Expands to include businesses with turnover of up to $250 million.
The New South Wales Government has expanded the JobSaver program to include more businesses as the state further extends its ongoing COVID-19 lockdowns.
The program now includes businesses with an annual turnover of between $75,000 and $250 million, up from $50 million, which have reported a revenue decline of 30 percent or more.
Also getting an increase is the maximum weekly payment to between $1500 and $100,000 per week, up from $10,000 if companies maintain their employee headcount. The payments are based on 40 percent of their weekly NSW payroll. Non-employing businesses also remain eligible for a maximum of $1000 per week.
Data from the Australian Bureau of Statistics reveal NSW has a sizeable IT industry, with 13.5 percent of businesses listed under "Professional, Scientific and Technical Services" as of 2020. The industry also accounts for 9.7 percent of all employees in the state.
With more companies eligible for the financial support, the monthly payments can support resellers and other IT channel firms that saw at least a 30 percent revenue decline be able to retain their staff and maintain cashflow during the lockdowns.
In the announcement, NSW Premier Gladys Berejiklian said the additional support would help deliver businesses and individuals the financial assistance needed during the necessary extension of the lockdown.
“We know these restrictions are tough but necessary to get the current situation under control and that is why we are coming to the table to help businesses and individuals with more financial support,” Berejiklian said.
“We don’t want people to have to worry about how they are going to keep the lights on or reopen their businesses when restrictions ease, which is why we are investing billions to give people that peace of mind.”
Applications for JobSaver opened on Monday and the NSW Govt has received more than 14,000 applications and some $28 million approved for payment so far. Payments are expected to arrive from 31 July.
Insolvency protections reactivation urged
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has urged the Federal Government and regulators to consider reactivating temporary insolvency protections that were in place during the 2020 lockdowns.
Ombudsman Bruce Billson said bringing back the protections would provide temporary additional protections for small and family businesses that may be trading insolvent due to lockdown trading restrictions.
“Small businesses aren’t like a light that can be switched on and off,” Billson said.
“With full respect for the need for public health orders, lockdowns do have a significant and immediate impact on small and family businesses and a cumulative effect when those businesses have endured multiple lockdowns.
“Many have far less cash in reserve, having eaten into savings to get through previous lockdowns.”
Billson cited CreditorWatch findings of a 75 percent increase in businesses entering administration in the last week of June, and he expects the trend would continue with payment times stretching out.
“Bringing back temporary protections that were in place last year, would be a sensible and appropriate policy measure, particularly for those small and family businesses impacted by recurring and protracted lockdowns in Melbourne and Sydney,” Billson said.
“Insolvency protections introduced temporarily last year worked to reduce the threat of creditors taking action against a small business impacted by trading restrictions and offered temporary relief for directors from any personal liability for trading while insolvent.
“Crucially, it’s measures like this that give otherwise viable small businesses more time to recover or turnaround, preventing a wave of unnecessary insolvencies. By giving a small company breathing space to restructure, you also help mitigate the risk of small business creditors getting swept up in the domino effect of insolvencies.”
In the meantime, Billson urges affected businesses to sit down with their financial advisers for a viability assessment.