‘Risk vs Reward’ – How the new NSW COVID-19 business support package affects SMEs

Published June 29, 2021 Author: Employsure
NSW COVID-19 Business Support

While the NSW government’s new COVID-19 business support package will help struggling small business owners, it may cause confusion for some as to their eligibility, and what they need to do to receive it.

Under the scheme, eligible employers and sole traders across the state with fewer than 20 full-time equivalent employees who experience a 70 per cent decline in turnover, can access $10,000. Those who have experienced a 50 per cent decline can access $7000, and those with a 30 per cent decline can access $5000.

Eligible employers must provide evidence of the downturn through an accountant and lodge through Service NSW. The decline in business turnover must be recorded across a minimum two-week period after the commencement of major restrictions on the 26th of June, before they receive their relevant payment from the 19th of July, 2021.

“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 some employers, others with more than 20 employees may not qualify,” said Nicholas Hackenberg, Business Partner at Employsure, Australia’s largest workplace relations advisor.

“While this eligibility factor doesn’t appear to affect hospitality and tourism businesses, for other SMEs, it could be an issue when trying to apply for the grant.

“Some who have managed to stay open during lockdown may also not have recorded enough of a downturn to be eligible. Should they risk closing their doors for a few days just to meet the threshold, or should they continue operating as normal? This is a risk vs reward situation some business owners may find them in, and it could lead to disappointment.

Employsure is urging the government to be flexible with providing additional support where it’s needed if the COVID-19 situation gets worse.

For some, the cost of running a business is far greater than the support being offered, and a lockdown extension will increase the financial stress businesses are under.

Over the next few days employers should go into cash preservation mode, plan for the worst and hope for the best. They need to assess what costs can be fairly cut and make subsequent changes to protect their cash flow.

“Small business is the key to economic recovery and without adequate support, struggling employers will have no choice but to close their doors,” continued Mr Hackenberg.

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

Further enquiries:

Matthew Bridges

[email protected]

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