the eligibility criteria will be a necessary lifeline, particularly to those small businesses in Victoria that were able to re-open when restrictions eased after the first wave, but are now impacted by tighter restrictions in response to the second wave,” Carnell said.
“The changes also allow struggling small businesses to get JobKeeper payments for new staff who have been employed since 1 July.”
While the changes to JobKeeper apply nation-wide, Victorian small businesses are expected to take up 80 per cent of the additional $15.6 billion allocated to the program.
“Carnell said there’s no doubt the latest round of restrictions has been devastating for Victorian small businesses.
“The federal government’s commitment ‘to keep Australians in jobs and businesses in business’ will give small businesses a much-needed confidence boost at this very difficult time. Small businesses will be reassured by the government’s pledge to continue to back them so they can get to the other side of this crisis,” she said.
However, Carnell suggested given the impact of the closures on small businesses and the economy, the government should delay reducing the wage subsidy scheme which is set to have payments tapered from September 28.
“The reality is that these small businesses won’t be back on their feet by 28 September, when payments will be reduced and commercial rent deferrals are scheduled to expire.”
Patrick Coghlan, CEO at CreditorWatch warned while support packages such as JobKeeper have provided businesses with an essential lifeline, the scheme is unsustainable.
“This isn’t a long-term solution. While this has been essential in safeguarding jobs, many businesses are being kept artificially afloat. Companies will do well to remember that hibernating will only last for so long.
“Our latest CreditorWatch data has actually shown that 44 per cent of Aussie businesses think they could be back up at pre-COVID cash-flow levels within five months. Whilst this doesn’t take into account the current situation in VIC, states outside of this should be thinking about standing on their own two feet as soon as they can. This will also force companies that should be wrapping up to do so.”
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