Is Victoria’s COVID-19 business support package enough?

Published June 01, 2021 (last updated January 25, 2022) -
Vic Business Lockdown Support Package

While the Victorian government’s $250m business support package is needed, the uncertainty surrounding further support should be a red flag for business owners.

Under the scheme, eligible employers and sole traders affected by the state’s latest seven-day COVID-19 lockdown can receive grants of $2,500, while hospitality venues with a liquor licence and a food certificate are eligible for a $3,500 grant per premises.

But as more cases of COVID-19 are being recorded in the lockdown, and with the list of exposure sites growing, it casts doubt on whether or not the whole state can expect restrictions to be lifted come Friday.

“We called on the state government to offer more support for small businesses and it delivered. However, while this will act as a temporary safety net for employers, the real impact will be felt if the lockdown is extended,” said Josh Paterson, Business Partner at Employsure, Australia’s largest workplace relations advisor.

“These payments are all well and good this week, but with the high cost of rent and stock, coupled with the cost of paying employees, if this lockdown were to be extended, it would have a significant impact on small business.

“The government needs to be flexible with providing additional support where it’s needed if things get worse. Small business is the key to economic recovery, and if that support were to stop, struggling employers will have no choice but to close their doors.”

Over the next few days, business owners should plan for the worst and hope for the best. Going into cash preservation mode could be more important now than ever before, especially in a post-JobKeeper world. Employers need to assess what costs can be fairly cut, and make changes to protect their cash flow. They should also consider their options for retaining, standing down, or making staff redundant during the lockdown.

While some businesses are resilient and have gotten good at shifting operations online where applicable, for others, this fourth lockdown might be the final one that breaks them, even with the extra week of financial support being offered to them.

“This lockdown has crippled an already fragile economy, and we’re already starting to see the cracks form,” continued Mr Paterson.

“The cost of running a business is far greater than the support being offered, and an additional week or two of lockdown with no extension of the cash grant will show just how much financial stress businesses are under.”

Further enquiries:

Matthew Bridges

[email protected]

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